Abt Associates, B-294130.2, October 12, 2004

B-294130.2 Oct 12, 2004 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Abt Associates protests the award of a contract to TCG International, LLC under request for proposals (RFP) No. 386-04-001, issued by the Agency for International Development (AID) to procure technical assistance to India for Phase III of the Financial Institutions Reform and Expansion (Debt Market) (FIRE-D III) program. Abt alleges that AID made the award to TCG based on an improper cost realism analysis of TCGs proposal. We deny the protest. View Decision B-294130.2, Abt Associates, October 12, 2004 Decision Matter of: Abt Associates File: B-294130.2 Date: October 12, 2004 Robert Sonenthal, Esq., Sonenthal and Overall, for the protester. Kenneth A. Martin, Esq., Martin & Associates, for TCG International, LLC, an intervenor. Diane A. Perone, Esq. and John B. Alumbaugh, Esq., Agency for International Development, for the agency. Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency did not perform proper cost realism analysis of awardees proposal is denied where agency reviewed proposed costs and determined that they were achievable, and protester does not allege that awardees proposed costs were inconsistent with its technical proposal. DECISION Abt Associates protests the award of a contract to TCG International, LLC under request for proposals (RFP) No. 386-04-001, issued by the Agency for International Development (AID) to procure technical assistance to India for Phase III of the Financial Institutions Reform and Expansion (Debt Market) (FIRE-D III) program. Abt alleges that AID made the award to TCG based on an improper cost realism analysis of TCGs proposal. We deny the protest. The solicitation, which contemplated the award of a cost-reimbursement contract, provided for a best value award based on an evaluation of technical, past performance and cost factors. With respect to cost, the solicitation provided that the contracting officer would perform an analysis of whether offerors proposed a realistic cost for successful completion of the effort and production of the outputs in the RFP. After multiple rounds of discussions, TCGs and Abts proposals were rated technically equal, with 83 and 83.25 (out of 100 possible) points, respectively. Thus, since TCGs final proposed cost was10,923,041, versus Abts $12,413,082, the agency selected TCGs lower cost proposal for award. Abt asserts that AID unreasonably determined that TCGs final cost proposal--reducing TCGs initial proposal cost of12,954.979 to $10,923,041--was realistic. More specifically, Abt maintains that AID improperly accepted TCGs cost reductions for travel ($245,348), per diem ($504,885) and field office ($465,023), because those reductions were not accompanied by supporting information. In this regard, TCG reduced its travel costs by reducing the proposed number of international and domestic trips and extending the duration of each trip. TCG reduced its per diem costs based on its projection that 60 percent of those costs would be incurred in smaller, less expensive cities, and based on a negotiated discount with the hotels where its staff would stay. TCG reduced its field office costs by proposing to rely on temporary offices located with consultants and partner institutions, rather than by establishing its own separate field offices. Abt argues that the agency should not have accepted the proposed cost reductions for travel and field offices because TCG did not explain or justify the decision to reduce the number of trips and extend their duration, and did not offer support to demonstrate that the proposed field office arrangements would be available. Abt asserts that AID should not have accepted the proposed reductions in per diem costs because TCG did not offer any support for its claim that 60 percent of those costs would be incurred in smaller, less expensive cities, or for the hotel discounts. According to Abt, the solicitation requires at least 50 percent of FIRE-D III activity to take place in larger cities, and that it is unlikely that TCG was able to negotiate hotel discounts. Where an agency evaluates proposals for the award of a cost-reimbursement contract, an offerors proposed costs are not considered controlling, since the costs are only estimates, and thus may not provide valid indications of the final actual costs that the government will be required, within certain limits, to pay. ViaSat, Inc. , B-291152, B-291152.2, Nov. 26, 2002, 2002 CPD 211 at 11. Accordingly, a cost realism analysis must be performed when a cost-reimbursement contract is contemplated. Federal Acquisition Regulation 15.404-1(d)(2).