B-310661; B-310661.2, Karrar Systems Corporation, January 3, 2008

B-310661; B-310661.2, Karrar Systems Corporation, January 3, 2008 TITLE: B-310661; B-310661.2, Karrar Systems Corporation, January 3, 2008 BNUMBER: B-310661; B-310661.2 DATE: January 3, 2008 ***************************************************************** B-310661; B-310661.2, Karrar Systems Corporation, January 3, 2008 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: Karrar Systems Corporation File: B-310661; B-310661.2 Date: January 3, 2008 Kevin P. Connelly, Esq., Seyfarth Shaw LLP, for the protester. Ross Aboff, Esq., Archer & Greiner, PC, for BANC3, Inc., an intervenor. Daniel Pantzer, Esq., Denise M. Marrama, Esq., and James F. Ford, Esq., Department of the Army, 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 1. Protest that agency failed to hold meaningful price discussions with protester regarding reasonableness of its proposed price is denied where agency did not find its price unreasonable and brought its only pricing concern to protester's attention. 2. Protest that awardee had an impermissible conflict of interest is denied where agency thoroughly considered circumstances in which awardee could have a conflict, and reasonably determined that there was no actual or potential conflict. DECISION Karrar Systems Corp. protests the award of a contract to BANC3, Inc., under request for proposals (RFP) No. W15P7T-07-R-A226, issued by the Department of the Army for program and administrative services for its R2 program. Karrar principally asserts that the Army failed to provide it with meaningful discussions, and that BANC3 had an impermissible organizational conflict of interest (OCI). We deny the protest. The solicitation contemplated a "best value" award of a 5-year indefinite-quantity/ indefinite-delivery (ID/IQ) contract based on four evaluation factors (in descending order of importance): technical (with subfactors for three sample task orders--pre-award, post-award and budget), management (with subfactors for transition plan to Aberdeen, transition plan, and management plan), performance risk, and price. RFP at 59. Four offerors responded to the RFP. A source selection evaluation board (SSEB) assigned the initial proposals adjectival ratings under the technical and management factors and subfactors based on the proposals' evaluated strengths and weaknesses.[1] Following the initial evaluation, a competitive range determination, discussions, and the submission and evaluation of final proposal revisions, Karrar's proposal was rated good for the technical factor, with subfactor ratings of good for the pre- and post-award sample task orders, and acceptable for the budget sample task order, Final Source Selection Briefing at 21; acceptable for the management factor, with subfactor ratings of acceptable for transition to Aberdeen, good for transition plan, and acceptable for management plan, id. at 37; and low for performance risk. BANC3's proposal was rated overall acceptable under the technical factor, with acceptable ratings for each subfactor, id. at 13; overall good under the management factor, with ratings of good for each subfactor, id. at 29; and low for performance risk. Karrar's proposed price was $25,119,864, and BANC3's was $17,251,531.92. Id. at 44. Based on these evaluation results, the agency selected BANC3's proposal as offering the best value to the government. Karrar protests the award decision. DISCUSSIONS Karrar asserts that the Army failed to provide it with meaningful discussions with respect to its price proposal. The solicitation contained historical workload data. In its proposal, Karrar referred to an anticipated increase in workload during the option years of the contract. Based on this language, the Army questioned whether Karrar had based its price proposal on the historical data in the RFP, and whether it understood that the contract was being awarded as a 5-year ID/IQ contract, and not as a contract with option years. AR at 14. During discussions, the Army advised Karrar that: "Your proposal refers to Option years. This will be a Five (5) Year Indefinite Quantity Indefinite Delivery Type contract. Please confirm that your offer is based on the historical workload provided in the Performance Work Statement." Id. Karrar responded by removing the reference to option years and stating that "Prices ... are based on our interpretation of the historical workload provided in the Performance Work Statement ...