TITLE: B-299557, A-TEK, Inc., May 3, 2007
BNUMBER: B-299557
DATE: May 3, 2007
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B-299557, A-TEK, Inc., May 3, 2007

   Decision

   Matter of: A-TEK, Inc.

   File: B-299557

   Date: May 3, 2007

   Debbie Rieger for the protester.

   Jonathan R. Celniker, Esq., and Michael J. Ettner, Esq., General Services
   Administration, for the agency.

   Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   In procurement that will include cost-reimbursement task orders, agency
   reasonably rejected protester*s proposal for lack of verification of
   federally audited accounting system as required by the solicitation.

   DECISION

   A-TEK, Inc. protests the rejection of its proposal as unacceptable, based
   on a requirement concerning the adequacy of the firm*s accounting system,
   under request for proposals (RFP) No. TQ2006MCB0001, issued by the General
   Services Administration (GSA) for information technology (IT) services.
   A-TEK primarily asserts that the rejection is unreasonable because it
   furnished sufficient information to satisfy the requirement and, in any
   event, GSA is responsible for A-TEK*s failure to meet the requirement.

   We deny the protest.

   The RFP anticipated the award of some 25 to 30 contracts under a
   multiple-award, indefinite-delivery/indefinite-quantity (ID/IQ)
   government-wide acquisition contract (GWAC) for a broad range of IT
   services, with a not-to-exceed ceiling of $50 billion. Contractors were to
   provide all management, supervision, labor, facilities and materials
   necessary to perform on a task order basis, including cost-reimbursement
   orders. Awards were to be made on a *best value* basis, with proposals
   evaluated under two equally important technical factors--past performance
   and contract plan--which, combined, were significantly more important than
   price. Prior to the evaluation under these factors, proposals were to be
   reviewed for acceptability on a pass/fail basis; those failing this review
   would not be considered further for award.

   Proposals were required to include the Defense Contract Audit Agency*s
   (DCAA), or other federal audit agency*s, verification of *an accounting
   system that has been audited and determined adequate for determining costs
   applicable to this contract in accordance with [Federal Acquisition
   Regulation] FAR 16.301-3(a)(1).* [1] RFP sect. L.12.5, as amended. Any
   offeror that did not have audit verification but was *certain its
   accounting system has been determined adequate* could provide contact
   information from a cognizant auditing representative office. Id. Offerors
   were warned that their proposals would be rejected if the agency was
   unable to obtain audit verification. Id.

   In response to this requirement, A-TEK*s proposal provided information on
   its use of Deltek software for its accounting and job costs system;
   contact information for the contracting officer on two current contracts
   with cost-type task orders; and notice that it had submitted provisional
   billing rates to DCAA. A-TEK Proposal, Folder J. After GSA reviewed this
   information and contacted the listed references, it informed A-TEK that it
   could not verify that the firm*s accounting system had been properly
   audited and deemed adequate. GSA requested additional contact information
   for verification purposes. In response, A-TEK repeated the information in
   its proposal, argued that the requirement was arbitrary, and requested
   that GSA conduct a pre- or post-award audit for offerors lacking audit
   verification. Thereafter, GSA notified A-TEK that its proposal had been
   rejected, and this protest followed.

   A-TEK asserts that, even though it did not have a verified accounting
   system, the agency erred in rejecting its proposal because the firm met
   the RFP*s requirements through its use of the Deltek accounting system,
   submission of provisional billing rates to DCAA for audit, and current
   contracts with cost-reimbursable-type task orders.[2]

   In considering a protest of an agency*s proposal evaluation, our review is
   confined to determining whether the evaluation was reasonable and
   consistent with the terms of the solicitation and applicable statutes and
   regulations. United Def. LP, B-286925.3 et al., Apr. 9, 2001, 2001 CPD
   para. 75 at 10-11. Offerors have the burden of submitting an adequately
   written proposal, and an offeror*s mere disagreement with the agency*s
   judgment concerning the adequacy of the proposal is not sufficient to
   establish that the agency acted unreasonably. Carlson Wagonlit Travel,
   B-287016, Mar. 6, 2001, 2001 CPD para. 49 at 3.

   The evaluation here was reasonable. The RFP unequivocally required
   offerors to have DCAA or other federal audit agency verification that the
   firm*s accounting system had been audited and determined adequate for
   determining costs applicable to the solicited work in accordance with FAR
   sect. 16.301-3(a)(1). Contact with DCAA revealed that A-TEK did not have
   any cost-reimbursement contracts in place; had never been audited by DCAA;
   and had never been subject to a pre-award survey of its accounting system.
   Further, A-TEK*s submission of provisional rates was not relevant because
   it lacked any existing cost-type contracts. Agency Report, exh. D, at 3.
   Further, while the Deltek software is widely used by companies with
   adequate accounting systems, use of the software alone did not constitute
   verification that A-TEK*s accounting system had been audited and verified
   as adequate. Id. With regard to A-TEK*s other contracts, GSA learned that
   those contracts contained provisions that specifically prohibited the firm
   from submitting a proposal for a cost-reimbursement-type task order
   because it had not had its accounting system audited and deemed adequate
   for those contracts. Id. at 3-4. While A-TEK also submitted a letter from
   its accountant, the agency found that it was insufficient to meet the
   RFP*s requirements because it was not from a federal audit agency, it
   clearly stated that the accountant had not audited A-TEK*s accounting
   system, and it failed to state that A-TEK*s system had been deemed
   adequate for this contract. In short, A-TEK failed to provide any
   information that satisfied the RFP requirement. Based on A-TEK*s failure
   to provide the required information, the agency reasonably concluded that
   the firm lacked a properly audited accounting system, and thus reasonably
   rejected the firm*s proposal.

   A-TEK has not challenged or refuted GSA*s findings. Instead, it simply
   asserts that, since only the government can request and perform the
   required audit, meeting the requirement is beyond the firm*s control, and
   it should not be penalized as a result. In this regard, A-TEK now asserts
   that the RFP requirement was ambiguous because it understood that filing
   its indirect rates and waiting for the government to take the necessary
   action was sufficient to meet the requirement. Comments at 1.

   A solicitation ambiguity exists where two or more reasonable
   interpretations of the terms of the solicitation are possible. Ashe
   Facility Servs., Inc., B-292218.3, B-292218.4, Mar. 31, 2004, 2004 CPD
   para. 80 at 10. To be reasonable, an interpretation must be consistent
   with the solicitation read as a whole and in a reasonable manner. Malkin
   Elecs. Intl, Ltd., B-228886, Dec. 14, 1987, 87-2 CPD para. 586 at 4.

   There is nothing ambiguous in the RFP provision at issue; again, it
   clearly required offerors to include verification of an audited and
   adequate accounting system, and warned that failure to do so would result
   in rejection of their proposals. Contrary to A-TEK*s reading of the RFP,
   nothing in the solicitation supports its interpretation that an offeror
   awaiting an audit will meet the requirement. In fact, prior to submitting
   its proposal, A-TEK was well-aware that the agency did not share this
   interpretation. In this regard, A-TEK had complained about its difficulty
   in obtaining a DCAA audit and asked GSA to revise its requirement to allow
   firms to compete that could show evidence of indirect rates on file with
   DCAA at the time of proposal submission. Protest, exh. A, Question
   No. 467. The agency responded unequivocally that there was no requirement
   for audited rates, but reiterated the requirement for DCAA or federal
   civilian audit agency evidence of an adequate accounting system to be in
   place by the time of proposal submission in order to be considered for
   award. Id. A protest based on alleged solicitation improprieties that are
   apparent prior to the closing time for receipt of proposals must be filed
   before that time. Bid Protest Regulations, 4 C.F.R. sect. 21.2(a)(1)
   (2006). Since the RFP clearly required offerors to include verification of
   an audited and adequate accounting system, and did not provide for the
   alternative A-TEK suggests, and since A-TEK was aware of the agency*s
   interpretation prior to the closing time, it was required to protest prior
   to that time. A-TEK did not protest on this basis prior to the closing
   time; accordingly, this aspect of the protest is clearly untimely and will
   not be considered.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] Under the provisions of FAR sect. 16.301-3(a)(1), a cost-reimbursement
   contract may be used only when a contractor*s accounting system is
   adequate for determining costs applicable to the contract.

   [2] A-TEK also asserted that the rejection of its proposal conflicted with
   RFP sect. L.12.5, as amended, which stated that offerors did not need a
   verified estimating system. This assertion is without merit. While the RFP
   provision advised that a verified estimating system was not required, it
   also provided that an offeror needed verification that its accounting
   system had been audited and deemed adequate. It was A-TEK*s failure to
   meet this accounting system requirement, not the lack of a verified
   estimating system, that resulted in the rejection of its proposal.