B-400550, Integrated Management Resources Group, Inc, December 12, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.
2. Protest challenging the evaluation of technical proposals is denied where the record establishes that the agency’s evaluation was reasonable and consistent with the evaluation criteria.
3. Protest challenging the agency’s evaluation of past performance is denied where the record establishes that the agency properly considered the relevance of the protester’s references when deciding what weight, if any, to give each reference.
Resources Group, Inc. (IMRG), of Lanham, Maryland, protests the award of a
contract to the Randstad Inhouse Services, L.P. of
The PBGC is a wholly-owned government corporation established to develop and administer the pension plan termination insurance program for various defined benefit pension plans as provided by the Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. sections 1001-1461 (2000). As trustee, PBGC is responsible for protecting the pensions of an estimated 44 million workers and retirees in more than 30,000 private defined benefit pension plans. To fulfill this mission, PBGC relies upon contractor-provided professional pension benefit administration support services, including in the areas of quality assurance initiatives, processing cases and participants, building participant databases, data integrity validation, plan closing, post valuation, special compliance validation, and special projects, for its various offices and divisions. RFP, Performance Work Statement (PWS) sections C.1 -- C.4.
The RFP, issued on
The solicitation established a two-phase evaluation process. In Phase I, offerors were to submit written proposals that the agency would evaluate using two criteria: past performance and key personnel. For the offerors whose proposals were found acceptable in Phase I, Phase II consisted of supplemental oral presentations. The solicitation established five evaluation factors for Phase II: technical approach; adequacy of management plan; experience and qualifications of personnel; past performance; and cost. The technical evaluation factors were of equal importance and, when combined, were significantly more important than cost. Award was to be made to the responsible offeror whose proposal was determined to represent the “best value” to the government, all factors considered. RFP sect. M.2--M.3.
Three offerors, including incumbent contractor Randstad and IMRG, submitted proposals by the February 19 closing date. As part of the Phase I evaluation, an agency technical evaluation panel (TEP) determined that both the IMRG and Randstad proposals were acceptable. Agency Report (AR), Tab 26, TEP Competitive Range Recommendation Report. The agency then held oral presentations, followed by the offerors submitting revised cost proposals by April 1. The TEP evaluated offerors’ Phase II proposals using an adjectival rating system, with the final ratings for Randstad and IMRG as follows:
Experience and Qualifications of Personnel
The PBGC also performed a cost realism evaluation of the
Randstad and IMRG proposals. The agency
found the costs proposed by each offeror to be realistic for the work to be
performed, and took no exceptions to the labor rates or the levels of effort
that the offerors proposed.
The contracting officer subsequently determined that
Randstad’s technical superiority--especially with regard to the experience and
qualifications of personnel factor--outweighed IMRG’s lower cost, and that
Randstad’s proposal represented the best value to the government.
IMRG’s protest raises various issues regarding the agency’s evaluation of proposals and subsequent source selection determination. IMRG first alleges that PBGC’s cost realism evaluation of Randstad’s proposal was improper. The protester also contends that the agency’s evaluation of its and Randstad’s technical proposals, as well as its own past performance, was unreasonable. Lastly, IMRG protests that there was a lack of impartiality on the agency’s part towards IMRG during the procurement. Protest at 5-9. Based upon our review of the record, we find no merit in any of the protest issues raised by IMRG. Although we do not here specifically address all of the protester’s arguments about the evaluation of proposals, we have fully considered all of them and find that they afford no basis to question the agency’s contract award determination.
Cost Realism Evaluation of Randstad’s Proposal
IMRG protests that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposal. The protester contends that both applicable procurement regulations and the RFP required the agency to perform a cost realism analysis to determine the extent to which an offeror’s proposed costs represent what the government realistically can expect to pay for the proposed effort. By contrast, IMRG argues, PBGC conducted nothing more than a cursory examination of the awardee’s proposed costs, and failed to submit any evidence supporting the conclusion that no exceptions to Randstad’s proposed direct or indirect labor rates were warranted. The protester maintains that the agency’s failure to reasonably determine Randstad’s realistic costs adversely affected the agency’s resulting source selection decision. Protest at 5-6; Comments at 5-7.
The RFP instructed offerors that their cost proposals were to include breakdowns of labor hours, direct and indirect labor rates, and other costs, RFP amend. 3 at 1-2; RFP amend. 7, at 2-3, and stated that the agency’s evaluation of an offeror’s proposed costs would include consideration of the extent to which it reasonably reflected the offeror’s proposed technical approach. RFP sect. M.2.
Randstad submitted its revised cost proposal by the April 1 closing date. Randstad’s cost proposal included breakdowns of its labor hours by performance period and labor category, labor costs by performance period and labor category, direct and indirect labor rates, and its other costs. With regard to its direct labor rates, Randstad’s proposal indicated by labor category both the offeror’s current pay rates for its incumbent workforce as well as its higher, proposed labor rates. For example, Randstad’s current direct labor rate for its project manager was $[DELETED] per hour, while its proposed pay rate for the new contract was $[DELETED] per hour. Randstad also included its 2008 budgeted rates in support of its various indirect rate submissions (i.e., its direct labor fringe rate, its government contract overhead rate, and its general and administrative overhead rate). AR, Tab 19, Randstad Revised Cost Proposal, at 1-34.
In preparation for performing his evaluation, the PBGC cost
analyst sought and received additional cost data information from Randstad,
including the offeror’s current direct labor rates by labor category,
Randstad’s 2008 budgeted overhead rates, its 2007 actual overhead rates, and
its 2008 (1st Quarter) actual overhead rates. The cost data provided by Randstad was
detailed in nature and provided a complete listing of the accounts within each
cost pool and base on which the offeror’s indirect rates were based.
The cost analyst then evaluated Randstad’s proposed direct
and indirect labor rates using the additional cost data received. With regard to Randstad’s direct labor rates,
the cost analyst compared the offeror’s proposed direct labor rates by labor
category with the current pay rates for the same individuals. The cost analyst found that Randstad’s
proposed direct labor rates were consistently higher than what it was currently
paying the same individuals and, in light thereof, concluded the proposed rates
were realistic. The cost analyst also
compared Randstad’s proposed indirect rates to the offeror’s current budgeted
overhead rates as well as its actual 2007 and actual 2008 (1st
Quarter) overhead rates and concluded that the proposed indirect rates were
When an agency evaluates proposals for the award of a
cost-reimbursement contract, an offeror’s proposed estimated cost of contract
performance is not considered controlling since, regardless of the costs
proposed by the offeror, the government is bound to pay the contractor its
actual and allowable costs. Magellan
Health Servs., B-298912,
A cost realism analysis is the process of independently
reviewing and evaluating specific elements of each offeror’s cost estimate to
determine whether the estimated proposed cost elements are realistic for the
work to be performed, reflect a clear understanding of the requirements, and
are consistent with the unique methods of performance and materials described
in the offeror’s proposal. FAR sect. 15.404-1(d)(1);
Advanced Commc’n Sys., Inc., B-283650 et al.,
IMRG argues that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposed direct and indirect labor rates. The protester argues that given Randstad’s much higher staffing levels than those proposed by IMRG, and the two offerors’ nearly equal overall costs, the agency should have been on notice that Randstad’s costs were probably understated. IMRG also argues that the agency’s cost evaluation report merely concludes that Randstad’s direct and indirect labor rates are realistic without demonstrating the basis for this conclusion. The fact that “no exception” was taken by the agency cost analyst, IMRG argues, does not substantiate the reasonableness of the agency’s conclusions. We disagree.
As noted above, while PBGC’s original report to our Office included only its cost evaluation report which indicated the conclusions reached, the agency later also provided the contemporaneous cost evaluator’s workpapers and underlying documentation supporting those conclusions. Randstad’s cost proposal set forth its proposed direct labor rates by labor category. The complete record reflects that the agency cost evaluator then compared Randstad’s proposed direct labor rates with the offeror’s current direct labor rates for the very individuals that Randstad was now proposing to employ for the contract here. Finding that in each instance Randstad’s proposed labor rates were higher than those it was currently paying to the same employees, the agency reasonably concluded that the proposed direct labor rates were realistic. Similarly, the agency compared Randstad’s proposed indirect rates with the offeror’s current budgeted and prior actual indirect rates submissions and found the offeror’s proposed indirect rates to be consistent with these submissions. We have no basis to find that the agency’s conclusion that Randstad’s proposed indirect rates were realistic ones was unreasonable.
Evaluation of Technical Proposals
IMRG also protests the agency’s evaluation of technical proposals. Among other things, the protester maintains that two of the perceived advantages of Randstad’s proposal--its use of incumbent personnel and a superior performance monitoring plan--were not advantages at all. Rather, IMRG argues, its proposal in these specific areas was equal or superior to that of Randstad and, thus, should have received equal credit for these strengths. IMRG also contends that because the alleged technical advantages in Randstad’s proposal were not meaningful, any award decision based on these perceived advantages was unreasonable. Although we do not specifically address all of IMRG’s arguments regarding the agency’s evaluation of technical proposals, we have fully considered each of them and find that they provide no basis upon which to sustain the protest.
Relevant to the protest here, among the RFP’s technical
approach subfactors was one regarding the offeror’s proposed performance
measurement and management program.
Specifically, the solicitation required offerors to describe “all
processes, tools and controls to ensure that accepted quality levels are met or
exceeded and that timely and accurate reporting of performance metrics is
provided to PBGC.” RFP sect. M.3.
Also, as to the experience and qualifications of personnel factor, the
agency’s evaluation was to be based on the “extent to which the offeror
provides qualified and experienced personnel with relevant experience to
perform this contract.”
In its proposal, incumbent Randstad proposed its current
workforce for both the key personnel and remaining staff positions. AR, Tab 16, Randstad Technical Proposal, at
18-32; Tab 18, Randstad Oral Presentation Slides Proposal, at 3-6. Also, with regard to the performance
measurement and management program subfactor, Randstad proposed the development
of a web-based “Performance Excellence Tool” to track metrics, report results,
and objectively measure individual and team success.
The TEP evaluated Randstad’s proposal after its
submission. The TEP found Randstad’s
plan to utilize the incumbent staff for the new contract to be a strength under
the experience and qualifications of personnel factor. The agency evaluators also considered
Randstad’s development of a tool designed to monitor the work and quality
assurance of work products for all staff to be a strength under the technical
approach and management plan factors.
IMRG’s proposal also planned to utilize the incumbent
Randstad workforce for both the key personnel and other staff positions. IMRG represented that, since its inception,
the company had transitioned 98 percent of incumbent employees, and established
a goal of capturing 98 percent of the incumbent workforce here.
The TEP considered IMRG’s
After completing its evaluation of each offeror’s
proposal, the TEP found Randstad’s proposal to be technically superior to that
of IMRG. The evaluators concluded that
the largest difference between the proposals was with regard to the experience
and qualifications of personnel factor, and that Randstad’s proposal was
superior because: (1) it utilized mostly incumbent personnel; (2) added a
Performance Control Manager as well as an impressive individual to fill that
role; (3) proposed an experienced Assistant Project Manager; and (4) planned
staffing levels of [DELETED] people (by comparison, IMRG’s staffing level was [DELETED]
In reviewing an agency’s evaluation, we will not
reevaluate offerors’ proposals; instead, we will examine the agency’s
evaluation to ensure that it was reasonable and consistent with the
solicitation’s stated evaluation criteria and applicable procurement statutes
and regulations. Urban-Meridian Joint
IMRG argues that the agency improperly judged Randstad’s performance monitoring plan, based on a developmental monitoring tool, as superior to IMRG’s performance monitoring plan which employed a monitoring tool already in use. Comments at 8-10. We disagree. As a preliminary matter, the record clearly indicates that the TEP was aware that IMRG was proposing an existing performance monitoring tool while Randstad was proposing a developmental performance monitoring tool. Contrary to IMRG’s assertion, the agency did not find Randstad’s performance monitoring plan superior to IMRG’s. Rather, the agency evaluators considered Randstad’s and IMRG’s monitoring plans to be equivalent strengths under the applicable evaluation factors. Moreover, the agency did not consider Randstad’s monitoring tool to be a discriminator between the two offerors’ proposals when making its determination of technical superiority. IMRG essentially argues that the agency should have given more weight to an area in which it had a perceived advantage over Randstad. This amounts to mere disagreement with the agency’s evaluation of proposals, which does not make the evaluation unreasonable. See Ben-Mar Enters., Inc., supra.
IMRG also argues that the agency improperly judged Randstad’s proposal as superior as to the experience and qualifications of personnel factor when IMRG also proposed the use of incumbent personnel. We find no merit to the protester’s assertion here. As set forth above, the TEP considered each offeror’s proposed use of the incumbent Randstad workforce to be an evaluation strength. Nonetheless, when determining the relative technical merits of the offerors’ proposals, the TEP properly considered the fact that Randstad currently employed the incumbent workforce, while IMRG had merely established a stated goal of capturing 98 percent of the incumbent workforce. It is reasonable, we think, for an agency to distinguish between the actual existing situation (i.e., that Randstad currently employs the incumbent workforce) and what an offeror proposes to accomplish. Moreover, the fact that the TEP considered both offerors’ planned use of the incumbent Randstad workforce to be strengths does not preclude the evaluators from recognizing that the offeror’s proposals were not in fact equal in this regard.
Past Performance Evaluation
IMRG also protests the agency’s evaluation of its past performance. Of foremost concern, the protester contends that the evaluation was unreasonable because of PBGC’s failure to consider as relevant various past performance references provided by IMRG in its proposal. IMRG argues that had the agency properly evaluated its past performance, it would have received a rating that was equal to or greater than that received by Randstad. Again, although we do not here specifically address all of IMRG’s arguments, we have fully considered each of them and find that they provide no basis upon which to sustain the protest.
The RFP required offerors to provide at least three
references evidencing past performance during the last 3 years that was “the
same as, or substantially similar to” the services described in the PWS
here. RFP sections L.8, M.3. Among the past performance information deemed
relevant by the solicitation and which offerors were required to provide were
the dollar value and length of prior contract efforts. Regarding the agency’s evaluation of past
performance, the RFP also informed offerors that, “[w]hen discussing previous
Government and/or private sector projects similar to that proposed, provide
sufficient detail to convince evaluators of the relevance of the skills and
IMRG’s proposal contained five past performance references. These were: (1) a $19.9 million contract with PBGC for audit support services (of defined benefit pension plans); (2) a $40.9 million contract with PBGC for pension administration support services; (3) a $92,000 contract with the Centers for Disease Control (CDC) Foundation for financial management and stipend administration services (four personnel, in support of an 8-month epidemiological study); (4) a $3 million contract with the Office of the Comptroller of the Currency (OCC) for support services (“[t]o date, our services have included . . . Senior Librarian, Technical Writer/Editor, Information Technology, and Administrative support services”); and (5) a $2,817,343 contract with the Environmental Protection Agency (EPA) for “communication center” (photocopying, shipping and receiving, supplies, ergonomic supplies, and mail) services. AR, Tab 20, IMRG Technical Proposal, at 7-18; Tab 38, IMRG Past Performance References.
As part of its evaluation of IMRG’s past performance, the TEP first considered the relevance of each of the offeror’s references. The agency evaluators concluded that IMRG’s first two past performance references were relevant (i.e., the same as or substantially similar) to the requirements in the PWS here. By contrast, the TEP determined that, based on the size and scope of the work involved, IMRG’s remaining three references were not relevant to the contract being awarded, and gave no weight to these references. The TEP then considered the quality of IMRG’s past performance for those references deemed relevant when determining the offeror’s past performance evaluation rating. AR, Tab 27, TEP Report, at 5.
Where a solicitation requires the evaluation of offerors’
past performance, we will examine an agency’s evaluation to ensure that it was
reasonable and consistent with the solicitation’s evaluation criteria and
procurement statutes and regulations. The
As a preliminary matter, the agency evaluators properly
considered the relevance of each of IMRG’s past performance references before
deciding what, if any, weight to give it.
See Chenega Tech. Prods., LLC, B-295451.5,
IMRG does not dispute the size and scope of its past performance references. The protester instead argues that at least four of its past performance references (presumably all but the CDC Foundation reference) were comparable in size and scope to the work described in the current solicitation. Comments at 8-9. IMRG fails to show, however, how the services in its past performance references were the same as, or substantially similar to, those described in the PWS. In sum, IMRG’s argument amounts to mere disagreement with the agency’s judgment and, thus, does not establish that the past performance evaluation was unreasonable. See Ben-Mar Enters., Inc., supra.
IMRG’s Allegations of Agency Bias
IMRG alleges that the agency lacked impartiality towards
it during the procurement process. In
support thereof, the protester points to an internal PBGC email message written
approximately 9 months prior to the issuance of the RFP, where the agency’s
chief administrative officer and procurement department director requested that
planned contract awards to IMRG be first brought to their attention. Protest, exh. 1, PBGC e-mail regarding IMRG
Government officials are presumed to act in good faith; we
will not attribute unfair or prejudicial motives to procurement officials on
the basis of inference or supposition. Saturn
Landscape Plus, Inc., B-297450.3,
IMRG has furnished no evidence to support its allegations
here; it merely infers bias based on its assumption that the request for a
higher-level review of planned contract awards improperly skewed the entire
procurement process against IMRG.
Further, the record indicates that neither of the PBGC employees
mentioned in the
e-mail message on which IMRG relies entirely as its proof of bias played a part
in either the evaluation of offerors’ proposals or the source selection
process. Contracting Officer’s
The protest is denied.
Gary L. Kepplinger
 As a wholly-owned government corporation, the PBGC is a “federal agency” as defined by section 3 of the Federal Property and Administrative Services Act of 1949, 40 U.S.C. sect. 472 (2000), over which GAO has bid protest jurisdiction. See 31 U.S.C. sect. 3551 (2000); 4 C.F.R. sect. 21.0(c) (2008).
 The RFP also established five technical approach subfactors, and six management plan subfactors. RFP sect. M.3.
The agency then considered each offeror’s proposed cost to be its evaluated
cost for purposes of the best value tradeoff determination.
 Similarly, Randstad’s current average pay rate for its Senior Pension Administrators was $[DELETED] per hour, while its proposed pay rate for this same labor category was $[DELETED] per hour.
 In its original report to our Office, PBGC included a cost evaluation report which indicated the agency had reviewed the cost elements within Randstad’s proposal and had taken no exception to the various rates proposed, but failed to show what cost data had been examined or how the agency had reached the conclusions that it did. It was only after the protester’s submission of comments and several conference calls with our Office that PBGC supplemented its report and provided the underlying contemporaneous documentation and agency workpapers on which its cost evaluation report was based.
IMRG also argues that the agency’s cost realism evaluation of offerors’
proposed staffing levels was improper--Randstad had proposed [DELETED]
full-time equivalents (
 One of the management plan subfactors also concerned the offeror’s ability to monitor performance against all performance standards and acceptable quality levels contained in the PWS. sect. M.3.
 IMRG’s proposal did not, however, address how it planned to capture 98 percent of the incumbent Randstad workforce, or what incentives the offeror would commit itself to in order to ensure accomplishment of this stated goal.
While IMRG’s proposal represented the contract amount here was $3 million
(without specifying if that meant annually, total amount to date, or total
estimated amount), AR, Tab 20, IMRG’s Technical Proposal, at 4, the
reference reported that the contract amount was $300,000 annually for 4 2/3
 Further, IMRG’s OCC past performance reference was estimated at $300,000 per year while the current solicitation is more than $5 million annually.