TITLE: B-298432.3, Indtai Inc., January 17, 2007
BNUMBER: B-298432.3
DATE: January 17, 2007
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B-298432.3, Indtai Inc., January 17, 2007

   Decision

   Matter of: Indtai Inc.

   File: B-298432.3

   Date: January 17, 2007

   Robert Brotzman for the protester.

   Janice Davis, Esq., Davis & Steele, for Dynamic Systems Technology, Inc,
   and Daniel R. Forman, Esq., and Peter J. Eyre, Esq., Crowell & Moring, for
   aXseum Solutions, LLC, the intervenors.

   Maj. ChristinaLynn E. McCoy and Capt. James F. Ford, Department of the
   Army, for the agency.

   Nora K. Adkins, Esq., and James Spangenberg, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. The past performance of proposed subcontractors may properly be
   considered in evaluating the past performance of an offeror where the
   solicitation does not expressly prohibit its consideration.

   2. Agency performed a sufficient price analysis, which determined the
   awardees' prices were fair and reasonable based on adequate price
   competition, and was not required to perform a price realism analysis to
   ascertain whether there were performance risks associated with awardees'
   low prices because the solicitation did not provide for such an analysis.

   DECISION

   Indtai Inc. protests the award of three contracts under request for
   proposals (RFP) No. W74V8H-06-R-0044, issued by the Department of the Army
   for non-personal educational support services to assist government
   professionals in the delivery of adult education services at sites in
   eight designated regions worldwide.

   We deny the protest.

   The RFP contemplated award on a "best-value" basis of as many as two
   indefinite-delivery, indefinite-quantity, labor-hour contracts for each of
   eight regions. Proposals were to be evaluated under three evaluation
   factors: technical capability, past performance, and cost/price. The RFP
   stated that technical capability was significantly more important than
   past performance, and that past performance was significantly more
   important than cost/price. The technical capability factor had six
   subfactors: understanding of requirement, transition plan, program
   management, key personnel, quality control, and contingency plan. Past
   performance information was to be provided by the offerors covering
   relevant existing and prior contracts over the past 3 years. Price
   proposals were to be evaluated for price reasonableness.

   Fifteen different proposals were received from 13 different offerors in
   response to the RFP. Eight of the 15 proposals, including those of the
   awardees, received "excellent" technical capability and "low risk" past
   performance ratings. Indtai's proposal received a "low risk" past
   performance rating but received only a "good" technical capability rating.
   Indtai's price for each region was significantly higher than the awardees'
   prices, as well as those offered by most of the other excellent, low-risk
   proposals. The agency made one award per region to the firm offering the
   lowest-priced proposal, which was rated excellent and low-risk for that
   region. Regions 1, 2 and 4 were awarded to aXseum Solutions, LLC; regions
   3, 6, and 7 were awarded to Evolver, Inc; and regions 5 and 8 were awarded
   to Dynamic Systems Technology, Inc.

   The protester contends that the agency did not conduct a sufficiently
   detailed analysis of the offerors' proposals, which was caused by the
   short time the agency took to complete its evaluation. The procuring
   agency is in the best position to determine the time necessary to conduct
   a satisfactory proposal evaluation; our Office will only examine the
   agency's evaluation to ensure it was reasonable and consistent with the
   RFP. IMODCO, B-216259, Jan. 11, 1985, 85-1 CPD para. 32 at 3-4. Contrary
   to the protester's allegation, as discussed below, based on our in camera
   review[1], the agency adequately documented its evaluation and award
   selections, which we find reasonable and consistent with the RFP's
   evaluation criteria.[2]

   Indtai challenges the agency's past performance evaluation, specifically
   alleging the agency's ratings for past performance were unreasonable
   because the agency did not differentiate between prime and subcontractor
   past performance to give more weight to prime contractor past performance.

   The RFP provided:

     Past performance evaluation will assess the relative risks associated
     with an offeror's likelihood of success in performing the solicitation's
     requirements as indicated by that offeror's record of past performance.
     . . . When assessing performance risk, the Government will focus its
     inquiry on past performance of the offeror under existing and prior
     contracts over the past three (3) years as it relates to all
     solicitation requirements. The Government will conduct a performance
     risk assessment based on the quality, relevancy and currency of the
     offeror's past performance as it relates to the quality of the service,
     schedule, business relations, management of key personnel, compliance
     with security requirements, cost management/ performance, and in
     successfully accomplishing the required effort. Quality of performance
     is defined as the level of past performance provided which will be used
     as an indicator of the offeror's likelihood of success. Relevancy is
     defined as the scope, magnitude, complexity, and similarity of offeror's
     past performance as it relates to this acquisition.

   RFP amend. 3, sect. M, at 34. The RFP did not specifically address the
   evaluation of subcontractors' past performance.

   The past performance of proposed subcontractors may properly be considered
   in evaluating the past performance of an offeror where the solicitation
   does not expressly prohibit its consideration. Federal Acquisition
   Regulation (FAR) sect. 15.305(a)(2)(iii); Roca Mgmt. Educ. & Training,
   Inc., B-293067, Jan. 15, 2004, 2004 CPD para. 28 at 5.

   In its evaluation, the agency gave the awardees credit for their
   subcontractors' favorable past performance in determining their
   performance was low risk. Contrary to the protester's argument, the RFP
   did not suggest that prime contractor past performance would necessarily
   be given greater weight than relevant past performance by subcontractors.
   Our in camera review of the record shows that the awardees' past
   performance evaluations are documented, give appropriate weight to
   subcontractor past performance and support the low risk ratings.[3]

   The protester also argues that the agency's price reasonableness
   evaluation was not consistent with the RFP. Where, as here, an agency
   evaluates proposals for the award of a fixed-price contract, in which the
   government's liability is fixed and the contractor bears the risk and
   responsibility for the actual costs of performance, the analysis of an
   offeror's price need only determine that the price offered is fair and
   reasonable to the government. FAR sections 15.402(a), 15.404-1(a); SAMS El
   Segundo, LLC, B-291620.3, Feb. 25, 2003, 2003 CPD para. 48 at 8. The
   government may use various price analysis techniques and procedures to
   ensure a fair and reasonable price, including the comparison of proposed
   prices received in response to the solicitation; adequate price
   competition can establish price reasonableness. FAR sect.
   15.404-1(b)(2)(i); MVM, Inc., B-290726 et al., Sept. 23, 2002, 2002 CPD
   para. 167 at 6.

   The RFP provided possible methods for evaluating price reasonableness:
   information submitted with the offeror's proposal, the comparison of other
   competitive offers, the independent government cost estimate (IGCE), or on
   any other reasonable basis. RFP amend. 3, sect. M, at 35. Of these
   options, the agency chose to evaluate price reasonableness by comparing
   price proposals to each other as well as to the IGCE. The agency has
   adequately documented its price analysis and reasonably determined, based
   on a comparison of price proposals and comparison of the prices to the
   IGCE, that the awardees' prices were fair and reasonable. Agency Report,
   Tab 25, Cost/Price Analysis Report, at 1. While the protester alleges the
   agency should have conducted a more in-depth analysis of the price
   proposals, the depth of an agency's price analysis is a matter within the
   sound exercise of the agency's discretion; we find no legal requirement
   here for the agency to have done a more in-depth analysis than was
   undertaken here. See Redcon, Inc., B-285828, B-285828.2, Oct. 11, 2000,
   2000 CPD para. 188 at 9.

   Given that Indtai's price is significantly higher than the awardees'
   prices, many of the protester's contentions concern the agency's alleged
   failure to perform sufficient analysis to determine whether the awardees'
   prices were too low or consider the performance risk of these assertedly
   low prices. However, the purpose of a price reasonableness analysis is to
   determine whether the prices offered are higher--as opposed to lower--than
   warranted. See Dismas Charities, Inc., B-289575.2, B-289575.3, Feb. 20,
   2004, 2004 CPD para. 66 at 4; Sterling Servs. Inc., B-291625, B-291626,
   Jan. 14, 2003, 2003 CPD para. 26 at 3. In contrast, arguments that the
   agency did not perform an appropriate analysis to determine whether prices
   are too low such that there may be a risk of poor performance concern
   price realism not price reasonableness; price realism is not required to
   be evaluated by the agency unless the solicitation provides for such an
   analysis. Dismas Charities, Inc., supra. Here, the solicitation did not
   provide for a cost realism analysis and the agency therefore did not have
   to perform such an analysis.

   The protester's finally challenges its own "good" technical capability
   evaluation rating. For the reasons discussed below, we find that Indtai is
   not an interested party eligible to raise this protest ground. A protester
   is not an interested party where it would not be in line for a contract
   award even if its protest were sustained, since it lacks the direct
   economic interest required by our Regulations to maintain a protest. 4
   C.F.R. sections 21.0(a)(1), 21.1(a) (2006); Four Seas and Seven Winds
   Travel, Inc., B-244916, Nov. 15, 1991, 91-2 CPD para. 463 at 4. We first
   note that, as discussed above, Indtai's protest of the past performance
   and price evaluation was without merit. In addition, Indtai's price is
   significantly higher than the awardees' prices, as well as the prices of
   most of the other offerors; in no case is there any region where Indtai
   would be next in line since there is at least one offeror in each of these
   regions with higher ratings and a lower price that did not receive an
   award. Moreover, Indtai has not challenged the excellent ratings of the
   proposals of the awardees and the five other low-risk offerors. Thus,
   Indtai would not be in line for award, even if its technical capability
   rating argument was upheld and it received an excellent rating, because
   there are intervening offerors who would be in line for award if Indtai's
   protest ground were sustained.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] Our discussion of the evaluation of the awardees' proposals, based on
   our in camera review, is necessarily general because much of the
   information is proprietary and the protester did not retain counsel who
   could view this information under a protective order issued by our Office.

   [2] For example, while the protester alleges that the agency's technical
   capability factor analysis was a simple count of strengths and weaknesses,
   the evaluation documentation reflects an in-depth review of the proposals
   under each of that factor's subfactors.

   [3] This case is distinguishable from Accurate Automation Corp., B-292403,
   B-292403.2, Sept. 10, 2003, 2003 CPD para. 186 at 7-8 (cited by the
   protester), where the offeror's "management of subcontractors" was the
   most important subfactor in the past performance evaluation. The
   solicitation here does not indicate that the past performance evaluation
   would focus on management of subcontractors.