HP Enterprise Services, LLC

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.

Decision

Matter of: HP Enterprise Services, LLC

File: B-410212.2

Date: January 26, 2015

DIGEST

1. Protest that agency failed to properly consider awardee’s intent to hire the “vast majority” of protester’s incumbent personnel and “slash” their compensation is denied where awardee’s proposal contemplated hiring incumbent employees as only one element of its multi‑faceted staffing strategy.

2. Protester’s assertions that the agency improperly assigned strengths to the awardee’s proposal and/or failed to properly assign strengths to the protester’s proposal reflect disagreement with the agency’s judgments which, by itself, provides no basis for sustaining the protest.

HP Enterprise Services, LLC (HPES), of Herndon, Virginia, protests the Defense Information Systems Agency’s (DISA) award of a task order to Booz Allen Hamilton (BAH), of McLean, Virginia, pursuant to request for proposals (RFP) No. E200540.00 for performance of assessment and certification activities to support DISA in countering cyber security threats.[1] HPES protests that the agency’s evaluation was flawed in that it failed to reasonably consider BAH’s alleged intent to hire the “vast majority” of HPES’s incumbent personnel, and reflected improperly-assigned strengths in BAH’s proposal and/or improperly-omitted strengths in HPES’s proposal.

We deny the protest.

BACKGROUND

On February 7, 2014, DISA published the solicitation at issue, seeking proposals from holders of ENCORE II contracts[2] to provide technical support services for DISA and other DII users[3] in obtaining and maintaining accreditation of IT systems.[4] PWS at 1-2. The solicitation contemplated the award of a fixed-price task order for a 1‑year base period, four 1-year option periods, and one 6-month option period.[5] The solicitation provided that award would be made on a best value basis considering the following evaluation factors: security,[6] technical/management approach,[7] and price.[8] AR, Tab 2, RFP, at 3-5.

On March 13, four offerors, including HPES and BAH, submitted their initial proposals.[9] Thereafter, the agency conducted three rounds of discussions, sending various evaluation notices (ENs) to each offeror.[10] On July 9, HPES and BAH submitted their final proposal revisions (FPRs). MOL/COS at 12‑13. On July 31, the agency selected BAH for award. On August 11, HPES filed a protest with our Office challenging that award. On August 26, the agency stated that it intended to take corrective action by reevaluating the proposals. On September 2, we dismissed HPES’s August 11 protest as academic, pending the agency’s reevaluation.

Thereafter, the agency reviewed all of the evaluation notices and the offerors’ responses thereto, and reevaluated the FPRs. Id. In its reevaluation, the agency considered whether the technical/management portion of each offeror’s proposal reflected strengths,[11] weaknesses, or deficiencies, and assigned adjectival ratings of outstanding, good, acceptable, marginal, or unacceptable under each of the four technical/management approach subfactors.[12] Id. at 14-16. In evaluating BAH’s proposal, the agency identified five strengths and no weaknesses or deficiencies. AR, Tab 16, SRD, at 19-41. In evaluating HPES’s proposal, the agency identified one strength and no weaknesses or deficiencies. Id. Following the evaluation, proposals were rated as follows:[13]

	HPES	BAH
Technical/Management Subfactor 1 (Command Cyber Readiness Inspections)	Acceptable	Outstanding
Technical/Management Sufactor 2 (Certification Assessment Support)	Acceptable	Acceptable
Technical Management Subfactor 3 (Focused Information Assurance Support)	Acceptable	Acceptable
Technical Management Subfactor 4 (Management Approach)	Good	Outstanding
Evaluated Price	$128,086,941	$99,638,573

MOL/COS at 13, 16; AR, Tab 16, SRD, at 2; AR, Tab 17, Price Evaluation Report, at 1.

In evaluating the offerors’ proposed prices, the agency reviewed each offeror’s proposal “to determine if the technical proposal addressed all areas of the PWS and indicated a clear understanding of the requirements.” AR, Tab 17, Price Evaluation Report, at 1, 2. The agency also performed various calculations regarding each offeror’s proposed pricing, including calculations of the overall discounts from their ENCORE II prices. HPES’s price proposal reflected an average discount of [redacted] percent from its ENCORE II labor rates; BAH’s proposal reflected an average discount of [redacted] percent from its ENCORE II rates. Id.

With regard to BAH’s price proposal, the agency stated:

As stated in the Price narrative of the Booz Allen Hamilton proposal, they performed a market salary analysis against the capability areas to ensure their ability to apply the right mix of functional skills to any IA [information assurance] Review. Booz Allen Hamilton conducted market salary analysis to provide an efficient and cost realistic price to the government, while still ensuring their ability to provide high quality staff with the functional expertise and diversity needed to execute the [DISA] FSO [Field Security Operations] mission. The amount of discount offered clearly illustrates the overall economic climate and the competitive environment that exists among companies to obtain Government contract awards. Therefore, the offeror’s total evaluated price was determined to be realistic.

Id. at 2.

In summarizing its price evaluation of both proposals, the agency stated:

The IGCE’s [independent government cost estimate] average labor rate is [redacted].[[14]] BAH’s average labor rate is [redacted] and HP[ES]’s average labor rate is [redacted]. In both BAH’s and HP[ES]’s proposal more than [redacted] of the hours are attributed to a [redacted] of some level (Associate, Intermediate, or Lead). For these most common labor categories, HP[ES]’s undiscounted ENCORE II rates are considerably higher [redacted] than BAH’s undiscounted ENCORE II rates. The large differences in the [redacted] labor categories are the cause of the difference in the offerors’ overall average labor rate.

*   *   *   *   *

Based on our analysis, all offerors’ labor rates are found to be realistic as all offerors demonstrated an understanding of the labor categories against the PWS. Each labor category was discounted from the ENCORE II price schedule, and those ENCORE II rates have previously been determined to be fair and reasonable. As the two overall discount rates are very close, [redacted] for BAH, and [redacted] for HP[ES], we consider the discount percentages and resulting proposed labor rates to be reasonable and realistic for all offerors.

Id. at 2-3.

On October 7, based on the determination that BAH’s proposal was superior with regard to technical/management approach and offered a lower evaluated price, the agency selected BAH for award. In documenting that selection decision, the contracting officer stated:

HP Enterprise Services was rated . . . Acceptable for three Technical subfactors (1, 2, & 3) and rated . . . Good for one Technical/Management subfactor (4), with one strength under subfactor 4. HP[ES] had an evaluated price of $128,086,942. Booz Allen Hamilton (BAH) was rated . . . Acceptable for two Technical subfactors (2 & 3) and rated . . . Outstanding for two Technical/ Management subfactors (1 & 4) with a total of five strengths, two strengths for subfactor 1 and three strengths for subfactor 4. BAH was the lowest price offeror with an evaluated price of $99,638,574. BAH is the evaluation team’s recommendation for award and I concur with their recommendation.

AR, Tab 22, Price Negotiation Memorandum, at 8.

Thereafter, HPES was notified of the source selection decision. This protest followed.[15]

DISCUSSION

HPES protests that the agency’s evaluation was flawed in that it failed to reflect BAH’s allegedly heavy reliance on hiring incumbent personnel, and reflected improperly-assigned strengths in the evaluation of BAH’s proposal and/or a failure to recognize strengths in HPES’s proposal. As discussed below, none of HPES’s allegations provide a basis for sustaining its protest.[16]

BAH’s Staffing Plan

HPES first references its status as the “highly successful” incumbent contractor and asserts that BAH’s staffing plan is to “rebadg[e] the vast majority of HPES’s incumbent contract employees and . . . slash labor rates for those employees.” Protest at 13, 29. Based on this premise, HPES asserts that BAH’s proposal did not include “a reasonable plan to recruit[] quality staff,” and maintains that the agency should have downgraded BAH’s proposal under either the technical/management evaluation factor[17] or the price factor.[18] Id. at 28-29.

The agency responds that HPES’s assertions are based on a false premise--that is, that BAH’s proposal reflected an intent to hire “the vast majority” of HPES’s incumbent personnel. MOL/COS at 51-53; see Protest at 29. To the contrary, the agency states that BAH’s proposed staffing plan did not primarily rely on hiring incumbent personnel but, rather, reflected multiple staffing approaches. AR, Supp. MOL/COS, at 10-11. Specifically, the agency refers to section 2.1 of BAH’s FPR where, under the heading “Innovative Staffing Approach,” BAH provided details regarding its proposed staffing approach, among other things referencing multiple team members that have “a current presence in Chambersburg.”[19] AR, Tab 12, BAH FPR, at 4-14. Consistent with the agency’s assertion, BAH’s staffing approach outlined the following four specific elements:

Promote Staffing Opportunities across the Booz Allen Team: [redacted]

Leverage Existing Qualified Staff: [redacted]

Conduct Hiring Events: [redacted]

Leverage Teammate [redacted] to Expand the Candidate Pool: [redacted]

Id. at 5.

Based on its review of BAH’s proposal, the agency maintains that, although BAH’s staffing approach contemplates hiring some incumbent personnel, BAH’s proposal does not “specifically and foremost rely on that approach to staff the task order.” Supp. MOL/COS at 13. (Italics in original.)

Further, to the extent BAH does contemplate hiring incumbent personnel, the agency challenges the basis for HPES’s conclusion that the compensation of such staff will be “slashed,” noting that, while the solicitation required offerors to submit fixed, fully-loaded labor rates, it did not seek or require data regarding actual employee compensation rates. Supp. MOL/COS at 14-15. In this context, the agency notes that HPES’s fully-loaded ENCORE II labor rates (which include HPES’s overhead and profit) are as much as [redacted] higher than BAH’s ENCORE II labor rates, further noting that HPES has not provided any information regarding the actual compensation levels of its incumbent personnel. Id. at 16-17. Accordingly, the agency questions HPES’s projections regarding the compensation levels that BAH will provide incumbent personnel, maintaining that HPES’s arguments purporting to compare past and future employee compensation levels lack an adequate foundation. Id. at 14-17. On this record, the agency maintains that HPES’s protest challenging the agency’s evaluation of BAH’s proposed staffing plan is without merit. We agree.

The evaluation of an offeror’s proposal is a matter within the agency’s discretion, and this Office will not reevaluate proposals; rather, we will review an agency’s evaluation to determine whether the agency’s judgments were reasonable and consistent with the stated evaluation criteria. See, e.g., GC Servs. Ltd. P’ship, B‑298102, B-298102.3, June 14, 2006, 2006 CPD ¶ 96 at 6. A protester’s disagreement with an agency’s judgments does not render the evaluation unreasonable. Id.

Here, as the agency points out, BAH’s staffing plan identified multiple sources for staffing the task order and the agency’s evaluation reflected that multi-faceted approach. As HPES acknowledges, nothing in BAH’s proposal for this fixed-price task order reflected BAH’s commitment to hire any particular portion of HPES’s incumbent staff. HPES Comments/Supp. Protest at 11; cf. Health Net Federal Services, LLC, B-401652.3, B-401652.5, Nov. 4, 2009, 2009 CPD ¶ 220; Alutiiq Pacific, LLC, B-409584, B-409584.2, June 15, 2014, 2014 CPD ¶ 196 (awardees of cost-reimbursement and time & material contracts indicated intent to hire significant portions of incumbent staff). Indeed, to the contrary, BAH’s proposal offered a team of [redacted] other companies “with highly qualified staff . . . across a broad spectrum of relevant cybersecurity and IT functional disciplines,” including firms “with a current presence in Chambersburg,” stating that it intended to “[p]romote [s]taffing [o]pportunities” within its team.[20] BAH FPR at 4-5. More specifically, BAH referenced its team member, [redacted], and its access to a proprietary database with over 180,000 candidates, describing that database as being comprised of “cleared IA [information assurance] professionals.” Id. at 4-5. Finally, BAH’s proposal included [redacted] resumes of specifically-proposed personnel that hold security clearances; only [redacted] of these resumes was for an HPES employee. Id. at A-1 through A-35.

On this record, we reject HPES’s factual assertion that BAH intends to hire the “vast majority” of HPES’s incumbent personnel. To the contrary, the record reasonably supports the agency’s conclusion that hiring incumbent employees does not constitute a major aspect of BAH’s proposed staffing approach. Accordingly, HPES’s assertion that the agency failed to reasonably consider the risk associated with hiring incumbent personnel at reduced rates is without merit.

Assignment of Strengths

HPES next protests the agency’s assignment of strengths under the technical/management approach factor. As noted above, the agency assigned a total of five strengths to BAH’s proposal--two under subfactor 1 (command cyber readiness inspections) and three under subfactor 4 (management approach). In contrast, the agency assigned a single strength to HPES’s proposal under subfactor 4 (management approach). HPES’s protest challenges several of the strengths assigned to BAH’s proposal and/or complains that its own proposal should have received similar or additional strengths.

As noted above, the evaluation of an offeror’s proposal is a matter within the agency’s discretion, and this Office will not reevaluate proposals; rather, we will review an agency’s evaluation to determine whether the agency’s judgments were reasonable and consistent with the stated evaluation criteria. See, e.g., GC Servs. Ltd. P’ship, supra. A protester’s disagreement with an agency’s judgments does not render the evaluation unreasonable. Id.

Here, we have considered all of HPES’s arguments challenging the agency’s strength assessments and find no basis for sustaining its protest. For example, the solicitation indicated that a total of 60 full time equivalent (FTE) personnel would be required to perform specific tasks evaluated under subfactor 1. AR, Tab 2I, RFP attach. 9. BAH’s FPR provided that it was committing “[redacted] qualified [redacted] staff” to perform these requirements, further stating that “[a]ll walkthrough trainers and senior reviewers are [redacted] in at least two technology areas, some possessing expertise in as many as [redacted] technologies.” BAH FPR at 5‑6. The agency assigned a strength to this aspect of BAH’s proposal stating:

[T]he staffing plan offered exceeds the stated PWS requirement of Staffing and comprises a substantial value given the Government’s ability to utilize available resources to aid in flexibility for scheduling purposes. The additional resource pool of personnel with up to [redacted] technology skill sets provides the Government flexibility to support planned and short notice review requests from customers. . . . As a result, this offering is a strength because it is a significant aspect of the offeror’s proposal that has merit and exceeds the specified performance or capability requirements in a way that is advantageous to the Government.

AR, Tab 16, SRD, at 31.

HPES complains that assignment of this strength to BAH’s proposal was unfair, asserting that HPES’s proposal should have been assigned a similar strength.

The agency responds that, in contrast to the [redacted] personnel proposed by BAH to perform the requirements, some of whom “possess[ed] expertise in as many as [redacted] technologies,” HPES proposal offered “60 or more” personnel and merely represented that its staff were trained in “more than one discipline.” AR, Tab 11, HPES FPR, at 3-4. On this record, we do not find the agency’s strength assessments to be unreasonable.

By way of another example, offerors were required to address their approach to supporting DISA’s reviewer certification program, which “certifies individuals to conduct SRRs [security readiness reviews] and provides oversight and ensures certification standards once teams have been established.” PWS at 23. In responding to this requirement, BAH’s proposal discussed various aspects of its proposed methodology and also referenced its prior success in reducing certification time by more than [redacted] percent. BAH FPR at 34. In assigning a strength related to this requirement, the agency stated:

[BAH’s] Technical Proposal . . . provides details on their rigorous assessment methodology that includes [redacted]. Through the use of this method they were able to reduce the US Navy Office of Compliance and Assessment (OCA) reviewers’ certification time by more than [redacted]. This same methodology would be used to provide enhanced feedback to FSO, facilitating more rapid improvement and effectiveness within the RCP. The RCP is an eight week program comprised of formal training, on the job training, completion of functional processes and four review trips each year. A [redacted] reduction of an eight week program would be [redacted] weeks. With 60 reviewers times a [redacted] week reduction would equate to [redacted] weeks of additional productive hours available to support FSO’s mission workload. Even if the offeror’s methodology does not result in a full [redacted] savings to the RCP within FSO, it is evident that any efficiency gained has the ability to result in a substantial benefit to the Government. As a result, this offering is a strength because it is a significant aspect of the offeror’s proposal that has merit and exceeds the specified performance or capability requirements in a way that is advantageous to the Government.

AR, Tab 16, SRD, at 31-32.

HPES complains that the strength assigned to BAH’s proposal reflects the agency’s consideration of past performance, arguing that such consideration was improper because past performance was not a stated evaluation factor.[21] The agency responds that the strength was assigned based on the specific methodologies that BAH proposed to perform the required activities, and did not reflect a past performance assessment.

Based on our review of the record, we do not question the reasonableness of the agency’s assessment of a strength based on the methodologies BAH proposed to perform the required activities. The fact that BAH also referenced its prior success in using the proposed methodology, and that the agency recognized that success, does not render the agency’s strength assessment of the proposed methodologies unreasonable, nor does it provide a basis for HPES to assert that the agency should have assigned a strength to HPES based on HPES’s past performance.

Next, the record establishes that the agency assigned BAH’s proposal a strength under subfactor 4, management approach, for [redacted]. BAH FPR at 12. In assigning a strength for this aspect of BAH’s proposal, the agency stated:

The overall advantages of a higher educated workforce includes lower employee turnover, increased loyalty, intelligent approach to work solutions, increased communication and leadership skills, and maintaining current technology skills within their fields of expertise. This benefit is provided [redacted] to the Government. As a result, this offering is a strength because it is a significant aspect of the offeror’s proposal that has merit and exceeds the specified performance or capability requirements in a way that is advantageous to the Government.

AR, Tab 16, SRD, at 41.

Nothing in HPES’s protest challenges the agency’s evaluation of this strength, nor does HPES identify any comparable aspect of its own proposal. Accordingly, we conclude that the agency’s assignment of this strength was reasonable. [22]

Finally, the agency assigned a strength to BAH’s proposal based on BAH’s submission of a transition plan. In this regard, the PWS provided that the successful offeror would be required to submit a transition plan 10 days after contract award. PWS at 38. Despite being permitted to defer submission, BAH submitted its transition plan with its proposal. The agency assigned a strength in this regard, stating:

The benefit of the early submittal is a fully developed clear detailed outline of the offeror’s Transition Strategy and Plan. This is a detail of the offeror’s understanding of the PWS requirements. The demonstration of forward thinking illustrates their preparedness to take over the workload responsibilities if awarded this task order. The benefit to the Government is the upfront time savings and reduced risk of degradation to the mission in transition.

AR, Tab 16, SRD, at 40.

HPES protests that the agency’s consideration of BAH’s transition plan and assignment of strength for its submission was improper, noting that the solicitation provided that “[t]he Technical/Management portion of the proposal must be limited to 50 pages.” RFP at 3. (Bold in original.) HPES asserts that BAH’s submission of its [redacted] transition plan effectively exceeded the solicitation’s page limitation, since BAH also submitted a 50-page technical/management proposal.

The agency responds that, because BAH referenced its transition plan throughout its 50-page technical/management proposal, the agency properly assigned a strength based on the “forward thinking” that submission of the plan reflected--not on the substance of the plan itself. Supp. MOL/COS at 27-29.

Here, we need not resolve whether assignment of this strength was proper. Based on the record discussed above, it is clear that, even without assignment of this strength, the agency reasonably evaluated BAH’s proposal as the technically superior and lowest-priced proposal. Accordingly, even if we were to conclude that assignment of the strength was improper, HPES was not prejudiced. See, e.g., Leisure-Lift, Inc., B-291878.3, B-292448.2, Sept. 25, 2003, 2003 CPD ¶ 189 at 10. (GAO will not sustain a protest based on procurement flaws where the record establishes that elimination of flaws would not reasonably alter the source selection decision). On the record here, we find no basis to sustain HPES’s protest.

The protest is denied.

Susan A. Poling
General Counsel