TITLE: B-299322.3, Optimum Management Systems, LLC, May 23, 2007
BNUMBER: B-299322.3
DATE: May 23, 2007
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B-299322.3, Optimum Management Systems, LLC, May 23, 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: Optimum Management Systems, LLC

   File: B-299322.3

   Date: May 23, 2007

   Randall H. Miller, Esq., and James N. Phillips, Esq., Holme Robert & Owen,
   LLP, for the protester.

   Mike Lebofsky for SofTec Solutions, Inc., an intervenor.

   Sherry Kinland Kaswell, Esq., Department of Interior, for the agency.

   Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
   of the General Counsel, GAO, participated in the preparation of the
   decision.

   DIGEST

   Protest of award to offeror with lower-rated, lower-priced proposal is
   denied where agency reasonably determined that premium involved in
   awarding to offeror with higher-rated, higher-priced proposal was not
   justified.

   DECISION

   Optimum Management Solutions, LLC protests the decision by the Department
   of the Interior to terminate its contract and instead make award to SofTec
   Solutions, Inc. under request for proposals (RFP) No. NBC07003, issued by
   the Department of the Interior for financial systems support for its
   National Business Center (NBC). The protester argues that the agency's
   selection of SofTec for award was inconsistent with the RFP's evaluation
   scheme.

   We deny the protest.

   The RFP, which was issued on November 9, 2006 as an 8(a) set-aside,
   contemplated the award of a fixed-price,
   indefinite-quantity/indefinite-delivery contract for a base and 4 option
   years. The solicitation provided for award to the offeror whose proposal
   was determined to be most advantageous to the government, with proposals
   to be evaluated on the basis of the following factors: management approach
   and technical capabilities, personnel qualifications, organizational
   experience, past performance, and price. The solicitation advised that the
   technical and past performance factors, when combined, were significantly
   more important than price.

   Ten firms submitted proposals by the December 1, 2006 closing date. Each
   of four evaluators rated each proposal on a scale of 1-4 under each of the
   four non-price factors;[1] these points were then totaled to yield the
   offeror's overall technical score.[2] The evaluators determined only the
   following three proposals to be technically acceptable:

+------------------------------------------------------------------------------+
|Offeror               |Technical Score            |Price                      |
|----------------------+---------------------------+---------------------------|
|OMS                   |59                         |$9,450,410                 |
|----------------------+---------------------------+---------------------------|
|SofTec                |56                         |$7,249,312                 |
|----------------------+---------------------------+---------------------------|
|Offeror A             |56                         |$9,069,406                 |
+------------------------------------------------------------------------------+

   The contracting officer determined that OMS's proposal represented the
   best value to the government based on its having received the highest
   technical score. On December 22, the agency awarded a contract to OMS and
   posted notice of the award on the Federal Business Opportunities
   (FedBizOpps) website.

   SofTec, the incumbent contractor, learned of the award to OMS on December
   26 and requested a debriefing the following day. SofTec also filed a
   protest with our Office on December 27, alleging that the award to OMS was
   improper because OMS had not proposed, and did not intend, to meet the
   solicitation requirement for a quality assurance (QA) manager working
   on-site at the NBC 20 hours per week. In a supplemental submission to our
   Office dated January 15, 2007, SofTec further argued that the proposed
   hourly rate for OMS's QA manager was unrealistically low.

   While SofTec's initial protest was pending, SofTec again contacted the
   agency and renewed its request for a debriefing. In reviewing the request,
   the contract specialist realized that she had overlooked SofTec's December
   27 debriefing request and agreed to furnish SofTec a debriefing. The
   debriefing was held on January 24. On January 29, SofTec filed a second
   protest, objecting to the evaluation of its own proposal. This protest was
   based on information learned by SofTec at the debriefing.

   By decision dated January 30, we dismissed SofTec's initial protest,
   finding that its allegations concerning OMS's QA manager were unsupported
   and concerned a matter of contract administration not subject to our
   review. Eight days later, on February 7, the agency notified us that it
   was taking corrective action in response to SofTec's second protest.
   Specifically, the agency informed us that the contracting officer had
   terminated for convenience the contract awarded to OMS and that she
   planned to award to SofTec. The agency explained that it was taking this
   corrective action because it had concluded that the procurement record did
   not support a defense against SofTec's second protest. By decision dated
   February 9, we dismissed SofTec's protest as academic. OMS requested a
   debriefing on February 9, which the agency provided on February 14. On
   February 26, OMS protested to our Office.

   OMS raises two preliminary challenges to the agency's decision to take
   corrective action in response to SofTec's second protest. OMS first
   asserts that the agency should not have taken corrective action because
   SofTec's protest was untimely filed. We disagree. It was within the
   agency's discretion to take corrective action in connection with the
   procurement regardless of whether SofTec's protest was timely; all that is
   required is that the agency have reasonable concerns that errors in the
   procurement occurred.[3] Alfa Consult S.A., B-298164.2, B-298288, Aug. 3,
   2006, 2006 CPD para. 127 at 2, 3 n.1.

   OMS next asserts that even if the agency's procurement record did not
   support a defense against SofTec's second protest, termination of the
   contract previously awarded to it and award of a contract to SofTec were
   not necessarily the appropriate corrective measures since the conclusion
   that the agency erred in its evaluation of SofTec's proposal does not
   necessarily lead to the conclusion that SofTec's proposal represents the
   best value to the government.[4]

   The agency responds that it took the corrective action that it did because
   the contracting officer determined, after reexamining the evaluation
   record in response to SofTec's second protest, that "the record could not
   support a rational cost/technical tradeoff justifying award based on a
   proposal that was rated only slightly higher technically, but was over $2
   million . . . higher in price." Agency Report at 2. That is, the
   contracting officer determined that OMS's proposal did not offer technical
   advantages sufficient to outweigh its higher price. Thus, contrary to the
   protester's assertion, the agency did not decide to terminate OMS's
   contract and award to SofTec simply because it concluded that it had erred
   in its initial evaluation; it took this action because, after reexamining
   the record, it concluded that SofTec's combination of technical merit and
   price represented the best value to the government.

   With regard to the selection of SofTec, OMS argues that it was
   inconsistent with the evaluation scheme set forth in the RFP, which
   provided that technical factors would be significantly more important than
   price in the determination of best value, for the agency to have selected
   SofTec's lower-rated proposal for award on the basis of SofTec's lower
   price.

   This argument is without merit. Even where price is the least important
   evaluation criterion, an agency may properly award to an offeror with a
   lower-rated, lower-priced proposal if the agency reasonably determines
   that the premium involved in awarding to an offeror with a higher-rated,
   higher-priced proposal is not justified. Computer Tech. Servs., Inc.,
   B-271435, June 20, 1996, 96-1 CPD para. 283 at 5. Here, the record clearly
   demonstrates the reasonableness of the contracting officer's conclusion
   that OMS's proposal did not offer technical advantages over SofTec's
   sufficient to justify its higher price.

   The agency reports that, in reviewing its source selection decision in
   response to SofTec's second protest, it reconsidered whether the large
   disparity between OMS's and SofTec's proposed prices could be justified by
   specific advantages in OMS's technical proposal. It found that while the
   technical evaluators had credited OMS for its plan to retain the incumbent
   staff since this would minimize the transition effort, [deleted]. Further,
   while the technical evaluators described OMS's experience on similar
   contracts as a strength, SofTec was performing as the incumbent on the
   project in question. In other words, these grounds did not furnish a
   reasonable basis for preferring OMS's proposal over SofTec's. The agency
   further noted that the major discriminator between the two proposals
   appeared to be in the area of past performance, where SofTec's proposal
   was perceived as weaker than OMS's due to difficulties that NBC officials
   had encountered in dealing with SofTec's project manager under the
   predecessor contract. In reexamining the record, however, the agency found
   that the contract file did not contain documentation demonstrating a basis
   for the negative perceptions regarding the performance of SofTec's project
   manager.[5]

   OMS contends that in her initial best value tradeoff determination in its
   favor, the contracting officer identified an additional advantage in its
   technical proposal, i.e., its low staff turnover, which she then
   improperly ignored in her second tradeoff determination in favor of
   SofTec. The protester cites the following excerpt from the initial price
   analysis of proposals as its basis for this argument:

     OMS has a history of hiring, and retaining highly skilled personnel. It
     is believed that this is due to OMS' decision to pay its employees
     slightly higher (but reasonable) labor rates. Low staff turnover is
     extremely important for this requirement, therefore, the Government
     considers OMS' proposed prices to be fair and reasonable.

   Price Analysis Attachment to Price Negotiation Memorandum.

   We do not think that OMS's low staff turnover was cited in the foregoing
   excerpt as an advantage justifying the selection of OMS's proposal over
   SofTec's; rather, it appears to have been cited as a justification for
   finding OMS's prices, which were substantially higher than SofTec's,
   reasonable. We note in this connection that the excerpt concludes by
   finding OMS's proposed prices fair and reasonable. Moreover, there is no
   mention of SofTec's rate of staff turnover or comparison of SofTec's rate
   to OMS's rate anywhere in the evaluation documentation.

   In sum, we think that the contracting officer reasonably concluded after
   reexamining the evaluation record that OMS's proposal did not offer
   sufficient advantages over SofTec's to make it worth a considerably higher
   price.[6]

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] The evaluation worksheet defined the ratings to be used by the
   evaluators as follows:

     4: Outstanding--Exceptionally Meets the Requirement
     3: Good--Meets the Requirement
     2: Marginal--Minimally Meets the Requirement
     1: Unacceptable--Does Not Meet the Requirement

   [2] Since there were four evaluators assigning points under four factors
   and the maximum possible score under each factor was four, the maximum
   possible overall technical score was 64.

   [3] In any event, we note that SofTec's protest was timely filed. OMS
   premises its argument that SofTec's protest was untimely on the fact that
   SofTec failed to request a debriefing within 3 days after it was
   constructively placed on notice of the award via publication on
   FedBizOpps, and the debriefing it ultimately received thus was not a
   "required" debriefing. See Federal Acquisition Regulation sect.
   15.506(a)(1), (3). As a consequence, the protester maintains, SofTec's
   10-day period for filing a protest should have started to run on the date
   of the award and not on the date of its debriefing. The provision in our
   timeliness rules cited by the protester, 4 C.F.R. sect. 21.2(a)(2) (2007),
   extends the time period for filing a protest based on information known to
   a protester prior to a debriefing beyond the usual 10-day period in the
   situation in which a debriefing is both requested and required. However,
   even where a disappointed offeror does not secure a required debriefing,
   it retains its right to file a protest within 10 days after it learns, as
   here, or should have learned, of the basis for its protest, provided it
   has diligently pursued the matter. This includes the right to file a
   timely protest based on information obtained during a debriefing that was
   not required. Raith Eng'g and Mfg. Co., W.L.L., B-298333.3, Jan. 9, 2007,
   2007 CPD para. 9.

   [4] OMS also asserts that the agency should have "reopened the bidding"
   because "there has been a defect in the solicitation identified after the
   agency" made award to SofTec. Comments at 11. There is no basis to
   conclude that the agency should have called for submission of revised
   proposals given that the flaws identified by the agency related to the
   evaluation of proposals, not any terms of the RFP.

   [5] We note in this connection that while the protester speculates that
   the agency's concerns regarding SofTec's project manager were eliminated
   through discussions that the agency improperly held with SofTec only, we
   find no support in the record for this speculation.

   [6] With regard to the protester's complaint that the agency failed to
   disclose required information to it at its debriefing, our Office will not
   review a protester's contention that the debriefing it received was
   inadequate because the adequacy of a debriefing is a procedural matter
   concerning an agency's actions after award, which are unrelated to the
   validity of the award itself. Symplicity Corp., B-297060, Nov. 8, 2005,
   2005 CPD para. 203 at 4 n.4.