Signal Corporation, B-275502.3; B-275502.4, July 6, 1998

Signal Corporation, B-275502.3; B-275502.4, July 6, 1998 BNUMBER: B-275502.3; B-275502.4 DATE: July 6, 1998 TITLE: Signal Corporation, B-275502.3; B-275502.4, July 6, 1998 ********************************************************************** DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Matter of:Signal Corporation File: B-275502.3; B-275502.4 Date:July 6, 1998 Richard J. Conway, Esq., William M. Rosen, Esq., and Karen Lau, Esq., Dickstein Shapiro Morin & Oshinsky, for the protester. J. Patrick McMahon, Esq., McMahon, David & Brody, for InfoPro, Inc., an intervenor. Arthur I. Rettinger, Esq., and William P. McGinnies, Esq., Department of the Treasury, for the agency. Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Agency reasonably determined that protester's proposed rates for labor categories that made up a majority of the anticipated level of effort created an unacceptably high level of performance risk where protester's proposed rates were substantially lower than rates the protester was charging for similar work under another contract. DECISION Signal Corporation protests the Department of the Treasury, U.S. Customs Service's award of a contract to InfoPro, Inc., under request for proposals (RFP) No. CS-95-064 for software support services. Signal primarily challenges the agency's determination that Signal's proposed labor rates were unrealistically low and therefore created an unacceptably high performance risk in Signal's proposal. We deny the protest. BACKGROUND The Customs Service issued the RFP on May 17, 1996, seeking proposals to provide various software support services for the Applications Development Division (ADD) of Custom's Office of Information and Technology under a fixed-price indefinite-delivery, indefinite-quantity contract for a base year with 4 option years.[1] The agency expects that a significant amount of the near-term work under this contract will encompass redesigning software to be Year 2000 (Y2K) compliant. In this regard, the RFP's SOW provided: The Contractor shall assess existing Customs technology and evaluate alternative hardware or software architectures. The Contractor shall redesign or modify existing software systems, and develop new software in anticipation of future Customs requirements . . . and respond to various legislative changes mandated by Congress, the Office of Management and Budget (OMB), Treasury and other governmental agencies. The solicitation listed 12 labor categories and the estimated number of hours for each category that the agency anticipated would be necessary for contract performance. Offerors were required to propose fully burdened, fixed hourly rates for each category and to provide information regarding fringe benefits, overhead, and general and administrative (G&A) rates. A majority of the RFP's listed estimate of required hours were under three labor categories: senior programmer/analyst, mid-level programmer/analyst, and junior programmer/analyst. The SOW described the functional duties that personnel under each labor category would be required to perform, along with required general and specialized experience. With regard to the programmer/analyst categories, the RFP stated: DUTIES: The Programmer/Analyst(s) support complex application problems involving all phases of software development and maintenance. Programmer/Analyst personnel analyze systems requirements, develop detailed design specifications, develop block diagrams and logic flow charts, and translate detailed designs to computer programs. . . . The Programmer/Analyst(s) test, debug and refine computer programs to produce the required product . . . . . . . . . Specialized Experience: The Contractor should provide personnel who collectively possess experience in the following areas: -demonstrated COBOL and CICS programming experience in an IBM or IBM-compatible mainframe environment . . . .[2] As initially issued, section M of the solicitation stated that proposals would be evaluated on the basis of technical qualifications (80 points)[3] and price considerations (20 points). Regarding price evaluation, section M.6.1 of the RFP stated: Separately and apart from the technical evaluation, a price evaluation will be performed. This will consist of conducting an analysis of each individual proposal to first determine if proposed prices accurately and adequately portray the work that is to be performed, and if they are reasonable and realistic. . . .