Matter of: Johnson Controls World Services, Inc. File: B-249643.2 Date: January 28, 1993 72 Comp.Gen. 91

B-249643.2: Jan 28, 1993

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Procurement Competitive Negotiation Offers Evaluation Personnel Adequacy Protest that agency improperly determined that staffing proposed by protester was inadequate is denied where protester. After being informed during discussions that the agency was concerned with its staffing. Failed to convince the agency that it could perform the requirements of the solicitation and where the record shows that the agency's conclusions are reasonable. Procurement Competitive Negotiation Offers Evaluation Cost realism Analysis Protest that agency improperly used only an independent government cost estimate in performing price analysis is denied where the Federal Acquisition Regulation provides the agency with the discretion to do so.

Matter of: Johnson Controls World Services, Inc. File: B-249643.2 Date: January 28, 1993 72 Comp.Gen. 91

Procurement Competitive Negotiation Offers Evaluation Personnel Adequacy Protest that agency improperly determined that staffing proposed by protester was inadequate is denied where protester, after being informed during discussions that the agency was concerned with its staffing, failed to convince the agency that it could perform the requirements of the solicitation and where the record shows that the agency's conclusions are reasonable. Procurement Competitive Negotiation Offers Evaluation Cost realism Analysis Protest that agency improperly used only an independent government cost estimate in performing price analysis is denied where the Federal Acquisition Regulation provides the agency with the discretion to do so. Procurement Competitive Negotiation Offers Evaluation Cost estimates Protest that agency staffing estimate is erroneous is denied where the agency had a reasonable basis for its estimate and where, in any case, even if the estimate was inaccurate, the protester was not harmed because the agency did not evaluate the protester's proposed staffing against the estimate on a pass/fail basis. Procurement Competitive Negotiation Contract awards Source selection boards Bias allegation Allegation substantiation Protest that in evaluating proposals agency failed to follow source selection plan is denied since failure to follow the source selection plan, which is an internal agency instruction, does not provide a basis on which to question an evaluation.

Attorneys

Johnson Controls World Services, Inc. protests the elimination from the competitive range of the proposal it submitted in response to request for proposals (RFP) No. N62474-91-R-2375C, issued by the Department of the Navy for base operating services at the Naval Air Weapons Station, China Lake, California.

We deny the protest.

The RFP, issued on November 5, 1991, contemplated the award of a firm, fixed-price contract, with some requirements to be priced on a lump-sum basis and some to be priced on an indefinite-quantity basis. There was also a provision for an award fee. The required services were grouped into 16 annexes, which were numbered 1 through 18 (annexes 10 and 11 were reserved). Each annex covered a different type of service and had its own performance work statement that detailed its requirements. The RFP required that offerors submit both technical and price proposals and listed the following technical factors against which proposals would be evaluated:

1. Experience 2. Staffing 3. Organization and management plan 4. Method of operation

Each factor was followed by numerous subfactors. The RFP also stated that proposals would be subject to a price realism analysis and provided that unrealistic prices could result in downgrading of the technical score. In reaching the award decision, price and technical factors were to be considered approximately equal in weight

Six offerors responded to the solicitation by February 3, 1992, the due date set for the receipt of initial proposals. The six proposals were evaluated by a technical evaluation team (TET) and a price evaluation team (PET). As a result of the evaluation, all six proposals were placed in the competitive range. Subsequently, the Navy held written discussions with all six offerors. The discussions held with Johnson were primarily related to the evaluators' major concerns with the protester's initial proposal. These concerns were that Johnson, which is the incumbent base operating services contractor, had underestimated the staff required to perform the work for a number of the annexes, had a questionable labor mix and failed to clearly explain its method of operation. Following discussions, the agency concluded that Johnson's proposal should be downgraded to unacceptable and removed from the competitive range. This conclusion was based primarily on the agency's view that Johnson's staffing levels were unrealistic in the six most labor intensive annexes.

Johnson protests this decision, questioning both the Navy's conclusion that it proposed insufficient staffing and the Navy's estimate of appropriate staffing levels. Johnson also argues that the agency failed to follow the source selection plan in evaluating the proposals.

Evaluation Of Staffing

Johnson argues that the Navy improperly found that its staffing was inadequate. The protester states that its proposed staffing is based on the scope of work set forth in the RFP and its extensive experience performing similar tasks as the incumbent for the base services. Johnson reasons that since it is satisfactorily performing the services in the current contract, "the Navy has no basis on which to question its staffing rationale.

The evaluation of proposals and the resulting determination of whether an offer is in the competitive range are matters within the discretion of the contracting agency, since it is responsible for determining its needs and for deciding on the best methods of accommodating them. In reviewing an evaluation and competitive range determination, we will not reevaluate a technical proposal but we will examine the agency's evaluation to ensure that it was reasonable. The record must show that an evaluation was unreasonable and this is not accomplished through the protester's mere disagreement with the agency's judgment. Allied Mgmt. of Texas, Inc., B-232736.2, May 22, 1989, 89-1 CPD Para. 485.

Based upon our review of the protest record, including the Navy's evaluation of Johnson's proposed staffing as well as Johnson's protest arguments, we conclude, as discussed in detail below, that the Navy had a reasonable basis on which to determine that Johnson's proposed staffing was not adequate to meet the requirements of the RFP for the annexes in question.

During the evaluation of the initial technical proposals, the agency evaluators concluded that the firm's proposed staffing was inadequate to perform the RFP requirements for annexes 1, 2, 4, 16, and 18. Following the initial evaluation, the Navy sent Johnson a list of discussion questions which, among other things, expressed concern that Johnson's proposal was understaffed for these annexes and requested that Johnson respond to that concern. After reviewing Johnson's responses to discussion questions, the agency was not convinced that Johnson's staffing was sufficient. A summary of the agency's specific concerns and Johnson's responses concerning each annex follows.

Annex 1 Grounds Maintenance

The Navy estimated that 14 staff-years of effort were required for annex 1. Johnson proposed to use 11.07 staff-years. During discussions, the Navy asked Johnson to provide detailed information to support how it estimated and arrived at its proposed level-of-effort to meet the RFP requirements. In response, Johnson affirmed its proposed staffing of 11.07 staff-years and provided a chart which broke out its staffing for the various grounds maintenance functions. In reviewing Johnson's response, the Navy was not satisfied that the firm could perform all the work required with its proposed staffing. The Navy was especially concerned that Johnson proposed only 8 staff-years of effort for ground work. The agency noted that for the past 6 months, Johnson had staffing levels 4 staff-years greater than it was currently proposing and that the requirements of the RFP were substantially the same.

Johnson asserts that the current solicitation reduces the scope of work by allowing longer intervals between grass cutting, weed pulling, and alley cleaning than were permitted under Johnson's current contract. For this reason, Johnson states that its proposed staffing was adequate.

Annex 2 Custodial Services

Johnson proposed 51.27 staff-years of effort. In its discussion questions, the Navy informed Johnson that it was concerned with the firm's proposed staffing levels. The agency also questioned the method Johnson used to arrive at those staffing levels. Specifically, the Navy requested that Johnson check its assumption as to the number of square feet to be cleaned with the RFP floor plan and to compare the Navy's routine cleaning task frequency chart with the list of tasks on which Johnson based its estimate of improved efficiency. The Navy also asked Johnson to provide detailed supporting data to show how it would accomplish all of the tasks for each cleaning level with the number of personnel proposed.

Johnson responded that it compared the appropriate appendixes in the RFP to its current contract requirements. The firm also stated that its proposed staffing was based upon actual expended staff-years of effort under its current contract, adjusted to conform to any significant task changes contained in the solicitation. Johnson also provided the number of square feet per hour for each level of service that it believed one janitor could accomplish and asserted that it considered its proposed staffing adequate to perform the requirements. The evaluators were not satisfied with Johnson's response. They noted that Johnson was proposing to clean more square footage per hour than it cleaned under its current contract even though the RFP increased the frequency of the required tasks and concluded that Johnson's estimate of the number of square feet it could service per hour was unrealistic.

Johnson argues that the Navy's concern is based on a lack of knowledge of the protester's work plan because, while Johnson proposed 51.27 staff years, it currently employs 70 individuals, most of whom are part-time. Johnson asserts that any Navy estimate that the services require more than 51.27 staff-years is based upon a count of Johnson's current staff of 70 without regard to the fact that many of these employees are part- time. In addition, Johnson asserts that its proposed cleaning rates are close to what has been historically achieved and that its proposed staffing is higher than ,its actual current staffing due to the increased RFP requirements.

Annex 4 Housing Maintenance

Following the evaluation of initial proposals, the Navy requested the firm to explain its rationale and justification for proposing general maintenance workers in lieu of skilled workers to accomplish certain tasks. Johnson explained that its general maintenance workers possessed the necessary craft skills to meet the requirements of the RFP. In reviewing Johnson's response, the Navy was concerned that the protester did not demonstrate how it could provide workers with the needed skills at the lower general worker wages during a strong economy.

Johnson asserts that in the local area the wages of a general maintenance worker are higher than that of a journeyman.

Annex 16 Supply Operations

The Navy requested during discussions that Johnson provide a complete rationale with supporting data on how it arrived at its relatively low staffing estimate. Johnson responded that its proposed staffing was based upon a thorough review of the current scope of work, including work load changes which had both decreased in certain functional areas and had increased slightly in other areas from that required under its incumbent contract, coupled with the historical staffing used to provide the Navy with like quality service over the past 2 1/2 years. Based on the government's historical data and Johnson's current staffing levels the Navy was not convinced that Johnson would be able to meet the requirements.

Johnson argues that the Navy's conclusion is unreasonable because that conclusion does not take into account that the work load estimates in certain functional area have been reduced and two warehouses have been closed.

Annex 18 Transportation

In discussions, the agency pointed out that Johnson had not included any staff-hours or cost for vehicle inspectors, and proposed insufficient personnel to meet the check-out/check-in inspection requirements. In response, Johnson revised its staffing to include 1 staff-year for an inspector and 2 staff-years for lead mechanics for inspection services. Johnson also acknowledged the agency's concern with check-out/check-in inspections but explained that its dispatcher assisted by its on-duty general laborer would perform the required check-out/check-in inspections. Johnson further asserted that while the dispatcher was absent form his desk to perform these inspections his dispatcher duties would be performed by a planner scheduler or taxi drivers not on call. While the Navy evaluators did accept some of the protester's rationale in support of its staffing plan they were still concerned that the overall staffing level proposed for these tasks was very close to the minimum. Specifically, the evaluators thought that Johnson's plan to use existing staff to perform the inspection and dispatching tasks could create shortages in other areas.

Johnson asserts that the agency's conclusions are based on its erroneous belief that a prudent manager should not transfer personnel to different functions to match the peaks and valleys of the work effort.

We have no basis to conclude that the Navy's judgment concerning Johnson's proposed stating was unreasonable. As shown above, in responding to the Navy's discussion questions, Johnson did not explain in any detail the rationale behind its proposed staffing despite specific requests to do so. Rather, for annexes 1, 2, 4, and 16, Johnson simply reviewed its proposal and, in essence, stated that it believed its staffing was adequate. For annex 18, Johnson defended its use of one person to perform multiple tasks.

It was reasonable, based on these responses, for the Navy to affirm its initial conclusion that Johnson's proposed staffing was inadequate. Further, Johnson has not in its protest submissions demonstrated that the agency's conclusions are erroneous. Johnson, in essence, states that its proposed staffing should be considered adequate because it has performed satisfactorily as the incumbent. However, the offeror's proposal must show that the firm understands the scope-of the work set forth in the RFP and that it has a staffing plan that is adequate to perform the required services. Thus, while Johnson's prior performance may have some bearing on its evaluation under the current solicitation, that experience alone is insufficient to demonstrate that its current proposed staffing is adequate to perform the work required by this solicitation where the proposal fails to justify the seemingly low staff levels offered. See Allied Mgmt. of Texas, Inc., supra.

Nor are we convinced by Johnson's specific arguments concerning the individual annexes. For example, Johnson states that it reduced its staffing for annex I to match the reduced RFP requirements. While the agency acknowledges that, the grass need not be mowed as often as was the case under the incumbent contract and that weeds can be allowed to grow higher before being pulled; in its' view this was not a basis on which to reduce staffing because it will now be more difficult and time-consuming to mow and weed. Similarly, Johnson's argument that for annex 2 its proposed cleaning rate of 1.06 square feet per second; is supportable because it is close to what the firm has already achieved does not contradict the agency's conclusion that the protester's proposed rates are unobtainable. Although a proposed efficiency rate may be fairly close to what has already been achieved, it does not follow that the proposed rate can be easily met or that it should be accepted by the agency without a thorough explanation as to how it will be accomplished. Accordingly, we have no basis to conclude that the agency's judgments were in error or that the agency determination eliminating Johnson's proposal from the competitive range was unreasonable.

Cost Estimate

Johnson next asserts that the agency improperly relied on the independent government cost estimate to conclude that Johnson's proposal was unacceptable. Specifically Johnson states that Federal Acquisition Regulation (FAR) Sec. 15.805-2 lists a number of factors that the agency must consider in performing a price analysis to ensure that an offeror's price is fair and reasonable and that the independent government cost estimate is only one of those factors. Johnson argues that the Navy's failure to consider the other factors listed in the regulation, most particularly the incumbent's experience, renders the agency's evaluation improper.

The regulation requires the agency to perform a price analysis to ensure that whatever price it receives is fair and reasonable. FAR Sec. 15.805 2. The provision lists a number of techniques which can be used in performing the price analysis, including a comparison of proposed prices with the government estimate, a comparison of proposed prices received in response to the solicitation and comparison of prior proposed prices and contract prices with current proposed prices for the same or similar services. There is no requirement that the contracting officer use all, or any particular one, of the techniques listed. See Dutra/AmClyde Joint Venture, B-249364.2, Dec. 30, 1992, 92-2 CPD Para. 453; NSE Corp., B-247610.2, Aug. 6, 1992, 92-2 CPD Para. 81.

Rather, the regulation specifically directs the contracting officer to use whichever technique will ensure a fair and reasonable price and states that one or more of the listed techniques may be used. Accordingly, we do not agree that the agency could not rely on the government's estimate alone in performing its price analysis.

Johnson argues that even if it is proper to rely only on the government estimate in the analysis, in this case the agency's cost estimates were inaccurate and thus should not have been used as a basis on which to find that Johnson's proposed staffing was inadequate. The protester points out that while the Navy states that, in part, it based its staffing estimate on Johnson's current performance, the only hard data the agency has concerning Johnson's performance relates to portions of annex 2. The protester asserts that the estimates for the remainder of the annexes were derived by the contracting officer's technical representative (COTR), without the use of any accurate data; Johnson further asserts that if the Navy based its estimates on its observations of Johnson's performance, this would not yield usable data because the Navy would not know if it was observing part-time or temporary personnel performing work rather than the regular staff. Finally, Johnson states that in developing its estimates, the Navy did not consider changes in the current solicitation's statement of work.

The Navy responds that it does have current data from Johnson on which it based its estimates. It asserts that this information includes cost and pricing data which Johnson supplied to support its contract modification proposals, daily fuel delivery reports, labor formulas used under the incumbent contract, and direct observation of Johnson's performance. The agency states that the estimates for the different annexes were formulated by its quality assurance experts and COTRs who are thoroughly familiar with the work to be performed in each annex. Finally, the agency states that it did consider the changes in the scope of work.

In our view, the Navy had a reasonable basis on which it calculated its staffing estimates. It did have some data from Johnson's current contract and the record shows clearly that the agency did consider the changes in the scope of work between that contract and the RFP. In addition, we disagree with Johnson that direct observation cannot provide useful information upon which to ascertain the staff required to perform a task. Even if the Navy was observing part-time or temporary personnel, the fact is that Johnson needed those individuals to perform the work and their use must be reflected in some manner in a proposed staffing plan. Similarly, if, as the protester suggests, it may transfer workers from other functions to take care of work surges, that too should be reflected in an offeror's staffing plan and evaluated as a rationale supporting the numbers proposed in that plan. We also disagree that the agency could not use its own experts, who are familiar with the services required, to formulate an estimate of required work hours. See Range Technical Servs., 68 Comp.Gen. 81 (1988), 88-2 CPD Para. 474.

More important, however, we fail to see how Johnson was harmed even if the agency's staffing estimate was not accurate. This is not a situation in which the agency compared Johnson's proposed staffing to the government's estimates and then rejected the proposal merely because the estimates did not match up. Rather, after reviewing Johnson's proposal, the agency provided the firm with the opportunity to explain its proposed staffing. Johnson's proposal was ultimately rejected not because it did not match up to the government staffing estimates but because the agency was not satisfied that Johnson could perform the work with the staffing it proposed. In other words, if Johnson's responses to discussion questions concerning staffing had explained to the agency's satisfaction that a smaller staff could perform the work, the agency would have accepted Johnson's proposal despite the deviations from the government estimates. As stated above, we find that the Navy was reasonable in viewing Johnson's responses as it did.

Evaluation Plan

Johnson complains that in evaluating its proposal, the Navy deviated from the source selection plan in two ways. First, the protester argues that under the source selection plan, proposals were to be rated with a raw technical score of 1.00, .75, .50, .25, or .00 depending upon whether the proposal was considered excellent, good, satisfactory, poor, or unacceptable. During the initial evaluation, the Navy followed this system. Johnson points out that in evaluating the revised proposals, the Navy deviated from this system and used interim scores, such as .40, to rate the proposals. Johnson argues that this deviation from the source selection plan was improper. The protester argues that the agency also deviated from the source selection plan because under the plan staffing was supposed to be considered under the technical evaluation criteria but the PET evaluated it as well in performing its price realism analysis of Johnson's proposal.

Alleged deficiencies in the application of an agency evaluation plan or source selection plan do not alone provide a basis for questioning the validity of an award selection. These plans are internal agency instructions and as such do not give outside parties any rights. The agency is required to follow the evaluation scheme set forth in the RFP for the information of potential offerors and to conduct its evaluation in a manner that will reach a rational result. Mandex, Inc.: Tero Tek Int'l, Inc. B-241759 et al., Mar. 5. 1991, 91-1 CPD Para. 244. Here, Johnson does not allege and our review of the evaluation does not show that the Navy failed to follow the evaluation factors set forth in the solicitation.

The protest is denied.