TITLE: B-310762, PM Services Company, February 4, 2008
BNUMBER: B-310762
DATE: February 4, 2008
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B-310762, PM Services Company, February 4, 2008

   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: PM Services Company

   File: B-310762

   Date: February 4, 2008

   Leigh T. Hansson, Esq., Gregory S. Jacobs, Esq., and Stephen D. Tibbets,
   Esq., Reed Smith LLP, for the protester.

   Lawrence M. Prosen, Esq., and Joel S. Rubinstein, Esq., Bell, Boyd & Lloyd
   LLP, for Four Seasons Environmental, Inc., an intervenor.

   Scott C. Briles, Esq., and Julie Ann Sammons, Esq., Department of Health
   and Human Services, Centers for Disease Control and Prevention, for the
   agency.

   Scott H. Riback, Esq., and John M. Melody Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency misevaluated protester's technical proposal, as well
   as protester's and awardee's cost proposals, is denied where record shows
   that none of the alleged errors could have resulted in prejudice to the
   protester.

   DECISION

   PM Services Company protests the award of a contract to Four Seasons
   Environmental, Inc. under request for proposals (RFP) No. 2005-N-1708,
   issued by the Department of Health and Human Services, Centers for Disease
   Control and Prevention (CDC), to acquire comprehensive operation and
   maintenance of the agency's facilities at various locations. PM asserts
   that the agency misevaluated its technical proposal, and both PM's and the
   awardee's cost proposals.[1]

   We deny the protest.

   The RFP contemplated the award, on a "best value" basis, of a
   cost-plus-fixed-fee contract for operation and maintenance of CDC's
   facilities, including scientific laboratories, offices, auditoriums, steam
   and chilled water plants, freezers, dining facilities, storage facilities,
   and research animal confinement facilities. The RFP advised that proposals
   would be evaluated on the basis of six technical factors: experience
   (worth up to 30 of 100 available points), program management plan
   (22 points), understanding of the problem (18 points), proposed staff and
   back-up personnel (16 points), technical approach (14 points), and past
   performance (not scored). RFP sections M.1, M.2, and M.4. For cost
   evaluation purposes, the agency would conduct a cost realism evaluation to
   determine each offeror's ability to project costs that are reasonable and
   whether the offeror understands the nature and extent of the work to be
   performed. RFP sect. M.6.

   The agency received four proposals and, after an initial evaluation,
   included two--the protester's and the awardee's--in the competitive range.
   The agency then engaged in discussions with both firms and solicited final
   proposal revisions (FPR). In evaluating the FPRs, the agency assigned the
   protester's proposal 85 points, and the awardee's 98 points. PM's final
   evaluated cost was $71,351,906, while the awardee's was $68,122,022.65. On
   the basis of these evaluation results, the agency determined that, since
   Four Seasons's proposal was technically superior and offered the lowest
   evaluated cost, it represented the best value. CDC thus made award to the
   firm. After receiving a debriefing, PM filed the instant protest.

   PM challenges the agency's technical evaluation under the understanding of
   the problem and proposed staff and back-up personnel evaluation factors.
   According to the protester, had the agency properly evaluated its proposal
   under these factors, its final total score would have been 8.9 points
   higher, for a total of 94.9 points.

   Prejudice is an essential element of every viable protest and, where it is
   not demonstrated or otherwise evident, we will not sustain a protest
   allegation, even where the record shows that the agency's actions were
   arguably improper. GC Servs. Ltd. P'ship, B-298102, B-298102.3, June 14,
   2006, 2006 CPD para. 96 at 7-8; Statistica, Inc. v. Christopher, 102 F.3d
   1577, 1681 (Fed. Cir. 1996). PM was not prejudiced by the alleged
   evaluation improprieties. While PM asserts that its proposal should have
   received a total technical score of 94.9 points, it does not challenge
   Four Seasons's proposal's score of 98 points, or the agency's substantive
   evaluation findings supporting its conclusion that Four Seasons's proposal
   was technically superior. Under these circumstances, even if we agreed
   with PM regarding the agency's evaluation of its proposal, there would be
   no basis for questioning the award, since Four Seasons's proposal still
   would be technically superior to PM's (or, at worst, technically
   equivalent), and lower cost. These assertions thus do not provide a basis
   for sustaining the protest.

   PM asserts that the RFP requirement that offerors escalate their proposed
   Service Contract Act (SCA) labor rates for the option years was unfair
   because firms were free to propose virtually any escalation rate;
   consequently, the agency's cost evaluation did not compare proposed costs
   on an equal basis. According to the protester, the evaluation criteria in
   the RFP did not state that the agency would evaluate information relating
   to offerors' proposed escalation rates as part of its cost evaluation.

   This aspect of PM's protest is untimely. Our Bid Protest Regulations
   require that protests relating to alleged improprieties in a solicitation
   that are apparent on its face be filed prior to the deadline for
   submitting proposals. 4 C.F.R. sect. 21.2 (a)(1) (2007). The RFP here
   instructed offerors as follows regarding the preparation of their cost
   proposals:

     Labor escalation provisions for Years 2-5 shall include anticipated wage
     increases for proposed personnel and/or proposed categories of labor. It
     shall be the contractor's responsibility to formulate and justify their
     rationale for Year 2-5 labor escalation rates.

   RFP sect. L.5 b (1)(a). Additionally, section M.6 provided: "Furthermore,
   cost/price will be evaluated on the basis of cost realism which is defined
   as the offeror's ability to project costs which are reasonable and
   indicate that the offeror understands the nature and extent of the work to
   be performed." Reading these provisions together, we find that it was
   clear from the RFP that offerors were free to propose and justify
   different escalation rates; it follows, that offerors' cost proposals
   could be evaluated based on different rates. Thus, to the extent PM
   thought this would result in an unfair evaluation, it was required to
   protest on this ground prior to the closing time for submission of initial
   proposals. 4 C.F.R. sect. 21.2(a)(1).

   We note that this issue came up in the context of discussions with the
   protester as well. The protester was advised as follows: "[Your] Direct
   Labor presentation includes provision for cost escalation of
   administrative personnel only (Project Manager, Supervisors,
   administrative, etc.). Escalation must also be applied to all DOL-covered
   personnel [see L.5 b(1)(a)]." AR exh. E, at 4. Thus, to the extent the
   protester may have thought that the RFP as originally issued did not
   contemplate offerors providing--and the agency evaluating--proposed
   escalation for DOL-covered employees, it knew at the point it received
   this discussion question what the agency was expecting from the offerors,
   and what it intended to evaluate. It follows that, even if the protester
   were not required to protest on this ground prior to the deadline for
   submitting proposals, it was required to protest within 10 days of
   receiving the agency's discussion question quoted above. 4 C.F.R.
   sect.21.2 (a)(2). In view of the forgoing considerations, we conclude that
   this aspect of PM's protest is untimely.

   In any case, as noted, PM's evaluated cost was $71,351,906, while the
   awardee's was $68,122,022.65, for a difference of $3,229,883.35, or
   approximately 4.4 percent. The record also shows that, in preparing its
   proposal, PM applied a [deleted] percent escalation rate for its SCA labor
   costs, AR exh. F, at 3, while Four Seasons applied a [deleted] percent
   escalation rate. Agency Supplemental Submission, Jan. 25, 2008, at 6.
   Given the approximately 4.4 percent difference between the firms' prices,
   the record shows that the slight variance between their escalation rates
   ([deleted] percent) could not have affected the relative standing of their
   cost proposals. Accordingly, PM was not prejudiced by the escalation
   provision. GC Servs. Ltd. P'ship, supra.

   PM argues that Four Seasons failed to provide justification for its
   [deleted] percent escalation rate, and that the record does not include an
   independent finding by the agency that its rate was reasonable. PM notes,
   in this connection, that its proposal contained a detailed analysis of the
   Atlanta, Georgia labor market in support of its proposed rate, whereas the
   record shows that Four Seasons reduced its initially proposed escalation
   rate from [deleted] percent based solely on the .89 percent rate reflected
   in the last SCA wage rate determination (issued as an amendment to the
   RFP). PM concludes that, absent a detailed rationale for Four Seasons's
   revised proposed escalation rate, there was no reasonable basis for the
   agency to conclude that the rate was reasonable and realistic.

   As PM notes, its proposal contained a detailed analysis of the Atlanta
   labor market for an 11-year period in support of its proposed [deleted]
   percent escalation rate.

   AR vol. III, Proposal Revision, Jan. 12, 2006, at (unnumbered) pages
   38-40. This analysis was not specific to PM's technical approach but,
   rather, was based on the Atlanta labor market generally. While Four
   Seasons's proposal did not include a similarly detailed analysis, we see
   no reason why the agency could not consider PM's analysis in concluding
   that the virtually identical rate of [deleted] percent offered by Four
   Seasons was reasonable as well. Moreover, consistent with the requirements
   of Federal Acquisition Regulation sect. 15.404-1, relating to the
   conducting of cost analyses, the record shows that the Defense Contract
   Audit Agency performed a cost evaluation of PM's proposal, which included
   a review of its proposed [deleted] percent escalation rate with no
   exception taken. AR exh. F, DCAA Report, Oct. 23, 2006, at 2. We conclude
   that the agency had a sufficient basis to find that Four Seasons's rate
   was reasonable and realistic based on the information contained in the
   record.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] In its initial protest, PM asserted that the agency improperly failed
   to consider information in PM's revised proposal in the final evaluation,
   and also failed to provide meaningful discussions. The agency responded to
   these assertions in its report, and PM made no further mention of the
   issues in its comments on the report. Under these circumstances, we deem
   the issues to have been abandoned. Israel Aircraft Indus., Ltd.--TAMAM
   Div., B-297691, Mar. 13, 2006, 2006 CPD para. 62 at 6-7.