Conwal, Inc., B-279260; B-279260.2, May 26, 1998

Conwal, Inc., B-279260; B-279260.2, May 26, 1998 BNUMBER: B-279260; B-279260.2 DATE: May 26, 1998 TITLE: Conwal, Inc., B-279260; B-279260.2, May 26, 1998 ********************************************************************** Matter of:Conwal, Inc. File: B-279260; B-279260.2 Date:May 26, 1998 J. Patrick McMahon, Esq., McMahon, David & Brody, for the protester. Gerald H. Werfel, Esq., Pompan, Murray, Ruffner & Werfel, for Analytical Sciences, Inc., an intervenor. Michael Colvin, Department of Health & Human Services, for the agency. Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Even if the protester's allegations with respect to the reasonableness of the agency's evaluation of the awardee's cost proposal had merit, the protester has failed to show that it was prejudiced by the agency's evaluation of the awardee's proposed costs. DECISION Conwal, Inc. protests the award of a contract to Analytical Sciences, Inc. (ASI) under request for proposals (RFP) No. 200-97-0610(P), issued by the Department of Health & Human Services, Public Health Service, Centers for Disease Control and Prevention, for the development, identification, collection, and dissemination of disease prevention communication and information materials through the operation of a Prevention Information Network. Conwal challenges the reasonableness of the agency's evaluation of ASI's cost proposal. We deny the protests. The RFP contemplated the award of a cost-plus-fixed-fee contract for the base period and four 1-year option periods. The RFP provided that the award would be made to the offeror whose integrated proposal (technical proposal, business proposal, oral presentation materials, past performance information, responses to sample tasks, and best and final offer (BAFO)) offered the highest technical merit at the best overall value to the government. The RFP also provided that where competing proposals were determined to be substantially equal, past performance and/or cost would become controlling factors. Of the four proposals initially submitted, the proposals of Conwal and ASI were included in the competitive range. Following technical and cost discussions and oral presentations, both offerors submitted BAFOs. The agency determined that the proposals of Conwal and ASI were technically acceptable. (Conwal's proposal received a slightly higher--by approximately 6.5 percent--technical score.) Conwal's evaluated cost was approximately 6 percent, or $2.2 million, higher than ASI's evaluated cost. The agency determined that because the proposals of Conwal and ASI, based on their respective strengths and weaknesses, were substantially equal, overall cost would be the determining factor for award. Accordingly, the agency awarded the contract to ASI, whose technically equal, low evaluated cost proposal was determined to represent the best value to the government. Conwal complains that ASI improperly fragmented its general and administrative (G&A) expense pool by separately creating a subcontractor G&A expense pool to which a lower indirect percentage rate would be applied. More specifically, in its BAFO, ASI noted that the agency recently finalized a new indirect rate agreement which included provisional rates for 1997. For this procurement, ASI proposed a non-subcontractor G&A rate lower than its provisional rate. (Starting from ASI's full provisional rate, ASI's non-subcontractor G&A rate will have cumulatively been reduced by 1.5 percent by the fourth option period.) In addition, ASI separately proposed a fixed subcontractor G&A rate, which was even lower than the firm's non-subcontractor G&A rate, for the entire period of contract performance. As requested by the agency during discussions, ASI agreed in its BAFO to a specific indirect percentage rate ceiling on its non-subcontractor and subcontractor G&A expense pools.[1] Conwal basically contends that the agency unreasonably accepted ASI's creation of a separate subcontractor G&A expense pool, to which a lower indirect percentage rate would be applied, thus providing ASI with an unfair competitive advantage resulting in its ability to submit the low evaluated cost proposal. However, the agency's evaluation and source selection documentation included in the record shows that even if it is assumed, arguendo, that the agency was unreasonable in accepting ASI's separate non-subcontractor and subcontractor G&A expense pools, Conwal was not prejudiced. Our Office will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency's actions, that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving the award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para.