Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
1. Protest challenging agency’s cost realism analysis is denied where the agency reasonably adjusted the protester’s proposed costs to account for its failure to propose the correct number of labor hours, as required by the solicitation.
2. Protest challenging agency’s technical evaluation is denied where the record shows that even if the agency’s identification of a minor weakness in the protester’s proposal was unreasonable, the conclusion did not materially affect the award decision.
General Counsel P.C. Highlight:
FedSys argues that the Army’s cost realism evaluation made two unreasonable adjustments to the protester’s proposed costs. These two adjustments increased FedSys’ evaluated costs by approximately $[deleted] million, and narrowed the difference between FedSys’ costs and ATS’s higher costs from approximately [deleted] percent to approximately 3 percent. GAO states that when an agency evaluates a proposal for the award of a cost-reimbursement contract, an offeror’s proposed estimated costs are not dispositive because, regardless of the costs proposed, the government is bound to pay the contractor its actual and allowable costs. Consequently, the agency must perform a cost realism analysis to determine the extent to which an offeror’s proposed costs are realistic for the work to be performed.
Here, FedSys omitted the necessary costs from its proposal and presents–in the course of its comments on this protest–certain –assumptions about those costs that it argues demonstrates that the agency’s IGCE was unreasonable. While GAO has reviewed the FedSys’ contentions, the protester does not explain or provide any support for its assumptions regarding the travel costs, and GAO sees nothing in this record to lead us to conclude that the agency’s estimate was unreasonable.
Next, FedSys contends that the Army unreasonably found two minor weaknesses in its technical proposal; these weaknesses were assessed under the subfactors of management capability and approach, and recruitment/retention and key personnel. GAO states that the evaluation of an offeror’s proposal is a matter within the agency’s discretion. In reviewing a protest against an agency’s evaluation of proposals, GAO will not reevaluate proposals but instead will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. A protester’s mere disagreement with the agency’s judgment in its determination of the relative merit of competing proposals does not establish that the evaluation was unreasonable.
While GAO agrees that the RFP did not clearly state that SMEs were required to be designated as key personnel, GAO does not think that the protester was prejudiced by this error. The RFP instruction that key personnel may include but [are] not limited to a list of designated positions was unclear as to whether the designation of the enumerated personnel was mandatory or at the discretion of the offeror, and may not have reasonably advised offerors of their obligations regarding key personnel. GAO will not sustain a protest absent a showing of competitive prejudice, that is, unless the protester demonstrates that, but for the agency’s actions, it would have a substantial chance of receiving award. As discussed above, the recruitment/retention and key personnel subfactor was one of three equally-weighted subfactors which, when combined, were of equal importance to the management capability and approach subfactor. Even if the minor weakness were removed from the evaluation, FedSys would be left with two minor strengths under the recruitment/retention and key personnel subfactor–an improvement that might improve the protester’s score to a goodrating, but would not likely improve the rating to the excellent score received by ATS for this subfactor. The protest is denied.