TITLE:  STEM International, Inc., B-295471, January 24, 2005
BNUMBER:  B-295471
DATE:  January 24, 2005

**********************************************************************

   Decision

   Matter of:   STEM International, Inc.


   File:            B-295471

   Date:              January 24, 2005

   C.S. Prakash, Ph.D., for the protester.

   Kenneth A. Martin, Esq., Martin & Associates, for Integrated Systems
Support Associates, Inc., the intevenor.

   Edward N. Ramras, Esq., United States Marine Corps, for the agency.

   Sharon L. Larkin, Esq., and Guy R. Pietrovito, Esq. Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest challenging evaluation of proposals for program management and
engineering support services is denied, where record shows that the agency
reasonably evaluated offerors' capability, experience, and price
consistent with the solicitation's evaluation criteria, and reasonably
determined that the awardee's technical superiority was worth the
additional cost.

   DECISION

   STEM International, Inc. protests the award of a contract to Integrated
Systems Support Associates, Inc. (ISSA) under request for proposals (RFP)
No. M00264-04-R-0012, issued by the United States Marine Corps (USMC) for
program management and engineering support services for the USMC
headquarter's installation and logistics program.

   We deny the protest.

   The RFP, issued as a section 8(a) set-aside, provided for the award of a
time and materials, indefinite-delivery/indefinite-quantity contract for a
base year and four option years.[2]  Award was to be made on a
best-value basis, considering the following factors:  (1) management
capabilities and experience, (2) personnel qualifications and technical
expertise, (3) knowledge of Department of Defense and USMC organization
and installations and logistics programs, (4) past performance, and (5)
price.  Offerors were informed that the technical evaluation factors, when
combined, were significantly more important than price, and that the
technical evaluation factors were listed in descending order of
importance.  RFP SA M.1.

   The solicitation's statement of work described the services to be
performed and personnel to be provided.  In this regard, the RFP
identified the positions of project manager, senior program analysts, and
program analysts as ``core team/key personnel.''  RFP S C.5.1.  Resumes for
these ``core team/key personnel'' were required for evaluation, see id. S
M.1, and offerors were informed that during the first 120 days of the
contract performance period, ``no personnel substitutions [of core team/key
personnel] shall be permitted unless such substitutions are necessitated
by an individual's sudden illness, death, termination of employment or to
meet specific personnel requirements described for individual task
orders.''  Id. S H.1.

   STEM and ISSA were among the seven offerors that responded to the RFP. 
Each proposal was evaluated by the agency's source selection board (SSB),
which rated proposals as outstanding, acceptable, or unacceptable under
the technical evaluation factors.  In this regard, ISSA received a total
of 4 outstanding ratings and 8A acceptable ratings; STEM received 2
outstanding ratings and 10 acceptable ratings.  Neither offeror received
any unacceptable ratings.  AR, Tab 10, SSB Report, at 3. 

   The SSB found advantageous ISSA's proposed partnership with other
companies to perform the requirements of the RFP.  This, the SSB found,
allowed ISSA to ``draw on resources of 1500 people'' from one of its team
members, and added capability and experience in environmental, scientific,
and technical services, as well as logistics support.  The SSB found that,
overall, the proposal ``displayed a significantly deeper understanding of
our work in the context of the [USMC's] logistics modernization efforts,
and provided a significant `reach back'[3] capability to tap that
experience, relationships, and personnel.''  The SSB also noted that the
firm offered to recruit incumbent employees.  Id. at 8.    

   In contrast, the SSB noted that STEM did not offer to partner with other
firms to bring a full range of capability to the contract.  Although the
SSB regarded STEM's proposed ``contingent hire commitments'' from various
personnel of the incumbent contractor to be a proposal ``strength,'' the SSB
found that STEM itself lacked any experience with USMC, and further noted
that a majority of the firm's experience related to United States Army and
chemical munitions management and oversight.  Additionally, the SSB found
that a ``major weakness'' in STEM's proposal in comparison to the other
proposals was that STEM ``presented the status quo, without any clear
articulation of where the [USMC] was headed within the logistics
modernization arena and how that impacted what they would present or
support via this contract.''  Id. at 14.    

   The SSB reported its findings to the source selection authority (SSA). 
The SSA adopted the SSB's technical findings and evaluated price, noting
that ISSA's proposed price of $6,513,811.20 was approximately 14 percent
higher than STEM's price of $5,719,958, and that as the third
lowest-priced offer for the 5-year life of the contract, ISSA's price
appeared fair and reasonable.  AR, Tab 11, Business Clearance Memorandum,
at 10. 

   The SSA selected ISSA for award, concluding that the additional cost to
the government was warranted given the firm's greater ``reach back''
capability and experience with logistics management and facilities and
installations programs.  The SSA found that the ``overall strength of
[ISSA's] technical proposal and their ability within the partnership to
address all the areas identified in the [statement of work] provides the
highest level of confidence [that] the current and emergent contract
requirements can be met and indicates the highest overall value of the
proposals evaluated.''  Id. at 12.  STEM was notified of the award and
protested to our Office.

   STEM challenges the agency's evaluation and source selection decision.  It
contends that the agency relied upon an unstated evaluation criterion,
ignored the strength of STEM's experience resulting from its incumbent
hire commitments, and failed to give sufficient consideration to its
proposal's lower price.  STEM also asserts that the awardee, which
allegedly was hiring incumbent employees, engaged in a ``bait and switch''
of its proposed personnel. 

   Our Office will review an agency's evaluation of proposals to determine if
the evaluation was reasonable and consistent with the RFP's stated
evaluation criteria and applicable procurement statutes and regulations. 
Independence Constr., Inc., B-292052, May 19, 2003, 2003 CPD P 105 at
4.  In evaluating a proposal, an agency may take into account specific,
albeit not expressly identified, matters that are logically encompassed by
or related to the stated evaluation criteria.  Id. 

   With respect to STEM's complaint that the agency relied upon an unstated
criterion when it evaluated offerors' ``reach back'' capability, USMC
asserts that this capability, which refers to an offeror's ability to call
upon the personnel and other resources available from both itself and its
team partners, is reasonably related to evaluation factors (1), (2) and
(3).  Based on our review, we agree with the agency that these factors all
contemplated that the agency would evaluate the capability of the
offeror's team to call upon its personnel and resources to perform the
work.  For example, the RFP stated that offerors would be evaluated for
their ``experience and capabilities that demonstrate familiarity and
expertise with [USMC] programs as described in the Statement of Work'';
their demonstrated ``understanding of [the USMC] Installations and
Logistics program missions, functions and goals''; and employee ``technical
expertise and experience . . . related to support of installations . . .
and military logistics programs.''  RFP S M.1.2.  These statements
contemplate that the agency would evaluate an offeror's capability and
resources, which would include its ability to ``reach back'' to the
resources of its team members.  Accordingly, we find that the agency did
not apply an unstated evaluation criterion in its evaluation.

   We also find reasonable the agency's conclusions regarding the offerors'
capability.  As the record shows, ISSA had the ability to call upon 1,500
persons from just one of its team members, as opposed to STEM, which
asserts that it has available a total of only 120 employees nationwide. 
AR, Tab 10, SSB Report, at 8; Protester's Additional Comments at 1. 
Moreover, ISSA's partnership approach, as evaluated by USMC, offered the
agency a broad depth of experience with facilities and installations
programs and management, and to an even larger extent logistics
management, which are pertinent to the required effort here.  AR, Tab 11,
Business Clearance Memorandum, at 12.

   STEM also complains that the agency gave insufficient consideration to the
firm's personnel and experience, which includes the experience of the
incumbent personnel that STEM identified as key employees.  However, the
record demonstrates that USMC recognized as a proposal strength the
commitments that STEM obtained from incumbent personnel, but found that
this was outweighed by STEM's lack of any past performance with USMC or
experience beyond United States Army chemical munitions management and
oversight, and the proposal's focus on maintaining the ``status quo.''  Id.
at 6.  Although STEM disagrees with the agency's assessment, it has not
demonstrated that it was unreasonable.  See UNICCO Govt. Servs., Inc.,
B-277658, Nov. 7, 1997, 97-2 CPD P 134 at 7 (mere disagreement with an
agency's assessment does not show that the agency's judgment was
unreasonable).

   STEM also challenges the agency's best-value analysis, maintaining that it
should have been awarded the contract based on its lower price.  However,
the RFP specified that the technical and past performance factors were
``significantly more important'' than price, and consistent with the
evaluation criteria, the agency gave greater consideration to the
technical superiority of ISSA's proposal over STEM's lower price.  Thus,
although the SSA recognized STEM's price advantage, she determined that
the ISSA team's greater ``reach back'' capability and logistics/installation
program support experience warranted paying the additional cost.  STEM has
not shown this trade-off judgment to be unreasonable.

   STEM also asserts that ISSA engaged in an unlawful ``bait and switch'' of
its proposed personnel, based on its belief the ISSA is now hiring
incumbent employees to perform the work.  STEM asserts that this is
improper because some of these individuals issued commitment letters to
STEM.

   Generally, an offeror's misrepresentation concerning personnel that
materially influences an agency's consideration of its proposal provides a
basis for proposalA rejection or termination of a contract issued based
upon the proposal.  TheA CentechA Group, Inc., B-278715, B-278715.2, Mar.
5, 1998, 98-1 CPD P 108 at 7.  AA misrepresentation is material where an
agency has relied upon the misrepresentation and that misrepresentation
likely had a significant impact on theA evaluation.  Id. 

   Here, ISSA has apparently not sought to replace any of its identified
``core team/key personnel'' with incumbents after award.  Affidavit of
Contracting Officer/SSA at 2.  Moreover, the post-award hiring of
incumbent personnel would be consistent with ISSA's representation in its
proposal that it would ``leverage[] the depth of talent on the ISSA TEAM
[by] recruitment of the right incumbent staff'' to supplement its
personnel.  See AR, Tab 6, ISSA's Technical Proposal, at 18.  The record
does not evidence that ISSA has engaged in a ``bait and switch'' with
respect to its proposed personnel.

   The protest is denied.

   Anthony H. Gamboa

   General Counsel

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

   [1] The protester was not represented by counsel and did not have access
to source selection sensitive and proprietary information.  Accordingly,
our discussion in this decision is necessarily general in order to avoid
disclosure of this information.  Our conclusions, however, are based on
our review of the entire record. 

   [2] The contract was to replace a contract with a narrower scope of work,
which was performed by EGG, Inc., a company which has since graduated from
the section 8(a) program.  Agency Report (AR) at 2.

   [3]  In response to our Office's request for additional information, the
agency explained that ``reach back'' capability refers to the contractor's
ability to perform the work through employing its own personnel or
resources, or that of its partners.  Agency E-mail to GAO, Protester,
and Intervenor (Jan. 13, 2005).
