Matter of: Environmental Science & Engineering, Inc. File: B-253208; B-253208.2 Date: August 25, 1993
B-253208,B-253208.2: Aug 25, 1993
PROCUREMENT Competitive Negotiation Contract awards Administrative discretion Cost/technical tradeoffs Cost savings Where solicitation provided that cost could be the deciding factor in the selection decision in the event there were no discernible differences in merit between technical proposals. Record supports evaluators' determination that two technical proposals were equal in merit. Cost evaluation that considered only the rates of key personnel was reasonable and selection of technically equal offeror who offered lower rates for all categories of key personnel was reasonable and consistent with solicitation. PROCUREMENT Bid Protests Moot allegation GAO review Allegation that prime contractor improperly relaxed requirement that category of labor be designated as key personnel is academic where parties modified subcontract to include category of key personnel omitted in initial award.
Matter of: Environmental Science & Engineering, Inc. File: B-253208; B-253208.2 Date: August 25, 1993
PROCUREMENT Competitive Negotiation Contract awards Administrative discretion Cost/technical tradeoffs Cost savings Where solicitation provided that cost could be the deciding factor in the selection decision in the event there were no discernible differences in merit between technical proposals, and record supports evaluators' determination that two technical proposals were equal in merit, Department of Energy prime contractor could properly award a subcontract for environmental remediation efforts at a government-owned plant to the lower cost offeror. PROCUREMENT Competitive Negotiation Offers Evaluation Personnel Cost evaluation Where evaluation team reasonably assumed that key personnel would perform greater part of environmental remediation effort under time and materials contract, cost evaluation that considered only the rates of key personnel was reasonable and selection of technically equal offeror who offered lower rates for all categories of key personnel was reasonable and consistent with solicitation. PROCUREMENT Bid Protests Moot allegation GAO review Allegation that prime contractor improperly relaxed requirement that category of labor be designated as key personnel is academic where parties modified subcontract to include category of key personnel omitted in initial award. PROCUREMENT Competitive Negotiation Contract awards Administrative discretion Cost/technical tradeoffs Technical superiority Where the record supports the reasonableness of the cost/technical tradeoff, General Accounting Office will not object to failure to discuss the tradeoff specifically in the selection document. PROCUREMENT Bid Protests GAO procedures Protest timeliness Apparent solicitation improprieties Where solicitation did not provide for consideration of travel time in technical evaluation or for consideration of travel costs in cost evaluation, it would have been improper for evaluators to consider effects of travel in the award decision; to the extent that protester contends that solicitation should have provided for consideration of travel in the evaluation, such issues related to an alleged solicitation impropriety should have been raised prior to the date set for receipt of initial proposals.
DECISION Environmental Science & Engineering, Inc. (ESE) protests the award of a subcontract to Systematic Management Services, Inc. (SMS) under request for proposals (RFP) No. ER-001-D30002, issued by Martin Marietta Specialty Components, Inc. (MMSC) in its capacity as prime management and operating contractor to the Department of Energy (DOE) at the agency's Pinellas, Florida plant. ESE argues that MMSC did not evaluate proposals or make award in a manner that was reasonable and consistent with the criteria set forth in the solicitation.
We deny the protest.
On September 16, 1992, MMSC issued the RFP for a time and materials/labor hour contract with fixed labor rates, for a contractor experienced with environmental remediation problems, to assist the plant's staff in development and implementation of environmental cleanup activities. The Pinellas plant is part of DOE's weapons complex, and faces problems with limited volatile organic compound contamination of the surface aquifer system and heavy metal contamination of soils. The solicitation described the scope of work in general terms; listed the general categories of support desired rather than specific taskings; and provided for award of a subcontract, with an initial ceiling of $650,000 for the first year, with four 1-year options at somewhat higher ceilings.
The prime contractor conducted a preliminary screening, to identify offerors with the required qualifications and experience; from 16 statements of qualifications and experience received on September 29, MMSC selected six offerors, whom, by letter of January 13, 1993, it invited to submit written technical proposals. The January 13 letter advised offerors that "selection of successful offers and award of subcontracts may be made without discussions" and advised offerors to include in their initial proposals "the most favorable terms . . . which you can offer."
The solicitation provided for selection of a subcontractor based primarily upon the results of a technical evaluation. The solicitation listed five technical factors, in descending order of importance, as follows: (1) qualifications of key personnel (48 points); (2) specific experience and knowledge of federal statutes pertaining to hazardous waste site remediation (16 points); (3) prior corporate performance (12 points); (4) overall management structure (12 points); and (5) breadth and depth of experience (12 points). The solicitation stated that price would not be point-scored and advised offerors as follows:
". . . total cost/price will not be a factor in the cost area evaluation. Cost proposals will be evaluated for inclusion of all appropriate catego- ries of labor that would be required to develop corrective and remedial action plans, health and safety plans, quality assurance plans and other tasks which may be ordered under a resulting subcontract. . . . Labor rates, labor overhead rates, [general and administrative] rates, and any other rates which might apply to an individual offeror will be evaluated for reasonableness and realism. The reasonableness and realism of proposed rates will be considered in the determination of the competitive range and in source selection. If no discernible differences between proposals are determined to exist based upon the technical area evaluation, cost may be the deciding factor in the selection of the successful sources. Fully burdened hourly rates for every Principal technical representative, Principal investigator, Team leader and Primary Technical support staff personnel shall be provided."
MMSC provided an oral briefing to the six offerors on January 28 and responded to their questions by letter of February 1. Written proposals were submitted on February 11; on February 22 and 23, the offerors provided the evaluators with oral presentations. MMSC then forwarded the written proposals to its technical team for evaluation. In the initial evaluation, SMS received the highest technical score, slightly higher than the protester's score, which was second high; in analyzing the scoring patterns, the evaluation team leader concluded that the advantage in technical score did not conclusively establish the superiority of the SMS proposal over the protester's proposal. Because SMS had proposed lower hourly rates for all three categories of key personnel, the evaluators recommended SMS for award, since its proposal was at least technically equal to ESE's and was technically superior to the other proposals. This protest followed.
The protester asserts that the results of the technical evaluation demonstrate that its proposal was superior to the awardee's and that in view of the solicitation's emphasis on technical factors, ESE should have received the award. The protester notes that one evaluator's extremely low scores resulted in a significant reduction of its technical score; the protester argues that this evaluator was biased and disregarded the evaluation standards. ESE contends that the evaluator's scores should be discarded.
The record shows that after the initial evaluation, the committee chairman performed four analyses of the evaluation results, which he referred to as A, B, C, and D. Analysis A was the original evaluation, showing the awardee, with an average score of 83.75 points (of 100 points available), ranked highest, and the protester second at 78.25 points. Analysis B identified individual evaluators' scores that appeared inconsistent with other scores; in analysis C, the chairman eliminated those ratings that under analysis B, appeared inconsistent with the overall results. This analysis showed ESE ranked higher, with a technical score of 87 points, versus 84.4 points for SMS.
Regardless of the merits of the protester's allegations of bias by the one evaluator, the record demonstrates that analysis C substantially accomplished the corrective action now sought by the protester; most of the increase in its score from analysis A to analysis C resulted from the elimination of the scores of the evaluator about whom it complains. The record also shows both that the same evaluator scored SMS considerably lower than did the other evaluators and that the evaluation team failed to take this into account in eliminating those scores from the technical ranking. If the evaluation team had consistently eliminated the low scores from the technical evaluation, the results would have been even closer, as follows:
A C A C 1. Key 39.25 44.3 41 42.7 personnel 2. Specific 12.25 14.0 12 12.7 experience 3. Prior 8.00 9.3 10 10.0 performance 4. Management 9.25 10.7 10 10.7 structure 5. Breadth 9.50 10.7 10.75 11.0 of experience. Total points 78.25 89.0 83.75 87.0
The evaluators did not, under analysis C, conclude that ESE's higher score--by 2.6 points--represented any real superiority such as to justify the payment of a cost premium; as the table above shows, the record supports an even closer 2-point difference in technical scoring. Under all analyses, the evaluators could not conclude that there was any discernible difference between the two proposals, even while essentially disregarding the one evaluator's scores that appeared anomalous and about which the protester complains.
Numerical point scores, when used for proposal evaluation, are not controlling and are useful only as guides to intelligent decisionmaking; they may be expected to reflect the disparate, subjective judgments of the evaluators. Bunker Ramo Corp., 56 Comp.Gen. 712 (1977), 77-1 CPD Para. 427. Even if the initial evaluation results are disregarded, resulting in a 2-point advantage in technical scoring for the protester, a selection official has discretion to determine whether a 2-point advantage represents any significant difference between proposals, such as would warrant the payment of a price premium. See M. Rosenblatt & Sons, B-230026; B-230026.3, Apr. 26, 1988, 88-1 CPD Para. 409. Here, the protester identifies nothing in its proposal to show that the evaluators unreasonably concluded that the two proposals were equal in technical merit or to warrant the payment of a price premium. Given that the evaluators reasonably concluded that there was no discernible difference in technical merit between the two proposals, using price as the discriminator to identify the most advantageous offer was reasonable and consistent with the solicitation.
In recommending an offeror for award, the evaluators examined the labor rates for three categories of key personnel--the principal technical representative (PTR), three principal investigators, and ten primary support staff. SMS offered lower rates across the board. These lower labor rates were the determinative factor in the selection decision.
Contracting agencies have broad discretion in determining an acceptable method of evaluating competing cost proposals, provided that that method provides a reasonable basis for source selection. Anamet Lab., B-241002, Jan. 14, 1991, 91-1 CPD Para. 31. Here, the solicitation provided no formula for comparing prices proposed by offerors; it expressly stated that the cost evaluation would not attempt to estimate the total price for performance by individual offerors. While the solicitation required offerors to provide rates for all categories of labor, it provided only that MMSC would examine the rates for reasonableness and realism. While not precisely set out in the solicitation, the evaluation methodology used by MMSC, with its reliance on the labor rates for key personnel, is consistent with the specific requirement in the solicitation that offerors provide the fully burdened hourly rates for every category of key personnel. In view of the evaluators' reasonable assumption that personnel in the key labor categories by definition would be performing the bulk of the work, we cannot conclude that limiting the cost evaluation to the labor rates for the key personnel was either unreasonable or inconsistent with the solicitation language.
The protester argues that the evaluators' assumption that its key personnel would perform most of the work was incorrect. The protester contends that it anticipated that the key personnel listed in its proposal would only do a relatively minor portion of the work, and that its middle to low-level support staff would be performing 65 to 70 percent of the effort, at much lower wages than those for the three categories of key personnel. Similarly, the protester argues that the assumption that the effort would require a full-time PTR was incorrect; indeed, the protester argues, its proposal expressly limited the PTR's effort to a ceiling of 200 hours.
From the record and the arguments advanced by the parties, it appears that the two offerors may have taken a different approach in planning the responsibilities of the key personnel and their reliance upon other personnel in their organizations to support the contractual effort. With regard to the additional labor categories, SMS did not propose to dedicate additional technical personnel to the effort; its proposal provides rates for seven additional categories--two "administrative assistants," a computer-assisted design and drafting operator, and four clerical personnel. The proposal, while stressing the firm's experience and expertise, clearly views the corporate resources as a backup to its key personnel, since it refers to the use of additional personnel chiefly with respect to "peak and unpredictable assignments." The awardee's proposal is therefore consistent with the evaluators' assumption that key personnel would perform the greater part of the work and that their salaries would be the chief determinant of the ultimate contract price.
Although ESE argues that its proposal provides for extensive support by other, lower paid personnel within its organization, the broad language of its proposal--for example, the statement that ESE would "draw on the combined resources of ESE team's technical staff" and references to the firm's overall expertise--does not clearly state that this was the approach ESE offered. While ESE listed 12 additional proposed labor categories--3 "technicians," 4 engineers, and 5 support personnel, including a computer programmer, a graphics editor, and a technical editor --there is no indication in the technical proposal that these personnel will perform a significant portion of the work; how such personnel would be chosen for tasks; or what qualifications those personnel might possess for accomplishment of the required effort. The record simply does not show that the agency was unreasonable in not interpreting the proposal in the manner ESE now describes. On the contrary, having designated three labor categories in the solicitation as "key"--and in the absence of a clear explanation of its proposed approach from ESE--MMSC had no reason to interpret ESE's offer as proposing to rely principally on other, non-key labor categories. To the extent that ESE failed to clearly communicate its intentions in its written proposal, the protester bears the risk of any negative evaluation of the proposal. See Computerized Project Mgmt. Plus, B-247063, Apr. 28, 1992, 92-1 CPD Para. 401.
The protester argues that in this situation, MMSC was required to conduct discussions, since it could not be certain that award on the basis of initial proposals would be most advantageous to the government. Since we do not find unreasonable either the evaluators' judgments as to the principal rates applicable or their conclusion that SMS offered a fair and reasonable price, we see no basis to object to the agency's decision to make award without conducting discussions. See Department of Energy Acquisition Regulation Sec. 970.7103(c)(3)(xii) (discussions to be held "as may be appropriate"); Marvin Eng'g Co., Inc., B-214889, July 3, 1984, 84-2 CPD Para. 15.
The agency report shows that MMSC did not designate the primary support staff as key personnel in the initial subcontract awarded to SMS. The protester challenges MMSC's action on several grounds. These arguments are academic, however, since MMSC has now modified the subcontract to designate the principal support staff as key personnel, for whom substitutions may not be made without the permission of MMSC.
The protester also argues that the agency failed to document its evaluation and award decision, to show the relative differences among proposals, their strengths, weaknesses, and risks, and the basis and reasons for the decisions, as required by Federal Acquisition Regulation (FAR) Sec. 15.612(d)(2). This FAR provision insures that our Office will have a basis upon which to judge the reasonableness of the agency's decision, and ultimately, its compliance with procurement statutes and regulations. Sonshine Enters., B-246268, Feb. 26, 1992, 92-1 CPD Para. 232. Even assuming that the documentation requirement reflected in the FAR provision applies under the federal norm standard applicable to MMSC here, our overriding concern has always been that the evaluation reflect the actual merits of the proposals, not that it be mechanically traceable back to the scores initially given by the individual evaluators. Schweizer Aircraft Corp., B-248640.2; B-248640.3, Sept. 14, 1992, 92-2 CPD Para. 200. The protester has suggested no basis, at least no basis consistent with the listed evaluation criteria, for discriminating between the technical merits of the two proposals or for finding the evaluators' conclusion that the two proposals were essentially equal in technical merit to be unreasonable. As regards the cost/technical tradeoff, our Office will not object to a contracting officer's failure to discuss the tradeoff specifically in the selection document, where, as here, the record supports the reasonableness of that tradeoff. Varian Assocs., Inc., B-238452.4, Dec. 11, 1990, 90-2 CPD Para. 478.
The protester also objects to the evaluators' failure to consider the effects of travel in its technical evaluation or the cost of travel in its cost evaluation; ESE asserts that its proposal offered enhanced responsiveness and efficiency due to the location of its personnel, who, unlike SMS's personnel, are located in the area of contract performance. The solicitation, however, did not provide for consideration of the costs or effects of travel, and it would have been inappropriate for the prime contractor to consider them in its evaluation. U.S. Def. Sys., Inc., B-245006.2, Dec. 13, 1991, 91-2 CPD Para. 541. To the extent that the protester argues that the solicitation should have provided for consideration of the effect of geographical distance upon performance or for the evaluation of travel costs, protests against alleged improprieties apparent on the face of a solicitation must be filed no later than the date set for receipt of initial proposals, and ESE's protest of this issue, filed on June 14, 4 months after the submission of initial proposals, is clearly untimely. See 4 C.F.R. Sec. 21.2(a)(2) (1993).
The protest is denied.
1. The parties have agreed to the resolution of the protest by our Office. We review subcontract awards by prime management and operating contractors under a "federal norm" standard, i.e., to determine whether they are consistent with the policy objectives set forth in statutes and regulations which apply directly to federal agency procurements. Com- puter One, Inc., B-249352.2, Feb. 23, 1993, 93-1 CPD Para. 252.
2. MMSC deleted the team leader category from the solicitation prior to receipt of offers.
3. Analysis D involved the overall ratings by all four evaluators and showed that two had ranked ESE higher overall and two ranked SMS higher overall.
4. The proposal actually states that the PTR's labor rate " . . . reflects a discount of twenty five percent. This offer will hold for up to 200 hours . . . " Thus, it appears that the 25 percent discount on the PTR's labor rate was limited to the first 200 hours. The proposal therefore sets no firm ceiling on the PTR's time, as the protester argues; indeed, such a limitation appears inconsistent with the broad range of activities that ESE proposes for the PTR in its written technical proposal.
5. In fact, it appears that the evaluators interpreted the proposal in the light most favorable to the protester, given that they would not have rated the proposal as highly if they had interpreted it in the manner now suggested by the protester. One evaluator specifically linked ESE's high technical score with insuring that the key personnel offered "be directly responsible for the day to day activities associated with this contract" and understood the protester's proposed PTR as agreeing to such a commitment. Other evaluators express a presumption that the key person- nel would have responsibility for day to day operations. Only the evaluator whose evaluation the protester considers anomalous appeared to understand that ESE did not intend to provide the key personnel, but that the promised support would drop off after award, but even this understanding was apparently based on past experience with the firm rather than the written proposal.
6. The protester's argument is drawn from the requirement of the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. Sec. 2305 (1988), which limits the authority of federal agencies other than the Department of Defense utilizing competitive negotiation to make award without discussions. As noted above, CICA standards do not apply directly to procurements by prime management and operating contractors, which are judged by a federal norm standard. Id.
7. The protester argues that this resulted in an improper relaxation of solicitation requirements for the awardee; that it casts doubt on the results of the cost evaluation, since if SMS could substitute the alternate personnel listed in its proposal for those evaluated as key personnel, its labor rate in the principal support staff category would be slightly higher than the protester's rate; that it shows that the original solicitation was defective because the inclusion of the principal support staff as key personnel overstated MMSC's minimum needs; and that MMSC must have held improper discussions with SMS prior to award in order to reach agreement to delete the primary support staff from the key personnel category in the subcontract as awarded.
8. In fact, of SMS's 14 key personnel, 9 are either new hires or already located in the state of Florida, while 3 are located in South Carolina; one of the two remaining principal technical support staff, Mr. Chiou, is not assigned responsibility for any specific portion of the contractual effort. The offsite personnel that SMS proposed were to perform only modeling and certain short-term tasks.