McCaffery & Whitener, Inc.

McCaffery & Whitener, Inc. BNUMBER: B-270814; B-270814.2 DATE: April 25, 1996 TITLE: McCaffery & Whitener, Inc. ********************************************************************** Matter of:McCaffery & Whitener, Inc. File: B-270814; B-270814.2 Date:April 25, 1996 Thomas F. McCaffery for the protester. Richard S. Haynes, Esq., Department of the Navy, for the agency. Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency properly did not consider transition costs in selecting awardee where solicitation did not provide for the evaluation of such costs. 2. Agency evaluation of awardee's technical proposal which did not take into account the need for a phase-in training period is unobjectionable where phase-in training was neither a requirement nor an evaluation factor. 3. Protest that agency should have rejected awardee's offer as presenting an unacceptable cost risk because it contained disproportionate prices for two labor categories is denied where agency reasonably concluded that the government could control the labor mixes to be used in the issuance of delivery orders. DECISION McCaffery & Whitener, Inc. (MWI) protests the award of a contract to Global Associates, Ltd. under request for proposals (RFP) No. N62387-96-D-3017, issued by the Department of the Navy for maritime related engineering, technical and analytical services. MWI alleges that the agency failed to evaluate transition costs in selecting Global for award and that the agency misevaluated Global's technical and price proposals. We deny the protests. The RFP, issued on July 17, 1995, contemplated the award of a 1-year indefinite quantity contract (with 1 option year) with provisions for both fixed-price and time- and-materials delivery orders to be issued by the Navy. Award was to be made to the offeror submitting the low technically acceptable proposal. Technical acceptability was to be measured against four factors listed in descending order of importance: technical approach/understanding; personnel; management; and facilities/resources. Price was to be evaluated by multiplying fixed labor rates submitted by offerors for five labor categories by the estimated labor hours associated with each category. Three initial proposals were received and one was eliminated, after which discussion were conducted with MWI and Global, the remaining competitive range offerors. Following discussions, each offeror submitted a best and final offer (BAFO), both of which were found to be technically acceptable. Global's evaluated price was $692,115; MWI's was $699,730. Global received the award as the result of its lower price and this protest followed. The protester's first two bases of protest relate to a transfer plan proposed in the event that MWI did not receive the award. Under the predecessor contract, MWI was required to return software and hardware used during contract performance so that relevant materials could then be provided to the successful contractor. Prior to the submission of BAFOs, MWI--the incumbent contractor--wrote the Navy proposing a transition plan. Following notice of the award to Global, MWI again wrote the Navy outlining the details of its proposed transition plan over a 30-day period at a cost of $40,078.50. The Navy submitted a counterproposal for a plan to be executed over a 2-week period at a cost of $8,674.40. In particular, the Navy envisioned MWI performing the following tasks: "-- Review of existing data bases -- Ship Data Base -- Ship Access to Ports Evaluator, -- Ship Availability Generator, and -- the Merchant Marine Manpower Model "Review shall include data base familiarization, critical assumptions, critical elements and data base maintenance." MWI submitted another slightly scaled-down proposal at a cost of $30,583.60; negotiations have been suspended in light of the stay of contract performance occasioned by this protest. Noting that there is a $7,615 difference in prices offered between Global and MWI, the protester first asserts that, since the Navy's estimate of transition costs ($8,674) is greater than the price difference, MWI's proposal reflects the lowest cost to the government and, accordingly, MWI should receive the award. Transition costs may be an evaluation factor in appropriate circumstances, but an agency may only evaluate them if offerors are advised in the RFP that such costs will be evaluated. Since the RFP in this case did not so advise offerors, there was no basis for the agency to consider transition costs in determining the low cost offeror. Cherokee Elecs. Corp., B-240659, Dec. 10, 1990, 90-2 CPD para.