BAE Systems, B-287189; B-287189.2, May 14, 2001

BAE Systems, B-287189; B-287189.2, May 14, 2001 TITLE: BAE Systems, B-287189; B-287189.2, May 14, 2001 BNUMBER: B-287189; B-287189.2 DATE: May 14, 2001 ********************************************************************** BAE Systems, B-287189; B-287189.2, May 14, 2001 Decision Matter of: BAE Systems File: B-287189; B-287189.2 Date: May 14, 2001 Kenneth M. Bruntel, Esq., Joseph W.C. Warren, Esq., Daniel R. Forman, Esq., and Amy Laderberg, Esq., Crowell & Moring, and D. Mark Baker, Esq., BAE Systems, for the protester. Raymond M. Saunders, Esq., Maj. John B. Alumbaugh, and Maj. David T. Crawford, Department of the Army, for the agency. Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protester challenging a cost comparison conducted pursuant to Office of Management and Budget Circular No. A-76 was not required to file or participate in an appeal to the agency's administrative appeals board (AAB) as a prerequisite to filing a protest at the General Accounting Office, where the protester's private-sector offer had been determined to be more economical than performance in-house before this determination was reversed by the AAB and where the revisions made by OMB Transmittal Memorandum No. 22 to the Circular's Revised Supplemental Handbook that arguably require protester to file an appeal were not applicable to this cost comparison. 2. Protest challenging a cost comparison conducted pursuant to Office of Management and Budget Circular No. A-76 is sustained, where the agency did not reasonably determine that the in-house plan satisfied the performance work statement's requirements. 3. Protest of the agency's administrative appeals board's decisions, which reversed the original cost comparison determination in favor of the protester, is sustained where the board's determination as to how much staffing was required to be added to the in-house "most efficient organization" to perform the performance work statement requirements lacked a reasonable basis. 4. In a negotiated procurement conducted pursuant to Office of Management and Budget Circular No. A-76, in which the private-sector offer was to be selected on the basis of a cost/technical trade-off, the agency improperly failed to consider the protester's offer to meet a performance standard that appeared to exceed the performance work statement requirements. DECISION BAE Systems protests the decision of the Department of the Army under request for proposals (RFP) No. DAPC50-98-R-0012 to retain in-house (rather than contract-out) performance of logistics support and services for the U.S. Army Garrison in Hawaii. The decision to retain the services in-house was as a result of a cost comparison pursuant to Office of Management and Budget (OMB) Circular No. A-76, which compared BAE's proposal to perform the work against the government's in-house offer. [1] BAE challenges the decisions of the agency's administrative appeals board (AAB) that reversed the agency's initial decision to contract out this work to BAE. BAE contends that the government's in-house offer did not satisfy the RFP's minimum performance requirements or offer the same level of performance and quality as offered by BAE. We sustain the protest. BACKGROUND 1. The Performance Work Statement and the Solicitation 2. The RFP was issued by the Army's Directorate of Contracting (DOC), Fort Shafter, Hawaii, on December 28, 1999, and provided for the award of a cost-plus-award-fee contract to provide all resources and management necessary to perform logistics support and services in accordance with the solicitation's performance work statement (PWS) for the U.S. Army Garrison in Hawaii. Offerors were informed that the RFP was issued as part of a government cost comparison to determine whether accomplishing the specified work under contract or by government performance was more economical. If government performance was determined to be more economical, then no award under the RFP would be made and the solicitation would be canceled. [2] The PWS identified the services to be performed and stated performance standards. Generally, the required services were in four functional areas: supply and services, transportation, maintenance operations, and Island of Hawaii satellite operations. PWS sect. C.5. Among other things, the PWS, as amended, required, as part of the transportation operations, the provision of personal property shipment services at Schofield Barracks and Fort Shafter on the Island of Oahu, and at Hilo on the Island of Hawaii. PWS sect. C.5.2.1.