TITLE: B-299477, Phoenix Management, Inc., May 16, 2007
BNUMBER: B-299477
DATE: May 16, 2007
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B-299477, Phoenix Management, Inc., May 16, 2007

   DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to a GAO Protective Order.
No party requested redactions; we are therefore releasing the decision in
its entirety.

   Decision

   Matter of: Phoenix Management, Inc.

   File: B-299477

   Date: May 16, 2007

   Johnathan M. Bailey, Esq., and Theodore M. Bailey, Esq., Bailey & Bailey,
   P.C., for the protester.

   Lt. Col. Frank A. March, Maj. Gregory A. Moritz, Maj. P. Daniel DiPaola,
   Capt. John J. Pritchard, Capt. Robert B. Nelson, Capt. Charlene T.
   Storino, and Raymond M. Saunders, Esq., Department of the Army, for the
   agency.

   Paul N. Wengert, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest is denied where the agency reasonably found the protester's
   proposal did not adequately explain protester's approach to utilizing
   staff to ensure that multiple tasks of performance work statement would be
   performed according to stated standards (without disrupting the
   performance of other tasks), and where the agency had provided comments
   during discussions that reasonably alerted the protester to that concern,
   but the revised proposal failed to alleviate the agency's concern.

   DECISION

   Phoenix Management, Inc. (PMI) protests the decision of the Department of
   the Army, pursuant to Office of Management and Budget Circular A-76, to
   accept the agency tender for performance by the government's most
   efficient organization (MEO) to perform in-house the requirements for
   airfield support services at Fort Rucker, Alabama, rather than to award a
   contract for these services, under request for proposals (RFP)
   No. W911SO-06-R-0011. PMI argues that, but for the agency's unreasonable
   evaluation, its lower priced proposal would have been viewed as
   acceptable, and it would have received the award.

   We deny the protest.

   BACKGROUND

   The Army issued the RFP on July 20, 2006, seeking firm fixed-price
   proposals, and an agency tender, for performance of airfield support
   services for a 10-month base period (preceded by a 60-day phase-in
   period), followed by four 1-year option periods. The performance work
   statement (PWS) described services in three main areas--flight
   operations,[1] motor vehicle operations,[2] and airfield support[3]--to be
   performed at five sites: Cairns Army Airfield, Hanchey Army Heliport, Lowe
   Army Heliport, Shell Army Heliport, and Knox Army Heliport. RFP amend. 4,
   Revised Performance Work Statement (PWS), at C-5-1.

   The RFP specified that proposals would be evaluated under three evaluation
   factors: mission capability, past performance, and price. The mission
   capability factor was divided into two subfactors of equal importance: (1)
   management and organization; and (2) technical approach. The RFP further
   explained these were "critical subfactors," and therefore a rating of
   marginal or unacceptable in either subfactor would "automatically carry
   forward to the [f]actor rating." RFP amend. 7, at 2. The RFP then provided
   that the mission capability and past performance factors were of equal
   importance in determining technical acceptability, and that award would be
   made to the offeror submitting the lowest-priced technically acceptable
   offer. Id.

   With respect to the mission capability portion of proposals, the RFP
   instructed offerors to be "specific, detailed, and complete to clearly and
   fully demonstrate that the offeror has a thorough understanding of the
   requirements," and required that proposals

     address how tasks in each functional area (except Quality Control
     [addressed elsewhere]) of the PWS will be accomplished by addressing how
     you will be organized and staffed along with specifically describing how
     work will be scheduled (including use of any automated systems or
     workloading procedures), proposed work processes and outputs, process
     interfaces, innovations, assumptions of support, and cross-utilization
     training and plans. . . .

   RFP amend. 6, at 6.

   The RFP explained that under the management and organization subfactor the
   agency would "focus on organization, personnel qualifications for labor
   categories, qualifications for key personnel, labor hours, and
   demonstrated understanding of personnel requirements." RFP amend. 7, at 2.
   Additionally, the RFP indicated that under the technical approach
   subfactor the agency would scrutinize the proposal "to determine the
   offeror's understanding of the technical requirements and assess the
   offeror's ability and methodology to meet the minimum requirements." Id.

   The Army received initial proposals from PMI and two other offerors, as
   well as an agency tender. After evaluating the offers, the Army determined
   that even though PMI's proposal was considered unacceptable under both
   subfactors (and thus under the mission capability factor itself), the
   agency would nonetheless conduct discussions with PMI. During these
   discussions, PMI was advised that its proposal was evaluated as
   unacceptable, and was provided with extensive comments about its approach.
   With respect to PMI's proposed staffing, the Army specifically advised
   that

     Staffing levels are far too thin to provide adequate coverage of all
     required tasks. Although the proposal states the intention of utilizing
     the part-time employees to back fill areas as needed, no clear
     explanation of how these employees will be activated or how they are
     guaranteed to be available at the same rate and time as the demand is
     presented. Please explain[.]

   The Army also provided the following comment on PMI's organizational
   structure:

     No clear description exists on who will be trained and performing
     specific required functions. The offeror proposes that both Flight
     Operations and Motor Vehicle Operation personnel will provide VIP
     support as needed, but does not clearly define how/who/what personnel
     are cross trained to perform these functions, how or when are they
     trained and in what areas. Please explain.

   AR, Tab 10, Discussions Letter, at 3-4.

   In addition, the evaluation of the flight operations technical approach
   led the Army to comment that "the proposal does not accurately describe
   how this and all other Motor Vehicle Operations and Airfield Support
   functions can and/or will be accomplished at the proposed manning level."
   The Army further commented that PMI did not seem to have a clear
   understanding of all requirements in the PWS, and noted, in particular,
   that PMI proposed to appoint both a Primary and an Alternate Publications
   Officer from the pool of Air Traffic Assistants. This apparent
   double-tasking led the Army to note that PMI had not clearly explained
   "how operations will continue to be supported with two individuals while
   this person is picking up, delivering and distributing publications to
   respective areas. Please explain." Id. at 4.

   Finally, with respect to motor vehicle operators, the agency again asked
   PMI to explain how it would accomplish the PWS tasks with the proposed
   staffing, and advised that the proposal did not provide details on "how
   all required [motor vehicle operations] functions as stated in the PWS
   will/can be accomplished at existing manning level." The Army also asked
   PMI to explain how it would accomplish regular pilot shuttle service tasks
   on the occasions when it must also simultaneously retrieve an aircraft
   crew from a remote site. Id. at 4-5.

   Generally, PMI's responses to these questions advised that the company was
   increasing staffing, and directed the Army to review PMI's revised total
   full-time equivalent (FTE) staffing level and revised organizational
   chart. The responses also advised that "[u]pon review, we expect the
   Government will find the newly proposed numbers will meet all of the
   requirements and expectations within the PWS while affording superb
   customer service and eliminating all risk to the Government." AR, Tab 6.a,
   PMI Negotiation Questions & Responses, at 2; see also id. at 8, 9, and 10.

   After receiving and evaluating revised proposals, the Army concluded that
   PMI's revised proposal was still unacceptable. Although the Army found
   certain aspects of PMI's proposal had been improved, and acknowledged that
   PMI had added staff and revised its organizational chart, the agency also
   concluded that PMI had not sufficiently explained its approach for
   performing the PWS, as required by the RFP, and as specifically requested
   during discussions. For example, the Army evaluators noted that, despite
   the increased staff levels, "the proposed placement of personnel, lack of
   detail and methodology for accomplishing required tasks at proposed
   staffing levels, and the lack of clarification on the provided
   Organizational Chart, leaves a remaining high level of risk." AR, Tab 11,
   Source Selection Evaluation Board Results for PMI, at 1.

   The Army evaluators also observed that PMI's proposed placement of Air
   Traffic Assistants (ATAs) and Motor Vehicle Operators (MVOs)--coupled with
   concerns about the proposal's lack of description about how all these
   functions could be accomplished at all airfields over the required
   operational times--"provides no assurance that all required functions will
   be accomplished, thus incurring a high level of risk." Id. Specifically,
   the evaluators noted that "the revised proposal for ATAs and MVOs provides
   absolute minimum manning (one layer deep for MVOs) . . . without a
   detailed description as to how all functions could be accomplished at all
   times, in all locations, and by whom." Id. at 1-2.

   Given the Army's conclusion that PMI's revised proposal remained
   technically unacceptable, the agency eliminated PMI from the competition,
   and ultimately selected the MEO to perform these services. The Army
   provided PMI with a debriefing, and this protest followed.

   DISCUSSION

   PMI argues that its revised proposal should not have been found
   technically unacceptable; and specifically, that the staffing increases
   added after discussions were adequate to perform the PWS tasks. In
   addition, PMI contends that the Army's explanation for concluding that
   PMI's approach was unacceptable is vague and unfounded.

   In response, the Army explains that PMI's decision to increase its
   staffing in its revised proposal simply did not resolve the concerns
   identified in discussions about how PMI would accomplish the tasks in the
   PWS. Legal Memorandum at 16-20. To better understand the Army's rationale
   for its conclusion, as well as PMI's views, our Office convened a hearing.

   During the hearing, the chair of the source selection evaluation board
   provided specific examples of how an offeror's failure to ensure that
   appropriate staff was available to handle multiple tasks simultaneously
   could impair the operation of the airfields. In addition, the Army witness
   highlighted areas in PMI's proposal where there was no detail to explain
   how PMI would accomplish all the required tasks. In contrast, PMI
   officials could not point to specific provisions in the revised proposal
   that addressed the Army's concerns. Rather, PMI witnesses offered
   explanations that had not been included in the revised proposal, and
   indicated that the 1-page organizational chart should have been sufficient
   to persuade Army evaluators that PMI could accomplish all PWS tasks with
   its staffing.

   In our view, the hearing confirmed the concerns raised by agency
   evaluators that the revised proposal did not explain PMI's management
   approach in narrative form. The hearing also confirmed that, in the
   absence of narrative explanations, PMI's approach could only be inferred
   from revisions to an organizational chart, which set forth numerical
   staffing levels in terms of full-time equivalents and full- and part-time
   employees. Hearing Transcript at 109-111, 124-26, 129-34, and 143-45.

   In its post-hearing comments, PMI argues that the complexity and
   fluctuation of workflow described by the Army's evaluator during the
   hearing was not captured by the PWS. Specifically, PMI contends that the
   workload tables in the PWS, which consisted of 13 pages tallying the
   monthly incidence of each PWS task at each of the five sites over a year,
   implied that PWS tasks were evenly distributed within daily operational
   periods.

   We think PMI's contentions about its interpretation of the PWS are not
   supported by the record. The PWS here focused on providing rapid-response
   service and support at five separate sites to student and instructor
   pilots, transient aircraft and crews, and other aviators not affiliated
   with the pilot training mission--a focus that is inherently inconsistent
   with the regular, steady process that PMI contends was conveyed in the
   RFP. Moreover, this interpretation of the PWS was not supported by the
   hearing testimony of PMI's own managers, including one of whom had several
   years of work experience on airfields at Fort Rucker. E.g., Hearing
   Transcript at 106, 108-111, 123-24, and 138-44.

   Offerors bear the responsibility to submit an adequately written proposal
   with sufficient detail to demonstrate an understanding of, and ability to
   meet, solicitation requirements; proposals that fail to make this showing
   may properly be found unacceptable. See, e.g., Aerostat Servs. P'ship,
   B-244939.2, Jan. 15, 1992, 92-1 CPD para. 71 at 6 (agency reasonably found
   protester's proposal unacceptable where proposal failed to adequately
   explain how staff needed continually for particular duties would also
   perform unrelated tasks that would necessarily divert their attention,
   time, and energy away from ongoing core duties). Based on our review of
   the record, including the detailed hearing testimony, we conclude that the
   Army evaluators reasonably found that several aspects of PMI's management
   approach did not go beyond depicting staffing in numerical form for
   particular days and hours, which left the evaluators without a clear
   explanation of how PMI's plan would address the tasks identified in the
   PWS, and unsure about whether PMI's staffing was sufficient.[4]

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] This section of the PWS required offerors to have two air traffic
   assistants on duty at each airfield at all times during specified hours to
   handle in-person and radio communications with instructors and students,
   in addition to other tasks. RFP amend. 4, Revised PWS, at C-5-1.

   [2] This section of the PWS included transporting students and instructors
   to aircraft, picking up students and instructors who land off-base (such
   as for mechanical or emergency weather conditions), and transporting
   distinguished visitors (VIPs). RFP amend. 4, Revised PWS, at C-5-8.

   [3] This section of the PWS primarily involved buildings and grounds
   maintenance, but also included many airfield-specific tasks, such as
   regular runway checks to remove debris (known as FOD for "Foreign Object
   Debris"), and inspection and repair of aircraft tie-downs. RFP amend. 4,
   Revised PWS, at C-5-10.

   [4] We also find no merit in PMI's argument that the discussions questions
   failed to advise the company of the Army's concerns. In our view, the
   record confirms that in each case, the Army reasonably directed PMI to the
   aspects of its initial proposal that caused concern. PMI's decision to
   respond by relying primarily on staffing increases--with no meaningful
   narrative description of its management approach to accomplishing the
   tasks--reasonably became the focus of the Army's evaluation of the revised
   proposal, and led the evaluators to rate it as unacceptable.