Rice Services, Ltd., B-284997, June 29, 2000

B-284997 Jun 29, 2000 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency failed to reasonably compare the level and quality of performance to be obtained under the government's Most Efficient Organization/Management Study (MEO) with the level and quality of performance to be obtained under the "best value" private-sector offer is sustained where the agency's comparison recharacterizes previously evaluated strengths in the private-sector proposal as "unnecessary expenses" and "redundancies. " uses "assumptions" that staffing levels in the MEO are "adequate" to meet the requirements of the performance work statement. Fails to compare the actual level of effort that will be obtained under each approach. The reasonableness of the agency's determination that the two proposed performance plans were technically equivalent. View Decision Matter of: Rice Services, Ltd. File: B-284997 Date: June 29, 2000 DIGEST Attorneys DECISION Rice Services, Ltd., protests the Department of the Navy's decision, pursuant to Office of Management and Budget (OMB) Circular No. A-76, that it would be more economical to perform full food service activities in-house at the United States Naval Academy (USNA) in Annapolis, Maryland, rather than to contract for these services with Rice under solicitation No. N00600-99-R-1649. Rice primarily challenges the adequacy of the agency's comparison of the performance reflected in the government's Most Efficient Organization/Management Study (MEO) with the performance reflected in Rice's proposal, and the reasonableness of the agency's determination that the two proposed performance plans were technically equivalent. We sustain the protest. BACKGROUND In January 1998, the Navy announced that it intended to perform a commercial activities study to determine whether it would be more economical to perform food service activities at the USNA in-house using government employees, or under contract with a private-sector firm. A commercial activities study team was formed to document the agency's requirements by creating a performance work statement (PWS) to provide a common basis for preparation of private offerors' proposals and the government's MEO. /1/ The PWS was completed and approved on March 29, 1999. On May 21, the agency issued a request for proposals (RFP) to be used to conduct a competition between private-sector offerors. The RFP stated that the successful offeror would be selected on the basis of the proposal representing the "best value to the Government from a technical and cost standpoint"; that proposals would be evaluated on the basis of technical, /2/ past performance, key personnel, and price factors; and that, when combined, the non-price evaluation factors were "significantly more important than cost or price." /3/ RFP Secs. M.4, M.5. Section C of the RFP incorporated the PWS as the statement of work, required that proposals identify both the "number of personnel and the number of man-hours proposed in each labor category," RFP Sec. C.1.3.3.4, and advised offerors that "[t]he ultimate focus of the management team should be to not merely meet expectations, but to exceed them and make USNA the top service academy dining facility," RFP Sec. C.1.3.2.2, and that "[f]ood quality and customer satisfaction shall always be the ultimate goal." RFP Sec. C.5.1.1.2. Proposals were submitted by three offerors, including Rice Services, by the July 23, 1999 closing date, /4/ and in early August, each offeror made an oral presentation to the agency. Thereafter, the agency's technical evaluation team (TET) evaluated the proposals using the adjectival rating system set forth in the RFP, and prepared a report documenting that evaluation. The offerors' ratings under the non-price evaluation factors, along with their proposed prices, were as follows: Offeror Technical Key Personnel Past Performance Price Rice Better [deleted] [deleted] [deleted] Offeror A Better [deleted] [deleted] [deleted] Offeror B Acceptable [deleted] [deleted] [deleted] Agency Report, Tab A, Business Clearance Memorandum, at 8. Rice proposed a total staffing level of [deleted] full-time equivalents (FTEs), which was [deleted]. As part of its technical proposal, Rice submitted [deleted]. The agency identified various aspects of Rice's proposed staffing plan as "strengths" under the evaluated factors. Overall, as indicated in the table above, the agency rated Rice's proposal as "Better" under the technical evaluation factor. /5/ In supporting this evaluation that Rice's proposal "significantly exceed[ed] many of the solicitation requirements . . . [in] areas . . . which . . .