B-309996; B-309996.4, Earl Industries, LLC, November 5, 2007

B-309996; B-309996.4, Earl Industries, LLC, November 5, 2007 TITLE: B-309996; B-309996.4, Earl Industries, LLC, November 5, 2007 BNUMBER: B-309996; B-309996.4 DATE: November 5, 2007 ************************************************************ B-309996; B-309996.4, Earl Industries, LLC, November 5, 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: Earl Industries, LLC File: B-309996; B-309996.4 Date: November 5, 2007 Robert M. Tata, Esq., and Carl D. Gray, Esq., Hunton & Williams, LLP, for the protester. Michael J. Gardner, Esq., Troutman Sanders, LLP, for the intervenor, Kelly M. Callahan, Esq., Department of the Navy, for the agency. Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest is sustained in a negotiated procurement for award on a "best value" basis where the source selection authority (SSA) did not reasonably assess the protester's evaluated superior technical merit in the SSA's cost/technical tradeoff assessment. 2. Protest is sustained in a negotiated procurement for the award of a cost-reimbursement contract, where the agency in its cost realism assessment accepted the awardee's work allocation in its cost proposal, but that allocation was inconsistent with the firm's allocation of work in its technical proposal. 3. Protest is sustained in a negotiated procurement for the award of a cost-reimbursement contract, where the agency in its cost realism assessment applied the protester's historic division-wide composite labor rate rather than the protester's proposed labor rate to perform the solicitation's notional work package and the agency did not consider the protester's explanation during discussions that the firm's division-wide rate included labor categories that the protester would not use in performing in accordance with its proposed technical approach to meeting the notional work package. DECISION Earl Industries, LLC protests the award of a contract to Marine Hydraulics, Inc./Tecnico Corporation, a Joint Venture (MTJV), under request for proposals (RFP) No. N00024-06-R-4409, issued by the Department of the Navy for execution, planning, maintenance, repair and alterations of FFG-7 class ships. Earl challenges the agency's cost and technical evaluations and source selection decision. We sustain the protest. The RFP provided for the award of a cost-plus-award-fee contract for execution, planning, maintenance, repair and alterations of Oliver Hazard Perry FFG-7 class frigates home-ported in and visiting Mayport, Florida. Offerors were informed that the contractor would be required to provide all "material, support (electrical, crane, rigging, etc.) and facilities" necessary to support 13 identified ships and any visiting FFG-7 class ships. See RFP, Statement of Work (SOW), at 43, 52-53. The SOW further informed offerors that "[r]epresentative items to be accomplished are detailed in the notional work package for the FFG 7 Class provided in [RFP] Section J."[1] Id. at 53. The RFP provided for award on a "best value" basis and identified the following evaluation factors: management capability, resource capabilities, past performance, and cost. Offerors were informed that the technical evaluation factors were more important than cost, and that the management capability factor was more important than the resource capabilities factor, which was more important than the past performance factor. RFP sect. M, at 178-80. With respect to the cost factor, the RFP provided that the agency would assess the realism of the offerors' proposed costs and develop a projected cost to the government for each proposal. In this regard, the RFP stated: The Government will analyze and review the Offeror's cost estimates and supporting cost data, including comparison to the Government estimate for the notional and definitized work items in Section L. Id. at 179. The RFP provided detailed proposal preparation instructions. With respect to the management capability factor, offerors were to, among other things, describe their management organization, "including all teaming partners and/or significant subcontractors (defined as those contractors providing effort consisting of five percent (5%) of total direct dollars, AND/OR ten percent (10%) of total man-hours." RFP sect. L, at 159.