Booz-Allen & Hamilton, Inc., B-275934.2, May 29, 1997

B-275934.2 May 29, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protester's arguments that the cost realism adjustments made to the proposed costs of two of its subcontractors were unreasonable is denied where the record shows that the agency had sound reasons for each of its conclusions and performed its evaluation consistent with the requirements set forth in the solicitation. BACKGROUND This is the second protest of this procurement. A more comprehensive explanation of the RFP and the Navy's award decision is set forth in our decision on the first protest. The Navy concluded that only the proposals of Booz-Allen and EG&G were in the competitive range. The assigned scores and proposed and evaluated costs for the two competitive range offerors are set forth below: OFFEROR SCORE PROPOSED COSTS EVALUATED COSTS EG&G 90.10 $106. View Decision Matter of: Booz-Allen & Hamilton, Inc. File: B-275934.2 Date: May 29, 1997 * REDACTED DECISION DIGEST Attorneys DECISION Booz-Allen & Hamilton, Inc. protests the award of a contract to EG&G Washington Analytical Services Center, Inc. pursuant to request for proposals (RFP) No. N00024-96-R-6430, issued by the Department of the Navy to procure technical and engineering support services for three Navy program offices--the New Attack Submarine Program, the Submarine Electronics Systems Program, and the AN/BSY-2 Program. Booz-Allen argues that the Navy made unreasonable cost realism adjustments to the proposed costs of two of its subcontractors. We deny the protest. BACKGROUND This is the second protest of this procurement. A more comprehensive explanation of the RFP and the Navy's award decision is set forth in our decision on the first protest, General Physics Fed. Sys., Inc., B-275934, Apr. 21, 1997, 97-1 CPD Para. 171 at 2-4. As Booz-Allen's protest challenges only the cost realism adjustments made to two subcontractors, we need not repeat the full background of this procurement here. Upon completion of the evaluation of offers for this cost-plus-award-fee level-of-effort contract--reserved for the offeror whose proposal offered the best value to the government--the Navy concluded that only the proposals of Booz-Allen and EG&G were in the competitive range. The assigned scores and proposed and evaluated costs for the two competitive range offerors are set forth below: OFFEROR SCORE PROPOSED COSTS EVALUATED COSTS EG&G 90.10 $106,567,354 $107,524,326 Booz-Allen 86.20 [deleted] [deleted] Using the offerors' total scores and evaluated costs, the Navy applied a series of calculations set forth in the RFP to determine which proposal offered the best value to the government. In essence, the Navy was willing to pay a premium of up to 30 percent above a minimally acceptable proposal with the lowest evaluated cost. The application of these formulae resulted in the determination that the EG&G proposal presented the best value, [1] and it was selected for award on December 20, 1996. Booz-Allen learned of the award on December 30, and requested a debriefing, which was held on January 7, 1997. During the debriefing, the Navy provided the company with its own evaluation information, but withheld from Booz-Allen information deemed proprietary to its subcontractors. Since one of Booz-Allen's subcontractors, [Company A], attended Booz-Allen's debriefing, the Navy gave a separate debriefing to [Company A] immediately following Booz-Allen's debriefing. A second major subcontractor, [Company B], also requested a debriefing, and received a written explanation of the Navy's cost realism adjustments by letter dated January 12. By letter dated January 10, Booz-Allen complained to the agency regarding the cost realism analysis of [Company A]'s proposal, and by letter dated January 14, [Company B] complained regarding its own cost realism analysis. The Navy denied both agency-level protests on February 6, and this protest followed. [2] ANALYSIS As stated above, Booz-Allen's protest here is limited to the upward cost realism adjustments made to the proposed costs of two of its subcontractors, [Company A] and [Company B]. With respect to [Company A], Booz-Allen challenges the Navy's: (1) use of unaudited 5-month year-to-date overhead rates instead of the audited full-year rates identified in [Company A]'s proposal (adding $392,897); (2) use of certain of the RFP's average labor category rates instead of the category average rates proposed by [Company A] (adding $805,392); and (3) use of the RFP's suggested wage escalation rate of 3.6 percent instead of [Company A]'s proposed [deleted] percent rate (adding $440,647).