GAO Report from B-283055

B-283055 Sep 23, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights RTS contends that a properly conducted study and cost comparison would have resulted in a determination that the protester's proposal was more economical. These services were performed by four Air Force personnel (three civilian and one military). This information was entered into the Air Force's COMPARE program. This worksheet was sealed in an envelope and maintained in the bid box in the contracting office. The offeror submitting a technically acceptable proposal at the lowest total price was to be selected to compete against the government's in-house cost. Was selected for the cost comparison. The public cost comparison was conducted on June 3. The government's total in-house cost was $910. View Decision Matter of: RTS Travel Service File: B-283055 Date: September 23, 1999 DIGEST Attorneys DECISION RTS Travel Service (RTS) protests the determination by the Department of the Air Force, pursuant to Office of Management and Budget (OMB) Circular No. A-76, that it would be more economical to obtain traffic management office services at Los Angeles Air Force Base, California (LAAFB) using in-house, Air Force personnel, rather than to contract for these services. RTS alleges that the Air Force violated A-76 guidelines in conducting the comparison under request for proposals (RFP) No. F04693-98-R-0049, which provided the basis for the agency's determination. RTS contends that a properly conducted study and cost comparison would have resulted in a determination that the protester's proposal was more economical. We deny the protest. Traffic management services at LAAFB entail the provision of advice and assistance for the worldwide movement of authorized government personnel and personal property, which includes resolving complaints, answering questions, and solving problems. At the time of the cost study, these services were performed by four Air Force personnel (three civilian and one military). Because the personnel involved numbered fewer than 10, the LAAFB conducted the cost study in accordance with Air Force Pamphlet (AFP) 26-12, which provides for direct conversion. AFP 26-12, ch. 12-1c. In order to calculate the government estimate of the cost of current in-house performance, the LAAFB Manpower Office used the number of personnel currently assigned and their extant grades to calculate personnel costs. The Manpower Office also developed material and supply costs based on historical information and, at the same time, developed an estimate of the cost of contract administration to be added to the contractor's offer. This information was entered into the Air Force's COMPARE program, which produced a worksheet for use in the actual cost comparison. This worksheet was sealed in an envelope and maintained in the bid box in the contracting office. The RFP, issued on March 10, 1999, sought proposals to provide all supervision, personnel, equipment, material, tools, and other items necessary to perform traffic management office services in accordance with the RFP's performance work statement. Offerors submitted annual unit prices for a base year with four 1-year options. The offeror submitting a technically acceptable proposal at the lowest total price was to be selected to compete against the government's in-house cost. RTS, one of three offerors submitting proposals, was selected for the cost comparison. The public cost comparison was conducted on June 3. The government's total in-house cost was $910,348 and RTS's unadjusted proposed price was $821,262. However, after the addition of $122,555 for contract administration, $2,310 for one-time conversion costs (equipment and supplies) and the deletion of $3,284 as an income tax credit, RTS's adjusted price became $942,843. Based on the government's cost being $32,495 less than RTS's adjusted total, the contracting officer determined that the requirement would remain in-house. /1/ After receiving notice of the results of the cost comparison, RTS filed this protest with our Office. OMB Circular No. A-76 describes the executive branch's policy on the operation of commercial activities that are incidental to performance of government functions. It outlines procedures for determining whether commercial activities should be operated under contract by private enterprise or in-house using government facilities and personnel. Our Office will review A-76 decisions resulting from an agency's issuance of a competitive solicitation for the purpose of comparing the cost of private and governmental operation of the commercial activity to determine whether the comparison was conducted reasonably. See Madison Servs., Inc., B-277614, Nov. 3, 1997, 97-2 CPD Para. 136 at 4; Crown Healthcare Laundry Servs., Inc., B-270827, B-270827.2, Apr. 30, 1996, 96-1 CPD Para. 207 at 3. In particular, we consider whether the agency complied with the applicable procedures.