The Cube Corporation, B-277353, October 2, 1997

B-277353 Oct 02, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Agency reasonably determined that the awardee's price was reasonable and realistic based on a price analysis. Properly based its award selection on price where the competing proposals were otherwise reasonably determined to be equal. Of particular relevance here are subfactors 1 and 3 which concern staffing and skill levels (journeyman to sub-journeyman). The subfactors were to be rated on a color scale of red (the lowest rating). The RFP stated: The limited cost data will be evaluated by Government Cost/Price Analysts for completeness and cost realism in narrative format. It is a common practice for all offerors to include in their proposals certain potential cost reducing factors. View Decision Matter of: The Cube Corporation File: B-277353 Date: October 2, 1997 DIGEST Attorneys DECISION The Cube Corporation protests an award of a fixed-price-with-award-fee contract to ORI Services Corporation (ORI) under request for proposals (RFP) No. DAAD01-97-R-0011, set aside for section 8(a) concerns, issued by the Department of the Army for installation support management services at Yuma Proving Ground, Arizona, for a base period with 7 option years. We deny the protest. The RFP stated a best value evaluation scheme with the management/technical factor being significantly more important than performance risk, and performance risk being slightly more important than cost. Under the management/technical factor, the RFP stated four subfactors; of particular relevance here are subfactors 1 and 3 which concern staffing and skill levels (journeyman to sub-journeyman), respectively. The subfactors were to be rated on a color scale of red (the lowest rating), yellow, blue, and green (the highest rating). [1] Under the cost factor, the RFP stated: The limited cost data will be evaluated by Government Cost/Price Analysts for completeness and cost realism in narrative format. It is a common practice for all offerors to include in their proposals certain potential cost reducing factors, i.e., attrition rates and insurance dividends. These cost reductions may or may not materialize during the contract, and the factors would be applicable to all offerors. Therefore, during the cost realism evaluation for this contract, no cost reduction factors will be allowed unless the offeror has accepted the risk and has included a guaranteed minimum for the proposed reduction. As with Performance Risk analysis, Management/Technical merit is significantly more important than cost for evaluation purposes for this requirement. The Government is willing to pay more if the management/technical advantages so warrant. However, as management/technical merit and performance risk tend to equalize, cost will become more important. The RFP elsewhere stated that the "cost analyses will receive narrative ratings." Three offerors, including Cube and ORI, submitted proposals. ORI's proposal received green ratings on all four management/technical subfactors and a low performance risk rating. Cube's proposal received yellow ratings on subfactors 1 and 3, blue ratings on subfactors 2 and 4, and a negligible performance risk rating. The reasons for Cube's proposal's yellow ratings were that it proposed fewer staff-years than the agency considered necessary, and it was contradictory and/or unclear regarding employment of sub-journeymen workers. The third offeror did not submit sufficient information to permit evaluation and was eliminated from the competitive range. ORI's $21.6 million price was 7 percent above the government estimate and Cube's $19.5 million price was 3.2 percent below the government estimate. Based on its analysis of the limited cost data submitted, the agency determined that both prices were fair and reasonable for their proposals, although it identified questions regarding specific costs of each proposal which were to be addressed during discussions. In response to the discussions, Cube increased its staffing by 1 staff- year. The agency determined that, based on historical staffing requirements, Cube's revised staffing level was still inadequate. Assuming that Cube's lower price was attributable to its low staffing level, the Army eliminated Cube's proposal from the competitive range, and requested a best and final offer (BAFO) from ORI. Cube requested and received a debriefing with regard to its proposal's elimination from the competitive range. During the debriefing, the contracting officer learned that the historical staffing level used by the agency to evaluate proposed staffing levels was incorrect, and was persuaded that Cube's evaluation ratings might be unreasonable. The contracting officer therefore conducted a neutral reevaluation of Cube's proposal.