Link: GAO Opinion
Agency: Pension Benefit Guaranty Corporation
Disposition: Protest denied.
- Protest challenging the agency’s cost realism evaluation of awardee’s proposal is denied where the agency’s workpapers demonstrate that the conclusions reached by the evaluators were reasonable.
- Protest challenging the evaluation of technical proposals is denied where the record establishes that the agency’s evaluation was reasonable and consistent with the evaluation criteria.
- Protest challenging the agency’s evaluation of past performance is denied where the record establishes that the agency properly considered the relevance of the protester’s references when deciding what weight, if any, to give each reference.
General Counsel P.C. Highlight:
IMRG first protests that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposal. The protester contends that both applicable procurement regulations and the RFP required the agency to perform a cost realism analysis to determine the extent to which an offeror’s proposed costs represent what the government realistically can expect to pay for the proposed effort. By contrast, IMRG argues, PBGC conducted nothing more than a cursory examination of the awardee’s proposed costs, and failed to submit any evidence supporting the conclusion that no exceptions to Randstad’s proposed direct or indirect labor rates were warranted. The protester maintains that the agency’s failure to reasonably determine Randstad’s realistic costs adversely affected the agency’s resulting source selection decision. GAO states that when an agency evaluates proposals for the award of a cost-reimbursement contract, an offeror’s proposed estimated cost of contract performance is not considered controlling since, regardless of the costs proposed by the offeror, the government is bound to pay the contractor its actual and allowable costs. Consequently, a cost realism analysis must be performed by the agency to determine the extent to which an offeror’s proposed costs represent what the contract costs are likely to be under the offeror’s technical approach, assuming reasonable economy and efficiency. A cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed, reflect a clear understanding of the requirements, and are consistent with the unique methods of performance and materials described in the offeror’s proposal. An offeror’s proposed costs should be adjusted when appropriate based on the results of the cost realism analysis. GAO’s review of an agency’s cost realism evaluation is limited to determining whether the cost analysis is reasonably based and not arbitrary, and adequately documented.
The RFP instructed offerors that their cost proposals were to include breakdowns of labor hours, direct and indirect labor rates, and other costs, and stated that the agency’s evaluation of an offeror’s proposed costs would include consideration of the extent to which it reasonably reflected the offeror’s proposed technical approach. IMRG argues that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposed direct and indirect labor rates. The protester argues that given Randstad’s much higher staffing levels than those proposed by IMRG, and the two offerors’ nearly equal overall costs, the agency should have been on notice that Randstad’s costs were probably understated. IMRG also argues that the agency’s cost evaluation report merely concludes that Randstad’s direct and indirect labor rates are realistic without demonstrating the basis for this conclusion. The fact that no exception was taken by the agency cost analyst, IMRG argues, does not substantiate the reasonableness of the agency’s conclusions. As noted above, while PBGC’s original report to GAO included only its cost evaluation report which indicated the conclusions reached, the agency later also provided the contemporaneous cost evaluator’s workpapers and underlying documentation supporting those conclusions. Randstad’s cost proposal set forth its proposed direct labor rates by labor category. The complete record reflects that the agency cost evaluator then compared Randstad’s proposed direct labor rates with the offeror’s current direct labor rates for the very individuals that Randstad was now proposing to employ for the contract here. Finding that in each instance Randstad’s proposed labor rates were higher than those it was currently paying to the same employees, the agency reasonably concluded that the proposed direct labor rates were realistic. Similarly, the agency compared Randstad’s proposed indirect rates with the offeror’s current budgeted and prior actual indirect rates submissions and found the offeror’s proposed indirect rates to be consistent with these submissions. GAO has no basis to find that the agency’s conclusion that Randstad’s proposed indirect rates were realistic ones was unreasonable.
IMRG next protests the agency’s evaluation of technical proposals. Among other things, the protester maintains that two of the perceived advantages of Randstad’s proposal–its use of incumbent personnel and a superior performance monitoring plan–were not advantages at all. Rather, IMRG argues, its proposal in these specific areas was equal or superior to that of Randstad and, thus, should have received equal credit for these strengths. IMRG also contends that because the alleged technical advantages in Randstad’s proposal were not meaningful, any award decision based on these perceived advantages was unreasonable. GAO states that in reviewing an agency’s evaluation, GAO will not reevaluate offerors’ proposals; instead, GAO will examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable procurement statutes and regulations. An offeror’s mere disagreement with the agency’s evaluation is not sufficient to render the evaluation reasonable. GAO’s review of the record here shows that the agency’s evaluation of proposals was unobjectionable.
Among the RFP’s technical approach subfactors was one regarding the offeror’s proposed performance measurement and management program. Specifically, the solicitation required offerors to describe all processes, tools and controls to ensure that accepted quality levels are met or exceeded and that timely and accurate reporting of performance metrics is provided to PBGC. Also, as to the experience and qualifications of personnel factor, the agency’s evaluation was to be based on the extent to which the offeror provides qualified and experienced personnel with relevant experience to perform this contract. In its proposal, incumbent Randstad proposed its current workforce for both the key personnel and remaining staff positions. Also, with regard to the performance measurement and management program subfactor, Randstad proposed the development of a web-based Performance Excellence Tool to track metrics, report results, and objectively measure individual and team success.
After completing its evaluation of each offeror’s proposal, the TEP found Randstad’s proposal to be technically superior to that of IMRG. The evaluators concluded that the largest difference between the proposals was with regard to the experience and qualifications of personnel factor, and that Randstad’s proposal was superior because: (1) it utilized mostly incumbent personnel; (2) added a Performance Control Manager as well as an impressive individual to fill that role; (3) proposed an experienced Assistant Project Manager; and (4) planned staffing levels of [DELETED] people (by comparison, IMRG’s staffing level was [DELETED] FTEs). The contracting officer subsequently adopted the TEP’s findings and conclusions as the basis for her cost/technical tradeoff determination.
As a preliminary matter, the record clearly indicates that the TEP was aware that IMRG was proposing an existing performance monitoring tool while Randstad was proposing a developmental performance monitoring tool. Contrary to IMRG’s assertion, the agency did not find Randstad’s performance monitoring plan superior to IMRG’s. Rather, the agency evaluators considered Randstad’s and IMRG’s monitoring plans to be equivalent strengths under the applicable evaluation factors. Moreover, the agency did not consider Randstad’s monitoring tool to be a discriminator between the two offerors’ proposals when making its determination of technical superiority. IMRG essentially argues that the agency should have given more weight to an area in which it had a perceived advantage over Randstad. This amounts to mere disagreement with the agency’s evaluation of proposals, which does not make the evaluation unreasonable.
IMRG also argues that the agency improperly judged Randstad’s proposal as superior as to the experience and qualifications of personnel factor when IMRG also proposed the use of incumbent personnel. GAO finds no merit to the protester’s assertion here. As set forth above, the TEP considered each offeror’s proposed use of the incumbent Randstad workforce to be an evaluation strength. Nonetheless, when determining the relative technical merits of the offerors’ proposals, the TEP properly considered the fact that Randstad currently employed the incumbent workforce, while IMRG had merely established a stated goal of capturing 98 percent of the incumbent workforce. It is reasonable, GAO thinks, for an agency to distinguish between the actual existing situation (i.e., that Randstad currently employs the incumbent workforce) and what an offeror proposes to accomplish. Moreover, the fact that the TEP considered both offerors’ planned use of the incumbent Randstad workforce to be strengths does not preclude the evaluators from recognizing that the offeror’s proposals were not in fact equal in this regard.
Finally, IMRG protests the agency’s evaluation of its past performance. Of foremost concern, the protester contends that the evaluation was unreasonable because of PBGC’s failure to consider as relevant various past performance references provided by IMRG in its proposal. IMRG argues that had the agency properly evaluated its past performance, it would have received a rating that was equal to or greater than that received by Randstad.
The RFP required offerors to provide at least three references evidencing past performance during the last 3 years that was –the same as, or substantially similar to— the services described in the PWS here. RFP sections L.8, M.3. Among the past performance information deemed relevant by the solicitation and which offerors were required to provide were the dollar value and length of prior contract efforts. Regarding the agency’s evaluation of past performance, the RFP also informed offerors that, –[w]hen discussing previous Government and/or private sector projects similar to that proposed, provide sufficient detail to convince evaluators of the relevance of the skills and objectives involved. GAO states that where a solicitation requires the evaluation of offerors’ past performance, it will examine an agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s evaluation criteria and procurement statutes and regulations. When made applicable by the solicitation, GAO reviews a past performance evaluation to determine the similarity or relevance of the past performance information considered by the agency. A protester’s mere disagreement with the agency’s judgment does not establish that an evaluation was improper.
As a preliminary matter, the agency evaluators properly considered the relevance of each of IMRG’s past performance references before deciding what, if any, weight to give it. Further, the agency’s decision not to consider relevant the offeror’s CDC Foundation, OCC, and EPA references was reasonable. As set forth above, the current solicitation involves a wide range of professional pension benefit administration support services, estimated at more than $22 million over four years and involving at least [DELETED] personnel. By contrast, the CDC Foundation reference was a $92,000, four-person contract for financial management and stipend administration services for an eight-month period. Likewise, IMRG’s OCC and EPA references involved support services (i.e., librarian, technical writer/editor, information technology, and administrative support services) and communication center services (i.e., photocopying, shipping and receiving, supplies, mail), respectively. Quite simply, the agency reasonably determined that IMRG’s references here were not similar in scope and/or size to the current solicitation. IMRG does not dispute the size and scope of its past performance references. The protester instead argues that at least four of its past performance references (presumably all but the CDC Foundation reference) were comparable in size and scope to the work described in the current solicitation. IMRG fails to show, however, how the services in its past performance references were the same as, or substantially similar to, those described in the PWS. In sum, IMRG’s argument amounts to mere disagreement with the agency’s judgment and, thus, does not establish that the past performance evaluation was unreasonable. The protest is denied.