Two Knights Defense, 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: Two Knights Defense, LLC

File: B-421053

Date: December 16, 2022

DIGEST

1. Agency reasonably evaluated protester’s past performance proposal, including relevancy assessments that reflected the protester’s failure to provide sufficient detail regarding its prior activities.

2. Agency was reasonable in upwardly adjusting protester’s proposed cost/price where protester failed to provide a convincing explanation regarding labor rates that were below the solicitation’s benchmark rates.

3. Agency reasonably concluded that protester’s proposal met, but did not exceed, the solicitation requirements with regard to two mission capability subfactors.

Two Knights Defense, LLC (2KD), of Huntsville, Alabama,[1] protests the Missile Defense Agency’s (MDA) award of a contract to Five Stones Research Corporation (Five Stones), pursuant to request for proposals (RFP) No. HQ0858-22-R-0002, to provide information technology (IT) services to support MDA’s mission.[2] The protester challenges the agency’s evaluation of 2KD’s proposal with regard to past performance, cost/price, and mission capability.

We deny the protest.

BACKGROUND

On December 28, 2021, the agency issued the solicitation as a small business set‑aside, seeking proposals to provide IT and cybersecurity management services,[3] and advising offerors that the agency intended to award a single, cost-reimbursement contract without conducting discussions. AR, Tab 4e, RFP § M at 3. The solicitation further provided that the source selection decision would be based on a best-value tradeoff between the following evaluation factors: mission capability, past performance, and cost/price.[4] With regard to the best-value tradeoff, the solicitation provided that past performance was more important than mission capability, and that the non-cost/price factors combined were more important than cost/price. Id. at 5.

With regard to the mission capability factor, the solicitation established four subfactors: (1) cyberspace mission support activities; (2) network operations support; (3) architecture and engineering; and (4) human capital management.[5] The solicitation provided that, under each subfactor, proposals would be assigned an adjectival rating of outstanding, good, acceptable, marginal, or unacceptable, and further stated that the agency would not roll up the subfactor ratings into an overall mission capability rating. AR, Tab 4e, RFP § M at 5‑10.

With regard to the most important factor, past performance, the solicitation permitted offerors to identify up to seven recent contracts to be evaluated,[6] and stated that the agency would: make relevancy assessments (very relevant, relevant, somewhat relevant, or not relevant) for each contract;[7] perform quality of performance assessments (exceptional, very good, satisfactory, marginal, or unsatisfactory) for prior contracts that were considered at least somewhat relevant; and assign an overall past performance rating (substantial confidence, satisfactory confidence, neutral confidence, limited confidence or no confidence) for each proposal. Id. at 13-16.

Of particular relevance to this protest, the solicitation contained a past performance information (PPI) form that offerors were required to submit for each prior contract identified in their proposals.[8] AR, Tab 3x, PPI Form. Section C of the PPI form directed offerors to “briefly describe” the scope of the prior contract and highlight the portion the offeror considered “most relevant.” Id. at 2. In contrast to the section C request for a brief description, and echoing the agency’s emphasis on the four tasks/subfactors to be evaluated under the mission capability factor, sections F, G, H, and I of the PPI form specifically directed offerors to “Illustrate how your experience on this program applies to [architecture/system engineering, network operations support, cyberspace mission support, and management, respectively].”[9] Id. at 2-3. The solicitation noted that “[t]he Government is not bound by the Offeror’s opinion of relevancy” and reminded offerors that proposals “shall include sufficient detail for effective evaluation by the Government and for substantiating the validity of stated claims.” AR, Tab 4j, RFP § L at 11, 26.

Finally, with regard to evaluation under the cost/price factor, the solicitation identified and defined various required labor categories; provided the level of effort contemplated for each category, by location and performance period; and provided applicable “benchmark” labor rates.[10] AR, Tab 4j, RFP § L at 33; Tab 3ab, Labor Categories and Benchmark Rates. Under the heading “Cost Reasonableness and Realism,” the solicitation advised offerors as follows:

NOTICE: Proposed average direct labor rates that are less than the provided benchmarks may be considered unrealistic. The Government will make cost realism adjustments to the proposed direct labor rates up to the benchmark rate unless a convincing explanation is proposed which explains in detail how the Offeror will be able to recruit and retain the current workforce at a rate lower than the benchmark. This adjustment will be reflected in the Offeror’s total evaluated price.

AR, Tab 4j, RFP § L at 31.

On or before the February 23, 2022 solicitation closing date, proposals were submitted by seven offerors, including 2KD and Five Stones.[11] Thereafter, 2KD’s and Five Stones’s proposals were evaluated as follows:

	Five Stones	2KD
Mission Capability
Cyberspace Mission Support	Outstanding	Outstanding
Network Operations	Good	Acceptable
Architecture and Engineering	Acceptable	Acceptable
Human Capital Management	Outstanding	Outstanding
Past Performance	Substantial Confidence	Satisfactory Confidence
Total Evaluated Cost/Price	$266,416,474	$239,541,626

 

AR, Tab 9, Source Selection Decision (SSD) at 4.

In evaluating past performance, the agency considered the PPIs submitted by an offeror, as well as past performance questionnaires (PPQs) and data obtained from the contract performance assessment rating system (CPARS). AR, Tab 7, Proposal Analysis Report (PAR) at 217. Consistent with the solicitation’s request that offerors “Illustrate how your experience on [each prior contract] applies to [architecture/system engineering, network operations support, cyberspace mission support, and management, respectively]),” the agency’s past performance evaluation assessed the extent to which each prior contract was relevant to each of those four tasks.[12] Id. at 216; Contracting Officer’s Statement at 6.

In evaluating the relevance of the prior contracts 2KD identified for evaluation,[13] more than half of the agency’s assessments were “not relevant” or “somewhat relevant.”[14] Id. In documenting its evaluation, the agency repeatedly noted that, while the information 2KD submitted in its PPIs made general references to, and listed total numbers of, activities that had been performed, the PPIs lacked detail regarding the specific activities and contained only a few examples. Id. at 217-28. Accordingly, the agency was frequently unable to determine whether the scope and complexity of 2KD’s prior efforts were “essentially the same” or “similar to” the tasks required under this solicitation--leading to multiple ratings of only “somewhat relevant” or “not relevant.”

Next, with regard to evaluation of 2KD’s proposal under the cost/price factor, the agency noted that two of 2KD’s minor subcontractors [redacted] proposed multiple labor rates that were lower than the benchmark rates provided in the solicitation--and that no explanation was offered for the lower rates proposed by [redacted]. With regard to [redacted], 2KD’s proposal offered the following statement:

One of the strengths of having [redacted] on this team is [redacted]. The [redacted] provides a pool of potential employees [redacted] that have been utilized to attract new hires to support the DOD [Department of Defense].

AR, Tab 5I, 2KD Cost Proposal at 6.

The agency was unpersuaded that the two subcontractors’ proposed rates were realistic, and upwardly adjusted 2KD’s total evaluated cost/price by $6,089,267 (approximately 3 percent of 2KD’s total proposed cost/price) to be consistent with the solicitation’s benchmark rates. AR, Tab 8, Cost Evaluation Report at 19.

Finally, in evaluating 2KD’s proposal under the mission capability factor, the agency assigned two strengths and no weaknesses under subfactor 1 (cyberspace mission support); no strengths or weaknesses under subfactor 2 (network operations); no strengths or weaknesses under subfactor 3 (architecture and engineering); and two strengths and one weakness under subfactor 4 (management). With regard to the weakness under subfactor 4, 2KD’s proposal stated that 2KD “proactively identifies and remediates deficient performance,” further stating that, when deficient performance is identified, 2KD will “begin [redacted]” and “test and reevaluate the individual after [redacted] hours.” AR, Tab 5d, 2KD Mission Capability Proposal at 16. The agency assigned a weakness to this aspect of 2KD’s proposal on the basis that “[redacted] hours is insufficient time to implement and execute a realistic employee improvement plan and can lead to an increase in turnover resulting in a decrease in contract performance.” AR, Tab 7, PAR at 196.

On August 9, the source selection authority (SSA) selected Five Stones for award, stating:

I recognized that [Five Stones’s] total evaluated price is approximately 10% greater than 2KD’s total evaluated price. I determined that the difference in the total evaluated price between [Five Stones] and 2KD is worth the advantages in Past Performance and the Mission Capability subfactors.

AR, Tab 9, SSD at 4.

On August 29, 2KD was notified that Five Stones had been selected for award. This protest followed.

DISCUSSION

The protester challenges the agency’s evaluation of 2KD’s proposal under the past performance factor, the cost/price factor, and the mission capability factor. As discussed below, we find no basis to sustain any of 2KD’s protest allegations.[15]

Past Performance Evaluation

First, 2KD protests the agency’s evaluation of 2KD’s proposal under the past performance factor, challenging the relevancy assessments for six of the seven contracts 2KD identified for evaluation. 2KD asserts that the assessments were “artificially low,” and challenges virtually every rating that was lower than “very relevant.” Protest at 20-34. In this context, 2KD asserts that the agency failed to consider all of the information 2KD submitted in its PPIs; maintains that the agency applied unstated evaluation criteria by requiring more detail than the terms of the solicitation contemplated; and complains that the 30-page limitation on PPIs precluded 2KD from “listing all relevant content with metrics and substantiation.” Id. at 22. Overall, 2KD asserts that, due primarily to the agency’s allegedly flawed relevancy determinations, 2KD’s proposal improperly received a “satisfactory confidence” past performance rating, rather than a “substantial confidence” rating.

While our decision here does not specifically address each and every one of 2KD’s allegations, we have considered them all and find no basis to question the agency’s multiple past performance assessments.

For example, 2KD challenges the agency’s relevancy ratings with regard to the first contract it identified for evaluation (HQ0147-17-C-0055, performed by System High Corporation), describing that contract as “essentially the predecessor” to the ITCM contract. Protest at 20. The agency’s relevancy ratings for this contract were as follows: architecture/system engineering – “relevant”; network operations – “somewhat relevant”; cyberspace mission support – “very relevant”; and management – “very relevant.” 2KD complains that the agency should have assigned ratings of “very relevant” for all four tasks (or “at least relevant” for network operations). Id. at 22. 2KD does not dispute that, in assigning a rating of “relevant” with regard to architecture/ system engineering, and “somewhat relevant” with regard to network operations, the agency’s evaluation record specifically referenced information contained in sections F and G of the PPI 2KD submitted for this contract,[16] and concluded that the activities reflected in this contract “involved similar scope and magnitude of effort and complexities” with regard to architecture/system engineering and “some” of the scope, magnitude, and complexity with regard to network operations. See AR, Tab 7, PAR at 217. Nonetheless, 2KD complains that, because the agency’s evaluation record does not expressly reference the information 2KD submitted in section C of the PPI,[17] the agency must have ignored that information in assessing both tasks. Specifically, 2KD notes that section C of the PPI advised the agency that:

[2KD] currently performs approximately 70% of the total workforce required in the TEAMS-Next ITCM SOW, and provides critical cybersecurity expertise essential for the performance of IT requirements that enables the MDA to operate in a secure and trusted environment. [2KD] conducted approximately 150 self-assessments, one for each MDA system. [2KD] supported cybersecurity equities for over 175 test events, including ground, flight, cooperative vulnerability, and penetration assessments. [2KD] facilitated the development, review, submission, and approval of 1,522 eMASS [enterprise mission assurance support service] packages, including 426 Authorization to Connect (ATC), 624 Interim Authorization to Test (IATT), Accreditation and Authorizations (A&A), and assess-only packages, and 176 System Security Plans, ensuring MDA IT systems meet cybersecurity standards.

AR, Tab 5g, 2KD Past Performance Proposal at 2-3.

Accordingly, 2KD argues that, if the agency had reasonably considered the information in section C of the PPI, it would have rated 2KD’s proposal as “very relevant” for all four of the tasks--or “at least relevant” with regard to network operations. Protest at 22.

The agency responds that it considered all of the information in the PPI form for this contract, including the information contained in section C, along with the information in sections F and G, and reasonably assigned ratings of “relevant” and “somewhat relevant” to two of the four tasks. Contracting Officer’s Statement at 5. The agency notes that in making the challenged relevancy assessments, it found that, while 2KD’s PPI made general references to its prior activities, it provided limited details or examples, see AR, Tab 7, PAR at 217-18, 220-21--despite the solicitation’s specific request to “illustrate” the relevance of an offeror’s experience, see AR, tab 3x, PPI Form at 2, and the requirement that proposals “include sufficient detail for effective evaluation by the Government and for substantiating the validity of stated claims.” See AR, Tab 4j, RFP § L at 11, 26.

GAO will examine an agency’s evaluation of an offeror’s past performance to ensure that it is reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations; however, the necessary determinations regarding the merits of an offeror’s proposal are primarily matters within the contracting agency’s discretion. Richen Mgmt., LLC, B-409697, July 11, 2014, 2014 CPD ¶ 211 at 4. The evaluation of past performance, by its very nature, is subjective, and GAO will not substitute its judgment for reasonably based evaluation ratings; further, a protester’s disagreement with the agency’s evaluation judgments, without more, does not render the judgments unreasonable. See American Envtl. Servs., Inc., B-406952.2, B-406952.3, Oct. 11, 2012, 2013 CPD ¶ 90 at 5; Smiths Detection, Inc.; Am. Sci. and Eng’g, Inc., B‑402168.4 et al., Feb. 9. 2011, 2011 ¶ 39 at 6-7.

Additionally, while procuring agencies are required to identify significant evaluation factors and subfactors in a solicitation, they are not required to identify every aspect of each factor that might be considered; rather, agencies reasonably may take into account considerations, even if unstated, that are reasonably related to or encompassed by the stated evaluation criteria. Front End Analytics, LLC, B-420024.2, B-420024.3, Feb. 2, 2022, 2022 CPD ¶ 53 at 8. An offeror has the burden of submitting a clearly written proposal, and where a proposal fails to clearly convey required information, the offeror runs the risk of an adverse agency evaluation. G.A. Braun, Inc., B-413735, Dec. 21, 2016, 201 CPD ¶ 374 at 5.

Here, based on our review of the record, we find no basis to question the agency’s multiple past performance assessments. First, we note that, while 2KD repeatedly refers to the information contained in section C of its proposal as a basis for challenging the agency’s assessments, it fails to point to any specific portion of the summary representations in that section that render the agency’s assessments unreasonable. In contrast, when discussing the positive aspects of 2KD’s proposal, the agency’s evaluation documentation repeatedly references examples of specific activities performed under the prior contract that correspond to specific portions of the ITCM’s SOW. See, e.g. AR, Tab 7, PAR at 217-18, 220‑21, 223, 226.

We also note that, while 2KD’s submission in section C asserts that under the “predecessor contract,” 2KD “performs approximately 70% of the total workforce required in the . . . ITCM SOW,” the solicitation defined a rating of “very relevant” as “essentially the same scope and magnitude of effort.” AR, Tab 4e, RFP § M at 14. Here, the record shows that the “predecessor contract” had a total value of $38.1 million, see AR, Tab 5g, 2KD Past Performance Proposal at 3, while the total evaluated cost/price of Five Stones’s and 2KD’s proposals for the ITCM contract was $266.4 million and $239.5 million, respectively. AR, Tab 9, SSD at 4.

In short, we reject 2KD’s assertion that the agency’s relevancy assessments under the “predecessor contract” were unreasonable. Similarly, based on our review of the entire record, we reject all of 2KD’s allegations regarding the agency’s past performance evaluation.

Cost/Price Evaluation

Next, 2KD protests the agency’s upward adjustment to 2KD’s cost/price, characterizing that action as “unsubstantiated and unreasonable.” Protest at 2. 2KD acknowledges that the solicitation cautioned offerors that proposed labor rates that were below the solicitation’s benchmark rates could be considered unrealistic, and specifically warned offerors that: “The Government will make cost realism adjustments to the proposed direct labor rates up to the benchmark rate unless a convincing explanation is proposed which explains in detail how the Offeror will be able to recruit and retain the current workforce at a rate lower than the benchmark.” AR, Tab 4j, RFP sec. L at 31.

As discussed above, two of 2KD’s minor subcontractors ([redacted] and [redacted]) proposed multiple labor rates that were lower than the benchmark rates. As also noted above, 2KG’s proposal offered no explanation for the rates proposed by [redacted], and offered a brief explanation regarding [redacted]’s rates, asserting that “[redacted] provides a pool of potential employees . . . that ha[s] been used to attract new hires to support the DOD.” AR, Tab 5I, 2KD Cost Proposal at 6.

2KD acknowledges that, despite the solicitation’s requirement to “explain in detail how the Offeror will be able to recruit and retain the current workforce,” the explanation it provided for [redacted]’s rates does not address workforce retention, and addresses only [redacted]’s purported “ability to attract new hires.” Protester’s Comments at 37. Nonetheless, 2KD maintains that the agency “did not review and consider, or otherwise take into account” [redacted]’s explanation. Id. at 35.

The agency responds by noting that 2KD’s proposal did not address the rates proposed by [redacted] in any way, and that [redacted]’s “general discussion” failed to constitute a convincing explanation of how 2KD would be able to successfully recruit and retain the current workforce. Contracting Officer’s Statement at 19.

When an agency evaluates proposals for a cost-reimbursement contract, an offeror’s proposed costs are not controlling since the government must pay the contractor its actual and allowable costs. See, e.g., Metro Machine Corp., B-402567, B-402567.2, June 3, 2010, 2010 CPD ¶ 132 at 6. Accordingly, a procuring agency must perform a cost realism analysis to determine the actual costs that are likely to be incurred, and adjust proposed costs as appropriate. See FAR 15.305(a)(1), 15.404-1(d). GAO’s review of an agency’s judgment in this regard is limited to considering whether the cost realism evaluation was reasonable and adequately documented. Honeywell Tech. Solutions, Inc., B-400771, B-400771.2, Jan. 27, 2009, 2009 CPD ¶ 49 at 18; Jacobs COGEMA, LLC, B-290125.2, B-290125.3, Dec. 18, 2002, 2003 CPD ¶ 16 at 26.

Here, we find no basis to question the agency’s cost realism assessment and upward adjustment to 2KD’s proposed cost/price. As noted above, the solicitation expressly warned offerors that, if an offeror proposed labor rates below the benchmark rates, those rates would be upwardly adjusted unless the offeror provided a convincing explanation of how it would recruit and retain the current workforce. First, 2KD’s proposal did not even purport to address the rates proposed by one of the two subcontractors. Further, based on our review of the entire record here, we find nothing unreasonable in the agency’s determination that 2KD’s proposal failed to provide an adequate explanation for [redacted]’s proposed rates.[18] 2KD’s protest challenging the agency’s cost realism evaluation is denied.

Mission Capability Evaluation

Finally, 2KD challenges the agency’s evaluation of 2KD’s proposal under various mission capability subfactors. First, 2KD asserts that the agency improperly assessed a weakness in its proposal under subfactor 4 (management). We find no merit in 2KD’s assertion.

As discussed above, 2KD’s proposal stated that 2KD “proactively identifies and remediates deficient performance,” elaborating that, when deficient performance is identified, 2KD will “begin [redacted]” and “test and reevaluate the individual after [redacted] hours.” AR, Tab 5d, 2KD Mission Capability Proposal at 16. The agency assigned a weakness to this aspect of 2KD’s proposal on the basis that “[redacted] hours is insufficient time to implement and execute a realistic employee improvement plan and can lead to an increase in turnover resulting in a decrease in contract performance.” AR, Tab 7, PAR at 196.

2KD protests that the weakness reflected the agency’s “incorrect reading” of 2KD’s proposal. Protest at 39. More specifically, 2KD asserts that the proposal’s reference to [redacted] hours, should have been interpreted as referring to [redacted] hours of [redacted], “split into workdays of eight hours,” rather than [redacted] consecutive hours, or [redacted] calendar days. Id.

The agency responds that it considered the plain language of 2KD’s proposal and, at best, the proposal was unclear as to the length of time the reference to [redacted] hours was intended to convey. The agency further notes that 2KD’s proposal contained no additional information clarifying the timeline. Contracting Officer’s Statement at 23. Accordingly, the agency maintains that it reasonably assessed a weakness in 2KD’s proposal.

It is well-established that an offeror has the burden of submitting a clearly written proposal, and where a proposal fails to do so, the offeror runs the risk of an adverse agency evaluation. G.A. Braun, Inc., supra at 5.

Here, we find no basis to question the agency’s assessment of a weakness in 2KD’s proposal under mission capability subfactor 4 (management). None of the explanations that 2KD has provided in its protest were reflected in the proposal it submitted. 2KD’s protest challenging the agency’s evaluation in this regard is denied.

In challenging the agency’s evaluation under the mission capability factor, 2KD also complains that the agency “overlooked multiple portions” of 2KD’s proposal that warranted strengths.[19] Protest at 36, 38. More specifically, 2KD refers to the agency’s evaluation under subfactor 2 (network operations) and subfactor 3 (architecture and engineering)--the two subfactors for which 2KD’s proposal received ratings of acceptable. Under subfactor 2, 2KD complains that its proposal should have received strengths for its proposed improvement methodology; its level of expertise; and its experience. Protest at 36-38. With regard to subfactor 3, 2KD asserts that it should have received strengths for its assessments approach and its experience. Id. at 38-39.

The agency responds that the agency did not “overlook” any aspect of 2KD’s proposal. More specifically, the agency points out that the contemporaneous evaluation record reflects the agency’s consideration of the aspects of 2KD’s proposal that allegedly warranted strengths, concluding that the proposal “met,” but did not exceed the solicitation requirements. See AR, Tab 7, PAR at 186-93. Accordingly, the agency maintains that its evaluation of 2KD’s proposal under subfactors 2 and 3 was proper.

In reviewing an agency’s evaluation, this Office will not reevalute proposals but, rather, will examine the agency’s evaluation to ensure it was reasonable and consistent with the solicitation’s evaluation criteria and procurement statutes and regulations. MicroTechnologies, LLC, B-413091, B-413091.2, Aug. 11, 2016, 2016 CPD ¶ 219 at 4‑5. An agency’s contemporaneous evaluation documentation is not required to explain why a proposal failed to receive a strength for a particular item, see Allied Tech. Grp., Inc., B-412434, B-412434.2, Feb. 10, 2016, 2016 CPD 74 at 13, and agencies should not assign strengths for aspects of proposals that merely meet the solicitation requirements. See, e.g., Building Operations Support Servs. LLC, B-407711, B‑407711.2, Jan. 28, 2013, CPD ¶ 56 at 6.

Here, we have reviewed all of 2KD’s protest allegations regarding the agency’s evaluation of 2KD’s proposal under the mission capability factor and find no basis to question the agency’s documented determination that 2KD’s proposal met, but did not exceed, the solicitation requirements under subfactors 2 and 3. 2KD’s complaints to the contrary are without merit.

The protest is denied.

Edda Emmanuelli Perez
General Counsel

 

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