Wyle Laboratories, Inc.

B-407784: Feb 19, 2013

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Wyle Laboratories, Inc., of Lexington Park, Maryland, protests the issuance of a task order to Imagine One Technology & Management, Ltd., of Colonial Beach, Virginia, under task order request for proposals (RFP) No. N00024-11-R-3521, issued by the Department of the Navy, Naval Air Warfare Center Aircraft Division, for program management and engineering services. Wyle argues that the agency's evaluation of offerors' proposals and subsequent source selection decision were improper.

We deny the protest.

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: Wyle Laboratories, Inc.

File: B-407784

Date: February 19, 2013

John A. Burkholder, Esq., and David J. Ginsberg, Esq., McKenna Long & Aldridge LLP, for the protester.
Alex D. Tomaszczuk, Esq., Evan D. Wesser, Esq., and Clare M. Cavaliero, Esq., Pillsbury Winthrop Shaw Pittman LLP, for Imagine One Technology & Management, Ltd., an intervenor.
Theresa M. Francis, Esq., and Amy N. Hanson, Esq., Department of the Navy, for the agency.
Louis A. Chiarella, Esq., and Sharon L. Larkin, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest of agency’s technical evaluation is denied where record shows evaluation was reasonable and consistent with the stated evaluation criteria.

2. Protest challenging agency’s cost realism evaluation of awardee’s proposal is denied where the record demonstrates that agency’s conclusions were reasonable; the mere fact that awardee’s proposed costs were lower than the protester’s and the government estimate does not make them unrealistic.

3. Protest that the agency treated offerors disparately regarding a subcontractor’s organizational conflict of interest is denied where the record does not support the protester’s allegations.

4. Protest that agency improperly changed the stated basis for award from best value to low cost/technically acceptable is denied where the record reflects that the agency found protester’s slight technical advantage did not outweigh awardee’s significant cost advantage.

DECISION

Wyle Laboratories, Inc., of Lexington Park, Maryland, protests the issuance of a task order to Imagine One Technology & Management, Ltd., of Colonial Beach, Virginia, under task order request for proposals (RFP) No. N00024-11-R-3521, issued by the Department of the Navy, Naval Air Warfare Center Aircraft Division, for program management and engineering services.[1] Wyle argues that the agency’s evaluation of offerors’ proposals and subsequent source selection decision were improper.

We deny the protest.

BACKGROUND

PMA-231 is the Navy program office responsible for the overall management of E-2 and C-2 weapons system acquisition.[2] It provides direction, control, and integration of program efforts involving the procurement and modification efforts of E-2/C-2 weapon systems for both the Navy and foreign customers. RFP at 12.

The RFP, issued on March 1, 2012, contemplated the issuance of a cost-plus-fixed-fee task order for a 1-year base period together with two 1-year options. The solicitation’s “performance-based statement of work” stated that the contractor was to provide various services in support of the production, upgrades, and deliveries of the E-2 and C-2 aircraft and weapon systems. Id. at 13. The solicitation also stated that the contractor was to provide approximately 144 full time equivalents (FTE) in specified labor categories, at both Navy and contractor locations, to support the PMA-231 program office in carrying out its mission. Id. at 44, 95.

The RFP established three evaluation factors in descending order of importance: technical; past performance; and cost.[3] Id. at 112. The technical factor in turn consisted of three subfactors, also in descending order of importance: understanding of the work; workforce; and management plan. Id. The solicitation informed offerors that the technical factor was more important than the past performance factor, and the noncost factors, when combined, were significantly more important than cost. Id. Task order issuance was to be made to the offeror whose proposal represented the “best value” to the government, all factors considered. Id. at 112, 117.

Wyle and Imagine One submitted task order proposals by the April 2 closing date. An agency technical evaluation team (TET) evaluated offerors’ proposals under the technical factor using an adjectival rating system that was set forth in the solicitation: outstanding; good; acceptable; marginal; and unacceptable.[4] A separate cost evaluation team (CET) evaluated (but did not score) the cost proposals.

After performing its initial evaluation, the Navy decided to establish a competitive range consisting of the Wyle and Imagine One proposals. The agency then held one round of discussions, followed by the offerors submitting their final proposal revisions (FPR) by July 27. The final evaluation ratings and costs for the Wyle and Imagine One proposals were as follows:

Factor

Wyle

Imagine One

Technical

Understanding of the Work

Outstanding

Outstanding

Workforce

Good

Acceptable

Management Plan

Good

Good

Overall

Good

Good

Past Performance

Substantial Confidence

Substantial Confidence

Proposed Cost

$88,416,993

$62,299,384

Evaluated Cost

$88,932,685

$65,865,248

Agency Report (AR), Tab 13, Task Order Recommendation Panel Report, at 1.

The Navy evaluators also documented the various findings they made in support of the ratings (and evaluated costs) assigned to offerors’ proposals. AR, Tab 11, Final TET Report; Tab 12, Final CET Report for Imagine One; Tab 36, Final CET Report for Wyle.

A Navy task order review panel (TORP) reviewed the technical and cost evaluation findings and recommended to the Navy source selection authority (SSA) that the task order be issued to Imagine One. AR, Tab 13, TORP Report, at 1-11. On October 11, the SSA reviewed the evaluation findings and recommendations and concluded that the technical advantages possessed by Wyle under the workforce subfactor did not outweigh Imagine One’s significant cost advantage ($23,067,436, or 35%), and that Imagine One’s proposal therefore represented the best value to the government. AR, Tab 14, Source Selection Decision, at 4-7. After providing Wyle with a debriefing, this protest followed.

DISCUSSION

Wyle’s protest raises numerous issues regarding the Navy’s evaluation of offerors’ proposals. The protester alleges that the agency’s evaluation of Wyle’s technical proposal was improper. Wyle also contends that the Navy’s cost realism review of Imagine One’s proposal was unreasonable. The protester also contends that the Navy treated offerors disparately regarding a subcontractor’s organizational conflict of interest (OCI). Lastly, Wyle alleges that the Navy’s source selection determination was improper.[5] We have fully considered all of Wyle’s arguments and find that they provide no basis to sustain the protest.

Technical Evaluation of Wyle

Wyle protests the Navy’s evaluation of its technical proposal. Specifically, the protester alleges that its proposal should have received an outstanding rating rather than a good rating under the workforce and management plan subfactors, as well as an outstanding technical rating overall.[6]

The RFP stated that, for the workforce subfactor, the agency would evaluate an offeror’s proposed personnel to determine their labor qualifications (e.g., education, experience, security clearance levels), together with how well the team was suited to perform the required tasks. RFP at 113. With regard to the management plan subfactor, the solicitation stated that the Navy would evaluate the extent to which the proposed processes and procedures would ensure successful accomplishment of the required tasks. Id. The RFP also included the technical evaluation rating scheme. Relevant to the protest here, a good rating was defined as, “[p]roposal meets requirements and indicates a thorough approach and understanding of the work. Proposal contains strengths which outweigh any weaknesses. Risk of unsuccessful performance is low.” Id. at 115. By contrast, an outstanding rating was defined as, “[p]roposal meets requirements and indicates an exceptional approach and understanding of the work. Strengths far outweigh any weaknesses. Risk of unsuccessful performance is very low.” Id.

In evaluating Wyle’s FPR under the workforce subfactor, the TET identified four strengths--the extensive experience of three different senior program analysts and the offeror’s overall experience with the E-2 program--and no weaknesses or deficiencies. AR, Tab 11, Final TET Report, at 21-22. Based on these findings, the agency evaluators concluded that Wyle’s proposal indicated a thorough approach and understanding of the work and that the risk of unsuccessful performance was low; thus, the proposal warranted a rating of good. Id. at 21. Likewise, under the management plan subfactor, the TET found two strengths--an experienced program management support team and the offeror’s commercial purchasing procedures--and no weaknesses or deficiencies in Wyle’s proposal, and the evaluators again concluded that a good rating was appropriate.[7] Id. at 23-24. Based on all subfactor ratings, the TET rated Wyle’s technical proposal as good overall. Id. at 16.

Wyle does not dispute the Navy’s evaluation findings regarding its proposal under the workforce and management plan subfactors; it does not argue that the agency should have identified additional aspects of its proposal as strengths. Rather, Wyle argues that its identified strengths demonstrated an exceptional approach and understanding of the work, and should have resulted in a higher, outstanding rating. Wyle also alleges that, consistent with the outstanding rating definition, its evaluated strengths far outweighed any weaknesses because no weaknesses were assessed to its proposal. Protest, Dec. 17, 2012, at 2-9. The agency argues that it reasonably assessed the quality of Wyle’s technical proposal, and that it assigned adjectival ratings consistent with the evaluators’ findings and the RFP’s evaluation rating scheme.

The task order competition here was conducted among ID/IQ contract holders pursuant to Federal Acquisition Regulation (FAR) Part 16. The evaluation of proposals in a task order competition, including the determination of the relative merits of proposals, is primarily a matter within the contracting agency’s discretion, since the agency is responsible for defining its needs and the best method of accommodating them. Optimal Solutions & Techs., B-407467, B-407467.2, Jan. 4, 2013, 2013 CPD ¶ 20 at 6. Our Office will review evaluation challenges to task order procurements to ensure that the competition was conducted in accordance with the solicitation and applicable procurement laws and regulations. Logis-Tech, Inc., B-407687, Jan. 24, 2013, 2013 CPD ¶ 41 at 5; Bay Area Travel, Inc., et al., B-400442 et al., Nov. 5, 2008, 2009 CPD ¶ 65 at 9. A protester’s mere disagreement with the agency’s judgment is not sufficient to establish that an agency acted unreasonably. STG, Inc., B-405101.3 et al., Jan. 12, 2012, 2012 CPD ¶ 48 at 7.

From our review of the record, we find that the Navy’s evaluation of Wyle’s technical proposal was reasonable. As noted above, Wyle does not dispute any of the TET’s findings (i.e., strengths, weaknesses, deficiencies) regarding its proposal under the workforce and management plan subfactors. Based on these undisputed findings, the Navy evaluators reasonably concluded on each occasion that Wyle’s proposal indicated a thorough approach and understanding of the work, that the risk of unsuccessful performance was low, and that a rating of good was warranted. We find this to be consistent with the evaluation rating scheme set forth in the RFP. There is also no legal requirement, as Wyle suggests, that an agency must award the highest possible rating, or the maximum point score, under an evaluation factor simply because the proposal contains strengths and/or is not evaluated as having any weaknesses. See, e.g., Applied Tech. Sys., Inc., B-404267, B-404267.2, Jan. 25, 2011, 2011 CPD ¶ 36 at 9; Archer Western Contractors, Ltd., B-403227, B-403227.2, Oct. 1, 2010, 2010 CPD ¶ 262 at 5. Moreover, the record demonstrates that the Navy’s evaluation of Wyle’s proposal regarding what constituted an outstanding proposal was not disparate, but consistent with its treatment of Imagine One’s proposal. Quite simply, Wyle’s belief that the few identified strengths associated with its proposal warranted an outstanding rating amounts to mere disagreement with the agency’s evaluation of proposals, which does not provide a basis on which to sustain the protest.

Cost Realism Evaluation of Imagine One

Wyle protests that the Navy failed to perform a reasonable cost realism evaluation of Imagine One’s proposal. Specifically, the protester argues that the agency failed to reasonably evaluate the cost realism of Imagine One’s direct labor rates. Wyle argues that a proper cost realism evaluation would have resulted in greater upward adjustments to Imagine One’s proposed costs, thereby decreasing the evaluated cost difference between the offerors’ proposals.

The RFP set forth, as part of the cost proposal instructions, the labor categories and labor amounts that offerors were to use when preparing their proposals (e.g., Program Manager, 960 hours). RFP at 95-97. Offerors were then to submit their direct labor rates, indirect rates (i.e., overhead, fringe benefits, general and administrative (G&A)), and fee based on the RFP’s specified labor categories and amounts. Id. at 92. Offerors were also required to submit sufficient information to adequately support their proposed direct and indirect costs. Id. Similarly, the RFP established that, as part of the cost evaluation factor, the Navy would assess the realism of each offeror’s proposal. Id. at 113. Further, “[u]nrealistically low costs or inconsistencies between the technical and cost proposals may be assessed as proposal risk and could be considered weaknesses under the technical factor. Id.

Imagine One’s cost proposal utilized the labor categories and amounts set forth in the solicitation. AR, Tab 35, Imagine One Cost Proposal, Narrative, at 2-4. When proposing current employees, Imagine One and its subcontractors submitted payroll verification demonstrating current hourly labor rates. Id.; Payroll Verification, at 9-66. Further, when proposing prospective hires, Imagine One based its labor rates on national and local salary survey data, comparisons to current employees, and input from its human resources department. Id., Narrative, at 21. Imagine One also submitted, in support of its proposed indirect rates, the offeror’s historic provisional and actual rates, as well as rates audited by the Defense Contract Audit Agency. Id., Narrative, at 8.

The CET, as part of its evaluation of Imagine One’s proposal, found that the offeror had provided certified payroll verification in support of the proposed labor rate for each current employee. AR, Tab 12, CET Report, at 4-22. The CET concluded in most instances that Imagine One’s proposed labor rates for current employees were supported and realistic. Id. at 4-6. In some instances, however, the CET concluded that, although Imagine One’s proposed labor rates were based on current salaries, the rates appeared extremely low as compared to prevailing rates. Id. at 7-22. The CET was concerned that, while the proposed individuals met RFP requirements, based on current market conditions, Imagine One would not be able to fill the positions at the proposed rates if the individuals left or were unable to work on the contract. Id. at 7. The CET then made direct labor rate adjustments based on prevailing rates. Id. at 7-22. Similarly, with regard to Imagine One’s prospective employees, the CET found most of the offeror’s proposed rates to be realistic, and made adjustments based on prevailing rates in those few instances where the labor rates were found to be unrealistic. Id. at 12-15. The CET found the indirect rates of Imagine One and its subcontractors to be realistic in light of supporting information and made no adjustments.[8] Id. at 22-32. Finally, the CET computed a total evaluated cost for Imagine One’s proposal based on the various adjustments made.

When an agency evaluates a proposal for the award of a cost-reimbursement contract, an offeror’s proposed estimated costs are not dispositive because, regardless of the costs proposed, the government is bound to pay the contractor its actual and allowable costs. American Tech. Servs., Inc., B-407168, B-407168.2, Nov. 21, 2012, 2012 CPD ¶ 344 at 5; DPK Consulting, B-404042, B-404042.2, Dec. 29, 2010, 2011 CPD ¶ 12 at 11; FAR § 15.404-1(d). Consequently, the agency must perform a cost realism analysis to determine the extent to which an offeror's proposed costs are realistic for the work to be performed.[9] 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. See Cascade Gen., Inc., B-283872, Jan. 18, 2000, 2000 CPD ¶ 14 at 8. Further, an agency’s cost realism analysis need not achieve scientific certainty; rather, the methodology employed must be reasonably adequate and provide some measure of confidence that the proposed costs are reasonable and realistic in view of other cost information reasonably available to the agency as of the time of its evaluation. See SGT, Inc., B-294722.4, July 28, 2005, 2005 CPD ¶ 151 at 7. We review an agency’s judgment in this area to see that the agency’s cost realism evaluation was reasonably based and not arbitrary. Hanford Envtl. Health Found., B-292858.2, B-292858.5, Apr. 7, 2004, 2004 CPD ¶ 164 at 8.

Wyle does not dispute that Imagine One used the labor categories and labor amounts required by the RFP, nor does Wyle dispute the Navy’s evaluation of Imagine One’s (and its subcontractors’) indirect rates, nor does Wyle dispute that Imagine One and its team members provided certified payroll records for each of the current employees proposed. Further, Wyle has not alleged or demonstrated that Imagine One’s proposed labor rates were below the prevailing market rates for the various categories and qualifications. Rather, the protester argues that Imagine One’s direct costs are unrealistic because they are significantly lower than both the IGCE and, more importantly, the costs proposed by Wyle, the 37-year incumbent contractor currently providing support to the E-2/C-2 program. Protest, Dec. 17, 2012, at 10-13. The agency argues that its cost realism evaluation was reasonable and that Imagine One’s direct labor rates were generally realistic in light of the offeror’s own circumstances.

Based on our review of the record, we find that the Navy’s cost realism evaluation of Imagine One’s proposal was reasonable. The record demonstrates that the Navy analyzed both the direct and indirect rates that Imagine One proposed as well as the sufficiency of the supporting information. As detailed above, Imagine One (and its subcontractors) provided certified payroll verification for each current employee proposed. The Navy generally determined that such certified payroll records established that Imagine One’s proposed labor rates were realistic. However, where a sizeable disparity existed between prevailing rates and proposed rates (even those supported by payroll records), the agency made adjustments based on its concern that Imagine One would not be able to attract and retain qualified replacement individuals (if necessary) at the proposed rates. The Navy also assessed the realism of Imagine One’s proposed labor rates for prospective employees, and made adjustments in each instance where the labor rates were found to be unrealistically low. Given the soundness and reasonableness of the agency’s cost realism evaluation, we reject Wyle’s contention that Imagine One’s costs were unrealistic simply because the firm’s proposed costs were lower than the IGCE and Wyle’s proposed costs.[10]

Disparate Treatment Regarding OCI

Wyle protests that the Navy treated offerors disparately regarding a subcontractor’s OCI. Specifically, the protester argues the Navy permitted Imagine One to propose J.F. Taylor, Inc., as a subcontractor here, but the Navy had previously informed Wyle that J.F. Taylor had an impermissible OCI which precluded J.F. Taylor’s participation. As detailed below, the record does not show that the Navy treated the Wyle and Imagine One disparately.

The relevant facts are as follows: In 2010, in response to other task order solicitations, Wyle proposed J.F. Taylor as one of its subcontractors. During the evaluation of those proposals, the Navy raised an OCI concern: one of J.F. Taylor’s proposed employees, who had been performing technical and advisory assistance services for the Navy, had been privy to the IGCE and other solicitation documents and had likely played a significant role in the creation of the IGCE. AR, Tab 16, Navy Letter to Wyle, Sept. 23, 2010. The contracting officer subsequently determined that J.F. Taylor’s participation was prohibited by the OCI clause in the task order under which the employee had performed (which had a 3-year “cooling off” period). AR, Tab 19, Navy Letter to Wyle, Oct. 26, 2010. In response, Wyle elected to replace all J.F. Taylor personnel with Wyle personnel in its proposals. AR, Tab 20, Wyle Letter to Navy, Nov. 16, 2010.

In September 2011, prior to the issuance of the solicitation here, J.F. Taylor inquired of the contracting officer whether it would be able to participate in the subject procurement; it was J.F. Taylor’s understanding that the OCI involving its employee affected only its ability to participate in the earlier solicitations. AR, Tab 21, J.F. Taylor Letter to Navy, Sept. 20, 2011. The ensuing exchange led the contracting officer to conclude that the previous OCI determination did not preclude J.F. Taylor’s participation as either a prime or subcontractor in the upcoming subject procurement, although an OCI mitigation plan would be required. AR, Tab 24, Navy Memorandum Regarding J.F. Taylor OCI Determination, Feb. 13, 2012. The contracting officer then informed J.F. Taylor of the same. AR, Tab 25, Navy Letter to J.F. Taylor, Feb. 13, 2012.

The RFP here was issued on March 1, 2012, and Imagine One proposed J.F. Taylor as one of its subcontractors. J.F. Taylor included an OCI mitigation plan with its subcontractor proposal; the Navy reviewed the plan and concluded that Imagine One’s proposed use of J.F. Taylor did not result in an impermissible OCI. AR, Tab 28, Navy Memorandum Regarding J.F. Taylor OCI Determination, July 11, 2012.

Wyle does not dispute the Navy’s determination that neither Imagine One, nor its proposed subcontractor J.F. Taylor, has an impermissible OCI in the procurement here. Rather, the protester argues that Navy treated offerors disparately: Wyle operated under the assumption that it could not propose J.F. Taylor as a teammate under the subject solicitation, while in fact the Navy allowed Imagine One to propose J.F. Taylor as a subcontractor. Protest, Dec. 17, 2012, at 16. The Navy argues that it treated both firms equally, and that its determination that J.F. Taylor was precluded from competing on previous occasions has no relevance to the present procurement.

We find no merit in Wyle’s assertion of disparate treatment. In 2010, the Navy determined that J.F. Taylor’s OCI prohibited its participation in other procurements, regardless of who proposed the company. In 2012, the Navy determined that J.F. Taylor’s previous OCI did not preclude its participation in the subject procurement, regardless of who proposed the company. The fact that Wyle mistakenly assumed that it could not propose J.F. Taylor as a teammate under the subject solicitation does not constitute disparate treatment on the part of the agency.[11]

Cost/Technical Tradeoff

Lastly, Wyle protests the Navy’s source selection determination. Specifically, in addition to challenging the underlying evaluation of proposals, the protester argues that the agency improperly converted the basis for issuing the task order here from best value to lowest-cost, technically acceptable. Protest, Dec. 17, 2012, at 17.

Source selection decisions must be documented, and include the rationale for any business judgments and cost/technical tradeoffs made or relied upon by the SSA. General Dynamics Info. Tech., Inc., B-406059.2, Mar. 30, 2012, 2012 CPD ¶ 138 at 4; see FAR § 15.308. However, there is no need for extensive documentation of every consideration factored into a tradeoff decision. See Terex Gov’t Programs, B-404946.3, Sept. 7, 2011, 2011 CPD ¶ 176 at 3. Rather, the documentation need only be sufficient to establish that the agency was aware of the relative merits and costs of the competing proposals and that the source selection was reasonably based. Id.

As the record demonstrates here, the SSA received an extensive preaward briefing describing the respective strengths and weaknesses of both offerors. AR, Tab 13, TORP Report, at 1-11. In comparing the proposals, the SSA’s award determination summarized these strengths and weaknesses. In considering the features of the technical proposals, the SSA stated that she found the proposals to be relatively equal except for the workforce subfactor, where Wyle’s proposal was superior to that of Imagine One’s proposal. Id. at 4. The SSA concluded, however, that the slight technical advantage of Wyle’s proposal did not outweigh the significant cost advantage of Imagine One’s proposal. Id. at 5-7. From the discussion in source selection decision, it is clear the SSA made a qualitative assessment of the technical proposals as part of her award determination. There is no basis to conclude that this determination was inconsistent with the solicitation’s best value methodology.

The protest is denied.

Susan A. Poling
General Counsel



[1] Although the solicitation here was captioned as an RFP, the Navy was in fact seeking task order proposals from business concerns holding SeaPort-e indefinite-delivery/indefinite-quantity (ID/IQ) contracts in the Navy’s Zone 2, National Capital region. RFP at 2. We adopt the Navy's terminology throughout the decision.

[2] The E-2 Hawkeye is the Navy’s carrier-based tactical battle management airborne early warning and command and control aircraft. The C-2 Greyhound provides logistics support to the Navy’s Carrier Strike Groups by transporting high-priority cargo, mail, and passengers between carriers and shore bases.

[3] The RFP referred to this factor as “cost/price,” although the Navy acknowledges that no part of the task order being awarded was fixed-price in nature. For ease of reference we will refer to it simply as the “cost” evaluation factor throughout our decision.

[4] A separate adjectival rating system was employed for offerors’ past performance proposals: substantial confidence; satisfactory confidence; limited confidence; no confidence; and for offerors without a record of relevant past performance, unknown confidence/neutral.

[5] Wyle also protested that the Navy’s evaluation of Imagine One’s past performance was unreasonable. Protest, Nov. 13, 2012, at 11-12. Wyle subsequently withdrew this protest ground. Protest, Dec. 17, 2012, at 1-2.

[6] Wyle also protested that the Navy used an unstated evaluation criterion as part of its technical evaluation by considering cost savings. Protest, Dec. 17, 2012, at 3-4. In support thereof, Wyle cites to the language in the SSA’s tradeoff analysis that the cost savings associated with various Wyle technical strengths were not quantifiable. See AR, Tab 14, Source Selection Decision, at 4. We find this issue to be untimely insofar as it was raised more than 10 days after Wyle knew or should have known of the basis of protest from documents provided by the Navy in advance of the filing of its agency report. 4 C.F.R. § 21.2(a)(2) (2012). Moreover, we find no merit in Wyle’s assertion as it was in the SSA’s cost/tradeoff analysis and not the agency’s technical evaluation report where cost savings was mentioned.

[7] By comparison, Imagine One’s rating of good under the management plan subfactor was based on three strengths and no weaknesses or deficiencies, while Wyle’s rating of outstanding under the understanding of the work subfactor was based on seventeen strengths and no weaknesses or deficiencies. AR, Tab 11, Final TET Report, at 16-20; Tab 13, TORP Report, at 4.

[8] The CET also considered that Imagine One’s direct and indirect costs were significantly below the independent government cost estimate (IGCE)--which was based primarily on the costs of the incumbent contract with Wyle--but found them nonetheless realistic. Id. at 33-41; AR, Tab 2, Declaration of Navy Contracting Officer’s Representative, Dec. 6, 2012.

[9] The end product of a cost realism analysis is the total estimated cost that the agency realistically expects to pay for the offeror’s proposed effort, as it is the estimated cost and not the offeror's proposed cost that must be the basis of the agency’s source selection determination. Magellan Health Servs., B-298912, Jan. 5, 2007, 2007 CPD ¶ 81 at 13 n.13.

[10] We also find no merit in Wyle’s related assertion that the adjustments to Imagine One’s cost proposal should have resulted in the Navy downgrading the awardee’s technical evaluation. As set forth above, the solicitation stated that unrealistically low costs, or inconsistencies between the technical and cost proposals, could be considered a weakness under the technical factor. RFP at 113. Here the protester has not alleged any inconsistencies between Imagine One’s technical and cost proposals, and the $3.6 million (about 6%) adjustment to Imagine One’s proposal was solely the result of changes to direct labor rates (not labor amounts). Given the size and type of the adjustments to Imagine One’s cost proposal, we find reasonable the Navy’s decision not to downgrade Imagine One’s technical proposal.

[11] Wyle essentially argues the Navy was required to disclose to it that J.F. Taylor was not precluded from participating in the procurement here. We are unaware of any legal duty that required the Navy to disclose to offerors, or to Wyle specifically, J.F. Taylor’s eligibility to compete for this procurement. Wyle’s reliance on J.F. Taylor as a subcontractor on a prior, unrelated procurement did not create a duty on the Navy to disclose the firm’s eligibility to compete here.

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