BMAR & Associates, Inc., B-281664, March 18, 1999

B-281664 Mar 18, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The Supplemental Handbook requires a TPP for evaluation purposes only where the private sector proposal is selected for cost comparison on the basis of a negotiated or best value procurement. 2. Protest that fixed-price solicitation for civil engineering services subjects bidders to unreasonable risk due to requirement for lump sum price with no limitation on amount of work that can be ordered under various tasks is sustained where pricing scheme imposes unreasonable risk on the contractors. Issued by the Department of the Air Force for civil engineering services at Eglin Air Force Base in Florida. /1/ The acquisition is being conducted as a cost comparison study under Office of Management and Budget (OMB) Circular No. View Decision Matter of: BMAR & Associates, Inc. File: B-281664 Date: March 18, 1999 * Redacted Decision DIGEST Attorneys DECISION BMAR & Associates, Inc. protests request for technical proposals (RFTP) No. F08651-98-R-0001, issued by the Department of the Air Force for civil engineering services at Eglin Air Force Base in Florida. /1/ The acquisition is being conducted as a cost comparison study under Office of Management and Budget (OMB) Circular No. A-76 and supplements. Memorandum for all Offerors, Oct. 27, 1998 (issued by contracting officer with RFTP, and hereinafter referred to as Memorandum). We sustain the protest because we conclude that the lump-sum pricing approach in the RFTP is defective. The RFTP was issued on October 27, 1998, as the first step of a two-step sealed bidding acquisition under Federal Acquisition Regulation (FAR) Sec. 14.5. Under the first step, interested firms submit technical proposals which are evaluated to determine acceptability. Under the second step, a formal invitation for bids (IFB) is issued only to those firms which have submitted acceptable technical proposals during the first step. Only bids based upon technical proposals determined to be acceptable, either initially or as a result of discussions, will be considered for award; each bid in the second step must be based on the bidder's own technical proposal. Memorandum Para. 10; FAR Sec. 14.5. 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 cost comparison process. Supplemental Handbook ch. 3, Sec. A.3. For sealed bid procurements, /2/ the contracting officer opens the bids, including the government's in-house cost estimate, and enters the price of the apparent low "offeror" on the cost comparison form (CCF). After all necessary adjustments are made and the CCF is completed, the contracting officer announces the tentative decision, subject to evaluation of bids for responsiveness, responsibility, and resolution of possible administrative appeals. Supplemental Handbook ch. 3, Sec. J.1. The Supplemental Handbook establishes an A-76 administrative appeals process for parties seeking to challenge the results of the cost comparison. Supplemental Handbook ch. 3, Sec. K. BMAR maintains that the RFTP violates the requirements for conducting the cost comparison because it does not require the government to submit a "technical performance plan (TPP)" /3/ for evaluation under the first step provided for in section H of chapter 3 of the Supplemental Handbook. The Air Force interprets the Supplemental Handbook as requiring a TPP only where the agency conducts a negotiated procurement. According to the Air Force, since this acquisition is a two-step sealed bid, no TPP is required. At issue is the following language in section H of chapter 3 of the Supplemental Handbook, entitled "Methods of Procurement." The section provides as follows: 1. All competitive methods of Federal procurement provided by the FAR are appropriate for cost comparison under the Circular and this Supplement. This includes: sealed bid, two-step, source selection and other competitive qualifications-based or negotiated procurement techniques. 2. In selecting the method of procurement and contract type, the contracting officer analyzes the PWS [Performance Work Statement] and applies the guidance contained in OFPP [Office of Federal Procurement Policy] Policy Letter 91-2 and FAR Part 16. 3. Source Selection or negotiated procurement techniques may be used for some A-76 Cost Comparisons. To ensure equity in the cost comparison process, the following guidelines are provided: a.