TITLE: B-294722.4, SGT, Inc., July 28, 2005
BNUMBER: B-294722.4
DATE: July 28, 2005
************************************
B-294722.4, SGT, Inc., July 28, 2005
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: SGT, Inc.
File: B-294722.4
Date: July 28, 2005
Andrew P. Hallowell, Esq. and Jennifer M. Morrison, Esq., Piliero, Mazza &
Pargament PLLC, for the protester.
Amy J. Weisman, Esq., and Kevin P. Travis, Esq., Space and Naval Warfare
Systems Command, for the agency.
Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest challenging agency's evaluation of protester's cost proposal is
denied where the agency's cost realism adjustments were reasonable.
2. Protest challenging evaluation of protester's technical proposal is
denied where the record supports the agency's evaluation.
DECISION
SGT, Inc. protests the award of a contract to Systems Integration &
Management, Inc. (SIM) under request for proposals (RFP) No.
N00039-04-R-0005, issued by the Space and Naval Warfare Systems Command
(SPAWAR) for a business, operations and administrative support services
(BOASS) contract at the U.S. Navy SPAWAR Information Technology Center in
New Orleans, Louisiana. The protester argues that the agency improperly
evaluated its cost and technical proposal.
We deny the protest.
The RFP anticipates award of an indefinite-delivery/indefinite-quantity
(ID/IQ) contract, which provides for cost-plus-award-fee and
fixed-price-award-fee task orders. The competition was restricted to
offerors who are participants in the Small Business Administration's 8(a)
program for small, disadvantaged businesses. The RFP sought proposals to
provide "all management, supervision, labor, administrative support,
reporting requirements, supplies, and associated support services"
required to support the SPAWAR Information Technology Center. RFP at 1.
The base performance period for the contract is 1 year, with four 1-year
option periods.
The RFP states that award would be made to "the responsible Offeror whose
offer conforming to the solicitation, is determined to provide the `best
value' to the Government." RFP sect. M-2(a). The evaluation factors were,
in descending order of importance: corporate experience and past
performance, technical and management approach, ability to perform 50
percent of the work and manage subcontractors, personnel resumes, and
transition plan. Id. at M-2(c). The non-cost evaluation criteria were
"significantly more important than cost." Id. at M-2(b).
Offerors were advised that the agency would review proposals for cost
realism:
Cost realism will be performed on the cost proposal. The cost realism
analysis shall (a) verify the proposed rates against [Defense Contract
Audit Agency (DCAA)] audited rates; (b) assess the degree to which
uncompensated overtime is utilized, and (c) assess escalation and how it
is derived. Proposed costs may be adjusted, for purposes of evaluation,
based upon the results of the cost realism analysis. The resulting
realistic cost estimate will be used in the evaluation.
RFP sect. M-2.
SGT proposed to perform the contract utilizing the incumbent contractor,
Systems Engineering & Security, Inc. (SES), as a subcontractor. Under
SGT's proposal, SGT would perform [deleted] percent of the work, with SES
performing [deleted] percent of the work. Agency Report (AR), Tab 19, SGT
Proposal, Vol. I., at C-7. All SGT personnel would be hired from SES's
incumbent staff, and the proposed direct labor rates for SGT and SES were
based on that staff. Id., Vol. II, sect. 2.1.2.
The agency requested that DCAA audit offerors' cost proposals. DCAA's
analysis of SGT's and SES's proposal stated that DCAA could not establish
an evaluated rate for the majority of SGT's proposed rates. AR, Tab 10,
DCAA SES Cost Audit, June 28, 2004, at 3; Tab 9, DCAA SGT Cost Audit, July
14, 2004, at 3. After receiving DCAA's report on SGT's proposed costs, the
Navy's cost evaluation board (CEB) compared SGT's and SES's proposed rates
to the evaluated rates from the next-most recent DCAA audit of SES's rates
under the incumbent contract, dated September 2003. AR, Tab 8, Original
CEB Report, at 5. Based on its review of the September 2003 DCAA audit,
the agency's analysis concluded that SGT's proposed costs could not be
confirmed and adjusted its proposed costs upward by a total of [deleted].
Id.
The contract was initially awarded to SIM on August 23, 2004. Two
disappointed offerors, other than SGT, filed protests with our Office. The
agency advised our Office on October 13, 2004 that it would take
corrective action in response to the protests, and we subsequently
dismissed both protests as academic.
During its corrective action, the agency advised offerors that it would
reevaluate existing proposals; offerors were not allowed to submit
proposal revisions, but instead were instructed to either withdraw or
extend their proposals under the same terms and pricing. The agency
convened a new technical evaluation board (TEB) and CEB to reevaluate
proposals, each with entirely new members. Memorandum of Law at 11. The
reevaluation TEB reviewed each offeror's proposal without consulting the
original TEB's work. Id. The reevaluation of SGT's technical proposal
produced lower ratings under several evaluation factors as compared to the
initial evaluation. Protest at 6. The reevaluation CEB reviewed the work
of the original CEB. AR, Tab 13, Reevaluation CEB Report, at 2-3. The
reevaluation CEB first determined that the original CEB's "overall
methodology was sound," and then reexamined the cost analyses performed
for each offeror. Id. The reevaluation CEB concluded that the original
CEB's cost analysis of SGT's proposal was reasonable, and made no changes
to the cost realism adjustments. Id., attach. 12, at 1-2. The agency did
not conduct discussions during the original or the revised evaluations.
After the reevaluation, SGT, SIM and a third offeror, were the three most
highly-rated offerors among whom the agency conducted a cost-technical
trade-off analysis. AR, Tab 7, Source Selection Decision (SSD), at 2. The
agency evaluated these proposals as follows:[1]
+------------------------------------------------------------------------+
| | SGT | SIM | Offeror C |
|--------------------+-----------------+----------------+----------------|
|Technical | Good, low risk |Outstanding, low| Good, low risk |
| | | risk | |
|--------------------+-----------------+----------------+----------------|
|Corporate Experience|Outstanding, low |Outstanding, low|Outstanding, low|
|And Past Performance| risk | risk | risk |
|--------------------+-----------------+----------------+----------------|
|Technical And |Satisfactory, low|Outstanding, low|Outstanding, low|
|Management Approach | risk | risk | risk |
|--------------------+-----------------+----------------+----------------|
|Ability To Perform | Satisfactory, |Outstanding, low| Good, low risk |
|50% Of Work And | moderate risk | risk | |
|Manage | | | |
|Subcontractors | | | |
|--------------------+-----------------+----------------+----------------|
|Personnel Resumes | Good, low risk | Good, low risk | Marginal, |
| | | | moderate risk |
|--------------------+-----------------+----------------+----------------|
|Transition Plan | Good, low risk |Outstanding, low|Unsatisfactory, |
| | | risk | high risk |
|--------------------+-----------------+----------------+----------------|
|Proposed Cost | [deleted] | $65,294,733 | [deleted] |
|--------------------+-----------------+----------------+----------------|
|Evaluated Cost | [deleted] | $68,514,755 | [deleted] |
+------------------------------------------------------------------------+
Id. at 1, 4-5.
Based on its trade-off analysis, the agency's source selection authority
again selected SIM for award on April 6, 2005. AR, Tab 7, SSD, at 6.
Following its debriefing, SGT filed this protest.
DISCUSSION
Cost Realism Analysis
SGT contends that the agency improperly refused to accept its proposed
costs and that the agency's cost realism analysis was flawed.
Specifically, SGT alleges that the agency unreasonably ignored language in
DCAA's audit that SGT argues approved its proposed direct labor rates and,
consequently, improperly adjusted SGT's proposed rates based on DCAA's
September 2003 audit of SES's direct labor rates under the incumbent
contract.[2]
As discussed above, SGT proposed to perform the contract using SES
personnel. SES would terminate certain of its personnel currently
performing the incumbent contract and SGT would hire those individuals;
the balance of the incumbent staff would be retained by SES to perform the
subcontract work. AR, Tab 19, SGT Proposal, Vol. II, sect. 2.1.2. The
majority of the labor categories, approximately
two-thirds, were proposed for performance by both SGT and SES staff. AR,
Tab 10, DCAA SES Cost Audit, June 28, 2004, at 2; Tab 9, DCAA SGT Cost
Audit, July 14, 2004, at 2. The position of project manager would be
provided by [deleted], while certain other positions would be performed
exclusively by either SGT or SES personnel. Id. SGT explained that it
would pay the same salaries currently provided for SES incumbent staff:
SGT will offer a salary that is at least equal to the incumbent employee's
current salary. SGT will not reduce the base salaries of current incumbent
employees who continue to perform the same work on the BOASS contract. We
have assured this by working with the incumbent contractor, SES, and have
developed average salaries for each proposed labor category that are based
on the actual salaries of SES employees currently working on the contract.
AR, Tab 19, SGT Proposal, Vol. II, sect. 5.1.
In its review of SGT's proposed costs, DCAA first evaluated the proposed
rate for SGT's program manager. DCAA adjusted the proposed rate based on
the salary identified in SGT's hiring letter, which indicated a higher
rate. AR, Tab 9, DCAA SGT Cost Audit, July 14, 2004, at 3.
Next, as relevant here, DCAA evaluated SGT's and SES's proposed labor
categories that were exempt from the Service Contract Act (SCA). These
categories comprised the bulk of the labor categories, and were to be
performed by either or both SGT and SES at the same labor rates:
For Exempt personnel . . . [t]he labor rates for each labor category are
based on the actual salaries of employees currently working on the
[incumbent] contract. An average labor rate by labor category was
calculated using these actual salaries. The SES labor category
descriptions are consistent to the labor category descriptions provided in
the solicitation and have been adopted for use by SGT.
AR, Tab 19, SGT Proposal, Vol. II, sect. 2.1.2.
Because SGT's and SES's proposed direct labor rates were based on SES
incumbent staff, DCAA reviewed SGT's and SES's rates based on "average
payroll data dated June 8, 2004," provided by SES to DCAA. AR, Tab 10,
DCAA SES Cost Audit, June 28, 2004, at 3; Tab 9, DCAA SGT Cost Audit, July
14, 2004, at 3. DCAA's audit of SGT's and SES's cost proposals "verified
the proposed direct labor rates to the contractor's supporting labor
data."[3] AR, Tab 9, DCAA SGT Cost Audit, July 14, 2004, at 1. DCAA
concluded that it could not establish evaluated rates for these labor
categories:
SES furnished us with their category payroll data dated June 8, 2004. We
compared the proposed base hourly rates to the payroll data. No
differences were noted. However, the subcontractor informed us at the
entrance conference that this is a Task Order proposal; and, as a result,
the Tasks will be defined at negotiations. The subcontractor informed us
that some of the SES personnel identified in this proposal will be
terminated by SES and hired by SGT, Inc., the prime contractor. The
employees who will be affected by this change will not be identified until
after this contract is negotiated. Therefore, since we were unable to
identify the employees who will be retained by SES and could not determine
the rate that the terminated individuals will be paid by the prime
contractor, we were unable to establish evaluated base hourly rates for
these labor categories.
AR, Tab 10, DCAA SES Cost Audit, June 28, 2004, at 3; Tab 9, DCAA SGT Cost
Audit, July 14, 2004, at 3.
In its review of SGT's cost proposal, the original CEB concluded that,
because DCAA could not evaluate SGT's and SES's proposed rates for
SCA-exempt labor categories, an alternative means of cost analysis was
required:
Since DCAA was unable to identify the employees who will be retained by
SES and could not determine the labor rate that the terminated individuals
will be paid by SGT, DCAA was unable to establish evaluated hourly rates
for these labor categories. Thus, to perform a cost analysis, the CEB
compared the proposed hourly labor rates to SES's, incumbent contractor,
FY 2004 labor rates provided in [DCAA] Report No. 6311-2003D2800105 dated
9 September 2003.
AR, Tab 8, Original CEB Report, at 8.
The September 2003 DCAA audit analyzed SES's rates for performing the
incumbent contract. AR, Tab 11, DCAA SES Cost Audit, Sept. 9, 2003, at 1.
The original CEB analysis concluded that, based on a comparison of SGT's
and SES's proposed rates with the SES rates in the September 2003 DCAA
audit, there were "significant differences between the proposed direct
labor base rates and the evaluated direct labor rates."[4] AR, Tab 8,
Original CEB Report, at 8. The original CEB's cost analysis of the
proposed direct labor rates consisted of adjusting all of the direct labor
rates for all labor categories, other than the program manager, to the
level of the September 2003 rates.[5] Id.
The cost realism adjustments to the direct labor rates increased SGT's
evaluated direct labor costs by [deleted] and its overhead by [deleted].
The adjusted direct labor rates also increased SES's evaluated subcontract
costs by [deleted]. Id. The original CEB then applied the SGT's adjusted
G&A rate, resulting in an increase of [deleted]. Id. The adjustments to
SGT's evaluated cost totaled [deleted]. Id.
Because the reevaluation CEB was responsible for the cost analysis that
formed the basis for the award, our focus is on that CEB's cost realism
analysis. As discussed above, the reevaluation CEB validated the original
CEB's cost analysis methodology, confirmed the analysis of proposals, and,
in the case of SGT, agreed that no changes were required to the original
CEB's adjustments to SGT's cost proposal.
When an agency evaluates proposals for the award of a cost-reimbursement
contract, an offeror's proposed costs are not considered controlling,
because regardless of the costs proposed, the government is bound to pay
the contractor its actual and allowable costs. Federal Acquisition
Regulation (FAR) sections 15.305(a)(1); 15.404-1(d). Consequently, a cost
realism analysis must be performed by the agency to determine the extent
to which an offeror's proposed costs represent what the contract should
cost, assuming reasonable economy and efficiency. FAR sect.
15.404-1(d)(2); Hanford Envtl. Health Found., B-292858.2, B-292858.5, Apr.
7, 2004, 2004 CPD para. 164 at 8-9. The evaluation of competing cost
proposals requires the exercise of informed judgment by the contracting
agency involved, since it is in the best position to assess the realism of
cost and technical approaches and must bear the burden resulting from a
defective cost realism analysis. Because the contracting agency is in the
best position to make this determination, we review an agency's judgment
in this area only to see that the agency's cost realism evaluation was
reasonably based and not arbitrary. Hanford Envtl. Health Found., supra,
at 8-9. An agency's cost realism analysis need not achieve scientific
certainty; rather, the methodology employed must be reasonably adequate
and provide some measure of confidence that the rates proposed are
reasonable and realistic in view of other cost information reasonably
available to the agency as of the time of its evaluation.
See Metro Mach. Corp., B-295744; B-295744.2, Apr. 21, 2005, 2005 CPD para.
112 at 10-11; Science Applications Int'l Corp., B-290971 et al., Oct. 16,
2002, 2002 CPD para. 184 at 17.
SGT first argues that DCAA's audit of its cost proposal confirmed that
SES's payroll submitted for purposes of DCAA's audit supported the
proposed rates for the SCA-exempt labor categories. Specifically, SGT
contends that DCAA compared the proposed salaries and labor rates, and
that "[n]o differences were noted." AR, Tab 10, DCAA SES Cost Audit, June
28, 2004, at 3; Tab 9, DCAA SGT Cost Audit, July 14, 2004, at 3. Thus,
SGT, argues, the agency improperly rejected its proposed rates.
While it is true that DCAA compared SES's labor rates to its payroll data,
there is no basis in the record to conclude that DCAA intended to
recommend that SGT's and SES's proposed rates to be accepted as a
reasonable estimate of the labor rates that will be applicable to the
contract. To the contrary, DCAA's reports for SGT and SES both indicated
that DCAA was "unable to establish evaluated base hourly rates for these
labor categories" because it was unclear how personnel would be
distributed between the two firms. AR, Tab 10, DCAA SES Cost Audit, June
28, 2004, at 3; Tab 9, DCAA SGT Cost Audit, July 14, 2004, at 3. We find
this conclusion reasonable, as each company proposed its own indirect
rates, and thus allocation of an employee to either SGT or SES would
affect the rate charged for that employee. Furthermore, although SGT
proposed to pay "no less" than SES's current rates, this statement left
open the possibility that SGT could pay more than the incumbent salaries.
In any case, based on the data provided by SES, DCAA was unable to provide
evaluated rates for the SCA-exempt positions, representing 18 of 25 SGT
labor categories, and 17 of 25 SES labor categories. AR, Tab 10, DCAA SES
Cost Audit, June 28, 2004, at 2; Tab 9, DCAA SGT Cost Audit, July 14,
2004, at 2.
During a hearing conducted by our Office, the reevaluation CEB chair
stated that the reevaluation CEB understood DCAA's report regarding SGT's
and SES's SCA-exempt labor categories to mean that SGT's approach of
proposing labor categories that either SGT or SES employees might fill
effectively precluded DCAA's analysis of the proposed rates because the
allocation of employees between the companies was not known at the time of
proposal submission. Tr. at 34:11-35:9; see also AR, Tab 8, Original CEB
Report at 7-8; Tab 13, Reevaluation CEB Report, attach. 12, at 1.
Although a contracting agency can utilize the services of DCAA when
performing a cost realism analysis rather than perform all aspects of the
evaluation itself, the audit agency is but one tool upon which the agency
may elect to rely. See Metro Mach. Corp., supra, at 11. In our view, the
agency had a reasonable basis to conclude that the DCAA audit of SGT's and
SES's cost proposal did not provide information that would allow the
agency to accept the rates as proposed, and that therefore an additional
analysis of the cost proposal was required.
SGT next argues that the agency unreasonably relied on the DCAA audit of
SES's rates under the incumbent contract in September 2003 as the standard
to evaluate SGT's and SES's proposed direct labor rates.[6] SGT challenges
the use of the September 2003 rates asserting that these rates were
outdated at the time proposals were submitted in May of 2004. SGT argues
that SES had experienced turnover in its staff, which resulted in
lower-cost staff replacing higher-cost staff during the months between the
September 2003 DCAA audit of SES's rates, which were based on SES's August
29, 2003 payroll data for the incumbent contract, and the submission of
SGT's proposal in May 2004. Protester's Comments at 5. SGT submitted as
part of its comments exhibits showing staff turnover during this time. See
Protester's Supplemental Comments, exh. 3. SGT, however, did not clearly
demonstrate in its proposal (and during this protest, for that matter),
that staffing changes had any effect on the proposed rates, i.e., that
higher-salaried personnel who performed work for SES and were evaluated
under the September 2003 audit were individuals who had left SES's
employment, and that the salaries of lower-cost replacements for these
individuals were the basis for the cost proposal in May 2004. It was SGT's
obligation to demonstrate in its proposal the basis for the change in its
rates from what the agency had experienced under the incumbent contract to
the proposed rates inasmuch as it was SGT's burden to submit an adequately
written cost proposal for the agency to evaluate, especially where, as
here, offerors are specifically on notice that the agency intended to make
award based on initial proposals without discussions.[7] See EER Sys.,
Inc., B-290971.3, B-290971.6, Oct. 23, 2002, 2002 CPD para. 186 at 14.
Because SGT's proposal provided no explanation regarding what SGT now says
was a significant reduction in SES's previously incurred labor costs, in
our view, the agency reasonably relied upon the most recent fully-audited
rates provided by DCAA of SES's rates under the incumbent contract.[8]
In sum, we conclude that, in light of DCAA's inability to develop
evaluated direct labor rates based on SGT's cost proposal and staffing
approach, the agency's experience with SES's costs under the incumbent
proposal as detailed in the September 2003 DCAA audit, and in the absence
of other data in SGT's proposal that would address the agency's concerns,
the agency's cost realism analysis was reasonable. The adjustments to both
the SCA-exempt and non-exempt rates and the use of the September 2003
audited rates as the most recently evaluated rates were reasonable in
light of the information available to the agency. This aspect of the
protest is denied.[9]
Technical Evaluation
SGT raises several objections to the agency's evaluation of its technical
proposal.[10] In reviewing a procuring agency's evaluation of an offeror's
technical proposal, our role is limited to ensuring that the evaluation
was reasonable and consistent with the terms of the solicitation and
applicable statutes and regulations. Urban-Meridian Joint Venture,
B-287168, B-287168.2, May 7, 2001, 2001 CPD para. 91 at 2. Our Office will
not question an agency's evaluation judgments absent evidence that those
judgments were unreasonable or contrary to the stated evaluation criteria.
Kay & Assocs., Inc., B-291269, Dec. 11, 2002, 2003 CPD para. 12 at 4.
SGT argues that the agency improperly evaluated its technical proposal
under eight areas for the technical and management approach evaluation
factor, the ability to perform 50 percent of the work and manage
subcontractors evaluation factor, and the transition factor. We have
reviewed all of the protester's contentions and find them to be without
merit. In each case, we conclude that the agency reasonably evaluated
SGT's and SIM's proposals, and reasonably identified differences or
similarities between the proposals that warranted their respective
evaluation ratings.[11]
For example, SGT argues that the agency improperly credited SIM with
proposing a "Team SIM Council" that "advises the [program manager] on key
issues," but did not find a similar strength in SGT's proposal. AR, Tab
22, SGT Proposal, at I.2.7-8. The agency's evaluation of SIM determined
that:
SIM has proposed an advisory council with a charter that outlines the role
and responsibility of the council. The council will assist in resolution
of management issues and facilitate access to corporate resources.
[deleted]
AR, Tab 20, Revaluation TEB Report, SIM Evaluation, at 3. SGT contends
that its proposal offered the same benefits as SIM's. SGT's proposal,
however, does not describe a formal council in the same manner as SGT, but
instead states that [deleted]. AR, Tab 19, SGT Proposal, Vol. I, at B-16.
SGT additionally notes that [deleted]. Id., Vol. I, at C-7.
Although SGT argues that its proposal offered strengths similar to SIM's,
we believe that the agency reasonably identified discriminating features
in SIM's proposal that warranted a strength for SIM, but not for SGT.
SIM's proposal provided a formal organizational structure specifically
charged with advising the program manager on management issues, whereas
SGT's proposal provided only isolated references to general resources
available to its own program manager. In sum, SGT provides no basis to
challenge the agency's evaluation of strengths for SIM or the lack of a
corresponding strength in its own proposal. Urban-Meridian Joint Venture,
supra; Kay & Assocs., Inc., supra.
As another example, SGT contends that SIM was improperly given a strength
for proposing a dedicated "risk manager" because this position was not a
required position under the PWS. The agency determined that "SIM offered a
detailed Risk Mitigation Plan," that "emphasizes pro-active planning and
includes a dedicated risk manager." AR, Tab 21, Reevaluation Source
Selection Advisory Counsel (SSAC) Report, at 40; Tab 20, Revaluation TEB
Report, SIM evaluation, at 4. Since the RFP sought detailed technical
proposals, and included technical evaluation criteria, offerors here were
on notice that qualitative distinctions would be made under various
evaluation factors. In such procurements, evaluation strengths properly
may be found where a proposal includes enhancements or features not
expressly identified in the solicitation, provided the strength is
consistent with the stated evaluation criteria. Medical Dev. Int'l,
B-281484.2, Mar. 29, 1999, 99-1 CPD para. 68
at 6-7. The RFP stated that evaluation elements for the technical and
management approach evaluation factor included "[c]omprehensiveness of the
proposed approach, and likelihood of successfully meeting the solicitation
requirements," and "[c]omprehensiveness of Program Management Plan,
including the demonstrated likelihood of successful program management to
meet the solicitation requirements." RFP sect. M-2. The SIM proposal
linked its risk management structure to the ability of the firm to provide
the work required by the PWS without interruption. AR, Tab 22, SIM
Proposal, Vol. I, at 2.20-21. We conclude that the agency reasonably
credited SIM's proposal with a strength for offering a risk manager,
consistent with the stated evaluation criteria.
SGT also argues that the agency improperly evaluated its proposal under
the key personnel resumes evaluation factor. Offerors were required to
provide at least 1, but no more than 10, key personnel resumes. RFP sect.
L-6 at 95. SGT provided 6 resumes, of which 4 were found to exceed the
minimum experience requirements, with the other 2 failing to meet the
requirements. AR, Tab 21, Reevaluation SSAC Report, at 39.
For one of the project manager positions, the agency concluded that the
proposed individual's experience did not clearly meet the RFP requirements
for the position. SGT argues that the agency unreasonably determined that
the proposed individual did not possess the required 5 years of
specialized experience in "complete engineering project development from
inception to deployment, expertise in management and control of funds, and
managing multi-task contracts." AR, Tab 21, Revaluation TEB Report, SGT
evaluation, at 7-8; Tab 18, revised labor category descriptions, at 1.
With regard to the "management and control of funds" criterion, a review
of the proposed individual's employment does not clearly demonstrate
experience in this area. AR, Tab 19, SGT Proposal, Vol. I, at D-9-10. In
its comments, the protester describes two of the proposed individual's
positions, arguing that they together constitute the required 5 years of
specialized experience. For these positions, however, the protester's
summary shows that the proposed individual has only 3 years and 1 month
"experience in management and control of funds." Protester's Comments at
16. We thus conclude that the agency's evaluation reasonably determined
that the proposed project manager did not meet the RFP requirement for
specialized experience.
For SGT's proposed customer service engineer supervisor, the agency
concluded also that the proposed individual did not meet the minimum
experience requirements. The RFP stated that the customer service engineer
supervisor must have 11 years of general experience and 5 years of
specialized experience. RFP, Revised Labor Category Descriptions, at 11.
The agency determined that the proposed individual did not meet the 5-year
requirement because experience was listed from October 1999 to the
present. AR, Tab 20, Revaluation TEB Report, SGT evaluation, at 8-9; Tab
19, SGT proposal, Vol. I, at D-11. The agency argues that the individual's
specialized experience should only have been counted up to the date of the
proposal, which was May 2004, resulting in 4 years and 8 months. However,
where the individual's resume says "to present," and the reevaluation took
place in April 2005 following offerors' confirmation of their proposals,
we think that the agency reasonably should have counted his experience as
of the date of the reevaluation.
Nonetheless, we believe the agency reasonably determined that the overall
general experience requirement of 11 years (the required 8 years plus 3
additional years to account for the individual's lack of a bachelor's
degree) was not met because the description of the individual's experience
with the Navy did not clearly meet the requirements of the RFP. The
individual's resume provided only a general description of the
individual's 20 years of experience in the Navy working on advanced data
processing work analysis. AR, Tab 19, SGT Proposal, Vol. I, at D-11. This
description did not clearly fit the RFP's requirement of 11 years of
"information systems development, network and other work in the
client/server field, or related fields." RFP, Revised Labor Category
Descriptions, at 11. Although SGT argues that the agency could have
reviewed his records to determine if this individual's work met the
requirements, there is no obligation for the Navy to do so; to the
contrary, it is an offeror's obligation to fully detail how a key
personnel resume meets the RFP requirements. Tessada & Assoc., Inc.,
B-293942, July 15, 2004, 2004 CPD para. 170 at 5-6.
The protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] Ratings for each evaluation factor were: outstanding, good,
satisfactory, marginal and unacceptable. RFP sect. M-4.1. A risk rating of
low, moderate, or high risk was also assigned each factor. Id. sect.
M-4.2.
[2] SGT additionally argues that the agency treated SGT unequally as
compared to other offerors regarding certain elements of the cost
evaluation. We find this allegation without merit. Based on our review of
the record, we conclude that the agency treated similarly-situated
offerors equally.
[3] DCAA also evaluated offerors' indirect rates. DCAA concluded that
SES's proposed indirect rates were "in line with the historical rates."
AR, Tab 10, DCAA SES Cost Audit, June 28, 2004, at 5. DCAA determined that
SGT's proposed G&A rate was [deleted], and adjusted it [deleted]. AR, Tab
9, DCAA SGT Cost Audit, July 14, 2004, at 4-5. SGT did not protest this
adjustment to its G&A rate.
[4] For the remainder of the SGT and SES labor categories, comprised of
SCA
non-exempt positions, DCAA compared the proposed rates to the applicable
Department of Labor wage determination rates. As the reevaluation CEB
chair explained, however, the agency was concerned that DCAA evaluated
these proposed rates against the DOL wage determination, only, and did not
review the actual salaries incurred by SES under the incumbent contract
for these labor categories. The agency concluded that the proposed wage
determination rates did not reflect the actual incumbent salaries because
they were [deleted] the rates from the September 2003 DCAA audit of SES's
rates. Hearing Transcript (Tr.) at 31:7-32:16, 92:5-93:-7. Consequently,
for offerors, such as SGT, whose proposals relied upon using the incumbent
workforce, the agency applied the September 2003 evaluated rates,
regardless of whether DCAA had determined that the wage determined
positions were in fact in line with the wage rates. Tr. at 181:2-8. We
conclude that this adjustment was reasonable in light of the agency's
concerns regarding SGT's proposed costs as being [deleted] experienced by
SES under the incumbent contract.
[5] In its cost analysis, the agency applied SGT's proposed rate for the
program manager, and not the evaluated rate established by DCAA based on
the individual's employment letter. The agency has acknowledged that using
the proposed rate was an error by the original CEB, and was not corrected
by the reevaluation CEB. Agency Post-Hearing Comments, at 3 n.12. However,
because the incorrect rate used by the agency is in fact lower than the
actual rate, there is no prejudice to SGT. See McDonald-Bradley, B-270126,
Feb. 8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v. Christopher,
102 F.3d 1577, 1581 (Fed. Cir. 1996).
[6] The reevaluation CEB chair stated that, prior to the issuance of the
RFP, the agency used the September 2003 DCAA audit of SES's labor rates
under the incumbent contract to establish a "benchmark" to develop the
agency most probable cost estimate for the solicitation. Tr. at
54:18-56:15, 92:5-93:7. The original CEB also conducted a "spot check"
analysis to compare SES cost data under the incumbent contract at the time
of proposal submission to the September 2003 DCAA audit rates. Tr. at
116:7-117:4. The agency now contends that the benchmark and spot check
analyses validated the use of the SES September 2003 audited rates for the
cost realism analysis for SGT's proposal. As the agency acknowledges,
however, the record contains no information regarding the methodology
behind or results of the initial benchmarking or the spot check analyses.
Tr. at 78:18-79:15, 93:8-18, 166:5-22. Although the agency submitted a
declaration by the original CEB chair, concerning the spot check, this
declaration also does not disclose any detail regarding the purported
analysis. Original CEB Chair Decl. para. 2. Because the agency has not
provided any evidence regarding these analyses, we find that they provide
no support for the agency's actions in this procurement.
[7] The RFP incorporated FAR sect. 52.215-1(f)(4), which states that the
agency intends to award without discussions: "The Government intends to
evaluate proposals and award a contracting without discussions with
offerors . . . The offeror's initial proposal should contain the offeror's
best terms from a cost or price and technical standpoint."
[8] During the course of this protest, the agency has offered several
post-hoc explanations as to why the use of the September 2003 rates was
appropriate. In addition to the benchmark and spot-check arguments,
discussed above, the agency prepared for purposes of this protest several
analyses of SES's cost data from various points in time under the
incumbent contract, which the agency argued showed that SES's costs at the
time of proposal submission in May 2004 were similar to those in September
2003. See Memorandum of Law at 20-21; Supplemental Memorandum of Law at
3-5; Hearing Exhs. 5-7. In general, although we consider the entire
record, including statements and arguments made in response to a protest
in determining whether an agency's selection decision is supportable, we
accord greater weight to contemporaneous source selection materials rather
than judgments made in response to protest contentions. See Boeing
Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 97-2
CPD para. 91 at 15. Here, because we conclude that the agency has neither
sufficiently linked its post-protest rationales to contemporaneous
decisions nor demonstrated that such rationales in fact support its
decisions, we exclude these from our decision.
[9] The protester additionally contends that the agency should have
conducted discussions regarding its cost proposal. Where a solicitation
advises offerors that award may be made on the basis of initial proposals
without discussions, agencies have broad discretion in deciding whether to
hold discussions. Modern Techs. Corp., B-278695 et al., Mar. 4, 1998, 98-1
CPD para. 81 at 14. Although discussions may have addressed doubts or
concerns regarding SGT's cost proposal, the agency was within its
discretion not to do so, and the protester's disagreement with that
decision does not demonstrate that the agency's decision was unreasonable.
Id.
[10] SGT notes that it received higher ratings under the initial
evaluation as compared to the revised evaluation, and protests that the
agency does not specifically provide a rationale for the lower scores.
Where an agency conducts a reevaluation of offerors that results in a
different ratings, we will not question the reasonableness of the revised
ratings simply because they differ from the initial ratings--particularly
where, as here, different evaluators were involved. 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. SOS Interpreting,
Ltd., B-293026.4, B-293026.5, Aug. 25, 2004, 2005 CPD para. 25 at 7. As
discussed above, we find no basis to challenge the reasonableness of those
revised evaluations in a manner that prejudices SGT.
[11] We have reviewed all of the challenges raised by SGT to its technical
evaluation and conclude that all issues not fully discussed herein also
lack merit.