Computer Systems International, Inc., B-276955; B-276955.2,

Computer Systems International, Inc., B-276955; B-276955.2, BNUMBER: B-276955; B-276955.2 DATE: August 13, 1997 TITLE: Computer Systems International, Inc., B-276955; B-276955.2, August 13, 1997 ********************************************************************** Matter of:Computer Systems International, Inc. File: B-276955; B-276955.2 Date:August 13, 1997 Thomas C. Pool for the protester. John A. Evans, Esq., Naval Air Systems Command, Department of the Navy, for the agency. Christine F. Davis, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST In a solicitation requesting firm, fixed-price proposals for operation and maintenance services of submarine training devices, the agency reasonably found the awardee's low-priced proposal realistic in accordance with the evaluation criteria, where the awardee's price, though less than the anticipated contract costs, compared favorably with another offeror's price and with the prior contract price for the same services. DECISION Computer Systems International, Inc. (CSI) protests the award of a contract to Applied Data Technology, Inc. (ADT) under request for proposals (RFP) No. N61339-96-R-0056, issued by the Department of the Navy, Naval Air Systems Command, for contractor operation and maintenance of simulators (COMS) services. We deny the protest. The RFP sought COMS services for fire fighter training devices, submarine damage control training devices, and other training devices to be used at four Navy submarine training sites: the Trident Training Facilities at Kings Bay, Georgia, and Bangor, Washington, and the Naval Submarine Training Center Pacific facilities at Pearl Harbor, Hawaii, and San Diego, California. The RFP requested firm, fixed prices for a 2-month base mobilization period, four 1-year options, and an 8-month option. The pricing schedules for the base and option periods included contract line item numbers (CLIN) corresponding to specific training devices. Prices for each CLIN were to include the labor, supply support (i.e., spare and repair parts), and consumables necessary to maintain and operate the specified devices during the designated contract period. No cost data supporting the CLIN pricing was required by the RFP. The RFP imposed a minimum manning requirement of 73 employees during the life of the contract, distributed among the four sites as specified in the RFP. The solicitation provided for application of the Service Contract Act of 1965, as amended, 41 U.S.C. sec. 351-358 (1994), which requires that employees be paid at least the wages set forth in Department of Labor (DOL) area wage determinations. 41 U.S.C. sec. 351(a)(1). The RFP provided for award based upon the technically acceptable proposal offering "the lowest reasonable and realistic total evaluated price," including options. The RFP evaluation scheme listed seven, equally important evaluation factors: (1) Organization (Personnel), (2) Management Approach, (3) Technical Approach, (4) Mobilization Plan, (5) Technical Questions, (6) Corporate Experience/Past Performance, and (7) Price Realism.[1] The RFP described all factors as "critical" and stated that an unacceptable rating for any factor would render a proposal unacceptable. The agency received five proposals by the January 24, 1997, due date. Four proposals were included in the competitive range. After two rounds of discussions, the Navy received best and final offers (BAFO) priced as follows:[2] ADT $16,136,057 Offeror B $16,344,254 CSI $19,341,484 Offeror D $18,361,120[3] Finding all proposals technically acceptable, the Navy awarded to ADT, whose lowest-priced offer was found reasonable and realistic. CSI disputes the agency's determination that ADT's price was realistic.[4] According to CSI, the Navy overlooked the fact that ADT's price was "below the actual known direct cost to operate the contract" and awarded the contract to a firm that "is not a recognized player in the COMS business arena" and is blind to the risks of this contract. Where, as here, the award of a fixed-price contract is contemplated, a proposal's "cost realism" is not ordinarily considered, since a fixed-price contract places the risk and responsibility for contract costs and resulting profit or loss on the contractor. HSG-SKE, B-274769, B-274769.3, Jan. 6, 1997, 97-1 CPD para. 20 at 5. However, since the risk of poor performance when a contractor is forced to provide services at little or no profit is a legitimate concern in evaluating proposals, an agency in its discretion may, as it did here, provide for a price realism analysis in the solicitation of fixed-price proposals. Volmar Constr., Inc., B-272188.2, Sept.