TITLE:  SOS Interpreting, Ltd., B-293026.4; B-293026.5, August 25, 2004

BNUMBER:  B-293026.4; B-293026.5

DATE:  August 25, 2004

**********************************************************************

   Decision



   Matter of:   SOS Interpreting, Ltd.



   File:            B-293026.4; B-293026.5



   Date:              August 25, 2004



   Alison L. Doyle, Esq., and Jason N. Workmaster, Esq., McKenna Long &

Aldridge, for the protester.



   Robert M. Moore, Esq., and Kelly L. Hellmuth, Esq., Moore & Lee, for

McNeil Technologies, Inc., an intervenor.



   James Hicks, Esq., Department of Justice, for the agency.



   Charles W. Morrow, Esq., and David A. Ashen, Esq., Office of the General

Counsel, GAO, participated in the preparation of the decision.



   DIGEST



   Protest against price/technical tradeoff which led to reselection of

offeror whose technical proposal, like the protester's, was rated highly

satisfactory, but whose price was higher, is denied where agency

reasonably determined that protester's lower prices were based on prices

and wage rates significantly lower than those historically paid by the

agency, so as to create a significant risk that the protester would be

unable to recruit and retain the highly qualified linguists with security

clearances which the agency required so as to conduct sensitive drug

enforcement wiretaps.



   DECISION



   SOS Interpreting, Ltd. protests the Drug Enforcement Administration's

(DEA) award of a contract to McNeil Technologies, Inc., under request for

proposals (RFP) No.A DEA-02-R-0001, for translation, transcription,

interception, and monitoring support services.  SOS challenges the

evaluation of proposals undertaken by DEA after it reopened discussions in

response to our decision, SOS Interpreting, Ltd., B-293026 et al., Jan.

30, 2004, 2004 CPD P __, sustaining SOS's prior protest against an initial

award to McNeil under this solicitation.



   We deny the protest.



   Six offerors, including McNeil and SOS, submitted proposals in response to

the RFP.  SOS's and McNeil's proposals were included in the competitive

range along with two other proposals.  After conducting detailed

discussions, DEA requested final revised proposals.



   Based upon its evaluation of the final revised proposals in the initial

competition, DEA made award to McNeil as the best value on the basis of

its low price.  In this regard, in the initial competition, the technical

evaluation panel (TEP) rated SOS's final revised proposal highly

satisfactory with low risk overall and superior to McNeil's final revised

proposal's rating of satisfactory with moderate risk overall.[1]  The TEP

assigned SOS's and McNeil's final revised proposals identical adjectival

ratings under all of the factors and subfactors, except for the furnishing

qualified personnel and security plan subfactors, and the quality control

plan and transition plan factors, where SOS's proposal was rated

outstanding and McNeil's proposal was rated highly satisfactory, which

differences accounted for SOS's higher rating.  However, the source

selection authority (SSA) did not agree with the TEP's evaluation and

instead determined that McNeil's and SOS's proposals were

"technically/substantially equal."  In her decision selecting McNeil for

award, the SSA modified SOS's overall rating from highly satisfactory with

low risk to satisfactory with a moderate risk in the source selection

document; the SSA specifically lowered SOS's individual ratings under the

furnishing qualified personnel and security plan subfactors and changed

SOS's low risk rating to moderate risk because of performance problems

experienced by SOS under prior similar contracts.  The SSA also modified

McNeil's rating from satisfactory with moderate risk to satisfactory with

low risk.



   When DEA then made award to McNeil, SOS protested to our Office, asserting

that the agency's best-value decision was unsupported and inconsistent

with the stated evaluation approach.  In sustaining SOS's protest, we

noted that while the SSA had discussed the evaluation of SOS's proposal

under the personnel and security plan subfactors and the past performance

factor, and the evaluation of McNeil's proposal under the personnel

subfactor, documenting her rationale for adjusting the adjectival scores

under these subfactors and factor, she did not discuss or acknowledge

SOS's evaluated advantage under the other two technical evaluation

factors, quality control plan and transition plan, where SOS's proposal

was assigned "outstanding" ratings and McNeil's proposal received only

"highly satisfactory" ratings.  Because of SOS's proposal's evaluated

superiority under those factors and the SSA's failure to consider this

evaluated superiority in her source selection decision, we concluded that

the SSA's statement that the proposals were technically substantially

equal was not reasonably supported by the contemporaneous documentation.



   SOS also questioned the propriety of the agency's past performance

evaluation, including the SSA's decision to increase SOS's overall

proposal risk rating to moderate risk because of past performance

problems, including a termination for default.  SOS argued that the agency

had failed to properly take into account efforts made by SOS to address

this problem and had failed to consider McNeil's performance problem under

a prior similar DEA contract.  Based upon our review of the record,

however, we found no basis to question the agency's past performance

evaluation.  We noted in this regard that the record indicated that the

SSA had considered all of the information submitted by the protester

involving its past performance, including SOS's efforts to cure prior

negative performance, in determining that SOS's past performance caused

its proposal to be considered a moderate risk.  As for SOS's argument that

DEA had failed to consider allegedly similar performance problems in

McNeil's past performance, we found that the record indicated that the SSA

was aware of these alleged problems, which had occurred several years ago,

but had concluded that the government contributed to them. 



   We recommended that DEA review the solicitation's evaluation scheme and

amend it to reflect the agency's requirements, reopen discussions with all

offerors whose proposals were in the competitive range, obtain revised

proposals, reevaluate the proposals, and make a new source selection with

a proper price/technical tradeoff decision.



   Second Source Selection



   To implement our recommendation, DEA amended the RFP to make past

performance a technical evaluation factor and to eliminate references to a

past performance risk assessment.  RFP S M.2.  The RFP was also amended to

provide with respect to the cost factor as follows:  "The offeror's

proposed price/cost will be evaluated on the basis of price reasonableness

and cost realism, if necessary.  The Offeror's business proposal will be

evaluated to determine whether the cost/price is realistic in terms of the

effort proposed and the price is fair and reasonable."  RFP SA M.4.[2] 

DEA then requested revised proposals from all offerors in the competitive

range, including SOS and McNeil, and established a new TEP to evaluate the

revised proposals which it had received.  Based upon the agency's

evaluation of the final revised proposals, SOS's and McNeil's proposals

were included in the competitive range, while the other two offerors'

proposals were excluded from it.



   Both SOS and McNeil were then asked to address a set of "clarification"

questions concerning labor rates, compliance with the applicable wage

rate, and compliance with Federal Acquisition Regulation (FAR) S

52.222-43, Fair Labor Standards Act and Service Contract Act-Price

Adjustment.[3]  A number of the questions posed to SOS related to how it

would be able to retain and recruit linguists, given the labor rates it

proposed.  In this regard, DEA questioned whether SOS would be able to

recruit and retain qualified linguists because [DELETED] any of the

linguist positions over the term of the contract and had proposed to pay

"exotic" language linguists (other than Arabic, Fuzhou Chinese, Jamaican

Patois, Mandarin Chinese, and Vietnamese) [DELETED].[4]  Although the

offerors were asked to respond to the clarification questions, they were

advised that changes to their proposals would not be permitted unless they

were notified in a separate response.



   Based upon its evaluation of the final revised proposals under the

reopened competition, DEA determined that McNeil's proposal represented

the overall best value.  The TEP assigned both SOS's and McNeil's revised

proposals overall technical ratings of highly satisfactory.  SOS's

proposal was rated highly satisfactory under all factors and subfactors

except under recruiting and retention, where it received an outstanding

rating, and quality control plan, transition plan and past performance

improvements, where it received satisfactory ratings.  McNeil's proposal

received highly satisfactory ratings under every factor and subfactor,

except recruiting and retention, quality control plan and transition plan,

where it received satisfactory ratings.



   However, while McNeil's proposal was evaluated as low risk, SOS's proposal

was determined to be low to moderate risk.  In this regard, the source

selection decision noted that SOS:  (1) had been terminated for default

within the last 3 years [DELETED]; (2) had received a cure notice on a DEA

contract [DELETED]; and (3) had encountered problems in recruiting and

retaining personnel for a DEA contract [DELETED].  Source Selection

Decision (SSD) at 5-8. 



   According to the SSA, however, her "major concern" was with SOS's

pricing.  DEA Comments, July 19, 2004, Contracting Officer's Statement, at

2.  In this regard, while the total price of SOS's revised proposal

([DELETED]) was lower than that of McNeil's proposal ($40,808,198), DEA in

its cost/price evaluation questioned the realism of DEA's proposed

pricing.  Specifically, DEA determined that SOS's:



   low pricing for some of the exotic languages gave rise to concern

regarding SOS's ability to recruit and retain qualified personnel in spite

of presenting a highly satisfactory plan for recruitment retention.  This

poses undue risk to the Government in whether or not there will be

constant employee turnover and additional cost to the Government in

completing and paying for contractor background investigations.



   Cost/Price Evaluation Analysis, SOS at 1.  Likewise, the SSA stated in her

source selection decision as follows:



   The [SSA] also considers SOS pricing of the majority of the Foreign

Linguists to represent a risk to the Government in that this offeror will

have a difficult time recruiting and retaining highly qualified

individuals to fulfill the agency's requirements at the rates proposed in

the contract. 



   Id. at 8.  Based on the above findings, the SSA determined that McNeil's

proposal represented the best value and made award to the company for the

second time on April 29, 2004.  This protest followed.



   PharmChem, Inc., Ba**291725.3A etA al., July 22, 2003, 2003 CPD P 148 at

3.  Based on our review of the record, including all of the protester's

challenges to the evaluation and source selection, we find the agency's

selection of McNeil as the best value offeror to be unobjectionable.



   Technical Evaluation



   Although SOS challenges several aspects of the technical evaluation, its

protest furnishes no basis for concluding that its proposal warranted a

higher overall technical rating.  For example, SOS challenges its

satisfactory rating for quality control plan on the basis that DEA

improperly attributed two weaknesses to its proposal in this area. 

According to the protester, the agency lacked a reasonable basis for

questioning whether SOS could achieve its proposed acceptable quality

level and for concluding that there was no indication that there would be

corporate oversight of problems identified during inspections.  In

addition, SOS, asserting that the agency's detailed clarification

questions and the offerors' responses thereto in fact amounted to

discussions, argues that if the agency considered these matters to be

weaknesses in its quality control plan, it should have afforded it an

opportunity to address these concerns by including them in the

clarification questions.



   However, as indicated in its technical evaluation rating plan, DEA

assigned highly satisfactory evaluation ratings only where a proposal both

met all minimum requirements and exceeded at least some of the

requirements.  McNeil's proposal, which had no evaluated weaknesses in

this area, likewise received only a satisfactory rating for its quality

control plan.  SOS has not shown that its quality control plan, even

absent these evaluated weaknesses, warranted a higher rating than McNeil's

received.  In these circumstances, we find no basis for concluding that

the agency's actions in this regard prejudiced SOS's competitive position.



   While SOS also challenges the evaluation of its past performance, the

protester raises essentially the same objections as it did in the prior

protest, and we again find that the record provides no basis to question

the agency's evaluation in this regard.  SOS does not dispute that one of

its contracts was terminated for default [DELETED] or that it had received

a cure notice on a DEA contract [DELETED].[5]  While SOS does note that

the TEP did not consider the weakness [DELETED] to be "significant" as to

whether the contractor can adequately perform the required

translation/transcription services, Source Selection Decision at 6, the

protester fails to acknowledge that the TEP viewed SOS's continuing

problems in this regard as a matter of concern and that the panel noted on

the consensus worksheet for the performance improvements subfactor of the

past performance factor a "[l]ack of corporate oversight."  TEP Evaluation

Worksheets, SOS, Performance Improvements.  Further, while SOS asserts

that it has undertaken corrective action since the termination for

default, we find nothing unreasonable in the agency nevertheless

determining that the breach of security leading to the default termination

indicated an increased performance risk with respect to a contract for the

support of sensitive drug enforcement wiretaps.  Likewise, while SOS again

asserts that DEA failed to consider problems in McNeil's past performance,

it has furnished no basis for questioning the agency's determination not

to downgrade McNeil's past performance on account of problems to which the

government had contributed.



   SOS contends that the lower ratings its proposal received in several

areas, such as for the transition plan and security plan, when compared to

the prior evaluation, are evidence that the agency evaluated the proposal

unreasonably.  We disagree.  We have long recognized that different

evaluation panels can reasonably reach different conclusions regarding the

quality of an offeror's proposal, given the subjective judgment

necessarily exercised by evaluators.  Warvel Prods., Inc., B-281051.5,

JulyA 7, 1999, 99-2 CPD P 13 at 12.  Based on our review of the record, we

find no reason to question the agency's evaluation of the relative merits

of the technical proposals.



   Price/Cost Evaluation



   SOS challenges DEA's determination that its pricing was unrealistic and

posed a risk to the government.  According to the protester, it was

improper for the agency to consider cost realism here, where the

solicitation contemplated award of a fixeda**price contract.  In any case,

the protester argues, since it received an outstanding technical rating

for its recruiting and retention plan, and proposed to pay its personnel

at least the [DELETED], there was no basis for questioning its pricing.



   Where, as here, an RFP contemplates the award of a fixed-price contract, a

cost realism analysis generally is not required, absent a solicitation

provision requiring such an analysis.  Federal Acquisition Regulation S

15.404-1(d)(3); ACS State Healthcare, LLC; PharmaCare Gov't Servs., Inc.;

PGBA, LLC; Humana Military Healthcare Servs., Inc., B-292981 et al., Jan.

9, 2004, 2004 CPD P 57 at 16.  Likewise, price realism is not ordinarily a

consideration in fixed-price contracts, since the risk of performing the

contract at the proposed price is borne by the contractor.  However, an

agency may decide to use price realism in the competition for a

fixeda**price contract, not to evaluate price, but to assess the risk of

poor performance in an offeror's approach or to measure an offeror's

understanding of the solicitation's technical requirements.  PHP

Healthcare Corp., Ba**251933, May 13, 1993, 93-1 CPD PA 381 at 5.  The

nature and extent of an agency's price realism analysis are matters within

the agency's discretion, and our review of an agency's price realism

evaluation is limited to determining whether it was reasonable and

consistent with the solicitation's evaluation criteria.  Uniband, Inc.,

Ba**289305, Feb. 8, 2002, 2002 CPD P 51 at 4.



   Here, the RFP required offerors to include in their business proposals "a

cost breakdown disclosing how the burdened labor rate had been developed,"

as well as "every element which constitutes its total price, such as

direct labor, material, overhead, general and administrative expenses,

PROFIT, and other categories such as fringe benefits."  RFP S L.6.2. 

Offerors were specifically required to specify the basic wage rate and

various types of fringe benefits for each labor category.  Further, the

RFP specifically provided that "[t]he offeror's proposed price/cost will

be evaluated on the basis of price reasonableness and cost realism.  The

Offeror's business proposal will be evaluated to determine whether the

cost/price is realistic in terms of the effort proposed."  RFP S M.4. 

Thus, contrary to SOS's interpretation, the RFP provided for evaluation of

the realism of both the offeror's prices to the government, as well as the

direct labor rates upon which that pricing was based.



   We find that the realism analysis was reasonable.  Again, SOS proposed to

pay "exotic" language linguists other than Arabic, Fuzhou Chinese,

Jamaican Patois, Mandarin Chinese, and Vietnamese [DELETED], and the

remaining exotic language linguists not much more ([DELETED]), which led

DEA to conclude that SOS's pricing for exotic language linguists

represented a risk that SOS would have difficulty in recruiting and

retaining highly qualified individuals needed to fulfill the agency's

requirements.  Although SOS maintains that its lower pricing is sufficient

because it is based on paying linguists [DELETED], the record indicates

that SOS's exotic language linguist prices are significantly lower than

the historical prices charged to the agency (as well as McNeil's prices),

including those charged to the agency under a blanket purchase agreement

under which SOS (among other companies) had been providing services.  For

example, while SOS's price per hour to the agency for Arabic linguists was

[DELETED] (based on paying linguists a base pay rate of [DELETED]),

McNeil's price to the agency was [DELETED] (based on a base pay rate of

([DELETED]), while the agency has previously paid under other contracts

for these services between [DELETED] and [DELETED].  Likewise, while SOS's

prices per hour to the agency for Mandarin and Cantonese Chinese were

[DELETED] and [DELETED] respectively (based on base pay rates of [DELETED]

and [DELETED]), McNeil's price for both was [DELETED] (based on a base pay

rate of [DELETED]), and the agency has previously paid between [DELETED]

and [DELETED].[6]  Similarly, while SOS will charge the agency only

[DELETED] per hour for Jamaican Patois linguists (based on a base pay rate

of [DELETED]), McNeil's price was [DELETED] (based on a base pay rate of

[DELETED]), and the agency has previously paid [DELETED].  Further, the

agency reports that an increased demand for linguists by the Department of

Homeland Security, National Security Agency and Federal Bureau of

Investigation, and the hostilities in Iraq, have placed a premium on the

services of qualified linguists who, like the linguists required by the

agency, have a security clearance.  In these circumstances, we find no

basis to question DEA's determination that SOS's prices, which were

significantly lower than the prices historically paid by the agency,

indicated a significant risk that SOS would be unable to recruit and

retain the required highly qualified linguists.



   The protest is denied.



   Anthony H. Gamboa



   General Counsel



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



   [1] The possible adjectival ratings were outstanding, highly satisfactory,

satisfactory, marginal, and unsatisfactory.  The possible risk ratings

were low, moderate, and high.



   [2] In addition, the RFP was amended to provide that the technical factors

were "significantly" more important than price, rather than

"substantially" more important as provided for in the initial

competition.  RFP S M.2.



   [3] FAR S 52.222-43, which was incorporated by reference into the RFP,

provides for equitable adjustments to the contract price to account for

new Department of Labor wage determinations, but requires the contractor

to warrant that the contract prices do not include any allowance for any

contingency to cover increased costs for which adjustment is provided

under the clause.



   [4] The majority of the work under the contract required linguists fluent

in Spanish.  The record indicates that DEA considered the languages

required by the contract other than Spanish, such as those cited above, to

be exotic.



   [5] Indeed, SOS concedes that a [DELETED] issue had also arisen with

respect to a contract with DEA [DELETED].  SOS Comments, July 8, 2004, at

16.



   [6] Although for Spanish linguistsa**a**the language for which DEA had the

greatest requirement--SOS will charge the agency more per hour than McNeil

([DELETED] vs. [DELETED]), McNeil's base pay rate ([DELETED]) to its

Spanish linguists was higher than SOS's ([DELETED]).