Systems Integration & Research, Inc.; Presearch Inc., B-

Systems Integration & Research, Inc.; Presearch Inc., B- BNUMBER: B-279759.2; B-279759.3 DATE: February 16, 1999 TITLE: Systems Integration & Research, Inc.; Presearch Inc., B- 279759.2; B-279759.3, February 16, 1999 ********************************************************************** 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:Systems Integration & Research, Inc.; Presearch Inc. File:B-279759.2; B-279759.3 Date:February 16, 1999 James J. McCullough, Esq., and Catherine E. Pollack, Esq., Fried, Frank, Harris, Shriver & Jacobson for Systems Integration & Research, Inc.; and Jacob B. Pompan, Esq., Pompan, Murray, Ruffner & Werfel, for Presearch Inc., the protesters. Kenneth D. Brody, Esq., McMahon, David & Brody, for DTI Associates, Inc., an intervenor. Thomas W. Essig, Timothy Hickey, Esq., Andrew C. Saunders, Esq., and John M. Davis, Esq., Naval Sea Systems Command, for the agency. Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency's acceptance of awardee's proposed uncompensated overtime and direct labor rates is unobjectionable where solicitation does not prohibit uncompensated overtime; agency reasonably relied on reviews and recommendations by Defense Contract Audit Agency of the awardee's direct labor rates, escalation rates, overhead, and general and administrative rates; and agency independently considered projected cost of awardee's performance. 2. Allegation that agency improperly evaluated protester's proposal is denied where the record shows that the agency evaluated the proposal in accordance with the evaluation factors announced in the solicitation and record reasonably supports protester's overall technical rating. DECISION Systems Integration & Research, Inc. (SIR) and Presearch Inc. protest the award of a contract to DTI Associates, Inc. under request for proposals (RFP) No. N00024-97-R-5487, issued by the Department of the Navy, Naval Sea Systems Command, for management support services.[1] SIR argues that the Navy failed to conduct a proper cost realism analysis to account for DTI's proposed uncompensated overtime and labor rates in both the technical and cost evaluations, which resulted in a flawed cost/technical tradeoff decision. Presearch contends that the Navy improperly evaluated its proposal. We deny the protests. BACKGROUND The RFP, issued on August 20, 1997, as a total small business set-aside, contemplated the award of a cost-plus-fixed-fee contract for a base period with up to four 1-year option periods. RFP Amendment No. 0004, sec. B.[2] Offerors were instructed to submit proposals in four separate volumes: offer (volume I); written capability information (volume II); supporting cost data (volume III); and oral presentation (volume IV). Id. sec. L-3. Section M of the RFP stated that the agency would first determine the acceptability of each offer on a pass/fail basis. Id. sec. M, at 130. The agency would then evaluate the "relative capability" of each offeror in the following areas, which were of equal importance: resumes, past performance information, and the oral presentation. Id. at 134. With respect to cost, the RFP stated that the evaluation would be based on an analysis of the realism and completeness of the cost data, the traceability of cost to the offeror's capability data, and the proposed hours and labor mix. The RFP stated that the government would estimate the overall cost to the government including fee. Id. at 131-32. The "relative capability" area was to be considered more important than projected cost. Award was to be made on the basis of the proposal deemed to represent the best value to the government. Id. at 130. Initial Evaluation and Source Selection Six firms submitted initial proposals by the time set on October 17, 1997, and the contracting officer (CO) determined that all six proposals were acceptable. A technical evaluation review panel (TERP) evaluated the resumes and past performance information,[3] and a cost analysis panel (CAP) evaluated the cost data with the assistance of the Defense Contract Audit Agency (DCAA). Oral presentations were made from October 23 to October 27. In accordance with section L of the RFP, all offerors were provided with the same task on the day they were scheduled for their oral presentation, and were given 1 hour in which to prepare their response to the task. The task consisted of a two-part acquisition support question requiring the preparation of a milestone chart and a "budget reclama" (sample tasks 1(a) and 1(b)), a management philosophy question, and a facilities capability question.