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
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[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.