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Matter of Information International Associates, Inc.

  • By GCPC GovCon Legal Team
  • December 6, 2019
  • Cost RealismGAO Standard of ReviewPrejudice
  • 0 Comments

Agency: Department of the Air Force

Disposition: Protest Sustained

Decided: May 28, 2019

Keywords:  Cost Realism, Prejudice, GAO Standard of Review

General Counsel P.C. Highlight: 

A protestor cannot succeed unless it can show that “but for the agency’s actions, it would have had a substantial chance of receiving the award.” A protest will be sustained when there is a reasonable possibility that the protestor was prejudiced by the agency’s action.

Summary of Facts 

Information International Associates, Inc. (IIA) protests the award of the Homeland Defense and Security Information Analysis Center (HDIAC) contract to Quanterion Solutions Inc. under an RFP issued by the Department of the Air Force for the collection, analysis, synthesizing/processing, and dissemination of scientific and technical information. The RFP sought proposals for the award of a single cost-plus-fixed-fee contract to the offeror whose proposal offered the best value to the government, considering past performance, technical, and cost. The technical factor had three subfactors: operations approach, management, and information support system (ISS). The past performance and technical factors were equally important and, when combined, were significantly more important than cost. 

For past performance, offerors were asked to submit references for contractors. Operations approach required contractors to develop and maintain an internet home page website for HDIAC within 60 days from the date of contract award. The ISS subfactor required the offeror to explain its approach for obtaining customer feedback and suggestions. The RFP explained that the Air Force would evaluate an offeror’s proposed costs for reasonableness, realism, and balance and perform a cost realism analysis. 

Three proposals were submitted, including proposals from IIA and Quanterion. Relevant here is that IIA was issued a weakness under the ISS subfactor and Quanterion was issued a strength under the operations approach subfactor. The agency determined that Quanterion’s proposal was slightly superior technically and lower in cost than IIA’s and, thus, represented the best value to the government. A major factor in this determination was the ISS subfactor, where Quanterion’s proposal was slightly better than IIA’s proposal, which contained one weakness. Quanterion was awarded the contract.

Basis of Protest 

IIA protests the award of the contract to Quanterion arguing the Air Force conducted a flawed source selection by unreasonably assessing a strength in Quanterion’s proposal and a weakness in its own proposal. IIA also argues the Air Force’s cost realism analysis was unreasonable, because there was no basis to accept Quanterion’s escalation rate or other direct costs as realistic.

Specifically, IIA argues that the Air Force unreasonably assessed a strength in Quanterion’s proposal for a HDIAC website running on the first day of contract award and for expertise that would assist the agency as it transitions its websites to a cloud environment, because the RFP did not indicate that the contractor would be evaluated on where the website was hosted. The Air Force argues that Quanterion’s proposal has a “preliminary HDIAC website” with “basic user functionality” that “meets and exceeds” the RFP requirement.

IIA also challenges the reasonableness of the assessed weakness in its proposal for failing to address how feedback would be obtained, responded to, and reported. IIA argues that its proposed response to this requirement was just as robust as Quanterion’s, but only IIA’s proposal was assessed a weakness. The Air Force contends that it “reasonably determined” that Quanterion’s proposal did not merit a weakness because of the proposed use of a system to track view counts and an automatic request for feedback, which met the RFP’s customer feedback requirement.

Protest Denied in Part and Sustained in Part

Strengths and Weaknesses

The GAO noted that “agencies are required to evaluate proposals based solely on the factors identified in the solicitation, and must adequately document the bases for their evaluation conclusions.” Agencies can only apply evaluation considerations not expressly outlined in the RFP, if they “are reasonably and logically encompassed within the stated evaluation criteria” and “there must be a clear nexus between the stated criteria and the unstated consideration.”

The GAO determined that there was “little relationship” between the RFP’s stated website requirement and the Air Force’s basis for assessing Quanterion’s proposal a strength. The GAO explained that “the reasonableness of the award of any strength is whether the benefit identified by the agency is reasonably and logically encompassed by the announced evaluation criteria.”  The GAO ultimately found that the RFP cannot reasonably be read as soliciting expertise in cloud migration, since the skills and experience required for such a task are “materially different” from the skills required under the RFP. Moreover, since the RFP required a fully functional website, the GAO held that the assessment of a strength for providing less than the minimum RFP requirement is unreasonable. 

Next, the GAO explained that the evaluation of technical proposals “is a matter within the discretion of the contracting agency” and the GAO only examines the evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria. However, here the GAO found that the Air Force “unequally applied its stated rationale for why Quanterion satisfied the RFP’s feedback requirement.” The agency assigned IIA’s proposal a weakness for failure to obtain feedback from the HDIAC website, but Quanterion proposed a similar method and was not assigned a weakness. Based on this inconsistency, the GAO concluded that the agency unreasonably assigned this weakness to IIA’s proposal. 

Cost Realism Analysis

A cost realism analysis is an evaluation of specific elements of each offeror’s proposed costs to determine whether the proposed costs are realistic for the work to be performed. The GAO noted that its review of an agency’s cost realism evaluation “is limited to determining whether the cost analysis is reasonably based and not arbitrary.” IIA’s probable total cost was slightly higher than Quanterion’s probable cost. The GAO found that IIA did not demonstrate that Quanterion’s escalation rate was unrealistic. Additionally, even if Quanterion’s escalation rate was unrealistic, the GAO found that IIA was not prejudiced by Quanterion’s use of this lower rate, because even if Quanterion’s escalation rate was replaced with IIA’s higher rate, Quanterion’s total proposed cost is still lower than IIA’s. The GAO denied the protest on this basis.

Prejudice

A protestor cannot succeed unless it can show that “but for the agency’s actions, it would have had a substantial chance of receiving the award.” A protest will be sustained when there is a reasonable possibility that the protestor was prejudiced by the agency’s action.

Since the GAO found one of the strengths assigned to Quanterion’s proposal and the weakness assigned to IIA’s proposal unreasonable, IIA’s proposal could be considered superior to Quanterion’s under the technical factor. The GAO determined that there “is a reasonable possibility” that IIA’s proposal would have been selected for award if it had been considered superior to Quanterion’s under the technical factor. Since there is a reasonable possibility that IIA was prejudiced by the Air Force’s actions, the GAO sustained IIA’s protest on the basis that the Air Force unreasonably evaluated proposals and conducted a flawed source selection. Based on this prejudice, the GAO recommended that the Air Force conduct and document a new evaluation before performing a new source selection and reimburse IIA’s reasonable protest costs.

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Cost Realism AnalysisGAO Standard of ReviewPrejudice

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