The Centech Group, Inc., B-278715; B-278715.2, March 5, 1998

The Centech Group, Inc., B-278715; B-278715.2, March 5, 1998 BNUMBER: B-278715; B-278715.2 DATE: March 5, 1998 TITLE: The Centech Group, Inc., B-278715; B-278715.2, March 5, 1998 ********************************************************************** DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Matter of:The Centech Group, Inc. File: B-278715; B-278715.2 Date:March 5, 1998 Michael A. Hordell, Esq., and Laura L. Hoffman, Esq., Gadsby & Hannah, for the protester. Robert M. Nutt, Esq., for Kathpal Technologies, Inc., an intervenor. William L. Murphy, Esq., and John F. Schorn, Esq., Department of the Treasury, for the agency. Andrew T. Pogany, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Contracting agency engaged in meaningful discussions where it advised offeror during written discussions that composite labor category prices for services contract were either too high or too low and it gave offeror more specific indications of its concern during oral discussions, even though the agency did not specify which categories were high and which were low; contracting agency is not required to conduct all-encompassing discussions, but is only required to lead offerors into those areas of their proposal needing amplification, given the context of the procurement. 2. Contracting agency properly determined that offeror's price proposal was unrealistically low based on comparison with prices received from other offerors, the independent government estimate, market survey prices, and the current contract price. DECISION The Centech Group, Inc., the incumbent contractor, protests the award of a contract to Kathpal Technologies, Inc. under request for proposals (RFP) No. A-97-04, a competitive section 8(a) set-aside, issued by the Department of the Treasury for support services for software applications maintenance, development, and testing. Centech contends that the agency's evaluation of its proposal, especially its determination that the firm's prices were unrealistic and unacceptable, was unreasonable. We deny the protest. BACKGROUND The RFP, issued December 19, 1996, sought proposals for support services for the agency's Automated Systems Division (ASD), which is responsible for the development and maintenance of many software applications systems, ranging in complexity from small administrative or tracking systems on personal computers and local area networks to large and complex databases, document management, and econometric systems on minicomputers and mainframes. To ensure continued reliability and availability of existing application systems and to develop new and enhanced application systems, the RFP required the successful contractor to "provide a stable cadre of personnel working on site in partnership with Government employees to deliver" the required services. The RFP provided for award of a fixed-price/level-of-effort and indefinite quantity/ labor hour contract for a base period with four 1-year options. Award was to be made to the offeror submitting the proposal representing the best value to the government, technical and price factors considered. To be "eligible for award," proposals had to meet the following conditions: the technical proposal had to be "responsive" to all sections of the solicitation and offer the best overall value; the proposed price had to be determined to be reasonable; and the offeror had to be found responsible. The RFP contained the following technical evaluation factors, listed in descending order of importance: (1) technical performance; (2) past performance; and (3) corporate capability and performance management. Concerning the cost/price evaluation, the RFP stated that each offeror's proposal would be assessed for cost realism, total contract cost, and cost risk. The RFP stated that cost realism would be evaluated in accordance with Federal Acquisition Regulation (FAR) sec. 52.222-46, which states, in part, as follows: The Government is concerned with the quality and stability of the work force to be employed on this contract.