TITLE:  Jantec, Inc., B-292668; B-292668.2, November 6, 2003
BNUMBER:  B-292668; B-292668.2
DATE:  November 6, 2003
**********************************************************************
Jantec, Inc., B-292668; B-292668.2, November 6, 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:   Jantec, Inc.
    
File:            B-292668; B-292668.2
    
Date:           November 6, 2003
    
Richard B. Oliver, Esq., McKenna Long & Aldridge, for the protester.
Brian Koji, Esq., Allen, Norton & Blue, for Call Henry, Inc., an
intervenor.
Maj. Brent Curtis, Department of the Air Force, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
    
1.  Evaluators reasonably rated protester as very good/significant
confidence under predictive preventative maintenance (PPM) past
performance subelement where references reported that protester had not
performed PPM and rated its performance for maintenance management
generally as very good or satisfactory.
    
2.  Evaluators reasonably determined that awardee had proposed an adequate
level of staffing where awardee proposed innovations in its approach to
the work that reduced the staffing required.
    
3.  Awardee did not improperly condition its offer by stating that if its
health insurance costs increased significantly, it would ask the
government to consider adjusting the contract price to reflect the extra
cost, since the awardee*s reservation of the right to request an
adjustment did not obligate the government to grant the request.
    
4.  Awardee did not improperly condition its offer by expressing
confidence that it would be able to perform using the level of staffing
that it had derived based on the workload data furnished in the
solicitation.
DECISION
    

   Jantec, Inc. protests the award of a contract to Call Henry, Inc. (CHI)
under request for proposals (RFP) No. F04693-02-R-0004, issued by the
Department of the Air Force for civil engineering services for Los Angeles
Air Force Base (LAAFB). Jantec contends that the Air Force misevaluated
its past performance, unreasonably determined CHI*s proposal to be
technically acceptable, and failed to perform an adequate price realism
analysis of CHI*s proposal.

    

   We deny the protest.
    
The RFP, which was issued on February 24, 2003, contemplated the award of
a contract encompassing fixed-price and cost-reimbursable items.[1]  The
performance period consists of a base year and seven 1-year options.
    
The RFP provided for the evaluation of proposals on the basis of three
factors:  mission capability (which was to be evaluated on a pass/fail
basis), present/past performance (which was to result in the assignment of
a performance confidence rating of exceptional/high confidence, very
good/significant confidence, satisfactory/confidence, neutral/unknown
confidence, marginal/little confidence, or unsatisfactory/no confidence),
and price.  Both mission capability and past performance were to be
evaluated on the basis of the following five subfactors, corresponding to
the five major categories of services to be furnished under the contract:
information technology (IT) management; real property management; housing
management; planning, programming, design, and execution (PPD&E); and
program management.  Award was to be made to the offeror whose technically
acceptable (i.e., passing under mission capability) proposal represented
the best combination of present/past performance and price, with
present/past performance of significantly greater importance than price. 
With respect to price, the RFP provided that proposals would be evaluated
to determine if the proposed prices, including labor rates, direct and
indirect costs, and profit rate, were reasonable and realistic for the
work to be performed.
    
Five offerors submitted proposals in response to the RFP.  The source
selection evaluation team (SSET) determined four of the proposals to be
technically acceptable and eliminated one from the competition as
technically unacceptable.  The SSET assigned performance confidence
ratings of very good/significant confidence to the four offerors that had
submitted technically acceptable proposals and determined the prices
submitted by all four to be both reasonable and realistic.  Of relevance
here, for the five categories of services, the evaluators rated CHI as
exceptional/high confidence for IT management and as very good/significant
confidence for real property maintenance/management, housing management,
PPD&E, and program management.  Jantec received ratings of very
good/significant confidence for IT management, real property
maintenance/management, and program management, and ratings of
satisfactory/confidence for housing management and PPD&E.  CHI*s proposed
price of $50,718,424 was lowest, while Jantec*s proposed price of
$52,875,325 was second low.  The SSET recommended award to CHI on the
basis that its proposal was technically acceptable, it had received a
performance confidence rating of very good/significant confidence, and its
price was lowest.  The source selection authority concurred in the
selection of CHI for award, noting that *no other offeror had documented
past performance that warranted a higher price.*  Source Selection
Decision at 4.  The agency awarded a contract to CHI on July 24.  Jantec
received a debriefing on July 30 and protested to our Office on August 4.
    
Jantec argues that the Air Force misevaluated its past performance and
should have assigned it an overall performance confidence rating of
exceptional/high confidence, as opposed to very good/significant
confidence.[2]  Specifically, Jantec takes issue with the performance
confidence ratings assigned its proposal for IT management, real property
maintenance/management, PPD&E, and program management, arguing that it
should have received ratings of exceptional/high confidence for IT, real
property, and program management, and a rating of very good/significant
confidence for PPD&E.[3]  Jantec contends that had the agency correctly
rated its performance risk as exceptional/high confidence, it would have
concluded that Jantec*s combination of past performance and price
represented the best value to the government.
    
The evaluation of past performance is a matter within the discretion of
the contracting agency.  In reviewing an agency*s evaluation of past
performance, we will not reevaluate proposals, but instead will examine an
agency*s evaluation to ensure that it was reasonable and consistent with
the solicitation.  Acepex Mgmt. Corp., B-280080 et al., Oct. 4, 1999, 99-2
CPD P: 77 at 3.  Here, as explained below, our review of the record
persuades us that the past performance/performance confidence ratings
assigned the protester*s proposal were reasonable and consistent with the
RFP.
    
First, regarding the protester*s argument that the Air Force unreasonably
assigned it a rating of very good/significant confidence, as opposed to
exceptional/high confidence, for IT management, the agency explains that
it considered three sources of information in assigning the protester a
rating under the subfactor:  questionnaires completed by both the
contracting officer and quality assurance representative concerning
Jantec*s performance under the preceding contract for civil engineering
services at LAAFB, and a Contractor Performance Assessment Report (CPAR)
rating for the same contract.  The contracting officer rated the
protester*s performance as very good under three of five questionnaire
items pertaining to IT management, as satisfactory under the fourth, and
as exceptional under the fifth, while the quality assurance representative
rated the protester*s performance as satisfactory under all five
questionnaire items.[4]  The CPAR did not include a rating for IT
management (the contractor instead being rated under the more general
categories of quality of product or service, schedule, cost control,
business relations, and management of key personnel); it did include the
following narrative under the quality of service/product heading, however:
    
Contractor has taken on task of installing a new Computer Maintenance
Management System (CMMS) well beyond scope of contract.  New CMMS is a
tremendous benefit to the government dramatically improving ability to
review and control maintenance processes.  Unscheduled heat and cooling
calls have been reduced by a factor of 10.
    
CPAR, Agency Report, Tab 35.  Jantec contends that the CPAR excerpt
reflects the exceptional nature of its IT management efforts, and that the
comments should have been given greater weight in the Air Force*s
evaluation than the questionnaires because *[a] questionnaire is completed
in a few minutes with no review process and no opportunity for the
contractor to respond,* while, in contrast, *the CPARS evaluation process
is a formalized, disciplined effort including a lengthy explanation for
each rating, internal agency review, the contractor*s response and a final
opportunity for the agency to reconsider the CPARS rating based upon the
contractor*s response.*  Protester*s Comments, Sept. 15, 2003, at 3.
    
We think that the rating of very good/significant confidence was
justified.  The agency explains that the evaluators did not consider the
protester*s installation of CMMS under the predecessor contract as
reflective of exceptional IT management on the part of Jantec since CMMS
was not developed by the protester.  We see nothing unreasonable in that
determination.  While, as the protester contends, the Air Force may have
benefited from Jantec*s initiative and foresight in installing CCMS, this
does not mean that the enhanced maintenance management benefits
attributable to the new system should be ascribed to Jantec as its
installer.  We also think that it was reasonable for the Air Force to give
significant weight in its evaluation to the questionnaires completed by
the contracting officer and the quality assurance representative, in
particular because they, unlike the CPAR, included ratings under the
specific category of IT management.  In any event, it does not appear that
there was any significant inconsistency between the CPAR and the
questionnaires since, as noted above, the evaluators did not interpret the
CPAR comments as reflective of exceptional IT management efforts by the
protester.
    
Turning then to the protester*s argument that it should have received a
rating of exceptional/high confidence, as opposed to very good/significant
confidence, for real property management, the evaluators considered
offerors* past performance in four areas in assigning a rating under this
subfactor:  commercial facilities maintenance, residential facilities
maintenance, grounds maintenance, and predictive preventative maintenance
(PPM).  The evaluators rated Jantec*s performance in maintaining
residential facilities and grounds as exceptional/high confidence and its
performance in maintaining commercial facilities as very good/significant
confidence.  In addition, the evaluators rated the protester*s performance
of PPM as very good/significant confidence.
    
Jantec argues that it should have received a rating of exceptional/high
confidence under the real property management subfactor because its
ratings in the residential facilities and grounds maintenance areas were
so outstanding as to outweigh the very good/significant confidence ratings
that it received in the other two areas.  In addition, Jantec argues that
it should have received a rating of exceptional/high confidence in the PPM
area, and that, if it had, it would have received an overall rating of
exceptional/high confidence under the real property management subfactor.
    
First, we see no basis for the protester*s argument that its outstanding
ratings in the residential facilities and grounds maintenance areas should
have outweighed its very good/significant confidence ratings in the
commercial facilities and PPM areas given that the four areas were equally
weighted.  Second, regarding the protester*s complaint that it deserved a
higher rating in the PPM area, the evaluators assigned Jantec a rating of
very good/significant confidence for PPM because the references furnishing
information regarding the protester*s performance under the only contract
cited by the protester in its proposal as relevant, i.e., the predecessor
contract to the one here, indicated that the contractor had not used PPM
techniques and rated its maintenance management process as generally very
good (one reference) and generally satisfactory (the second reference). 
The protester disputes the references* representations that it did not use
PPM techniques, asserting that *[d]uring the last two years of its current
contract performance, Jantec reorganized to establish a Predictive and
Preventative Maintenance capability,* hiring maintenance engineers who
were experienced with PPM.  Protest at 5.  Regardless of whether the
protester*s maintenance efforts constituted predictive preventative
maintenance, the fact remains that the evaluators rated these maintenance
efforts as very good/satisfactory, as opposed to exceptional.  In other
words, regardless of the relevance of the efforts, Jantec*s performance of
them was rated as less than exceptional.  Under these circumstances, we
see nothing unreasonable in the evaluators having rated Jantec as very
good/significant confidence for PPM.
    
Because we find that the evaluators* ratings of very good/significant
confidence for IT management and real property management were reasonable,
and the protester has not challenged its rating of satisfactory/confidence
for housing management, we do not reach its arguments that it should have
been rated very good/significant confidence (as opposed to
satisfactory/confidence) under PPD&E and as exceptional/high confidence
(as opposed to very good/significant confidence) under program
management.  We need not consider these arguments because it is apparent
from the record that the protester would have received an overall
performance confidence rating no better than very good/significant
confidence even if it had received the higher ratings under the PPD&E and
program management subfactors.  In this regard, raising Jantec*s ratings
under PPD&E and program management to very good/significant and
exceptional/high confidence, respectively, would give the protester
ratings of very good/significant confidence under three of the five
subfactors, a rating of exceptional/high confidence under one, and a
rating of satisfactory/confidence under one.  Based on this array of
ratings, there is no reasonable basis to assume that Jantec*s overall
rating would be anything but very good/significant confidence.  By way of
comparison, CHI received an overall confidence rating of very good/
significant based on four subfactor ratings of very good/significant
confidence and one of exceptional/high confidence.
    
Next, Jantec argues that CHI*s proposed level of staffing--i.e., [deleted]
full time equivalents (FTE) for the base year and [deleted] FTEs for the
option years--was inadequate and should have resulted in rejection of its
proposal as technically unacceptable.  The protester cites as evidence
that CHI*s proposed staffing level was inadequate the level of staffing
proposed in the government estimate ([deleted] FTEs), the level of
staffing proposed by the other two technically acceptable offerors
([deleted] and [deleted] FTEs), and the level of staffing that it, the
incumbent contractor, proposed ([deleted] FTEs).
    
The evaluators determined that CHI had proposed an *[e]ffective and
efficient organizational structure with adequate overall staffing.* 
Proposal Analysis Report (PAR) at 16.  The fact that other offerors
proposed (and that the government estimate was based on) lower levels of
staffing does not demonstrate that the evaluators* determination was
unreasonable, given that, as noted by the contracting officer in the
following excerpt, CHI proposed innovations in its approach to the work to
reduce the required level of staffing:
    
CHI*s proposal relies heavily on a centralized maintenance model that
eliminates redundancies between the two locations where work will be
performed.  Furthermore, CHI proposed to utilize extensive information
technology resources to automate planning and execution of maintenance. 
Both of these approaches reduce the staffing required, compared to the
approaches adopted by the incumbent contractor and other offerors.
    
Addendum to Contracting Officer*s Statement of Facts at 2.
    
Jantec further argues that CHI*s staffing for contract line item numbers
(CLIN) 0002 (Grounds Maintenance), 0003 (Operations and
Maintenance--Military Family Housing), and 0009 (Military Family Housing
Change of Occupancy Maintenance) was inadequate, as demonstrated by the
discrepancy between the number of FTEs proposed by the awardee and the
number proposed by the protester itself, i.e., [deleted] versus [deleted]
for CLIN 0002, [deleted] versus [deleted] for CLIN 0003, and [deleted]
versus [deleted] for CLIN 0009.  The PAR indicates that proposed staffing
levels were evaluated at the CLIN level as part of the agency*s price
realism analysis and that CHI*s proposal was deemed to be realistic for
the work to be performed.  PAR at 54.  Again, the mere fact that CHI*s
staffing levels were lower than Jantec*s does not demonstrate that the
evaluators* judgment was unreasonable.[5]
    
In an argument related to the above one, Jantec contends that the
evaluators failed to conduct an adequate analysis of CHI*s proposed price
by failing to verify that CHI had proposed a sufficient number of FTEs.
    
First, regarding the protester*s allegation that it is not clear from that
record that the Air Force conducted any price realism analysis at all
during its conduct of this procurement, the following excerpt from the PAR
demonstrates that this was not the case:
    
Realism: Each offeror*s proposal was analyzed to determined realism.  Each
proposal was deemed to be realistic for the work to be performed,
reflected a clear understanding of the requirements, and was consistent
between the technical and cost proposals.  The realism determination is
based on the following analysis.
    
Full Time Equivalents (FTEs): The proposed numbers of FTEs by CLIN by
option period were evaluated to determine if the proposed numbers of FTEs
were reasonable for the level of effort required by the SOW for each
CLIN.  Also, the skill mix and types of FTEs per CLIN were evaluated to
determine if they were adequate for the effort required in the SOW for
that particular CLIN.
    
Non-Exempt Labor: The proposed direct labor rates were verified to the
Service Contract Act or the Davis Bacon Act or local Union Agreements, as
applicable.  Any discrepancies that were noted during this analysis have
been successfully resolved.  The proposed non-exempt direct labor rates
have been accepted as reasonable.
    
Professional Labor: This labor was evaluated in accordance with FAR
52.222-46 *Evaluation of Compensation for Professional Employees.*  Our
analysis determined that all professional employees are being properly and
fairly compensated.
    
Other Direct Charges (ODCs):  The ODCs were evaluated by determining the
type and level of effort that was being subcontracted and to what extent
the ODC effort was sufficient, when taken in conjunction with the proposed
FTEs, to perform the tasks contained in the SOW.
    
Indirect Expense Rate: A comparison of the indirect expense rates between
offerors was made and all the proposed indirect rates were accepted as
reasonable.
    
Profit: A comparison of the profit rates between offerors was conducted
and all the proposed profit rates were determined to be within a
reasonable range.
    
PAR at 54.  While the protester characterizes the foregoing analysis as
nothing more than *a few conclusory statements, apparently copied from the
solicitation,* Protester*s Comments, Oct. 10, 2003 at 10, we disagree with
this assessment; although the details of the analysis pertaining to each
particular offeror are not spelled out in the PAR, the steps taken in
performing that analysis are, and thus, we do not think that it is
accurate to characterize the analysis as consisting of mere conclusions. 
Moreover, since we see no language in the RFP similar to the language
quoted here regarding the analysis of FTEs, we do not see the basis for
the protester*s argument that this portion of the analysis is *apparently
copied* from the RFP.
    
Second, regarding the protester*s argument that CHI*s price is not
realistic because its staffing is grossly inadequate, as noted above, the
evaluators determined that CHI*s proposed staffing was adequate, and the
protester has failed to demonstrate that this determination was
unreasonable.
    
Jantec also argues that CHI*s proposed price was unrealistic because CHI
did not increase it in response to a revised wage determination contained
in solicitation amendment 0005.  In a letter to the Air Force dated May
28, 2003, CHI acknowledged receipt of amendment 0005 and stated that the
newly issued wage determination might cause changes in its cost/price,
estimated at an additional $30,000 annually.  CHI further stated that it
would submit a revised cost/price proposal incorporating any price changes
with its final proposal revision (FPR).  In its FPR, dated July 11, CHI
advised that it had determined not to revise its technical or cost/price
proposal further, however.  In addition, by letter dated July 14, CHI
confirmed that its final price of $50,718,424 included the costs of the
wage determination.  The agency maintains that this confirmation
*indicates that CHI is aware of and accounted for the increased costs of
the wage determination.*  Addendum to Contracting Officer*s Statement of
Facts at 4.  We agree, and we no basis to reject CHI*s price as
unrealistic.
    
Finally, Jantec alleges that CHI improperly conditioned its offer to its
competitive advantage by reserving the right to request an equitable
adjustment if health care costs increased by a significant amount or if
the actual workload under the contract exceeded the workload data listed
in the solicitation.
    
The protester*s first allegation is premised on the following language
from CHI*s proposal:
    
Labor Related Health Insurance Costs.  This is a risk area where no one
can predict what is going to happen to future health insurance rates.
    
Our approach to mitigate this risk is to have employees assume some of the
insurance costs as employers are doing nation wide.  As we are doing with
our current contracts, we continue to look at other insurance options and
their cost before we renew each year as another cost mitigating
technique.  We also, if the increase becomes a significant amount; i.e.
30% to 40%, we would ask the Government to consider this extra cost.
    
CHI Proposal, Volume IV, at 4.  Jantec contends that *[o]ver the course of
an eight year contract, such increases in health insurance costs are
likely and CHI, by reserving its right to request an equitable adjustment
for such cost increases, has unfairly received a competitive advantage.* 
Supplemental Protest, Sept. 2, 2003, at 9.
    
We do not think that CHI has improperly conditioned its offer by reserving
the right to seek an equitable adjustment from the government in the event
that its health care costs increase.  Reserving the right to ask for an
adjustment--a request that the government may decline--is not equivalent
to reserving the right to receive an adjustment.  Accordingly, unlike the
cases cited by Jantec, e.g., Georgetown Univ.,
B-249365.2, Jan. 11, 1993, 93-1 CPD P: 87 (where offeror made its labor
rates contingent on salary increases determined by its board of directors
during contract performance), CHI did not improperly qualify its fixed
prices here.
    
Jantec*s second allegation is based on the following excerpt, which
appeared in CHI*s proposal under the heading *Cost/Price Risk(s)*:
    
Direct Labor Costs.  Of course, direct labor costs are in direct
proportion to the required staffing level.  Have we staffed and priced to
a level to accomplish quality SOW work?  To assure ourselves that we have,
we have approached this contract the same as we do on every contract, we
bid; i.e., we had two separate technical teams do independent estimates of
the staffing required based on the SOW and work load data in the RFP,
using CHI proven performance factors.
    
                           *          *          *          *          *
    
Based on the above analysis, we are confident we can perform the SOW
giving reasonable interpretation of the government provided work load
data.  We follow this same process on every bid, and we have never failed
to provide quality services in support of our customers with our proposed
staffing.
    
CHI Proposal, Volume IV, at 4, 5.
    
We do not think that the foregoing language reserves to CHI the right to
an equitable adjustment in the event that the actual contract workload
exceeds the workload data in the RFP; rather, in our view, it seeks to
reassure the agency that CHI has based its proposed staffing levels on a
reasoned analysis and that its proposal entails minimal risk.  The
protester asserts that the above language provides CHI with more than a
*theoretical competitive advantage,* Protester*s Comments, Oct. 10, 2003,
at 14, citing an alleged plan by CHI to modify the terms of the contract
awarded to it in order to secure payment from the government for
additional employees.  CHI cannot modify the contract without the
government*s agreement, and there is no evidence in the record here that
the agency has agreed or intends to agree to such a modification.  Given
the absence of such evidence, we regard the protester*s allegation as
speculative, and thus not for consideration.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    
    
    
    
    
    
    
    

   ------------------------

   [1] The cost-reimbursable line items were for materials, travel, and
emergency overtime.  Under the RFP, equal fixed dollar amounts were added
to all offerors* proposed prices for these categories for evaluation
purposes.
[2] While the protester initially objected to the evaluation of CHI*s past
performance as well, it subsequently withdrew this ground of protest.
[3] In its initial protest, the protester also objected to the rating of
satisfactory/confidence assigned its proposal for housing management. 
After reviewing that agency*s explanation for the rating in the agency
report, the protester withdrew this complaint.
[4] The questionnaire items pertaining to IT management were whether the
contractor had ensured that the data maintained was current and accurate;
whether the contractor had managed data for fast and easy retrieval;
whether the data collected was valuable and relevant for the purpose
intended; whether computer support was provided in a timely and effective
manner; and whether the contractor had maximized the use of
electronic/paperless methods for processing data and managing
project/program communications.
[5] We also note that while Jantec proposed significantly higher levels of
staffing than CHI for CLINs 0002, 0003, and 0009, it proposed a
significantly lower one for CLIN 0001 (Operations and Maintenance
excluding Military Family Housing)--i.e.,
[deleted] versus [deleted]--and presumably, the protester would object to
the contention that this discrepancy should be viewed as evidence that its
proposed staffing level was inadequate.