General Offshore Corporation-Riedel Company, a Joint Venture

General Offshore Corporation-Riedel Company, a Joint Venture BNUMBER: B-271144.2; B-271144.3 DATE: July 2, 1996 TITLE: General Offshore Corporation-Riedel Company, a Joint Venture ********************************************************************** DOCUMENT FOR PUBLIC RELEASE A protected decision was issued on the date below and was subject to a GAO Protective Order. This version has been redacted or approved by the parties involved for public release. Matter of:General Offshore Corporation-Riedel Company, a Joint Venture File: B-271144.2; B-271144.3 Date:July 2, 1996 Jacob B. Pompan, Esq., Neil H. Ruttenberg, Esq., and Gerald H. Werfel, Esq., Pompan, Ruffner & Werfel, for the protester. William A. Roberts III, Esq., Lee Curtis, Esq., and Brian A. Darst, Esq., Howrey & Simon, for Global PCCI, a Joint Venture, the intervenor. Virginia B. Sanaie, Esq., Department of the Navy, for the agency. Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Award of contracts to an offeror under a predetermined cost/technical tradeoff formula which the solicitation stated was intended to be strictly followed by the agency to determine the awardee is proper where, although the formula actually applied by the contracting agency was not consistent with that stated in the solicitation due to a flaw in the computer program used by the agency, the record shows that the award was made to the offeror whose proposal represents the best value proposal under a proper application of the stated tradeoff formula. 2. Agency's upward adjustment of protester's proposed cost for a cost reimbursement contract is reasonable where the protester introduced labor overhead rate reductions in its best and final offer without a reasonable explanation for the reduction, or without providing documentation supporting the rate. DECISION General Offshore Corporation-Riedel Company, a Joint Venture, protests an award to Global PCCI, a Joint Venture, under request for proposals (RFP) No. N00024-93-R-4156, issued by the Department of the Navy, Naval Sea Systems Command, for management, maintenance and operation of Emergency Ship Salvage Material (ESSM) bases, and for services related to pollution control, underwater ship husbandry and salvage operations. We deny the protests. BACKGROUND The RFP contemplated the award of two contracts for a base year with 4 option years to a single offeror. The first contract, for the management, maintenance and operation of ESSM bases, is a cost-plus-award-fee contract. The other contract is for indefinite delivery/indefinite quantity type services related to pollution control, underwater ship husbandry and salvage operations, which contemplated either fixed-price or cost reimbursement orders for the services. The RFP listed all of the required labor categories and positions for which offerers were required to propose specific personnel (referred to as "scheduled personnel"); non-scheduled services would be performed by additional, non-specified individuals (referred to as "non-scheduled personnel"). Offerors were required to include and identify in their cost proposals loaded "man-day rates" for each required labor category to include all components of cost. The RFP contemplated that work placed under the contracts would be based on these "man-day rates." The RFP provided for a best value evaluation with technical factors of greater importance than cost. The RFP listed the technical evaluation factors, their respective first, second, third and fourth-tier subfactors, and the relative importance of each factor or subfactor. Raw technical scores were converted to a weighted score on a 100-point scale. The RFP contained a specific cost/technical tradeoff methodology to be used for determining the proposal which represented the best value. This methodology was stated in the RFP as follows: "Technical factors, taken as a whole, are on the average more important than cost; however, cost is an important factor. The degree of its importance will increase with the degree of equality of proposals in relation to other factors on which selection is to be based. The [g]overnment is willing to pay a premium over [the] lowest-priced technically acceptable offer for a technically superior proposal offering the 'greatest value' to the Government. A 'decreasing cost effectiveness' methodology will be employed to determine which proposal represents the best value.