B-299504; B-299504.2, IBM Corporation, June 4, 2007

B-299504; B-299504.2, IBM Corporation, June 4, 2007 TITLE: B-299504; B-299504.2, IBM Corporation, June 4, 2007 BNUMBER: B-299504; B-299504.2 DATE: June 4, 2007 *************************************************** B-299504; B-299504.2, IBM Corporation, June 4, 2007 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: IBM Corporation File: B-299504; B-299504.2 Date: June 4, 2007 Thomas P. Humphrey, Esq., John E. McCarthy Jr., Esq., David Z. Bodenheimer, Esq., Adelicia Cliffe Taylor, Esq., Jane R. Foster, Esq., and Derek A. Hahn, Esq., Crowell & Moring LLP, for the protester. Mark D. Colley, Esq., Christopher R. Yukins, Esq., Kristen E. Ittig, Esq., Cameron W. Fogle, Esq., and Antonella Karlin, Esq., Arnold & Porter LLP, for CGI Federal, Inc., an intervenor. Avital G. Zemel, Esq., and Kenneth A. Redden, Esq., Environmental Protection Agency, for the agency. Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging agency's evaluation of offerors' price and cost proposals is sustained where agency improperly adjusted upward portions of protester's fixed-price proposal. 2. Protest alleging unreasonable technical evaluation is denied where record supports agency's evaluation of protester's personnel approach. 3. Protest alleging misleading discussions is denied where protester unreasonably relied on oral advice allegedly provided by agency during discussions which deviated from solicitation instructions. DECISION IBM Corporation protests the award of a contract to CGI Federal, Inc. under request for proposals (RFP) No. PR-HQ-05-12521, issued by the Environmental Protection Agency (EPA) for the upgrade of the agency's financial management system. The protester contends that the EPA's evaluation of the offerors' price and technical proposals was unreasonable. The protester also alleges that the agency did not conduct meaningful discussions, and that the source selection decision was flawed. We sustain the protest. BACKGROUND The EPA's Financial System Modernization Project (FSMP) calls for the acquisition, implementation and hosting[1] of a software solution to provide a new agency-wide financial management system for the agency's Office of the Chief Financial Officer. The RFP sought proposals for the new software solution and anticipated award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract with a 5-year base term, and five 1-year options. The work under the contract will be performed through the issuance of performance-based task orders. The RFP identified two technical evaluation factors, technical merit (375 total points) and oral presentations and solution demonstration (125 total points).[2] RFP at M-2-M-8. Offerors were required to submit proposals in six volumes, titled: (1) minimum requirements matrix, (2) software solution, (3) technical merit, (4) supporting documentation, (5) price proposal,[3] and (6) solicitation set. RFP attach. 5, Proposal Instructions. The "minimum qualifications matrix" volume was to be used by each offeror to identify whether its proposal met each requirement, and, if not, how the offeror would meet the requirement in the future. Id. at attach. 6, Minimum Qualifications Matrix. Each offeror's matrix was evaluated, overall, on a pass/fail basis. Id. Offerors were also required to address potential conflicts of interest and provide a subcontracting plan. RFP at M-8-M-9. The RFP allowed offerors to propose how they would be reimbursed by the agency for the work under each area of the contract, i.e., on a fixed-price, labor hour, or time and materials (T&M) basis. RFP attach. 5, at 17. The RFP also instructed offerors to include any assumptions or exclusions from their price and cost proposals, including "contingency allowances" for expected and unknown risks, RFP attach. 5, at 7, and advised that the agency would evaluate proposals based on cost and price realism. RFP at M-2.