TITLE: Research Analysis & Maintenance, Inc.; Westar Aerospace & Defense Group, Inc., B-292587.4; B-292587.5; B-292587.6; B-292587.7; B‑292587.8, November 17, 2003
BNUMBER: B-292587.4; B-292587.5; B-292587.6; B-292587.7; B‑292587.8
DATE: November 17, 2003
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Research Analysis & Maintenance, Inc.; Westar Aerospace & Defense Group, Inc.,
B-292587.4; B-292587.5; B-292587.6; B-292587.7; B‑292587.8, November 17,
2003
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Research Analysis & Maintenance, Inc.; Westar Aerospace &
Defense Group, Inc.
File: B-292587.4; B-292587.5; B-292587.6; B-292587.7;
B‑292587.8
Date: November 17, 2003
William L. Walsh, Jr., Esq., Lars E. Anderson, Esq., J. Scott Hommer, III,
Esq., John T. Kirsch, Esq., and Benjamin A. Winter, Esq., Venable, Baetjer
and Howard, for the protester Research Analysis & Maintenance, Inc.;
Stephen S. Kaye, Esq., and William E. Olson, Esq., Bryan Cave, for the
protester Westar Aerospace & Defense Group, Inc.
Karen L. Manos, Esq., and Gregory S. Seador, Esq., Howrey, and Linda T.
Maramba, Esq., for Northrop Grumman Technical Services, Inc., an
intervenor.
Maj. Leslie A. Nepper, and Capt. Peter G. Hartman, Department of the Army,
for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest is sustained where, based on a reasonable interpretation of
agency*s stated expectations in the solicitation with respect to the
desired staffing approach, protester, the incumbent contractor, was misled
into proposing a staffing approach‑‑involving a significant
reduction in core staffing from the historical staffing, reliance on
extensive cross‑training, and use of surge staffing to perform a
significant portion of the operational requirement‑‑that the
agency viewed as essentially unacceptable.
DECISION
Research Analysis & Maintenance, Inc. (RAM) and Westar Aerospace & Defense
Group, Inc. (COBRO) protest the actions of the Threat Systems Management
Office (TSMO), Department of the Army, in conducting the procurement and
making award to Northrop Grumman Technical Services, Inc. (NGTS) under
request for proposals (RFP) No. DABK39-03-R-0007, for maintenance and
operation of foreign threat systems. RAM and COBRO challenge a number of
aspects of the procurement, including the terms of the reopening of
discussions after prior protests by RAM and COBRO, the evaluation of
potential organizational conflicts of interest (OCI), and the evaluation
of revised proposals leading to reaffirmation of the prior award to NGTS.
We sustain RAM*s protest and deny COBRO*s protest.
The RFP contemplated the award of a cost-plus-award-fee/award term
contract, with a base period of 3 years, with six 2-year award terms, for
an overall possible term of 15 years, to operate and maintain TSMO ground
and aviation systems and their supporting equipment.[1] Offerors were to
submit written past/present performance and cost volumes, and make an oral
presentation (including slides). Award was to be made to the responsible
offeror whose proposal conformed to the RFP and was determined to be the
most advantageous to the government considering price and non-price
factors. The *best value* proposal was to be determined based on three
evaluation factors: (1) technical merit, including (in descending order
of importance) subfactors for competence and experience, program
management, mission understanding, employee recruitment and retention, key
personnel, and (as subsequently added) organizational conflict of interest
(OCI); (2) past and present performance, rated as performance risk; and
(3) cost (also denoted as price). Proposals were assigned color ratings
under the technical merit subfactors (other than the OCI subfactor) as
follows: (1) purple, indicating a proposal that demonstrates competence
and far exceeds the minimum requirements of the criteria, and has a high
probability of success; (2) green, indicating a proposal that demonstrates
competence and exceeds the minimum requirements, and has an above average
probability of success; (3) blue, indicating a proposal that meets the
minimum requirements and has a good probability of success; (4) yellow,
indicating a proposal that fails to meet the minimum requirements of the
criteria but may through negotiations, and has a low probability of
success; or (5) red, indicating a proposal that fails to meet the minimum
requirements and needs major revisions. Technical merit was much more
important than performance risk, which was much more important than cost.
Initial proposals were received from eight offerors, including NGTS, RAM
(the incumbent contractor), and COBRO. The cost proposals from four of
the offerors, including COBRO, were considered noncompetitive, and the
firms were furnished an opportunity to withdraw from the competition.
Five offerors, including COBRO, proceeded to make oral presentations.
Based upon its evaluation of initial proposals, TSMO determined that
NGTS*s represented the best value, and made award to that firm.
Upon learning of the resulting award, and after being debriefed, RAM and
COBRO protested to our Office, questioning the agency*s interpretation of
the specifications, arguing that the solicitation was ambiguous, and
otherwise challenging the evaluation of proposals and conduct of the
procurement. In response to the protests, TSMO advised our Office that it
would undertake corrective action. TSMO amended the RFP to provide for
evaluation of potential OCIs, and advised our Office that, after receipt
of responses to the amendment, it would reevaluate technical and cost
proposals as required and make a new best value source selection
decision. Our Office thereupon dismissed RAM*s and COBRO*s protests as
academic. (B‑292587; B-292587.2, Aug. 15, 2003).
Based upon offerors* responses to the amendment, TSMO again determined
that NGTS*s proposal represented the best value. Although the evaluated
cost of NGTS*s proposal ($[DELETED]) was higher than RAM*s ({DELETED]),
even after the cost of [DELETED] additional staff (approximately
$[DELETED]) had been added to the evaluated cost of RAM*s proposal, NGTS*s
proposal was rated higher under the four most important technical merit
subfactors. Under the experience/competence subfactor, NGTS*s proposal
was rated green, while RAM*s was rated blue. Although NGTS was assigned a
weakness for lack of direct experience with foreign aviation systems, the
agency viewed that weakness as mitigated by NGTS*s experience with
American aviation systems and it assigned the firm a strength based on its
overall experience with complex ground and aviation systems, including
foreign weapons systems identical to those under the contemplated
contract. In contrast, RAM, the incumbent contractor, was assigned a
weakness under the experience/competence subfactor on the basis that its
proposal of a core staff for ground systems of only [DELETED] staff
personnel‑‑significantly lower than the ground systems
staffing of [DELETED] staff under its contract with TSMO‑‑was
*highly risky.* RAM Debriefing, Sept. 3, 2003, at 4. Given the reduction
in RAM*s proposed core ground systems staff, RAM*s resulting overall
staffing of [DELETED] core, full-time equivalent staff (plus [DELETED]
surge staff [DELETED]) was significantly lower than the current staffing
of [DELETED] under its contract, RAM Oral Presentation, Slide 53; RAM
Price Proposal at 13‑19, the agency*s independent estimate of
[DELETED] staff, and NGTS*s proposed [DELETED] staff.
RAM*s proposal of lower core staffing likewise contributed to its
proposal*s receiving a yellow rating under the program management
subfactor. Although RAM*s proposal was assigned strengths for an
excellent aviation program management proposal, excellent marketing plan,
and for proposing a new information management system (IMS) with *high*
potential, the proposal also was assigned a number of weaknesses,
including a *too slim* core organization, no capability to *reach back*
into the firm for additional personnel, cross training its staff in too
many systems, and the use of an untried IMS. RAM Debriefing, Sept. 3,
2003, at 5. In contrast, NGTS*s proposal received a purple rating under
the program management subfactor on the basis of an efficient
organization, *tremendous reach back capability,* centralization of
functions, and empowerment of employees. NGTS*s proposal received purple
ratings under both the mission understanding and employee recruitment
subfactors, while RAM*s received only green ratings. Among the weaknesses
assessed RAM*s proposal under the employee recruitment subfactor was RAM*s
reliance on part‑time, *surge* staff, which the agency found was
risky. Both NGTS*s and RAM*s proposals received green ratings for key
personnel. Although both proposals also initially received a low
performance risk rating based on past and present performance, RAM*s risk
rating was downgraded to low/moderate risk based on the agency*s
determination that its OCI plan was only marginally acceptable (and less
advantageous than NGTS*s acceptable plan). Source Selection Decision at
5; POM/PNM at 5. As for COBRO, its cost proposal, with an evaluated cost
of $[DELETED]million, and proposed staffing of [DELETED] personnel, was
determined to be unreasonable.
CORE STAFFING REQUIREMENT
RAM*s Protest
RAM challenges the evaluation of its proposed effort as understaffed, and
the consequent downgrading of its proposal under the technical merit
factor and adjustment of its evaluated cost upward to account for the
addition of [DELETED] personnel to its proposed ground systems staff. In
this regard, RAM stated in its proposal that it was proposing a core
staffing level to meet the solicitation*s maintenance requirements, and
that, for operational missions beyond those that could be supported by
that core maintenance staffing, it would provide additional
maintenance/operators, as necessary, from a pool of surge employees (who
normally would be recalled for only 1 day of work each month). RAM Price
Proposal at 13‑14. RAM maintains that, at minimum, its proposed
lower level of staffing‑-[DELETED] staff, including a core,
full-time staff for ground systems of [DELETED]‑‑was in accord
with a reasonable reading of the RFP regarding the required core
staffing. The Army stands by its evaluation conclusions.
The RFP generally described the statement of work (SOW) as providing
*non‑personal services such as operation and maintenance of foreign
threat systems (aviation and ground systems), engineering, training,
analysis, management and technical support* of TSMO. SOW S: C.1.1.
Section C.1.3.4.3 of the SOW specifically provided as follows:
Contractor Operators. You shall provide qualified maintenance technicians
as operators to simultaneously operate different types of threat systems.
You shall be proficient and provide skilled operators for all threat
systems in the TSMO inventory. You shall maximize the utilization of
maintenance personnel by cross training to reduce the number of
maintainers/operators and increase the number of threat systems in an
active operational status required.
SOW S: C.1.3.4.3. The SOW further provided as follows:
Contractor Operators. You shall provide qualified operators to
simultaneously operat[e] the systems identified in Enclosure 5,
Simultaneous Operation System Density. You shall be proficient and
provide skilled operators for the remaining systems in Exhibits D, E, and
K. You shall maximize the utilization of maintenance personnel to
accomplish the operator functions.
SOW S: C.5.6.1. The Army relies upon these provisions in support of its
position that the RFP required offerors to propose a core staff sufficient
both to maintain and to operate TSMO*s systems.
RAM, on the other hand, in support of its view that the RFP required
offerors to propose core staffing only for maintenance, and not for
operations, or surge, requirements, cites several written questions and
answers incorporated into the solicitation. In this regard, RFP S: B.2,
Adjustment to Fee, noting that *the Contractor may expect periodic
fluctuations in staffing above proposed core staff due to changing
workload requirements ever present in a dynamic testing environment,*
provided for adjusting the award fee *for each manyear in excess of the
proposed core manning level.* RFP S: B.2. In response to a question as
to the meaning of the reference to *proposed core manning level,* TSMO
responded that offerors were *to propose the costs for providing a CORE
staff responsible for maintenance of the equipment and other management
requirements. In your oral presentation you will address how you will
meet surge requirements as the need arises.* RFP, amend. No. 0002,
Question and Answer No. 63. Likewise, in response to a question
concerning when the simultaneous operation density figures referenced in
SOW S: C.5.6.1 would be furnished, the agency responded that the offerors
were *being asked to propose a CORE group to handle maintenance. Your
proposal will address how you will ramp up with an adequate number of
operators when needed. We have provided you with the use of systems over
the past three years.* RFP, amend. No. 0002, Question and Answer No. 58.
As further support for its position, RAM cites statements of the
contracting officer made during the site visit. In this regard, according
to TSMO, *[i]n order to reduce costs for providing these services, the
contractors were asked to bid on a core group of full-time employees and
to have the capability to obtain additional personnel during surge
requirements.* Contracting Officer*s Statement (COS), Aug. 22, 2003, at
1. Further, according to the contracting officer, when asked about the
level of effort desired by the agency, she advised that: *We are not
setting the level of effort. We are looking for innovation. The correct
number may be 60, may be 80, may be 100. That is for you to propose.*
COS, Sept. 29, 2003, at 6.
When a dispute exists as to the meaning of a solicitation requirement, our
Office will resolve the matter by reading the solicitation as a whole and
in a manner that gives effect to all the provisions of the solicitation.
Energy Maint. Corp., B-223328, Aug. 27, 1986, 86-2 CPD P: 234 at 4. Here,
RAM*s proposal reflected the RFP as clarified. Specifically, the RFP as
clarified defined the requested core staffing in a manner that indicated a
desire for a reduced operational component. In instructing offerors *to
propose the costs for providing a CORE staff responsible for maintenance
of the equipment and other management requirements,* *to propose a CORE
group to handle maintenance,* and to address how they *will ramp up with
an adequate number of operators when needed,* the RFP indicated that the
core staffing should be based on the maintenance requirement, with any
additional staffing required for operations to come from surge staffing.
RFP, amend. No. 0002, Question and Answer Nos. 58, 63. Further, although
not binding on the agency, the contracting officer*s statements during the
site visit‑‑instructing offerors to reduce costs by bidding on
a core group of full-time employees, with the capability to obtain
additional personnel during surge requirements, and raising the
possibility that significantly lower staffing might be
acceptable‑‑reinforced this direction. COS, Sept. 29, 2003,
at 1, 6.
We conclude that RAM*s proposal to meet the solicitation*s maintenance
requirements with a core staff, and to meet additional operational
missions by providing additional maintenance operators, as needed, from a
pool of surge employees, was consistent with the RFP. In these
circumstances, TSMO*s assignment of weaknesses to RAM*s proposal on
account of its reduced core staffing, reliance on surge staffing for some
operational requirements, and attempt to mitigate the directed staffing
reduction by extensive cross-training, was unreasonable, and we sustain
RAM*s protest on this basis.
COBRO*s Protest
COBRO asserts that the original evaluation was unreasonable--and that
there thus was no basis for the agency*s reopening of the evaluation in
response to its and RAM*s initial protests. In this regard, COBRO
maintains that, although its original proposal was based on a reasonable
interpretation of the RFP as requiring full staffing, a latent ambiguity
in the RFP with respect to the agency*s concepts of core and surge
staffing resulted in its otherwise reasonable staffing approach being
found to be excessive and its cost unreasonable. COBRO asserts that,
while it offered staffing ([DELETED] staff) sufficient, based on the
historical workload, to operate and maintain TSMO*s systems, the agency
apparently intended, by distinguishing in the RFP between core and surge
staffing, to require that offerors propose something less than the
staffing required for the historical workload. (As noted above, TSMO*s
independent estimate of the required staffing was [DELETED].)
COBRO*s protest is based on an incorrect premise. As discussed above, the
agency, like COBRO, interpreted the solicitation as requiring core
staffing based on performing both the maintenance and operations
requirements. Consistent with that interpretation, the agency selected
for award an offeror proposing core staffing [DELETED]. Since COBRO*s
proposal thus was not downgraded based on its reading of the RFP, we deny
COBRO*s protest.
OCI
RAM challenges the evaluation of its OCI mitigation plan as increasing the
performance risk associated with its proposal. RAM*s OCI plan focused on
the firm*s view that, since it was not involved in the development of
weapons systems, and it intended to supplement its staffing when needed
with personnel from its surge pool of *alumni,* who it claimed were
unlikely to raise OCI concerns, there were no foreseeable actual or
potential OCI issues. TSMO determined, however, that it was unreasonable
for RAM to assume that it would be able to handle all of the new
technologies likely to be encountered over the potential 15-year period of
the contract without recourse to outside technical expertise. TSMO thus
rated RAM*s plan marginally acceptable, and downgraded RAM*s performance
risk from low (based on past/present performance) to low/moderate.
We find that TSMO reasonably viewed with concern RAM*s failure to describe
an approach to avoiding OCI issues in the event that it entered into new,
contractual relationships for outside technical assistance. As asserted
by the agency, it was unreasonable for RAM to assume that it would not
need to look outside the company (and RAM*s pool of surge personnel) for
technical expertise sometime during the potential 15-year period of the
contract. Given the reasonable possibility that RAM would require
recourse to outside technical expertise sometime during the potential
15-year period of the contract, and given the possibility that such
assistance might carry with it OCI concerns, it was not unreasonable for
the agency to expect that RAM*s mitigation plan would address the OCI
implications of such an eventuality.
However, we also find that the agency failed to apply the same strict
standard in evaluating NGTS*s mitigation plan as acceptable and its risk
as low. In this regard, NGTS*s OCI plan contemplated a number of possible
responses when faced with a potential OCI, including (depending on the
nature of the potential OCI) [DELETED]. NGTS OCI Plan, attach. 2, at
3-4. TSMO concluded that OCIs would be rare and that NGTS*s mitigation
plan would effectively eliminate OCIs that did arise. In this regard,
TSMO states that, in the event it is faced with an actual OCI, it will
either, as it has in the past, ask other military services or the
intelligence community to provide operators, or award a short-term
contract to another firm [DELETED]. Given the availability of operators
from other military services or the intelligence community, TSMO expects
to have to award a short‑term, limited contract for support services
no more than 3-5 times over the potential 15-year period of the contract.
TSMO Comments, Oct. 23, 2003, at 4-5; Declaration of TSMO Operations Team
Leader, Oct. 23, 2003, at 4-6.
Even if TSMO reasonably concluded that the OCIs resulting from award to
NGTS could be avoided or mitigated such that award to NGTS was not
precluded, it does not follow that there were no OCI concerns that had to
be reflected in the evaluation, at least in light of the strict standard
applied in evaluating RAM*s mitigation plan. It is clear from the record
that the agency was fully aware during the evaluation that, in some
limited number of instances, an award to NGTS likely would require TSMO to
proceed outside the terms of NGTS*s contract and have contract work
performed by some other contractor or government entity. This likely
outcome does not appear to have been factored into the agency*s evaluation
of NGTS*s proposal, despite the agency*s view during its evaluation of
RAM*s proposal that RAM*s failure to plan for a merely potential OCI
warranted downgrading RAM for performance risk. We conclude that the
agency did not evaluate the proposals on an equal basis, and that the
evaluation in this regard therefore was unreasonable. Symplicity Corp.,
B‑291902, Apr. 29, 2003, 2003 CPD P: 89 at 5.
CONCLUSION
Based on our conclusions, we sustain RAM*s protest. While it is not
possible to determine the precise impact of the evaluation deficiencies on
the award decision, there is no basis for finding that they were not
material. In this regard, as discussed above, the evaluated weaknesses
concerning RAM*s proposed staffing approach negatively affected RAM*s
evaluation under three of the six (including the two most important)
technical merit subfactors, and also led to RAM*s proposed cost being
viewed as unrealistic. In addition, the agency*s unreasonable failure to
account in its evaluation for the OCI concerns that would arise from an
award to NGTS negatively affected RAM*s competitive standing relative to
NGTS. Since RAM*s evaluated price also was [DELETED] than NGTS*s, we
conclude that RAM was competitively prejudiced by the evaluation
deficiencies. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD P: 54 at
3; see Statistica v. Christopher, 102 F. 3d 1577, 1581 (Fed. Cir. 1996).
We recommend that TSMO amend the RFP to reflect its actual minimum needs
with respect to staffing, conduct general discussions with offerors in the
competitive range, and request revised proposals. In the event that its
evaluation of revised proposals results in the determination that an offer
other than NGTS*s represents the best value, the agency should terminate
NGTS*s contract for convenience. We also recommend that the agency
reimburse RAM its reasonable costs of filing and pursuing the protest,
including attorneys* fees. 4 C.F.R. S: 21.8(d)(1) (2003). RAM*s
certified claim for costs, detailing the time spent and the costs
incurred, must be submitted to the agency within 60 days of receiving this
decision. 4 C.F.R. S: 21.8(f)(1).
RAM*s protest is sustained, and COBRO*s protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] TSMO is responsible for providing realistic threats during the testing
of United States weapon systems and during training and other exercises.
Specifically, TSMO is tasked with the assembly of intelligence information
and the design, development and procurement of limited quantities of
operational hardware simulations of threat systems. TSMO is responsible
for operating and maintaining these threat simulators and a significant
inventory of actual foreign ground and aviation systems. Many of the
foreign weapon systems in TSMO*s inventory are 20, 30, 40, or even 50
years old and are based on old technology. For example, the ground
systems may use tube technology that is no longer taught or used.