Omni Corporation, B-281082, December 22, 1998

B-281082 Dec 22, 1998 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights A-76 is dismissed as premature where the protester files its challenge prior to the post-award debriefing offered by the agency at the conclusion of the administrative appeal process resolving the successful private-sector offeror's challenge to the agency's in-house cost estimate. 2. Agencies are required to provide offerors who participate in the private-sector competition portion of the A-76 cost comparison process. Are not selected for comparison with the in-house offer. The RFP was used to select a private-sector offer for comparison to the government's in-house cost estimate under Office of Management and Budget (OMB) Circular No. Three of these lock and dam facilities are currently operated by the government. View Decision Matter of: Omni Corporation File: B-281082 Date: December 22, 1998 * Redacted Decision DIGEST Attorneys DECISION Omni Corporation protests that the U.S. Army Corps of Engineers treated Omni unfairly during the competition held pursuant to request for proposals (RFP) No. DACW66-98-R-0003 for the operation and maintenance of locks and dams on the Red River Waterway in Louisiana. The RFP was used to select a private-sector offer for comparison to the government's in-house cost estimate under Office of Management and Budget (OMB) Circular No. A-76. Omni argues that, among other things, the Corps misled it to increase its staffing (and thus its price) for these services, while the government's in-house estimate used a lower staffing level than Omni. We dismiss the protest. BACKGROUND The RFP, issued December 29, 1997, contemplates award of a contract for the operation and maintenance of five lock and dam facilities located along a 236-mile stretch of the Red River from Shreveport, Louisiana to the Red River's junction with the Old River. Three of these lock and dam facilities are currently operated by the government, while two have been operated by Omni since 1992. To streamline operations along the river system, the Corps concluded that either the government or a contractor should operate all five of the locks and dams along this stretch of waterway. The procedures for determining whether the government should perform an activity in-house, or allow the activity to be performed by a contractor, are set forth in OMB Circular No. A-76, and the Circular No. A-76 Revised Supplemental Handbook (March 1996) (the "Supplemental Handbook"). When an activity is considered appropriate for an in-house versus private-sector cost comparison, the Supplemental Handbook outlines the process. Supplemental Handbook, Chap. 3, Sec. A.3. Where a negotiated procurement approach is used, the cost comparison process can be viewed as consisting of three basic steps: (1) a competition among private-sector offerors, conducted much as any federal procurement is conducted; (2) a comparison of the winning private-sector offer with the in-house estimate to ensure that both are based upon the same scope of work and performance levels--and if they are not, to adjust the in-house estimate; and (3) a straightforward cost comparison of the offers to determine which offer will be most economical for the government. Id. Sec. H, J; see NWT, Inc.; PharmChem Labs., Inc., B-280988, B-280988.2, Dec. 17, 1998, 98-2 CPD Para. ___ at 4-5. In addition, the Supplemental Handbook establishes an A-76 administrative appeals process for parties seeking to challenge the results of the cost comparison. Id. Sec. K. The RFP used here to conduct the competition among private-sector offerors--the first step of the three-step process described above--anticipates selection of the proposal which presents the best value to the government. RFP Sec. M.3. The RFP also contains the clause found at Federal Acquisition Regulation (FAR) Sec. 52.207-2, "Notice of Cost Comparison (Negotiated)," which advises that the "solicitation is part of a Government cost comparison to determine whether accomplishing the specified work under contract or by Government performance is more economical." RFP Sec. L.3. In response to the RFP, the agency received initial proposals from four offerors, including Omni and Ferguson-Williams, Inc., the offeror whose proposal ultimately was selected for comparison with the in-house estimate. In the Corps's view, none of the initial proposals was acceptable, and no proposal became acceptable until submission of the third round of revised proposals. Before each call for revised proposals, the Corps held discussions with the four offerors and pointed out the perceived weaknesses and deficiencies in their proposals. At the conclusion of the evaluation of the third round of revised proposals, the source selection authority excluded Omni and another offeror from further consideration, and selected Ferguson-Williams as the best value offeror for the cost comparison with the in-house estimate. Source Selection Decision, Aug.