B-294722.4, SGT, Inc., July 28, 2005

B-294722.4 Jul 28, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights SGT, Inc. protests the award of a contract to Systems Integration & Management, Inc. (SIM) under request for proposals (RFP) No. N00039-04-R-0005, issued by the Space and Naval Warfare Systems Command (SPAWAR) for a business, operations and administrative support services (BOASS) contract at the U.S. Navy SPAWAR Information Technology Center in New Orleans, Louisiana. The protester argues that the agency improperly evaluated its cost and technical proposal. We deny the protest. View Decision B-294722.4, SGT, Inc., July 28, 2005 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: SGT, Inc. File: B-294722.4 Date: July 28, 2005 Andrew P. Hallowell, Esq. and Jennifer M. Morrison, Esq., Piliero, Mazza & Pargament PLLC, for the protester. Amy J. Weisman, Esq., and Kevin P. Travis, Esq., Space and Naval Warfare Systems Command, for the agency. Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging agency's evaluation of protester's cost proposal is denied where the agency's cost realism adjustments were reasonable. 2. Protest challenging evaluation of protester's technical proposal is denied where the record supports the agency's evaluation. DECISION SGT, Inc. protests the award of a contract to Systems Integration & Management, Inc. (SIM) under request for proposals (RFP) No. N00039-04-R-0005, issued by the Space and Naval Warfare Systems Command (SPAWAR) for a business, operations and administrative support services (BOASS) contract at the U.S. Navy SPAWAR Information Technology Center in New Orleans, Louisiana. The protester argues that the agency improperly evaluated its cost and technical proposal. We deny the protest. The RFP anticipates award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract, which provides for cost-plus-award-fee and fixed-price-award-fee task orders. The competition was restricted to offerors who are participants in the Small Business Administration's 8(a) program for small, disadvantaged businesses. The RFP sought proposals to provide –all management, supervision, labor, administrative support, reporting requirements, supplies, and associated support services— required to support the SPAWARInformationTechnologyCenter. RFP at 1. The base performance period for the contract is 1 year, with four 1-year option periods. The RFP states that award would be made to –the responsible Offeror whose offer conforming to the solicitation, is determined to provide the 'best value' to the Government.— RFP sect. M-2(a). The evaluation factors were, in descending order of importance: corporate experience and past performance, technical and management approach, ability to perform 50 percent of the work and manage subcontractors, personnel resumes, and transition plan. Id. at M-2(c). The non-cost evaluation criteria were –significantly more important than cost.— Id. at M-2(b). Offerors were advised that the agency would review proposals for cost realism: Cost realism will be performed on the cost proposal. The cost realism analysis shall (a) verify the proposed rates against [Defense Contract Audit Agency (DCAA)] audited rates; (b) assess the degree to which uncompensated overtime is utilized, and (c) assess escalation and how it is derived. Proposed costs may be adjusted, for purposes of evaluation, based upon the results of the cost realism analysis. The resulting realistic cost estimate will be used in the evaluation. RFP sect. M-2. SGT proposed to perform the contract utilizing the incumbent contractor, Systems Engineering & Security, Inc. (SES), as a subcontractor. Under SGT's proposal, SGT would perform [deleted] percent of the work, with SES performing [deleted] percent of the work. Agency Report (AR), Tab 19, SGT Proposal, Vol. I., at C-7. All SGT personnel would be hired from SES's incumbent staff, and the proposed direct labor rates for SGT and SES were based on that staff. Id., Vol. II, sect. 2.1.2. The agency requested that DCAA audit offerors' cost proposals. DCAA's analysis of SGT's and SES's proposal stated that DCAA could not establish an evaluated rate for the majority of SGT's proposed rates. AR, Tab 10, DCAA SES Cost Audit, June 28, 2004, at 3; Tab 9, DCAA SGT Cost Audit, July 14, 2004, at 3. After receiving DCAA's report on SGT's proposed costs, the Navy's cost evaluation board (CEB) compared SGT's and SES's proposed rates to the evaluated rates from the next-most recent DCAA audit of SES's rates under the incumbent contract, dated September 2003. AR, Tab 8, Original CEB Report, at 5.