Cygnus Corporation, B-275957; B-275957.2, April 23, 1997

Cygnus Corporation, B-275957; B-275957.2, April 23, 1997 BNUMBER: B-275957; B-275957.2 DATE: April 23, 1997 TITLE: Cygnus Corporation, B-275957; B-275957.2, April 23, 1997 ********************************************************************** 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:Cygnus Corporation File: B-275957; B-275957.2 Date:April 23, 1997 William M. Rosen, Esq., Hilary S. Cairnie, Esq., and Edward W. Kirsch, Esq., Dickstein, Shapiro, Morin & Oshinsky, L.L.P., for the protester. Barbara S. Kinosky, Esq., Bean, Kinney & Korman, and James S. Phillips, Esq., and Leigh H. Turner, Esq., James S. Phillips, P.C., for Palladian Partners, Inc., an intervenor. Michael Colvin, Department of Health & Human Services, for the agency. Andrew T. Pogany, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. The presence of vested marital property rights of a government employee in the assets or income of an offeror controlled by the employee's spouse does not, by itself, establish that the government employee possesses substantial ownership or control of the offeror such that the matter constitutes a conflict of interest precluding a contract award to the offeror. 2. Contracting agency may properly consider the experience of a firm's personnel in evaluating its organizational experience even where the solicitation defines the factor being evaluated in terms of corporate experience. 3. While an offeror's misrepresentation concerning personnel that materially influences an agency's consideration of its proposal generally provides a basis for proposal rejection or termination of a contract award based upon the proposal, where protest that awardee misrepresented experience of principals is not supported by the record, agency's award is not objectionable. DECISION Cygnus Corporation, the incumbent contractor, protests the award of a level-of-effort, cost reimbursement contract to Palladian Partners, Inc. under request for proposals (RFP) No. N02-BC-66212-82, issued by the National Cancer Institute (NCI), National Institutes of Health (NIH), Department of Health & Human Services, as a total small business set-aside for technical support services for the Division of Basic Sciences (DBS), a component of NCI. Cygnus principally alleges that a conflict of interest precluded award by the agency to Palladian; that Palladian made material and prejudicial misrepresentations in its proposal; and that both offerors' technical and cost proposals were misevaluated. We deny the protest. BACKGROUND The RFP, issued July 10, 1996, and as amended, contemplated the award of the cost-plus-fixed-fee contract for a base period with 4 option years. The technical support services to be furnished by the successful contractor to DBS include furnishing all skilled personnel, facilities, equipment, and supplies, except as otherwise specified, for editorial services (administrative support for the preparation of scientific manuscripts and research documents for publication), annual report preparation, arranging conferences, meetings and workshops, miscellaneous general support, and records management. The RFP required the submission of separate technical and business proposals. The RFP specifically reserved to the agency the right to "make an award [based on] the best advantage of the [g]overnment, cost and other factors considered." The RFP stated that the technical proposals would receive "paramount consideration"; however, the RFP also stated that "[i]n the event that the technical evaluation reveals that two or more offerors are approximately equal in technical capability, then cost may become a significant factor in determining [award]." The RFP listed the following major technical evaluation factors: (1) technical approach (35 points); (2) related experience of company (35 points); and (3) personnel (program manager (15 points) and other personnel (15 points)).[1] Concerning cost, the RFP required the offerors to submit a "Breakdown of Proposed Estimated Cost (Plus Fee) and Labor Hours." For each separate cost estimate, the offerors were required to provide a breakdown by cost elements, including direct labor, fringe benefits, indirect costs, fee, and other costs.[2] "Other Direct Costs" (defined in the RFP as materials/supply, travel, consultants, postage, reproduction communications, honoraria and other such costs) were "normalized" in the RFP at a total "assum[ed]" total cost of $614,477. Costs were to be evaluated for fairness and reasonableness. The agency received 12 proposals by the closing date, including proposals from Cygnus and Palladian.