TITLE:  Career Quest, a division of Syllan Careers, Inc., B-293435.4, March 31, 2005
BNUMBER:  B-293435.4
DATE:  March 31, 2005
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   Decision

   Matter of: Career Quest, a division of Syllan Careers, Inc.

   File: B-293435.4

   Date: March 31, 2005

   Darcy Hennessy, Esq., Moore Hennessy & Freeman, PC, for the protester.

   John E. Cornell, Esq., General Services Administration, for the agency.

   Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest raising various challenges to agency's conduct of a cost
comparison study pursuant to Office of Management and Budget Circular A-76
is denied where record shows that preparation of agency's most efficient
organization, and evaluation thereof, were reasonable and consistent with
solicitation's performance work statement and applicable guidance. 

   DECISION

   Career Quest, a division of Syllan Careers, Inc. (CQ) protests the General
Services Administration's (GSA) determination that it would be more
economical to continue to perform services in-house at the agency's
National Customer Support Center for Federal Supply Schedule users (NCSC)
than to contract for the services with CQ under request for proposals
(RFP) No. TFTP-MN-03-R-0001, issued pursuant to Office of Management and
Budget (OMB) Circular A-76.[1]  CQ maintains that the agency's cost
comparison improperly failed to account for all of the costs that will be
required for in-house performance.

   We deny the protest.

   This is the second occasion where we have considered GSA's actions in
connection with this A-76 cost comparison study.  The agency announced in
August 2002 that it would perform an A-76 study regarding its NCSC
operations and, pursuant to that announcement, issued the RFP in April
2003.  In response to the solicitation, the agency received three
proposals, two of which were found to be in the competitive range.  After
engaging in discussions with the competitive range offerors and obtaining
final proposal revisions, GSA selected CQ's proposal as the private sector
proposal offering the best overall value to the government.  The agency
then performed its cost comparison and determined that performance
in-house by the agency's most efficient organization (MEO) would cost
$11,604,402, compared to an evaluated cost of $12,501,638 for contracting
with CQ.[2]  Agency Report (AR), exh. 51, at 1.  The agency concluded that
it would save $897,236 by keeping the requirement in-house.  Id.  CQ
appealed the matter to the agency appeal authority (AAA), which affirmed
GSA's decision to keep the requirement in-house (although in so doing it
added $327,000 to the MEO's cost of performance, increasing it to
$11,931,402, which was still $570,236 less than the evaluated cost of
contracting with CQ).

   CQ then protested to our Office, maintaining that the agency had
improperly failed to account for all of the costs of performing the
requirement in-house.  In the course of that protest, the agency conceded
several issues that it maintained would have added $324,968 to the cost of
in-house performance; the agency nonetheless maintained that the cost of
in-house performance continued to be less expensive than CQ's evaluated
cost by $245,268.  We sustained CQ's protest, however, finding that there
were two issues that could potentially affect the outcome of the cost
comparison.  Career Quest, a division of Syllan Careers, Inc., B-293435.2,
B-293435.3, Aug. 2, 2004, 2004 CPD P 152.  First, the record showed that
there was an apparent discrepancy between the number of full-time
equivalents (FTE) accounted for in the MEO technical performance plan
(TPP) (38.5 FTEs) versus the cost calculations for the MEO (34.5 FTEs). 
This discrepancy had a potential cost impact of $1,236,524 in upward
adjustments to the cost of in-house performance, and therefore could have
resulted in the cost of in-house performance being higher than CQ's
evaluated cost.  Id. at 2-4.  Second, we found an apparent inconsistency
in that the MEO TPP had referenced a particular American National
Standards Institute/American Society for Quality (ANSI/ASQ) standard for
purposes of meeting the PWS's quality control call monitoring requirement,
but the MEO appeared not to have included adequate staff to perform in
accordance with that standard; again, the cost of additional personnel
necessary to meet the standard could have affected the outcome of the cost
comparison.  Id. at 4-5.  Accordingly, we recommended that the agency
obtain clarification or revision of the MEO's intended level of staffing
(including quality control personnel), reevaluate the MEO's TPP to
determine whether it included staffing adequate to meet the performance
work statement (PWS) requirements, perform a new cost comparison, and
award a contract to CQ if its evaluated cost was found to be lower than
the MEO's cost estimate.

   In response to our decision, GSA sought and obtained a revised TPP and
cost estimate from the MEO.  For purposes of this protest, two
considerations are relevant.  First, the MEO adjusted and clarified its
TPP and cost estimate so that both unequivocally reflected a staffing
level of 34.915 FTEs.  Second, the MEO removed the reference to the
ANSI/ASQ standard previously included in its TPP as it related to
conducting the quality control call monitoring function, and clarified
that it intended to perform the requirement with only one quality control
FTE.  Based on these clarifications, the agency conducted another cost
comparison, and again determined that the cost of in-house performance
would be less than CQ's evaluated cost.  Specifically, the agency found
that performance of the requirement in-house would be $633,877 less costly
than CQ's evaluated cost.  Agency Report (AR),

   exh. 54, at 4.  This protest followed the agency's announcement of its
decision to retain the function in-house.

   REVISION OPPORTUNITY

   CQ asserts that the MEO should not have been afforded an opportunity to
revise and clarify its TPP and in-house cost estimate in response to our
initial decision.  According to the protester, this opportunity
essentially provided the MEO with "two bites at the apple," and was
fundamentally unfair because the MEO knew CQ's staffing and cost
information at the time it revised its TPP and cost estimate.  CQ asserts
that, at minimum, CQ should have been afforded the same opportunity.

   Our Bid Protest Regulations, 4 C.F.R. S 21.2(a)(2) (2004), require
protesters to file within 10 days of when they knew or should have known
of their basis for protest.  Our prior decision contained the express
recommendation that the agency obtain revision or clarification of the
MEO's staffing levels generally, and also, more specifically, to have the
TPP revised or clarified as it pertained to meeting the quality control
aspect of the PWS.[3]  Accordingly, at the time we issued our decision,
the protester knew or should have known that the agency might obtain
revisions to the TPP without seeking revisions from CQ.  CQ therefore was
required to file any objection that it may have had within 10 days of
receiving our previous decision.  Since CQ did not submit its protest on
this basis within the required 10-day timeframe, it is untimely and will
not be considered.

   QUALITY CONTROL STAFFING 

   CQ asserts that the MEO does not include adequate staffing to meet the
quality control call monitoring aspect of the PWS.  As noted in our prior
decision, the MEO originally proposed a particular ANSI/ASQ standard as
the basis for establishing the number of calls that would be monitored per
month for quality control purposes, and we found that the MEO's staffing
appeared inconsistent with this standard--the standard would have required
the MEO to monitor approximately 10 times the number of calls that the MEO
stated would be monitored in its TPP.  In response to our decision, the
MEO modified its TPP to eliminate the ANSI/ASQ standard as the basis for
its call monitoring quality control, and essentially kept its staffing
unchanged (1 FTE) from the prior TPP.[4]  CQ asserts that this staffing is
insufficient to meet the PWS requirements for an effective quality control
program. 

   We have no basis to object to the sufficiency of the MEO's staffing in
this area.  While the solicitation required a quality control plan that
includes a call monitoring program, AR, exh. 2, at 8; AR, exh. 7,
technical exhibit (TE) 1-002, nothing in the solicitation required that a
particular quality control standard be used, or that any particular
quantity of call monitoring be performed.  The evaluators were aware of
the elimination of the reference to the ANSI/ASQ standard from the revised
TPP for purposes of performing call monitoring, and nonetheless concluded
that the MEO's proposed quality control program and staffing were adequate
to meet the requirements of the solicitation.  AR, exh. 55, at 1-2. 
Additionally, the agency's independent review officer (IRO) reviewed the
sufficiency of the MEO's proposed staffing against the requirements of the
PWS, and concluded as follows:

   The revised in-house cost estimate was based on the workload requirements
stated in the performance work statement.  In our opinion, the estimate[d]
in-house costs were based on the workload requirements prescribed in the
performance work statement, and the revised in-house estimate was
generally prepared in accordance with OMB Circular A-76[,] and in
conformity with that guidance[,] provide[s] a reasonable estimate of
government cost.

   AR, exh. 56, at 2.  While CQ proposed more staffing than the MEO for call
monitoring, this was a business judgment and does not establish that the
MEO's staffing level was inadequate.  Given the absence from the PWS of
any specified staffing level for call monitoring and the elimination of
the ANSI/ASQ standard from the MEO TPP (as well as the corresponding
resolution of the apparent staffing inconsistency identified in our prior
decision), we have no basis to object to the agency's conclusion that the
MEO's call monitoring program staffing is sufficient to meet the PWS. 

   CALL CENTER STAFFING

   CQ asserts that the MEO does not include adequate staffing to meet the
PWS's NCSC call center operations requirement.  According to the
protester, while the MEO's staffing may be marginally adequate to meet the
number of calls coming in during the center's 11-hour operating day, it
will be inadequate to meet surge and peak volumes. 

   We have no basis to object to the agency's conclusion that the MEO
proposed adequate staff to perform call center operations.  The PWS
contained detailed information regarding the workload of the call center,
in terms of both volume and types of calls.  AR, exh. 7, TE 5.1-002.  The
PWS also included information presented in a variety of formats relating
to the effectiveness of call center operations at various prior points in
time, AR, exh. 7, TE 5.1-012, 5.1-013; the data in these exhibits are
expressed principally as averages (such as the average time to answer a
call, the average duration of a call and the average number of staff
positions at given points in time).  The record shows that the MEO chose
not to use historical methods for assigning staff to the call center
operation, and instead established its proposed staffing based primarily
on its independent analysis of the workload at the call center.  The MEO's
analysis included direct staff observations, an analysis of staff work
logs, and a technical analysis based on staff surveys.  AR, exh. 42, at
10-12.  The MEO then prepared a "grid staffing analysis" that first
divided each work day into hour-long segments and then arrived at an
average number of staff hours required for each hour of the center's
business day.  Id.; AR, exh. 57, at app. G-1.  Referring to this analysis,
the MEO assigned its staffing based on the number of FTEs that would be
required to provide the average staff hours required for each hour of call
center operations (with the number of staff performing call center
operations varying depending upon the hour of the day and day of the
week).  AR, exh. 57, at app. G-2. 

   Both the agency's source selection evaluation board and the IRO determined
on the basis of the information presented in the TPP that the MEO staffing
was adequate.  AR, exhs. 55, 56.  We think this conclusion was
reasonable.  As with the quality control staffing discussed above, the PWS
did not specify a particular required level of call center staffing;
rather, competitors were left to determine the best means of satisfying
the PWS.  The MEO's methodology for calculating the necessary staffing
appears reasonable; the MEO was focused on ensuring that there would be
sufficient staffing, on average, to meet the demand that it charted in its
studies, which is consistent with the data presented in the PWS relating
to the call center workload.  While CQ asserts that the MEO's staffing is
inadequate to meet peak or surge demand situations, the fact of the matter
is that the data in the PWS were presented in terms of averages;
consistent with that information, the MEO proposed staffing adequate to
meet the average demand outlined in the PWS.  (In fact, there was no peak
or surge information even included in the PWS.)  We therefore have no
basis to object to the agency's finding that the MEO's proposed staffing
for call center operations was sufficient.

   UNDERSTATED HOURS FOR CERTAIN PERSONNEL

   CQ asserts that, in several instances, the MEO improperly reduced its cost
by omitting hours for certain personnel.[5]   By way of example, CQ
challenges the MEO's calculation of its in-house cost for the program
management officer, maintaining that the MEO improperly attributed only
.046 of an FTE for his time to the in-house cost estimate; according to
the protester, the MEO should have allocated at least .5 of an FTE for
this individual.  In support of its position, CQ notes that this
individual has numerous duties specified in the MEO's TPP that, CQ
maintains, cannot possibly be performed in the allotted time.

   This aspect of the protest is without merit.  To the extent that the MEO
attributes only partial FTEs to certain positions, it appears that those
partial FTEs reflect the amount of time necessary for those positions to
perform their PWS functions under the MEO TPP.  For example, the record
does not support CQ's position regarding the duties of the program
management officer.  Specifically, CQ's argument in this regard was
presented during the prior protest, and the MEO made changes to its TPP
that significantly altered the duties of the program management officer. 
Under the earlier version of the TPP, the program management officer was
to serve, for example, as the phase-in team leader for the MEO, AR, exh.
28, at TPP-6, while under the current version of the TPP, the program
management officer has only very limited planning activities for the
phase-in period.  AR, exh. 57, at TPP-6.  Indeed, under the earlier TPP,
the program management officer was specified as one of the MEO's key
personnel with significant responsibilities, AR, exh. 28 at TPP-13,
whereas under the current TPP, the program management officer is
specifically excluded from the MEO's list of key personnel, with the TPP
stating:

   For the sake of clarity, the Program Management Officer (PMO) position has
been removed as a key position.  The reasoning is that only a very small
portion of the PMO's activities are contractible and therefore related and
attributable to the MEO and its costs.  The few contractible activities
are:  1) Subcontract Management, 2) Personnel-related for 3 staff, 3)
Interacting on a periodic basis with the quality control analyst.  The MEO
was directed to make this position a direct report to the PMO despite the
fact that operationally, the Quality Control Analyst will frequently and
almost entirely interact with other MEO staff.

   AR, exh. 57, at TPP-13.  In light of these changes, we find that the
protester's arguments no longer reflect the staffing profile of the MEO. 
We conclude that there is no basis for finding that the hours or cost of
the program management officer, or any other proposed position in the MEO,
have been understated for the reasons asserted by the protester. 

   BIAS

   CQ asserts that the contracting officer improperly has favored the MEO
throughout the cost comparison.  In support of this aspect of its protest,
CQ refers to a litany of events (some of which are discussed above, others
of which were discussed in our prior decision) that have occurred during
the various agency appeals and protests to our Office.  Where a protester
alleges bias on the part of contracting officials, it must present
credible evidence that clearly demonstrates bias.  See Wilcox Indus.
Corp., B-281437.2 et al., June 30, 1999, 99-2 CPD P 3 at 4.  CQ's protest
does not meet this standard.  Rather, CQ merely points to events--such as
the agency's acceptance of the MEO's staffing in the quality control call
monitoring program in light of the MEO's decision to remove any reference
to the ANSI/ASQ standard--and concludes

   that they were motivated by bias; we have found that the agency's
evaluation conclusions in this area were reasonable.  We conclude that
there is no showing of agency bias here. 

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] The procedures applicable for determining whether the government
should perform an activity in-house or by a contractor are set forth in
OMB Circular A-76 and that Circular's Revised Supplemental Handbook (RSH)
(March 1996).  Although the Circular was revised in May 2003, that
revision was not applicable to this cost comparison.

   [2] The total evaluated cost for CQ includes the addition of a one-time
conversion differential of 10 percent of the MEO's personnel cost.  A-76
RSH, part II, at 28.  In this instance, the conversion differential
amounted to the addition of $895,139 to CQ's evaluated cost.  AR, exh. 51,
at 1. 

   [3] The protester has made much of the specific language included in our
recommendation, maintaining that we recommended only that the agency
clarify, as opposed to obtain revisions of, the TPP.  While the protester
is correct regarding the wording of the recommendation portion of our
decision, elsewhere in the decision, we specifically stated "we recommend
that the agency reopen the acquisition and obtain TPP revisions or
clarifications from the MEO . . . ."  Career Quest, a division of Syllan
Careers, Inc., supra, at 5 n.5.  Thus, it was clear from our decision that
the agency could permit revisions to the TPP.

   [4] The TPP continues to use the ANSI/ASQ standard as the basis for
establishing other aspects of the quality control program such as the
inspection of data entries made by employees.

   [5] Underlying CQ's assertions in this respect is an argument that these
hours were omitted by the MEO through its calculation of activities
performed by various personnel that were determined to be inherently
governmental, or "governmental in nature" (GIN); CQ seems to suggest that
the MEO first determined the staffing necessary to meet the PWS, and then
reduced the staff hours used to calculate the MEO's cost estimate by hours
deemed necessary to perform functions that are GIN.  This is incorrect. 
Office of Federal Procurement Policy (OFPP) Policy Letter 92-1 (September
23, 1992) addresses in detail the question of how to determine those
organizational functions susceptible to contracting out versus those which
are GIN functions.  That guidance requires agencies to establish, prior to
the issuance of a solicitation for a cost comparison study, whether the
functions being considered for contracting out are GIN functions and, if
so, further requires their exclusion from the cost comparison study. 
Circular A-76 RSH, at 55-59.  This results in the PWS being limited solely
to the functions covered by the cost comparison study.  Id. 

   The record shows that, consistent with this guidance, the agency arrived
at its determination regarding which functions could potentially be
contracted out (that is, not GIN) during the preparation of the management
study leading up to the issuance of the PWS, AR, exhs. 46, 48, 49, and
that the GIN functions were established before the MEO was certified,
reviewed by the IRO, and submitted to the contracting officer.  AR, exh.
27.