Remtech Services, Inc., B-292182, July 17, 2003

B-292182 Jul 17, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest challenging agency decision to retain certain services in-house as a result of a cost comparison conducted pursuant to Office of Management and Budget Circular A-76 on the basis that government's "most efficient organization" (MEO) plan improperly failed to include sufficient staffing to meet performance work statement (PWS) requirements is denied where record supports reasonableness of agency's determination. Virginia. /1/ Remtech contends that the agency should have determined that award of a contract to Remtech to perform the services would be more economical. Was flawed. The MEO plan is insufficiently staffed to meet the solicitation's performance work statement (PWS). View Decision Remtech Services, Inc., B-292182, July 17, 2003 * REDACTED DECISION DIGEST Attorneys DECISION Remtech Services, Inc. protests the determination of the Department of the Army to retain in-house Directorate of Information Management (DOIM) information resource management services at Fort Monroe, Virginia. /1/ Remtech contends that the agency should have determined that award of a contract to Remtech to perform the services would be more economical. Remtech contends that the agency's cost comparison under Office of Management and Budget (OMB) Circular A-76, comparing Remtech's proposal to perform the services to the government's "most efficient organization" (MEO) plan for the services, was flawed, since, according to Remtech, the MEO plan is insufficiently staffed to meet the solicitation's performance work statement (PWS), and, consequently, is understated in cost. /2/ We deny the protest. The Army issued request for proposals (RFP) No. DABT60-01-R-3027 on March 15, 2002, for a private-sector competition, as part of a Circular A-76 commercial activities study to determine whether it would be more economical to perform the DOIM services at Fort Monroe in-house, using government employees, or under a contract with a private-sector firm. /3/ The RFP advised that the lowest-cost technically acceptable private-sector proposal would be selected for a cost comparison with the MEO plan; if the private-sector offeror ultimately won the cost comparison, a cost-plus-award-fee contract for a base year, with up to four 1-year options, and phase-in/phase-out transition periods, was contemplated. RFP amend. 10, at 16, 18. The RFP's PWS set out the services to be provided by the contractor or the MEO at the conclusion of the study. /4/ Private-sector firms and the MEO were to propose costs to perform all of the PWS requirements in order to provide for a fair comparison between the private sector and government submissions. The source selection evaluation board evaluated the technical proposals received from the private sector offerors; discussions were conducted with two of those offerors, including Remtech. Based upon the revised proposals received, Remtech was found to have submitted the lowest-cost technically acceptable proposal under the RFP. An official of the U.S. Army Audit Agency (USAAA), who served as the independent reviewing official (IRO) of the government's in-house plan, reviewed the MEO's management plan and supporting documentation (including the PWS, the MEO's technical performance plan, and the in-house cost estimate (IHCE)) to confirm the MEO's ability to meet the PWS requirements as submitted. Hearing Transcript (Tr.) at 149-54. /5/ As part of the review, the IRO interviewed Fort Monroe representatives, evaluated the methodology and rationale for anticipated efficiencies (vis- -vis current procedures), and reviewed the management plan for consistency with the PWS. Based on this review, the IRO certified that the management plan costs were consistent with the workload in the PWS and the resources in the management study. The IRO concluded that the management study reasonably established the government's ability to perform the PWS's requirements with the resources identified in the MEO management and technical performance plans. On November 15, 2002, Remtech was notified by the agency that it had been successful in the private-sector competition, and that its proposal had been selected as the private-sector offer for the cost comparison with the MEO plan. The firm also was notified that, on the basis of that cost comparison, the agency had issued its tentative decision that the MEO provided the most economical approach to meeting the agency's requirements. Accordingly, the firm was advised that the agency intended to retain the DOIM services in-house. Remtech filed an administrative appeal on December 30, challenging numerous aspects of the agency's Circular A-76 study. Remtech primarily challenged that the MEO plan was insufficiently staffed, which, Remtech contended, led to an understatement of costs in the IHCE.