MCA Research Corporation, B-278268.2, April 10, 1998

B-278268.2 Apr 10, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Proposal which did not clearly take exception to the solicitation's subcontracting limitation was properly considered to be technically acceptable by the contracting agency. 2. The procurement was conducted competitively pursuant to section 8(a) of the Small Business Act. That the contracting agency's technical evaluation and award selection were otherwise improper. That were together significantly more important than cost/price. Which is required for section 8(a) contracts. The RFP states that the quantities of services specified in the schedule are estimates only and that performance shall be made only as authorized by issued delivery orders. APT stated in its proposal that its "subcontracts will be prepared in full compliance with FAR 52.219-14.". View Decision Matter of: MCA Research Corporation File: B-278268.2 Date: April 10, 1998 * Redacted Decision DIGEST Attorneys DECISION MCA Research Corporation protests the award of a contract to Automated Precision Technology, Inc. (APT) under request for proposals (RFP) No. SPO410-97-R-0281 issued by the Defense Logistics Agency (DLA), Defense General Supply Center, Richmond, Virginia, for management support services for various Naval Ordnance Center facilities. The procurement was conducted competitively pursuant to section 8(a) of the Small Business Act, as amended, 15 U.S.C. Sec. 637(a) (1994). /1/ MCA contends that APT's proposal did not comply with the solicitation's mandatory subcontracting limitation, which rendered its proposal technically unacceptable, and that the contracting agency's technical evaluation and award selection were otherwise improper. We deny the protest. BACKGROUND The RFP, issued November 19, 1996, contemplated the award of an indefinite- quantity, time-and-materials contract for a base period of 1 year with four 1-year options. RFP at 56, 72. The RFP's best value evaluation scheme provided for an integrated assessment of proposals considering price and certain capability criteria. RFP at 72, 75. The capability criteria consisted of three equally weighted evaluation criteria--management, personnel, and past performance--that were together significantly more important than cost/price. RFP at 75. The RFP incorporated the Limitation on Subcontracting clause, FAR Sec. 52.219-14, which is required for section 8(a) contracts. RFP at 56. This clause states, in relevant part, as follows: By submission of an offer and execution of a contract, the Offeror/Contractor agrees that in performance of the contract in the case of a contract for-- (1) Services (except construction). At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern. The RFP's schedule of supplies/services identified 23 categories of labor required for performance of 9 task areas identified in the RFP's statement of work, and provided estimated annual quantities (in hours) for each labor category line item. The estimated annual quantities represent the maximum number of hours that can be ordered for each labor category. RFP at 2, 56. The RFP states that the quantities of services specified in the schedule are estimates only and that performance shall be made only as authorized by issued delivery orders. RFP at 56. DLA received four proposals, including APT's and MCA's. The source selection evaluation board (SSEB) rated APT's proposal the highest, with highly acceptable/low risk ratings for the management, past performance, and personnel criteria. The SSEB rated MCA's proposal the [deleted], with [deleted] ratings for the [deleted] criteria and an [deleted] rating for the [deleted] criterion. APT stated in its proposal that its "subcontracts will be prepared in full compliance with FAR 52.219-14." After initial proposals were received, the RFP's schedule of supplies/services was amended to include separate line items for subcontracted effort for each year; these line items had not-to-exceed ceiling amounts starting at $1.6 million for the base year and escalating $50,000 for each option year. RFP Amendment 0002. Offerors were instructed to use only prime contractor rates for their prices for the labor category line items in the schedule because all subcontracting costs were to be encompassed in the separate not-to-exceed subcontracting line items. /2/ Id. In other words, offered labor rates were to be prime contractor rates only and offerors were not to price any labor categories which were not to be performed by the prime contractor's employees. Given the approximate $5 million estimated annual value of the contract, the not-to-exceed subcontracting line items potentially limit the subcontracting effort more than the FAR Sec.