Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
Keywords: Task Orders; Discussions
General Counsel P.C. Highlight: As a general rule, FAR Part 15 procedures do not govern task and delivery order competitions conducted under FAR Part 16. GAO will review such task order competitions to ensure that the competition is conducted in accordance with the solicitation and applicable procurement laws and regulations. But, where the agency’s evaluation record expressly provides that the agency conducted discussions in accordance with FAR part 15, GAO will evaluate the agency’s adherence to those regulations in evaluating this aspect of the evaluation.
Imagine One Technology & Management, Ltd. (Imagine One) protests the issuance of a task order by the Department of the Navy under a request for proposals (RFP) for program management support services.
The RFP was issued as a competitive small business set?aside, seeking program management support services to support domestic and foreign military sales requirements. The RFP anticipated issuance of a performance-based cost-plus-fixed-fee and firm-fixed-price task order issued under a multiple award indefinite-delivery/indefinite-quantity (ID/IQ) contract. The solicitation announced that award would be based on the evaluation of three factors: technical, past performance and cost/price. The solicitation identified four technical subfactors in descending order of importance: workforce, understanding of the work, corporate experience, and management plan.
With regard to the workforce subfactor, the solicitation stated that the agency would evaluate personnel, the labor mix proposed, and the supporting information to determine how well the team was suited to perform the tasks. With regard to the cost/price factor, the RFP stated that, in evaluating each proposal, the agency would consider the realism of offerors’ estimated costs to determine if the overall costs proposed were realistic for the work to be performed, if the costs reflected the offeror’s understanding of the requirements, and if the costs were consistent with the various elements of the offeror’s technical proposal. The solicitation informed offerors that the agency did not contemplate holding discussions, but that it reserved the right to do so, should the need arise. The RFP also stated that the agency “may contact any or all or a limited number of awardees with questions concerning their responses as permitted under FAR Part 16.”
The source selection authority (SSA) found that, while Imagine One’s proposal contained several strengths, the number of significant and minor weaknesses in the protester’s proposal was notably higher than in ASTM’s proposal. Thus, while the SSA found that the risk of unsuccessful contract performance was low for Imagine One, the risk was very low for the awardee. The SSA found that the proposal submitted by the awardee was more advantageous in all evaluation areas, with the exception of the corporate experience technical subfactor and the past performance evaluation factor, where the proposals were equally rated. The SSA noted that under the past performance evaluation factor, the agency had equal confidence in the ability of both offerors to successfully accomplish the requirements set forth in the statement of work. With regard to cost/price, the SSA noted that the awardee offered the more advantageous price, with a total evaluated cost/price that was $445,696.8, or 2.1%, lower than Imagine One’s total evaluated cost/price. The SSA concluded that the government could obtain the numerous advantages associated with the awardee’s proposal without paying any price premium. Therefore, the SSA determined that the proposal submitted by the awardee represented the best value to the government.
Imagine One asserts that the agency engaged in unequal discussions when it informed the awardee that “a decrease in overall price would enhance materially the proposal’s potential for award,” while at the same time it informed the protester that some of its rates were considered to be unrealistically low. GAO states that as a general rule, FAR part 15 procedures do not govern task and delivery order competitions conducted under FAR part 16. GAO will review such task order competitions to ensure that the competition is conducted in accordance with the solicitation and applicable procurement laws and regulations. Where, as here, the agency’s evaluation record expressly provides that the agency conducted discussions in accordance with FAR part 15, GAO will evaluate the agency’s adherence to those regulations in evaluating this aspect of the evaluation.
When conducting discussions pursuant to FAR part 15, contracting officers are required to raise with each offeror proposal deficiencies and significant weaknesses; contracting officers are also “encouraged to discuss other aspects of the offeror’s proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award.” FAR sect. 15.306(d)(3). Although discussions may not be conducted in a manner that favors one offeror over another, discussions need not be identical among offerors; rather, discussions are to be tailored to each offeror’s proposal.
Here, the agency’s discussions with the awardee were appropriately tailored to the firm’s proposal and, consistent with FAR sect. 15.306(d)(3), addressed an area where the firm could enhance materially the proposal’s potential for award. Likewise, discussions with the protester were tailored to its proposal and raised issues that could materially enhance the proposal’s potential for award. GAO disagrees with the protester’s contention that the agency’s statement to the awardee provided the firm with an advantage over other offerors, given that the question merely restated, in a general way, the requirements of the FAR.
Imagine One also protests that the agency’s evaluation of engineer labor rates. The agency advised the protester during discussions that its proposed labor rate for engineers appeared to be unrealistically low, and the agency requested that the protester either substantiate the rate or revise its cost proposal. Imagine One complains that the agency erred in concluding that the rates were unrealistically low, and that the agency misled the firm to increasing its rates.
The problem for the protester, however, is that there is no reference to this salary survey in the protester’s initial or revised proposals, or in its response to the agency’s discussion questions. To the contrary, with regard to the labor rate for engineers, the only salary survey referenced in the protester’s proposals was an ONET salary survey, which was provided in response to the agency’s discussion question. The ONET salary survey shows a much higher rate of $44.13 as the median rate (50th percentile) for an engineer in Huntsville, Alabama, and a rate of $51.87 for the 75th percentile of engineer labor rates in that geographic area, which supports the agency’s conclusion that the protester’s initially proposed rate was unrealistically low. Based on the record, Imagine One’s decision to revise its engineer rates upward reflects the exercise of the firm’s own business judgment and not improper conduct by the agency. In sum, GAO finds nothing misleading or coercive regarding the discussions about which Imagine One complains, and nothing unreasonable in the agency’s evaluation of Imagine One’s proposed engineer labor rates.
Imagine One asserts that the agency’s decision to ignore its proposed impacted indirect rates, and upwardly adjust the proposal’s evaluated cost/price as a result, was without a reasonable basis. GAO states that the RFP here required a cost realism analysis to determine whether each offeror’s proposed costs were realistic for the work to be performed, reflected the offeror’s understanding of the requirements, and were consistent with the offeror’s technical proposal.
During discussions, the agency informed Imagine One that it was concerned about the realism of these rates because they were notably lower than the fiscal year 2009 budgeted rates submitted to, and approved by, DCAA. In its evaluation of the protester’s revised proposal, the cost evaluation team indicated that it continued to have doubts about the protester’s estimated savings as a result of winning the task order. Thus, contrary to the protester’s arguments, the record shows that the agency did discuss its concerns with Imagine One during discussions. The record also supports the agency’s doubts about the accuracy of the impacted indirect rates and the agency’s decision not to rely on them in its cost realism analysis.
Imagine One challenges several aspects of the agency’s technical evaluation and contends that the agency applied unstated evaluation criteria in conducting its technical evaluation.
GAO reviews task order competitions to ensure that the competition is conducted in accordance with the solicitation and applicable procurement laws and regulations. Although GAO does not discuss each of the protester’s numerous arguments, it has considered them all and finds they amount to mere disagreement with the reasonable judgment of the agency.
The record shows that the agency considered the protester’s approach, and found that it presented a risk for quality support of the advanced precision kill weapon system program, especially given that the program was approaching a milestone. Based on the review of the record, the agency’s analysis is unobjectionable. The protest is denied.