Integrated Management Resources Group, Inc.

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: Integrated Management Resources Group, Inc

File: B-400550

Date: December 12, 2008

DIGEST

1. Protest challenging the agency's cost realism evaluation of awardee's proposal is denied where the agency's workpapers demonstrate that the conclusions reached by the evaluators were reasonable.

2. Protest challenging the evaluation of technical proposals is denied where the record establishes that the agency's evaluation was reasonable and consistent with the evaluation criteria.

3. Protest challenging the agency's evaluation of past performance is denied where the record establishes that the agency properly considered the relevance of the protester's references when deciding what weight, if any, to give each reference.

Integrated Management Resources Group, Inc. (IMRG), of Lanham, Maryland, protests the award of a contract to the Randstad Inhouse Services, L.P. of Washington, D.C. under request for proposals (RFP) No. PBGC01-RP-08-0004, issued by the Pension Benefit Guaranty Corporation (PBGC) for professional pension benefit administration support services. IMRG argues that the agency's evaluation of its and Randstad's technical proposals, its own past performance, as well as the evaluation of Randstad's cost proposal, was unreasonable. The protester also contends that the agency lacked impartiality towards IMRG during the procurement.

We deny the protest.

BACKGROUND

The PBGC is a wholly-owned government corporation established to develop and administer the pension plan termination insurance program for various defined benefit pension plans as provided by the Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. sections 1001-1461 (2000).[1] As trustee, PBGC is responsible for protecting the pensions of an estimated 44 million workers and retirees in more than 30,000 private defined benefit pension plans. To fulfill this mission, PBGC relies upon contractor-provided professional pension benefit administration support services, including in the areas of quality assurance initiatives, processing cases and participants, building participant databases, data integrity validation, plan closing, post valuation, special compliance validation, and special projects, for its various offices and divisions. RFP, Performance Work Statement (PWS) sections C.1 -- C.4.

The RFP, issued on January 16, 2008, as a small business set-aside, contemplated the award of a cost-plus-fixed-fee contract for a 4-month base period together with four 1-year options for the required pension benefit administration services. RFP sect. B.1; amend. 7, at 2-3. In general terms, the PWS required the contractor to provide all personnel and material necessary to perform the described services and work activities in accordance with the RFP's performance standards. PWS sect. C.3.

The solicitation established a two-phase evaluation process. In Phase I, offerors were to submit written proposals that the agency would evaluate using two criteria: past performance and key personnel. For the offerors whose proposals were found acceptable in Phase I, Phase II consisted of supplemental oral presentations. The solicitation established five evaluation factors for Phase II: technical approach; adequacy of management plan; experience and qualifications of personnel; past performance; and cost.[2] The technical evaluation factors were of equal importance and, when combined, were significantly more important than cost. Award was to be made to the responsible offeror whose proposal was determined to represent the –best value— to the government, all factors considered. RFP sect. M.2--M.3.

Three offerors, including incumbent contractor Randstad and IMRG, submitted proposals by the February 19 closing date. As part of the Phase I evaluation, an agency technical evaluation panel (TEP) determined that both the IMRG and Randstad proposals were acceptable. Agency Report (AR), Tab 26, TEP Competitive Range Recommendation Report. The agency then held oral presentations, followed by the offerors submitting revised cost proposals by April 1. The TEP evaluated offerors' Phase II proposals using an adjectival rating system, with the final ratings for Randstad and IMRG as follows:

Factor	Randstad	IMRG
Technical Approach	Good (+)	Good (-)
Management Plan	Good (-)	Good
Experience and Qualifications of Personnel	Excellent (-)	Good
Past Performance	Good (-)	Acceptable (+)
Overall	Good	Good (-)
Cost	$22,553,779	$22,256,494

Id., Tab 27, TEP Report, at 2-5.

The PBGC also performed a cost realism evaluation of the Randstad and IMRG proposals. The agency found the costs proposed by each offeror to be realistic for the work to be performed, and took no exceptions to the labor rates or the levels of effort that the offerors proposed.[3] Id., Tab 28, Cost Evaluation Report, at 3, 5.

The contracting officer subsequently determined that Randstad's technical superiority--especially with regard to the experience and qualifications of personnel factor--outweighed IMRG's lower cost, and that Randstad's proposal represented the best value to the government. Id., Tab 29, Source Selection Decision, at 5-6. This protest followed.

DISCUSSION

IMRG's protest raises various issues regarding the agency's evaluation of proposals and subsequent source selection determination. IMRG first alleges that PBGC's cost realism evaluation of Randstad's proposal was improper. The protester also contends that the agency's evaluation of its and Randstad's technical proposals, as well as its own past performance, was unreasonable. Lastly, IMRG protests that there was a lack of impartiality on the agency's part towards IMRG during the procurement. Protest at 5-9. Based upon our review of the record, we find no merit in any of the protest issues raised by IMRG. Although we do not here specifically address all of the protester's arguments about the evaluation of proposals, we have fully considered all of them and find that they afford no basis to question the agency's contract award determination.

Cost Realism Evaluation of Randstad's Proposal

IMRG protests that PBGC failed to perform a proper cost realism evaluation of Randstad's proposal. The protester contends that both applicable procurement regulations and the RFP required the agency to perform a cost realism analysis to determine the extent to which an offeror's proposed costs represent what the government realistically can expect to pay for the proposed effort. By contrast, IMRG argues, PBGC conducted nothing more than a cursory examination of the awardee's proposed costs, and failed to submit any evidence supporting the conclusion that no exceptions to Randstad's proposed direct or indirect labor rates were warranted. The protester maintains that the agency's failure to reasonably determine Randstad's realistic costs adversely affected the agency's resulting source selection decision. Protest at 5-6; Comments at 5-7.

The RFP instructed offerors that their cost proposals were to include breakdowns of labor hours, direct and indirect labor rates, and other costs, RFP amend. 3 at 1-2; RFP amend. 7, at 2-3, and stated that the agency's evaluation of an offeror's proposed costs would include consideration of the extent to which it reasonably reflected the offeror's proposed technical approach. RFP sect. M.2.

Randstad submitted its revised cost proposal by the April 1 closing date. Randstad's cost proposal included breakdowns of its labor hours by performance period and labor category, labor costs by performance period and labor category, direct and indirect labor rates, and its other costs. With regard to its direct labor rates, Randstad's proposal indicated by labor category both the offeror's current pay rates for its incumbent workforce as well as its higher, proposed labor rates. For example, Randstad's current direct labor rate for its project manager was $[DELETED] per hour, while its proposed pay rate for the new contract was $[DELETED] per hour.[4] Randstad also included its 2008 budgeted rates in support of its various indirect rate submissions (i.e., its direct labor fringe rate, its government contract overhead rate, and its general and administrative overhead rate). AR, Tab 19, Randstad Revised Cost Proposal, at 1-34.

In preparation for performing his evaluation, the PBGC cost analyst sought and received additional cost data information from Randstad, including the offeror's current direct labor rates by labor category, Randstad's 2008 budgeted overhead rates, its 2007 actual overhead rates, and its 2008 (1^st Quarter) actual overhead rates. The cost data provided by Randstad was detailed in nature and provided a complete listing of the accounts within each cost pool and base on which the offeror's indirect rates were based. Id., Tab 55A, Randstad Cost Evaluation Workpapers (Indirect Rates), at 4-46; Tab 55B, Randstad Cost Evaluation Workpapers (Direct Labor), at 4-48.

The cost analyst then evaluated Randstad's proposed direct and indirect labor rates using the additional cost data received. With regard to Randstad's direct labor rates, the cost analyst compared the offeror's proposed direct labor rates by labor category with the current pay rates for the same individuals. The cost analyst found that Randstad's proposed direct labor rates were consistently higher than what it was currently paying the same individuals and, in light thereof, concluded the proposed rates were realistic. The cost analyst also compared Randstad's proposed indirect rates to the offeror's current budgeted overhead rates as well as its actual 2007 and actual 2008 (1^st Quarter) overhead rates and concluded that the proposed indirect rates were also realistic.[5] Id., Tab 28, Cost Evaluation Report, at 1-11, Tab 55A, Randstad Cost Evaluation Workpapers (Indirect Rates), at 2-3, 47-49, Tab 55B, Randstad Cost Evaluation Workpapers (Direct Labor), at 3-12.

When an agency evaluates proposals for the award of a cost-reimbursement contract, an offeror's proposed estimated cost of contract performance is not considered controlling since, regardless of the costs proposed by the offeror, the government is bound to pay the contractor its actual and allowable costs. Magellan Health Servs., B-298912, Jan. 5, 2007, 2007 CPD para. 81 at 13; Metro Machine Corp.,

B-295744, B-295744.2, Apr. 21, 2005, 2005 CPD para. 112 at 9; see Federal Acquisition Regulation (FAR) sect. 16.301. Consequently, a cost realism analysis must be performed by the agency to determine the extent to which an offeror's proposed costs represent what the contract costs are likely to be under the offeror's technical approach, assuming reasonable economy and efficiency. FAR sections 15.305(a)(1), 15.404-1(d)(1), (2); The Futures Group Int'l, B-281274.2, Mar. 3, 1999, 2000 CPD para. 147 at 3.

A cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror's cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed, reflect a clear understanding of the requirements, and are consistent with the unique methods of performance and materials described in the offeror's proposal. FAR sect. 15.404-1(d)(1); Advanced Commc'n Sys., Inc., B-283650 et al., Dec. 16, 1999, 2000 CPD para. 3 at 5. An offeror's proposed costs should be adjusted when appropriate based on the results of the cost realism analysis. FAR sect. 15.404-1(d)(2)(ii). Our review of an agency's cost realism evaluation is limited to determining whether the cost analysis is reasonably based and not arbitrary, and adequately documented. See Magellan Heath Servs., supra. For the reasons set forth below, we find that PBGC conducted a proper cost realism analysis of Randstad's proposal.

IMRG argues that PBGC failed to perform a proper cost realism evaluation of Randstad's proposed direct and indirect labor rates. The protester argues that given Randstad's much higher staffing levels than those proposed by IMRG, and the two offerors' nearly equal overall costs, the agency should have been on notice that Randstad's costs were probably understated. IMRG also argues that the agency's cost evaluation report merely concludes that Randstad's direct and indirect labor rates are realistic without demonstrating the basis for this conclusion. The fact that –no exception— was taken by the agency cost analyst, IMRG argues, does not substantiate the reasonableness of the agency's conclusions. We disagree.

As noted above, while PBGC's original report to our Office included only its cost evaluation report which indicated the conclusions reached, the agency later also provided the contemporaneous cost evaluator's workpapers and underlying documentation supporting those conclusions. Randstad's cost proposal set forth its proposed direct labor rates by labor category. The complete record reflects that the agency cost evaluator then compared Randstad's proposed direct labor rates with the offeror's current direct labor rates for the very individuals that Randstad was now proposing to employ for the contract here. Finding that in each instance Randstad's proposed labor rates were higher than those it was currently paying to the same employees, the agency reasonably concluded that the proposed direct labor rates were realistic. Similarly, the agency compared Randstad's proposed indirect rates with the offeror's current budgeted and prior actual indirect rates submissions and found the offeror's proposed indirect rates to be consistent with these submissions. We have no basis to find that the agency's conclusion that Randstad's proposed indirect rates were realistic ones was unreasonable.[6]

Evaluation of Technical Proposals

IMRG also protests the agency's evaluation of technical proposals. Among other things, the protester maintains that two of the perceived advantages of Randstad's proposal--its use of incumbent personnel and a superior performance monitoring plan--were not advantages at all. Rather, IMRG argues, its proposal in these specific areas was equal or superior to that of Randstad and, thus, should have received equal credit for these strengths. IMRG also contends that because the alleged technical advantages in Randstad's proposal were not meaningful, any award decision based on these perceived advantages was unreasonable. Although we do not specifically address all of IMRG's arguments regarding the agency's evaluation of technical proposals, we have fully considered each of them and find that they provide no basis upon which to sustain the protest.

Relevant to the protest here, among the RFP's technical approach subfactors was one regarding the offeror's proposed performance measurement and management program. Specifically, the solicitation required offerors to describe –all processes, tools and controls to ensure that accepted quality levels are met or exceeded and that timely and accurate reporting of performance metrics is provided to PBGC.—[7] RFP sect. M.3. Also, as to the experience and qualifications of personnel factor, the agency's evaluation was to be based on the –extent to which the offeror provides qualified and experienced personnel with relevant experience to perform this contract.— Id.

In its proposal, incumbent Randstad proposed its current workforce for both the key personnel and remaining staff positions. AR, Tab 16, Randstad Technical Proposal, at 18-32; Tab 18, Randstad Oral Presentation Slides Proposal, at 3-6. Also, with regard to the performance measurement and management program subfactor, Randstad proposed the development of a web-based –Performance Excellence Tool— to track metrics, report results, and objectively measure individual and team success. Id., Tab 18, Randstad Oral Presentation Slides Proposal, at 11, 22-24.

The TEP evaluated Randstad's proposal after its submission. The TEP found Randstad's plan to utilize the incumbent staff for the new contract to be a strength under the experience and qualifications of personnel factor. The agency evaluators also considered Randstad's development of a tool designed to monitor the work and quality assurance of work products for all staff to be a strength under the technical approach and management plan factors. Id., Tab 27, TEP Report, at 2-3.

IMRG's proposal also planned to utilize the incumbent Randstad workforce for both the key personnel and other staff positions. IMRG represented that, since its inception, the company had transitioned 98 percent of incumbent employees, and established a goal of capturing 98 percent of the incumbent workforce here.[8] Id., Tab 20, IMRG Technical Proposal, at 5; Tab 23, IMRG Oral Presentation Slides Proposal, at 3. IMRG also proposed, with regard to the performance measurement and management program subfactor, the use of its existing web-based PAR! Tool to reflect the RFQ's quality assurance surveillance plan and evaluate the contractor's performance against the required services and performance standards. Id., Tab 23, IMRG Oral Presentation Slides Proposal, at 7.

The TEP considered IMRG's PAR! tool and quality monitoring program generally to be a strength under both the technical approach and management plan factors. Also, the agency evaluators expressly recognized IMRG's stated goal of capturing 98 percent of the incumbent workforce, and considered the offeror's plan to utilize many of the incumbent staff as a strength under the experience and qualifications of personnel factor. Id., Tab 27, TEP Report, at 4-5.

After completing its evaluation of each offeror's proposal, the TEP found Randstad's proposal to be technically superior to that of IMRG. The evaluators concluded that the largest difference between the proposals was with regard to the experience and qualifications of personnel factor, and that Randstad's proposal was superior because: (1) it utilized mostly incumbent personnel; (2) added a Performance Control Manager as well as an impressive individual to fill that role; (3) proposed an experienced Assistant Project Manager; and (4) planned staffing levels of [DELETED] people (by comparison, IMRG's staffing level was [DELETED] FTEs). Id. at 5. The contracting officer subsequently adopted the TEP's findings and conclusions as the basis for her cost/technical tradeoff determination. Id., Tab 29, Source Selection Decision, at 5.

In reviewing an agency's evaluation, we will not reevaluate offerors' proposals; instead, we will examine the agency's evaluation to ensure that it was reasonable and consistent with the solicitation's stated evaluation criteria and applicable procurement statutes and regulations. Urban-Meridian Joint Venture, B-287168, B-287168.2, May 7, 2001, 2001 CPD para. 91 at 2. An offeror's mere disagreement with the agency's evaluation is not sufficient to render the evaluation reasonable. Ben-Mar Enters., Inc., B-295781, Apr. 7, 2005, 2005 CPD para. 68 at 7. Our review of the record here shows that the agency's evaluation of proposals was unobjectionable.

IMRG argues that the agency improperly judged Randstad's performance monitoring plan, based on a developmental monitoring tool, as superior to IMRG's performance monitoring plan which employed a monitoring tool already in use. Comments at 8-10. We disagree. As a preliminary matter, the record clearly indicates that the TEP was aware that IMRG was proposing an existing performance monitoring tool while Randstad was proposing a developmental performance monitoring tool. Contrary to IMRG's assertion, the agency did not find Randstad's performance monitoring plan superior to IMRG's. Rather, the agency evaluators considered Randstad's and IMRG's monitoring plans to be equivalent strengths under the applicable evaluation factors. Moreover, the agency did not consider Randstad's monitoring tool to be a discriminator between the two offerors' proposals when making its determination of technical superiority. IMRG essentially argues that the agency should have given more weight to an area in which it had a perceived advantage over Randstad. This amounts to mere disagreement with the agency's evaluation of proposals, which does not make the evaluation unreasonable. See Ben-Mar Enters., Inc., supra.

IMRG also argues that the agency improperly judged Randstad's proposal as superior as to the experience and qualifications of personnel factor when IMRG also proposed the use of incumbent personnel. We find no merit to the protester's assertion here. As set forth above, the TEP considered each offeror's proposed use of the incumbent Randstad workforce to be an evaluation strength. Nonetheless, when determining the relative technical merits of the offerors' proposals, the TEP properly considered the fact that Randstad currently employed the incumbent workforce, while IMRG had merely established a stated goal of capturing 98 percent of the incumbent workforce. It is reasonable, we think, for an agency to distinguish between the actual existing situation (i.e., that Randstad currently employs the incumbent workforce) and what an offeror proposes to accomplish. Moreover, the fact that the TEP considered both offerors' planned use of the incumbent Randstad workforce to be strengths does not preclude the evaluators from recognizing that the offeror's proposals were not in fact equal in this regard.

Past Performance Evaluation

IMRG also protests the agency's evaluation of its past performance. Of foremost concern, the protester contends that the evaluation was unreasonable because of PBGC's failure to consider as relevant various past performance references provided by IMRG in its proposal. IMRG argues that had the agency properly evaluated its past performance, it would have received a rating that was equal to or greater than that received by Randstad. Again, although we do not here specifically address all of IMRG's arguments, we have fully considered each of them and find that they provide no basis upon which to sustain the protest.

The RFP required offerors to provide at least three references evidencing past performance during the last 3 years that was –the same as, or substantially similar to— the services described in the PWS here. RFP sections L.8, M.3. Among the past performance information deemed relevant by the solicitation and which offerors were required to provide were the dollar value and length of prior contract efforts. Regarding the agency's evaluation of past performance, the RFP also informed offerors that, –[w]hen discussing previous Government and/or private sector projects similar to that proposed, provide sufficient detail to convince evaluators of the relevance of the skills and objectives involved.— Id., sect. M.3.

IMRG's proposal contained five past performance references. These were: (1) a $19.9 million contract with PBGC for audit support services (of defined benefit pension plans); (2) a $40.9 million contract with PBGC for pension administration support services; (3) a $92,000 contract with the Centers for Disease Control (CDC) Foundation for financial management and stipend administration services (four personnel, in support of an 8-month epidemiological study); (4) a $3 million contract[9] with the Office of the Comptroller of the Currency (OCC) for support services (–[t]o date, our services have included . . . Senior Librarian, Technical Writer/Editor, Information Technology, and Administrative support services—); and (5) a $2,817,343 contract with the Environmental Protection Agency (EPA) for –communication center— (photocopying, shipping and receiving, supplies, ergonomic supplies, and mail) services. AR, Tab 20, IMRG Technical Proposal, at 7-18; Tab 38, IMRG Past Performance References.

As part of its evaluation of IMRG's past performance, the TEP first considered the relevance of each of the offeror's references. The agency evaluators concluded that IMRG's first two past performance references were relevant (i.e., the same as or substantially similar) to the requirements in the PWS here. By contrast, the TEP determined that, based on the size and scope of the work involved, IMRG's remaining three references were not relevant to the contract being awarded, and gave no weight to these references. The TEP then considered the quality of IMRG's past performance for those references deemed relevant when determining the offeror's past performance evaluation rating. AR, Tab 27, TEP Report, at 5.

Where a solicitation requires the evaluation of offerors' past performance, we will examine an agency's evaluation to ensure that it was reasonable and consistent with the solicitation's evaluation criteria and procurement statutes and regulations. The MIL Corp., B-297508, B-297508.2, Jan. 26, 2006, 2006 CPD para. 34 at 10. When made applicable by the solicitation, we review a past performance evaluation to determine the similarity or relevance of the past performance information considered by the agency. Continental RPVs, B-292768.2, B-292768.3, Dec. 11, 2003, 2004 CPD para. 56 at 9; CMC & Maint., Inc., B-292081, May 19, 2003, 2003 CPD para. 107 at 3. A protester's mere disagreement with the agency's judgment does not establish that an evaluation was improper. See, e.g., Clean Harbors Envtl. Servs., Inc., B-296176.2, Dec. 9, 2005, 2005 CPD para. 222 at 3. As detailed below, our review of the record leads us to conclude that PBGC's past performance evaluation was unobjectionable.

As a preliminary matter, the agency evaluators properly considered the relevance of each of IMRG's past performance references before deciding what, if any, weight to give it. See Chenega Tech. Prods., LLC, B-295451.5, June 22, 2005, 2005 CPD para. 123 at 6. Further, the agency's decision not to consider relevant the offeror's CDC Foundation, OCC, and EPA references was reasonable. As set forth above, the current solicitation involves a wide range of professional pension benefit administration support services, estimated at more than $22 million over 4 years and involving at least [DELETED] personnel. By contrast, the CDC Foundation reference was a $92,000, four-person contract for financial management and stipend administration services for an 8-month period. Likewise, IMRG's OCC and EPA references involved support services (i.e., librarian, technical writer/editor, information technology, and administrative support services) and communication center services (i.e., photocopying, shipping and receiving, supplies, mail), respectively.[10] Quite simply, the agency reasonably determined that IMRG's references here were not similar in scope and/or size to the current solicitation.

IMRG does not dispute the size and scope of its past performance references. The protester instead argues that at least four of its past performance references (presumably all but the CDC Foundation reference) were comparable in size and scope to the work described in the current solicitation. Comments at 8-9. IMRG fails to show, however, how the services in its past performance references were the same as, or substantially similar to, those described in the PWS. In sum, IMRG's argument amounts to mere disagreement with the agency's judgment and, thus, does not establish that the past performance evaluation was unreasonable. See Ben-Mar Enters., Inc., supra.

IMRG's Allegations of Agency Bias

IMRG alleges that the agency lacked impartiality towards it during the procurement process. In support thereof, the protester points to an internal PBGC email message written approximately 9 months prior to the issuance of the RFP, where the agency's chief administrative officer and procurement department director requested that planned contract awards to IMRG be first brought to their attention. Protest, exh. 1, PBGC e-mail regarding IMRG Awards, Apr. 5, 2007. Based on this email message, IMRG contends the PBGC personnel interfered with the agency's regular procurement process and imposed undisclosed, contractor-specific, selection criteria on the offeror.

Government officials are presumed to act in good faith; we will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or supposition. Saturn Landscape Plus, Inc., B-297450.3, Apr. 18, 2006, 2006 CPD para. 70 at 3; Pride Mobility Prods. Corp., B-292822.5, Dec. 6, 2004, 2005 CPD para. 72 at 5. Further, where a protester alleges bias, it not only must provide credible evidence clearly demonstrating a bias against the protester or for the awardee, but also must demonstrate that this bias translated into action that unfairly affected the protester's competitive position. ABIC Ltd., B-286460, Jan. 12, 2001, 2001 CPD para. 46 at 7-8; Advanced Scis., Inc., B-259569.3, July 3, 1995, 95-2 CPD para. 52 at 17.

IMRG has furnished no evidence to support its allegations here; it merely infers bias based on its assumption that the request for a higher-level review of planned contract awards improperly skewed the entire procurement process against IMRG. Further, the record indicates that neither of the PBGC employees mentioned in the e-mail message on which IMRG relies entirely as its proof of bias played a part in either the evaluation of offerors' proposals or the source selection process. Contracting Officer's Statement, May 19, 2006, at 1. The record also indicates that most TEP members were completely unaware of this e-mail message; one member knew of the e-mail's existence. We conclude that IMRG has presented no evidence that the identified individuals were motivated by bias against it, or that any alleged bias was in some way translated into prejudicial action. Finally, as discussed above, our review of the record shows that the source selection decision was supported by the record and in accord with the selection criteria.

The protest is denied.

Gary L. Kepplinger
General Counsel