THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON March 31, 1994 ____________________________________________________________ DENIED: March 22, 1994 _____________________________________________________________ GSBCA 12699-P ARC PROFESSIONAL SERVICES GROUP, INC., Protester, v. GENERAL SERVICES ADMINISTRATION, Respondent, and CBIS FEDERAL INC., Intervenor. Paul M. Vincent and E. John Steren of Ober, Kaler, Grimes & Shriver, Washington, DC; and Daryl D. Savage, General Counsel of ARC Professional Services Group, Inc., counsel for Protester. Seth Binstock and Tenley A. Carp, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. William A. Roberts, III, Jerone C. Cecelic, and Alice M. Crook of Howrey & Simon, Washington, DC; and Susan Warshaw Ebner of CBIS Federal Inc., Fairfax, VA, counsel for Intervenor. Before Board Judges PARKER, HENDLEY, and HYATT. PARKER, Board Judge. ARC Professional Services, Inc. protests its exclusion from the competitive range in a procurement for computer services. In anticipation of the issuance of an amendment to the solicitation, the General Services Administration (GSA) revised the competitive range to exclude ARC. GSA determined that, even if ARC were to price its personnel at the minimum direct labor rates set forth 2 in the amendment (Amendment 8), ARC, because of its low technical score, had no reasonable chance for award of the contract. ARC maintains that Amendment 8 is illegal because it does not permit offerors to propose reasonable, realistic rates which may be below the minimum rates set forth in the amendment. We agree with GSA and intervenor CBIS Federal Inc. that ARC does not have a reasonable chance for award, whether or not Amendment 8 becomes a part of the solicitation. GSA's decision to exclude ARC from the competitive range was thus correct. In this "best value" procurement, where technical merit is more important than price, ARC's technical score (which will not change, even under Amendment 8) was significantly lower than the other four remaining offerors' technical scores. Because ARC was properly excluded from the competitive range, regardless of whether Amendment 8 becomes a part of the solicitation, we need not, and do not, decide the legality of the amendment. In a second ground of protest, ARC maintains that its technical proposal was mis-evaluated. However, even if ARC's technical proposal is rescored as it requests, ARC still has no reasonable chance of receiving the award. We therefore need not decide whether ARC's technical proposal was, in fact, mis- evaluated. The protest is denied. Findings of Fact The contract that results from this procurement will require the successful offeror to provide people at fixed hourly rates to perform various types of computer-related services. According to the solicitation, award was to be made to the offeror whose proposal was "most advantageous to the Government, price and other factors considered." Technical factors were stated to be more significant than price. Protest File, Exhibit 1. After evaluating initial proposals submitted in February 1992, GSA included ARC in the competitive range. That decision was not revisited during the round of revised proposals, and the two rounds of best and final offers (BAFOs) which followed. After the second BAFO, the technical scores and prices of the offerors stood as follows: 3 Offeror Price (millions) Technical Score A B C ARC D E F Protest File, Exhibit 58. On June 1, 1993, GSA awarded the contract to offeror A, which had the highest technical score and the lowest price. Id., Exhibit 61. For reasons not relevant to this protest, however, the contract with offeror A was terminated, and offeror A was not permitted to remain in the competition. Offeror F has voluntarily dropped out of the competition. On October 29, 1993, ARC received a letter from the contracting officer that stated: In preparing for the reopening of [the procurement] I have revised the competitive range. Based on the low score assigned to its technical proposal, ARC does not have a reasonable chance of being selected for award and is not included in the competitive range. No revision of the proposal will be considered. Protest File, Exhibit 66. ARC protested, first, to the agency on November 10, 1993, and later, to the Board on December 8, 1993. Essentially, ARC argued that, since neither the technical scores nor the prices had changed, there was no justification for GSA to revise the competitive range. ARC also argued that its technical proposal had been unfairly evaluated. Protest Complaint. During the discovery phase of this protest, ARC learned the reason for its exclusion from the competitive range. At the time ARC was excluded, GSA was about to issue Amendment 8 to the solicitation. Amendment 8 prescribes for each of seventeen direct labor categories, and for each of the three 4 geographical areas covered by the solicitation, a minimum direct labor rate that must be proposed by each offeror. Protest File, Exhibit 69. GSA determined that, even if ARC offered the minimum rates, ARC would not have a reasonable chance for award of the contract.[foot #] 1 Protest File, Exhibit 58. If ARC's technical score were adjusted to the full extent requested in its protest, ARC's technical score would only rise to reducing the deficit to about percent. Id. ARC admits that it offered its "best price" in its first BAFO. CBIS Federal's Motion for Partial Summary Judgment, Exhibit 5 at 24. GSA has already obtained new cost proposals from the offerors remaining in the competitive range. The prices, which include work to be done from September 1994 through September 1998, take into account the minimum labor rates set forth in Amendment 8. They are as follows: Offeror Total Price (millions) Technical Score Respondent's Supplemental Submission (Mar. 15, 1994).[foot #] 2 ARC, which was not included in the competitive range, did not submit an offer pursuant to Amendment 8. However, ARC's BAFO price for the period from September 1994 through September 1998 (which was not subject to the minimum labor rates provided in ----------- FOOTNOTE BEGINS --------- [foot #] 1 Although offerors will submit new cost proposals pursuant to Amendment 8, the technical scores will not change. ARC does not protest this aspect of the amendment. See ___ Second Record Submission of Respondent General Services Administration, Exhibit 3. [foot #] 2 At a conference held on March 14, 1994, the hearing judge requested this information. The other parties had no objection to respondent providing it. ARC filed a supplemental memorandum discussion the information on March 16. ----------- FOOTNOTE ENDS ----------- 5 Amendment 8) was [foot #] 3 ARC's technical score, like the others, would have remained the same (except for any adjustment made as a result of this protest). Looking just at the total direct labor rates for the period September 1994 through September 1998 (the rates subject to the minimums), the results are as follows: Offeror Total Price (millions) Respondent's Supplemental Submission. Using the same comparison methodology as above, ARC's total direct labor rates for the same period were -- the highest of all, notwithstanding ARC's ability to employ labor rates below the minimums. Discussion ARC protests its exclusion from the competitive range. As discussed below we hold that GSA's decision to exclude ARC was proper. Federal Acquisition Regulation (FAR) 15.609 governs competitive range determinations: (a) The contracting officer shall determine which proposals are in the competitive range for the purpose of conducting written or oral discussion (see 15.610(b)). The competitive range shall be determined on the basis of cost or price and other factors that were stated in the solicitation and shall include all proposals that have a reasonable chance of being selected for award. When there is doubt as to whether a proposal is in the competitive range, the proposal should be included. ----------- FOOTNOTE BEGINS --------- [foot #] 3 The original BAFO prices covered the period from September 1993 through September 1998. In order to conduct a valid price comparison, however, ARC's BAFO price for years two through five (from September 1994 through September 1998) was used. ----------- FOOTNOTE ENDS ----------- 6 (b) If the contracting officer, after complying with 15.610(b), determines that a proposal no longer has a reasonable chance of being selected for contract award, it may no longer be considered for selection. 48 CFR 15.609 (1993). Contracting officers have broad discretion in determining whether a proposal should be placed within the competitive range, and their decisions in this regard will not be disturbed unless they are clearly unreasonable. Birch and Davis International, Inc. v. Christopher, 4 F.3d 970 (Fed. Cir. 1993). Moreover, a contracting officer is not bound by his or her initial determination to include an offeror in the competitive range. See Terminals Unlimited, Inc., GSBCA 11114-P, 91-2 BCA 23,963, 1991 BPD 89. If it becomes clear that a proposal either should not have been included, or no longer belongs in the competitive range, the proposal may be excluded. Cotton & Co., B-210849, 83- 2 CPD 451 (Oct. 12, 1983). In that case, the Comptroller General approved a revised competitive range determination based on the fact that (1) technical merit, rather than price, was the primary evaluation factor, (2) the protester's low technical rating could not be improved in a best and final offer, and (3) it did not appear that the protester could reduce its costs sufficiently to offset the other offeror's technical superiority. That is precisely the situation we have here. In this procurement, where technical merit is more important than price, ARC has a technical score of out of a possible . Even if ARC's score were to be adjusted as it requests in count two of its protest, the score would rise only to . Because GSA is soliciting new cost proposals only, neither ARC nor the other offerors can improve their technical scores.[foot #] 4 The remaining four offerors have technical scores ranging from to . ARC has admitted that it offered its "best price." ARC maintains that it has a reasonable chance to receive the award if it is not required to adhere to the minimum labor rates ----------- FOOTNOTE BEGINS --------- [foot #] 4 The amended solicitation does permit offerors to substitute for personnel who are no longer available to work on the contract, but these changes will not be scored. Protest File, Exhibit 69. No offeror has protested this provision. ----------- FOOTNOTE ENDS ----------- 7 called for in Amendment 8, which ARC argues is illegal.[foot #] 5 Based on the information in the last paragraph, we agree with GSA that ARC does not have a reasonable chance for award. In order for ARC to have any chance at all, the other offerors would have to submit substantially higher prices -- high enough to outweigh their technical advantages. After five rounds of proposal submission, it would be virtually impossible for the prices to rise that much. Fortunately, we do not have to guess about the new prices. GSA has already received new proposals from the offerors remaining in the competitive range. Even with those offerors being subject to the minimum labor rate requirements in Amendment 8, ARC's BAFO price still is not the lowest. If we look just at the cost of the total direct labor (the rates of which are subject to the minimums), , even though ARC's price was not subject to the minimums. Although GSA's contracting officer determined that ARC would have no reasonable chance for award of the contract because of the minimum labor rates that would have to be adhered to under Amendment 8, the record is clear that ARC had no reasonable ----------- FOOTNOTE BEGINS --------- [foot #] 5 Respondent and intervenor argue that this ground of protest is untimely. GSA and ARC, however, entered into the following stipulation: 1. The brief and affidavit of Protester argue an issue not expressly stated in the protest complaint. This argument, that ARC has been prejudiced by Amendment 8 to [the solicitation], will be considered a new ground of protest. 2. The General Services Administration stipulates that it will not contest the timeliness of this new ground of protest under Board Rule 5. Second Record Submission of Respondent (Jan. 25, 1994), Exhibit 1. Subsequently, all of the parties, including intervenor, entered into a stipulation which set forth the two remaining grounds of protest and reserved the rights of respondent and intervenor to challenge the timeliness of any issue "except for the issues stipulated to be timely raised in the Joint Stipulation of January 25, 1994[.]" Although the parties do not agree on what was intended by the phrase "ARC has been prejudiced by Amendment 8," we read the language as being broad enough to encompass ARC's ground of protest here -- that Amendment 8 is illegal. ----------- FOOTNOTE ENDS ----------- 8 chance for award anyway. Amendment 8 had absolutely no effect on ARC's 9 chances. The contracting officer's decision to exclude ARC from the competitive range prior to issuing the amendment was thus correct. We need not, and do not, decide the legality of Amendment 8; resolution of that issue is irrelevant to the resolution of this protest. Similarly, we do not decide whether ARC's technical proposal was mis-evaluated. ARC has no chance for award, even with the adjustments it seeks. Decision For the reasons discussed above, the protest is DENIED. The suspension of respondent's procurement authority is hereby lifted. ___________________________ ROBERT W. PARKER Board Judge We concur: _______________________ JAMES W. HENDLEY Board Judge _______________________ CATHERINE B. HYATT Board Judge