Prospective Computer Analysts, Inc., B-275262.2, February 24,

B-275262.2 Feb 24, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST The Navy may properly reopen negotiations after receiving best and final offers where the Navy reasonably decided that further discussions are needed to resolve whether offerors intend to pay minimum wage rates required by the Service Contract Act. (PCA) protests the Navy's decision to reopen negotiations with firms whose proposals were determined to be in the competitive range under request for proposals (RFP) No. The protester contends that: (1) the Navy does not have a valid reason for reopening discussions and soliciting a second round of best and final offers (BAFO). Soliciting a second BAFO will result in a prohibited auction. (3) CSDC should be considered ineligible for contract award because it received and was allowed to review a copy of the RFP before it was issued. View Decision Matter of: Prospective Computer Analysts, Inc. File: B-275262.2 Date: February 24, 1997 * REDACTED DECISION DIGEST Attorneys DECISION Prospective Computer Analysts, Inc. (PCA) protests the Navy's decision to reopen negotiations with firms whose proposals were determined to be in the competitive range under request for proposals (RFP) No. N00244-96-R-5142 for engineering and technical support services. The protester contends that: (1) the Navy does not have a valid reason for reopening discussions and soliciting a second round of best and final offers (BAFO); (2) Navy officials improperly revealed PCA's proprietary data to a competing offeror, Computer Systems Development Corporation (CSDC) and, therefore, soliciting a second BAFO will result in a prohibited auction; and (3) CSDC should be considered ineligible for contract award because it received and was allowed to review a copy of the RFP before it was issued. We deny the protest. Issued on April 10, 1996, by the Fleet and Industrial Supply Center (FISC) as a total small business set-aside, the RFP requested proposals for providing product development and engineering and technical support services for various Navy systems, including various aircraft, air combat electronic platform support equipment, common support equipment, and aircraft carrier launch and recovery site equipment. Among other things, the contractor will be required to perform engineering investigations, modification of hardware and software, preparation of technical directives, assembly of change kits, development of support equipment and air launch and recovery engineering, maintenance, configuration management, revision of technical documentation, and site activation and deactivation at various locations worldwide. The RFP envisioned a time and materials, indefinite delivery, indefinite quantity contract for a 1-year base period and included options for four additional 1-year periods; offers were to include fixed hourly rates for a number of labor categories, and services would be provided at those rates upon issuance of delivery orders. The RFP required offerors to submit separate cost and technical proposals and stated that the contract would be awarded to the offeror whose proposal was determined to be most advantageous to the government after evaluation of cost and technical factors. The RFP stated that the technical factors combined were more important than cost. Because the procurement was for services, it was subject to the Service Contract Act of 1965 (SCA), as amended, 41 U.S.C. Secs. 351-358 (1994), and the RFP advised that offerors must pay non-exempt employees not less than the minimum wages and fringe benefits set forth in the Department of Labor (DOL) area wage determination for the San Diego area which was incorporated into the RFP. The RFP also provided that the cost proposals would be evaluated for cost realism and advised that an offeror's proposed cost might be adjusted for evaluation purposes, based on the results of the cost realism evaluation. Three offerors, including PCA and CSDC, submitted initial offers by the June 28 closing date. After initial proposals were evaluated, only the proposals of PCA and CSDC were considered to be in the competitive range. In performing the cost realism analysis, the contracting officer noted that both PCA's and CSDC's initial proposals included hourly rates for several labor categories that were less than the SCA rates. During discussions, the agency expressed concern that the hourly rates proposed by each offeror for certain labor categories were substantially less than the pay rates specified in the wage determination. The agency asked each offeror to either confirm that the relevant labor category was subject to the SCA or to explain why the relevant labor categories were exempt from the SCA and to explain how it would retain qualified employees at the proposed rates, and requested BAFOs. Both PCA and CSDC submitted BAFOs addressing the pay rate issue.