Vectrus Systems Corporation

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:  Vectrus Systems Corporation

File:  B-412306.2; B-412306.3

Date:  January 6, 2017

DIGEST

1.  Agency reasonably evaluated protester’s proposal as technically unacceptable on the basis of the agency’s determination that protester’s approach to performing the solicitation’s munitions requirements did not demonstrate an acceptable understanding of those requirements. 

2.  Agency conducted meaningful discussions with protester where agency repeatedly led protester into the areas of its proposal that needed to be addressed in order for the proposal to be evaluated as technically acceptable.

3.  Agency’s most probable cost adjustment to protester’s proposed cost/price does not provide a basis to sustain the protest where agency reasonably concluded that protester’s proposal was technically unacceptable.

Vectrus Systems Corporation, of Colorado Springs, Colorado, protests the Department of the Air Force’s elimination of Vectrus’s proposal from consideration for award under request for proposals (RFP) No. FA4890-15-R-0004 to provide support for the Air Force’s pre-positioned war reserve material (WRM) program.  Vectrus protests that the agency’s technical evaluation was unreasonable; that the agency failed to conduct meaningful discussions; and that the agency’s most probable cost adjustment to Vectrus’s proposed cost/price was improper. 

We deny the protest.

BACKGROUND

In July 2015, the agency issued solicitation No. FA4890-15-R-0004 to provide WRM program support for deployed forces.[1]  Under the solicitation, the contractor will be responsible for WRM storage, maintenance, outload, reconstitution, exercise and contingency logistics, as well as maintenance, repair and minor construction for government furnished facilities and property.  AR, Tab 4, Performance Work Statement (PWS), at 5.  To aid offerors in preparing their proposals, the solicitation included certain level-of-effort information, but did not require offerors to propose any particular level of manhours or FTE (full time equivalent) personnel.[2]  Instead, the solicitation required offerors to “[p]rovide organizational charts that are site specific and broken down to the functional level” to demonstrate how they intended to perform the solicitation requirements.  AR, Tab 5, RFP, at 131. 

The solicitation provided that award would be made on a lowest price technically acceptable (LPTA) basis and established the following evaluation factors:  technical,[3] past performance, and price.[4]  RFP at 144.  Under the technical factor, the solicitation established four subfactors:  program management; operations and maintenance; exercise/contingency logistics support; and infrastructure management and mission support.  Id. at 145-48.  The solicitation provided that proposals would be evaluated as acceptable or unacceptable under each subfactor, and stated that an evaluation of unacceptable with regard to any subfactor would render the proposal technically unacceptable.  Id. at 144.  Finally, the solicitation contemplated award for a base-year period, with seven 1-year option periods, and one 6-month extension period, for a total estimated value of $629 million.  AR, Tab 2, Source Selection Plan, at 4; Contracting Officer’s Statement/Memorandum of Law (COS/MOL), Oct. 31, 2016, at 4. 

On or before the October 21, 2015 closing date, proposals were submitted by several offerors, including Vectrus.  The initial proposals were evaluated and the agency established a competitive range that included Vectrus.  Thereafter, the agency engaged Vectrus in multiple rounds of discussions--many of which focused on Vectrus’s proposed approach to staffing the contract. 

Specifically, on April 18, the agency initiated discussions with Vectrus, providing an evaluation notice (EN) that stated: 

[Vectrus’s] proposed site specific organizational chart does not demonstrate an effective approach to how each site will be able to perform WRM program baseline activities, sustainment, reconstitution and refurbishment of WRM resources activities, and support LRC [logistics readiness center] tasks at each site at all times.  Proposed manpower numbers seem significantly low, particularly for munitions, vehicles, AGE [aerospace ground equipment] and BEAR [basic expeditionary airfield resources].  Because of the significant use of [redacted] there is potential performance risk in the event [redacted]. 

Please demonstrate how you will be able to perform [the required activities] . . . based on your proposed manpower and overcome potential performance risk in your organizational structure. 

Protest, attach. D, EN No. Tech1-001, at 1.

Vectrus responded on May 2, making various revisions to its staffing approach, including an increase to its overall manning levels. 

On June 16, the agency sent Vectrus another EN that summarized Vectrus’s revisions, noted that Vectrus’s responses with regard to staffing were inconsistent with its organization chart, and further stated: 

The updated proposal still appears significantly low for vehicles, munitions, and AGE.  Because of the significant use of [redacted], there is a potential performance risk in the event [redacted].

Please demonstrate how you will be able to perform [the required tasks] . . . based on your proposed manpower. . . .  Additionally, please provide a breakout (by FTE) of baseline support and both exercises (CLIN 7) and LRC’s/Recons[titution] (CLIN 8) positions to enable evaluation of CLIN 7 & 8 manpower estimates.  Please ensure that all proposed volumes reflect the proposed approach.

Protest, attach. D, EN No. Tech1-001a.

On June 24, Vectrus responded by again increasing the number of total proposed FTEs and stating that “shifts are expanded to [redacted].”  Protest, attach. D, Vectrus Response to EN Tech1-001a, at 2.  Vectrus summarized its proposed approach by asserting:  “The foundation of Vectrus’s approach is flexibility.”  Id.

On July 13, the agency sent Vectrus another EN, which again summarized Vectrus’s revisions and stated: 

[Vectrus’s] proposed staffing still remains significantly low considering all the baseline, contingency and LRC requirements and the LOE [level of effort] that was provided in the RFP.  The offeror has not provided any significant information in their technical approach that shows any innovation that would satisfy the Government in accepting the risk of having a small workforce.

Please provide more details regarding your innovative processes that will allow you to execute all baseline and contingency/exercise operations by minimally executing a waiver request, with the proposed manning structure, particularly in AGE, BEAR, FSE [fuels support equipment], and Munitions. . . .

Protest, attach. D, EN No. Tech1-001b. 

On July 18 Vectrus responded, listing various “initiatives” such as [redacted].  Protest, attach D, Vectrus Response to EN Tech1-001b, at 2.

On July 26, the agency sent Vectrus yet another EN, stating:

[Vectrus] does not meet the minimum requirement of the solicitation.  [Vectrus] is still relatively low for Munitions personnel, especially at Al Udeid [Air Base in Qatar], our largest Munitions site.  Although [Vectrus] increased their number to [redacted] FTE at Al Udeid, in their overall approach, they have [redacted] that they have postured under the Munitions branch.  In the Operational Air Force, [redacted] are not the same as Munitions Systems personnel (2W0XX). 

Please clarify how you intend on utilizing [redacted] under the Munitions branch.

Protest, attach. D, EN No. Tech1-001c, at 1. 

On July 28, Vectrus responded by stating that it proposed to “share resources between [redacted] and munitions.”  Protest, attach. D, Vectrus Response to EN Tech1‑001c, at 2.  In this regard, Vectrus asserted that [redacted], and represented that Vectrus would [redacted].  Finally, Vectrus again concluded:  “Flexibility is the key to our WRM solution.”  Id.

On August 2, the agency sent Vectrus its final EN, expressing disagreement with Vectrus’s position that [redacted] and munitions personnel were interchangeable--specifically noting that the solicitation included differing certification requirements for munitions, [redacted], and [redacted] personnel.  Protest, attach. D, EN No. Tech1‑001d, at 1; see RFP appendix M.  The agency’s final EN stated: 

[Vectrus’s] response does not meet the minimum requirement of the solicitation.  [Vectrus] states that they have added an additional [redacted] Munitions personnel to their proposal.  They have shifted [redacted] individuals from Thumrait, and Al Dhafra to Al Udeid for a total of [redacted] Munitions and [redacted] personnel at Al Udeid alone.

    *     *     *     *     *

Please re-evaluate your proposed manning structure specifically for Munitions, and [redacted]. 

Failure to correct or fully explain your munitions proposal inadequacy may result in your proposal being eliminated from further consideration.  Request you exercise extreme caution in responding to subject EN as the Government reserves the right to close discussions after the third round on this subject.

Protest, attach. D, EN No. Tech1-001d, at 1. 

On August 3, Vectrus responded, making limited changes to its proposed staffing approach, asserting without explanation that “[o]ur personnel will meet or exceed certification requirements,” and repeating its mantra: “Flexibility remains key to our WRM solution.”  Protest, attach. D, Vectrus Response to EN No. Tech1-001d, at 2. 

Thereafter, the agency evaluated Vectrus’s proposal as unacceptable, stating:

Following four (4) rounds of discussions and evaluation of five (5) EN responses, [Vectrus] still does not meet the minimum requirement of the solicitation.  They provided an update in their manning for Munitions, increasing their Munitions personnel to [redacted] total program wide and just [redacted] at Al Udeid, which is clearly inadequate for the largest and busiest Munitions Storage Area on the program, both in total stored munitions and projected level of effort.  Based on their technical approach, their proposed number of munitions personnel poses a significant concern for the Government; additionally, it is well below the Government’s estimate without demonstrating any processes or innovations to support their proposed manning.  No offeror proposing under 90 munitions FTEs would be considered acceptable.  With constant movement of munitions in theater where AFCENT [Air Force Central Command] WRM prepositioned munitions are utilized to support all operations in theater, across Services and various MAJCOMs [major commands], this poses a risk where operations could potentially fail because the manpower is not sufficient which is not a risk that the Government can accept.  Additionally, inadequate manning also poses a safety risk, where potentially work schedules will be extended to [redacted] shifts to meet mission requirement.  Potentially the limited personnel could cause [] safety issues if they are on extended hours and [have] not received the appropriate “crew rest” break between shifts[,] additional risks that as a Government we could not accept.  [Vectrus] continued to state they would utilize [redacted] personnel to augment the Munitions function, particularly at Al Udeid and claimed [redacted]; however, per the Government’s munitions subject matter expert, the [redacted] have separate and distinct qualifications/certifications and the [redacted].  No other offeror proposed [redacted] and Munitions personnel and this approach would not be considered acceptable unless an offeror provided details that these personnel were fully certified in [redacted].  It appears that [Vectrus] does not have a comprehensive understanding of what the WRM program entails or the scope of operations supported by the AFCENT WRM Munitions functional community.

AR, Tab 17, Proposal Analysis Report, Aug. 31, 2016, at 139-40 (emphasis in original).

On September 12, the agency notified Vectrus that its proposal was technically unacceptable and would not be further considered, stating:  “your Program Management (Munitions and [redacted]) approach does not demonstrate an adequate understanding of the requirements.”  AR, Tab 19, Agency Letter to Vectrus, at 1.  This protest followed. 

DISCUSSION

Vectrus asserts that the agency’s technical evaluation of Vectrus’s proposal was flawed; that the agency failed to conduct meaningful discussions; and that the agency’s cost realism evaluation was improper.  As discussed below, we find no merit in any of Vectrus’s protest allegations.[5]

Technical Evaluation

First, Vectrus challenges the agency’s determination that Vectrus’s proposal failed to “demonstrate a comprehensive understanding of the nature and scope of work,” as required by the solicitation.  See RFP at 144.  Specifically, Vectrus asserts that the agency was required to evaluate its proposed approach to meet the solicitation’s munitions requirements as technically acceptable, asserting that the agency “mechanically applied” undisclosed “historical staffing numbers” and used that information as an unstated evaluation factor, failing to consider Vectrus’s “experience and individualized technical approach.”[6] Protest at 24-32, 38. 

The agency responds that it considered the historical staffing numbers and its internal government cost estimate (IGCE) in evaluating proposals, but did not rely upon that information as an evaluation factor, maintaining that it properly considered each offeror’s individual approach to performing the stated requirements.  In evaluating each offeror’s approach to performing the munitions requirements, the agency states that it considered 90 FTEs as a “baseline” or “starting point” from which the agency considered the offerors’ technical approaches.[7]  Supp. AR at 10.  The agency maintains that it gave extensive consideration to Vectrus’s proposed approach to staffing and performing the munitions requirements--as reflected in the agency’s multiple requests during discussions that Vectrus provide more explanation and detail regarding its proposed approach.  Notwithstanding those repeated requests, the agency concluded that Vectrus’s responses “offered no unique processes, efficiencies or innovations” and noted that a majority of Vectrus’s “initiatives” and “innovations” were already, in fact, standard practices.  Id. at 10-11. 

Specifically, with regard to Vectrus’s intent to [redacted] and munitions personnel, the agency reiterates that the qualifications and certifications required for these [redacted] are not interchangeable, and that Vectrus’s mere assertion that its proposed personnel would be properly trained and certified was insufficient to demonstrate an acceptable understanding of the solicitation requirements.[8]  Id.

Finally, the agency notes that the solicitation clearly established that the Al Udeid Air Base in Qatar is the largest and most active munitions stockpile; that this fact was clearly communicated to offerors by the data contained in the RFP’s site-by-site listing of munitions assets and equipment, see RFP appendix G; and that the agency specifically called this fact to Vectrus’s attention during discussions.  In the agency’s judgment, Vectrus’s responses to the agency’s multiple expressions of concerns regarding its proposed approach to meeting the munitions requirements failed to demonstrate an adequate understanding with regard to munitions generally, and with regard to the Al Udeid site specifically. 

In reviewing a protest challenging an agency’s evaluation, our Office will not reevaluate proposals, nor will we substitute our judgment for that of the agency, as the evaluation of proposals is a matter within the agency’s discretion.  Computer World Servs. Corp., B-410513, B-410513.2, Dec. 31, 2014, 2015 CPD ¶ 21 at 6.  Rather, we will review the record only to determine whether the agency’s evaluation was reasonable and consistent with the stated evaluation criteria and with applicable procurement statutes and regulations.  Id.  With regard to staffing estimates, an agency may properly consider its own undisclosed estimates, provided it also considers whether an offeror’s unique approach could satisfy the requirements with differing manning levels.  See Orion Tech., Inc.; Chenega Integrated Mission Support, LLC, B-406769 et al., Aug. 22, 2012, 2012 CPD ¶ 268 at 3-4.

Here, based on our review of the entire record, we do not find the agency’s evaluation of Vectrus’s proposal unreasonable.  First, as noted above, the solicitation specifically advised each offeror that it must “demonstrate a comprehensive understanding of the nature and scope of work required,” warning that the agency “will not search for data to cure problems or address inconsistencies in an [o]fferor’s proposal.”  RFP at 144.  While Vectrus may wish, at this point, that it had been given more detailed information regarding the munitions requirements, the time for challenging the adequacy of those requirements was before it submitted its proposal.  4 C.F.R. § 21.2(a)(1).  Indeed, Vectrus’s arguments suggesting that the information in the solicitation was inadequate seem to support, rather than refute, the agency’s ultimate determination that Vectrus’s proposal did not reflect an adequate understanding of the solicitation’s requirements. 

As discussed above, the record supports the agency’s assertion that it gave extensive consideration to Vectrus’s proposed approach to performing the solicitation’s munitions requirements, repeatedly advising Vectrus that its proposed staffing was considered insufficient; specifically advising Vectrus that its reliance on [redacted] created risk; and questioning Vectrus’s reliance on [redacted] to perform those requirements.  In this regard, the evaluation record reflects the agency’s specific consideration of, and the risks the agency associated with, Vectrus’s proposal to extend work shifts to [redacted]; to treat differing [redacted] as interchangeable; and to propose staffing below the historical manning levels.  AR, Tab 17, Proposal Analysis Report, Aug. 31, 2016, at 139-40. 

As noted above, our Office will not reevaluate proposals and we will properly defer to the procuring agency with regard to substantive evaluation judgments, as it is the procuring agency that must live with those judgments.  In light of the agency’s various considerations of Vectrus’s proposed technical approach to perform the munitions requirements, and the agency’s assessment that nothing in that approach was uniquely innovative--and, indeed, that most of Vectrus’s “initiatives” reflected standard Air Force practices--we reject Vectrus’s assertion that the agency “mechanically applied” any particular manning level.  In this regard, we specifically reject Vectrus’s assertion that the agency’s evaluation statement that “[n]o offeror proposing under 90 munitions FTEs would be considered acceptable,” id. at 139, establishes that the agency failed to consider Vectrus’s particular technical approach.[9]  To the contrary, the record is replete with indications of the agency’s extensive consideration of, and rejection of, Vectrus’s munitions staffing approach--including Vectrus’s approach of extending work shifts; using [redacted] to perform the work; and proposing relatively low manning levels without identifying any particularly unique approach. 

Overall, we conclude that the agency reasonably considered Vectrus’s proposed approach to performing the solicitation’s munitions requirements, and we find no basis to question the reasonableness of the agency’s ultimate determination that Vectrus’s proposal was technically unacceptable for failing to demonstrate an acceptable understanding of those requirements.  Vectrus’s protest challenging that conclusion is denied.

Meaningful Discussions

Next, Vectrus asserts that the agency failed to conduct meaningful discussions with Vectrus.  More specifically, Vectrus asserts that the agency “failed to apprise Vectrus of the perceived inadequacies in its munitions staffing,”[10] and further maintains that “at no point . . .  did the Agency indicate that it had concerns related to the number of munitions personnel [proposed at] Al Udeid.”  Protest at 2, 34‑35.  (Underlining in original).  Vectrus also complains that the agency failed to “raise concerns with respect to certification issues in the staffing of munitions.”  Supp. Protest at 3-4. 

The agency responds that it repeatedly directed Vectrus’s attention to its proposed munitions staffing, noting the numerous times this matter was addressed in the agency’s multiple rounds of discussions with Vectrus.  COS/MOL, Oct. 31, 2016, at 28.  In short, the agency maintains that it provided multiple questions to Vectrus regarding its proposed approach for staffing the munitions requirements generally, and its staffing at Al Udeid specifically, further noting the difference between [redacted] personnel and munitions personnel.  Overall, the agency maintains that its discussions with Vectrus were more than adequate.  We agree.

Although discussions, when conducted, must be meaningful--that is, they must identify deficiencies and significant weaknesses that exist in an offeror’s proposal-- that requirement is satisfied when an agency leads an offeror into the areas of its proposal that require amplification or revision.  See, e.g., Epsilon Systems Solutions, Inc., B‑409720, B-409720.2, July 21, 2014, 2014 CPD ¶ 230 at 16.  In this regard, we have repeatedly noted that an agency is not obligated to “spoon‑feed” an offeror as to each and every item that could be revised, nor is there an obligation for agencies to conduct successive rounds of discussions until all proposal defects have been corrected.  See, e.g., ITT Indus. Space Sys., LLC, B‑309964, B-309964.2, Nov. 9, 2007, 2007 CPD ¶ 217 at 12; OMV Med., Inc., B‑281490, Feb. 16, 1999, 99-1 CPD ¶ 38 at 7.

Here, based on our review of the entire record, we find Vectrus’s assertions that the agency failed to conduct meaningful discussions quite remarkable.  Contrary to Vectrus’s assertion that the agency failed to lead Vectrus into the weak and/or deficient areas of its proposal that addressed performance of the munitions requirements, the record unequivocally establishes that the agency did so repeatedly. 

For example, as discussed above, on April 18, 2016, the agency sent Vectrus the first EN regarding its munitions staffing that stated:  “Proposed manpower numbers seem significantly low, particularly for munitions . . . .  Please demonstrate how you will be able to perform [the required activities] . . .  based on your proposed manpower.”  Protest, attach. D, EN No. Tech1-001, at 1.

On June 16, the agency sent Vectrus the second EN regarding this matter, stating: “The updated proposal still appears significantly low for . . . munitions . . . . Please demonstrate how you will be able to perform [the required tasks] . . .  based on your proposed manpower.”  Protest, attach. D, EN No. Tech1‑001a. 

On July 13, the agency sent Vectrus a third EN, stating: “[Vectrus’s] proposed staffing still remains significantly low . . . . Please provide more details regarding your innovative processes that will allow you to execute all baseline and contingency/exercise operations . . . with the proposed manning structure, particularly in . . . Munitions.”  Protest, attach. D, EN No. Tech1-001b. 

On July 26, the agency sent Vectrus a fourth EN, stating: “[Vectrus] does not meet the minimum requirement of the solicitation.  [Vectrus] is still relatively low for Munitions personnel, especially at Al Udeid, our largest Munitions site” and further noted that “[redacted] personnel . . . are not the same as Munitions Systems personnel.”  Protest, attach. D, EN No. Tech1-001c, at 1.

Finally, on August 2, the agency sent Vectrus a fifth EN, stating:  “[Vectrus’s] response [to the July 26 EN] does not meet the minimum requirement of the solicitation. . . . The certifications requirement[s] in [RFP] Appendix M for Munitions, [redacted], and [redacted] personnel are specific in the certifications that each position must obtain.  Please re-evaluate your proposed manning structure specifically for Munitions, and [redacted].  Failure to correct or fully explain your munitions proposal inadequacy may result in your proposal being eliminated from further consideration.”  Protest, attach. D, EN No. Tech1‑001d.

On this record, Vectrus’s assertions that the agency failed to lead Vectrus into the areas of its proposal that ultimately formed the basis for the agency to eliminate Vectrus from the competition are wholly without merit.  All of Vectrus’s various protests challenging the adequacy of the agency’s discussions are denied. 

Cost/Price Evaluation

Finally, Vectrus protests that the agency made a cost realism adjustment to Vectrus’s proposal, increasing its proposed cost/price of [redacted] million by [redacted] million to $543.7 million.  Protest at 36.  Vectrus asserts that the agency’s cost/price evaluation was flawed because its adjustment to Vectrus’s proposed cost/price was “based on [the agency’s] flawed Technical evaluations.”  Supp. Protest at 6. 

Since Vectrus’s assertion regarding the agency’s cost/price evaluation is based on the premise that the agency improperly evaluated Vectrus’s technical proposal as unacceptable--and, as discussed above, we have rejected Vectrus’s protest challenging the agency’s technical evaluation--Vectrus’s protest challenging the cost/price evaluation “based on” the agency’s allegedly flawed technical evaluation fails to state a valid basis for protest.  4 C.F.R. § 21.1(c)(4) and (f); see E.L. Hamm & Assocs., B-290783, B-290783.2, Sept. 30, 2002, 2002 CPD ¶ 177 at 4 (where agency properly evaluated proposal as technically unacceptable, proposal was ineligible for award even if its proposed cost was realistic). 

The protest is denied.

Susan A. Poling
General Counsel

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