Pacific Architects and Engineers, Inc.

Pacific Architects and Engineers, Inc. BNUMBER: B-274405.2; B-274405.3 DATE: December 18, 1996 TITLE: Pacific Architects and Engineers, Inc. ********************************************************************** 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:Pacific Architects and Engineers, Inc. File: B-274405.2; B-274405.3 Date:December 18, 1996 Howell Roger Riggs, Esq., for the protester. Stuart Young, Esq., and Cheralyn S. Cameron, Esq. for DynCorp, an intervenor. Thomas J. Duffy, Esq., Department of the Army, for the agency. Katherine I. Riback, Esq., Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Although agency did not give protester an opportunity to comment on each individual survey response regarding past performance, discussions were adequate where agency identified multiple categories in which protester's past performance was deficient and protester has not identified any other past performance areas under which its proposal was downgraded. 2. Agency's cost realism analysis was adequate where the agency reasonably considered the likely cost of awardee's performance, including a determination that the awardee's proposed manning levels were adequate to perform the solicitation tasking requirements. DECISION Pacific Architects and Engineers, Inc. (PAE) protests the Department of the Army's award of a contract to DynCorp under request for proposals (RFP) No. DAHC92-95-R-0132. PAE, the incumbent contractor, argues that the agency failed to conduct adequate discussions, improperly evaluated its proposal, and failed to perform an adequate cost realism analysis.[1] We deny the protest. BACKGROUND On April 26, 1996, the agency issued the RFP, seeking proposals to provide base operations support services (BOSS) to the Army at Soto Cano Air Base, Honduras. The RFP contemplated the award of a cost-plus-award-fee contract for a base period with four 1-year option periods. The solicitation provided that proposals would be evaluated, in descending order of importance, on the basis of management, technical and cost factors, and stated that the evaluation would also incorporate a performance risk assessment.[2] With their proposals, offerors were required to submit multiple references regarding their performance of recent contracts for similar services. Under the management factor, the RFP listed three subfactors, the most important being past performance. The RFP also provided that award would be based on the proposal offering the best value to the government following an integrated assessment of all evaluation factors. PAE and DynCorp submitted initial proposals by the June 13, 1996, closing date; each proposal listed multiple past performance references. Upon receipt, the contracting officer sent past performance surveys to each reference and subsequently evaluated the initial proposals. At the time evaluation of initial proposals was completed, the agency had received past performance responses regarding two of PAE's prior contracts--the predecessor BOSS contract at that Soto Cano Air Base and another contract for similar services performed in Japan. Following initial evaluation, the agency had certain concerns regarding PAE's proposal, including negative past performance information and the agency's conclusion that PAE's proposed manning levels were excessive. By letters dated June 28, the agency conducted written discussions with both offerors, which consisted of multiple "items for negotiation" (IFNs). Discussions with PAE included the following: "IFN # 32 Contractor's past performance input from Japan has indicated less than minimum performance in PAE's internal quality control plan, contractor's initiative, timely providing adequate resources, personnel turnover, data reporting and average initiative to initiate and employ cost savings. Panama's input notes a number of problems with government property accountability, initiative to employ cost savings, implementation of TQM and employees relations training."[3] Regarding PAE's proposed manning levels, discussions included the following: "IFN # 28 Labor Hours. Overall [PAE's proposal] has overestimated the hours of labor. [PAE's] labor structure more or less resembles the current contractor labor structure [but] the U.S. labor hours are higher than current contract hours, and the estimate for local hours appears to be unreasonabl[y] high. Explain why [deleted] [hours per year] is used to calculate hours required under the contract. . .