The Right One Company, B-290751.8, December 9, 2002

B-290751.8 Dec 09, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that the agency improperly excluded protester's proposal from consideration for award is denied where the decision to eliminate the protester's proposal was reasonably based on a finding that protester's proposed rates for certain line items were unreasonably high. The RFP was restricted to firms certified under the Small Business Administration's Historically Underutilized Business Zone (HUBZone) program and provided for the award of multiple indefinite-delivery/indefinite-quantity contracts for a base period of 2 years. Work under the contracts was to be performed pursuant to specific task orders covering one or more of seven functional areas (FA) corresponding to various required services. /1/ RFP at M-1. View Decision The Right One Company, B-290751.8, December 9, 2002 DIGEST Attorneys DECISION The Right One Company (TRO) protests the elimination of its proposal from consideration for award under request for proposals (RFP) No. 6TA-02-MTV-0057, issued by the General Services Administration (GSA) for government-wide acquisition contracts for information technology services. TRO argues that the agency unreasonably excluded its proposal based on the agency's conclusion that TRO either qualified the solicitation requirements or otherwise proposed unreasonably high rates for many line items. We deny the protest. The RFP was restricted to firms certified under the Small Business Administration's Historically Underutilized Business Zone (HUBZone) program and provided for the award of multiple indefinite-delivery/indefinite-quantity contracts for a base period of 2 years, with three 1-year options. Work under the contracts was to be performed pursuant to specific task orders covering one or more of seven functional areas (FA) corresponding to various required services. /1/ RFP at M-1. Offerors could elect to propose on any one or more of the FAs and the solicitation advised that GSA intended to make awards based on initial proposals without conducting discussions. Id. at L-1. In addition, the amended RFP cautioned that a proposal would be considered unacceptable and would be ineligible for award if, among other things, it took exception to any of the terms and conditions in the RFP, or imposed additional conditions. RFP at M-1. The RFP instructed offerors how to prepare their price proposals. The pricing schedules for the base and option periods for each FA included contract line item numbers (CLIN) corresponding to specific labor categories with an estimated number of hours for each labor category. Offerors were requested to provide an hourly ceiling labor rate for each labor category and to multiply this unit rate by the number of estimated hours to calculate the total price for each labor category. For each FA, the price schedule also contained CLINs for supplies, travel, and other direct costs (STODC), and provided an estimated cost amount of $500,000 for supplies, $50,000 for travel, and $25,000 for other direct costs. The solicitation contained a pricing formula in which the estimated cost amount (A) was multiplied by the ceiling handling rate (B) proposed by each offeror; this amount was then added to the estimated cost amount to establish the total extended price for each STODC line item. RFP at B-6. Regarding ceiling handling rates, the RFP provides: Handling rates are markups applied to bare cost serving as maximum consideration for all indirect (i.e., overhead, general and administrative) charges, fringe benefits and profit. Handling rates will be expressed as a decimal and not a percentage, and be rounded to three places to the right of the decimal point. . . . If authorized in an Order, the Contractor will be reimbursed the bare cost of supplies, bare cost of travel . . . and bare cost of ODCs plus the handling amounts (not to exceed the application of the ceiling rates) specifically definitized in the order. To reiterate, there is an absolute requirement that the bare cost amounts of the supplies, travel, ODCs and associated handling amounts be fixed at the time of Order inception. . . . The ceiling handling rates in the schedules of this Section B are caps on the markup allowed for overhead, G&A and profit--they do not serve as mechanical measures of those rates. It is customary for profit to not be applied to travel costs and it is not allowable under this Contract. . . . . . The ceiling handling rate(s) proposed shall stand regardless of actual utilization (e.g., even if only $5,000.00 of the estimated $500,000.00 for supplies is ordered, the ceiling handling rate remains constant.) RFP at B-4, B-5.