BNUMBER: B-274194; B-274194.2; B-274194.3
DATE: November 26, 1996
TITLE: Ryan Associates, Inc.
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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:Ryan Associates, Inc.
File: B-274194; B-274194.2; B-274194.3
Date:November 26, 1996
Jessica C. Abrahams, Esq., David F. Dowd, Esq., and Marcia G. Madsen,
Esq., Miller & Chevalier, for the protester.
David R. Johnson, Esq., Kathleen C. Little, Esq., and Robert J.
Rothwell, Esq., McDermott, Will & Emery, for System Planning
Corporation, an intervenor.
Gerald Q. Brown, Esq., Ballistic Missile Defense Organization, for the
agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Technical evaluation of offerors' proposals is unobjectionable
where the agency followed evaluation criteria stated in solicitation,
the challenged evaluation findings all have a reasonable basis, and
there is no evidence of unequal treatment of offerors.
2. Agency satisfied obligation to conduct meaningful discussions
where it reasonably led protester into areas of its proposal requiring
clarification or correction. Agency is not required to reopen
negotiations to discuss matters first identified in an offeror's best
and final offer.
3. Protest alleging "bait and switch" of proposed key personnel is
denied where solicitation does not prohibit substitution of key
personnel, and the substitution at issue consists of only two of more
than [deleted] key personnel proposed by the awardee, both of whom
left the awardee's employ after having performed a significant portion
of their proposed level of effort.
4. Under a level-of-effort solicitation which sets the labor hours
and labor categories, agency's cost realism analysis of proposals and
determination of most probable cost is reasonable where it includes:
identification of cost issues by the agency; review of audits by
Defense Contract Audit Agency; and adjustments to costs based upon
negotiated overhead rate ceilings.
5. In best value procurement, where solicitation provides that
non-cost factors are of greater importance, record supports
cost/technical tradeoff which focuses on technical distinctions
between competing proposals and reasonably determines that
higher technically rated proposal represents best value despite higher
cost.
DECISION
Ryan Associates, Inc., protests the award of a contract to System
Planning Corporation (SPC) under request for proposals (RFP) No.
HQ0006-96-R-0005, issued by the Department of Defense, Ballistic
Missile Defense Organization (BMDO) as a total small business
set-aside. In its protests Ryan challenges various aspects of the
technical and cost evaluations and the award determination.[1]
We deny the protest.
The BMDO's mission to develop a robust ballistic missile defense (BMD)
includes knowing what countermeasures are currently deployed on
ballistic missiles and how these countermeasures could be deployed in
the future. This solicitation was for independent, expert, scientific
assessments, and technical evaluations concerning the development of
BMD countermeasures by potential adversaries of the United States and
its allies. These assessments and evaluations were to include
technical analysis, modeling and simulations, engineering and design
studies, budgetary and cost analysis, and reporting of results. The
successful contractor is expected to participate in countermeasures
integration program reviews and meetings, as well as information
exchanges with other BMD elements.[2] The RFP contemplated award of
an indefinite delivery/indefinite quantity, level-of-effort contract,
on a cost-plus-fixed-fee, task order basis, for a base year with two
1-year options. Award was to be made to the offeror whose proposal
was judged, by an integrated assessment of the cost and other listed
evaluation factors, to be the most advantageous to the government.
Technical proposals were to be evaluated on the basis of six criteria,
in descending order of importance: personnel, understanding and
approach, past performance, experience, management, and facilities.
Proposals were scored on a color/adjectival basis:
"Blue/Exceptional," "Green/Acceptable," "Yellow/Marginal," and
"Red/Unacceptable." Proposals also were evaluated on a risk
assessment basis: "High," "Moderate," and "Low" based upon the
potential for disruption of schedule, increase in cost, or degradation
in performance, along with an assessment of the amount of contractor
special effort and government monitoring needed.
Cost was to be evaluated, but not scored, on the basis of whether
proposed costs were realistic, complete, and reasonable in relation to
the RFP requirements. Costs had to be compatible with the technical
proposal and no advantage was to accrue to offerors submitting
unrealistically low cost proposals. Adjustments could be made to
proposals to obtain a most probable cost (MPC) using the results of
the cost realism evaluation. While evaluated probable cost was a
substantial area of consideration, non-cost factors collectively were
of greater importance.
Ryan and SPC were the only two offerors to submit proposals by the
April 15, 1996, closing date. The source selection evaluation team
(SSET) evaluated the technical proposals and the oral presentations,
conducted written discussions, obtained written responses, and
evaluated the offerors' best and final offers (BAFO), resulting in the
following final ratings:
OfferorPersonnelUnderstand/ApproachPast PerformExper'nceManagm'tFacili
ty
SPC Blu/Low Blu/Low Blu/LowGrn/Low Grn/Low Grn/Low
Ryan Grn/Low Grn/Mod Blu/LowGrn/Mod Grn/Mod Grn/Low
The cost team, headed by the contracting officer reviewed the
offerors' cost proposals for realism, completeness, and reasonableness
and conducted written discussions based on the evaluations. Due to
questions concerning both offerors' proposed overhead, the agency
negotiated a ceiling with both offerors. [deleted] Both cost
proposals were adjusted upward to reflect the negotiated ceilings,
resulting in an MPC of $9.175 million for SPC and an MPC of $7.757
million for Ryan.
The SSET prepared a briefing for the source selection authority (SSA)
as well as a detailed cost/technical tradeoff discussion recommending
award to SPC as offering the best value to the government. Because
the tradeoff discussion attempted to quantify the value of SPC's
proposal, emphasizing matters which were not included in the RFP's
evaluation criteria, the contracting officer wrote a detailed critique
of the tradeoff. In her critique, the contracting officer noted that
SPC's proposal was technically superior to Ryan's but concluded that
the SSET's tradeoff discussion had not sufficiently justified the
conclusion that SPC's proposal was worth the cost premium associated
with it. The contracting officer provided both the tradeoff and the
critique to the SSA, but advised him that there was no joint
recommendation for award. Based upon his review of the evaluation
record and briefing, the SSA concluded that SPC's proposal represented
the best value to the government. His decision was based on his
finding that SPC's proposal was superior to Ryan's in the areas of
personnel and understanding and approach and in risk ratings for the
areas of experience and management. Overall, the SSA determined that
SPC's technically superior proposal was worth the [deleted] percent
cost premium. The agency awarded the contract to SPC. After
receiving notice of the award and a debriefing, Ryan filed this
protest.
TECHNICAL EVALUATION
Ryan first challenges the technical evaluation of its and SPC's
proposals. It is not the function of our Office to evaluate proposals
de novo. Rather, we will examine an agency's evaluation to ensure
that it was reasonable and consistent with the stated evaluation
criteria and applicable statutes and regulations, since the relative
merit of competing proposals is primarily a matter of administrative
discretion. Information Sys. & Networks Corp., 69 Comp. Gen. 284
(1990), 90-1 CPD para. 203; Advanced Technology and Research Corp.,
B-257451.2, Dec. 9, 1994, 94-2 CPD para. 230. The protester's mere
disagreement with the agency's judgment does not establish that an
evaluation was unreasonable. Medland Controls, Inc., B-255204;
B-255204.3, Feb. 17, 1994, 94-1 CPD para. 260. Our review of the record
provides no basis for objecting to the agency's evaluation.
Ryan contends that the technical evaluations of its proposal and SPC's
were flawed in several of the areas reviewed.[3] For example, under
the personnel factor, Ryan argues that the agency improperly cited the
lack of desired experience as a weakness for one of its personnel,
while failing to cite the same weakness for one of SPC's personnel.
The RFP sought personnel with certain specialized experience, defined
as performance of a technical discipline directly related to that
required for statement of work (SOW) performance. The solicitation
envisioned that both the program manager and principal analyst would
have 10 years of specialized experience. One of Ryan's proposed
principal analysts was listed as having only 8 years of specialized
experience. Clarification was sought during discussions and, in
response, Ryan confirmed that the analyst had only 8 years of
specialized experience. Accordingly, the agency properly treated the
matter as a weakness. With regard to SPC's proposal, one of the
evaluators questioned the specialized experience of SPC's proposed
program manager and clarification was sought in discussions. Unlike
Ryan's response, SPC's response provided three pages of information
that substantiated its program manager's more than 10 years of
specialized experience. Thus, the agency properly did not identify
this matter as a weakness in SPC's proposal.
Similarly, under the understanding and approach factor, Ryan argues
that the agency improperly downgraded its proposal of work beyond the
scope of the solicitation, while not downgrading SPC's similar
proposal of beyond-the-scope work. Again, the difference in treatment
is attributable to the fact that what Ryan proposed reasonably
constituted a weakness, while what SPC proposed did not. In this
regard, SPC proposed to perform additional [deleted] comparable to
activities included in previous BMDO contracts, but which were not
included in this solicitation's SOW. The agency treated this neither
as a strength nor a weakness. Ryan, on the other hand, proposed to do
more than the normal interfacing with other government offices. For
example, since Ryan and its team members conducted work for other
ballistic missile defense related offices, the protester proposed to
use these relationships to have the results of its work under this
solicitation "seriously considered." While Ryan believed that use of
its contacts would be beneficial to the agency, BMDO viewed such
contacts as presenting the potential for improper influence. BMDO
sought clarification during discussions and Ryan reiterated its
intention to use its contacts as proposed. Because of the potential
for lack of impartiality in the technical studies performed under this
contract, BMDO treated the matter as a weakness in Ryan's
understanding and approach. While the protester disagrees with the
agency's assessment, it has provided nothing to establish that this
evaluation was unreasonable or objectionable.
Ryan also challenges BMDO's evaluation of SPC's past performance based
on the agency's failure to evaluate SPC's performance under its
incumbent contract, which Ryan argues was SPC's most relevant
contract. Ryan alleges that SPC was issued a stop work order due to
SPC-generated cost overruns on that contract. Since the evaluators
apparently considered positive aspects of SPC's performance on that
contract elsewhere in the evaluation, Ryan argues that they were
required to consider the allegedly negative cost overrun information
as well. In Ryan's view, had BMDO considered this negative
information, it would not have rated SPC's proposal as "blue" with
"low" risk under the past performance factor. BMDO advises, and has
submitted documents which support its position, that the stop work
order was issued because of a funding shortfall for which the
government was responsible, and not due to any SPC-generated cost
overruns. Thus, to the extent the evaluators may have considered
SPC's past performance on that contract, their failure to consider
non-existent negative information was unobjectionable.
In a related argument, Ryan contends that the agency improperly
provided guidance to SPC's team without providing comparable guidance
to Ryan's team. In this regard, Ryan notes that the agency
specifically advised SPC's primary subcontractor, SAIC, that it could
tailor its submissions on past performance to reflect the 10 most
relevant of its recent contracts. The reason for allowing the
tailoring was that SAIC, a large business, had numerous recent
contracts, many involving company divisions unrelated to that which
would perform the contract. Ryan contends that this was inconsistent
with the RFP requirement for information on the 10 most recent
contracts and that it was "severely prejudiced" by this apparent
waiver of the restriction on past performance contract submissions.
Ryan, however, has not shown that had the agency dealt with it
similarly, its primary subcontractor would have done something
different that would have put Ryan in line for award. On the
contrary, the record establishes that even without the agency's
advice, Ryan's primary subcontractor also submitted its 10 most
relevant recent contracts. Further, Ryan and its subcontractors' past
performance was rated as "blue" with "low" risk, the highest possible
rating. Accordingly, we are not persuaded that had Ryan received
guidance on this matter it would have submitted any different proposal
or been evaluated in a way that would have increased its chance for
award. Thus, it was not prejudiced by the agency's actions.
MEANINGFUL DISCUSSIONS
Agencies are required to conduct meaningful discussions with all
competitive range offerors. Stone & Webster Eng'g Corp., B-255286.2,
Apr. 12, 1994, 94-1 CPD para. 306. In order for discussions to be
meaningful, contracting officials must advise offerors of deficiencies
in their proposals and afford offerors an opportunity to revise their
proposals to satisfy the government's requirements. Id. This does
not mean that offerors are entitled to all-encompassing discussions.
Agencies are only required to lead offerors into areas of their
proposals that require amplification. Caldwell Consulting Assocs.,
B-242767; B-242767.2, June 5, 1991, 91-1 CPD para. 530. The degree of
specificity required in conducting discussions is not constant and is
primarily a matter for the procuring agency to determine. JCI Envtl.
Servs., B-250752.3, Apr. 7, 1993, 93-1 CPD para. 299.
Ryan alleges that the agency improperly failed to advise it of a
number of issues in discussions. For the majority of the issues, the
agency report clearly establishes that the agency in fact discussed
these issues and the protester's revised proposal addressed them. For
example, Ryan originally argued that the agency had not discussed its
principal analyst's lack of desired experience. As discussed above,
the matter was raised during discussions; Ryan's response simply
failed to satisfy the evaluators. The fact that the protester's
responses did not fully satisfy the evaluators does not mean that the
discussions were inadequate. Reflectone Training Sys., Inc.;
Hernandez Eng'g, Inc., B-261224; B-261224.2, Aug. 30, 1995, 95-2 CPD para.
95. In its comments on the agency report, Ryan did not rebut the
agency's explanation. Instead, it identified new areas in which its
proposal was allegedly downgraded without the benefit of discussions.
For example, Ryan argues that the agency improperly downgraded its
proposal for a lack of "credibility" and an unresolved organizational
conflict of interest (OCI) matter without discussing the matters with
them. While the consensus ratings of the evaluators listed SPC's
credibility in the BMDO community as a strength, there is nothing to
indicate that the agency downgraded Ryan's proposal for, or otherwise
identified as a weakness, any perceived lack of "credibility." The
only place the lack of credibility is discussed is in the SSET's
tradeoff discussion which the contracting officer effectively rebutted
and the SSA explains did not materially aid in his own cost/technical
tradeoff. Since the issue of credibility did not enter into the
evaluation or into the award decision, the agency had no
responsibility to discuss the matter with the protester.
With regard to the OCI matter, the agency requested additional
information from the protester in discussions regarding one of its
subcontractor's work on other contracts with BMDO. In response, Ryan
explained that it perceived no OCI problems, but to avoid the
appearance of a problem, would recuse any affected subcontractor
personnel. In reviewing this response, the agency found that such a
recusal could have affected contract performance. This continuing
concern was not the subject of discussions. However, since it was
first introduced in Ryan's revised proposal, the agency was not
required to reopen discussions to obtain Ryan's further input. See
Potomac Research, Inc., B-250152.8; B-250152.11, July 22, 1993, 93-2
CPD para. 109.
On this record, we see no basis to conclude that the agency failed to
afford meaningful discussions to Ryan.
BAIT AND SWITCH
Ryan contends that SPC engaged in a "bait and switch" of proposed
personnel.[4] Specifically, Ryan identifies two key personnel who are
no longer working on the contract and contends that SPC proposed them
with the intention of replacing them after winning the contract.
Ryan's contentions are baseless.
Offeror "bait and switch" practices, which result in an offeror's
proposal being favorably evaluated on the basis of personnel that it
does not expect to use during contract performance, have an adverse
effect on the integrity of the competitive procurement system and
provide a basis for rejection of that offeror's proposal. Meridian
Management Corp., Inc.; NAA Servs. Corp., B-254797; B-254797.2, Jan.
21, 1994, 94-1 CPD para. 167; PRC, Inc., B-247036, Apr. 27, 1992, 92-1
CPD para. 396. This does not mean that substitution of employees after
award is prohibited; such substitution is unobjectionable where the
offeror acted reasonably and in good faith. Unisys Corp., B-242897,
June 18, 1991, 91-1 CPD para. 577.
Here, there is no evidence that SPC engaged in bait and switch
practices. Rather, the record shows that virtually all of the
personnel, key and non-key, proposed by SPC and its team members are
available and working on the contract. The SPC team proposed more
than [deleted] key personnel and states that it intended to use them
all in performance of the contract. SPC acknowledges that two
personnel are no longer working on the contract, but explains that
both were long-term SPC employees who left unexpectedly. One of them
left to care for his ill parents, while the other left to accept
another business opportunity. Both were proposed to work 500 hours on
the contract and, prior to resigning, each worked a significant
portion of that time: 124.5 and 255 hours, respectively. Nothing in
the RFP prohibits substitution of personnel, and by itself,
substitution after contract award, of two key personnel out of more
than [deleted] proposed, provides no basis to conclude that award to
SPC was improper. Whether any substituted personnel are qualified to
fill the vacated positions is a matter of contract administration
which our Office will not review. Bid Protest Regulations, sec. 21.5(a),
61 Fed. Reg. 39039, 39045 (1996) (to be codified at 4 C.F.R. sec.
21.5(a)).
COST REALISM ANALYSIS
Ryan contends that the cost realism evaluation was flawed because the
agency did not take into account various inconsistencies discovered in
SPC's cost proposal and used only rudimentary calculations to make
adjustments. When a cost-reimbursement contract is to be awarded, a
cost realism analysis must first be performed by the agency. See
Federal Acquisition Regulation sec. 15.801, 15.805-3. The purpose of a
cost realism analysis by an agency under a level-of-effort, cost-type
contract is to determine the extent to which the offeror's proposed
labor rates are realistic and reasonable. ERC Envtl. and Energy
Servs. Co., Inc., B-241549, Feb. 12, 1991, 91-1 CPD para. 155. In this
regard, an agency is not required to conduct an in-depth cost analysis
or to verify each and every item in conducting its cost realism
analysis. Rather, the evaluation of competing cost proposals requires
the exercise of informed judgment by the contracting agency involved,
since it is in the best position to assess "realism" of cost and
technical approaches and must bear the difficulties or additional
expenses resulting from a defective cost analysis. Since the cost
realism analysis is a judgment function on the part of the contracting
agency, our review is limited to a determination of whether an
agency's cost evaluation was reasonably based and not arbitrary.
General Research Corp., 70 Comp. Gen. 279 (1991), 91-1 CPD para. 183;
Science Applications Int'l Corp., B-238136.2, June 1, 1990, 90-1 CPD para.
517. We have reviewed BMDO's cost realism analysis of SPC's proposal
and find it unobjectionable.
Here, the cost evaluators reviewed SPC's cost proposal for realism,
completeness, and reasonableness. The evaluation included a
comparison of the labor hours and mix proposed in the cost volume of
the proposal to the labor effort in the technical volume; an
assessment of the responsiveness of the cost proposal to the RFP's
requirements; and an assessment of the degree to which proposed cost
methodology supported the development of the proposed costs and total
price. The evaluators found SPC's proposal to be reasonable and
complete, and with regard to cost realism, that its proposal was
consistent and compatible with the labor effort in its technical
volume and that in the RFP. They also had the Defense Contract Audit
Agency (DCAA) verify SPC's direct and indirect rates. In verifying
SPC's rates, DCAA considered them for reasonableness, unallowable
costs, and proper allocation bases. DCAA also compared SPC's proposed
budget rates with actual rates from previous year's and the year to
date. DCAA took no exceptions in its review. Since SPC proposed
labor hours as set by the RFP, and used labor rate escalations similar
to Ryan's and those recommended by DCAA, the evaluators determined
that it was unnecessary to make adjustments in the out years. SPC's
labor mix was determined sufficient to perform the SOW making
adjustments to the labor mix unnecessary. Due to questions concerning
SPC's overhead rates, the agency negotiated a [deleted] percent
ceiling on labor overhead and adjusted the cost proposal to reflect
the negotiated ceiling.[5] Since the level of effort is set by the
agency and the agency obtained verification of SPC's direct labor
rates from DCAA, and since the agency both negotiated an indirect rate
ceiling and adjusted SPC's costs upward based on that ceiling, we have
no basis to conclude that BMDO's cost realism analysis was
unreasonable or otherwise flawed. Further, since SPC's most probable
cost is approximately [deleted] percent higher than Ryan's, there
appears little risk that SPC's proposal is unrealistically low.
Ryan, however, contends that this evaluation was insufficient because
it failed to take into account four matters which the agency
identified in its evaluation: proposed escalation rates, subcontractor
costs, low other direct costs (ODC), and discrepancies in the
percentage of direct productive labor hours (DPLH) per year. Ryan
argues that had the agency made adjustments to SPC's costs to account
for these matters, SPC's probable cost would have "greatly exceeded"
the MPC originally calculated. Contrary to Ryan's allegations, the
agency raised three of these matters in discussions and SPC
satisfactorily responded to all three. For example, the discrepancies
in DPLH percentages were primarily attributable to the fact that SPC's
personnel matrix did not list all proposed personnel, while the cost
proposal did. Correction of the personnel matrix to account for all
personnel eliminated the discrepancies. Similarly, SPC provided
explanations for missing subcontractor costs and its low ODCs which
the agency reviewed and accepted as reasonable. Though Ryan claims
that these matters should have resulted in significant cost
adjustments, it makes no attempt to quantify them. We find that
Ryan's objections merely constitute its disagreement with the agency's
determination, which alone does not establish that the evaluation was
unreasonable.
With regard to SPC's escalation rate, Ryan notes that DCAA had
identified a data resource index rate of 3.5 percent for both Ryan and
SPC; yet, SPC's rate was only [deleted] percent. The agency explains
that this slight difference was determined to be too low to warrant
any adjustment. In this regard, the agency explains that Ryan's
escalation rate [deleted]. Since the agency would have had to
upwardly adjust Ryan's rate as well as SPC's rate and the small
increases would not have been significantly dissimilar, we find
unobjectionable the agency's determination to simply accept both
offerors' proposed escalation rates.
COST/TECHNICAL TRADEOFF
Finally, Ryan contends that the flawed evaluations make the
cost/technical tradeoff performed by the SSA unreasonable. Ryan also
contends that the SSA failed to properly consider cost and to justify
award to SPC at a price premium in his selection statement. We
disagree.
In a negotiated procurement, the government is not required to make
award to the lowest-cost, technically acceptable offeror unless the
RFP specifies that cost will be the determinative factor for award.
General Servs. Eng'g, Inc., B-245458, Jan. 9, 1992, 92-1 CPD para. 44.
Agency officials have broad discretion in determining the manner and
extent to which they will make use of technical and cost evaluation
results. Cost/technical tradeoffs may be made; the extent to which
one may be sacrificed for the other is governed by the test of
rationality and consistency with the established evaluation factors.
Id. While the selection official's judgment must be documented in
sufficient detail to show it is not arbitrary, KMS Fusion, Inc.,
B-242529, May 8, 1991, 91-1 CPD para. 447, an SSA's failure to
specifically discuss the cost/technical trade-off in the selection
decision document does not affect the validity of the decision if the
record shows that the agency, in consideration of the relative
technical merit of the awardee's and the lower-cost protester's
proposals, reasonably decided that the higher-cost awardee's proposal
was worth the associated additional cost. McShade Gov't Contracting
Servs., B-232977, Feb. 6, 1989, 89-1 CPD para. 118.
As discussed above, we find nothing objectionable in the agency's
evaluation of SPC's or Ryan's proposals. We also find that the SSA's
cost/technical tradeoff decision to award to SPC as the technically
superior offeror, at an [deleted] percent higher evaluated cost, was
rational and is supported by the record.
The RFP provided that award would be made to the offeror whose
proposal was determined most advantageous, based upon an integrated
assessment of cost and non-cost factors. The non-cost factors,
personnel, understanding and approach, past performance, experience,
management, and facilities, were considered more important than cost.
The RFP permitted award to an offeror with a higher technically rated
proposals at a higher evaluated cost, but also provided that award
would not be made at a significantly higher overall cost to achieve
only slightly superior capability.
The SSA is the director of Security, Intelligence and Countermeasures
at BMDO and has more than 30 years of experience in the areas of
intelligence, science, and technology. Before making his selection
decision, he was briefed by the SSET, read all the top-level documents
comprising the proposal analysis report (PAR), the SSET's
cost/technical tradeoff, and the contracting officer's critique of the
tradeoff. According to the SSA, the tradeoff did not materially aid
his understanding of the respective proposals and the critique
reinforced his independently conceived view that he was simply being
called upon to make the straightforward judgment of whether the
superior quality of the SPC proposal was worth the associated
additional cost.
The SSA's decision was based primarily on the PAR. The SSA noted the
difference in technical and risk ratings for both offerors in four of
the six non-cost factors. In personnel, the most important of the
factors, he considered that SPC's "blue/low" ratings were justified,
while Ryan's "green/low" ratings were "generous." He based this
determination on the superior qualifications and experience of the SPC
team against the more limited qualifications and experience of the
Ryan team. In this regard, the PAR reflects seven strengths and no
weaknesses for SPC and emphasizes its personnel's "exceptional" and
"extensive" experience. For Ryan's proposal, the PAR reflects six
strengths emphasizing its "superior" but more limited experience, and
contains two weaknesses concerning the deputy program manager's less
than desired level of experience and Ryan's limited experience in
certain areas.
With regard to understanding and approach, the SSA was "disappointed"
with Ryan's failure to grasp the full scope of the BMDO
countermeasures program. Instead of the comprehensive threat risk
assessment process emphasized in the program, the SSA found that
Ryan's approach was a much more limited endeavor focusing only on
characterizing given countermeasures and inserting them into specific
threat products. The SSA noted that Ryan persisted in this approach
even after discussions, but found SPC's proposal exhibited a
reassuring grasp of both the strategic vision of the countermeasures
program, as well as the specific steps required to carry it out.
Thus, he concluded that SPC's "blue/low" ratings versus Ryan's
"green/moderate" ratings were justified. Again, the PAR supports
these findings. SPC's proposal contained nine strengths and no
weaknesses, while Ryan's proposal contained only six strengths and
three weaknesses, including confusion as to the role of the
senior-level team and lack of full understanding of a risk assessment
process.
In the areas of experience and management, both Ryan's and SPC's
proposal were rated "green." While SPC's proposal was rated as "low"
risk, the SSA noted that Ryan's proposal was rated as "moderate" risk.
In this regard, the PAR reflects five strengths each for the offerors
under the experience factor, as well as one weakness for Ryan. While
SPC had performed many contracts larger and/or more complex than the
SOW, Ryan had not been the prime on contracts of similar size and
complexity. Under management, SPC's proposal had three strengths,
including an [deleted]. Ryan's proposal had two strengths and two
weaknesses including its planned, beyond the scope work, and the lack
of clarity in its interface with related contract support areas.
With regard to cost, the SSA considered the [deleted] percent cost
premium associated with SPC's proposal, and noted that the cost risk
for both proposals was low and that both offerors had agreed to
overhead rate ceilings. Overall, the SSA concluded that SPC's
proposal was substantially superior to the Ryan proposal and that it
was worth the added cost to obtain SPC's level of performance. In his
view, a primary consideration was the criticality of the
countermeasures program to the ultimate success of the BMD program,
thus making the highest quality contractor support most important.
In sum, the record shows that the SSA reviewed the technical
evaluations and carefully weighed the differences in the two proposals
to determine whether selection of the higher-rated proposal would
result in sufficient added value to justify the payment of an
[deleted] percent cost premium. In our view, since non-cost factors
were more important than cost, and SPC's proposal was plainly
technically superior to Ryan's in four of six non-cost factors,
including the two most important factors, the record supports the
SSA's tradeoff determination. McShade Gov't Contracting Servs.,
supra. While the [deleted] percent most probable cost difference
between the proposals is significant, we do not believe that alone is
reason to question the SSA's determination. General Servs. Eng'g,
Inc., supra (award to offeror whose technically superior proposal was
125 percent higher in cost than lower technically rated proposal was
proper).
Our conclusion is not changed by the agency's admitted problems with
the SSET's tradeoff methodology. While Ryan argues that the SSA's
tradeoff was tainted by the SSET's tradeoff, the record does not
support this argument. The SSET's tradeoff emphasized credibility,
learning curve, and other discriminators which the contracting officer
correctly criticized as not representing identified evaluation
factors. The SSA was fully briefed on the matter by the contracting
officer's memorandum and he avers that the SSET's tradeoff did not
materially aid his understanding of the proposals. Since an SSA is
not bound by the evaluation findings of lower-level evaluators, where,
as here, there is no evidence that an SSA has relied upon improper
evaluations, we will not impute those evaluations to the SSA. See
Aguirre Eng'rs, Inc., B-258931, Feb. 21, 1995, 95-1 CPD para. 104.[6]
Accordingly, the record provides no basis to question the SSA's
cost/technical tradeoff and resulting award determination.
The protest is denied.
Comptroller General
of the United States
1. The protester submitted numerous arguments in support of these and
other protest grounds; the agency responded to each argument,
explaining and justifying its actions. We have reviewed the entire
record, considered all of the protester's arguments, and find no basis
for sustaining the protest. However, we will discuss only the more
significant arguments in this decision.
2. This would include interfacing with the Theater High Altitude Area
Defense, PATRIOT, AEGIS/SM-2, Block IVA, Theater Missile Defense,
National Missile Defense, BMD Advanced Technology Program project
offices, various offices internal to BMDO, and the intelligence
community, to convey the results of research and studies.
3. In another argument, Ryan alleges that the agency improperly used
undisclosed evaluation criteria: credibility, learning curve, and
transition concerns. For example, with regard to credibility, the
evaluators observed that SPC's senior level team had great credibility
in the BMD community and treated this as one of seven strengths under
the personnel factor and one of nine strengths under the understanding
and approach factor. We do not believe that this constituted the
application of undisclosed evaluation factors. Rather, it simply
concerned the qualifications of the proposed senior level team and its
ability to perform the contract, matters reasonably encompassed by the
respective evaluation factors. See Avogadro Energy Sys., B-244106,
Sept. 9, 1991, 91-2 CPD para. 229. Ryan's position regarding the
significance of this matter stems from its consideration in the SSET's
cost/technical tradeoff. However, this document played no significant
role in the award determination (see cost/technical tradeoff
discussion below). In this regard, the SSA's selection decision does
not mention credibility, learning curve, or transition concerns, and
we find nothing to indicate that they had any effect on the award
decision.
4. Ryan also contends that SPC misled the agency with regard to the
availability of various personnel. Specifically, Ryan notes that
three personnel who were proposed to work on the senior level team
were also proposed as key personnel but were obligated to work on the
contract for very limited hours. Ryan has simply misconstrued SPC's
proposal. Each of the personnel was proposed only for the senior
level team. The reference to other positions simply complies with the
RFP's requirement that personnel be categorized according to their
education and experience. Thus, these personnel were not proposed to
perform two jobs on the contract. Ryan also noted that although SPC's
program manager was proposed to devote "100 percent" of his time to
this contract in fact he was spending less time. This allegation also
is without merit. The program manager was proposed to work for a
specific number of hours per year and SPC intends for him to work the
hours proposed. Whether he performs as proposed is a matter of
contract administration which our Office will not review. Bid Protest
Regulations, sec. 21.5(a), 61 Fed. Reg. 39039, 39045 (1996) (to be
codified at 4 C.F.R. sec. 21.5(a)).
5. In fact, the agency made upward adjustments to both proposals.
However, Ryan contends that the agency should not have adjusted its
indirect costs upward to reflect the ceiling because its originally
proposed rate was realistic and reasonable. The agency explains that
it negotiated the ceiling on Ryan's indirect cost rate because of
concerns with Ryan's lack of [deleted] and due to a lack of
information concerning Ryan's [deleted]. Since the ceiling rate was
negotiated with Ryan without objection and has a reasonable basis, the
agency reasonably considered this ceiling in determining Ryan's MPC.
In any event, even if this adjustment had not been made, the
difference between Ryan's proposed costs and SPC's MPC would increase
less than [deleted] percent, an amount unlikely to have affected the
outcome of the cost/technical tradeoff.
6. Ryan also argues that the selection decision was tainted by the
SSA's attempt to quantify the non-cost factor ratings in his draft
selection statement. According to the SSA, after making his
selection decision, he created a numerical analysis as a check,
assigning relative weights to the color and risk ratings. These
calculations reinforced his decision and he included the analysis in
his draft decision. The SSA was advised that it would be
inappropriate to include this analysis in his selection decision.
Since the selection decision does not reference this analysis and is
fully supported by the evaluation record, we are unpersuaded that the
SSA's use, and subsequent rejection, of a numerical quantification
makes his selection decision suspect.
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