B-297879.2, Metro Machine Corporation, May 3, 2006

B-297879.2 May 03, 2006 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Metro Machine Corporation protests the award of a contract to Earl Industries, LLC under request for proposals (RFP) No. N00024-05-R-4401, issued by the Department of the Navy, Naval Sea Systems Command (NAVSEA), for maintenance and modernization work on Dock Landing and Amphibious Transport Dock class ships (i.e., LSD and LPD class ships) homeported in Norfolk, Virginia. Metro alleges that the agency's cost evaluation of Earl's proposal was improper and that the source selection decision was flawed. We sustain the protest. View Decision B-297879.2, Metro Machine Corporation, May 3, 2006 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: Metro Machine Corporation File: B-297879.2 Date: May 3, 2006 Michael R. Katchmark, Esq., Gary A. Bryant, Esq., Brett A. Spain, Esq., and Michael C. Laurence, Esq., Willcox & Savage P.C., for the protester. Robert M. Tata, Esq., Carl D. Gray, Esq., and Kevin J. Cosgrove, Esq., Hunton & Williams LLP, for Earl Industries, LLC, an intervenor. Rhonda L. Russ, Esq., Naval Sea Systems Command, for the agency. Edward Goldstein, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Agency's cost realism evaluation of awardee's proposal was unreasonable where the awardee proposed to perform the solicitation requirements under a teaming arrangement whereby its proposed team members would perform almost [deleted] of the production work under the contract, but the agency failed to consider the impact of the team members' higher rates in determining the awardee's probable cost of performance under the contract. DECISION Metro Machine Corporation protests the award of a contract to Earl Industries, LLC under request for proposals (RFP) No. N00024-05-R-4401, issued by the Department of the Navy, Naval Sea Systems Command (NAVSEA), for maintenance and modernization work on Dock Landing and Amphibious Transport Dock class ships (i.e., LSD and LPD class ships) homeported in Norfolk, Virginia. Metro alleges that the agency's cost evaluation of Earl's proposal was improper and that the source selection decision was flawed.[1] We sustain the protest. The RFP, issued on March 9, 2005, contemplated the award of a cost-plus-award-fee contract for execution planning and accomplishment of repair, maintenance, and alteration requirements of LSD 41/49 and LPD 4 class ships. The RFP provided for the award of a base contract including execution planning for the first scheduled availability[2] for the USS Gunston Hall, as well as non-scheduled repair and alteration requirements between scheduled availabilities as ordered on various LSD and LPD class ships. [3] In addition, the RFP provided for 31 option items—the first option was for performance of the Gunston Hall availability, and the remaining options were for 15 additional scheduled availabilities and associated execution planning over a period of 7 years. RFP sect. B, Schedule of Supplies or Services and Prices. The RFP indicated that the agency would make award to the offeror whose proposal represented the best value to the government based on a consideration of two factors: technical and cost. Overall technical merit was considered more important than cost; however, the importance of cost would increase –as the differences in overall Technical merit among competing proposals decreas[ed].— RFP at 171. Under the technical category, the RFP listed three evaluation factors in descending order of importance: (1) management capability; (2) resource capabilities; and (3) past performance. RFP at 177-78. In evaluating proposals under the management capability and resource capabilities factors, the agency assigned adjectival ratings of outstanding, very good, satisfactory, marginal, and unsatisfactory. The adjectival scheme used to rate offerors' past performance differed slightly, with the agency assigning ratings of outstanding, good, satisfactory, neutral, marginal, or unsatisfactory. As it relates to the protest, under the management capability factor, offerors were required to –provide a systematic approach that demonstrates a comprehensive understanding and application of management techniques, methods and procedures required to efficiently execute the requirements of this solicitation.— RFP at 172. In this regard, offerors were to describe corporate management and organizations, the formation, function and responsibilities of project teams, the proposed management organization and functions, including all teaming partners and/or significant subcontractors, a plan for managing subcontractors, and lines of communication and authority with the Navy as well as significant subcontractor key personnel.