Ruchman and Associates, Inc.

Decision

Matter of:  Ruchman and Associates, Inc.

File:  B-415400; B-415400.2; B-415400.3

Date:  January 2, 2018

DIGEST

1.  Protester's challenge to the establishment of a blanket purchase agreementon the grounds that it includes items not on the awardee's Federal Supply Schedule is denied, where the record and the agency's explanation show that the agency had a reasonable basis for its decision to accept the vendor's proposed labor categories.   

2.  Protest challenging the agency's price realism analysis is denied, where the agency evaluated the realism of proposed prices in accordance with the solicitation and was not required to conduct an in-depth analysis of vendors' labor mixes in the manner argued by the protester.

3.  Protest challenging the agency's evaluation of the protester's quotation is dismissed where the protester is not an interested party because, even if it prevails, it is not in line for selection.

Ruchman and Associates, Inc. (Ruchman), of Jessup, Maryland, a small business, protests the establishment of a blanket purchase agreement (BPA) with Information Technology Coalition, Inc. (ITC), of Alexandria, Virginia, a service-disabled veteran-owned small business, pursuant to request for quotations (RFQ) No. DJD-17-Q-0081, issued by the U.S. Department of Justice, Drug Enforcement Administration (DEA), for accounting, finance and administrative support services.  Ruchman alleges that the agency's technical, past performance and price realism evaluations were flawed, that its own quotation should have been rated acceptable, and that DEA should have rejected the awardee's and second-lowest-priced vendor's quotations as unawardable. 

We deny the protest in part and dismiss the protest in part. 

BACKGROUND

DEA issued the RFQ on May 30, 2017, using Federal Acquisition Regulation (FAR) 8.4 federal supply schedule (FSS) procedures, to small business vendors holding contracts under the FSS for professional services, special item number 520 13, complementary financial management services.  Agency Report (AR), Tab 2a, RFQ, at 2.The agency intended to establish a BPA consisting of a 1-year base period and four 1-year option periods, with an estimated value of $97,094,280.Id.The RFQ provided for selection of the responsible vendor with the lowest-priced technically-acceptable (LPTA) quotation.  Id. at 10. 

As relevant to this protest, vendors were instructed to complete a sample task order in order "to establish labor categories, fixed hourly rates for services, and a firm discount for additional labor categories appearing in the vendor's FSS."  Id. at 6.  These sample task order prices "will be compared to the Independent Government Cost Estimate (IGCE) for the Sample Task Order and evaluated pursuant to FAR 15.404-1, Proposal analysis techniques, to include, but not limited to . . . price realism (not cost realism) at the bottom line grand total."  Id. at 12.  In addition to a price evaluation, the RFQ included five non-price evaluation factors:  management/key personnel, staffing plan, task order/fiscal tracking system, security plan, and past performance.  Id. at 7-9.  Any quotation receiving a rating of unacceptable for a technical factor or past performance would receive an overall rating of unacceptable.  Id. at 10-11. 

The agency received seven quotations by the July 10 deadline.  AR, Tab 5, Contracting Officer (CO) Award Decision, Sept. 21, 2017, at 1.  ITC, Vendor A, and Ruchman were the three lowest-priced vendors.  Id. at 2.  The final evaluations, as relevant to this protest, were as follows:

Id.  On September 21, 2017, the agency selected ITC for establishment of the BPA; this protest followed. 

DISCUSSION

Ruchman contends that DEA impermissibly allowed ITC and Vendor A to propose services not included on their FSS contracts and that the agency's price realism evaluation was insufficient.  The protester also challenges the unacceptable ratings that were assigned to its own quotation.[1]  For the reasons below, the protest grounds are denied in part and dismissed in part.

As a preliminary matter, if Ruchman is only successful with regard to the challenges relating to its own quotation, it would nevertheless not be in line for selection in this LPTA procurement because there are two lower-priced vendors.  Thus, in order to prevail in this protest, Ruchman must demonstrate both that its own quotation should have been rated acceptable and that DEA's evaluation of ITC's and Vendor A's quotations was flawed.  Given these facts, we first evaluate Ruchman's challenges to the two lower-priced quotations.  As described below, these protest grounds are denied.  Because we deny Ruchman's complaints relating to the lower-priced quotations, we dismiss Ruchman's arguments regarding the unacceptable ratings assigned to its own quotation because, as addressed in more detail below, the protester is not an interested party under our Bid Protest Regulations to contest these aspects of the agency's evaluation. 

RFQ Labor Categories and ITC's FSS Schedule Contract

Ruchman contends that DEA should have rejected ITC's and Vendor A's quotations as unawardable because their FSS contracts did not contain the RFQ's exact labor categories or other categories that could perform the functions described in the RFQ.  DEA contends that the RFQ "did not require vendors to match the naming convention for each labor category but [instead] requested that offerors propose equivalent labor categories under their FSS that matched the job descriptions provided in the Statement of Work (SOW) and as specified in the RFQ."  Contracting Officer's Statement (COS) at 1-2 (record citations omitted). 

Where, as here, an agency issues an RFQ to FSS vendors under FAR subpart 8.4 and conducts a competition for the issuance of an order or establishment of a BPA, we will review the record to ensure that the agency's evaluation was reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations. Digital Sols., Inc., B-402067, Jan. 12, 2010, 2010 CPD ¶ 26 at 3-4; DEI Consulting, B-401258, July 13, 2009, 2009 CPD ¶ 151 at 2.  In reviewing a protest challenging an agency's technical evaluation, our Office will not reevaluate the quotations; rather, we will examine the record to determine whether the agency's evaluation conclusions were reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations.  OPTIMUS Corp., B-400777, Jan. 26, 2009, 2009 CPD ¶ 33 at 4.  A protester's disagreement with the agency's judgment, without more, does not establish that an evaluation was unreasonable.  DEI Consulting, supra. 

The RFQ instructed vendors to use the RFQ's sample BPA task order spreadsheet to "provide their price quote for each labor category by location for all years of the anticipated BPA."  RFQ at 6.  Vendors were instructed to "enter the name of the labor category equivalent and two rates for each labor category," consisting of the "GSA FSS contract rate" and "the rate quoted for this requirement" into the RFQ sample task order.  RFQ at 9.  The vendors completed the sample task order spreadsheet using the labor categories listed below: 

RFQ, Attach. 5.  As the table above shows, ITC, Vendor A, and Ruchman each proposed some labor categories whose titles differed from those in the RFQ.  AR, Tab 8a, ITC Price Quotation; Tab 9a, Vendor A Price Quotation; Tab 10a, Ruchman Price Quotation.  We agree with the agency that the RFQ permits vendors to propose "labor category equivalent[s]" who meet the performance specifications of the labor categories in the RFQ regardless of their exact title. [2]  This was also apparently the understanding of the vendors, none of whom proposed all of the exact labor categories in the RFQ.  Id.  For example, for a secretary III position, ITC proposed an administrative assistant II, Vendor A proposed an administrative analyst I, and Ruchman proposed a program assistant.  DEA concluded that all three quotations proposed acceptable labor categories.  AR, Tab 4, Technical Evaluation Panel (TEP) Report, at 7; Tab 5, CO Award Decision, at 2.  Given the flexibility permitted by the RFQ--and understood by the vendors--the agency's decision not to disqualify vendors on labor category title alone was reasonable. 

Ruchman also contends that several of ITC's and Vendor A's proposed labor categories did not possess skill sets corresponding to those in the RFQ and are thus outside of ITC's and Vendor A's FSS contracts.  Protester Comments at 4-8.  DEA responds that "the labor category equivalents that ITC proposed, as reasonably interpreted, either explicitly or implicitly satisfied the RFQ's requirements."  Mem. of Law (MOL) at 9.  Regarding Vendor A, Ruchman argues that this vendor simply does not have the FSS categories to satisfy several of the RFQ labor categories.  Protester Comments at 8.  DEA asserts that Vendor A "proposed equivalent labor categories under their FSS."  COS at 5. 

An agency may not use FSS procedures to purchase items that are not listed on a vendor's GSA schedule.  American Warehouse Sys., B-402292, Jan. 28, 2010, 2010 CPD ¶ 41 at 2.  Where an agency announces its intent to order from an existing FSS, all items quoted and ordered are required to be on the vendor's schedule contract as a precondition to its receiving the order.  Science Applications Int'l Corp., B-401773, Nov. 10, 2009, 2009 CPD ¶ 229 at 2 n.1; Tarheel Specialties, Inc., B-298197, B-298197.2, July 17, 2006, 2006 CPD ¶ 140 at 4; CourtSmart Digital Sys., Inc., B-292995.2, B-292995.3, Feb. 13, 2004, 2004 CPD ¶ 79 at 5.  When a concern arises that a vendor is offering services outside the scope of its FSS contract, the relevant inquiry is whether the services offered are actually included on the vendor's FSS contract, as reasonably interpreted.  AWS Convergence Techs., Inc., B-404002.2, B-404002.3, Apr. 20, 2011, 2011 CPD ¶ 95 at 7. 

While the contemporaneous record is somewhat limited, based on our review of the

record and the agency's explanation, we find reasonable the agency's decision to accept the vendors' proposed labor categories.  The record reflects no concerns regarding vendors' proposed labor categories.  AR, Tab 5, CO Award Decision, at 2. The agency compares the RFQ labor categories and those proposed by ITC and shows how ITC's proposed labor categories can be reasonably read as meeting the agency's needs.  MOL at 11-19; see also Intervenor Comments at 6-10.  For example, although Ruchman argues that "[n]othing" in ITC's data analyst description meets the computer operator II requirements for "apply[ing] standard operating or corrective procedures," the agency demonstrates the skill set overlap and highlights that a data analyst will possess considerably more education and experience than that required for the computer operator II position.  Protester Comments at 5; MOL at 18.  We agree that the functions to be performed by the computer operator II--i.e. "apply[ing] standard operating and corrective procedures"--may reasonably be viewed as encompassed within ITC's data analyst position description, of someone with 5-9 years of experience who can "[r]esolve complex problems, which require in-depth knowledge of analytic methodologies and principles."  RFQ, Attach. 1 at 11; ITC FSS Price List available at https://www.gsaelibrary.gsa.gov/ElibMain/contractorInfo.do?contractNumber=GS-00F-067GA& contractorName=INFORMATION +TECHNOLOGY+COALITION%2C+INC.&executeQuery=YES (last checked Dec. 21, 2017). 

Although the protester claims that we should give no weight to the agency's post-protest explanations, our Office generally considers such statements where the explanations merely provide a detailed rationale for contemporaneous conclusions and fill in previously unrecorded details, so long as the explanations are credible and consistent with the contemporaneous record.  Arrington Dixon & Assocs., Inc., B-409981, B-409981.2, Oct. 3, 2014, 2014 CPD ¶ 284 at 8; The S.M. Stoller Corp., B-400937 et al., Mar. 25, 2009, 2009 CPD ¶ 193 at 13.  Here, we find that the contracting officer's statements and agency report are consistent with, and provide a more detailed explanation of, the TEP report and CO award decision.  In this regard, the agency report discusses in detail the requirements for the labor categories and explains how the categories proposed by ITC meet or exceed the RFQ's experience and skill requirements.  MOL at 11-19; COS at 2-3.  See also Intervenor Supp. Comments, Nov. 22, 2017, at 6-10.  Although Ruchman disagrees with the agency's conclusions, the protester has not shown that the RFQ requirements were not reasonably encompassed by ITC's proposed labor categories.  DEI Consulting, supra. 

In addition, even if the agency considered a vendor's proposed labor category equivalents broadly, Ruchman was not prejudiced by this approach.  In this regard, DEA notes that Ruchman successfully proposed an information resource associate for the computer operator II and III categories, although the information resource associate does not perform "standard operating or corrective procedures" as described in the RFQ.  MOL at 18 n.3; RFQ at 23.  The protester argues that this reasoning is "irrelevant."  Protester Comments at 8.  Competitive prejudice is an essential element of a viable protest, and we will sustain a protest only where the protester demonstrates that, but for the agency's improper actions, it would have had a substantial chance of receiving the award.  DRS ICAS, LLC, B-401852.4, B-401852.5, Sept. 8, 2010, 2010 CPD ¶ 261 at 21.  Here, the record shows that the agency's substantive review was applied equally to the quotations.  Under these circumstances, we conclude that Ruchman could not have been prejudiced, even assuming, arguendo, that the agency's evaluation of vendors' proposed labor categories was excessively permissive, as asserted by the protester.  This protest ground is denied.

Price Realism

Ruchman next contends that the agency's price realism evaluation was "unreasonable and undocumented."  Protester Supp. Comments at 2.  In this regard, the protester argues that ITC's and Vendor A's proposed prices are below its costs, as well as below the IGCE, and that the agency was required to perform an in-depth price realism analysis to "assess whether their low prices reflected a lack of technical understanding, realistic unit pricing, or a risk of poor performance."  Id. at 9. 

Where a solicitation contemplates the award of a fixed-price contract, an agency may provide in the solicitation for the use of a price realism analysis for the purpose of measuring an offeror's understanding of the requirements.  Ball Aerospace & Techs. Corp., B-402148, Jan. 25, 2010, 2010 CPD ¶ 37 at 9.  Analyzing whether an offeror's fixed price is so low that it reflects a lack of understanding of solicitation requirements is the crux of a price realism evaluation.  See Science Applications Int'l Corp., B-407105, B-407105.2, Nov. 1, 2012, 2012 CPD ¶ 310 at 10; NJVC, LLC, B-410035, B-410035.2, Oct. 15, 2014, 2014 CPD ¶ 307 at 8.  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.  Our review of a price realism analysis is limited to determining 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 agency's independent government cost estimate was $97,094.280.61.  AR, Tab 3, IGCE Revision 1, Aug. 18, 2017.[3]  The RFQ provides that "[p]rice quotes will be compared to the Independent Government Cost Estimate (IGCE) for the Sample Task Order and evaluated pursuant to FAR 15.404-1, Proposal analysis techniques, to include . . . price realism (not cost realism) at the bottom line grand total."  RFQ at 12.  FAR section 15.404-1 provides for evaluation of price "without evaluating its separate cost elements."  FAR § 15.404-1(b).  Ruchman attempts to inflate the agency's commitment to perform a comparison of "bottom line grand total[s]" to an obligation to perform detailed price realism analysis at the unit pricing level.  Because the RFQ informed vendors of the anticipated evaluation, we find no obligation here for DEA to do more.[4]

Here, the agency concluded that "ITC's price quote of $91.5 [million] at the bottom line is approximately 6% less than the IGCE (Rev[ision] 1) of $97.1 [million] and is deemed realistic.  Since this is a fixed price BPA, risk is born[e] predominately by the vendor."  AR, Tab 5, CO Award Decision, Sept. 21, 2017, at 3.  See also AR, Tab 4, TEP Report, at 7. 

The solicitation provides for a price realism evaluation that compares a vendor's sample task order price with the IGCE.  The agency performed this comparison, found a difference of approximately 6 percent, and concluded that the proposed price was realistic.  Our Office has held that an agency may rely on comparisons between vendors' or offerors' prices, or comparison of those prices to an IGCE, to conclude that similarly-priced proposals are realistic.  See Accumark, Inc., B-310814, Feb. 13, 2008, 2008 CPD ¶ 68 at 3.  In this regard, we have previously concluded that the agency was reasonable in awarding a fixed-price contract where the awardee's price was 5.5 percent lower than the protester's price and 12.5 percent lower than the IGCE.  AAR Def. Sys. & Logistics, B-413284, Sept. 22, 2016, 2016 CPD ¶ 274 at 7; see also AbacusSecure, LLC, B-415175 et al., Dec. 6, 2017, 2017 CPD ¶ ___ (adequate price competition and minimal price differential formed adequate basis to find agency's FAR § 15.404-1(b) price realism evaluation reasonable).  Given the evaluation provided for in the RFQ, on the record here we find no basis to question the reasonableness of the agency's price realism analysis, and Ruchman's protest challenging that aspect of the procurement is denied. 

Interested Party

Ruchman also raises numerous challenges to DEA's evaluation of its own quotation, disputing the unacceptable ratings assigned for the security plan factor and past performance.  Based on our conclusions regarding the reasonableness of the agency's price realism evaluation and decision to accept vendor's proposed labor categories, we dismiss Ruchman's challenges to its own evaluation since the protester lacks standing to challenge the award to ITC. 

In order to have standing to protest a federal procurement, a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award of, or the failure to award, a contract.  4 C.F.R. § 21.0(a).  A protester is not an interested party where it would not be in line for contract award if its protest were sustained.  AlliedBarton Sec. Servs., LLC, B-299978 et al., Oct. 9, 2007, 2007 CPD ¶ 186 at 10.  Thus, even if Ruchman's quotation were rated acceptable for the technical and past performance factors, it would not be in line for selection here as it submitted the third-highest price in an LPTA competition.  Accordingly, given our conclusions above regarding labor categories and price realism, Ruchman is not an interested party to challenge the agency's evaluation of its own quotation.  Id. (protester not interested party where there are other eligible vendors in line for selection even if protest were sustained).   

The protest is denied in part and dismissed in part. 

Thomas H. Armstrong
General Counsel