KPMG Peat Marwick, L.L.P.

B-271673 Jul 15, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Protest that agency failed to give adequate weight to performance risk in its source selection decision is denied where record shows that agency evaluated and considered performance risk in accordance with the requirements of the solicitation. Protest that agency failed to consider cost in tradeoff decision is denied where the record shows that the source selection official was aware of the cost differences among the competing offerors and reasonably chose to select for award the higher priced. The Technical Merit and Management areas (which each included numerous subfactors) were of equal weight. Was to be evaluated for realism. The RFP advised that "Each of the areas and factors (except cost) will be rated in three ways: an adjectival rating [of either exceptional. View Decision Matter of: KPMG Peat Marwick, L.L.P. File: B-271673 Date: July 15, 1996 Protest that agency failed to give adequate weight to performance risk in its source selection decision is denied where record shows that agency evaluated and considered performance risk in accordance with the requirements of the solicitation. Protest that agency failed to consider cost in tradeoff decision is denied where the record shows that the source selection official was aware of the cost differences among the competing offerors and reasonably chose to select for award the higher priced, technically superior proposals. Attorneys DECISION KPMG Peat Marwick protests the award of two contracts under request for proposals (RFP) No. DECA01-95-R-0036, issued by the Defense Commissary Agency (DCA) for advisory and assistance services. KPMG contends that the agency failed to give adequate consideration to past performance and cost in its award decision. We deny the protest. The RFP contemplated the award of multiple indefinite delivery, indefinite quantity fixed-price-per-labor-hour contracts on a best value basis. For evaluation purposes, the RFP provided that offers would be reviewed under three broad criteria, Technical Merit, Management, and Cost; the Technical Merit and Management areas (which each included numerous subfactors) were of equal weight. Cost, described in the solicitation as a "substantial consideration" but deemed less important than Technical Merit or Management, was to be evaluated for realism, reasonableness and completeness. In connection with the evaluation, the RFP advised that "Each of the areas and factors (except cost) will be rated in three ways: an adjectival rating [of either exceptional, acceptable, marginal or unacceptable], a proposal risk rating and a performance risk rating. The adjectival rating depicts how well the offeror's proposal meets the evaluation standards and solicitation requirements. Proposal risk assesses the risk associated with the offeror's proposed approach as it relates to accomplishment of the requirements of the solicitation. Performance risk assesses the probability of each offeror's successfully accomplishing the proposed effort based on each offeror's demonstrated present and past performance. Within each area and/or factor, each of the three ratings shall be given equal consideration in making an award decision. The cost area . . . will also receive a performance risk rating which shall be given equal consideration with the evaluated cost." Finally, as part of their proposals, offerors were required to prepare responses to two sample tasks. These responses were to be evaluated for both technical merit and cost purposes. DCA received five initial offers, four of which were found to be within the competitive range. After engaging in discussions and obtaining best and final offers (BAFO), the agency determined--with the advice and assistance of the Defense Contract Audit Agency--that all four firms' proposed costs were reasonable, realistic and complete. Overall, DCA rated the four offers as follows: OFFEROR KPMG PEAT MARWICK SRA CORP. HAY MGMT. CONSULTANTS BOOZE, ALLEN & HAMILTON TECH. MERIT/ Marginal/Moderate Accept./ Accept./ Marginal/Moderate PROPOSAL RISK Low Low MGMT./PROPOSAL Accept./Low Accept./ Accept./ Accept./Moderate RISK Low Low PERF. RISK Low Moderate Low Moderate EVALUATED COST FOR TWO SAMPLE TASKS $397,782 $503,459 $761,215 $363,316 On the basis of these evaluation results, DCA awarded contracts to Hay Management Consultants and SRA, finding that their offers represented the best value to the government. KPMG initially protested on the grounds that the agency had failed to engage in meaningful discussions, failed to perform a cost realism evaluation, performed a flawed technical evaluation of KPMG's offer, failed to evaluate risk in accordance with the terms of the RFP, and made an arbitrary cost/technical tradeoff.