Pulau Electronics Corporation, B-280048.4; B-280048.5; B-280048.6; B-280048.7, May 19, 1999

Pulau Electronics Corporation, B-280048.4; B-280048.5; B-280048.6; B-280048.7, May 19, 1999 TITLE: Pulau Electronics Corporation, B-280048.4; B-280048.5; B-280048.6; B-280048.7, May 19, 1999 BNUMBER: B-280048.4; B-280048.5; B-280048.6; B-280048.7 DATE: May 19, 1999 ********************************************************************** Pulau Electronics Corporation, B-280048.4; B-280048.5; B-280048.6; B-280048.7, May 19, 1999 Decision Matter of: Pulau Electronics Corporation File: B-280048.4; B-280048.5; B-280048.6; B-280048.7 Date: May 19, 1999 Thomas P. Humphrey, Esq., Kenneth M. Bruntel, Esq., John E. McCarthy, Jr., Esq., Joseph W.C. Warren, Esq., and Tejpal Singh Chawla, Esq., Crowell & Moring, for the protester. Donald J. Walsh, Esq., Scaldara & Potler, for AAI/Engineering Support, Inc., an intervenor. John A. Evans, Esq., Sharon Hershkowitz, Esq., and Andrea E. Brotherton, Esq., Department of the Navy, for the agency. Christine Davis, Esq., and James Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Agency unreasonably determined that awardee corrected during discussions a significant staffing shortfall in support of a major solicitation requirement, where the agency, both in its award selection and in defense of this protest, relied upon proposal revisions that, in fact, addressed an unrelated staffing area in the awardee's proposal and did not consider whether the uncorrected staffing shortfall-which alone accounted for the awardee's decisive price advantage-would adversely affect the awardee's ability to meet its requirements. 2. In a solicitation for a fixed-price-award-fee contract with some unevaluated time and materials (T&M) contract line items (CLIN), a solicitation requirement that offerors use common labor rates in developing their prices for the evaluated fixed-price CLINs and the unevaluated T&M CLINs did not prohibit offerors from proposing discounts to the fixed-price CLINs. DECISION Pulau Electronics Corporation protests the award of a contract to AAI/Engineering Support, Inc. under request for proposals (RFP) No. N61339-97-R-0011, issued by the Department of the Navy on behalf of the Department of the Army for life cycle contractor support of command, control, communications, computers and intelligence (C4I) devices located at designated Army installations worldwide. We sustain the protest in part and deny it in part. The RFP, issued May 9, 1997, sought comprehensive support for a variety of C4I devices, including hardware and software maintenance and operational support services. The RFP required support for three general categories of C4I devices: intelligence devices, the simulation network devices, and Family of Simulation (FAMSIM) devices. FAMSIM devices train Army leadership in the command and control of troops through the use of computer-generated battle scenarios. The battle scenarios are generated by contractor personnel, known as "operators," who run computer workstations housed at several Army simulation centers. RFP amend. 3, statement of work (SOW) sect. 3.9. The RFP contemplated the award of a fixed-price-award-fee, indefinite-quantity contract with some time-and-materials (T&M) contract line items (CLIN) for a base period with 5 option periods. RFP amend. 3, sect.sect. B, L.2. The RFP requested monthly unit prices for the fixed-price CLINs, but did not request prices for the T&M CLINs. RFP amend. 3, sect. B. As a result, the T&M CLINs played no part in determining a proposal's total evaluated price. The RFP, in a provision entitled "Labor Pricing Summary," also asked offerors to propose labor rates, which were to apply to work performed under the T&M CLINs (and under any contract modifications, whether negotiated on a fixed price or T&M basis, RFP amend. 3, sect. C.7). The Labor Pricing Summary provision requested these labor rates as follows: Offerors shall complete the blanks below with all labor categories and corresponding labor rates utilized in developing their proposal. These fully burdened fixed hourly labor rates and overtime rates (include the base wage, all applicable indirect burden rates and profit) and labor categories shall constitute the sole ones used in the proposal, award, and billing of any delivery orders issued under the contract whether the delivery order is issued on a Firm Fixed-Price or Time & Material Basis. RFP amend. 3, sect.sect. B.1(a), B.2(a), B.3(a), B.4(a), B.5(a). [1] The solicitation provided for award based on a price/technical tradeoff considering three evaluation factors: (1) price/administrative, (2) technical/management, and (3) past performance. RFP amend. 3, sect. M.1. The technical/management factor was most important, and the past performance and price/administrative factors were comparatively equal to each other. RFP amend. 3, sect. M.3.