Burke Consortium, Inc.

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release.

Decision

Matter of: Burke Consortium, Inc.

File: B-407273.3; B-407273.5

Date: February 7, 2013

DIGEST

1. Protest of an agency’s price evaluation is denied where the agency reasonably concluded that an awardee’s lower-priced proposal was realistic and consistent with its highly-rated technical proposal.

2. Protest that an agency should have assigned lower past performance ratings to awardees that submitted less than the required number of past performance questionnaires is denied where, consistent with solicitation’s evaluation criteria, the agency reasonably evaluated offerors’ past performance based upon information in their proposals as well as from other available sources.

3. Protest of an agency’s selection decisions is denied where, consistent with the solicitation’s evaluation criteria, the agency found qualitative differences in the protester’s and awardees’ proposals and reasonably concluded that the protester’s higher-priced proposal did not provide the best value to the government.

Burke Consortium, Inc., of Alexandria, Virginia, protests the Department of Homeland Security’s (DHS) decision not to award Burke a contract under request for proposals (RFP) No. HSHQDC-11-R-10001 for information technology services. The protester challenges the agency’s technical evaluation of its proposal, as well as the agency’s price and technical evaluations, and source selection, of a number of awardees’ proposals.

We deny the protest.

BACKGROUND

The RFP provided for multiple awards of indefinite-delivery/indefinite-quantity contracts for the second generation of the agency’s enterprise acquisition gateway for leading-edge solutions (EAGLE II) program, under which fixed-price, cost reimbursement, time and materials, or labor hour task orders for department-wide information technology services will be issued for a 5-year base period and a single 2-year option period. See RFP at 2; Statement of Work (SOW) at 10.[1] The RFP had an unrestricted and a small business set-aside track, and provided for a manageable number of contract awards under each track. RFP at 2, 108.

The SOW identified three functional categories for which an offeror could be selected for award, and advised offerors that they could only submit a proposal for one of these functional categories.[2] SOW at 10. This protest concerns the agency’s selection for award,[3] under the small business set-aside track and functional category 3, of eight offerors, including Gnostech Inc. of Warminster, Pennsylvania, TestPros, Inc. of Sterling, Virginia, and the Mason Harriman Group of Towaco, New Jersey.

Offerors under the small business set-aside track were informed that awards would be made on a best value basis considering price and the following non-price factors, stated in descending order of importance: corporate experience, past performance, program management, and staffing. Id. at 109-10. The non-price factors, when combined, were significantly more important than price. Id. at 110.

Detailed instructions were provided for the preparation of proposals under each evaluation factor. Id. at 88-107. With respect to price proposals, offerors were instructed to propose fully-burdened hourly ceiling rates for 3,024 labor categories for on and off-site personnel with varying levels of security clearances and capabilities. See id. at 103; attach. L-1, Pricing Tables. These rates were required to include all direct labor costs, indirect costs (such as fringe benefits, overhead, and general and administrative costs), and profit. See RFP at 103. Offerors were also required to propose indirect ceiling rates for materials, subcontracts, and other direct costs (ODCs) for all performance periods.[4] Id. at 104.

The RFP stated that an offeror’s evaluated price would be calculated based on the total prices over the entire performance period for all labor rates, materials, subcontracts, and ODCs. Id. at 111-12. Offerors were advised that prices would be evaluated for reasonableness and realism, and that unrealistically low prices may indicate an offeror’s inability to understand requirements and a high-risk approach to contract performance. See id. at 105, 111.

As relevant here, with regard to the past performance factor, offerors were instructed to provide past performance information for five recent, relevant contracts, task orders, and/or subcontracts, that were directly related to the services required under the functional category. See id. at 98-99. This information was to include a brief narrative statement for each reference and a completed questionnaire submitted by each reference for each contract, task order, or subcontract cited. Id. at 99. In this regard, offerors were informed that they were responsible for ensuring that each reference received, completed, and submitted the questionnaire directly to the agency’s contracting officer. See id. Offerors were advised that failure to receive a questionnaire would result in the reference not being considered, but that the agency may, at its discretion, consider a reference if the offeror demonstrated an earnest attempt to collect the required information. See id. Moreover, the agency reserved the right to contact references and obtain past performance information from a variety of sources, including government agencies. See id. at 100, 110. The RFP stated that past performance would be evaluated to assess the level of confidence in the offeror’s ability to successfully perform in delivering high quality service and solutions within the proposed functional category. Id. at 110.

With regard to the staffing factor, offerors were required to provide resumes for a project manager and a teaming coordinator that describe their respective qualifications. Offerors were also required to provide a plan for recruiting, training, and retaining qualified personnel with appropriate security clearances. Id. at 101. The RFP stated that the agency would evaluate the extent to which the proposed program manager and teaming coordinator were qualified for their respective roles, and the extent to which the offeror’s plan demonstrates a sound approach to recruiting, training, and retaining qualified/secured personnel. Id. at 110-11.

The agency received proposals from 30 offerors, including the protester, Mason Harriman, Gnostech, and TestPros. Burke’s proposal, and those of the eight awardees, were evaluated as follows:[5]

AR, Tab 34(B), Source Selection Evaluation Board (SSEB) Report, addendum, at 13; Tab 40, Pre-award Notice, at 2.

Technical proposals were evaluated by the agency’s technical evaluation panel (TEP). As relevant here, Gnostech’s rating of excellent under the past performance factor reflected the TEP’s high level of confidence and little or no doubt that Gnostech could successfully perform the contract and deliver high quality services and solutions. See AR, Tab 35, Technical Evaluation Report, append. 2, at 48. The TEP noted that it received completed past performance questionnaires from three of Gnostech’s references, including the Department of the Navy, Space and Naval Warfare Systems Command (SPAWAR).[6] The TEP assessed strengths for all three references, including the reference from SPAWAR, all of which rated Gnostech’s past performance superior in all respects and indicated that they would do business with the offeror again. Id. at 51. Moreover, the TEP identified 18 entries in the Past Performance Information Retrieval System (PPIRS) for Gnostech, with ratings from satisfactory to exceptional.[7] Id. at 50. The TEP noted as a weakness under this factor that Gnostech only provided a narrative for four of its five past performance references. Id. at 49.

Burke’s rating of good under the staffing approach factor reflected the TEP’s judgment that Burke proposed a sound approach with several salient features, which indicated a thorough understanding of program goals, resources, schedules and other aspects essential to program performance. See id. at 76. In particular, the evaluators noted as strengths Burke’s proposed program manager and teaming coordinator, and its training and retention plan. See id. at 76-77. The evaluators also found, however, that Burke’s recruitment approach was basic and indicated an understanding of program goals, resources, and schedules that satisfied the minimum requirements, but did not exceed them. Id. at 77.

TestPros’ rating of superior under the staffing approach factor reflected the TEP’s judgment that TestPros proposed an approach that demonstrated an exceptionally thorough and comprehensive understanding of program goals, resources, schedules, and other aspects essential to program performance. Id. at 162. The evaluators noted as strengths TestPros’ proposed program manager and teaming coordinator, and its recruitment, training, and retention approaches, which the evaluators also found exceeded overall solicitation or program requirements.[8] See id. at 162-63.

Price proposals were evaluated by the agency’s business management and price evaluation panel (PEP). The panel compared each offeror’s total evaluated price to the average of all offerors’ prices and to the independent government cost estimate (IGCE) for the procurement.[9] The PEP also compared offerors’ proposed ceiling rates to the average of all offerors’ rates for the same labor category. See AR, Tab 36, Price Evaluation Report, at 3-6; appends. 3-5. As relevant here, the panel found that Gnostech submitted the lowest total evaluated price, 40 percent below the average evaluated price and 42 percent below the IGCE, and that 25 percent of Gnostech’s ceiling rates were 50 percent or more below the offerors’ average rates. See id. at 7-8. The PEP stated that, based upon its “preliminary responsibility determination” no issues were found with respect to Gnostech’s financial ability to perform. See id. at 8. The PEP recommended, however, given Gnostech’s comparatively low price and labor rates, that Gnostech’s technical proposal be further evaluated to ensure that its low price did not reflect a lack of understanding of the requirements or pose a risk to the agency.[10] See id. at 6-7.

The technical and price evaluations were reviewed by the SSEB. See AR, Tab 34(A), SSEB Report, at 4; Tab 34(B), SSEB Report, addendum, at 4. The SSEB conducted a price realism assessment of Gnostech’s proposal to ensure that its price was not unrealistically low. See AR, Tab 34(A), SSEB Report, at 22-23. In this regard, the SSEB reviewed the PEP’s evaluation of Gnostech’s price, labor rates, and preliminary responsibility determination, as well as the TEP’s evaluation of the firm’s corporate experience, past performance, proposed program management, and proposed staffing approach. Id. at 21-23. The SSEB also compared Gnostech’s rates to two incumbent EAGLE contractors, finding that Gnostech’s ceiling rates were, on average, 18 to 53 percent below the contractors’ rates for the same or similar labor categories.[11] See id. at 22.

The SSEB found that, although hiring of incumbent personnel would likely prove difficult for Gnostech at its proposed ceiling rates, Gnostech had presented sufficient evidence of its capability to staff positions and recruit personnel from other internal and external resources. Id. at 23. Moreover, according to the SSEB, any risk to DHS in that regard could be mitigated through the task order proposal process, which would further permit the agency to ascertain the firm’s ability to perform and staff the required work. See id. The SSEB concluded that, although Gnostech’s low ceiling rates may present some performance risk, the firm’s experience providing similar services and proven past performance demonstrated its understanding of the requirements. Id. The SSEB also concluded that Gnostech’s lower rates appeared to reflect the firm’s business decision or possibly its low overhead structure. Id. The SSEB found that Gnostech’s price and ceiling rates were realistic. See id.

The SSEB conducted a cost/technical tradeoff analysis, by first sorting proposals by non-price evaluation ratings and identifying the highest technically rated proposals, and then considering price and non-price factors. See AR, Tab 34(B), SSEB Report, addendum, at 6. The SSEB documented its cost/technical tradeoff analysis with detailed narrative analyses comparing the most highly-rated proposals. See AR, Tab 34(A), SSEB Report at 10-48. With regard to Burke’s proposal, the SSEB compared it to the highest and the lowest priced proposals that were among the eight most highly technically rated proposals. See id. at 23-25. Although the SSEB did not find the protester’s price to be unreasonably high, unlike the PEP,[12] the SSEB concluded that Burke’s proposed price could not be justified by any derived benefits when compared to several of the most highly-rated proposals, all of which had significantly lower evaluated prices. See id.

The SSEB recommended that small set-aside awards for functional category 3 be made to eight offerors (cited in the table above), but not to Burke. See AR, Tab 34(B), SSEB Report, addendum, at 12-14. The source selection authority for the procurement reviewed the TEP, PEP, and SSEB reports, and agreed with the SSEB’s recommendation. See AR, Tab 27, Source Selection Decision, at 1-7.

Burke was advised that it had not been selected to receive an award. This protest followed.

DISCUSSION

Burke challenges DHS’s evaluation of Gnostech’s price and past performance, as well as the agency’s evaluation of its and TestPros’ staffing approaches. The protester also contends that DHS’s selection decisions, which were based upon these evaluations, were unreasonable. We have considered all of the protester’s arguments, and although we only discuss the primary ones, we find that Burke’s arguments merely reflect the protester’s disagreement with the agency’s evaluation and selection decisions, and offer no basis to sustain the protest.

Gnostech’s Price Realism

The protester challenges the agency’s price evaluation, arguing that DHS failed to reasonably consider the realism of Gnostech’s low price and ceiling labor rates. Protester’s Comments & Supp. Protest at 15-18. Burke argues that the SSEB merely repeated the TEP’s evaluated ratings without conducting an integrated review of whether Gnostech’s significantly lower price reflected the awardee’s understanding of the contract requirements. See id. at 17-18. In this regard, the protester notes that the SSEB acknowledged that Gnostech’s low ceiling rates presented a performance risk and were inconsistent with retention of incumbent personnel, which, according to Burke, is a significant part of Gnostech’s staffing plan. See id. at 15, 18; Protester’s Supp. Comments at 22. Burke contends that the SSEB, without analysis, only speculated that Gnostech’s lower labor rates reflected the firm’s business decision or low overhead structure. Protester’s Comments & Supp. Protest at 20; Protester’s Supp. Comments at 20-26.

The agency responds that the SSEB conducted a detailed realism analysis, noting that the SSEB considered the firm’s financial condition, financial ratios, and the TEP’s evaluation of Gnostech’s technical proposal. See Supp. AR at 9. DHS states that, although the SSEB found that Gnostech’s low rates presented some performance risk, the SSEB reasonably concluded that Gnostech’s proven experience and past performance demonstrated the offeror’s understanding of the project, including its staffing requirements. See id. at 14. Moreover, to the extent that the protester complains that the agency did not investigate Gnostech’s overhead structure, the agency points out that offerors proposed fully-burdened ceiling labor rates, and did not provide detailed breakdowns of those rates. Id. at 14, 16-17. The agency also disputes Burke’s assertion that hiring incumbent personnel was central to Gnostech’s staffing approach, and states that Gnostech’s primary staffing plan was to use its internal employees.[13] See id. at 15. DHS points out in this regard that, as the SSEB noted, Gnostech submitted a good staffing plan that focused on using its internal resources. See id. at 16.

Where, as here, a solicitation provides for a price realism evaluation, we will review an agency’s price realism analysis to determine whether it was reasonable and consistent with the terms of the solicitation. Smiths Detection, Inc.; Am. Sci. & Eng’g, Inc., B-402168.4 et al., Feb. 9, 2011, 2011 CPD ¶ 39 at 17. The nature and extent of an agency’s price realism analysis are matters within the agency’s discretion. Star Mountain, Inc., B-285883, Oct. 25, 2000, 2000 CPD ¶ 189 at 6.

Based on our review of the record, we find that the agency’s price evaluation, including its realism assessment of Gnostech’s proposed price and ceiling rates, was reasonable and consistent with the RFP’s stated evaluation criteria. In accordance with the RFP, the agency assessed whether offerors’ low prices or rates indicated a lack of understanding or performance risk. In this regard, DHS’s price realism analysis was consistent with price analysis techniques provided in FAR § 15.404-1(b)(2), which include comparison with other prices received under the solicitation and comparison of proposed prices with IGEs. As we describe above, the PEP compared each offeror’s total evaluated price to the others received, as well as to the median prices, to identify outlier (high or low) pricing that indicated a lack of understanding of the work requirements or that otherwise provided performance risk to the agency.

With respect to Gnostech, the SSEB examined the firm’s low price and ceiling rates in light of the evaluation of the firm’s technical proposal. Contrary to the protester’s arguments, the SSEB’s review entailed more than “merely parroting the technical ratings,” see Protester’s Supp. Comments at 15, but also included an assessment of the underlying technical merit of Gnostech’s proposal. In this regard, the SSEB found that Gnostech’s proven experience and past performance, as well as its staffing resources and financial condition, demonstrated both the firm’s understanding and its capability to perform. Although Burke disagrees with this assessment, it does not show that the agency’s judgment was unreasonable.

Past Performance

Burke also protests DHS’s past performance evaluation, complaining that the agency should not have assigned favorable past performance ratings to offerors, such as Gnostech, that did not have five completed past performance questionnaires. See Protester’s Comments & Supp. Protest at 30-32; Protester’s Supp. Comments at 31-40. In this regard, the protester states that, contrary to the RFP’s explicit terms, nothing in the record indicates that these awardees made the requisite, earnest attempt to collect the missing questionnaires.[14] See Protester’s Supp. Comments at 38. The protester contends that the agency should have assigned lower past performance ratings in this regard, because, for these firms, the agency did not have all the past performance information required by the RFP.[15] See id. at 31.

The evaluation of an offeror’s past performance, including the agency’s determination of the relevance and scope of an offeror’s performance history, is a matter of agency discretion, which we will not find improper unless it is inconsistent with the solicitation’s evaluation criteria. National Beef Packing Co., B-296534, Sept. 1, 2005, 2005 CPD ¶ 168 at 4; see MFM Lamey Group, LLC, B-402377, Mar. 25, 2010, 2010 CPD ¶ 81 at 10. The evaluation of experience and past performance, by its very nature, is subjective; we will not substitute our judgment for reasonably based evaluation ratings, and an offeror’s mere disagreement with an agency’s evaluation judgments does not demonstrate that those judgments are unreasonable. Glenn Def. Marine-Asia PTE, Ltd., B-402687.6, B-402687.7, Oct. 13, 2011, 2012 CPD ¶ 3 at 7.

The RFP here instructed offerors to identify five references, provide a narrative statement for each one, and seek completed questionnaires. The RFP also warned that, if a completed questionnaire was not received by the agency, DHS would generally not consider that reference. See RFP at 99. However, the RFP explicitly informed offerors that the agency would also evaluate an offeror’s past performance based upon information in its proposal, as well as information from other sources. Id. at 100, 110.

In this regard, the agency’s evaluation of offerors’ past performance, including Gnostech’s, was based, as we discuss above, not only on questionnaires received, but on PPIRS evaluations and offerors’ descriptions of their relevant contract, task order, or subcontract experience. The TEP’s assignment of evaluation ratings, and of strengths and weaknesses in this area, was supported by extensive narrative discussions. In this respect, the TEP noted as a weakness that Gnostech provided only four narratives for its five past performance references. See AR, Tab 35, Technical Evaluation Report, append. 2, at 49. Although Burke disagrees with the TEP’s evaluation ratings, it has not identified any aspect of its past performance that establishes that Burke’s proposal should have been found superior to the proposals submitted by other offerors--nor does Burke challenge the relevance of Gnostech’s or other awardees’ past performance.

Instead, Burke essentially seeks a mathematical or mechanical consideration of the number of weaknesses assessed against the offerors. However, our Office has repeatedly rejected such arguments. See Wackenhut Servs., Inc., B-400240, B-400240.2, Sept. 10, 2008, 2008 CPD ¶ 184 at 7 (rejecting protester’s attempt to engage in a mathematical or mechanical comparison of the number of significant strengths in protester’s and awardee’s proposals); see also Nippo Corp., B-402363.2, May 5, 2010, 2010 CPD ¶ 112 at 5; Master Lock Co., LLC, B-309982.2, June 24, 2008, 2009 CPD ¶ 2 at 10; Medical Dev. Int’l, B-281484.2, Mar. 29, 1999, 99-1 CPD ¶ 68 at 9; Opti-Lite Optical, B-281693, Mar. 22, 1999, 99-1 CPD ¶ 61 at 5. The essence of an agency’s evaluation is reflected in the evaluation record itself, not the adjectival ratings. Stateside Assocs., Inc., B-400670.2, B-400670.3, May 28, 2009, 2009 CPD ¶ 120 at 8. We see no basis in these arguments for concluding that the agency’s evaluation was improper.

Staffing Approach

The protester argues that it should have received a higher rating under the staffing factor. Protest at 12-13. Burke asserts that its rating was inconsistent with its assessed strengths, as well as with the firm’s superior corporate experience and program management ratings. Id. Moreover, according to the protester, Burke proposed a recruitment approach that was “virtually identical” to the one proposed by TestPros, which received a superior rating under the staffing factor. Protester’s Comments & Supp. Protest at 33-36. The protester argues that the TEP should have assessed its proposal as superior, which the protester believes would have increased its chance for receiving an award. Id. at 36.

The agency responds that it conducted a detailed and thorough analysis of Burke’s staffing proposal that clearly explained why the firm received a rating of good under that factor. AR at 10. The agency also points out that the staffing factor is qualitatively distinct from the corporate experience and management approach factors and that, in any event, the protester does not identify which strengths under those factors were allegedly inconsistent with the agency’s evaluation under the staffing factor. Id. at 8-10.

In reviewing protests challenging the evaluation of proposals, we do not conduct a new evaluation or substitute our judgment for that of the agency but examine the record to determine whether the agency’s judgment was reasonable and in accord with the RFP evaluation criteria. Abt Assocs. Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD ¶ 223 at 4.

The record here shows that the agency reasonably evaluated the relative merits of Burke’s and TestPros’ staffing approaches and assessed strengths, weaknesses, and ratings in a fair and impartial manner consistent with the RFP. Here, as described above, the RFP provided for the evaluation of the qualifications of offerors’ proposed program manager and teaming coordinator, and the extent to which offerors’ staffing plans demonstrate a sound approach to recruiting, training, and retaining qualified/secured personnel. Id. at 110-11. For both Burke and TestPros, the TEP assessed the level of experience of their proposed program managers and teaming coordinators, the firms’ recruitment methods and staff resources, and their training and employee certification requirements. See AR, Tab 35, Technical Evaluation Report, at 76-77, 162-63. While Burke disputes the precise number of strengths assessed by the TEP in that regard, there is no legal requirement 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 Applied Tech. Sys., Inc., B-404267, B-404267.2, Jan. 25, 2011, 2011 CPD ¶ 36 at 9; see also Wackenhut Servs., Stateside Assocs., supra. Based on our review of the record, we find that the protester’s arguments reflect only its disagreement with the agency’s judgments, but do not afford a basis to sustain Burke’s protest.

Best Value Determination

Finally, Burke protests DHS’s selection decisions, asserting that the agency’s tradeoff analysis was flawed because it was based on evaluations that, according to the protester’s arguments described above, were unreasonable. Protest at 13-15. The protester also argues that DHS’s best value determination was inconsistent with the RFP’s stated basis for award and the relative weight of the evaluation criteria, because, according to the protester, the agency failed to consider whether Burke’s technically superior proposal justified its higher price. See Protester’s Comments & Supp. Protest at 42-43.

Selection officials have considerable discretion in making price/technical tradeoff decisions. American Material Handling, Inc., B-297536, Jan. 30, 2006, 2006 CPD ¶ 28 at 4. The propriety of the cost/price-technical tradeoff decision does not turn on the difference in the technical scores or ratings per se, but on whether the selection official's judgment concerning the significance of the difference was reasonable and adequately justified in light of the RFP's evaluation scheme. Johnson Controls World Servs., Inc., B-289942, B-289942.2, May 24, 2002, 2002 CPD ¶ 88 at 6.

As discussed above, there is no merit to Burke’s objections to the agency’s technical and price evaluations. Thus, there is no basis to question the agency’s reliance upon those evaluation judgments in making its source selections. We also find that the agency reasonably considered the merits of the firms’ proposals based upon the firms’ respective evaluated strengths, weaknesses, and deficiencies. In this regard, the agency reasonably determined that Burke’s proposal was not worth the price premium over other offerors’ similarly rated, but significantly lower-priced proposals.

The protest is denied.

Susan A. Poling
General Counsel