Pacific Support Group, LLC, B-290467, August 8, 2002

B-290467 Aug 08, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Is denied. Is an appropriate element of agency-level A-76 appeal process. That is. The resultant cost comparison did not change the agency's initial determination that it was more economical. PSG argues primarily that the MEO is understaffed in numerous regards and does not include required costs for all of the necessary personnel under the PWS. That there are various calculation errors that result in overstatement of PSG's evaluated cost and understatement of the IHCE. A performance work statement (PWS) for this function was prepared by the agency for inclusion in a solicitation to be issued as part of a public/private cost comparison under Circular A-76. The MEO and IHCE that had been prepared by the DPW management study team was submitted to the Army Audit Agency. View Decision Pacific Support Group, LLC, B-290467, August 8, 2002 * REDACTED DECISION DIGEST Attorneys DECISION Pacific Support Group, LLC (PSG) protests the Department of the Army's determination to retain in-house the real property maintenance support services for the U.S. Army Garrison, Hawaii, rather than to contract for these services with PSG under request for proposals (RFP) No. DAPC50-00-R-0007. The Army decided to retain the services in-house based on the results of a cost comparison conducted pursuant to Office of Management and Budget (OMB) Circular A-76, which compared PSG's proposal to perform the work against the government's in-house management plan, that is, its "most efficient organization" (MEO). PSG challenges numerous aspects of the agency's determination that in-house performance remained more economical than contractor performance, even after the agency had made certain adjustments to reflect the findings of the agency's administrative appeal board (AAB). Although the AAB had agreed with PSG with respect to parts of certain of the appeal issues that PSG had raised, as a result of which both the protester's evaluated cost and the in-house cost estimate (IHCE) had been adjusted, the resultant cost comparison did not change the agency's initial determination that it was more economical, by a substantial margin, to retain the services in-house. PSG argues primarily that the MEO is understaffed in numerous regards and does not include required costs for all of the necessary personnel under the PWS, and that there are various calculation errors that result in overstatement of PSG's evaluated cost and understatement of the IHCE. PSG also questions the propriety of the procedures followed by the AAB in reaching its determination. We deny the protest. BACKGROUND In October 1997, the Army announced that the Directorate of Public Works (DPW) for the U.S. Army Garrison, Hawaii, which then employed approximately 400 civilian employees to perform real property maintenance activity support services for Army facilities in Hawaii, would be the subject of a commercial activities study. A performance work statement (PWS) for this function was prepared by the agency for inclusion in a solicitation to be issued as part of a public/private cost comparison under Circular A-76, in which the selected offeror's proposal to perform the work would be compared with the agency's MEO. /1/ On January 17, 2001, the MEO and IHCE that had been prepared by the DPW management study team was submitted to the Army Audit Agency, which served as the IRO. The MEO was based on performing the PWS requirements under a plan which took into account the historical staffing levels adjusted to reflect "efficiencies that will streamline operations and fully utilize its smaller workforce," and reflected certain changes in "current business practices." Agency Report (AR), Tab 7, IRO Review and Adjustment Memorandum, at 764-65. The IRO evaluated the MEO and recommended certain adjustments to in-house costs, which were made with the agreement of the DPW study team, after which the IRO concluded that the MEO "reasonably establishes the Government's ability to perform work requirements of the performance work statement with the resources [indicated]," and that the IHCE "provides a reasonable estimate of government costs and has been completed in compliance with OMB Circular A-76, its supplement, and related DOD and Army Guidance." Id. at 758-59, 764. The RFP was issued electronically on November 2, 2000, seeking proposals to provide all resources and management necessary to perform real property maintenance activity support services for the U.S. Army Garrison, Hawaii. The major functional areas included in the services to be performed were DPW business management, housing, environmental compliance and pollution prevention, engineering, plans and services, operations support, and maintenance and repair of facilities.