Matter of Apprio, Inc.
Decided: June 30, 2022
Agency: Department of Homeland Security
Disposition: Protest Sustained
Generally, cost realism and assessment of unreasonable weakness challenges are rarely successful protest grounds. However, this matter shows that is not an absolute rule. The largest issue for the agency here was the lack of a contemporaneous record to adequately support evaluation judgments. Without such supporting documentation, GAO is unable to determine the reasonableness of an agency’s decision. This case underscores why a protestor should seek the agency report and records, which provide information not available from the agency’s debrief.
Protesting an award should be a data driven, fact specific, strategically assessed, and appropriately funded decision for any business. However, Government Contractors often can only determine deficiencies in an award, including whether an agency evaluated proposals reasonably, by filing a bid protest. With GAO bid protests, such information is typically uncovered from the Agency Report, available 30-days after the protest is filed. General Counsel, P.C. helps our clients reach critical decisions before protesting an unsuccessful award or intervening as a successful awardee, litigating bid protests through to decision, and adapting post-decision internal methods for a more successful acquisitions win plan.
Summary of Facts
Apprio, Inc. protests the issuance of a task order to Leidos, Inc., under request for quotations (RFQ) No. 70FA2022Q00000003, issued by the Department of Homeland Security, Federal Emergency Management Agency (FEMA), for training services. The RFQ was issued on November 22, 2021 and contemplated the issuance of a task order including both fixed-price and cost-plus-award-fee contract line items. Issuance of the task order was to be made on a best-value tradeoff basis considering cost and price, and four non-price factors, including corporate experience.
The RFQ explained that all fixed-price contract line-item numbers (CLINs) would be evaluated for price reasonableness based on adequate competition, and the cost-reimbursement CLINs would be evaluated for cost realism. FEMA received seven proposals by the due date, including Apprio and Leidos. FEMA found Apprio’s proposal warranted three strengths and one weakness and Leidos’s proposal warranted five strengths and no weaknesses. Ultimately, the source selection official concluded that Leidos’s proposal represented the best value to the government based on the superiority of Leidos’s technical proposal under the corporate experience factor and substantially lower cost. The source selection official noted that the additional benefits offered by Apprio did not warrant a price premium. FEMA issued the task order to Leidos and provided Apprio with a written debriefing. Apprio submitted this protest.
Basis of Protest
Apprio challenges FEMA’s evaluation of the realism of Leidos’s proposed costs, as well as the evaluation of its own proposal, arguing that the agency unreasonably assessed a weakness under the corporate experience factor. Specifically, Apprio challenges the realism of Leidos’s proposed costs regarding certain direct labor rates and the lack of any escalation for those rates for the option years.
When reviewing protests, GAO will not reevaluate quotations or proposals, but instead will examine the record to determine whether the evaluation and source selection decision were reasonable and consistent with the solicitation and applicable procurement law and regulation. When reviewing an agency’s evaluation of proposals, GAO will consider the contemporaneous record, as well as post-protest explanations that provide a detailed rationale for contemporaneous conclusions and simply fill in previously unrecorded details, as long as those explanations are credible and consistent with the contemporaneous record. Additionally, agencies must have adequate documentation to support evaluation judgments. If an agency fails to document or retain evaluation materials, it bears the risk that there may not be adequate supporting rationale in the record for GAO to conclude that its judgments were reasonable.
Here, Apprio argues that FEMA unreasonably evaluated the realism of Leidos’s proposed costs. GAO noted that where an agency intends to issue a task order containing cost-reimbursable contract CLINs, an offeror’s estimated costs of performing the cost-reimbursable CLINs are not dispositive because the government is bound to pay the contractor its actual and allowable costs, regardless of the proposed costs. Procuring agencies 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. GAO explained that the analysis must provide a reasonable measure of confidence that the costs proposed are realistic based on information reasonably available to the agency at the time of its evaluation.
The RFQ required offerors to thoroughly detail their proposed costs, including direct labor, and required the agency to evaluate offerors’ proposed costs for realism. GAO determined that the contemporaneous record did not reflect any actual consideration of Leidos’s labor rates or any evaluation or consideration of the fact that Leidos’s cost proposal did not include any escalation for its labor rates for the option years of performance. While FEMA’s responses to the protest address Apprio’s arguments, GAO determined that the contemporaneous evaluation record did not demonstrate any evaluation of the essential costs elements challenged by Apprio. FEMA’s arguments rely on judgements that are not found in the record. GAO concluded that the contemporaneous record is inadequate for it to conduct “a meaningful review of the agency’s evaluation judgments” and it is unable to conclude that the agency’s evaluation of Leidos’s proposed costs was reasonable.
Apprio also challenges the agency’s evaluation of its proposal under the corporate experience factor. In evaluating Apprio’s proposal under this factor, the agency found one weakness—that Apprio’s description of work and responsibilities “are not the same as the delivery of instruction.” However, this is directly contradicted by the contents of Apprio’s proposal, since three of the five projects submitted “explicitly involved the delivery of instruction.” GAO found that the agency’s evaluation of Apprio’s proposal under the corporate experience factor was unreasonable. GAO concluded that the agency’s post hoc justifications for the weakness are not consistent with the contemporaneous record. Since FEMA assessed a weakness to Apprio’s proposal which is directly contradicted by the contents of the proposal, GAO concluded that the weakness was unreasonable and sustained the protest.
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