Matter of: Allied Signal Technical Services Corporation File: B-252993.2 Date: October 6, 1993
B-252993.2: Oct 6, 1993
This RFP was issued by the Navy on July 20. The award was to result in a cost-plus-fixed-fee contract for a 6-month base period with 4 option years. For which resumes were required to be submitted with the proposal. Were considered "key personnel.". The RFP includes a "Key Personnel Requirements" clause that requires the contractor to agree that it will make no personnel substitutions unless necessitated by an individual's sudden illness. Was determined to offer the greatest value to the government. The RFP advised that cost was not the most important evaluation factor. Was an important factor. The RFP stated that the degree of importance of cost would increase with the degree of equality of the proposals in relation to the technical factors upon which the selection was to be based.
Matter of: Allied Signal Technical Services Corporation File: B-252993.2 Date: October 6, 1993
PROCUREMENT Competitive Negotiation Offers Evaluation Downgrading Propriety Agency acted reasonably in not downgrading the awardee's proposal for excessive personnel turnover where the agency reasonably found that the awardee's proposal, as clarified in response to agency discussions on the matter, exhibited normal personnel turnover for the type of engineering services contract involved. REDACTED VERSION[*]
We deny the protest.
This RFP was issued by the Navy on July 20, 1992, to obtain technical and engineering services for the Air Traffic Control Division of the Naval Electronics Systems Engineering Activity in support of the Navy's air traffic control and landing system equipment. The RFP required the contractor to provide technical assistance, equipment improvement, integrated logistical support, test bed operation, repair and restoration, testing, and training services. The award was to result in a cost-plus-fixed-fee contract for a 6-month base period with 4 option years.
The RFP detailed standards for the personnel positions required under the contract, specifying minimum experience and education requirements for each position. Twenty-four of the required positions, for which resumes were required to be submitted with the proposal, were considered "key personnel." The RFP includes a "Key Personnel Requirements" clause that requires the contractor to agree that it will make no personnel substitutions unless necessitated by an individual's sudden illness, death, or termination of employment, and that the contracting officer must approve any substitutions.
Section L of the RFP required offerors to submit proposals in three separate volumes: volume I for general information, volume II for the technical proposal, and volume III for the cost proposal. In section M, the RFP listed technical approach, personnel, facilities, management approach, and corporate experience as technical evaluation factors. The RFP required cost proposals to be evaluated for realism, fairness, and reasonableness. The RFP provided for award to the responsible offeror whose proposal, conforming to the RFP, was determined to offer the greatest value to the government, cost and other factors considered. As between the cost and technical factors, the RFP advised that cost was not the most important evaluation factor, but was an important factor. The RFP stated that the degree of importance of cost would increase with the degree of equality of the proposals in relation to the technical factors upon which the selection was to be based, and further advised that cost could become the deciding factor for selection, depending upon whether a highly evaluated technical proposal warranted the evaluated cost differential.
On September 11, the Navy received proposals from Allied and Tracor. The technical proposals were evaluated by the Technical Source Selection Evaluation Board (TSSEB) on a 100-point scale. Tracor's technical proposal received a technical score of 64.78 and Allied's technical proposal a score of 62.07. The TSSEB considered the technical proposals to be technically unacceptable, but capable of becoming acceptable, for a variety of reasons; for example, both Tracor and Allied proposed key personnel who failed to meet the RFP's minimum qualifications.
The cost proposals were evaluated, but not scored, by the Cost Evaluation Board (CEB). Allied's proposed cost was $21,090,815, while Tracor's proposed cost was $18,614,384. The CEB evaluated the cost realism and reasonableness of offerors' prices with the assistance of the Defense Contract Audit Agency and technical personnel. While the CEB considered both offerors' costs to be generally reasonable, the CEB was concerned with the estimated turnover of key personnel apparently reflected in Tracor's cost proposal, finding that it approximated [deleted] percent for the 4-1/2-year contract term, and that only the program manager and the project manager were projected not to be replaced during the life of the contract. This not only caused cost concerns ("new personnel are hired at a lower labor rate and the escalation factor is lower") but technical concerns since the technical proposal did not reflect this high turnover rate.
On March 5, 1993, the Navy conducted written discussions with Allied and Tracor, where the various deficiencies were pointed out. In light of the personnel turnover reflected in Tracor's cost proposal, the Navy asked Tracor to explain, through revisions to its technical proposal, how it could maintain the level and quality of services proposed in its technical proposals with such an extensive rate of personnel turnover.
Tracor's revised proposal included a detailed response to the Navy's personnel turnover concerns. Tracor specifically assured the Navy that it would only provide technical and management personnel "who fully meet RFP requirements," and that it "will ensure all actions involving key personnel comply with" the Key Personnel Requirements clause. Tracor modified its cost proposal in this regard, explaining that its initial cost proposal was misleading in that its structure magnified the estimated personnel turnover. Tracor also explained that:
"[t]urnover in professional labor categories, while somewhat higher than the turnover under our existing [air traffic control services] contract, was well within Tracor's overall turnover rate for exempt positions, which was approximately [deleted] percent during the past 5 years."
Finally, "in response to the [g]overnment's concerns," Tracor identified six key personnel positions for which Tracor "anticipated" "replacement" during the contract term; Tracor then predicted, for inclusion in the cost proposal, which personnel would be replaced and when.
The Navy considered Tracor's response to be acceptable and did not downgrade Tracor's proposals for turnover. The Navy's final technical evaluation resulted in scores of 75.60 for Allied and 78.64 for Tracor. The cost evaluation results were as follows:
Offeror Proposed Cost Evaluated Cost
Allied $20,721,901 $20,710,798 Tracor $18,280,140 $18,243,504
On March 31, the Navy awarded Tracor the contract since it had the higher technical score and lower cost. On April 8, Allied filed this protest, arguing that the Navy improperly evaluated Tracor's technical proposal.
The crux of Allied's protest is that the Navy improperly failed to downgrade Tracor's technical proposal for the anticipated high turnover in professional personnel. Allied contends that the personnel turnover proposed in Tracor's final proposal required the Navy evaluators to assign below average scores to Tracor's technical proposal under the personnel evaluation factor because of the alleged high turnover and since Tracor did not provide resumes for the replacement personnel for the key personnel positions where turnover was proposed. Allied also argues that Tracor's proposal should be downgraded under the management approach evaluation factor because the overall turnover in key and non-key professional positions will adversely affect the quality of Tracor's management approach. Allied argues that if the Navy had properly lowered Tracor's technical score, Allied would have had a reasonable possibility of receiving the award.
The evaluation of technical proposals is primarily the responsibility of the contracting agency since it is responsible for defining its needs and the best method of accommodating them and must bear the consequences of a defective evaluation. Therefore, we will not engage in an independent evaluation of technical proposals but will examine the agency's evaluation to ensure that it was reasonable and consistent with the stated evaluation criteria. Comarco, Inc., B-249697.2, Jan. 26, 1993, 93-1 CPD Para. 65. The fact that a protester does not agree with an agency's evaluation does not render the evaluation unreasonable. GRD, Inc., B-251926, May 14, 1993, 93-1 CPD Para. 383.
From our review of the record, including the testimony of the TSSEB Chairman who also was a member of the CEB, we find that the Navy's evaluation of Tracor's estimated turnover in personnel was reasonable because it reasonably determined that Tracor's personnel turnover (both key and non-key) was normal for this type of contract. See Tr. at 19 through 20, 25 through 26, 28, 33 through 36, 73, 78, 111, and 118 through 120. While it is true that the Navy maintains that it could not consider personnel turnover in the technical evaluation, Tr. at 35 through 36, 48, 59 through 61, 78 through 80, 90 through 92, 115, and 126 through 127, the Navy in fact determined that Tracor's projected turnover no longer represented a technical concern after reevaluating Tracor's technical proposal, as clarified by its response to the discussion question on this point. The Chairman testified that the Navy did not consider Tracor's turnover in key personnel to warrant technical concern because Tracor's proposed turnover was not extraordinary and the minimal turnover in key proposal that was ultimately factored into Tracor's cost proposal could be governed by the RFP's Key Personnel Requirements clause. Tr. at 28 and 36. The Chairman also testified that Tracor's final estimate of personnel turnover was acceptable because the Navy considered it to be:
"an anticipated predicted number that was just being used [by Tracor] to figure cost and because it was reasonable for the type of work over the period of the contract . . . [and Tracor] could experience something of this nature and that the provisions in the contract for personnel substitution [would govern the substitution of personnel]." Tr. at 25 through 26; see Tr. 35 through 36.
The Chairman noted that Tracor's personnel turnover was consistent with the Navy's experience on such contracts, Tr. at 36, and that Tracor's estimate of turnover in key personnel was not significantly greater than Allied's-Tracor's cost proposal anticipated turnover in six key personnel positions to occur at various intervals during the course of the contract, while Allied's cost proposal anticipated turnover in four key personnel in the first contract year. Tr. at 26 through 28.
Based on our review of the record, we think the agency acted reasonably in not downgrading Tracor's proposal for turnover based on the Navy's conclusion that Tracor's turnover, as explained in its response to the Navy's discussion question, was not excessive. In this regard, Tracor explained that the cost proposal was misleading on this matter and that Tracor's technical proposal states that Tracor's Air Traffic Control Division has an annual turnover rate of less than [deleted] percent.
Allied protests that the evaluation of the personnel evaluation factor was unreasonable because Tracor did not submit, and the Navy therefore did not evaluate, the resumes and qualifications of Tracor's replacement key personnel. Allied misconstrues Tracor's proposal. Tracor did not propose that it would substitute specific personnel during the course of the contract, but only identified specific positions that were "anticipated" to be replaced for cost evaluation purposes to assuage the Navy's concerns about Tracor's turnover. See Tr. at 34, 102 through 104, 119 through 120. Tracor's approach to the turnover issue is not significantly different from Allied's response, except that Allied did not identify which specific positions were anticipated to be replaced, but only estimated that four positions would be replaced in the first year. The Navy was not required to obtain and evaluate resumes for the hypothetical individuals who may replace the personnel who it was "anticipated" would be replaced; such substitutions will be handled under the appropriate contract clause.
In sum, the record shows that the Navy undertook a reasonable approach with respect to evidence of an apparently high turnover in Tracor's initial cost proposal. Discussions with Tracor reasonably allayed the Navy's concerns, and Tracor's revised proposal reflected an acceptable personnel turnover. We conclude that the Navy reasonably evaluated Tracor's proposal.
The protest is denied.
* The decision issued on October 6, 1993, contained proprietary information and was subject to a General Accounting Office protective order. This version of the decision has been redacted. Deletions in text are indicated by "[deleted]."
1. There is provision under the clause for expanding the key personnel position, whereby a contractor could promote an individual within the organization to a key personnel position and the replaced individual would also remain within the contract organization, if it can be demonstrated that this would enhance contract performance.
2. The personnel factor was to evaluate the qualifications of "key personnel."
3. The stated subfactors of management approach are:
"(1) The extent to which the offeror's management approach demonstrates ability to fully perform within 30 days after contract award, respond to work load fluctuations in a timely manner and ensure successful completion of [statement of work] requirements.
"(2) Appropriateness and projected effectiveness of the quality assurance procedures for monitoring and evaluating qualitative and quantitative aspects of contract performance."
4. The technical approach and personnel factors combined were weighted one and one-half times the combined weight of the remaining factors. The technical approach factor was equal to the personnel factor, which was two times more important than the facilities and management approach factors. The facilities and management approach factors were equal and each was four times more important than the corporate experience factor.
5. Allied is the incumbent contractor; Tracor's Air Traffic Control Division has performed similar support services contracts.
6. Allied has argued that this statement confirmed that Tracor's historical turnover rate was over [deleted] percent for a 5-year contract period ([deleted] percent times 5 years). We think the plain meaning of this statement is that Tracor's historical turnover rate on a prior contract for similar services was [deleted] percent for 5 years, not "per year" for 5 years, notwithstanding that Allied obtained testimony on cross-examination from the Chairman of the TSSEB that this statement meant [deleted] percent per year. Hearing Transcript (Tr.) at 100. (The Chairman also testified that he did not remember how he interpreted this statement at the time revised proposals were evaluated. Id.) We also note that this interpretation is consistent with the statement in Tracor's technical proposal that Tracor's Air Traffic Control Division has had an "annual" turnover rate of less than [deleted] percent.
7. On May 5, the Navy determined to continue performance notwithstanding the protest.
8. Allied initially protested other areas of the Navy's evaluation of Tracor's proposal; however, after receiving the agency's report, it specifically limited its protest to the issues discussed herein.
9. In his report on the evaluation of the discussion responses, the Chairman stated:
"Tracor addressed the question of personnel turnover by indicating by option year which personnel would be replaced, promoted or assumed in attrition rates. Their arguments are acceptable and are reflected in the revised cost proposal. Since the turnover in engineering [non-key] personnel is due to promotion out of the organization, a significant negative impact in technical performance is not likely."
10. The Navy could have considered excessive turnover, even though only disclosed in the cost proposal, under the management approach factor if the turnover rate was considered detrimental to successful completion of the contract or the quality of contract performance, and under the personnel factor if an offeror had not committed to supply key personnel for the entire contract term, subject to the conditions in the contract. See Akal Sec., Inc., B-243940.2, Sept. 30, 1991, 91-2 CPD Para. 308 (agency may consider personnel turnover in the technical evaluation under relevant evaluation factors, even though turnover is not specifically identified as a specific area of concern; however, if personnel turnover is not disclosed as an evaluation element, the agency should conduct meaningful discussions on the matter if it considers personnel turnover to be a deficiency). In this regard, an agency may take into account specific, albeit not expressly identified, matters that are logically encompassed by or related to the stated evaluation criteria. AWD Techs., Inc., B-250081.2; B-250081.3, Feb. 1, 1993, 93-1 CPD Para. 83.
11. For example, that clause provides that the qualifications of the proposed additional personnel shall be at least equal to those personnel whose resumes were evaluated during the source selection process.
12. As noted above, notwithstanding Allied's arguments, this less than [deleted] percent rate is consistent with Tracor's response to a discussion question that on its prior air traffic control services contract, it experienced a [deleted] percent turnover rate for 5 years. See footnote 7, infra.
13. Contrary to Allied's suggestion, Tracor's revised proposal did not propose to provide personnel that it had no intention of supplying for the entire contract term, but only "estimated" what turnover was anticipated for purposes of making a realistic cost projection. Indeed, Tracor stated in this same response:
"Tracor will provide the [g]overnment with highly qualified, fully trained technical and management personnel who fully meet all RFP requirements. Additionally, Tracor will ensure that all actions involving key personnel comply with the Key Personnel Requirements clause of the RFP."
Allied makes much of the statement in Tracor's revised proposal, explaining the apparently high turnover rate exhibited in Tracor's originally submitted cost proposal, that among the projected personnel changes were "anticipated internal promotions and transfers." As noted by Tracor, it would violate the Key Personnel Requirements clause to promote or transfer an individual identified as a key personnel off this contract work. However, it is clear that the referenced statement was made with reference to all Tracor personnel, not just key personnel, and there are no restrictions on transferring personnel that were not key personnel, so long as the contract requirements are otherwise met.