TITLE:  Computer & Hi-Tech Management, Inc., B-293235.4, March 2, 2004
BNUMBER:  B-293235.4
DATE:  March 2, 2004
**********************************************************************
Computer & Hi-Tech Management, Inc., B-293235.4, March 2, 2004

   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:   Computer & Hi-Tech Management, Inc.
    
File:            B-293235.4
    
Date:              March 2, 2004
    
Edward J. Tolchin, Esq., Fettmann, Tolchin & Majors, for the protester.
Claude P. Goddard, Jr., Esq., and Mary K. Holohan, Esq., Wickwire Gavin,
for User Technology Associates, Inc., an intervenor.
Mark Langstein, Esq., Terry Hart Lee, Esq., and Lauren Kalish, Esq.,
Department of Commerce, for the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Protest of exclusion of protester*s proposal from the competitive
range is denied where the agency*s evaluation was conducted in accordance
with announced evaluation criteria and the record supports the evaluators*
conclusions.
    
2.  Where solicitation advised prospective offerors that the competitive
range might be limited for purposes of efficiency, agency*s determination
in this regard is unobjectionable where protester fails to show the
determination was unreasonable. 
DECISION
    
Computer & Hi-Tech Management, Inc. (CHM) protests the exclusion of its
proposal from the competitive range under request for proposals (RFP) No.
CM1301-03-RP-0019, a total small business set-aside, issued by the
Department of Commerce (DOC), for information technology (IT) services.
CHM contends that exclusion of its proposal was based on the agency*s
improper evaluation.
    

   We deny the protest.
    
This procurement is a follow-on to an earlier procurement, known as the
Commerce Information Technology Solutions (COMMITS) program.  The current
procurement, referred to as the Commerce Information Technology Solutions
Next Generation (COMMITS NexGen) program, will create a pool of small
business firms certified under multiple North American Industrial
Classification System (NAICS) codes to meet the demands of federal
agencies for IT solutions.  RFP amend. 6, S: B.1 at 2. 
The COMMITS NexGen solicitation will use a three-tier process for
submission of proposals as well as for task order competition among the
ultimate contract awardees.  The tiers are defined by a firm*s annual
level of revenue and the associated NAICS code under which they
qualified.  RFP amend. 3, S: C.2 at 6.
    
On August 18, 2003, the agency issued the solicitation for this
procurement, which contemplates the award of multiple indefinite-delivery,
indefinite-quantity task order contracts with a 5-year ordering period. 
RFP amend. 6, S: B.3 at 2.  As amended, the RFP provided that the
procurement would be conducted in three phases and may encompass several
competitive range determinations in accordance with Federal Acquisition
Regulation (FAR) S: 15.306(c)(2).[1]  RFP amend. 6, Cover Letter at 1. 
Phase I is a down-select process in which DOC intends to select the
offerors that will proceed to the next phase of the competition.  In Phase
II, qualified offerors will submit a more detailed technical and price
proposal in accordance with the Phase II solicitation instructions.  Under
Phase III (which is optional) offerors would be invited to make oral
presentations.  RFP amend. 5, S: L.11.1 at 64-65.  This protest concerns
the Phase I competition for Tier III offerors only. [2]
    
As relevant here, the RFP Phase I proposal instructions specified as
follows: 
    
Offerors shall respond to the request for information identified as an
attachment to the solicitation cover letter.  This will include responses
to the pertinent questions for the offeror [referred to in the record as
the *down-select questions*] as well as past performance information and
pricing information.  The government will evaluate responses to questions
as they relate to the offeror*s overall experience and quality of services
provided and pricing information.  The criteria used will include the
offeror[*]s technical capabilities, experience in providing similar work,
and quality of completed work as determined by past performance
information.  Offerors shall also submit pricing information in accordance
with Section L.11.2.1.2.
RFP amend. 6, S: L.11.2.1 at 65.
    
Under price, the RFP required offerors to complete a pricing matrix
included as an attachment to the solicitation and provide rates for
designated standard labor categories on both an hourly and annual basis. 
The RFP directed offerors to assume that the work would be performed at a
Washington, DC location and reflect government-site labor rates, and were
instructed to use 1,800 annual hours for purposes of calculating the total
price over a 5-year period.  RFP attach. J-6, Pricing Matrix; RFP amend.
6, S: L.11.2.1.2 at 65a.  The RFP advised that the purpose of the pricing
matrix was to allow the agency to compare pricing among all offerors and
further advised in section L.11.2.1.2 as follows:
    
Prices should be tied into an existing contract arrangement such as a
[General Services Administration] Schedule contract or another
[government-wide acquisition contract].  Separately identify the specific
contract vehicle where the prices are derived from including the
applicable contract number.  All proposed labor rates must have been
negotiated on a prior procurement within a year of the response to this
solicitation.[3]
RFP amend. 6, S: L.11.2.1.2 at 65a.
    
Section M of the RFP provided that offerors* responses to the down-select
questions would be evaluated under the following factors:  quality;
experience/technical capability; and price.  RFP amend. 6, S: M.4 at 74. 
The RFP stated that the quality and experience/technical capability
factors were of equal importance and each was more important than price. 
When combined, the non-price factors were significantly more important
than price.[4]  Id.  Under the quality evaluation factor, the RFP also
stated that an offeror would be evaluated on the quality of the service
provided, that is, its past performance.  For the experience/technical
capability factor, the agency would evaluate the offeror*s overall
experience with similar type of work.  With regard to
    
the price evaluation, section M stated:
    
Price proposals will be evaluated for realism and reasonableness. 
Government-site rates for work in the Washington, DC area will be examined
to determine if they deviate above or below what is expected.  If prices
are excessively low or unrealistically high such information will indicate
a lack of understanding of the requirements.  A designated sample of rates
will also be compared against those of other offerors to determine if they
are reasonable.
RFP amend. 6, S: M.4.3 at 74.
    
The solicitation required submission of proposals by August 26, 2003.  By
that date, the agency received [DELETED] proposals from Tier III firms,
including CHM.  CHM currently has a COMMITS contract and has performed
task order work for various agencies, including DOC.  Contracting
Officer*s Statement at 5.  In evaluating offerors* submissions, the
technical evaluation panel (TEP) used a color-coded rating system to
evaluate the offerors* responses to the down-select questions and the
pricing information.[5]  The results of the evaluation of proposals were
summarized by the chairman of the TEP in a detailed memorandum to the
contracting officer.[6]  AR exh. 15, TEP Evaluation Memorandum.  In that
report, the TEP noted, among other things, that offerors whose proposals
were assigned an overall blue rating demonstrated their potential to
*deliver top quality IT services and solutions in a performance based
environment.*  Offerors whose proposals were rated green overall were
found to have *specific areas where they excelled* but the TEP noted that
these offerors did not provide *an overwhelming clearly comprehensive
response* for each of the down-select questions.  Id. at 7-8.  The TEP
recommended that only those offerors whose proposals received an overall
blue rating should proceed to Phase II.
    
The price evaluation team (PET) reviewed the offerors* pricing within
individual tiers and found that all offered prices were based upon rates
already established through existing contracts and the PET determined that
all offerors* prices were fair and reasonable.  The PET then performed an
independent price analysis by developing a hypothetical sample task order
and assigning hours for each labor category.  Within individual tiers, an
average price for the sample task order was developed and after
calculating each offeror*s proposed cost using the pricing proposal rate
matrix, a total price was assigned to each offeror based on projected
rates.  Each offeror then received a color rating after its price was
evaluated.  An offeror whose proposed prices were [DELETED] percent or
more below the average price was considered to be very favorable and its
proposal received a blue rating.  Those whose prices were plus or minus
[DELETED] percent of the average were evaluated as favorable and their
proposals were assigned a green rating.  Contracting Officer*s Statement
at 12-13; AR exhs. 13a-13q, Tier III Price Evaluations; AR exh. 25, CHM
Debriefing Materials, at 23-24.  The average Tier III price was [DELETED];
since CHM*s evaluated price of [DELETED] was more than [DELETED] percent
above the average, its price proposal was assigned a green rating.  AR
exh. 13(c), CHM Price Evaluation; AR exh. 25, CHM Debriefing Materials at
25.
    
In order to determine which proposals should be included in the
competitive range, the contracting officer reviewed the technical and
price evaluation results and determined that the competitive range would
be limited to the [DELETED] proposals assigned an overall blue rating.  AR
exh. 14, Final Evaluation Report.  That rating took into account the
ratings for the technical factor (which, in turn, reflected the ratings
for the offerors* responses to the 10 down-select questions); past
performance (for which CHM and the [DELETED] competitive-range offerors
all received blue ratings); and price.
    
The agency reports the following with regard to the competitive range
determination:
    
This determination was made based on the fact that those offerors were
substantially stronger in areas where the government believed its
requirements would be met, as well as an adequate amount of competition
within each tier.  If offerors that had received an overall rating of
*green* had been included in the competitive range, the [agency] would
have had to evaluate over [DELETED] proposals, effectively precluding fair
and timely evaluations.  If those with an overall *yellow* rating had been
included, effective and timely evaluations would have been impossible.
Contracting Officer*s Statement at 7.  The remaining offerors, including
CHM, were informed of their exclusion and after requesting and receiving a
debriefing from the agency on November 24, CHM filed this protest with our
Office.
    
CHM protests that its proposal was improperly excluded from the
competitive range on the basis of an improper evaluation.  More
specifically, CHM maintains that its proposal should have been assigned a
rating of blue rather than green under down-select question Nos. 1, 9, and
10, arguing that its responses to these questions were misevaluated.  CHM
also contends that the agency*s evaluation of price proposals was based on
an undisclosed price evaluation plan and that CHM and other offerors were
impermissibly excluded from the competitive range for purposes of
efficiency.  Protest at 3-5, Protester*s Comments at 8.
    
FAR S: 15.306(c)(1) requires the contracting officer to establish a
competitive range comprised of all the most highly rated proposals based
on evaluation of the information submitted in each proposal against the
stated evaluation criteria unless the competitive range is further reduced
for purposes of efficiency.  That provision permits the contracting
officer to limit the number of proposals in the competitive range to the
greatest number that will permit an efficient competition provided that
the solicitation notifies offerors that this may be done.  FAR S:
15.306(c)(2); RFP
S: L.2(f)(4) at 59.  In reviewing protests of competitive range
determinations, we will not reevaluate proposals; rather, we will review
the record to ensure that the evaluation and competitive range
determination were reasonable and consistent with the terms of the
solicitation.  Matrix Gen., Inc., B-282192, June 10, 1999,
99-1 CPD P: 108 at 3.  A protester*s disagreement with the agency does not
render the evaluation unreasonable.  Id.  As explained in greater detail
below, CHM*s protest allegations regarding the evaluation of its proposal
responses to the cited questions constitute mere disagreement with the
agency*s evaluation judgments and fail to demonstrate that the evaluation
was unreasonable.
    
The first instance where CHM alleges its proposal should have received a
higher rating relates to the evaluation of CHM*s response to down-select
question No. 1.  Under this question, the offeror was required to provide
a summary of its experience in moving software design projects through the
entire system life cycle, highlighting the production to operations and
maintenance phases, and to describe the challenges and lessons learned
from its experience in providing design integrity for projects where
migration of data from legacy systems was involved.  RFP amend. 5,
Question No. 1.  The TEP evaluation noted, among other things, that CHM*s
response did not *specifically describe nor provide adequate detail on
challenges and lessons learned from experience providing design integrity
where migration of data from legacy systems was involved.*  See, e.g., AR
exh. 11c, Individual Evaluator*s Ratings at 13; exh. 25, CHM Debriefing
Materials at 9.  While this down-select question required CHM to describe
the challenges and lessons learned, CHM*s proposal response used vague
descriptions such as the firm *utilizes best practices* and *lessons
learned* without providing further information which identified these best
practices and lessons learned.  Because of this, the agency rated the
protester*s response to this question as green.  Although the protester
disagrees with this evaluation and insists that its proposal described the
challenges and lessons learned in *great and clear detail,* Protester*s
Comments at 7, we view the agency*s evaluation of the protester*s proposal
as reasonable.
    
Down-select question No. 9 required the offeror to provide an overview of
its experience in the review of management procedures and controls and an
organization*s operational compliance with published policy or guidance
documents, and to provide specific examples.  RFP amend. 5, Question No.
9.  The TEP rated CHM*s response to this question green rather than blue
because, although CHM*s response provided a detailed description of the
process for conducting reviews, it failed to provide adequate detail
regarding CHM*s actual experiences in reviewing management procedures and
controls.
    
Specifically, CHM*s response to question No. 9 contains a single example
based on one contract.  AR exh. 10c, CHM Proposal at 9, AR exh. 11c,
Individual Evaluator*s Ratings.  While CHM insists that its response to
this question gave an overview and *multiple examples* of its review of
management procedures and controls based on *an extremely complex
contract,* we conclude that DOC reasonably determined that CHM*s response
failed to satisfy the requirement that the protester provide multiple
examples--as opposed to a single example--regarding its actual experience
in reviewing management procedures and controls.  As discussed previously,
the amended RFP required Tier III offerors, such as CHM, to provide three
or more examples of relevant experience to demonstrate the firm*s level of
accomplishment under this question.  RFP amend. 5, S: M.3 at 71.  Since
CHM did not provide the required number of examples to satisfy this
requirement, we have no basis to question the evaluators* judgment that
CHM*s response warranted a rating of green rather than blue.
    
Down-select question No. 10 required CHM to describe its recent experience
which demonstrates responsiveness in providing the services of a Computer
Incident Response Team for similar organizations and stated that CHM
should specifically address how it has responded to computer incidents,
the forensics analysis methods used, and procedures followed to return IT
systems to service following incidents or attack.  RFP amend. 5, Question
No. 10.  The TEP again found that CHM*s proposal failed to furnish the
required information regarding its actual experience.  Specifically, the
evaluators noted that while CHM*s response provided a description of CHM*s
process, the response failed to describe CHM*s actual experience in
applying the identified processes to specific computer incidents and the
manner in which such incidents were resolved.  AR exh. 10c, CHM Proposal
at 9; exh. 11c, Individual Evaluator*s Ratings; exh. 25, CHM Debriefing
Materials at 18.  Given CHM*s failure to describe its actual experience in
response to this question, we conclude the agency*s evaluation was
reasonable.  In our view, the protester has not demonstrated that the
evaluators* scoring of its proposal responses to these questions was
unreasonable.
    
CHM also alleges that its proposal was subjected to unequal treatment
because one or more of the proposals included in the competitive range had
*equivalent responses* for question Nos. 1, 9, and 10 to those in CHM*s
proposal.  Protester*s Comments at 4-7.  The agency responds that the
competitive range offerors* responses to these questions contained greater
information regarding their actual experiences.[7]  In contrast, as
discussed above, CHM*s responses to these questions primarily addressed
CHM*s general processes and procedures, and failed to describe its actual
experience in these areas.  Our review of the record supports the
reasonableness of the agency*s evaluation in this regard; accordingly, we
find no merit in CHM*s assertion that its proposal was subjected to
unequal treatment.   
    
Next, the protester maintains that the agency*s price evaluation was
unreasonable.  Protester*s Comments at 1-3.  CHM essentially maintains
that the prices proposed by the competitive range offerors were
unrealistically low.[8]
    
The RFP provided that price proposals would be evaluated for realism and
reasonableness, but did not specify a particular manner in which this
analysis would be performed.  RFP amend. 6, S: M.4.3 at 74.  In this
regard, the FAR provides a number of price analysis techniques that may be
used, including comparison of the prices received with each other.  FAR S:
15.404-1(a)(1) and (b)(2).  As for price realism, the nature and extent of
an agency*s price analyses are matters within the sound exercise of the
agency*s discretion.  See HSG Philipp Holzmann Technischer Serv. GmbH,
B‑289607, Mar. 22, 2002, 2002 CPD P: 67 at 6. 
    
Here, the RFP provided, among other things, that the proposed rates would
be *examined to determine if they deviate above or below what is
expected.*  RFP amend. 6, S: M.4.3 at 74.  The agency explains that its
independent price assessment was based on a standard level of effort
considered reasonable and representative of actual tasks contemplated for
the COMMITS NexGen project.  That is, the price team evaluated prices
based on applying each offeror*s proposed hourly rates to a sample task. 
Although CHM is dissatisfied with the results of the agency*s price
analysis, it provides no support for the assertion that the methodology on
which the agency relied was improper.  Similarly, other than the fact that
the competitive range offerors proposed prices lower than its own, CHM
offers no support for the assertion that those lower prices were
unreasonable.  Accordingly, there is no basis to question the agency*s
evaluation of CHM*s and the other Tier III offerors* proposed prices.
    
Finally, CHM*s complains that the agency impermissibly failed to ensure
that the competitive range was comprised of the greatest number of
offerors that would permit an efficient competition.  In its view, an
efficient competition could be conducted even if proposals such as CHM*s,
which received an overall rating of green, were included in the
competitive range.  The RFP specifically permitted the agency to limit the
number of proposals in the competitive range to the greatest number that
would permit an efficient competition.  FAR S: 15.306(c)(2).  Here, the
agency did so, selecting [DELETED] proposals for inclusion in the
competitive range.  The record shows that, while CHM submitted an
acceptable proposal, its proposal was not among the [DELETED] most highly
rated ones.  We see no basis to question the agency*s determination that a
competitive range of [DELETED] proposals was the largest number that could
be permitted and still allow an efficient competition.  (Indeed, we
believe the agency had the discretion to establish a smaller competitive
range.)  On this record, the agency reasonably excluded CHM*s proposal
from the competitive range.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    

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

   [1]As relevant to this protest, the RFP informed offerors that the
contracting officer may limit the number of proposals in the competitive
range to the greatest number that will permit an efficient competition
among the most highly rated proposals if the number of proposals that
would otherwise be in the competitive range exceed the number at which an
efficient competition can be conducted.  RFP S: L.2(f)(4), at 59.
[2]Specifically, Tier III firms consists of firms that are certified as
small, with less than 1,500 employees; these firms will only be allowed to
compete on task orders with a life cycle value in excess of $40 million. 
RFP amend. 3, S: C.2 at 5. 
[3]The source selection plan, which was not disclosed in the RFP,
indicated that offerors who propose rates from existing government
contracts would satisfy the criteria of price realism and price
reasonableness.  If an offeror did not propose rates from an existing
contract, the agency then would perform a price analysis to determine if
the prices were fair and reasonable.  Agency Report (AR) exh. 26, at 5.
[4]While the same technical criteria applied to all three tiers, the
minimum levels of accomplishments would be more stringent for the higher
tiers.  For instance, the solicitation advised that *one relevant instance
of cited experience may be acceptable for a Tier I offeror while three or
more relevant experience[s] are required for a Tier III offeror.*  RFP
amend. 5, S: M.3 at 71.  In addition, the RFP stated that each tier would
be evaluated independently utilizing the stated evaluation criteria.  RFP
amend. 6, P: P at 6.
[5]The RFP contains definitions for each rating.  For example, under the
quality factor (denominated as past performance by the RFP), a blue rating
was defined as follows: *Based on information obtained on the quality and
satisfaction of work provided, essentially no doubt exists that the
offeror will successfully perform work contemplated by this procurement.* 
A rating of green essentially meant *slight concerns* were raised but the
overall risk level was good.  Under the experience/technical capability
factor (denominated as overall experience with similar type work), a
rating of blue meant that the offeror has *comprehensive experience* and
*exceptional* technical capabilities to perform the work.  A green rating
meant the offeror has *overall good experience and capabilities* to
perform.  As to price, a blue rating meant prices were *realistic* and
compared *very favorably* with other offerors within a tier; a rating of
green meant that prices were *realistic* and compared *favorably* with
others.  Contracting Officer*s Statement
at 3-5; Source Selection Plan at 3-5.
[6]The extensive TEP memorandum addresses the Phase I evaluation of
[DELETED] proposals received from all three tiers.  The proposals received
from Tier I and Tier II offerors are not relevant to the protest issues
and, accordingly, are not discussed.
[7]For example, the competitive range offerors discussed experience with
operating a help desk, experience with firewall design, implementation and
maintenance, as well as information technology security, policy
development and review.  AR exh. 15, TEP Evaluation Memorandum.   
[8]CHM*s evaluated price was more than [DELETED] percent higher than the
average price proposed by offerors; all of the competitive range offerors*
evaluated prices were lower than CHM*s.