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.