KPMG LLP, B-292624, October 27, 2003

B-292624 Oct 27, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that vendor's quotation should have been rejected for failure to satisfy alleged solicitation requirement to provide labor rates under a specific labor category is denied where the solicitation did not contain mandatory labor categories. KPMG contends that Deloitte & Touche's quotation should have been rejected as noncompliant with the solicitation requirements. Under which subsequent task orders will be issued. Selection was to be made on a "best value" basis with the evaluation criteria consisting of technical acceptability and experience. Which were equal in importance. Which was less important. Price which was least important. Which could be determinative if the difference in the other factors was slight in comparison to the price difference. View Decision KPMG LLP, B-292624, October 27, 2003 DIGEST Attorneys DECISION KPMG LLP protests the issuance under the General Services Administration (GSA) Federal Supply Schedule (FSS) of a blanket purchase agreement (BPA) to Deloitte & Touche LLP, under request for quotations (RFQ) No. SSA-RFQ-03-0290, issued by the Social Security Administration (SSA). KPMG contends that Deloitte & Touche's quotation should have been rejected as noncompliant with the solicitation requirements. We deny the protest. SSA issued the RFQ on March 31, 2003, for contract services to conduct reviews of SSA's financial management systems and management controls, and special studies of selected financial management functions for the agency's chief financial officer. The RFQ sought quotes by April 29, and contemplated the issuance of a BPA, under the vendor's current FSS contract, under which subsequent task orders will be issued, for a base year with 4 option years. Selection was to be made on a "best value" basis with the evaluation criteria consisting of technical acceptability and experience, which were equal in importance; past performance, which was less important; and price which was least important, but which could be determinative if the difference in the other factors was slight in comparison to the price difference. RFQ Sec. E(B), (C). With respect to price, the RFQ called for quotes of prices and discounts that were consistent with the contractor's GSA schedule, and provided that price would be evaluated on the basis of the overall price for the functions required during the base year of the contract, with option year prices to be evaluated for completeness, reasonableness, balance, and consistency with the contractor's GSA schedule. RFQ Sec. E(A)(4). The agency received quotes from KPMG and Deloitte, both of which were evaluated as warranting the maximum possible score under each of the three non-price evaluation factors, and were considered technically equal. KPMG's base year price was evaluated as [DELETED], and its total price including all option years was evaluated as [DELETED]. Deloitte's base year price was evaluated as $2,993,487.40, and its total price including all option years was evaluated as $18,593,467.60. Agency Report (AR), Tab E, Business Management and Cost/Price Evaluation Reports, at 5. However, the evaluators recognized that the price difference "may be a result of KPMG not applying escalation to Contract Years 2-5." Id. /1/ As a result, the agency issued amendment No 6, which provided in relevant part that overall price would be evaluated on the basis of the 5-year term of the contract, rather than only the base year, called for "fixed prices" for the full 5-year contract term, and required revised quotes by June 25. RFQ amend. 6. In response, Deloitte did not change its quote because, consistent with its FSS schedule, Deloitte's prices reflected a constant [DELETED] percent labor escalation rate for each option year; KPMG revised its quote, which had not contained any option year escalation, consistent with its FSS schedule which provides for future adjustment based on a market index. /2/ KPMG stated that for each option year, it now "applied an escalation factor of [DELETED] to the previous year's labor category rates," and that it "understand[s] that this change will provide the Social Security Administration (SSA) with greater contract price certainty by providing firm fixed labor category rates for each labor category over the life of the contract, and an estimated firm fixed price for each contract year, based on the estimated labor hours detailed in your solicitation." AR, Tab B, KPMG Revised Quotation, Cover Letter. In the revised quote, KPMG's base year price was unchanged. However, its total price including all option years increased to [DELETED]. There were no changes to either vendor's technical quotation.