Quantech Services, Inc.

Decision

Matter of: Quantech Services, Inc.

File: B-422624.10

Date: June 5, 2025

DIGEST

Protest challenging the agency’s evaluation of the awardee’s professional employee compensation plan is denied because the record demonstrates that the agency’s evaluation was reasonable and consistent with the solicitation and the requirements of Federal Acquisition Regulation provision 52.222-46.

Quantech Services, Inc., a small business located in Lexington, Massachusetts, protests the issuance of a task order to Credence Management Solutions, LLC, a small business located in McLean, Virginia, under task order request for proposal (TOR) No. 47QFPA24R0001, issued by the General Services Administration (GSA), Federal Acquisition Service, on behalf of the United States Space Force, Space Systems Command (SSC), for command staff support services. The protester challenges the agency’s evaluation of the awardee’s proposed professional employee compensation plan.

We deny the protest.

BACKGROUND

GSA issued the TOR on January 30, 2024, under the procedures of Federal Acquisition Regulation (FAR) subpart 16.5, to holders of GSA’s One Acquisition Solution for Integrated Services (OASIS) small business indefinite-delivery, indefinite-quantity (IDIQ) contract pool 5B.[1] Agency Report (AR), Tab 2, TOR amend. 0009 (hereinafter TOR) at 3; Contracting Officer's Statement (COS) at 1. The solicitation contemplated the issuance of a task order, using cost-plus-fixed-fee contract line item numbers (CLINs) for the two main CLINs and cost-reimbursable (no fee) CLINs for other direct costs and the contract access fee, with a 12-month base period and four 1‑year option periods. TOR at 4.

The agency sought proposals for advisory and assistance services to the SSC, to include acquisition, financial, and administrative capabilities to execute effective and responsive integrated program management of space-related research, development, production, and lifecycle acquisition activities. Id. at 5. The solicitation provided for the evaluation of proposals based on three factors: quality control plan (to be evaluated on a pass/fail basis), technical capability, and cost/price. Id. at 61. Award was to be made on a best-value tradeoff basis considering the latter two factors, in descending order of importance. Id. at 60. The technical capability factor included the following two elements: task order management plan and contractor experience with command staff support requirements.[2] Id. at 62-64. As relevant here, the TOR included FAR provision 52.222‑46. Id. at 44.

After the initial evaluation of proposals, in May 2024, GSA selected Credence for award. COS at 3. Thereafter, another unsuccessful offeror filed a protest at GAO. In response, the agency notified our Office of its decision to take corrective action to reevaluate proposals and make a new award decision. Tecolote Rsch., Inc., B-422624, June 20, 2024 (unpublished). As a result, our Office dismissed the protest as academic. Id.

Upon completion of the reevaluation, the agency assigned the following overall ratings to the proposals of Quantech and Credence:[3]

AR, Tab 10, Award Decision Memorandum (ADM) at 54.[4]

The contracting officer noted that both offerors received multiple strengths under the technical capability factor. Id. at 56. For the task order management plan element, the contracting officer noted that Quantech received a significant weakness; the agency did not find any weaknesses in Credence’s technical approach. Id. Given the noted strengths and lower evaluated cost of Credence’s proposal, the agency found that Credence’s proposal represented the best value and issued the task order to that firm for the total amount of $221,811,016. Id. at 55-56, 58.

The agency notified Quantech on October 17, 2024, that its proposal had not been selected for award. COS at 4. Thereafter, Quantech and two other unsuccessful offerors filed protests at GAO.[5] Quantech’s protest challenged the agency’s evaluation of proposals, including the evaluation of Credence’s proposed professional employee compensation plan. After development of the record, the GAO attorney assigned to the protest conducted outcome prediction alternative dispute resolution (ADR) with the parties, explaining that the record did not reflect that GSA had properly evaluated Credence’s proposed professional compensation plan as required by FAR provision 52.222-46. Thereafter, GSA opted to take corrective action to reevaluate cost proposals, including professional compensation plans, and either reaffirm the award to Credence or make a new best-value determination. Accordingly, GAO dismissed the protest as academic. Quantech Servs., Inc., B-422624.3, B-422624.7, Feb. 18, 2025 (unpublished decision).

As relevant here, the agency’s corrective action involved conducting an evaluation of Credence’s proposed professional compensation plan.[6] COS at 5. After the reevaluation, the contracting officer confirmed the award to Credence. Id. On February 27, 2025, the agency notified Quantech that it had not been selected for award. Id.; AR, Tab 4, Unsuccessful Offer Letter at 1. Thereafter, Quantech filed this protest with our Office.[7] Id.

DISCUSSION

Quantech argues that GSA unreasonably evaluated the awardee’s professional compensation under FAR provision 52.222-46. Comments at 1. According to Quantech, GSA “has not reasonably evaluated either element required by the professional compensation clause”--i.e., whether the total compensation is lower than incumbent compensation such that it risks continuity of support, or the realism of the total compensation.[8] Id. For the reasons discussed below, we find the protester’s arguments provide no basis to sustain the protest.[9]

Comparison to Incumbent Compensation

The protester contends that the agency’s methodology for evaluating proposed total compensation plans was flawed because the agency failed to compare the proposed compensation plans with the incumbent compensation levels as required by FAR provision 52.222-46.

As relevant here, the TOR required proposals to include a professional employee compensation plan, as prescribed in FAR provision 52.222-46. TOR at 44. The purpose of FAR provision 52.222-46 is to evaluate whether offerors will obtain and keep the quality of professional services needed for adequate contract performance, and to evaluate whether vendors understand the nature of the work to be performed. Obsidian Sols. Grp., LLC, B-416343, B-416343.3, Aug. 8, 2018, 2018 CPD ¶ 274 at 7. The provision requires that the agency evaluate an offeror’s proposed professional compensation (salaries and fringe benefits) by considering its impact on recruiting and retention, its realism, and its consistency with a total plan for compensation. FAR provision 52.222‑46(a). In addition, our Office has explained that if an agency resolicits a requirement in a follow-on procurement, FAR provision 52.222-46(b) requires the agency to compare the awardee’s proposed professional compensation to the incumbent contractor’s.[10] SURVICE Eng’g Co., LLC, B-414519, July 5, 2017, 2017 CPD ¶ 237 at 5-6.

As relevant here, the instant requirement is the consolidation of five incumbent task orders. Supp. Memorandum of Law (MOL) at 2. In conducting its evaluation, the agency concluded that the instant requirement is a new requirement, not a follow-on requirement. COS at 8; AR, Tab 11, Contracting Officer (CO) Memo for Record at 2. In making this determination, the contracting officer explained that although “this requirement is a summation of multiple prior contracts (both ongoing and expired) that have been modified, combined and restructured,” this requirement is “not a direct follow-on award.” AR, Tab 11, CO Memo for Record at 2. The contracting officer found that, “[a]s a result, [while] this does create an ability for possible incumbents working on portions of the various existing contracts to be utilized in this effort,” it “does not allow for an adequate direct side by side comparison of proposed and past rates for incumbent personnel.” Id. According to the agency, “because this is not a recompete effort with true and complete incumbent compensation data available for use in the 52.222-46 analysis, . . . the provision’s requirements for recompete procurements (and the GAO’s stated two-part analysis for such situations) are not applicable.” MOL at 10.

Quantech argues that the agency unreasonably concluded that it had “no obligation to compare proposed compensation to incumbent compensation data.” Comments at 8. The protester argues that the agency’s decision not to compare proposed and incumbent compensation do not follow from the facts it has identified and that it is unclear why the agency could not perform a side-by-side comparison with the incumbent information. Id. at 9. In the protester’s view, because the agency has access to compensation data from the prior contracts, the agency is required by the FAR to compare that information to the proposed compensation data even though the agency concluded that this was not a follow-on requirement. Supp. Comments at 3. In this regard, the protester maintains that “FAR 52.222-46 is not concerned with the label assigned by the agency to the procurement (e.g., ‘recompete,’ ‘follow-on,’ or ‘new requirement’),” but rather, “whether the effort anticipates using professional employees to perform ‘essentially the same professional work’ they performed under a prior service contract.” Id.

The agency asserts it reasonably determined that this was a new acquisition, not a follow-on or recompetition, and therefore, found that incumbent compensation data for limited aspects of the new acquisition would not be relevant for purposes of FAR 52.222-46. MOL at 9. Based on this determination, the agency argues that its evaluation properly did not compare the offerors’ proposed professional compensation with any incumbent compensation data. Id. at 11.

Based on our review, we find nothing unreasonable regarding the agency’s determination that this is a new requirement and therefore the agency was not required to consider incumbent compensation data as part of its evaluation. As referenced above, FAR provision 52.222-46(a) provides that “[r]ecompetition of service contracts may in some cases result in lowering the compensation (salaries and fringe benefits) paid or furnished” and that “[t]his lowering can be detrimental in obtaining the quality of professional services needed for adequate contract performance.” The FAR further provides that “proposals envisioning compensation levels lower than those of predecessor contractors for the same work will be evaluated” and cautions that “lowered compensation for essentially the same professional work may indicate lack of sound management judgment and lack of understanding of the requirement.” FAR provision 52.222-46(b). As noted above, our Office has found that if an agency resolicits a requirement in a follow-on procurement, FAR provision 52.222-46(b) requires the agency to compare the awardee’s proposed professional compensation to the incumbent contractor’s. SURVICE Eng’g Co., LLC, supra.

Despite the protester’s arguments to the contrary, the aspect of FAR provision 52.222‑46 that requires comparison to incumbent compensation is applicable to only a “recompetition” for “essentially the same professional work.” FAR provision 52.222‑46(a); (b). Here, the agency found that the instant requirement was not a recompetition for essentially the same work, but rather, a mixture of portions of five prior efforts that have been modified, combined, and restructured with new requirements. AR, Tab 11, CO Memo for Record at 2; COS at 8.

As the agency further explains in response to the protest, its acquisition plan lists five predecessor contracts--some of which were awarded by GSA and others by the SSC--that are blended into this requirement along with the new requirements. Supp. MOL at 2 (quoting Supp. MOL, exh. 1, Acquisition Plan at 6) (“SSC has gone through several major reorganizations and as a result this is deemed to be a new requirement and not the combining of task orders and/or efforts.”); id. at 6-7(noting that the “previous cited contracts . . . make up [only] a small subset of the totality of the work to be performed on the new requirement” as the “scope of work of [the new] requirement is expanded to include additional command staff support and services.”). The agency explains that “[e]conomies of scale and cost-savings are logically anticipated to accrue to the awardee of this much larger and higher dollar value task order” that are “likely to impact the amount and extent of compensation the awardee provides its employees as contrasted to individual smaller predecessor efforts subsumed into this task order.” Supp. MOL at 2. While Quantech disagrees with the agency, the protester has not demonstrated that the agency’s assessment was unreasonable. This protest ground is denied.

Realism Evaluation

Quantech further argues that the agency failed to properly assess the realism of Credence’s total proposed professional compensation. Comments at 6. The protester also asserts that the agency’s evaluation was insufficient to properly assess the realism of Credence’s total compensation plan (i.e., salaries and fringe benefits) because it included consideration of the “technical analyses” performed by the agency. Id. at 1.

The agency responds that it reasonably evaluated the awardee’s total compensation plan in accordance with FAR provision 52.222-46. In this regard, the agency contends that it conducted a thorough analysis of the awardee’s total compensation plan--including labor rates and fringe benefits--and reasonably found it to be realistic. The agency maintains that it reasonably used recognized, acceptable techniques for evaluating the realism of the awardee’s professional compensation under the circumstances of this acquisition. Supp. MOL at 5.

Provision 52.222-46 of the FAR calls for a cost evaluation of each offeror’s compensation plan that considers the realism of the proposed professional compensation and its impact upon recruitment and retention. Target Media Mid Atlantic, Inc., B-412468.8, Jun. 27, 2017, 2017 CPD ¶ 208 at 5. In conducting such a cost realism analysis, an agency is not required to conduct an in-depth cost analysis, or to verify each and every item in assessing cost realism; rather, the evaluation requires the exercise of informed judgment by the contracting agency. Id. Additionally, an agency’s cost realism analysis need not achieve scientific certainty; rather, the methodology employed must be reasonable and realistic in view of other cost information reasonably available to the agency as of the time of its evaluation. CSI, Inc.; Visual Awareness Techs. & Consulting, Inc., B‑407332.5 et al., Jan. 12, 2015, 2015 CPD ¶ 35 at 6. Our review of an agency’s cost realism evaluation is limited to determining whether the cost analysis is reasonably based and not arbitrary. Jacobs COGEMA, LLC, B-290125.2, B‑290125.3, Dec. 18, 2002, 2003 CPD ¶ 16 at 26.

Here, the record reflects that the agency conducted an evaluation that was reasonable, consistent with the solicitation, and in accordance with the requirements of FAR provision 52.222-46.

First, the cost/price evaluators compared the offerors’ proposed direct labor rates, broken down by standard occupational classification and labor skill level using Bureau of Labor Statistics (BLS) salary information. See AR, Tab 11, CO Memo for Record at 2; COS at 8. For this comparison, each skill level was compared to the commensurate BLS wage percentiles. Id. The evaluators then performed an impact analysis on the direct labor rates that fell significantly (more than 10 percent) below the BLS wage estimates and adjusted the questioned direct labor rates upwards to the equivalent BLS rates in order to estimate the total impact. AR, Tab 10, ADM at 47-49; Supp. MOL at 6.

Next, with regard to proposed fringe benefits, the agency analyzed the reasonableness and realism of the offerors’ proposed fringe rates by conducting a side-by-side comparison of the rates provided by each offeror.[11] COS at 11-12; AR, Tab 11, CO Memo for Record at 6 (noting that Credence’s and Quantech’s proposed fringe rates are part of their Defense Contract Audit Agency (DCAA) approved provisional billing rates and that both offerors’ proposals applied their approved fringe rates). For example, this comparison showed that Quantech and Credence proposed “[DELETED]” ([DELETED] percent for Quantech and [DELETED] percent for Credence). AR, Tab 11, CO Memo for Record at 5-6.

In addition, the contracting officer, who also served as the source selection authority for the procurement, expressly noted her consideration of Credence’s fringe benefits, including flexible paid time off, [DELETED] of vacation and [DELETED] holidays, 401(k) individual retirement account savings plan with employer matching up to [DELETED], as well as company shared premiums for healthcare and disability insurance for employees. AR, Tab 11, CO Memo for Record at 6. The contracting officer also noted that the technical evaluation team assigned Credence a strength for its hiring and retention policies, which she found supports the agency determination that Credence will be able to fulfill the contract requirements and retain the personnel necessary for successful contract performance. AR, Tab 10, ADM at 26. Based on this analysis, the agency concluded that Credence’s proposed compensation levels reflect a clear understanding of the work to be performed and the capability to obtain and keep suitably qualified personnel to meet mission objectives. AR, Tab 11, CO Memo for Record at 2.

While the protester asserts that it was improper for the agency to consider the findings from the technical evaluation in assessing the awardee’s proposed compensation plan, we find nothing unreasonable about the contracting officer’s consideration of the strength assessed for Credence’s hiring and retention policies, which the contracting officer found supports the agency’s determination that Credence will be able to fulfill the contract requirements and retain the personnel necessary for successful contract performance. We have previously found an agency’s consideration of similar findings reasonable. See e.g., Apptis Inc., B-403249, B-403249.3, Sept. 30, 2010, 2010 CPD ¶ 237 at 10-11 (finding the agency’s evaluation of realism under FAR provision 52.222‑46 reasonably relied in part on findings that the contractor’s proposal merited a strength under the recruitment and retention subfactor based on proposed excellent training benefits, tuition reimbursement for degree or certification programs, and a retention goal with an actual average well above the industry standard).

Furthermore, to the extent the protester alleges that the agency’s realism evaluation was insufficient because it did not include additional analyses, we note that the protester’s disagreement with the agency’s evaluation in this regard, without more, does not demonstrate that those judgments were unreasonable or provide a basis on which to sustain the protest. A-P-T Research, Inc., B-419459, Mar. 12, 2021, 2021 CPD ¶ 151 at 13-14. As previously referenced, our Office does not require an agency’s cost evaluation of an offeror’s compensation plan to achieve scientific certainty; rather, the methodology employed must be reasonable and realistic in view of the information reasonably available to the agency. CSI, Inc.; Visual Awareness Techs. & Consulting, Inc., supra. We find that the agency’s evaluation met this requirement here. On this record, we find no basis to sustain the protester’s challenges to the evaluation of the awardee’s proposed professional compensation.

The protest is denied.

Edda Emmanuelli Perez
General Counsel