IT Corporation, B-288507, September 7, 2001

B-288507 Sep 07, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest objecting to possible agency actions in response to the decision of an administrative appeal authority under Office of Management and Budget Circular A-76 is dismissed as premature. Where the appeal authority upheld the protester's appeal and remanded the matter to the agency to take corrective action and the agency has not yet determined what action it will take. The RFP was issued as a part of a public/private cost comparison to determine whether accomplishing the specified work under contract by government performance was more economical than retaining the work in-house. /1/ In response to the RFP's performance work statement. Offers were received from a number of private-sector offerors. View Decision IT Corporation, B-288507, September 7, 2001 DIGEST Attorneys DECISION IT Corporation protests the actions of the Department of the Navy under request for proposals (RFP) No. N68711-00-R-4101, which provided for a cost comparison pursuant to Office of Management and Budget (OMB) Circular No. A-76 to determine whether to retain in-house or contract out performance of public works services at the Naval Air Weapons Station, China Lake, California. We dismiss the protest as premature. The RFP was issued as a part of a public/private cost comparison to determine whether accomplishing the specified work under contract by government performance was more economical than retaining the work in-house. /1/ In response to the RFP's performance work statement, agency personnel prepared an in-house plan consisting of a management plan, a technical performance plan, and an in-house cost estimate. The Naval Audit Service, acting as the "independent review officer," certified that the in-house plan provided sufficient hours to perform the performance work statement requirements. Offers were received from a number of private-sector offerors, including IT. Discussions were conducted, and best and final offers received. IT was selected to compete against the agency's most efficient organization (MEO). As a result of the cost comparison between the MEO and IT, the Navy tentatively decided that performance in-house would be less costly (after the appropriate adjustments were made) than performance by IT. IT appealed the cost comparison to the agency's appeal authority. In its administrative appeal, IT complained that the MEO's technical performance plan did not address all the requirements of the performance work statement, that the in-house cost estimate did not include costs associated with performance commitments in the technical performance plan, that the in-house plan significantly understated the level of effort required to perform many of the performance work statement requirements, that the Navy "failed to level clear quality differences between the IT Corporation and the MEO," and that the Navy (in making the adjustments called for by Circular A-76) applied excessive contract administration and one-time conversion costs to IT's proposal and failed to provide sufficient credit to IT for federal taxes paid. Appeal of IT Corp. at 2. The Navy's administrative appeal authority upheld IT's appeal, finding that "several of the questions raised by IT Corporation should be sustained in IT's favor." Appeal Decision at 2. The appeal authority, however, did not specifically identify the issues sustained or their cost impact. With respect to IT's complaint that the in-house plan significantly understated the level-of-effort required to satisfy the performance work statement requirements, /2/ the appeal authority found that in 14 areas there were "large disparities in the bases that were used in judging what would be realistic levels of performance." Id. at 3. That is, the appeal authority found that the independent review officer (in reviewing the in-house offer) and the evaluation board (in reviewing the private-sector offers) had used substantially different judgments as to realism of the proposed levels of effort. In one example, the appeal authority noted that, although IT proposed a higher level of effort than had the MEO (whose level of effort was found realistic by the independent review officer) to perform a particular function, the evaluators found IT's proposed level of effort to be unrealistically low. As a result, IT was encouraged in discussions to substantially raise its level of effort for the function, which resulted in IT's level-of-effort for this work being substantially higher (and therefore presumably far more costly) than that estimated in the in-house plan. Id. at 4.