Bechtel Hanford, Inc., B-292288; B-292288.2; B-292288.3, August 13, 2003

Bechtel Hanford, Inc., B-292288; B-292288.2; B-292288.3, August 13, 2003 TITLE: Bechtel Hanford, Inc., B-292288; B-292288.2; B-292288.3, August 13, 2003 BNUMBER: B-292288; B-292288.2; B-292288.3 DATE: August 13, 2003 ********************************************************************** Bechtel Hanford, Inc., B-292288; B-292288.2; B-292288.3, August 13, 2003 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This is an interim redacted version that has been approved for public release; GAO intends to issue a final redacted version at a later date. Decision Matter of: Bechtel Hanford, Inc. File: B-292288; B-292288.2; B-292288.3 Date: August 13, 2003 Marcia G. Madsen, Esq., David F. Dowd, Esq., and Michael J. Farley, Esq., Mayer, Brown Rowe & Maw, and Robert Humphries, Esq., Bechtel Hanford, Inc., for the protester. Kenneth B. Weckstein, Esq., Shlomo D. Katz, Esq., and Tammy Hopkins, Esq., Epstein Becker & Green, for Washington Closure Company, LLC, an intervenor. Gena E. Cadieux, Esq., Joseph B. Schroeder, Esq., Patricia D. Grahm, Esq., and Jonathan M. Dreger, Esq., Department of Energy, for the agency. Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency improperly made award in a cost-plus-incentive-fee acquisition to a firm that submitted a proposal whose cost was found to be [deleted] unrealistic by the agency is sustained where solicitation called for evaluation of realism of cost proposals, agency emphasized need for realism during written and oral discussions, agency never indicated to offerors during the competition that it would accord little weight to realism in its source selection, protester relied on agency*s direction in submitting a proposal that was found very realistic, and agency failed to adequately document in its selection decision why it discounted the importance of realism in its source selection. DECISION Bechtel Hanford, Inc. (BHI) protests the award of a contract to Washington Closure Company, LLC (WCC) under request for proposals (RFP) No. DE-RP06-02RL14300, issued by the Department of Energy (DOE) to acquire environmental remediation services. BHI maintains that the agency misevaluated proposals and made an improper source selection decision. We sustain the protest. BACKGROUND DOE occupies a 586 square mile area in southeastern Washington State known as the Hanford Site, through which flows the Columbia River. The 210 square mile area adjacent to the river is known as the River Corridor. The agency acquired the Hanford Site in 1943, and for almost 50 years it was dedicated to the production of plutonium used to construct nuclear weapons. The agency describes the environmental legacy resulting from these activities as *multifaceted and immense.* The object of the current RFP is to acquire environmental remediation services leading, ultimately, to restoration of the River Corridor area. The RFP contemplated the award, on a *best value* basis, of a cost-plus-incentive-fee (CPIF) contract, considering evaluated cost and several non-cost evaluation criteria, with the non-cost criteria collectively being significantly more important than evaluated cost. RFP at M-2.[1] Offerors were required to submit both technical and cost proposals. Cost proposals were to include estimates based on two differing assumptions relating to the level of available funding: the *base case* level of funding--which assumed funding of approximately $150 million per year--and the *40 percent increment* level of funding--approximately $210 million per year (40 percent higher than the base case level). RFP at L-21. These two estimates would be averaged together for purposes of evaluation and award. RFP at M 5-6. The solicitation included a document designated as attachment 11, which was a comprehensive list of all tasks to be performed under the contract. This document included a government estimate, expressed in unescalated fiscal year 2001 dollars, of the cost for each element of work. The agency also separately published a government estimate and an accompanying report relating to the preparation of the estimate (referred to as the ICE) that was available to offerors through the Internet.[2] DOE engaged the services of the U.S. Army Corps of Engineers to prepare the estimate, which is expressed in two ways--a 50-percent confidence level and an 80-percent confidence level--reflecting the degree of certainty the agency had in the estimates (with the 80-percent confidence level estimate reflecting greater certainty). AR, exh. 84.