TITLE: Bevilacqua Research Corporation, B-293051, January 12, 2004
BNUMBER: B-293051
DATE: January 12, 2004
**********************************************************************
Bevilacqua Research Corporation, B-293051, January 12, 2004
Decision
Matter of: Bevilacqua Research Corporation
File: B-293051
Date: January 12, 2004
Andy Bevilacqua for the protester.
Jesse W. Nunn for Future Research Corporation, an intervenor.
Steven W. Feldman, Esq., Department of the Army, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest is denied where the agency*s evaluation of the protester*s
proposal was reasonable and consistent with the terms of the solicitation,
and where the solicitation provided that the technical evaluation factors
were significantly more important than price, the agency reasonably
selected for award a firm submitting a higher technically rated, higher
priced proposal.
DECISION
Bevilacqua Research Corporation (BRC) protests the award of a contract to
Future Research Corporation (FRC) under request for proposals (RFP)
No. DACA87‑03-R-0008, issued by the Army Corps of Engineers for
implementation of its next generation project management information
system, known as the *P2 system.* BRC, which submitted a significantly
lower priced proposal, protests the evaluation of its proposal and the
agency*s decision to award to FRC, an offeror submitting a higher
technically rated, higher priced proposal.
We deny the protest
BACKGROUND
The RFP, issued on March 14, 2003, described the P2 system as a group of
commercial, off-the-shelf software application products (specifically,
Oracle applications and Primavera P3e and Primavision applications) that
will be modified as necessary to accommodate the Corps*s newly
standardized business process and to interface with the Corps*s financial
management and other legacy systems; the P2 system will be the Corps*s
sole project management business process automated information system and
will support 20,000 users in the agency*s core mission areas (i.e.,
military programs, civil works, and environmental projects). Under the
terms of the RFP, the contract will be performed at the Corps*s Huntsville
Engineering and Support Center in Huntsville, Alabama.
The RFP contemplated the award of an
indefinite-delivery/indefinite-quantity contract (fixed-price and
time-and-materials) for the base period and four 1-year option
periods.[2] As relevant here, at the end of the pricing schedule and in
clause 4.0, captioned *Minimum Ordering Obligation,* the RFP included the
estimated monetary value for each period of contract performance and the
total estimated contract value, i.e., the government estimate, which was
$11,258,750. (In the administrative report, the agency explains that the
government estimate was calculated in large part using the most current
(2001) Bureau of Labor Statistics (BLS) national occupational employment
and wage estimates for labor categories that basically corresponded to the
labor categories in the RFP. The BLS estimates reflected non-loaded,
hourly rates paid to employees, to which the agency added amounts
corresponding to general and administrative expenses, overhead, and fringe
benefits; the agency also added a 3-percent inflation factor to the BLS
estimates for each year past 2001. Contracting Officer*s Statement, Nov.
7, 2003, at 21-22.) The RFP also included labor category descriptions
that listed desired education/general experience qualifications for the
particular labor category position. For example, the RFP*s labor category
description for the program manager position stated as follows:
Desired Education/General Experience: Should have a Bachelor*s degree in
Computer Science, Engineering, Business or related field. Should have a
minimum of 12 years in software/system development/implementation or
software/system maintenance.
Functional Responsibility: Provides day-to-day management of overall
contract support operations, possibly involving multiple projects and
groups of personnel at multiple locations. Organizes, directs and
coordinates planning and production of all contract support activities.
Demonstrates writing and oral communications skills. Establishes and
alters (as necessary) corporate management structure to direct effective
contract support activities. Negotiates and makes binding decisions for
the company.
RFP S: C, Labor Category Descriptions.
The RFP provided that the award would be made to the offeror whose
proposal was determined to represent the best value to the government,
considering technical evaluation factors and price. The RFP stated that
the technical evaluation factors were significantly more important than
price. The technical evaluation factors, in order of importance, were as
follows: (1) past performance--most important; (2) personnel--somewhat
less important than past performance, but significantly more important
than project management or quality management; (3) project
management--equal to quality management; and (4) quality management--equal
to project management.[3]
As relevant here, for past performance, the RFP required offerors to
identify up to five contracts performed within the past 3 years for work
similar to the current procurement. The RFP stated that in evaluating an
offeror*s past performance, the agency would focus on information
demonstrating the quality of an offeror*s performance relative to the size
and complexity of the current procurement. Among other things, the RFP
required offerors to provide the awarded cost/price for each contract
identified. The RFP advised that if an offeror lacked relevant past
performance, the offeror would not be evaluated favorably or unfavorably,
i.e., a neutral past performance rating would be assigned. RFP S: L,
P: 2.1, Tab A--Past Performance. For personnel, the RFP stated that
individuals proposed for particular labor category positions should meet
the qualifications (i.e., desired education/general experience) as set
forth in the RFP*s section C labor category descriptions. RFP S: L, P:
2.1, Tab B--Personnel.
With respect to price, the RFP stated that the agency would evaluate an
offeror*s proposed price for reasonableness and realism. The RFP
explained that a price realism review would be performed to determine if
an offeror*s proposed price was realistic for the work to be performed; if
the offeror*s proposal reflected a clear understanding by the firm of the
RFP requirements; and if the offeror*s proposal was priced consistent with
the various elements of the firm*s technical proposal. The RFP also
included the clause at FAR S: 52.222-46, which explained that the agency
would evaluate an offeror*s professional employee compensation plan
(salaries and fringe benefits) to ensure that it reflected a sound
management approach and an understanding of the RFP requirements,
including an assessment of the offeror*s ability to provide uninterrupted,
high-quality work and the plan*s effect in terms of the offeror*s ability
to recruit and retain qualified personnel. The RFP emphasized that the
agency was concerned with the quality and stability of the work force to
be employed under the contract; accordingly, the RFP advised that
professional compensation that was unrealistically low could be viewed as
impairing the offeror*s ability to attract and retain competent
professional service employees and as evidencing the offeror*s failure to
comprehend the complexity of the requirements.
Finally, the RFP stated that the agency intended to award the contract
without conducting discussions. In this regard, the RFP instructed that
an offeror*s initial proposal should contain the firm*s best terms from a
technical and price standpoint and that statements merely repeating,
paraphrasing, or promising general performance would not be considered
sufficient evidence of the offeror*s ability to meet the RFP requirements.
Twenty-eight firms, including BRC and FRC, submitted technical and price
proposals by the amended closing date of April 29. (BRC, FRC, and two
other firms were based in Huntsville.) As relevant here, the final
consensus ratings assigned to the proposals of BRC and FRC were as
follows:
+-----------------------------------------------------------------------+
| |BRC |FRC |
|-------------------------+-----------------------+---------------------|
|Past Performance |Neutral |Excellent |
|-------------------------+-----------------------+---------------------|
|Personnel |Marginal |Excellent |
|-------------------------+-----------------------+---------------------|
|Project Management |Very Good |Excellent |
|-------------------------+-----------------------+---------------------|
|Quality Management |Very Good |Excellent |
|-------------------------+-----------------------+---------------------|
|OVERALL RATING |ACCEPTABLE |EXCELLENT |
+-----------------------------------------------------------------------+
Agency Report (AR), Tab 10, Consensus Evaluation Summary, at 5.
As relevant here,[4] in assigning a neutral rating to BRC*s proposal for
past performance, the agency determined that BRC had no past performance
similar in scope and complexity to the requirements of the RFP. In
assigning a marginal rating to BRC*s proposal for personnel, the agency
concluded that BRC*s proposed program manager did not satisfy the desired
general experience qualifications for the position, i.e., software/system
development/implementation or software/system maintenance, and that
overall, BRC*s proposed personnel did not have experience with a system
similar in complexity to the Corps*s P2 system. Id. at 8.
With respect to price, BRC*s price was approximately 30 percent below the
government estimate, while FRC*s price was approximately 7 percent below
the government estimate. BRC*s price was approximately 25 percent less
than FRC*s price. (The prices of the other two Huntsville firms
submitting proposals (one was rated overall excellent and the other was
rated overall marginal) were approximately 3 to 4 percent higher than
FRC*s price and approximately 3 to 4 percent below the government
estimate. BRC*s price was approximately 27 percent less than the prices
of these two other Huntsville firms.) AR, Tab 10, Price Evaluation
Report, at 5. The agency determined, based on a comparison of BRC*s price
to the government estimate and to the prices proposed by the other
offerors, that BRC*s price was unrealistically low and posed a risk to
successful contract performance because of the likelihood of high
personnel turnover that would affect BRC*s ability to recruit and retain
qualified personnel. Id. at 7-9.
The contracting officer, who served as the source selection authority,
determined that FRC*s higher technically rated, higher priced proposal
represented the best value to the government. The contracting officer
made her selection decision after considering BRC*s significantly lower
price versus FRC*s higher technical rating. The contracting officer
concluded that BRC*s significantly lower price did not reflect a clear
understanding by the firm of the RFP requirements. The contracting
officer concluded that the advantages associated with FRC*s
proposal--solid past performance on similar large, complex projects,
highly qualified personnel with, among other things, extensive software
and system development experience, very strong and extensive project
management experience (software development, hotline support, and overall
maintenance process), and clearly defined quality performance measurement
indicators (hotline and testing support)--justified the payment of a price
premium to FRC. AR, Tab 11, Source Selection Decision, at
2-3.[5]
ISSUES AND ANALYSIS
Past Performance
BRC challenges the agency*s assignment of a neutral rating to its proposal
for past performance because the firm did not demonstrate past performance
similar in size and complexity to the RFP requirements. In its proposal,
BRC described five contracts (involving, for example, configuring and
maintaining commercial software applications and providing user support)
performed within the past 3 years for the federal government, which were
valued, according to BRC, at $600,000, $80,000, $180,999, $2.5 million
(a specific task order), and $446,107.
In evaluating BRC*s past performance, we conclude that consistent with the
terms of the RFP, the agency reasonably considered the value of BRC*s
prior contracts in determining whether these contracts were similar in
size and complexity to the requirements of this RFP. In fact, we have
recognized that dollar value is an objective measure of the size (or
scale) and complexity of referenced contracts. American Artisan Prods.,
Inc., B‑292559, B-292559.2, Oct. 7, 2003, 2003 CPD P: 176 at 6-7;
Knightsbridge Constr. Corp., B-291475.2, Jan. 10, 2003, 2003 CPD P: 5 at
3. Here, in evaluating past performance, the RFP required offerors to
identify up to five contracts performed within the past 3 years for work
similar in size and complexity to the requirements of the RFP. Among
other things, the RFP required offerors to provide the awarded cost/price
for each identified contract. In our view, it is clear from the terms of
the RFP that the dollar values of an offeror*s prior contracts and their
comparability to the estimated value of the current procurement reasonably
could be evaluated.
As stated above, the RFP specifically advised that the total estimated
contract value for this procurement was $11,258,750. Since the value of
each of BRC*s prior contracts, as shown above, was significantly less than
the estimated value of the current procurement, we believe the agency
reasonably determined that BRC failed to demonstrate past performance
under contracts similar in size and complexity to the requirements of the
RFP. Accordingly, we have no basis to question the reasonableness of the
agency*s assignment of a neutral rating to BRC*s proposal for the past
performance evaluation factor which shows, consistent with the terms of
the RFP, that the agency did not penalize BRC for failing to demonstrate
past performance similar to that required by the RFP. See FAR
S: 15.305(a)(2)(iv).[6]
Personnel
BRC next challenges the agency*s assignment of a marginal rating to the
firm*s proposal for the personnel evaluation factor. More specifically,
BRC contends that the agency improperly treated the RFP*s personnel
qualifications in education and general experience as if they were
mandatory, not simply desired, qualifications, and, as a result,
improperly downgraded its proposal for the personnel evaluation factor.
For example, BRC complains that the agency improperly downgraded its
proposal because its proposed program manager failed to meet the RFP*s
desired general experience qualifications, as set forth above. We
disagree.
As explained above, the RFP contained labor category descriptions that
included desired education/general experience qualifications that an
individual proposed for a particular position should have. While we agree
that the RFP did not require, or mandate, that the proposed individual
meet any of the desired qualifications, we do not agree with BRC*s
apparent view that an offeror, like itself, was free to essentially
disregard these desired qualifications without there being any evaluation
consequence. With respect to the program manager position, the RFP stated
that the individual proposed by an offeror for this position should have
experience with software/system development/implementation or
software/system maintenance. This RFP language certainly indicated that
the agency was seeking an individual with the stated qualifications and we
think the agency reasonably could downgrade an offeror, like BRC, whose
proposed program manager did not meet the desired qualifications in
material ways.
In any event, in this case, whether the RFP*s stated general experience
qualifications are characterized as desired or mandatory, the record shows
that BRC*s proposed program manager (a former Corps employee who, since
March 2003, has been employed as a consultant/program manager with BRC)
failed to demonstrate any experience whatsoever with software/system
development/implementation or software/system maintenance. More
specifically, the detailed resume submitted for BRC*s proposed program
manager shows that this individual has a bachelor*s degree (civil
engineering) and a master*s degree (engineering) and over 20 years of
management experience at the Corps*s Huntsville Engineering and Support
Center. This individual described, in reverse chronological order, three
positions he previously held with the Corps. First, for a 10-year period
from 1993 to 2003, this individual held the position of Chief of Design
and Chief of Civil-Structures Division, Engineering Directorate, a
200-person engineering element at the Corps*s Huntsville facility. In
this position, this individual was responsible for technical adequacy and
quality of all in-house and contract design for Army and Defense
Department facilities managed by the Corps*s Huntsville facility,
including, for example, programs involving chemical demilitarization,
missile defense, army range design, and ordnance and explosives; he also
served on numerous advisory groups related to chemical weapons, blast
effects, and explosive safety. Second, for a 5-year period from 1988 to
1993, this individual held the position of Chief of Structures Branch,
Civil-Structures Division, at the Corps*s Huntsville facility. In this
position, this individual was responsible for, among other things, all
structural design, both in‑house and contract, and he developed and
maintained specialty structural engineering expertise in nuclear and
conventional weapons effects, explosive safety, design of hardened
structures, missile defense, and chemical demilitarization. Finally, for
a 5-year period from 1981 to 1986, this individual held the position of
lead structural engineer for the Federal Emergency Management Agency Key
Worker Nuclear Shelter Program at the Corps*s Huntsville facility. In
this position, among other things, this individual jointly led the effort
to develop new structural technologies to reduce the cost of shelters used
to resist nuclear weapons. BRC*s Technical Proposal, Resume of BRC*s
Proposed Program Manager, at 24-26.
While there is no dispute that the individual proposed by BRC for the
program manager position had significant experience with the Corps*s
engineering programs, it is clear from this individual*s resume that he
did not describe any experience with software/system
development/implementation or software/system maintenance, which reflects
the general experience qualifications stated in the RFP. Moreover,
although the RFP does not designate the program manager as a key personnel
position, the RFP nevertheless describes the critical role the program
manager will play in terms of providing overall daily contract management
support and of being responsible for negotiating and making binding
management and contractual decisions on behalf of the contractor.[7] On
this record, we have no basis to question the reasonableness of the
agency*s evaluation of BRC*s proposed program manager.[8]
Price
BRC, whose price was based on wages it previously had paid to information
technology professionals in the Huntsville area, challenges the agency*s
determination that its price was unreasonably low in comparison to the
government estimate, which was based on higher BLS national occupational
employment and wage estimates, as earlier described. BRC, which does not
dispute that a government estimate may be used to assess the
reasonableness of an offeror*s proposed price, nevertheless contends that
the agency *clearly erred in the first place by using . . . national
average labor rates instead of Huntsville rates as the basis of [the
government estimate]. The use of national labor rates as the basis of
[the government estimate] was clearly misleading* where the RFP
specifically stated that performance would be in Huntsville. Protester*s
Comments, Nov. 24, 2003, at 5. BRC maintains that if the government
estimate had been based on lower Huntsville rates, BRC*s rates would have
been determined reasonable and in line with wages paid to information
technology professionals in the Huntsville area where the contract will be
performed.
The underlying premise for BRC*s post-award argument is that the
government estimate, as contained in the RFP, was materially flawed and
overstated. Because the government estimate was set forth in the RFP,
however, this argument involves an alleged solicitation impropriety
apparent from the face of the RFP that was not timely raised prior to the
closing time for receipt of proposals. 4 C.F.R. S: 21.2(a)(1). In order
to make this argument, it was not necessary for BRC to know the basis, or
source, for the agency*s calculation of its government estimate, i.e., BLS
numbers. Rather, in light of its own historical experience, if BRC
believed that the government estimate, as contained in the RFP for work to
be performed in Huntsville, was unreasonably high, BRC had to protest this
matter in a timely manner prior to award.[9]
In any event, assuming the validity of BRC*s argument that the appropriate
reference should have been wages paid in the Huntsville area, we point
out, as described above, that BRC*s proposed price was substantially lower
(by approximately 25 to 27 percent) than the prices proposed by the three
other Huntsville-based offerors, including FRC. We conclude, based on
this record, that BRC has not provided any meaningful basis for our Office
to question the reasonableness of the agency*s conclusion that BRC*s price
was unreasonably low not only with reference to the government estimate,
but also in comparison to the prices proposed by the other offerors,
including competitors from the same geographic area as BRC which
presumably would be recruiting from the same local pool of information
technology professionals.
Tradeoff
Finally, BRC believes that as a lower priced, technically acceptable
offeror, it should have received the award, contending that the price
premium associated with FRC*s higher technically rated proposal was not
justified.
In a negotiated procurement, where the solicitation does not provide for
award on the basis of the lowest priced, technically acceptable proposal,
an agency has the discretion to make an award to an offeror with a higher
technical rating and a higher price where it reasonably determines that
the price premium is justified and the result is consistent with the
evaluation criteria. ACC Constr. Co., Inc., B-288934, Nov. 21, 2001, 2001
CPD P: 190 at 5-6.
Here, the RFP stated that the technical evaluation factors were
significantly more important than price in determining the proposal
representing the best value to the government. Where BRC does not
challenge the agency*s evaluation of FRC*s technical proposal and where
the record shows that the agency reasonably evaluated BRC*s proposal as
overall acceptable,[10] we have no basis to question the agency*s
decision, consistent with the terms of the RFP, to pay a price premium to
FRC in order to obtain a contractor which, among other things, had a
strong record of past performance on similar large, complex projects,
proposed highly qualified personnel, demonstrated very strong and
extensive project management experience, and proposed clearly defined
quality performance measurement indicators.
The protest is denied.[11]
Anthony H. Gamboa
General Counsel
------------------------
[1] This decision addresses the primary issues presented in BRC*s
protest. BRC raised a number of collateral issues that we have considered
and find to be without merit; these collateral issues do not warrant
detailed analysis or discussion.
[2] The RFP included the clause at Federal Acquisition Regulation (FAR) S:
52.219-18, which limited the competition to small business concerns
certified by the Small Business Administration (SBA) for participation in
the SBA*s 8(a) program.
[3] According to the source selection plan, for each of the technical
evaluation factors, proposals could receive one of the following
adjectival ratings: excellent, very good, acceptable, marginal, or
unacceptable.
[4] BRC does not challenge the evaluation of its proposal in the areas of
project management and quality management.
[5] BRC does not challenge the agency*s conclusions concerning FRC*s
proposal in these technical areas.
[6] Apart from contract value, even if BRC*s performance of the referenced
five contracts may have included some elements in common with the
requirements of this RFP, for example, configuring and maintaining
commercial software applications and providing user support, the agency
reasonably could determine that having elements in common was not
sufficient to demonstrate past performance similar to the requirements of
this RFP in terms of size and complexity. To the extent BRC now argues,
after award, that the RFP requirement to demonstrate similar past
performance was somehow ambiguous and/or too restrictive in light of the
fact that the competitors were small 8(a), as opposed to large,
businesses, this argument constitutes an alleged solicitation impropriety
apparent from the face of the RFP that was not timely raised by the
closing time for receipt of proposals. Bid Protest Regulations, 4 C.F.R.
S: 21.2(a)(1) (2003).
[7] In the experience summary preceding the detailed resume for BRC*s
proposed program manager, there is a statement that this individual *has
over 22 years of management experience in Corps of Engineers programs,
which included many computer and software related projects . . . [and] is
knowledgeable of Corps of Engineers rules and regulations, culture,
management and people and is intimately familiar with the history of the
P2 program. [He] is [a] valuable asset to the P2 Project team as a
subject matter expert providing functional, institutional, and [program
management business processes] knowledge.* BRC*s Technical Proposal,
Resume of BRC*s Proposed Program Manager, at 25. As discussed above,
notwithstanding these general statements, BRC*s proposed program manager*s
detailed resume does not identify experience with the P2 system or make
reference to software-related experience.
[8] With respect to BRC*s other proposed personnel, the agency concluded
that they lacked experience working with a system of the same breadth as
the Corps*s P2 system. Other than disagreeing with the Corps*s
assessment, BRC does not meaningfully rebut the Corps*s position in this
regard. Mere disagreement is not sufficient to render the evaluation
unreasonable. Chant Eng*g Co., Inc., B-292140, May 29, 2003, 2003 CPD P:
110 at 4 n.6.
[9] In its price proposal, BRC specifically acknowledged that the *[t]otal
cost as proposed by BRC is lower than the Government estimated value.*
BRC*s Price Proposal at 10.
[10] Contrary to BRC*s position, BRC*s proposal was not rejected as
unacceptable and the firm was not determined nonresponsible. Accordingly,
there was no basis for the agency to refer any matter to the SBA for
certificate of competency review. See, e.g., Global Bus. and Legal
Servs., B-290381.2, Dec. 26, 2002, 2002 CPD P: 222 at 4.
[11] Prior to this decision, GAO dismissed BRC*s supplemental protest
(docketed as B‑293051.2 and filed in the same submission as BRC*s
comments on the initial administrative report) because BRC failed to file
comments in response to the agency*s supplemental administrative report
and in accordance with the accelerated schedule established by GAO and
conveyed in writing to all parties, including BRC. 4 C.F.R. S:S: 21.3
(i), 21.10(e). GAO dismissed BRC*s supplemental protest 6 days after the
deadline established for filing supplemental comments.