TITLE:  Mindleaf Technologies, Inc., B-294242, B-294242.2, August 24, 2004
BNUMBER:  B-294242, B-294242.2
DATE:  August 24, 2004
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   Decision

   Matter of:   Mindleaf Technologies, Inc.

   File:            B-294242, B-294242.2

   Date:           August 24, 2004

   Paresh K. Shah for the protester.

   Clarence D. Long III, Esq., and Capt. David W. Armstrong, Department of
the Air Force, for the agency.

   Paul F. Khoury, Esq., and William J. Grimaldi, Esq., Wiley Rein &
Fielding, for KMR, LLC, an intervenor.

   Matthew T. Crosby and James A. Spangenberg, Esq., Office of the General
Counsel,

   GAO, participated in the preparation of the decision.

   DIGEST

   Agency reasonably determined that awardee*s proposal price was not
unrealistically low where awardee*s price was in line with the prices of
two other competitive proposals.

   DECISION

   Mindleaf Technologies, Inc. protests the award of a contract to KMR, LLC
under request for proposals FA2823-04-R-0009, issued by the Department of
the Air Force for operation of central appointments and referral centers
for healthcare services at Eglin Air Force Base and Hurlburt Field,
Florida.  Mindleaf challenges the reasonableness of the agency*s price
analysis and performance risk determinations, and alleges that it suffered
a competitive disadvantage due to disclosure of the firm*s pricing
information.

   We deny the protest.

   On August 1, 2003, the Air Force issued a request for quotations (RFQ) for
centralized appointment and referral services (CA/RS) for military
healthcare facilities at Eglin Air Force Base and Hurlburt Field,
Florida.  The RFQ, issued as a small business set aside, contemplated the
award of a fixed-price contract to a Federal Supply Schedule vendor in
accordance with Federal Acquisition Regulation (FAR) Subpart 8.4.  The
selected vendor was to operate a number of call centers and appointment
desks, including the Centralized Appointment Call Center (CACC), Referral
Management Center, Primary Care Manager by Name Desk, Tricare Plus
Enrollment Center, and several health clinic appointment desks that were
to be operated like the CACC.  Following receipt of quotations and
subsequent evaluation, the Air Force awarded Mindleaf a task order
contract.  Following that award, KMR, the incumbent contractor, filed a
protest with our Office challenging the reasonableness of the Air Force*s
evaluation of past performance and its best value determination.  We
sustained KMR*s protest on the basis that the past performance rating that
the Air Force assigned Mindleaf was based on experience that was not
relevant under the RFQ*s past performance criteria.  KMR, LLC, B-292860,
Dec.A 22, 2003, 2003 CPD P 233.  We recommended that the agency reevaluate
the vendors under the RFQ*s stated past performance evaluation criteria
and perform a new best value determination.

   The Air Force subsequently determined that its requirements had changed
and that the solicitation*s evaluation criteria needed to be modified. 
Thus, on April 20, 2004, the Air Force resolicited the Eglin Air Force
Base and Hurlburt Field CA/RS requirement in a request for proposals
(RFP).  The RFP, issued as a small business set aside, contemplated award
of a fixed-price contract in accordance with FAR PartA 15.  In addition to
two base contract line item numbers (CLIN) that mirrored the CA/RS
requirements contained in the original solicitation, the RFP added two
option CLINs related to benchmarking criteria.[1]  The RFP stated that for
price evaluation purposes, the base and option CLINs would be added
together.  The RFP also stated that the agency would make award to the
offeror representing the best value based on three factors:  mission
capability, past performance, and price.  For evaluation purposes, mission
capability and past performance, when combined, were approximately equal
when compared to price.  The RFP also stated that unrealistically low
proposed costs/prices may be grounds for eliminating a proposal from
competition either on the basis that the Offeror does not understand the
requirement or the Offeror has made an unrealistic proposal.  RFP at 21.

   Eight proposals were received in response to the RFP.  Both KMR and
Mindleaf submitted proposals and received passing ratings for mission
capability and exceptional/highly-relevant ratings for past performance. 
Agency Report (AR), TabA 11, Price Competition Memorandum, attach. 3,
Proposal Evaluations.  KMR*s proposed price was $4,080,936.00 while
Mindleaf*s was $5,171,045.59.  Id., attach. 2, Revised Comparison of
Pricing.  On June 10, 2004, the Air Force selected KMR for award.  This
protest followed.

   Mindleaf primarily challenges the Air Force*s price analysis of KMR*s
proposal, arguing that KMR*s price was unrealistically low, given the
addition of the option CLINs to the RFP.  The Air Force responds that it
determined that KMR*s price was realistic by comparing it to other
proposals and a government estimate.

   Price analysis is the process of examining and evaluating proposals
submitted in response to a solicitation, such as this one, which does not
require offerors to submit cost elements and proposed profit.  See FAR S
15.404-1(b).  Examples of price analysis techniques provided in the FAR
include comparison of proposed prices received in response to a
solicitation and comparison of government contract prices for similar
items.  See FAR S 15.404(b)(2)(i), (ii).

   Here, the contracting officer compared KMR*s price to other prices
received in response to the solicitation and determined that KMR*s price
was less than 4 percent below the second lowest technically acceptable
offer.  Contracting Officer*s Statement, at 3; AR, Tab 11, Price
Competition Memorandum, attach. 2, Revised Comparison of Pricing.  The
record also reflects that the third lowest technically acceptable offer
was less than 13 percent higher than KMR*s proposal.  AR, Tab 11, Price
Competition Memorandum, attach. 2, Revised Comparison of Pricing. 
Additionally, the contracting officer noted that KMR*s price was 3 percent
more than the government estimate, which was based on the costs of the
incumbent contract.  AR, Tab 11, Price Competition Memorandum, at 3.

   The manner and depth of an agency*s price analysis is a matter within the
sound exercise of the agency*s discretion, and we will not disturb such an
analysis unless it lacks a reasonable basis.  Gentex Corp.--Western
Operations, B-291793 et al.,
Mar.A 25, 2003, 2003 CPD P 66 at 21.  We conclude that reliance on the
closeness in price between KMR*s proposal price and two other offers with
passing mission capability ratings provided a reasonable basis for the Air
Force to determine that KMR*s price is realistic.[2]

   Mindleaf also contends that because KMR*s price proposal is
unrealistically low, it reflects KMR*s lack of understanding of the
solicitation, which, in turn, represents a significant performance risk to
the government.  The Air Force responds that it determined that
performance risk was low by virtue of KMR*s understanding of the
solicitation*s requirements as reflected in KMR*s proposal.  Specifically,
in addition to responding to each of the evaluation criteria, KMR*s
proposal identified an approach for realizing efficiency in staff
training.  Furthermore, KMR*s experience as incumbent gave credence to
KMR*s understanding of the solicitation.  We find no basis to disagree
with the Air Force*s conclusion.  In any event, as discussed above, we
find reasonable the Air Force*s determination that KRM*s price is not
unrealistically low.

   Mindleaf also protests that it suffered a competitive disadvantage because
the firm*s CA/RS contract price appeared in the redacted version of the
initial protest decision.  We dismiss this protest grounds as untimely. 
Our Bid Protest Regulations require that a protest based upon alleged
improprieties in a solicitation that are apparent prior to the closing
time for receipt of initial proposals be filed before that time. 
Bid Protest Regulations, 4 C.F.R. S 21.2(a)(1) (2004).  Because Mindleaf
received a copy of the redacted version of the initial protest decision,
Mindleaf knew that its CA/RS contract price had been disclosed prior to
the time for receipt of initial proposals under the RFP.  Instead of
protesting the release of its price as adverse to the firm, Mindleaf
participated in the competition.  For that reason, this protest ground is
untimely and will not be considered.[3]

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] The benchmarking criteria related to decreasing the amount of on hold
time experienced by callers.  RFP, Statement of Work, at 3.

   [2] Mindleaf argues that because the government estimate does not include
the benchmark criteria costs or inflation costs, comparison of KMR*s price
to the government estimate is not a suitable method of price analysis. 
Even assuming Mindleaf*s contention regarding the government estimate has
merit, we have no basis to disagree with the Air Force*s price analysis
determination because the Air Force received three technically acceptable
proposals containing prices within 12A percent of each other.  AR, Tab 11,
Price Competition Memorandum, attach. 2, Revised Comparison of Pricing.

   [3] Mindleaf also alleges that it suffered a competitive disadvantage
because in the course of the initial protest, KMR had access to a letter
from Mindleaf to our Office containing information about Mindleaf*s CA/RS
price proposal strategy.  The record, however, indicates that Mindleaf
approved a redacted version of its letter for release to KMR.  While KMR*s
counsel had access to the unredacted version of the letter pursuant to a
GAO protective order, Mindleaf offers no evidence or reason to believe
that KMR*s counsel made the unredacted letter available to KMR in
violation of the express terms of the protective order.