E. L. Hamm & Associates, Inc., B-280766.3, April 12, 1999

B-280766.3 Apr 12, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Evaluation of awardee's proposal for cost-reimbursement contract was unreasonable where awardee's cost proposal was based on use of personnel in labor category with wage determination labor rate substantially lower than that of labor category required to perform tasks set out in solicitation's performance work statement. 2. Protest is sustained where agency did not assess the realism of the awardee's proposed overhead rate. Which was significantly below its most recent Defense Contract Audit Agency (DCAA) approved rate. The primary mission of the ATSC is the storage and distribution of training materials. These materials are shipped to the warehouse from all over the United States. They are unloaded and placed in storage locations by forklift operators and shippers/ receivers. View Decision Matter of: E. L. Hamm & Associates, Inc. File: B-280766.3 Date: April 12, 1999 * Redacted Decision DIGEST Attorneys DECISION E. L. Hamm & Associates, Inc. (Hamm) protests the award of a contract to Communication Technologies, Inc. (Comtek) under request for proposals (RFP) No. DABT60-98-R-0014, issued by the Department of the Army for storage and warehouse services at the Army Training Support Center (ATSC), Fort Eustis, Virginia. Hamm, the incumbent subcontractor, challenges various agency actions with regard to this procurement, including the agency's failure to perform a proper cost realism evaluation and the agency's source selection decision. We sustain the protest. The primary mission of the ATSC is the storage and distribution of training materials. These training materials include correspondence course books, tapes, compact discs, videotapes, posters, testing materials, training support plans, soldier handbooks, and other training materials. These materials are shipped to the warehouse from all over the United States; upon arrival at the warehouse, they are unloaded and placed in storage locations by forklift operators and shippers/ receivers. Thereafter, training materials are shipped on a scheduled and unscheduled basis worldwide to all components of the Army, authorized civilians, and foreign military. This RFP is for a follow-on contractor to provide support services for the ATSC in six major areas of warehouse operations: (1) receiving, (2) storing, (3) pre-packaging, (4) inventory control, (5) shipping and mailing, and (6) destruction and recycling. RFP Sec. C.5. The RFP, a total small-business set-aside, was issued on March 19, 1998, and contemplated the award of a cost-plus-award-fee contract for a base period with 4 option years. RFP Sec. L.6, F.3. Proposals were evaluated on the basis of four evaluation factors with associated subfactors, listed in descending order of importance: technical, management, past performance, and cost (including options). RFP sec. M.3. The RFP identified technical subfactors and sub-subfactors of equal importance, management subfactors of varying importance, and past performance subfactors of equal importance. As relevant here, the technical subfactors were the offeror's degree of understanding of the six major areas of warehouse operations and the offeror's proposed level of staffing. The latter subfactor included two sub-subfactors: the adequacy of the proposed skill types, including cross utilization of personnel; and the adequacy of the number of personnel proposed. /1/ RFP Sec. M.5. The RFP provided detailed instructions for the preparation of proposals, and requested that offerors submit separate technical/management and cost proposals corresponding to the four evaluation factors. RFP Sec. L.9. Among other things, the technical/management proposal was to identify the offeror's proposed staffing by listing the number of personnel proposed to perform the required tasks, the mix of skill types, the personnel to be cross-utilized, and resumes for key personnel identified as the project manager and alternate project manager. /2/ RFP Sec. L.9.B(2)(b). To assist offerors in estimating the number of personnel necessary to accomplish the anticipated workload, the RFP included actual workload data and related workload information for fiscal years 1996 and 1997. RFP Sec. C.1 and Technical Exhibit 2 (TE-2). Because the procurement is for services, it is subject to the Service Contract Act of 1965 (SCA), 41 U.S.C. Sec. 351-358 (1994). Pursuant to that Act and the implementing provisions of the Federal Acquisition Regulation (FAR), the contracting officer had advised the Department of Labor (DOL), through submission of Standard Form (SF) 98, "Notice of Intention to Make a Service Contract and Response to Notice," of the contracting agency's intent to award a service contract. Pursuant to FAR Sec.