B-233372, Mar 6, 1989, 68 Comp.Gen. 300

B-233372, Mar 6, 1989, 68 Comp.Gen. 300

Procurement - Competitive Negotiation - Offers - Personnel experience Contractor misrepresentation Protest is sustained in part where awardee failed to disclose material changes in the availability of its proposed key personnel which occurred between the submission of initial and best and final offers.

Omni Analysis:

Omni Analysis protests the award of a cost-plus-fixed-fee contract for a base year with three 1-year options to Advanced Technology, Inc. (ATI), under request for proposals (RFP) No. N60921-88-R-0113, issued by the Naval Surface Warfare Center for training support services. The protester objects to the agency's evaluation of technical and cost proposals.

We sustain the protest.

The RFP was issued on February 29, 1988, and provided that cost considerations would be secondary to considerations of technical competence in the selection of an offeror. Technical aspects were to be evaluated on the basis of three factors: (1) personnel, and (2) management and understanding, which were equal in importance, and (3) corporate experience, which was least important. Although performance was scheduled to begin with six key personnel and build up to a maximum level of 18 individuals some time beyond the base contract year, offerors were required to provide resumes for all 18 key personnel positions and proposals were evaluated with respect to all 18 positions. In addition, the RFP stressed the importance of demonstrating the availability of proposed key personnel as it specifically required offerors to submit signed letters of intent from individuals proposed who were not presently
in their employ.

Seven initial proposals were submitted by the April 28 closing date.
ATI
and Omni were determined to be in the competitive range.
During the
technical evaluation, ATI received a score of 875 out of a maximum
possible 1,000 points; Omni's score was 800.
The primary technical
difference between the proposals was in the area of proposed personnel.
ATI's entire personnel team was found to be strong.
While Omni's basic
personnel team was found to be strong in several areas, the future
availability of its other key personnel was questioned.
ATI's proposed
costs were $3,823,019; Omni's were $4,058,163.
Following discussions,
offerors were requested to submit best and final offers (BAFOs) by August
26.

ATI made no changes to its technical proposal.
While Omni provided
further technical explanation as requested during discussions, a
reevaluation resulted in no scoring changes to either offeror's technical
proposal.
ATI reduced its proposed costs to $3,635,015 and these were
regarded as realistic by the agency; Omni reduced its proposed costs to
$3,313,882 but, due mainly to the Navy's concerns about Omni's large
reduction in its direct labor costs, the agency adjusted them upwards to a
figure of $3,899,715.47.
Award was made to ATI on October 18.

Omni questions the technical and cost evaluations on several grounds.
However, the primary basis of Omni's protest is that, by the time ATI
submitted its BAFO, 3 of the 18 individuals identified in its original
proposal, and for which the firm had received evaluation credit under the
heavily-weighted personnel factor, had left its employ.
Omni argues that,
in failing to apprise the agency of the employees' departures in its BAFO,
ATI failed to conform to the RFP requirement that letters of intent be
submitted by those proposed but not currently employed by the offeror and
knowingly misled the Navy as to the identity and availability of persons
it was proposing.

Both ATI and the agency concede that two of the individuals mentioned by
Omni had, in fact, left the awardee's permanent employ prior to the
submission of BAFOs.
With respect to the first individual - a highly-
rated technical librarian scheduled to be among the first six individuals
to commence performance-- both the agency and the awardee state that since
an admittedly less competent but nonetheless adequate substitute librarian
was finally provided from among the 18 individuals originally proposed by
ATI, the awardee's failure to amend its BAFO was immaterial.
With respect
to the second individual-- an analyst not scheduled among the six to begin
performance-- the awardee first reported that the individual had not, in
fact, left ATI's employ as alleged, but subsequently amended this position
to indicate that he had departed.
Both the awardee and the agency now
argue that this departure was immaterial because the individual was not
among the first group of employees scheduled to commence performance
during the base year.
/1/

Where an offeror knows prior to submission of BAFOs that proposed key
employees are no longer available, the appropriate course of action is to
withdraw the individuals and propose substitutes who will be available.
See Informatics General Corp., B-224182, Feb. 2, 1987, 87-1 CPD Para.
105.
To do otherwise is, in effect, to misrepresent the availability of
proposed personnel, a circumstance which impermissibly compromises the
validity of the technical evaluation, notwithstanding the fact that post-
award substitutions of key personnel may later be made and approved by the
agency pursuant to a clause in the awardee's contract.
Ultra Technology
Corp., B-230309.6, Jan. 18, 1989, 89-1 CPD Para. 42.
This is particularly
true where, as here, the factual accuracy of an offeror's submissions may
have had a material influence on the evaluation of the proposals.
Informatics, Inc., 57 Comp.Gen. 217 (1978), 78-1 CPD Para. 53.

Here, the record shows that two of the individuals proposed by ATI were
no longer available to perform after submission of its initial offer; yet
ATI's BAFO did not reflect this fact and actually contained continued
assurances that the personnel team it had originally proposed remained
intact.

It is not clear whether the selection decision would have been different
had ATI's BAFO accurately reflected the personnel available for this
contract.
ATI had a 75-point advantage in technical score, as well as a
cost advantage of approximately $264,000; it thus appears that ATI's
technical score would have had to be significantly reduced for the
selection decision to have been different.
On the other hand, technical
competence was weighted higher than cost, personnel was one of the two
most heavily weighted technical evaluation criterion, and it is clear from
the evaluation record that the evaluators thought highly of the two
individuals ATI proposed, particularly the librarian, who in fact were not
available for this contract.

Moreover, the evaluation was based on 18 proposed employees, not some
lesser number, and the evaluators specifically noted that ATI was strong
in the area of personnel availability since all 18 of ATI's proposed key
people actually worked for ATI; how the evaluators would have reacted to
whatever ATI would have proposed as replacements for the two individuals
originally proposed is, of course, not known, but it does seem apparent
that the evaluators would have been less impressed with substitute
personnel.
Furthermore, while the agency and ATI argue that the loss of
the proposed analyst was immaterial because he was not among those
scheduled to work under the contract during the base year, we simply point
out again that in the evaluation no distinction was made between employees
scheduled to begin work immediately and those who were to start later--
the evaluation of personnel took into account all 18 key people.
effect, ATI proposed only 16 key personnel when the RFP required offerors
to propose 18 such individuals, while the agency believed it was
evaluating 18 individuals who were in fact available for the contract.

We also find no merit to ATI's argument that it did all that was required
by the RFP because, when it submitted its initial proposal in April 1988,
"all eighteen proposed individuals were employees of ATI," and that
personnel substitutions could be made during contract performance under
the Key Personnel Requirements Clause.
Given the evaluation emphasis on
proposed personnel, we do not believe an offeror can rely on such a clause
as a substitute for the fact that some of its proposed key people will not
be available.

Accordingly, we conclude under the circumstances of this case that the
award to ATI was improper and we sustain the protest on this basis.
/2/
See Ultra Technology Corp., B-230309.6, supra.

Since base period performance is underway, we will not disturb the award
at this point.
However, in light of our concern about what happened here
and its effect on the integrity of the procurement system, we are
recommending that the options in ATI's contract not be exercised.
We also
find that the protester is entitled to recover its reasonable costs of
filing and pursuing this protest, including attorneys' fees.
Bid Protest
Regulations, 4 C.F.R. Sec. 21.6(d)(1) (1988).

The protest is sustained.

/1/ The explanation regarding the third individual of concern to Omni-- an analyst scheduled to commence performance upon award-- was that he was temporarily laid off after the submission of initial proposals with a verbal understanding that he would rejoin active employment upon contract award. The record indicates that his individual gave ATI a letter of intent after it had submitted its BAFO but before award; while this may indicate that ATI was not in technical compliance with the RFP requirement for a letter of intent, we do not believe that any prejudice resulted because ATI's proposal was evaluated on the basis of this individual's availability, the letter of intent was submitted before award and the individual is in fact performing as originally proposed.

/2/ We have reviewed the remainder of the agency's technical evaluation and its cost evaluation in the context of Omni's other protest allegations and find that they were conducted reasonably.