Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Independent Government Estimate (IGE); meaningful discussions
General Counsel P.C. Highlight: When an agency reviews staffing needs it can look at the historical data to determine whether a proposed staffing plan is the best value to the government.
GAO denies the protest of Serco Inc. where it was denied award of a contract by the Department of the Army, under a request for proposals (RFP), for personal effects (PE) processing services for the Army Human Resource Command.
Serco contends that the independent government estimate (IGE) prepared by the agency and used in the evaluation of offerors’ proposals was unreasonable because it failed to accurately reflect the level of effort that will be required to process PE cases under the contract. Specifically, the protester argues that the agency’s IGE unreasonably disregarded the staffing levels required by the reach-back order under the incumbent contract. GAO states that the evaluation of an offeror’s proposal is a matter within the agency’s discretion. 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. 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. To resolve this issue, GAO first reviews the staffing-level history under the predecessor contract, the IGE, and the proposals submitted.
Serco was the incumbent contractor for the Joint Personal Effects Depot (JPED) contract. The protester began performing the requirement in July 2008, under a labor-hour contract with a maximum authorized full-time equivalent (FTE) level of 98 FTEs. In August 2010, an Army contracting officer’s representative (COR) prepared a memorandum for the CO concerning a backlog in work at the JPED. The COR noted that Serco had not been providing the full level of 98 FTEs authorized for the JPED contract. The COR recommended that the agency exercise the “reach-back” provisions of the contract, which requires the contractor to provide additional staffing on short notice, in order to address the backlog. On September 30, the Army issued a 10-month reach-back order directing Serco to provide up to 47 additional FTEs to address the backlog of work; this order raised the authorized staffing limit from 98 to 145 FTEs. On November 10, the Army prepared its initial IGE for this RFP, which addressed the estimated costs and staffing levels required to perform the contract. The initial IGE assumed that the work would require 99 FTEs, as well as 47 additional FTEs to perform reach-back work. On January 25, 2011, the agency prepared a revised IGE, which deleted the reach-back order staffing levels, and reduced the non-reach-back staffing levels to 98 FTEs. The Army states that the reach-back staffing was deleted from the IGE because the enhanced levels of performance were not anticipated to be required under the new contract. In this regard, the CO states that part of the increased workload was the result of the backlog created during Serco’s performance, the agency assumed that the reach-back order represented a temporary staffing level that would not be required for the new contract.
Serco’s proposal assumption that the JPED contract will be required to process only 234 PE cases per month also undercuts its challenge to the reasonableness of the IGE, particularly in light of the protester’s performance on the incumbent contract. The data show that for nine of the 30 months before Serco began to experience a backlog and was authorized to increase its FTE levels (January 2008 – June 2010), the company was able to address more PE cases than what its proposal assumes would be required under the current award. Specifically, during the period that Serco was limited to no more than 98 FTEs, the protester met the following levels of performance for processing of PE cases: 272 cases (Jan-08), 289 cases (Feb-08), 320 cases (Apr-08), 245 cases (Jun-08), 291 cases (Jul-08), 307 cases (Sep-09), 264 cases (Oct-09), and 272 cases (Nov-09). In sum, GAO does not think the record supports the protester’s argument that the requirements for the JPED contract, as identified by the workload data set forth in the RFP, could not be performed with the 98 FTEs identified in the IGE or the 105 FTEs proposed by the awardee.
Serco next argues that the Army’s evaluation of its proposal under the staffing plan factor was unreasonable because the agency conducted misleading discussions, and also treated the protester and intervener unequally during evaluations. GAO states that the Federal Acquisition Regulation (FAR) requires agencies to conduct discussions with offerors in the competitive range concerning, “at a minimum . . . deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” Discussions, when conducted, must be meaningful; that is, they may not mislead offerors and must identify proposal deficiencies and significant weaknesses that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award.
GAO finds that the agency’s discussions were not misleading, as they meaningfully advised the protester of the agency’s concern regarding its proposed staffing, and permitted the protester to revise its proposal in a way that improved its prospect for award. In this regard, the protester’s response to the discussions question resulted in the agency’s elimination of the weakness for the protester’s proposal, and an increase in Serco’s score for staffing plan subfactor from good to excellent. In any event, even if the agency had improperly led the protester into increasing its price, there is no possibility that Serco could have been prejudiced by the agency’s actions. Where, as here, an agency’s discussions are alleged to be misleading as to price or cost, GAO will not sustain the protest where the protester’s and awardee’s proposal were rated equal and the protester’s price or cost would have still remained lower than the awardee’s in the absence of the disputed discussions. Here, any adjustment to this relatively minor element of cost could not affect the result of the competition, in light of the more than a slight difference between the offerors’ proposed prices.
The Army responds that the concern raised in discussions with Serco did not relate to the number of labor categories or the details regarding those categories, as alleged by the protester. Instead, the agency states that the concern related to the designation of personnel, which were lower-paid categories under the Service Contract Act (SCA) wage determination. The protester argues that the agency’s argument is not supported by the record, because the discussion question related to a “limited labor mix,” rather than the designation of personnel under the SCA wage determination. The protester clearly understood that agency’s question related to the classification under different SCA categories; indeed, Serco’s response directly addressed the reclassification of personnel performing these positions. The Army accepted the protester’s response as addressing the concern, removed the weakness from the evaluation, and increased Serco’s rating for the staffing approach subfactor to the highest rating of excellent. On this record, GAO finds no basis to conclude that the agency assessed a weakness based on the number or diversity of labor categories proposed by Serco or that the agency treated the offerors unequally by not assessing a weakness for the awardee based on its proposal of fewer labor categories than Serco. The protest is denied.