Vector Planning & Services, Inc. | U.S. GAO

Decision

Matter of: Vector Planning & Services, Inc.

File: B-415005

Date: November 8, 2017

Cynthia Malyszek, Esq., Malyszek & Malyszek, for the protester. Theresa Chesnut, Esq., Cheryl R. Parker, Esq., Space and Naval Warfare Systems Command, for the agency. Young S. Lee, Esq., and Amy B. Pereira, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest challenging the agency's evaluation of awardee's past performance is denied where the agency reasonably evaluated prior efforts as being relevant.

2. Protest challenging the agency's evaluation of technical proposal is denied where the evaluation was reasonable and consistent with the solicitation, or without prejudice to the protester as a result of the alleged errors.

3. Protest challenging the agency's cost realism evaluation is denied where the record demonstrates that the agency's conclusions were reasonable.

4. Protest challenging the agency's best-value decision is denied where record shows that the agency's award decision was reasonable and consistent with the terms of the solicitation.

DECISION

Vector Planning & Services, Inc., (VPSI) a small business of San Diego, California, protests the issuance of a task order to SBG Technologies Solutions, Inc., a small business of Stafford, Virginia, by the Department of the Navy, Space and Naval Warfare Systems Command under request for task order proposals (RFTOP) No. N00039-17-R-3045 for systems engineering support services for the Program Executive Office for Space Systems, the Navy Communications Satellite Program Office. VPSI contends that the Navy's evaluation of proposals and the award decision were unreasonable.

We deny the protest.

BACKGROUND

On December 15, 2016, the Navy issued the RFTOP as a small business set-aside to holders of the Navy's Seaport-e multiple award contract, pursuant to the "fair opportunity" provisions of Federal Acquisition Regulation (FAR) subpart 16.5. Agency Report (AR), Tab 3, RFTOP, at 1, 58; Tab 6, Business Clearance Memorandum (BCM), at 6. The solicitation contemplated the issuance of a cost-plus-fixed-fee task order with a six-month base period and five option periods.[1] RFTOP at 13, 16.

The RFTOP provided that award would be made on a best-value tradeoff basis, considering the following six factors: (1) organizational experience; (2) sample problems; (3) technical capability/management approach; (4) key personnel qualifications; (5) past performance; and (6) cost. Id. at 58. The non-cost factors were listed in descending order of importance and, when combined, were more important than cost. Id.

The solicitation, under the organizational experience factor, instructed offerors to describe their relevant organizational experience in performing and managing tasks similar to those required by the Performance Work Statement (PWS). Id. at 49. Relevant organizational experience was defined as work of a similar nature, scope, size and complexity as that required by the PWS. Id. Proposals were to be evaluated based on the extent to which they demonstrated relevant corporate experience, knowledge, and capability to perform PWS requirements. Id. at 59.

With regard to the technical capability/management approach factor, offerors were required to describe their proposed overall technical capability and management approach for accomplishing and managing PWS tasks. Id. at 50. Proposals were required to also identify the offeror's organizational structure, lines of communication and overall management of work flow. Id. Additionally, offerors were to describe how they would implement their staffing plan, their approach to hiring and retaining qualified personnel, and how they would manage personnel turnover. Id. Proposals were to be evaluated based on the extent to which the offeror's approach met the requirement of the PWS, including organizational structure, subcontractors, lines of authority and functional areas of responsibility. Id. at 59. In addition, the solicitation anticipated consideration of whether an offeror's approach minimized learning curve demands and disruption to operations, including processes to ensure quality standards and otherwise meet requirements. Id.

Proposals were to be assigned an adjectival rating of outstanding, good, acceptable, marginal, or unacceptable under the following factors: organizational experience, sample problems, technical capability/management approach, and key personnel qualifications. Id. at 62.

With regard to past performance, offerors were required to complete and submit up to three relevant experience forms for contracts or orders that were completed within the past three years. Id. at 50-51. The prior efforts had to be relevant to the work described in the PWS, with relevant work defined as being similar in nature, scope, magnitude and difficulty. Id. at 52. An offeror's past performance was to be evaluated based on the probability of whether it would meet the solicitation's requirements and to determine whether the offeror demonstrated a recent and relevant record of performance in supplying the products and services required by the solicitation. Id. at 59.

Proposals were to be assigned an overall past performance confidence assessment rating based on an evaluation of the recency, relevance, and quality of past performance records submitted. Id. at 60. With regard to relevancy, each prior contract or order was to be assigned a rating of either very relevant, relevant, somewhat relevant, or not relevant. Id. at 63-64. Of significance here, a relevant rating was defined as an effort involving similar scope, magnitude of effort, and complexities as required by the RFTOP. Id. at 64. The overall confidence ratings that could be assigned were substantial confidence, satisfactory confidence, neutral confidence, limited confidence, and no confidence. Id.

With regard to costs, the RFTOP instructed offerors to propose costs for each contract line item. Id. at 42. In this regard, offerors were required to propose a level of effort for the labor categories and the labor mix identified in the RFTOP. Id. at 43. The solicitation informed offerors that the cost evaluation would be based on the realism and completeness of the information provided. Id. at 60. The rates proposed by offerors would be compared to information from a variety of sources including historical rates, other offerors' rates, and various other federal government labor rate information sources. Id. at 60-61. Based on the rates proposed, the agency reserved the right to make upward adjustments to an offeror's costs. Id. at 61.

The agency received four proposals by the solicitation's February 6, 2017, closing date, including the ones submitted by VPSI and SBG. Combined Contracting Officer Statement and Memorandum of Law (COS/MOL) at 12; RFTOP at 2. Non-cost evaluation factors were evaluated by a source selection evaluation board (SSEB), while cost proposals were separately evaluated by a cost evaluation board (CEB). AR, Tab 5, SSEB Evaluation, at 1-50; Tab 11, CEB Report, at 1-52. The CEB upwardly adjusted certain aspects of the costs proposed by both VPSI and SBG. Id. at 26, 52.

The evaluation ratings assigned to the proposals of VPSI and SBG were as follows:

VPSI	SBG
Organizational Experience	Good	Outstanding
Sample Problems	Acceptable	Outstanding
Technical Capability / Management Approach	Acceptable	Good
Key Personnel Qualifications	Good	Good
Past Performance	Substantial Confidence	Satisfactory Confidence
Overall Rating	Good	Outstanding
Total Evaluated Cost	$46,366,405.32	$51,934,497.82

AR, Tab 9, Source Selection Decision (SSD), at 2.

The source selection authority (SSA) reviewed and concurred with the SSEB's and CEB's evaluation findings for VPSI's and SBG's proposals, and determined that the proposal submitted by SBG represented the best value to the government. AR, Tab 9, SSD, at 1-11. In reaching this conclusion, the SSA noted that while VPSI's proposal offered a cost advantage, that advantage was offset by the benefits to be gained from the strengths identified in SBG's proposal. Id. at 11.

On July 20, the Navy awarded the contract to SBG. COS/MOL at 13. VPSI received a post-award debriefing on July 25. Id. VPSI filed its protest with our Office on July 30.[2] Protest at 1.

DISCUSSION

The protester contends that the agency misevaluated the proposals submitted by VPSI and SBG. VPSI also contends that the agency's award decision was flawed and made without considering offerors' costs. Although we do not address every allegation and argument raised by the protester, we have reviewed them all and find that none provide a basis to sustain the protest.

RFTOP's Evaluation Factors

The protester challenges various aspects of the agency's evaluation of proposals under the past performance, organizational experience, technical capability/management approach, and cost factors. In this regard, the protester asserts that the agency unreasonably assigned weaknesses to VPSI's proposal, misevaluated aspects of SBG's proposal, failed to properly adjust SBG's costs upwards, and deviated from the solicitation's evaluation criteria.

The evaluation of proposals in a task order competition, including the determination of the relative merits of proposals, is primarily a matter within the agency's discretion, since the agency is responsible for defining its needs and the best method of accommodating them. See Engility Corp., B-413120.3 et al., Feb. 14, 2017, 2017 CPD ¶ 70 at 10. An offeror's disagreement with the agency's judgment, without more, is insufficient to establish that the agency acted unreasonably. STG, Inc., B-405101.3 et al., Jan. 12, 2012, 2012 CPD ¶ 48 at 7. In reviewing protests of awards in a task order competition, we do not reevaluate proposals but examine the record to determine whether the evaluation and source selection decision are reasonable and consistent with the solicitation's evaluation criteria, and applicable procurement laws and regulations. See Ball Aerospace & Techs. Corp., B-411359, B-411359.2, July 16, 2015, 2015 CPD ¶ 219 at 7. A protester's disagreement with the agency's judgment, by itself, is not sufficient to establish that an agency acted unreasonably. Id.

Past Performance Evaluation

VPSI argues that the Navy's evaluation of SBG's past performance was flawed. In support of this challenge, the protester contends that the agency failed to follow the solicitation's evaluation criteria. More specifically, the protester asserts that certain prior efforts submitted by SBG should not have been evaluated as relevant because they were substantially smaller in magnitude than the estimated cost of the instant effort.

The evaluation of an offeror's past performance is within the discretion of the contracting agency; our Office will, however, question an agency's evaluation of past performance where it is unreasonable or undocumented. P3I, Inc.; Quantech Servs., Inc., B-405563.4 et al., Aug. 6, 2015, 2015 CPD ¶ 333 at 7. A protester's disagreement with the agency's judgment concerning the merits of the protester's past performance, without more, does not establish that the evaluation was unreasonable. Id.

The RFTOP required offerors to submit up to three relevant experience forms for prior contracts or orders that were completed within the past three years. RFTOP at 51. Those efforts had to be relevant to the work described in the PWS. Id. at 51-52. Relevant work was defined as "work of similar nature, scope, magnitude and difficulty to that which is described in the solicitation." Id. at 52. Past performance was to be evaluated to determine whether an offeror demonstrated a "recent and relevant record of performance in supplying products and services that [met] the requirements of [the] [t]ask [o]rder." Id. at 59. An overall confidence assessment rating was to be assigned to each offeror based on the agency's evaluation of the totality of the past performance records submitted. Id. at 60.

SBG submitted past performance information for three contracts and was the prime contractor under two of them. AR, Tab 5, SSEB Evaluation, at 30-31. The third contract was for an effort that was performed by one of SBG's proposed subcontractors.[3] Id. at 31. Although the agency recognized that the dollar value of the two contracts performed by SBG were "significantly lower than the current requirement for this solicitation," the SSEB and SSA evaluated them as being relevant because the efforts were similar in scope and complexity. Id. at 30-31, AR, Tab 9, SSD, at 10. Based on its review of SBG's past performance information, the SSEB concluded that there was a reasonable expectation that SBG could successfully perform the required effort and assigned SBG an overall satisfactory confidence rating. Id. In responding to the protester's allegations, the agency explains that the SSEB recognized that SBG's contracts were substantially smaller in magnitude, and contends that its evaluation was reasonable and in accordance with the solicitation because the contracts were similar in scope and complexity.

We find nothing unreasonable with the agency's decision to assign a relevant rating for the two contracts performed by SBG. Here, the SSEB evaluated two of the three efforts submitted by SBG as being relevant, and in doing so, expressly acknowledged the difference in magnitude of the dollar values between SBG's prior efforts as a prime contractor and the instant requirement.[4] As discussed above, the SSEB found that the magnitude of both these contracts was "significantly lower than the current requirement." Id. at 30-31. In addition, the SSA also expressly acknowledged that SBG's recent past performance was lower in magnitude than the current requirement. AR, Tab 9, SSD, at 10. Nonetheless, both the SSEB and SSA further concluded that these references were relevant based on the similarity of the work in terms of scope and complexity. AR, Tab 5, SSEB Evaluation, at 30-31; Tab 9, SSD, at 10. On this record, we find no basis to conclude that the agency's evaluation was unreasonable.

Organizational Experience

VPSI next contends that the agency unreasonably assigned various weaknesses to its proposal under the organizational experience factor. Here, the record confirms that the agency's evaluation was consistent with the terms of the solicitation, and reasonable in light of the RFTOP's stated evaluation methodology. The solicitation made offerors responsible for describing their relevant organizational experience in performing and managing the tasks provided for in the PWS. RFTOP at 49. Furthermore, the solicitation advised that proposals would be evaluated based on an offeror's ability to demonstrate relevant corporate experience, knowledge, and the capability to perform PWS requirements. Id. at 59. The agency assigned a good rating to VPSI's proposal under the organizational experience factor and credited it with multiple strengths along with a number of weaknesses. AR, Tab 9, SSD, at 4-5; Tab 5, SSEB Evaluation, at 42-43. The weaknesses that were identified related to the protester's failure to document detailed experience in certain discrete PWS tasks and requirements. AR, Tab 9, SSD, at 4; Tab 5, SSEB Evaluation, at 43-44.

The protester asserts that the agency unreasonably found that VPSI's proposal failed to demonstrate the full scope of experience with regard to the Department of Defense architectural framework (DoDAF), National Security Space (NSS) architectures, and in providing assessments for the Space Industrial Base (SIB).[5] VPSI argues that its proposal contained all the information necessary to demonstrate expertise in these areas. The PWS stated that contractors were required to provide their engineering analysis on NSS architectures, utilize DoDAF, and provide capability assessments for the SIB. AR, Tab 2, PWS, at 7. The protester challenges the assignment of this weakness by referring back to sections of its proposal which VPSI asserts demonstrates its ability to provide the expertise required. Comments at 9, 10-13. In response, the agency explains that the protester's proposal failed to adequately address the PWS requirements in the areas identified, and that the agency is not required to connect the dots or make assumptions regarding the experience provided in VPSI's proposal. COS/MOL at 18-20.

Our review of the record confirms that VPSI's proposal contained only one brief reference to experience related to DoDAF, and no references to NSS architectures or the SIB.[6] AR, Tab 8, VPSI Technical Proposal, at 1-51. In this regard, we find nothing unreasonable about the agency's finding that VPSI's proposal failed to demonstrate experience under these areas of the PWS because they were not adequately addressed in the protester's proposal. We note that it is an offeror's responsibility to submit a well-written proposal, with adequately detailed information that clearly demonstrates compliance with the solicitation and allows a meaningful review by the procuring agency. Mike Kesler Enters., B-401633, Oct. 23, 2009, 2009 CPD ¶ 205 at 2-3. The protester's disagreement with the agency's judgment, without more, is insufficient to establish that the agency acted unreasonably. STG, Inc., supra.

Technical Capability/Management Approach

VPSI also argues that the agency improperly assigned a weakness to its proposal under the technical capability/management approach factor for failing to provide details explaining the specialized roles of its key personnel. In support of this allegation, the protester asserts "there is NO reference to [k]ey [p]ersonnel" in the solicitation section describing how proposals would be evaluated under this factor. Comments at 30 (emphasis in original). The agency asserts that the criterion was logically encompassed within the evaluation criteria. The agency further argues that even if the weakness was improperly assigned, the protester is unable to establish that it was prejudiced by the error because SBG was also assigned a key personnel weakness under this factor.

To succeed in a protest, the protester must demonstrate not only that the agency failed to evaluate proposals in accordance with the solicitation and applicable regulations, but also that the failure could have materially affected the outcome of the competition. See Sunrise Med. HHG, Inc., B-310230, Dec. 12, 2007, 2008 CPD ¶ 7 at 9. Competitive prejudice is an essential element of a viable protest, and we will sustain a protest only where the protester demonstrates that, but for the agency's improper actions, it would have had a substantial chance of receiving the award. Engility Corp., supra, at 17.

For the technical capability/management approach factor, offerors were required to describe their proposed overall technical capability and management approach for accomplishing and managing PWS tasks. RFTOP at 50. Proposals were required to also identify an offeror's organizational structure, its lines of communication and overall management of work flow. Id. Additionally, offerors were to describe how they would implement their staffing plan, their approach to hiring and retaining qualified personnel, and how they would manage personnel turnover. Id.

The protester argues that the RFTOP did not establish a requirement that key personnel be evaluated under this factor. Here, as the agency explains, it also criticized SBG's key personnel under this factor, which was the basis for a weakness that was assigned to SBG's proposal.[7] Thus, even if the solicitation did not require offerors to explain how they would use their key personnel under the technical capability/management approach factor, there was no possibility of prejudice to VPSI because the agency assessed key personnel weaknesses to both SBG's and VPSI's proposals.

On this record, we find no basis to conclude that removal of the weakness associated with VPSI's key personnel under this factor would give the protester a substantial chance for award, particularly where the record shows that SBG was also assigned a weakness for its key personnel under the same evaluation factor. See Sunrise Med. HHG, Inc., supra (protester is unable to demonstrate prejudice where agency assigned a weakness associated with in-house testing to both the awardee's and protester's proposals).

Cost Realism

Next, VPSI alleges several errors in the Navy's evaluation of SBG's cost proposal. In this regard, the protester alleges that the agency should have made a larger upward adjustment to the labor rates and costs proposed by SBG. For example, VPSI contends that the Navy was not "consistent in cost adjustment escalation in accord with Global Insight's [i]ndex." Comments at 36.

When an agency evaluates proposals for the award of a cost-reimbursement contract or task order, an offeror's costs are not dispositive because, regardless of the costs proposed, the government is bound to pay the contractor its actual and allowable costs. FAR §§ 16.505(b)(3); 15.305(a)(1); TeleComm. Sys., Inc., B-413265, B-413265.2, Sept. 21, 2016, 2016 CPD ¶ 266 at 10. Consequently, an agency must perform a cost realism analysis to determine the extent to which an offeror's proposed costs are realistic for the work to be performed.[8] FAR §§ 15.404-1(d)(1), 16.505(b)(3); Solers Inc., B-409079, B-409079.2, Jan. 27, 2014, 2014 CPD ¶ 74 at 4. An agency's cost realism analysis requires the exercise of informed judgment, and we review an agency's judgment in this area only to see that the cost realism analysis was reasonably based and not arbitrary. TeleComm. Sys., Inc., supra, at 12 The analysis need not achieve scientific certainty; rather, the methodology employed must be reasonably adequate and provide some measure of confidence that the agency's conclusions about the most probable costs for an offeror's proposal are reasonable and realistic in view of other cost information reasonably available to the agency at the time of its evaluation. Id.

In response to the protester's challenges, the Navy asserts that VPSI's allegations are mere speculation and contends that its cost realism analysis was reasonable and in accordance with the solicitation's evaluation methodology. Our review of the record supports the agency's position. The solicitation required offerors to propose a level of effort for the labor categories and the labor mix identified in the RFTOP. RFTOP at 43. The labor rates proposed were to be compared to information from a variety of sources including historical rates, other offerors' rates, and various other federal government labor rate information sources. Id. at 60-61. Based on the rates that were actually proposed, the agency reserved the right to make upward adjustments to an offeror's costs. Id. at 61.

The record establishes that the CEB performed a thorough analysis of the costs proposed by SBG. AR, Tab 11, CEB Report, at 16-26. For example, the CEB's report shows that it evaluated SBG's labor rates and made upward adjustments to them when they were not in line with the company's payroll records and a Defense Contract Management Agency rate verification report. Id. at 17. The record also reflects that the CEB applied upward adjustments, using the same Global Insight escalation factor rates, to certain option periods in both SBG's and VPSI's proposals, where applicable.[9] Id. at 18, 23, 24-25, 44, 50. The CEB performed a careful analysis of SBG's proposed costs and properly adjusted them to ensure that they were realistic for the work to be performed. Solers Inc., supra. Accordingly, we find no basis to sustain VPSI's protest on this ground because the cost realism analysis performed by the agency was reasonably based. TeleComm. Sys., Inc., supra.

Best-Value Decision

Finally, the protester contends that the agency's best-value tradeoff decision was flawed because it was based on an unreasonable evaluation, not adequately documented, and because it did not account for VPSI's lower-cost proposal. In response, the agency asserts that the SSA reasonably determined that SBG's technically superior proposal represented the best value to the government despite its higher price, and characterizes the protester's allegations as disagreement with the agency's award decision.

Where, as here, a procurement provides for issuance of a task order on a best-value tradeoff basis, it is the function of the selection official to perform a cost/technical tradeoff, that is, to determine whether one proposal's technical superiority is worth its higher cost. TeleComm. Sys., Inc., supra, at 12. An agency has broad discretion in making a tradeoff between cost and non-cost factors, and the extent to which one may be sacrificed for the other is governed only by the tests of rationality and consistency with the solicitation's stated evaluation criteria. Id.; Portage, Inc., B-410702, B-410702.4, Jan. 26, 2015, 2015 CPD ¶ 66 at 19. The agency's rationale for any cost/technical tradeoffs made and the benefits associated with the additional costs must be adequately documented. FAR §§ 16.505(b)(1)(iv)(D), (b)(7)(i); see Lockheed Martin Integrated Sys., Inc., B-408134.3, B-408134.5, July 3, 2013, 2013 CPD ¶ 169 at 10. However, there is no need for extensive documentation of every consideration factored into a tradeoff decision. FAR § 16.505(b)(7); Lockheed Martin Integrated Sys., Inc., supra. Rather, the documentation need only be sufficient to establish that the agency was aware of the relative merits and costs of the competing proposals and that the source selection was reasonably based. Id.

The solicitation indicated that non-cost factors, when combined, were more important than cost. RFTOP at 58. Moreover, our review of the record confirms that the SSA's award decision was well-documented, and that the SSA decided to make award to SBG in spite of SBG's higher costs because he believed that SBG's proposal offered the best value to the government. AR, Tab 9, SSD, at 1-4. For example, the SSA determined that although VPSI's proposal offered "a cost advantage over SBG['s] [proposal], this advantage [was] offset by the weaknesses and associated risks in the technical ratings." Id. at 11. The SSA also found that "SBG's proposed approach include[d] a comprehensive transition plan, and a staffing approach with a highly qualified and experienced team with the breadth of knowledge and experience to cover the full range of tasking required by the PWS." Id. Based on this analysis the SSA concluded that "SBG's technical[ly] superior proposal justifie[d] the cost premium over VPSI." Id. Here, the record reflects that the agency was aware of the relative merits and costs of the competing proposals and that the source selection decision was reasonably based. Lockheed Martin Integrated Sys., Inc., supra.

Furthermore, and as discussed above, we find nothing unreasonable with the various weaknesses that the agency assigned to VPSI's proposal or the Navy's evaluation of proposals. Because we deny the protester's underlying arguments upon which it challenges the agency's best-value award decision, this protest allegation is also denied. TeleComm. Sys., Inc., supra (denying challenge to agency's best-value tradeoff decision where protester's argument was premised entirely on allegations that had been discussed earlier and denied).

The protest is denied.

Susan A. Poling General Counsel