Matter of Vectrus Systems Corporation

Matter of Vectrus Systems Corporation

Agency: Department of the Army

Disposition: Protest Denied

Decided: December 21, 2016

General Counsel P.C. Highlight:  

The burden of compliance is upon the offerors; the evaluation of prior joint venture is unnecessary where proposed venture does not include prior venture partner, where cost realism is well documented, follow-up questions are asked re: disparities, and evaluation is reasonable.

Summary of Facts

Vectrus Systems Corporation (Vectrus) protests the issuance of a task order to URS Federal Services.  The task order sought logistics support services in Qatar and Kuwait under the Enhanced Army Global Logistics Enterprise (EAGLE) Program.  The solicitation sought to grant a best value award of a cost-plus-fixed-fee task order, with a base year and three (3) option years.  The RFP established a two-stage evaluation process of proposals.  

At the first stage of the evaluation, the Army established over 20 requirements in section L of the RFP, which would comprise a “strict compliance review.”  The RFP made clear that the Army would only consider proposals compliant with the requirements listed in section L and thus, only those would advance to the next stage of evaluation.  

At the second stage of the evaluation, the Army evaluated proposals under technical, past performance, and cost/price factors.  Evaluation under the technical factor relied upon an acceptable/unacceptable determination.  Under past performance, the Army evaluated proposals using a qualitative assessment with confidence ratings.  Cost/price evaluations considered both price reasonableness and cost realism.

The Army received 6 proposals.  Of those, 4 proposals met the initial strict compliance review, including Vectrus, and URS Federal.

Vectrus filed a protest which challenged each area of the Army’s evaluation of proposals.

Basis for the Protest

1. Vectrus challenged the Army’s determination that URS Federal met the strict compliance review criteria.  Specifically, Vectrus asserted that URS Federal’s proposal violated the labor laws of Kuwait.
2. Vectrus challenged the Army’s past performance evaluation on three prongs:
   1. The Army should have given Vectrus more favorable consideration;
   2. The Army’s evaluation of the past performance of 2 other bidders was unequal and disparate in relation to its evaluation of Vectrus;
   3. The Army unreasonably ignored URS Federal’s parent company’s past performance problems.
3. Vectrus challenged the Army’s cost realism analysis, arguing that URS Federal’s proposal was 59 percent below the independent government cost estimate and that this is attributable to the proposal’s flawed methodology and violations of labor laws.  

General Standard of Review

Strict Compliance Review

1. URS Federal provided an explanation of how they would comply with the labor laws of Kuwait, as well as a certification of compliance that was signed by attorneys licensed to practice law in Kuwait, as required by the RFP.  The GAO notes, “although Vectrus may have envisioned a more robust legal analysis in the plan, we see nothing objectionable in the Army’s conclusion that the plan satisfies the requirements of the RFP.”  The GAO further notes that the RFP does not require the Army to make an independent assessment of compliance with local labor laws.  Rather, the Army’s intent to place the burden of proving compliance on the offerors is clear in the RFP language.

Past Performance Review

1. As a preliminary matter, the GAO limits past performance review to ensuring that the evaluations were reasonable and consistent with the stated evaluation criteria, and applicable statutes.  
   1. While Vectrus argued that the Army should have considered their overall performance on a prior contract, which included improvements after initial failures to meet deadlines, the GAO notes that “an agency is not required to ignore instances of negative past performance.”  Further, the RFP at issue specifically noted that significant past problems were subject to consideration.
   2. In evaluating whether the Army engaged in disparate treatment, the GAO found that the record established considerable differences between the degree of adverse past performance, as well as the quantity of adverse past performance.  Consequently, the record supports the Army’s conclusion.
   3. Finally, the GAO rejected Vectrus’ assertion that the Army should have considered AECOM’s record.  The GAO noted that the issue is not as simple as where or not the two companies are affiliated with one another. Rather the consideration involves an evaluation of the the nature and the extent of the ”relationship between the two – –  in particular whether the workforce, management, facilities, or other resources of one may affect the contract performance by the other.”  In the case at hand, no joint venture was being proposed, thus, there was no basis for the agency to consider the past performance of any joint venture.  

Cost/Price Evaluation

1. The GAO found that the cost realism analysis performed by the Army was reasonable and well documented.  The SSA expressly sought explanations regarding the disparity of cost between the offerors and the IGCE.  Further, as to Vectrus’ allegation that the proposal violated labor laws, the GAO reiterated that compliance with local labor laws was not part of the evaluation considerations under cost/price nor technical factors.  Additionally, the RFP did not require the Army to evaluate compliance with local labor laws.

Protest Denied

Given the forgoing evaluation, and noting Vectrus’ other arguments provide no basis to conclude any reasonable possibility of prejudice, the GAO denied the protest.