BNUMBER: B-261662.2
DATE: December 4, 1995
TITLE: Vitro Corporation
**********************************************************************
DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:Vitro Corporation
File: B-261662.2
Date:December 4, 1995
William L. Walsh, Jr., Esq., Lars E. Anderson, Esq., J. Scott Hommer
III, Esq., and Wm. Craig Dubishar, Esq., Venable, Baetjer & Howard,
for the protester.
Jacob B. Pompan, Esq. and John J. O'Brian, Esq., Pompan, Ruffner &
Werfel, for QuesTech, Inc., intervenor.
Capt. Arthur E. Lees, and Vera Meza, Esq., Department of the Army, for
the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably concluded that protester's proposed potential
[deleted] discount would not accrue to the benefit of the government
where the discount took effect only for labor hours beyond specified
levels and the agency reasonably determined that the threshold
requirements would not be achieved.
2. Agency's adjustment of protester's proposed labor rates to reflect
risk was permitted by the terms of the solicitation.
3. Agency reasonably considered protester's performance of
predecessor contract in evaluating protester's proposed rates and
agency's across-the-board adjustment of protester's proposed labor
rates does not provide a basis to sustain the protest where record, as
a whole, demonstrates that adjustment did not have a significant
impact on source selection decision.
4. Agency conducted meaningful discussions regarding protester's
labor rates where it advised protester that rates were unacceptably
low, and protester's response demonstrated clear understanding of the
minimum expected rates.
DECISION
Vitro Corporation protests the Department of the Army's award of a
contract to QuesTech, Inc. under request for proposals (RFP) No.
DAAB10-93-R-1017, to provide support for the Army's Intelligence and
Electronic Warfare (IEW) activities. Vitro contends that the agency
improperly evaluated its cost and technical proposals and failed to
engage in meaningful discussions.
We deny the protest.
BACKGROUND
On May 2, 1994, the Army issued the RFP seeking proposals to provide
operational, program management, technical, engineering, integration,
prototype development and fabrication services to support the Army's
Intelligence and Electronic Warfare Directorate (IEWD) and its
customers.[1] The requirements being competed under this solicitation
are a consolidation of activities currently being performed by
QuesTech and Vitro, individually, under separate contracts. The Army
describes the new contract as one which will require a broad range of
technical disciplines and which is intended to push the
state-of-the-art in intelligence and electronic warfare, specifically
ensuring the ability to jam enemy communications while avoiding
detection.
Consistent with the Army's description of the contract, the RFP
emphasized technical and performance factors over cost factors.
Specifically, the RFP stated that award would be based on three
evaluation factors--technical, performance risk, and cost--and that
technical factors would be significantly more important than
performance risk, which would be significantly more important than
cost.
The solicitation contemplated award of an indefinite
delivery/indefinite quantity (ID/IQ) contract for a base period with
four 1-year option periods; upon award of a contract, delivery orders
will be issued and contract payments will be made on a
time-and-materials basis. The RFP listed 83 labor categories for
which offerors were required to propose rates. For each labor
category, the RFP provided the agency's estimate of the number of
hours likely to be required during each contract year. In the
aggregate, the agency estimated it would require approximately 434,000
labor hours per year. For each labor category listed, the RFP also
specified the civil service or "GS" grade level which the agency
considered to represent the appropriate equivalent level of experience
and expertise sought.
On October 24, following several RFP amendments, proposals were
submitted by four offerors, including Vitro and QuesTech. Technical
proposals were evaluated by a technical evaluation committee (TEC);
cost proposals were evaluated by a cost evaluation committee (CEC);
and offerors' performance risks were evaluated by a performance risk
analysis group (PRAG). All four proposals were included in the
competitive range, and discussions were subsequently conducted with
each offeror. Best and final offers (BAFO) were submitted on March
13, 1995. Proposals were again evaluated and final reports from the
TEC, CEC, and PRAG were sent to the source selection evaluation board
(SSEB), which reviewed those reports and sent them, along with its own
report, to the source selection advisory council (SSAC). The SSAC
reviewed the evaluation documentation and subsequently met with the
source selection authority (SSA). The final ratings for QuesTech's
and Vitro's proposals were as follows:
Offeror Technical Rating[2]Performance RiskProposed Cost
(in millions)Evaluated Cost
(in millions)
QuesTech Blue Low $228.6 $228.9
Vitro [deleted] [deleted] [deleted] [deleted]
The [deleted] difference between Vitro's proposed cost and its
evaluated cost reflected the agency's determination that Vitro's
proposal included an illusory [deleted] discount, plus an upward
adjustment of [deleted] for certain proposed labor rates which the
agency believed were unrealistically low.
On April 19, the SSA selected QuesTech for award and subsequently
prepared a source selection document (SSD) which, among other things,
stated:
"I have examined all the advantages and disadvantages found in
the evaluation of those offerors/proposals which conformed to the
solicitation. I have weighed all those advantages and
disadvantages in making this decision and have selected
[QuesTech] as the successful offeror. I understand that my
decision to award this contract to [QuesTech] results in the
payment of a premium of approximately [deleted]."
A contract was awarded to QuesTech on May 31. Vitro was debriefed on
June 6, and filed its initial protest on June 8. Following receipt of
the agency's response to its initial protest, Vitro filed a
supplemental protest on July 25.
DISCUSSION
Vitro's [deleted] Million Discount
A. Background
In its BAFO, Vitro introduced a discount that was triggered by
specified levels of labor hours being both ordered and delivered
within the base period and first option period, respectively.
Specifically, Vitro's BAFO stated:
"Vitro Corporation is proposing a [deleted] discount for all
labor in excess of [deleted] hours ordered and delivered during
the base year 12 month ordering period. Additionally, we are
offering a [deleted] discount for all labor in excess of
[deleted] hours ordered and delivered during the 1st option year
ordering period."[3]
Vitro states that the proposed discount was intended to provide an
incentive to the agency to maximize the quantity of hours placed on
the contract and to place orders early in each contract period.
Upon reviewing the discount provisions in Vitro's BAFO, various agency
officials expressed concern regarding whether the proposed discount
would provide any benefit to the agency in light of the requirement
that labor hours be both ordered and delivered in the same contract
period. There were various bases for this concern. First, funding
for this contract will come from a variety of sources and will become
available for obligation at different times throughout the contract
periods;[4] in this regard, overall funding for the estimated level of
effort was never entirely certain. Further, the agency states that,
after reviewing the discount provisions in Vitro's BAFO, it examined
existing data regarding Vitro's and QuesTech's performance of the
predecessor contracts. The agency concluded that, for quick reaction
prototyping, only about 35 percent of the hours ordered in a given
period were actually delivered within that same period.[5] Thus,
applying its most optimistic experience to the 434,000 hours per year
estimated in the RFP, the agency concluded that only 152,000 hours (35
percent of 434,000) were likely to be both ordered and delivered
within a given 12 month period. Accordingly, the agency concluded
that the threshold requirements triggering Vitro's [deleted]
discount--[deleted] hours ordered and delivered in the base year and
[deleted] hours ordered and delivered in the option year--were
unlikely to be realized.
Following the agency's decision not to credit Vitro's proposal with
the [deleted] discount, the CEC Chairman drafted a memorandum
summarizing this issue, which stated:
"3. Using actual data and extrapolating through the next 5 years
it became clear that there was very little chance of the
government expending over [deleted] hours in the first year and
[deleted] hours in the second year. The current reductions in
funding further reduced the probability of reaching those
thresholds.
"4. It appears clear that [Vitro] also had the same historic
data and did the same analysis, coming up with a very low risk
method of lowering [its] proposal costs with little or no chance
of having to provide the Government any discount. If all
offerors had access to the historic data or had the Government
more accurately predicted the anticipated hours, this discount
would not be an issue. The Government felt that using the
average yearly hours would be fair and reasonable for evaluation
purposes. It appears that [Vitro] has found a way to offer the
Government a meaningless, no substance discount that only gives
the appearance of savings to the Government, when, in fact, the
Government will not see a cent."
B. Vitro's Protest
Vitro protests the agency's refusal to credit its [deleted] discount,
asserting that the action was based on a "secret" revision by the
agency of its estimates regarding the amounts of labor that would be
required in the base year and first option year.
Partially in response to Vitro's allegations that the agency's
projected requirements changed during the evaluation process, our
Office conducted a hearing during which testimony was provided by
various agency officials. At the hearing, the SSA testified that he
believed the contract requirements stated in the solicitation were
accurate. Hearing Transcript (Tr.) at 37-38. The SSA further
testified that he was responsible for the final decision not to
include the [deleted] discount as part of Vitro's evaluated cost and
that this decision was based on his belief, after considering input
from his subordinates, that Vitro's requirement that labor hours be
ordered and delivered in the same period precluded the discount from
having any value. Tr. at 33-36, 82-85. The SSAC Chairman and the
SSEB Chairman similarly testified that they had no reason to question
the accuracy of the RFP's stated requirements and that the [deleted]
discount in Vitro's proposal would not have any value to the
government on the basis of the "ordered and delivered" requirement.
Tr. at 129, 130, 243.
In selecting an offeror for award of a cost-type contract, 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 is likely to cost the government. CACI, Inc.--Fed., 64 Comp.
Gen. 71 (1984), 84-2 CPD para. 542; Radian, Inc., B-256313.2; B-256313.4,
June 27, 1994, 94-2 CPD para. 104. In reviewing an agency's judgment in
this area, our Office is concerned with determining whether the cost
evaluation had a reasonable basis. General Research Corp., 70 Comp.
Gen. 279 (1991), 91-1 CPD para. 183, aff'd, American Management Sys.,
Inc.; Department of the Army--Recon., 70 Comp. Gen. 510 (1991), 91-1
CPD para. 492.
We find that the agency reasonably determined that Vitro's proposed
[deleted] discount would not actually lower the cost to the government
and thus should not be taken into account in the cost evaluation.
Vitro does not dispute the agency's understanding that, in order for
Vitro's offered discount to take effect, the labor hours would have to
be both ordered and delivered (that is, performed) within the same
period. Vitro has not presented any persuasive evidence challenging
the agency's conclusion that the contract performance history
indicates that the thresholds established in Vitro's BAFO were not
likely to be realized.[6] In light of the manner in which this
contract is funded, the past contract performance data, and the fact
that Vitro, itself, would have a significant amount of control in
determining when discount thresholds were attained,[7] the agency
reasonably concluded there was little likelihood that the proposed
discount would actually accrue to the benefit of the government.
We find no merit in Vitro's assertion that the agency's decision to
disallow its [deleted] discount was based on a revision to its stated
requirements. The record shows that the agency's estimates of its
requirements were based on the agency's consideration of the levels of
effort required under the predecessor contracts, as well as its
estimate of anticipated requirements that had not been performed under
the predecessor contracts. Although the record shows that, due to the
manner in which this contract is funded, there was some uncertainty
regarding whether the estimated levels of effort would actually be
realized, the SSA, SSAC Chairman, and SSEB Chairman all concluded that
the levels of effort contained in the RFP represented the agency's
best estimates of its requirements. Tr. at 37-38, 129, 130, 243. We
will not sustain a challenge to an agency's estimated requirements
unless those estimates are not based on the best information available
or are otherwise defective. Dynalectron Corp., 65 Comp. Gen. 92
(1985), 85-2 CPD para. 634; American Contract Servs., Inc., B-225182, Feb.
24, 1987, 87-1 CPD para. 203. Based on the entire record here, Vitro has
not shown that the agency's estimates were based on anything other
than the best information available or that they were otherwise
defective.
Vitro's Labor Rates
A. Background Pertaining to the [deleted] Adjustment
In evaluating proposals, the agency established an independent
government cost estimate (IGCE) applicable to the direct labor rates
for each labor category; this IGCE consisted of the "Step 1" salary of
the appropriate equivalent "GS" grade level.[8] The agency considered
the "Step 1" rates to reflect the lowest level of direct compensation
necessary to attract and retain a work force with the required
experience and qualifications. Where an offeror's direct labor rates
were below the government's IGCE, those proposed rates were adjusted
up to the IGCE for purposes of the cost evaluation.
The agency explains that its adjustment of offerors' rates reflected
the agency's quantification of the risk associated with rates below
the IGCE. Specifically, the agency explains that, because the
solicitation contemplated negotiation of delivery orders following
contract award, there was a risk to the government that lower
compensated personnel would take longer to perform the required tasks
or, alternatively, that the agency would be required to negotiate
delivery orders using higher level personnel. Based on these
considerations, the agency determined that several of Vitro's labor
category prices were unrealistically low, and adjusted them upward in
an aggregate amount of [deleted].
B. Vitro's Protest
Vitro argues that the solicitation did not permit this type of
adjustment to its proposed labor rates. Specifically, Vitro asserts
"[t]he only potential adjustment to labor rates which was mentioned in
the solicitation was [in RFP section M.5.B which provided] that 'the
Government will adjust the proposed labor rates to reflect a 40 hour
work week, 1920 hour work year, if necessary.'"
Although Vitro accurately recites the RFP provision advising offerors
that proposing uncompensated overtime would result in labor rate
adjustments, Vitro's assertion that this is the "only" adjustment
permitted by the RFP fails to recognize the specific provisions of RFP
section M.5.C. That section (which was part of RFP section M.5,
titled "Evaluation Approach--The Cost Evaluation Factor") states
"The government will also examine the realism of the offeror's
proposed rates in terms of the requirements described in the
solicitation. Rates must be realistic for securing and retaining
the calibre of highly trained professionals required to perform
the government's requirements. The proposed rates will be
examined to determine their being unrealistically high or low,
which may affect an offeror's overall rating."
A procuring agency is not compelled to accept as realistic labor rates
offered for contracts where, as here, services are to be ordered and
the labor mix set after award. Stanley Assocs., Inc., B-232361, Dec.
22, 1988, 88-2 CPD para. 617. Under an ID/IQ contract such as this, an
agency must rely heavily on the contractor's assessment regarding the
number of hours and type of labor that will be required to perform the
delivery orders. In such circumstances, an agency may reasonably
determine that the proposed pricing structure will result in actual
costs to the government greater than those stated in the proposal.
Id.
Here, the need for quick responses to highly technical requirements
exacerbates the risk associated with potential disagreement over
levels of effort and qualifications of personnel required for
successful contract performance. The agency's consideration of that
risk was proper in determining the probable cost of a given offeror's
proposal. Accordingly, the agency's upward adjustment of Vitro's
labor rates was permissible under this solicitation.
Vitro next argues that the agency "mechanically" adjusted its labor
rates up to the IGCE and failed to consider Vitro's proposed rates in
the context of Vitro's past experience. Specifically, Vitro asserts:
"the Army completely ignored the fact that Vitro, as the incumbent
contractor, has successfully employed personnel at these same proposed
labor rates while meeting and exceeding all Government requirements
under the contract."
The agency acknowledges that it did not individually assess the
realism of each Vitro labor rate in light of the personnel it
proposed. At the hearing the CEC Chairman testified as follows:
"Q . . . [Was there] any instance where you made a subjective
judgment that [Vitro] offered something below the Step 1 rate for
[a] particular person . . . and you looked at it and concluded
that, for whatever reason, this [rate] was uniquely acceptable? .
. .
"A. No.
"Q . . . . There isn't a single example where you subjectively
looked at [the proposed rates]?
"A. No, I was not going to do that.
"Q . . . . [I]t would have required subjective judgment?
"A. Then I would be saying, gee, yeah, he probably could
[perform at that rate]. Maybe. We didn't do that." Tr. at
429-432.
The agency also states that it did not specifically compare Vitro's
proposed rates to the rates being charged under the predecessor
contracts. Nonetheless, the agency asserts that it did, generally,
consider Vitro's performance of the predecessor contract in its
evaluation of Vitro's proposal. Specifically, the agency states that
Vitro was awarded the predecessor contract primarily on the basis of
its low proposed rates, and that those low rates led to problems in
staffing and performance immediately after contract award. Contrary
to Vitro's representations that it met or exceeded all government
requirements under the predecessor contract, the agency submitted as
part of the record here [deleted]. In short, the agency maintains
that it did, in fact, give appropriate consideration to Vitro's
performance under the predecessor contract.
More significantly, in responding to Vitro's protest, the agency
identified a specific portion of Vitro's cost proposal, omitted in the
cost evaluation, which properly requires a [deleted] increase to
Vitro's evaluated cost.[9] The agency's explanation of this issue, as
well as its supporting worksheets, were provided to Vitro as part of
the agency's response to Vitro's supplemental protest. In its
subsequent protest submissions, Vitro did not dispute the agency's
assertions in this regard.
As noted above, agencies must perform cost realism analyses in
selecting awardees for contracts where the cost to the government is
not fixed. CACI, Inc.--Fed., supra; Radian, Inc., supra. Our review
in this area is primarily concerned with determining whether the cost
evaluation was reasonable. General Research Corp., supra; Department
of the Army--Recon., supra. While a reasonably derived agency
estimate of direct, unburdened labor rates for comparable labor
categories can provide an objective standard against which proposed
rates may be compared, an agency may not mechanically apply that
estimate to determine evaluated costs. United Int'l Eng'g, Inc. et
al., 71 Comp. Gen. 177 (1992), 92-1 CPD para. 122. In order to undertake
a proper cost realism evaluation, the agency must independently
analyze the realism of an offeror's proposed costs based upon its
particular approach, personnel and other circumstances. Allied
Cleaning Servs., Inc., 69 Comp. Gen. 248 (1990), 90-1 CPD para. 275.
Here, we do not resolve the question of whether the agency gave
adequate consideration to Vitro's proposed labor rates because, based
on the entire record, we find no potential prejudice to Vitro
regarding this issue. Prejudice is an essential element of every
viable protest, Lithos Restoration, Ltd., 71 Comp. Gen. 367 (1992),
92-1 CPD para. 379. We will not sustain a protest where the record, read
as a whole, demonstrates that the protester was not prejudiced.
Dynamic Isolation Sys., Inc., B-247047, Apr. 28, 1992, 92-1 CPD para. 399;
OAO Corp., B-228599.2, July 13, 1988, 88-2 CPD para. 42.
If we were to assume that each and every one of Vitro's proposed labor
rates should have been accepted without adjustment, Vitro's total
evaluated cost would have been a total of [deleted] lower. However,
as discussed above, Vitro has not challenged (and the record supports)
the agency's assertion that its evaluation of Vitro's cost proposal
improperly omitted [deleted] (unrelated to the labor rate
adjustments), which virtually offsets the [deleted] adjustment. In
the context of this solicitation, which provided that cost was
"significantly" less important than performance risk, which was
"significantly" less important than technical factors, the adjustment
urged by Vitro, after the offset, clearly would not have altered the
source selection decision. We thus have no basis to sustain the
protest on this ground.
Vitro maintains that the agency failed to engage in meaningful
discussions regarding its evaluation of Vitro's proposed personnel and
labor rates. Specifically, Vitro asserts that the agency created a
"secret IGCE" reflecting the Step 1 salaries, and that Vitro had no
reason to know that its proposal to pay direct labor rates below that
IGCE would be considered unacceptable. The record is to the contrary.
On January 30, 1995, the agency sent written discussion questions to
Vitro regarding its cost proposal. Among other things, this document
stated
"Several labor categories which are unacceptably low have been
proposed. The direct labor rates (not the totally loaded labor
rates) were compared to the minimum GS level the government feels
are reasonable. [Deleted.] The following is a list of
excessively low labor categories and their levels. [The
discussion question then listed [deleted] labor categories.]
"The government needs explanations as to how the offeror plans to
provide personnel with the required quality and skill levels at
the excessively low proposed labor rates."
Vitro responded to this discussion question with the following
statement:
"When taken in the context of Vitro's entire proposed salary
structure, each category of concern to the government
[deleted].[[10]]
. . . . .
"In several cases where we [deleted] deviate from the
Government's minimum expected salary, Vitro has recognized the
deviation and accepted it as a business risk." (Emphasis added.)
In negotiated procurements, contracting agencies are required to
conduct meaningful discussions with offerors whose proposals are in
the competitive range. Federal Acquisition Regulation (FAR) sec. 15.610.
In this regard, however, agencies are admonished to protect the
integrity of the procurement process by balancing the need for
meaningful discussions against actions that result in technical
leveling, technical transfusion, or auctions. See SeaSpace Corp.,
B-252476.2, June 14, 1993, 93-1 CPD para. 462. Accordingly, agencies are
not to "spoon-feed" offerors, nor does the FAR contemplate
"all-encompassing" discussions in which the agency identifies every
aspect of an offeror's proposal that receives a rating below the
maximum score. See ITT Fed. Servs. Corp., B-250096, Jan. 5, 1993,
93-1 CPD para. 6. Rather, agencies are required to lead offerors,
generally, into the areas of their proposals that require attention.
SeaSpace Corp., supra.
On the basis of the record discussed above, the agency clearly
apprised Vitro of the area of its proposal that required attention,
that is, labor rates which were below the level the agency believed
necessary to attract and retain qualified personnel. Specifically,
the agency's discussion question referred to the government's "minimum
GS rates," stating that some of Vitro's labor rates were "unacceptably
low." Significantly, Vitro's own response makes clear its
understanding regarding "the government's minimum expected salary" for
each labor category. Having unambiguously demonstrated this
understanding, Vitro may not now credibly complain that it was
prejudiced by the agency's failure to specifically list each category
in which it or its subcontractors proposed rates below the clearly
communicated criterion. The agency was not required to provide that
level of specificity.
Source Selection Decision
Vitro also protests that the SSA improperly performed the
cost/technical tradeoff in selecting QuesTech's proposal for award.
Specifically, Vitro refers to the portion of the source selection
decision which states that the SSA recognized that the agency was
paying a [deleted] premium for QuesTech's technically superior
proposal. Vitro argues that the SSA's quantification of the premium
erroneously focused on the difference in the total proposed costs of
the offerors; Vitro maintains that the premium should have been
calculated only on the difference in labor costs, since other portions
of the cost proposals (for example, material costs) differed only to
the extent the offerors' burden rates differed.[11]
Section M.1 of the RFP, titled "Basis for Award," stated
"Offerors are advised that . . . [a] Best Value analysis will be
used to determine the most favorable overall value to the
Government. The Best Value will be based on trade-offs between
the offerors' Technical and Cost proposals and the
evaluated/assessed Performance Risk."
Since the RFP unambiguously called for determination of the most
favorable overall value, the SSA properly considered the offerors'
total proposed costs in calculating the premium associated with
QuesTech's proposal.
Other Protest Issues
Vitro raises various other arguments, including challenges to the
agency's evaluation of sample tasks and assertions that QuesTech's
technical proposal was rated too high or, alternatively, that Vitro's
technical proposal was rated too low.[12]
Regarding the evaluation of sample tasks, Vitro complains that the
number of man-hours and type of labor proposed by QuesTech differed
from the agency's estimates for the various tasks.[13] In this
regard, while Vitro's protest focuses on various areas in which
QuesTech's proposal did not mirror the agency solution, it neglects to
acknowledge that its own proposed approaches to the sample tasks
similarly diverged from the agency estimates.
At the hearing, various agency officials testified concerning the
evaluation of sample tasks. Among other things, the officials
explained that the agency had individually considered each offeror's
proposed approach to accomplishing the objectives identified in the
sample tasks and had considered the degree and efficiency with which
each offeror's individual responses to the sample task would
accomplish the agency's objectives. Where offerors proposed a
solution relying on differing levels or types of personnel than that
assumed in the agency's solution, the proposed approach was not
necessarily rejected; rather, the agency considered whether the
proposed approach reflected an alternative, acceptable solution.
In reviewing an agency's evaluation, we will not reevaluate the
proposals; we will only consider whether the agency's evaluation was
reasonable and in accord with the evaluation criteria listed in the
solicitation. CORVAC, Inc., B-244766, Nov. 13, 1991, 91-2 CPD para. 454.
A protester's mere disagreement with the agency's judgment is not
sufficient to establish that the agency acted unreasonably. United
HealthServ Inc., B-232640 et al., Jan. 18, 1989, 89-1 CPD para. 43.
We have reviewed the record regarding the agency's evaluation of the
proposed sample tasks, and find that neither QuesTech's nor Vitro's
proposed approaches mirrored the government solution. Nonetheless,
with one exception, each offeror contemplated generally comparable
aggregate levels of effort.[14] To the extent that Vitro asserts that
its proposed approaches to the sample tasks were less divergent from
the agency's solution than QuesTech's, we view the protest as simply
expressing disagreement with the subjective judgments and ultimate
conclusions of the agency evaluators.
Similarly, Vitro's assertions that its technical proposal should have
been rated higher in various areas, or that QuesTech's technical
proposal should have been rated lower, merely reflects Vitro's
disagreement with the agency's subjective evaluation judgments and
ultimate conclusions. For example, Vitro asserts that QuesTech's
proposal of 14 subcontractors should have precluded its technical
proposal from being rated "blue" with regard to the management
subfactor of the technical evaluation factor.[15] Vitro asserts "it
is axiomatic that management problems increase when there are multiple
subcontractors." The agency responds that it considered both the
positive and negative aspects of QuesTech's proposed subcontractors
and concluded that the depth of resources and flexibility afforded by
the multiple subcontractors was a positive aspect of QuesTech's
proposal. Vitro has not shown that the agency's judgment in this
regard was unreasonable. In summary, we do not find Vitro's
disagreements with the agency regarding the technical evaluation of
proposals to provide a basis for sustaining the protest.
The protest is denied.
Comptroller General
of the United States
1. The IEWD performs work for the Marine Corps, the National Security
Agency, the Federal Bureau of Investigation, Customs Service, the
Department of State, and others.
2. Technical proposals were evaluated under a color-coded rating
scheme, in which blue was outstanding, green was
acceptable, yellow was marginal, and red was
unacceptable.
3. Vitro's proposal quantified the value of the discount at [deleted].
4. Efforts under this contract are funded by several customer agencies
as well as through the Army's appropriated funds.
5. The percentage of hours delivered within the ordering period for
activities other than quick reaction prototyping were lower. For
example, for prototyping activities generally, approximately 22
percent of hours ordered were delivered in the same period; for
service activities, approximately 15 percent of the hours ordered were
delivered in the same period.
6. Although Vitro has criticized various aspects of the agency's
analysis, it has not presented evidence, based on its own performance
of the predecessor contract, that the agency's conclusions were
fundamentally flawed. Clearly, if Vitro's own performance of its
predecessor contract contradicted the agency's conclusions in this
regard, Vitro could have made that data available during the protest.
7. Performance of delivery orders under an ID/IQ contract may span
more than one contract period, and a contractor, of necessity, has
some latitude in determining when hours that are ordered will actually
be performed. Thus, in performing the contract, Vitro would know that
labor hours delivered prior to the end of a contract period would
trigger the discount and, thus, be billed at a considerably lower rate
than those same labor hours if delivered immediately after the end of
the contract period. Thus, during the first two contract periods,
there would be a significant disincentive for Vitro to perform work
that could be reasonably postponed.
8. Each "GS" grade level contains 10 levels of compensation, referred
to as "Steps."
9. Section L.39.9 required that offerors identify all indirect costs.
RFP section B included contract line item numbers (CLINs) 0004, 0012,
0020, 0028 and 0036, labeled "Other Indirect Charges," applicable to
each of the five contract periods respectively. Prior to submitting
its BAFO, Vitro did not include any amount in the "Other Indirect
Charge" CLINs. In one of the written discussion questions sent to
Vitro prior to BAFO submission, the agency noted that Vitro's proposal
appeared to contemplate certain costs which should have been included
in the "Other Indirect Charge" CLINs. In its BAFO, Vitro for the
first time included "Other Indirect Charge" entries for each contract
period in the appropriate CLINs. The total of these entries increased
Vitro's proposed cost by approximately [deleted]. Nonetheless, in its
final evaluation of Vitro's cost proposal, the agency neglected to
include any amount for the "Other Indirect Charge" CLINs.
10. The attached graphs plotted the [deleted] each of the labor
categories, labeling each graph [deleted].
11. Section L of the RFP identified various amounts for material costs
and other charges that offerors were to assume would be incurred, and
to which each offeror was to attach its burdened rates.
12. Among other things, Vitro also asserts that the agency failed to
comply with its source selection plan, failed to properly consider
Vitro's proposed fringe benefit package, failed to amend the
solicitation to specifically include its IGCE for direct labor rates,
and applied unstated evaluation criteria. We have considered all of
these arguments and find them without merit.
13. Agency personnel responsible for preparing the sample tasks for
inclusion in the RFP also prepared proposed solutions; these solutions
were not disclosed to the offerors.
14. With regard to sample task No. 4, QuesTech's proposed level of
effort was significantly higher than the agency's estimate. In
reviewing QuesTech's proposal, the agency determined that QuesTech's
proposed solution contemplated activities beyond those included in the
agency's solution to this specific task. Accordingly, the agency did
not view QuesTech's proposed solution as unreasonable, inefficient or
unacceptable.
15. Vitro proposed substantially fewer subcontractors than QuesTech.
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