TITLE: B-310814, Accumark, Inc., February 13, 2008
BNUMBER: B-310814
DATE: February 13, 2008
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B-310814, Accumark, Inc., February 13, 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: Accumark, Inc.

   File: B-310814

   Date: February 13, 2008

   Thomas O. Mason, Esq., and Francis E. Purcell, Jr., Esq., Williams Mullen,
   for the protester.

   John Pope Midyette for InfraMap Corporation, an intervenor.

   Dave Nimmich, Esq., Naval Facilities Engineering Command, 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

   1. Protest that agency unreasonably found that awardee's prices were
   realistic under a fixed-price contract is denied where record shows agency
   based its determination on a comparison of all offerors' prices to one
   another and to the government estimate, and all prices received were
   within a narrow range.

   2. Protest that agency should have rejected awardee's proposal for
   offering unbalanced prices is denied where awardee's price was low overall
   and, to extent that its prices for one element of contract were high in
   comparison to other offerors' prices and government estimate, record shows
   estimated quantity for that element was reasonably accurate; thus, based
   on the record, there is little risk that award will not result in lowest
   cost to government.

   DECISION

   Accumark, Inc. protests the award of a contract to InfraMap Corporation
   under request for proposals (RFP) No. N40085-05-R-2545, issued by the
   Department of the Navy to acquire utility and underground facilities
   locating and marking services at various Naval facilities in the Hampton
   Roads, Virginia area. Accumark asserts that the agency misevaluated the
   awardee's price proposal.

   We deny the protest.

   The RFP contemplated the award of a fixed-price,
   indefinite-delivery/indefinite-quantity (ID/IQ) contract for a base
   period, with 4 option years and 5 award option years. Award was to be made
   on a "best value" basis, considering price and three non-price evaluation
   factors--technical approach/management, corporate experience and past
   performance. RFP sect. M.2. The technical factors, combined, were equal in
   weight to price. The agency was to consider the reasonableness, realism
   and completeness of the proposed prices; proposals that offered
   unreasonable, unrealistic, or unbalanced prices could be downgraded or
   considered unacceptable. Id. In this regard, realism was defined as
   follows: "Prices are compatible with the scope of solicitation performance
   requirements and proposed technical approach." Id.

   The agency received three proposals and included all in the competitive
   range. Following discussions with the offerors, the agency made award to
   Accumark. InfraMap challenged the award in an agency-level protest,
   alleging that the Navy improperly had failed to solicit final proposal
   revisions (FPR) at the conclusion of discussions. The agency determined
   that InfraMap was correct, and thereafter advised all three offerors that
   they would be permitted to submit FPRs. In soliciting FPRs, the agency
   disclosed all offerors' total prices in order to ameliorate any
   competitive harm to Accumark due to the release of its price in connection
   with the announcement of the award. Agency Report (AR), exhs. 17, 18.

   InfraMap and Accumark (and the third offeror) submitted revised proposals;
   Accumark made limited changes to its technical proposal and also slightly
   revised its proposed prices, while InfraMap revised only its price. After
   evaluating the proposals, the agency rated the proposals as follows:

   +------------------------------------------------------------------------+
   |Offeror |Tech./Mgmt. | Corp. Exp. | Past Perf. |  Overall   |   Price   |
   |        |            |            |            |Tech. Rating|           |
   |--------+------------+------------+------------+------------+-----------|
   |Accumark| Very Good  |Satisfactory|Satisfactory|Satisfactory|$15,088,000|
   |--------+------------+------------+------------+------------+-----------|
   |InfraMap|Exceptional | Very Good  | Very Good  | Very Good  |$13,607,638|
   |--------+------------+------------+------------+------------+-----------|
   |Offeror |Satisfactory|  Marginal  |  Neutral   |  Marginal  |$14,494,800|
   |   A    |            |            |            |            |           |
   +------------------------------------------------------------------------+

   AR, exhs. 21, 27. On the basis of these evaluation results, the agency
   made award to InfraMap, concluding that, because the firm had submitted
   the best technical proposal at the lowest price, it offered the best value
   to the government. AR, exh. 22. After being advised of the award decision,
   Accumark filed this protest.

   Accumark asserts that the agency unreasonably determined that InfraMap's
   proposed prices were realistic.[1] InfraMap reduced its price in its FPR
   and the protester maintains that this was a dramatic price reduction that
   should have led the agency to conclude that there would be an adverse
   impact on InfraMap's technical capability to perform the contract.[2]

   In the context of a solicitation that provides for award of a fixed-price
   contract, an agency may, in its discretion, provide for considering the
   realism of offered prices for purposes of assessing whether a price is so
   low as to evince a lack of technical understanding on the part of the
   offeror. Consolidated Servs., Inc., B-276111.4, Dec. 29, 1997, 98-1 CPD
   para. 14 at 4. In such a context, an agency's simple comparison of the
   prices received with one another, as well as with a government estimate,
   can serve as an adequate basis to establish the realism of the proposed
   prices where, as here, there was adequate competition, and the proposed
   prices fall within a narrow range. Id. at 5.

   The realism determination here was unobjectionable. The record shows that
   InfraMap's initial price--$[deleted]--was found by the agency to be
   unreasonably high, AR, exh. 27, at 5, and the agency so advised InfraMap
   during discussions. AR, exh. 8, at 1. InfraMap reduced its price in its
   FPR, and the agency compared this reduced price to the other prices
   received to determine whether it was realistic. The agency found that
   InfraMap's price compared favorably to the other prices.[3] It thus
   concluded that, since there was adequate price competition, InfraMap's
   proposed price was realistic, reasonable and complete. AR, exh. 22, at 3,
   5-8. The agency's methodology was consistent with the applicable standard,
   and its conclusion was reasonable in light of the fixed-price nature of
   the requirement, the comparability of the prices received and the adequacy
   of the competition. Under these circumstances, the protester's general
   assertion that InfraMap may not have understood the requirement is not
   sufficient to bring the agency's determination into question. In this
   regard, the agency rated InfraMap's proposal superior to the others
   received, and Accumark has raised no substantive challenge to the agency's
   evaluation conclusions. See Consolidated Servs., Inc., supra.

   Accumark asserts that the award to InfraMap was improper because its
   proposed prices were unbalanced. In this connection, offerors were
   required to submit prices for six exhibit line items (ELINS) for each of
   the contract's performance periods. RFP sect. B.17; sect. J, exhs. A-K.
   Each of the ELINS represented a different aspect of the required work.
   Accumark maintains that InfraMap's prices for the first five ELINS are
   understated, and that its price for the sixth is overstated. According to
   the protester, there was no historical information available for the sixth
   ELIN, and the agency thus did not have a reasonable basis for its quantity
   estimate under that ELIN; as a result, there is a risk that InfraMap's low
   total price will not result in the lowest actual cost to the government.

   As an initial matter, we note that, to the extent that the protester is
   challenging the accuracy of the agency's estimated quantity for the sixth
   ELIN, its protest is untimely. Our Bid Protest Regulations require that
   protests concerning alleged improprieties apparent on the face of a
   solicitation be filed prior to the deadline for submitting proposals. 4
   C.F.R. sect. 21.2(a)(1) (2007). Here, the RFP included the agency's
   estimated quantities for all of the ELINS, and if Accumark thought that
   the estimated quantities were inaccurate, it was required to protest the
   matter prior to the deadline for submitting proposals.

   In any case, this argument is without merit. Under Federal Acquisition
   Regulation (FAR) sect. 15.404-1(g), unbalancing exists where, despite a
   proposal's low overall price, individual line item prices are either
   understated or overstated. In such circumstances, agencies are required to
   consider whether award to a firm whose prices are unbalanced may pose a
   risk that the government will pay unreasonably high prices for contract
   performance. Id. In the context of an ID/IQ contract, a key consideration
   is the accuracy of the government's quantity estimates; if the estimates
   are reasonably accurate, then evidence of mathematical unbalancing
   generally does not present a risk that the government will pay
   unreasonably high prices for contract performance. Neals Janitorial Serv.,
   B-279633, June 3, 1998, 98-1 CPD para. 156.

   The sixth ELIN is for global positioning system (GPS) mapping services,
   and the RFP specified an estimated 800 units for these services. The
   individual responsible for preparing the estimate states that, while no
   historical data existed for this aspect of the contract, he based his
   estimate on the potential number of parcels for which the agency might
   require that GPS survey work be performed. Specifically, he states:

     For the line item involving GPS mapping, this service had not been part
     of the previous contract, so I did not have historical data from that
     contract to assist me in creating the estimated quantity. Instead, I had
     been informed that the primary Navy customer for these services would be
     a communications command that was planning to earmark funds to map
     portions of its underground communications lines that had not previously
     been mapped using GIS [geographic information system] technology. My
     estimated quantity of 800 such units was based upon the number of
     parcels required to complete that effort.

   AR, exh. 26. The agency further explains that the GPS mapping line item
   reflects an estimate of the level of effort required if the Navy
   telecommunications command orders mapping for the entirety of its unmapped
   network in the Hampton Roads area, and that it therefore would be
   virtually impossible to overrun the estimated quantity.

   The protester challenges the estimate on two bases. First, it asserts that
   the estimate is based on the needs of the primary user of the GPS mapping
   requirement, but does not account for other possible users of the service.
   However, Accumark has produced absolutely no information or evidence to
   show that other commands within the Navy may require GPS mapping services,
   and nothing in the record suggests that the agency contemplates allowing
   other commands to use the contract for these purposes. Accumark's mere
   speculation regarding other possible ordering activities is insufficient
   to reasonably draw into question the accuracy of the estimate. Second, the
   protester maintains that, because the number of underground lines to be
   mapped varies from one parcel to another, the actual cost of mapping any
   given parcel could vary depending on the amount of time necessary to map a
   given parcel. However, the RFP called for a lump-sum price per mapping
   survey. Thus, the number of lines to be mapped and the amount of time
   involved would have no effect on the estimated quantity or the cost to the
   government. We conclude that Accumark has failed to show that the estimate
   is inaccurate and there is no basis in the record to otherwise find that
   there is any risk that the agency will pay unreasonably high prices for
   the GPS survey requirement.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] In its initial protest, Accumark also asserted that the agency
   improperly had accepted an alternate price proposal from InfraMap that was
   noncompliant with the terms of the solicitation, and also engaged in
   unequal discussions. The agency responded to these assertions in its
   report, and in its comments, Accumark makes no mention of these
   assertions. We deem these allegations to be abandoned. Israel Aircraft
   Indus., Ltd.--TAMAM Div., B-297691, Mar. 13, 2006, 2006 CPD para. 62 at
   6-7.

   [2] Accumark also argues that the agency failed to consider the
   reasonableness of InfraMap's price. However, price reasonableness concerns
   whether a price is too high, not whether it is too low. Medical Matrix,
   LP, B-299526, B-299526.2, June 12, 2007, 2007 CPD para. 123 at 9 n.6.
   Since Accumark claims that the awardee's price is too low, there is no
   basis to find that price unreasonable.

   [3] The record shows that the agency also used the government
   estimate--$18,394,585.90-- as a reference point in its price evaluation,
   AR, exh. 27.