TITLE: B-298494.2; B-298494.3; B-298494.4; B-298494.5; B-298494.6; B-298494.7; B-298494.8; B-298494.9; B-298494.10; B-298494.11; B-298494.12; B-298494.13; B-298494.14, Computer Sciences Corporation; Unisys Corporation; Northrop Grumman Information Technology, Inc.; IBM Business Consulting Services--Federal, May 10, 2007
BNUMBER: B-298494.2; B-298494.3; B-298494.4; B-298494.5; B-298494.6; B-298494.7; B-298494.8; B-298494.9; B-298494.10; B-298494.11; B-298494.12; B-298494.13; B-298494.14
DATE: May 10, 2007
**********************************************************************************************************************************************************************************************************************
B-298494.2; B-298494.3; B-298494.4; B-298494.5; B-298494.6; B-298494.7; B-298494.8; B-298494.9; B-298494.10; B-298494.11; B-298494.12; B-298494.13; B-298494.14, Computer Sciences Corporation; Unisys Corporation; Northrop Grumman Information Technology, Inc.; IBM Business Consulting Services--Federal, May 10, 2007
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: Computer Sciences Corporation; Unisys Corporation; Northrop
Grumman Information Technology, Inc.; IBM Business Consulting
Services--Federal
File: B-298494.2; B-298494.3; B-298494.4; B-298494.5; B-298494.6;
B-298494.7; B-298494.8; B-298494.9; B-298494.10; B-298494.11;
B-298494.12; B-298494.13; B-298494.14
Date: May 10, 2007
Carl J. Peckinpaugh, Esq., and Helaine G. Elderkin, Esq., for Computer
Sciences Corporation; David S. Cohen, Esq., John J. O'Brien, Esq., Laurel
A. Hockey, Esq., Bryan T. Bunting, Esq., Catherine K. Kroll, Esq., and
Tenley A. Carp, Esq., Cohen Mohr LLP, and E. Charles Rowan, Jr., Esq., and
Charlotte D. Young, Esq., for Unisys Corporation; William W. Thompson,
Jr., Esq., Michael A. Branca, Esq., Lori Ann Lange, Esq., and Diane Foose,
Esq., Peckar, Abramson, Bastianelli & Kelley, LLP, and Linda T. Maramba,
Esq., for Northrop Grumman Information Technology, Inc.; John S. Pachter,
Esq., Jonathan D. Shaffer, Esq., Mary Pat Gregory, Esq., and Matthew L.
Haws, Esq., Smith Pachter McWhorter PLC, and Todd Hutchen, Esq., for IBM
Business Consulting Services--Federal, the protesters.
Thomas P. Barletta, Esq., Daniel C. Sauls, Esq., Paul R. Hurst, Esq.,
Michael J. Navarre, Esq., and Ana Holmes Voss, Esq., Steptoe & Johnson
LLP, and James S. Kennell, Esq., for Science Applications International
Corporation; Lori A. Conlon, Esq., for Lockheed Martin Information
Services, Inc.; Kevin P. Mullen, Esq., David E. Fletcher, Esq., and Tara
M. Lee, Esq., Cooley Godward Kronish LLP, for Electronic Data Systems
Corp.; Thomas O. Mason, Esq., Frances E. Purcell, Jr., Esq., Robert E.
Korroch, Esq., and Megan E. Burns, Esq., Williams Mullen, for Booz Allen
Hamilton Inc.; and Gregory S. Jacobs, Esq., Reed Smith LLP, for CACI,
Inc.--Federal, the intervenors.
Robert R. Goff, Esq., Defense Information Systems Agency, for the agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
In a negotiated procurement, an agency's exchanges with offerors with
respect to their proposed subcontracting plans were discussions, where the
solicitation provided for the comparative assessment of the merits of the
plans as part of the agency's technical evaluation, a number of the
offerors' subcontracting plans were assessed as being unacceptable, and
the offerors made material revisions in their plans in response to the
exchanges with the agency that made them acceptable.
DECISION
Computer Sciences Corporation (CSC); Unisys Corporation; Northrop Grumman
Information Technology, Inc. (NGIT); and IBM Business Consulting
Services--Federal protest the failure of the Defense Information Systems
Agency (DISA), Department of Defense (DoD), to award "Encore II" contracts
to the protesters under request for proposals (RFP) No. HC1013-05-R-2003
for information technology services supporting DoD and other federal
agencies. The protesters challenge the agency's technical, past
performance and price evaluation, the conduct of exchanges with the
offerors,1 and source selection decision.
We sustain the protests.
The RFP provides for the award of multiple, indefinite-delivery,
indefinite-quantity contracts for a 60-month base period with five 1-year
options, under which the agency will award time-and-materials or
labor-hour, fixed-price or cost-reimbursable task or delivery orders for
technical solutions for [DoD] in support of its migration to an integrated
and interoperable Global Information Grid (GIG), as well as other Federal
agencies having similar Information Technology (IT) migration and
integration needs. The Encore II contracts represent an ongoing expansion
of [DISA's] Defense Enterprise Information Services (DEIS) I and DEIS II
contracts, and Encore follow-on contracts.
RFP amend. 12, sect. B.1.a. The Encore II contractors will provide
services, hardware, software, and associated products to satisfy
information technology activities at all operating levels in support of
the functional requirements, including command and control, intelligence
and mission support, and to all elements of the GIG.2 Id. sect. C.1.3.
The RFP stated that the agency would "keep the number of [contract] awards
to a reasonable amount," which the solicitation defined to be six awards
for this acquisition. Id. sect. B.1.d. Offerors were also informed that
the total amount of all orders placed would not exceed $12.225 billion
over the life of the Encore II contracts and that each contractor was
guaranteed a minimum amount of $10,000. Id. sect. B.1.b.
The RFP provided for award on a "best value" basis, and stated the
following evaluation factors, subfactors, and elements:
Past Performance Factor
Element 1: Cost Control
Element 2: Schedule
Element 3: Mission Requirements
Element 4: Quality
Element 5: Socioeconomic Goals
Element 6: Subcontracting Management
Element 7: Business Relations
Element 8: Key Personnel
Technical/Management Approach Factor
Technical Solutions Subfactor
Element 1: Overall Task Area Approach
Element 2: Task 1 Interoperable Communications
Services
Element 3: Task 2 Interoperable Information Sharing
Systems
Element 4: Task 3 Operations Support
Element 5: Task 4 Automated Processing System
Management Solutions Subfactor
Element 1: Management and Organizational Structure
Element 2: Quality Awards, Recognition and
Certifications
Element 3: Key Personnel
Element 4: Electronic Commerce/Electronic Business
Element 5: Ability to Recruit, Train, Maintain and
Retain High-Quality Personnel
Element 6: Small Business Subcontracting Plan
Element 7: Mentor-Protege Program
Element 8: Invoice Processing
Cost/Price Factor
RFP amend. 12, sect. M.5.2. The past performance factor was stated to be
comparatively equal in weight to the technical/management approach factor,
and each of these factors was more important than the cost/price factor.
The subfactors and elements were stated to be comparatively equal within
each factor. Offerors were informed that proposals "must meet or exceed
all evaluation criteria to be eligible for award." Id. sect. M.5.1.c; see
also id. sect. M.3.f ("Any proposal that does not substantially and
materially comply with all of the requirements of the solicitation will be
rejected and not considered for further evaluation.")
Detailed proposal preparation instructions were provided. With respect to
the past performance factor, offerors were requested to identify "no more
than four (4) recent (completed within the last 3 years: 2003-2005, or
work that is on-going) contracts or task orders on which [they had]
performed as either the prime contractor or subcontractor." For each of
the four prior contract or task order efforts, the offeror was to complete
a past performance data sheet and to provide a past performance
questionnaire to one of the customer points of contact identified in the
data sheet. Id. sect. L.10.b. With respect to the technical solutions
subfactor under the technical/management approach factor, offerors were
instructed to address their understanding and approach to performing all
of the Encore II tasks. With respect to the management solutions
subfactor, offerors were instructed to address their management approach
with regard to the eight identified elements.
With regard to the small business subcontracting plan element of the
management solutions subfactor, offerors were informed that the agency
would evaluate the feasibility and comprehensiveness of the offeror's
planned approach to meeting the subcontracting goals established by the
RFP. Id. sect. L.10.c.(2)(vi). The RFP identified minimum small business
subcontracting awards as a percentage of the total task order dollars; for
example, offerors were expected to subcontract at least 24 percent of the
total task order dollars to small business concerns; similar, albeit
smaller, requirements were stated for small disadvantaged businesses,
woman-owned small businesses, service-disabled veteran-owned small
businesses, HUBZones, historically black colleges and
universities/minority institutions, and veteran-owned small businesses.
Id.; see also id. sect. H.32. In addition to addressing the small business
subcontracting plan element in their technical proposals, offerors were
required to submit a separate subcontracting plan as part of their
proposal addressing general contract information (such as section K
representations and certifications). Id. sections L.10e(4), L.11.
With respect to the cost/price factor, offerors were required to submit
fixed, loaded labor rates for the life of the contract. Offerors were
informed that the "proposed rates for the labor categories and other
direct costs (ODCs) in section B would be evaluated with respect to their
completeness and reasonableness" and that the "reasonableness of the
overall price [would] be determined on the basis of adequate price
competition and by comparison with the Independent Government Cost
Estimate (IGCE)." Id. sect. M.5.2.b.(2). The RFP identified 88 labor
categories for which offerors were required to propose fixed labor rates,
and each labor category identified estimated labor hours. Id. sect. B.4.,
Labor Rate Table; attach. 10, Labor Hour Estimates. Offerors were
permitted to propose additional labor categories to those identified in
the solicitation's labor rate table. Id. sect. L.10.d.(1). The RFP
provided that the price evaluation would be based on the total discounted
life cycle cost (DLCC) for each proposal and that the DLCC would be
determined based upon the offeror's proposed rates for the labor
categories and the mark-up and profit percentages for ODCs listed in
section B of the solicitation.3 In this regard, the RFP stated that
"[c]ontractor-generated labor categories will not be included as part of
the DLCC evaluation." Id. sect. M.5.2.b.(4). The solicitation also
informed offerors that the agency
may evaluate cost/price realism with respect to the ability of the Offeror
to meet requirements in terms of skills required, complexity of
disciplines and job difficulty, if the [agency] deems such analysis
necessary. The Offeror's Cost/Price proposal may be compared to the
Technical proposals to determine the Offeror's (1) understanding of work
to be performed and (2) capability and capacity to provide the required
services and accomplish the required tasks . . . . Unrealistically low
prices may indicate an inability to understand requirements and a
high-risk approach to contract performance and the ability to attract and
maintain a high-quality workforce. Accordingly, the [agency] may consider
the findings of such analysis regarding an Offeror's ability to perform
and the risk of its approach. Since proposed labor rates are fixed, the
price evaluation shall not be adjusted as a result of any such cost/price
realism analysis.
Id. sect. M.5.2.b(3).
In addition, the RFP informed offerors that the agency intended to make
award on the basis of initial proposals and without conducting
discussions. Id. sect. M.3.a. In this regard, the RFP provided that
[t]here will be no communications with Offerors after the time and date
specified in the Contracting Officer's request for final proposal
revisions, except for communications regarding an Offeror's Subcontracting
Plan. Subcontracting Plan validation is not to be construed as
negotiations or a reopening of negotiation[s].
Id. sect. L.3.c.
DISA received 16 proposals, including those of the protesters (CSC,
Unisys, NGIT, and IBM) and the 6 awardees (Booz Allen Hamilton, Inc.
(BAH), CACI, Inc.-Federal, Electronic Data Systems Corporation (EDS),
Lockheed Martin Information Services, Inc. (LMI), Science Applications
International Corporation (SAIC), and Systems Research and Application
Corporation (SRA)). The proposals were evaluated by the agency's
respective evaluation teams: the past performance team (PPT) evaluated
offerors' past performance information; the technical/management approach
team (TMAT) evaluated offerors' technical/management approach; the
cost/price team evaluated offerors' price proposals, and the contracting
officer evaluated the offerors' general contract information proposal.
Contracting Officer's Statement at 25. With respect to the past
performance and technical/management approach evaluations, the evaluators
independently prepared individual, written assessments and ratings of the
proposals, which were assembled into a document presenting the evaluators'
individual views. See, e.g., AR, Tabs 659-74, PPT and TMAT Decision Point
Documents for Offerors. Following their individual evaluations, the PPT
and TMAT met to discuss and agree upon a consensus evaluation and ratings
for each of the proposals. Contracting Officer's Statement at 44.
Consensus evaluation reports were then prepared for each offeror and
submitted to the source selection advisory council (SSAC). See AR, Tabs
832-47, Past Performance Consensus Reports, Tabs 848-63,
Technical/Management Approach Consensus Reports.
The offerors' price proposals were evaluated by the agency's cost/price
team, which reviewed the offers for completeness and reasonableness, by
comparing the offerors' prices to each other, developing the DLCC for each
proposal, and comparing each offeror's calculated DLCC to the IGCE.
Contracting Officer's Statement at 53.[1]
The protesters' and awardees' proposals received the following overall
ratings:5
Offeror Past Performance Tech./Mgmt. Approach DLCC
(in billions)
SRA Blue/Low Risk Blue/Low Risk $7.51
CACI Blue/Low Risk Blue/Low Risk $7.98
BAH Blue/Low Risk Blue/Low Risk $7.99
EDS Blue/Low Risk Blue/Low Risk $8.01
LMI Blue/Low Risk Blue/Low Risk $8.37
SAIC Blue/Low Risk Green/Low Risk $8.55
NGIT Blue/Low Risk Green/Low Risk $10.09
IBM Blue/Low Risk Green/Low Risk $10.11
CSC Blue/Low Risk Green/Moderate Risk $8.69
Unisys Blue/Low Risk Yellow/Moderate Risk $9.31
AR, Tab 831, SSAC Report, at 37.
The evaluation results were presented to the agency's SSAC, which accepted
the evaluators' ratings. Id. at 9-10, 37. The SSAC also accepted the
recommendation of the contracting officer to request "clarifications" from
the offerors with the 10 highest rated proposals (which did not include
Unisys). Id. at 33-34. The agency requested additional information from
the protesters (but not Unisys) and the awardees in the following areas:
past performance (clarifying contact numbers for references); quality
awards (confirming that submitted awards were actually those of the
offeror); contract administration information (obtaining statements that
offerors would comply with the contract requirements); and small business
subcontracting plans (correcting nonconforming plans). Id.; Contracting
Officer's Statement at 36, 45, 61-74.
The small business subcontracting plans of a majority of the offerors were
found to be "unacceptable" by the agency for various reasons, including
the proposal of less than the required small business subcontracting goals
and/or the failure to identify the dollar values associated with proposed
goal percentages. See Agency Legal Memorandum at 9; AR, Tabs 675-704,
Small and Disadvantaged Business Utilization Specialist (SADBUS) and Small
Business Administration Procurement Center Representative (PCR)
Subcontracting Plan Comments. For example, [Deleted]'s plan did not
satisfy the RFP requirement that the firm subcontract at least 24 percent
of total task order dollars to small business concerns,6 nor did it
provide, as requested by the RFP, proposed subcontracting dollar values to
allow the agency to assess whether the firm's proposed subcontracting
would satisfy the RFP requirements. As another example, [Deleted]'s plan
was found to provide for subcontracting only 9 percent of the contract
work to small business concerns. See id., Tab 681, SADBUS Review of
[Deleted]'s Subcontract Plan; Tab 714, Clarification Request to [Deleted],
at 1.
In response to the agency's questions and requests, it received additional
information from the highest rated offerors with respect to their past
performance, quality awards, small business subcontracting plans, and
general contract information proposals. With respect to the small business
subcontracting plans, the agency found that the awardees' plans had become
acceptable. Agency Legal Memorandum at 9. With respect to the quality
awards, the offerors' responses resulted in increased ratings for six
offerors, including three awardees, under the quality awards element of
the management solutions subfactor, which resulted in a higher management
solutions subfactor rating for two offerors (CSC and CACI), although these
offerors' higher subfactor rating did not result in a higher
technical/management factor rating. Contracting Officer's Statement at 66.
The SSAC provided a detailed briefing to the SSA that described the
consensus evaluation and price evaluation conclusions of the evaluators
and the SSAC. This briefing identified each offeror's evaluated strengths
and weaknesses under each factor, subfactor, and element. The briefing
also informed the SSA of the agency's exchanges with the offerors. See AR,
Tab 788, SSA Decision Briefing, at 190. The SSAC recommended that the SSA
select the proposals of BAH, CACI, EDS, LMI, SAIC, and SRA for award on
the basis that "[t]hese offerors [were] capable of providing . . .
superior IT products and services to meet future task order requirements
in a timely and cost-effective manner." Id. at 195.
The SSA conducted a price/technical tradeoff analysis, in which she
concluded that the offers of BAH, CACI, EDS, LMI, SAIC, and SRA reflected
the best value to the agency. Specifically, the SSA noted that BAH, CACI,
EDS, LMI, and SRA had submitted the five highest technically-rated offers
with the lowest DLCCs. With respect to SAIC, the SSA found:
SAIC was the next lowest evaluated DLCC price, and they received the same
overall Technical/Management Approach rating of Green as CSC, IBM,
[another offeror], and NGIT. Within the Technical/Management Approach
[factor], CSC and [the other offeror] were rated Medium Risk, while NGIT
and IBM were rated Low Risk. However, CSC, IBM, [the other offeror] and
NGIT had evaluated DLCCs that were more than the evaluated DLCC for SAIC.
In addition, IBM and NGIT have evaluated DLCCs that were higher than the
IGCE. I conclude that the risk rating for CSC and [the other offeror]
along with the cost differential between CSC, IBM, [the other offeror],
NGIT and SAIC is significant enough to preclude award to CSC, IBM, [the
other offeror] and NGIT.
AR, Tab 894x, Source Selection Decision, at 29-30. Awards were made to
BAH, CACI, EDS, LMI, SAIC, and SRA, and, after debriefings, these protests
followed.
CSC, Unisys, NGIT, and IBM protest that the exchanges between DISA and the
offerors with the 10 highest rated proposals constituted discussions and
that these discussions were not meaningful, as required by the FAR.7 DISA
and the intervenors contend that the agency's exchanges were
clarifications.
FAR sect. 15.306 describes a range of exchanges that may take place
between an agency and an offeror during negotiated procurements.
Clarifications are "limited exchanges" between the agency and offerors
that may allow offerors to clarify certain aspects of proposals or to
resolve minor or clerical mistakes. FAR sect. 15.306(a)(2). Discussions,
on the other hand, occur when an agency indicates to an offeror
significant weaknesses, deficiencies, and other aspects of its proposal
that could be altered or explained to materially enhance the proposal's
potential for award or to obtain information from the offeror that is
necessary to determine the proposal's acceptability. See FAR sect.
15.306(d)(3); Nu-Way, Inc., B-296435.5, B-296435.10, Sept. 28, 2005, 2005
CPD para. 195 at 7. When an agency conducts discussions with one offeror,
it must conduct discussions with all other offerors in the competitive
range, FAR sect. 15.306(d)(1), and those discussions must be meaningful;
that is, the discussions must identify deficiencies and significant
weaknesses in each offeror's proposal. FAR sect. 15.306(d)(3); Spherix,
Inc., B-294572, B-294572.2, Dec. 1, 2004, 2005 CPD para. 3 at 13-14. It is
the actions of the parties that determine whether discussions have been
held and not merely the characterization of the exchanges by the agency.
Gulf Copper Ship Repair, Inc., B-293706.5, Sept. 10, 2004, 2005 CPD para.
108 at 6. In this regard, we have found that the acid test for deciding
whether an agency has engaged in discussions is whether the agency has
provided an opportunity for proposals to be revised or modified. See,
e.g., Priority One Servs., Inc., B-288836, B-288836.2, Dec. 17, 2001,
Here, the record shows that the majority of the small business
subcontracting plans submitted by the offerors were found to be
unacceptable by the agency, and that, as a result of the agency's
exchanges on this subject with the 10 highest rated offerors (including
the awardees), those firms revised their proposals, such that the
proposals became acceptable.
DISA does not disagree that a majority of the offerors, with whom
exchanges were conducted regarding their subcontracting plans, revised
their plans to become acceptable. The agency contends, however, citing a
number of decisions of our Office, that exchanges regarding the
acceptability of a required small business subcontracting plan--even the
submission of a revised plan--relate to an offeror's responsibility and
therefore are not discussions. See General Dynamics-Ordnance & Tactical
Sys., Inc., B-295987, B-295987.2, May 20, 2005, 2005 CPD para. 114 at
9-10; AmClyde Engineered Prods. Co., Inc., B-228271.2, June 21, 1999, 99-2
CPD para. 5 at 8; Kahn Instruments, B-277973, Dec. 15, 1997, 98-1 CPD
para. 11 at 10-11; A.B Dick Co., B-233142, Jan. 31, 1989, 89-1 CPD para.
106 at 3; Southeastern Center for Electrical Eng'g Educ., B-230692, July
6, 1988, 88-2 CPD para. 13 at 5-6.
It is true that in each of the cases cited by DISA we found that exchanges
concerning an offeror's small business subcontracting plan were not
discussions because those plans were only evaluated as part of the
agency's responsibility determination. See, e.g., General
Dynamics-Ordnance & Tactical Sys., Inc., supra, at 10 ("A request for, or
providing of, information that relates to offeror responsibility, rather
than proposal evaluation, does not constitute discussions and thus does
not trigger the requirement to hold discussions with other competitive
range offerors. ") (footnote omitted). However, in each of these cases,
unlike the RFP at issue here, the solicitation did not include a technical
evaluation factor under which the comparative merits of offerors' small
business subcontracting plans would be considered to determine which
proposal represented the best value to the government and thus entitled to
award. Thus, under the circumstances of each of these cases, the
assessment of offerors' small business subcontracting plans could only be
done as part of the agency's responsibility determination.
In contrast, the RFP here provided for a comparative assessment of the
offerors' small business subcontracting plans as part of the agency's
technical evaluation to determine which proposal represented the best
value to the government.^8 See RFP amend. 12, sect. M.5.2.a.(2)(ii)(6)
("For large businesses, the Government will evaluate the feasibility and
comprehensiveness of the Offeror's planned approach to meeting the
established subcontracting goals of . . . ."). In accordance with this
evaluation scheme, the agency's TMAT performed a comparative evaluation of
the offerors' proposed small business subcontracting plans that were
provided as part of the offerors' technical/management approach proposals,
assigning strengths and weaknesses for each proposal. See, e.g., AR, Tab
881, SSAC Evaluation Report, app. 4, Technical/Management Approach Factor
Evaluation, at 103 (SRA's proposal was evaluated as exceeding the small
business subcontracting plan requirements, with a number of strengths,
including that the firm had committed to exceeding the small business
goal); see also id. at 189, 212 ([Deleted]'s and [Deleted]'s proposals
were evaluated as exceeding the small business subcontracting plan
requirements, with a number of strengths and no weaknesses). In contrast,
[Deleted]'s proposed small business subcontracting plan was evaluated as
failing to satisfy the solicitation requirements and a number of
weaknesses were assigned, including that the proposal did not adequately
address how the firm would meet small business goals. Id. at 279. The SSA,
in her selection decision, specifically recognized the relative strengths
and weaknesses assessed in the offerors' proposed small business
subcontracting plans. See, e.g., AR, Tab 894x, Source Selection Decision,
at 15 ("[Deleted] has committed to exceeding goals for [small businesses
and other small business entities identified in the RFP for which goals
were identified]"), and at 20 ("CSC did not provide details on how they
were going to meet or exceed small business goals").
More akin to the circumstances of this procurement than the cases cited by
DISA are our decisions in Fritz Cos., Inc., B-246736 et al., May 13, 1992,
92-1 CPD para. 443, aff'd, Daniel F. Young--Recon., B-246736.4, July 30,
1992, 92-2 CPD para. 62. The solicitation at issue in the Fritz case
required the submission of small business and small disadvantaged business
subcontracting plans and informed offerors that these plans could become
the determining factor in the award decision if offers were found to be
essentially equal. In Fritz, we found that, despite the agency's
characterization that award had been made on the basis of initial
proposals, the agency had actually conducted discussions with the awardee,
where the agency selected the awardee's proposal on the basis of its
superior subcontracting plan but after the awardee had been provided with
an opportunity to revise its plan, which we found to be a material
revision to the awardee's proposal.
DISA also contends that these exchanges do not constitute discussions
because they relate only to the small business subcontracting plan that
was submitted as part of the general contract information proposal and not
to the plan that was submitted as part of the technical/management
approach proposal. DISA and the intervenors argue that the solicitation
informed offerors that the small business subcontracting plans submitted
with the firms' general contract information proposals would not be
considered in the agency's technical evaluation, and that the RFP informed
offerors that the agency would not conduct discussions with regard to the
small business subcontracting plans. See RFP amend. 12, sect. L.3.c. DISA
also states in this regard that offerors' revisions to their small
business subcontracting plans were not provided to the agency's TMAT and
therefore did not affect the firms' technical/management approach factor
evaluations. See Agency Legal Memorandum at 15.
We do not agree that the solicitation provided that offerors' small
business subcontracting plans (and more specifically their promises to
satisfy or exceed the small business subcontracting goals) would not be
evaluated by the agency in its consideration of the firms' proposals under
the technical/management approach factor. Rather, as noted above, the RFP
specifically stated that the firms' promises to satisfy the solicitation's
mandatory subcontracting goals would be considered under this factor.9 See
RFP amend. 12, sect. M.5.2.a.(2)(ii)(6). In fact, these promises were
specifically considered by the TMAT, the SSAC, and the SSA in their
consideration of the relative merits of the firms' technical/management
approach proposals. See, e.g., AR, Tab 894x, Source Selection Decision, at
15, where the SSA recognized that SAIC had committed to exceeding the
small business subcontracting goals.
We also find no merit to the agency's and intervenors' argument that the
RFP's statement that the agency did not intend to conduct discussions with
offerors with respect to their small business subcontracting plans
resolves whether the actual exchanges provided were discussions or
clarifications. As noted above, we look at the actions of the parties to
determine whether discussions have been held, and thus neither an agency's
characterization of its exchanges nor its stated intention not to conduct
discussions is determinative of whether the exchanges are in fact
discussions or clarifications. See Gulf Copper Ship Repair, Inc., supra;
Raytheon Co., B-261959.3, Jan. 23, 1996, 96-1 CPD para. 37 at 11; see also
Global Analytic Info. Tech. Servs., Inc., B-298840.2, Feb. 6, 2007, 2007
CPD para. __ at 5 (exchanges at an offeror's oral presentation that
allowed the offeror to materially revise its price proposal were
discussions, despite the solicitation's statement that oral presentations
would not constitute discussions). In this regard, we see no meaningful
difference between the agency's stated intent not to conduct discussions
with offerors with respect to their subcontracting plans and the more
generally stated intention to make award on the basis of initial
proposals. See RFP amend. 12, sections L.3.c., M.3.a. Under either
solicitation section, it is the nature and substance of the agency's
exchanges and actions that determine whether the exchanges constitute
discussions or clarifications.
Finally, we do not find dispositive that the agency chose to not share the
offerors' responses concerning their small business subcontracting plans
with the TMAT. The fact remains that a majority of the 10 highest rated
offerors had submitted subcontracting plans that were determined to be
unacceptable and that these firms were provided with an opportunity to
revise these plans (including proposing new subcontracting goals or
providing additional information to establish that the firms would satisfy
or exceed these goals). Following these actions, the firms' plans were
determined to be acceptable, and this information was shared with both the
SSAC and the SSA, who presumably considered the TMAT's, the SADBUS's/PCR's
and contracting officer's assessment of the firms' subcontracting plans,
and the results of the firms' discussion responses.10
In conclusion, we find that the agency's exchanges with the offerors,
which allowed a majority of the highest rated offerors to revise their
proposals in a material way, were not clarifications but were discussions.
As noted above, when an agency conducts discussions with one offeror, it
must conduct discussions with all other offerors whose proposals are in
the competitive range, and those discussions must be meaningful; that is,
the discussions must identify deficiencies and significant weaknesses in
each offeror's proposal. See Spherix, Inc., supra, at 13-14. Here, the
record establishes that the protesters were prejudiced, because, although
the agency conducted discussions with CSC, NGIT, and IBM concerning their
subcontracting plans, the discussions with the protesters were not
meaningful, given that there were a number of significant weaknesses
identified in each of the protesters' proposals, and considered by the SSA
in her selection decision, which the protesters were never given an
opportunity to address, but which could have been altered or explained to
materially enhance the proposals' potential for award. See, e.g., AR, Tab
894x, Source Selection Decision, at 19-21, 24, and 27-28 (identifying
numerous weaknesses in the protesters' proposals).
Because we sustain the protests on the basis of the agency's failure to
afford the protesters meaningful discussions, we do not address the
protesters' challenges to the agency's evaluation and source selection
decision, given our recommendation below that the agency open the
competition to conduct discussions with offerors whose proposals are found
to be in the competitive range. However, as the agency proceeds with its
corrective action, it may want to be mindful of the other issues raised by
protesters, including the significant concerns raised by the protesters
with respect to the agency's past performance evaluation, which found no
discriminators in the evaluation of the protesters' and awardees'
proposals, and with respect to price realism, given that the record does
not evidence that a price realism analysis was performed.
The protests are sustained.
We recommend that the agency establish a competitive range and conduct
meaningful discussions with offerors whose proposals are found to be
within the competitive range, obtain and evaluate revised proposals, and
make a new source selection decision. We also recommend that the agency
reimburse the protesters for their reasonable costs of filing and pursuing
the protests. Bid Protest Regulations, 4 C.F.R. sect. 21.8(d)(1) (2007).
The protesters' certified claims for costs, detailing time expended and
costs incurred, must be submitted directly to the agency within 60 days of
receiving this decision. 4 C.F.R. sect. 21.8(f)(1).
Gary L. Kepplinger
General Counsel
------------------------
1 The Federal Acquisition Regulation (FAR) provides for a range of
"exchanges" with offerors after the receipt of proposals, including
clarifications, communications, and discussions. FAR sect. 15.306.
2 Offerors were informed that the following could not be obtained under
the Encore II contracts:
point to point circuits; transmission (voice/data/video) and network
management in support of the [Defense Information System Network]; and
standalone hardware purchase and/or maintenance and standalone software
purchase and/or maintenance.
RFP amend. 12, sect. C.1.3.
3 The total DLCC for each proposal is calculated by first computing an
annual price by totaling the annual labor costs with the estimated ODCs
with mark-up and profit. A discount factor (identified in the RFP) for
each year is applied to the total annual price to arrive at a discounted
price for each contract year; the discounted annual prices are then added
to compute the proposal's evaluated total DLCC. RFP amend. 12, sect.
M.5.2.b.(4).
[1] The proposed price of one offeror (not a party to this protest) was
found to be unreasonable.
5 The awardees and protesters are identified in descending order from the
highest non-price evaluation rating (SRA) to the lowest non-price factor
rating (Unisys). The proposals of 11 offerors received higher non-price
factor ratings than Unisys.
6 [Deleted]'s plan actually states that the firm's proposed subcontracting
to small business concerns goal would be 24 percent of the total
subcontracted work value, and not of the total contract task order
dollars. See [Deleted] Subcontracting Plan, attach. A, Goals for
Individual Subcontracting Plan, at 1.
7 Unisys, which did not have any exchanges with the agency, also complains
that it was treated unequally. Unisys Protest at 24-25.
8 Traditional responsibility factors may be comparatively evaluated in a
negotiated procurement as part of agency's technical evaluation and not as
a matter of the offeror's responsibility. See Medical Info. Servs.,
B-287824, July 10, 2001, 2001 CPD para. 122 at 5; Nomura Enter., Inc.,
B-277768, Nov. 19, 1997, 97-2 CPD para. 148 at 3. In this regard, the
protesters cite numerous decisions of our Office, in which the small
business subcontracting plans were assessed in the agencies' technical
evaluations and were the subject of discussions. See, e.g., Southwest
Educational Dev. Lab., B-298259, July 10, 2006, 2006 CPD para. 105;
Coastal Mar. Stevedoring, LLC, B-296627, Sept. 22, 2005, 2005 CPD para.
186.
9 Accepting the agency's argument distinguishing between the
subcontracting plans submitted in the offerors' technical/management
proposals and general contracting information proposals would mean that
offerors could submit different and inconsistent plans. For example, an
offeror could promise to exceed the subcontracting goals in its
technical/management proposal and receive evaluation credit for doing so,
yet propose goals that were merely acceptable in its plan submitted in its
general contracting information proposals. (The plan submitted with the
offerors' general contracting information proposals were incorporated by
the agency into the contracts awarded under the solicitation.) Or as
presented here, an offeror's small business subcontracting plan could be
determined to be acceptable in the agency's technical evaluation, but the
firm's plan in the general contract information proposal could be found
unacceptable because the plan failed to satisfy the RFP's mandatory goals.
Such an inconsistency in an offeror's subcontracting plan could not
reasonably be ignored by the agency in its evaluation of proposals. See
TRW, Inc., B-254045.2, Jan. 10, 1994, 94-1 CPD para. 18 at 11 (agency
improperly failed to resolve through negotiations its evaluated negative
concerns with the awardee's technical proposal, caused by its apparent
inconsistency with the cost proposal).
10 Although the record does not document exactly what was provided to the
SSA with respect to the exchanges with the offerors, the record does
evidence that the SSA was informed by the SSAC of the areas (including the
small business subcontracting plans) that were the subject of the
exchanges. See AR, Tab 788, SSA Decision Briefing, at 190.