THIS OPINION, ORIGINALLY ISSUED UNDER PROTECTIVE ORDER, IS RELEASED WITHOUT REDACTION ON AUGUST 1, 1995 _________________________________ GRANTED IN PART: December 8, 1994 _________________________________ GSBCA 12999-P COLUMBIA SERVICES GROUP, INC., Protester, and TRESP ASSOCIATES, INC., Permissive Intervenor, v. DEPARTMENT OF ENERGY, Respondent. David R. Smith, General Counsel of Columbia Services Group, Inc., Arlington, VA; and John R. Tolle and William T. Welch of Barton, Mountain & Tolle, McLean, VA, counsel for Protester. Mary Beth Bosco, Timothy B. Mills, Glenn T. Reynolds, and Christy L. Gherlein of Patton Boggs, Washington, DC, counsel for Permissive Intervenor. Mary D. Copeland, Wendy E. Ojeda, and Nicole Porter, Office of Chief Counsel, Department of Energy, Oak Ridge, TN, counsel for Respondent. Before Board Judges PARKER, HYATT, and VERGILIO. VERGILIO, Board Judge. On October 3, 1994, Columbia Services Group, Inc. filed this pre-award protest challenging actions of the respondent, the Department of Energy, Oak Ridge Operations Office (ORO). Following submission of initial proposals and evaluations, the agency determined that the protester is not within the competitive range. The protester maintains that the agency lacks procurement authority to proceed with the procurement, improperly evaluated the cost and technical volumes of the proposals, and improperly made the competitive range determination. Having previously filed a protest with the Comptroller General involving this procurement, TRESP Associates, Inc. is a permissive intervenor. The Board concludes that the agency has procurement authority to proceed with this procurement. Aspects of the evaluations were not consistent between the offerors. The protester has established that with proper evaluations and discussions of weaknesses, as required by the agency's regulations, the protester has a reasonable chance for award. The agency erred in its competitive range determination. Accordingly, the Board grants in part the protest. Findings of Fact The solicitation 1. In January 1994, the agency issued a request for proposals to result in a contract for one year, with four one- year options. Protest File, Exhibit 8 at 17 ( F.1). The solicitation contemplates the award of a labor-hour contract; however, the agency expressly reserves the right to negotiate whatever contract type it determines to be most appropriate. Id. at 83 ( L.13). The solicitation specifies that, under the contract, reimbursed costs are to be incurred only in the performance of contracting officer-issued task orders. Id. at 29 ( H.8). 2. The solicitation's statement of work describes the project as requiring the contractor "to provide a broad array of information resources and facilities management functions." Protest File, Exhibit 8, Attachment at 1 ( II). A "summary of tasks" within the statement of work states that the work to be performed shall include eight particular services, each of which is described: computer operations, software engineering, networking support, hardware maintenance, user support, computer security, special studies, and office administration services. Id. at 1-3 ( III). The contractor is to provide training as well. Id. at 4 ( VI). 3. The solicitation, as amended at the time of initial proposals, describes eleven labor categories of non-key personnel whose services may be ordered under the contract. For each labor category, the solicitation specifies a number of direct productive labor hours (DPLH) for the base and each of the four option years, as well as the DPLH of overtime anticipated, if any. The given DPLH, which total 410,562.5, are to form a basis for proposals, award and contract. Two of the eleven positions are Secretary I and Switchboard Operator-Receptionist. The total DPLH for these two categories is 29,062.5; the individual DPLH are, respectively, 14,062.5 and 15,000. The total DPLH for the remaining categories (different levels of computer operator, programmer, and systems analyst, as well as a technical writer and an instructor) is 381,500. Protest File, Exhibit 10, Attachment E at 1.[foot #] 1 4. In addition to non-key personnel, an offeror is to propose key personnel--those individuals "considered [by the offeror] to be essential to the work being performed" under the contract. Protest File, Exhibit 8 at 27 ( H.5). The solicitation does not specify any number of key personnel which an offeror is to provide or otherwise define any particular position within the key personnel category. Id., Exhibit 10, Questions and Answers at 1 ( 2). The solicitation specifies that the described labor categories and associated DPLH, Finding 3, do not include key personnel, although offerors "are required to propose key personnel positions." Id. at 2 ( 9). 5. The proposal of each offeror is to contain a volume on technical and business management and a volume on cost. Protest File, Exhibit 10 at 90 ( L.35.b.1). The solicitation establishes criteria for purposes of proposal preparation, and evaluation and selection. The criteria fall under the headings: planning and organization; key personnel; experience of offeror; organizational structure; and corporate commitment. Id., Exhibit 8 at 90-107 ( L.35 to L.38), Exhibit 10 at 90, 96, 97, 101; Finding 14 ( M.3). Technical and business management volume 6. Regarding the technical and business management volume, the proposal preparation instructions specify, under criterion 1.b, planned approach to assure an effective diversity program, what an offeror is to do: Describe the planned approach to assure effective equal employment opportunity and affirmative action, including: -- offeror's current equal employment opportunity and affirmative action policies and practices. -- past, present or future planned initiatives or activities which demonstrate a commitment to innovative affirmative actions affecting direct-hire work force, subcontractors, and ----------- FOOTNOTE BEGINS --------- [foot #] 1 As amended, the solicitation requires the contractor to give the right of first refusal of employment and other benefits to non-key employees of the predecessor contractor, under specified terms and conditions. Protest File, Exhibit 10 at 34 ( H.20). ----------- FOOTNOTE ENDS ----------- any community involvement/outreach activities. -- the extent and nature of experience with federal, state and local compliance and complaint handling agencies in the past five years. Id., Exhibit 10 at 96 ( L.37.b.2(b)(1)). 7. The "key personnel" portion of the proposal "shall describe the offeror's personnel resources which are integral factors for successfully completing the work under the contract." Protest File, Exhibit 10 at 97 ( L.37.b.2.(b)(2)). In addition to requiring a resume for each key personnel position proposed, the solicitation instructs offerors: Provide a signed commitment letter from each of the key personnel proposed, and state the percentage of time to be devoted to the contract by these personnel. In the event any of the key personnel will not be committed full time to this contract an explanation must be provided. The commitment letter from each of the key personnel must reflect each individual[']s unconditional agreement to accept the position if the offeror is awarded the contract. Failure to submit the letter(s) of commitment will result in the proposal being evaluated as deficient in this area. Provide a letter of intent for any individuals proposed as key personnel (including any consultants or subcontractors) who are not currently on the prime offeror's payroll. Id. In response to a question asking how the agency plans to order program manager (i.e., a key individual) hours, the solicitation states: "The government will not order Program Manager Hours. The offeror is expected to propose an organizational structure and identify responsibilities and authorities. If the offeror determines a need for Program Manager functions, it should be reflected in the proposed organizational structure and costed out in the cost proposal." Id., Questions and Answers at 14 ( 68). 8. The third section of the proposal, experience of offeror, "shall describe the total experience of the offeror which will contribute to successfully completing the work under the contract." Protest File, Exhibit 8 at 98 ( L.37.b.2.(b)(3)). The related criterion considers "[r]ecent (past 3 years), relevant experience, technical competency, and past record in providing services comparable to those required by the statement of work." Id. The solicitation specifies that the proposal is to identify not more than four recent projects of comparable type, size, and complexity and provide a customer point of contact for reference. For each of the projects, the proposal is to describe relevant experience, technical competency, and customer relations. Id. 9. The fourth section of the proposal, organizational structure, "shall describe the organization to be instituted by the Contractor to ensure that all requirements of the Statement of Work are met." Protest File, Exhibit 8 at 99 ( L.37.b.2.(b)(4)). The instructions state that a proposal is to provide "a comprehensive staffing plan, and discuss the allocation of skills in relation to effort required and ability to respond to changing needs." Id. Cost volume 10. For the base and each option year, each offeror is to provide a fixed, hourly rate (including wages, indirect costs, general and administrative expenses, and profit) for each labor classification which the offeror identifies; these unit prices are subject to change only if required by the Service Contract Act of 1965. Protest File, Exhibit 10 at 4-9 ( B.3, B.5), Questions and Answers at 3 ( 16). 11. A portion of the cost volume is to consist of mandatory exhibits. One exhibit is to contain the labor categories and hours that form the basis of the offer. Another exhibit is to "show the details of how the labor rates used in [the other exhibit] were derived. . . . Identify Key and Resume personnel by name and labor category." Protest File, Exhibit 8 at 103 ( L.38.d.2, 4). Through an answer to a question, the solicitation highlights that, for key personnel, offerors are required to propose fully loaded labor rates, as well as the estimated direct productive labor hours for the positions. Id., Exhibit 10, Questions and Answers at 2 ( 9). 12. The agency fails to provide a responsive answer to a question asking how the agency will evaluate an offeror proposing labor rates below those of the incumbent; rather, the response states that a "new clause, H. 20, Right of First Refusal for Employment, has been added to the solicitation. This clause states that the successful contractor must provide both compensation and benefits which are equivalent to those provided by the predecessor contractor." Protest File, Exhibit 10, Questions and Answers at 5 ( 24). The clause does not require an offeror to directly charge the agency at or above the rates of the incumbent, although the contractor may be required to pay such rates. Evaluation and selection criteria 13. The cover letter within the initially-issued solicitation summarizes the evaluation process and states that the "DOE Draft Source Evaluation Board Handbook dated November 1992 will be used as guidance only." Protest File, Exhibit 8 at 2 ( Evaluation Criteria). Amendment 2 to the solicitation deletes the reference to the Handbook. Id., Exhibit 10 at 1. The amendment does not state that the handbook will not be used.[foot #] 2 Instead, section M of the solicitation specifies: "Proposals will be evaluated in accordance with applicable Federal and DOE acquisition policies and procedures." Id. at 120 ( M.2.a). 14. The solicitation contains the criteria under which the technical and business management aspects of proposals are to be evaluated. Within each criterion, subcriteria are listed in descending order of importance: 1. Planning and Organization Criterion 1.a. Planned approach to successfully accomplish the work including management control systems to assure cost efficiency, customer service, responsiveness/timeliness, quality of work, efficient utilization of resources, and application of information resources technology. Criterion 1.b. Planned approach to an effective diversity program. 2. Key Personnel Criterion 2.a. Relevant experience, qualifications, and commitment of key personnel, (those whom you consider to be critical to the successful accomplishment of the Statement of Work) including the experience in comparable work, technical skills, and management experience. 3. Experience of Offeror Criterion 3.a. Recent (past 3 years), relevant experience, technical competency, and past record in providing services comparable to those required by the Statement of Work. ----------- FOOTNOTE BEGINS --------- [foot #] 2 Although some counts of protest allege that the agency has failed to abide by the draft handbook, the protester has not introduced that document into the record and has not made any argument with respect to a particular aspect of the draft handbook. ----------- FOOTNOTE ENDS ----------- 4. Organizational Structure Criterion 4.a. Proposed organizational structure, proposed staffing plan and delegation of responsibility and authorities. 5. Corporate Commitment Criterion 5.a. Interest and commitment of corporate management to achievement of excellence in performance of the work (for prime and any subcontractors, if applicable). Protest File, Exhibit 10 at 120-21 ( M.3). 15. The solicitation specifies that cost proposals are to be evaluated to establish the reasonableness and appropriateness of the costs, and the evaluated probable cost to the Government. Cost criteria are not to be assigned numerical weights, point scored or adjectivally rated. Protest File, Exhibit 10 at 121 ( M.3.B). 16. The selection criteria specify the relative weights of the technical evaluation criteria, and state that the technical proposal is of greater importance than the cost proposal; however, if "two or more competing overall proposals are within the competitive range, evaluated probable cost to the Government may be the deciding factor for selection." Protest File, Exhibit 10 at 122 ( M.5). 17. The solicitation addresses discussions with offerors: "The Contracting Officer may conduct written or oral discussions with any or all of the offerors. Offerors will be notified of the date, time, and place for any such oral discussions. Any such discussions will be conducted in accordance with DOE acquisition policies and procedures." Protest File, Exhibit 8 at 89 ( L.29). Initial proposals and the evaluation process 18. Initial proposals were received by April 15, the due date. Protest File, Exhibit 12. The protester, the intervenor, and others submitted initial proposals. Id., Exhibit 21 at 10- 11. 19. The agency source evaluation board (SEB) for this procurement established a technical evaluation committee (TEC) to evaluate the technical and business management volume of proposals, and a cost committee to evaluate the cost volume of proposals. Two of the three voting members of the SEB served as evaluators on the TEC. Each SEB member evaluated the technical and business management volume of proposals. With reports from the TEC and cost committee available, and after discussions among agency personnel, the SEB computed final scores for each proposal (the average scores of the three voting members). The final scores were reported to the source selection official (SSO) in a report and presentation regarding the competitive range determination proposed by the SEB. Transcript at 210, 338; Protest File, Exhibit 21 at 11-12[foot #] 3, Exhibit 22. 20. Although not part of the solicitation (and presumably not released to offerors such that there exists no offeror reliance), the agency established a rating plan for the SEB to use in evaluating proposals. Protest File, Exhibit 21 at 126a to 126d. The rating plan establishes the following guidelines to be used in assigning scores to proposals: score guideline 10 Offeror fully addresses all aspects of the criterion, convincingly demonstrates that it will meet the performance requirements and demonstrates no weaknesses. 8 Offeror fully addresses all aspects of the criterion, convincingly demonstrates the ability to meet the Government's performance requirements and demonstrates only a few minor weaknesses. 5 Offeror fully addresses all aspects of the criterion, demonstrates a likelihood of meeting the Government's requirements, an[d] demonstrates several minor weaknesses. 2 Offeror does not address all aspects of the criterion, nor is evidence presented indicating the likelihood of successfully meeting the Government's requirements. 0 Offeror does not address all aspects of the criterion, and the information presented indicates a strong likelihood of failure to meet the Government's requirements. Id. at 126b. 21. The rating plan further specifies: "Following initial evaluations, the SEB may conduct written and oral discussions with each offeror in the competitive range to clarify or substantiate questionable aspects of the proposal; to assess the key personnel; to review experience on related projects; and to ----------- FOOTNOTE BEGINS --------- [foot #] 3 The evaluation methodology does not fully comply with the SEB rating plan. Protest File, Exhibit 21 at 126a. ----------- FOOTNOTE ENDS ----------- gauge the degree of capacity and interest to undertake the project in light of other work planned or in process." Protest File, Exhibit 21 at 126b. 22. The final scoring by the SEB as reported to the SSO is not consistent with the SEB rating plan. For each evaluation criterion, the SEB report details the strengths and weaknesses of the proposals. Despite the recognition by the SEB members that weaknesses exist for particular aspects of various proposals, perfect scores were awarded. Protest File, Exhibit 21 at 29-30, 32, 66, 104, 151-52. This is contrary to the plan which states that a perfect score will be awarded only if no weaknesses are present. Finding 20. criterion 1.b 23. Regarding criterion 1.b, the SEB noted a weakness in the protester's proposal: "The offeror's discussion of initiatives for community involvement/outreach activities is weak." Protest File, Exhibit 21 at 105. The protester specifies in its proposal simply that it externally communicates its affirmative action program by disseminating it through recruiting sources and various organizations within the community, that prospective employees are informed of the existence of the plan, and that newspaper advertising indicates that the protester is an equal opportunity employer. Id., Exhibit 14 at II-36. The SEB rated the protester at 8 for this criterion. Id., Exhibit 21 at 151. criterion 2.a 24. Regarding criterion 2.a, the SEB rated the protester at 5. Protest File, Exhibit 21 at 151. The SEB report notes seven paragraphs of weaknesses. Id. at 106-07. One paragraph highlights an inconsistency between the letters of commitment and availability of the individuals and the requirements of the solicitation. The protester states in its proposal that key personnel are currently available and fully committed to this project. Further, the proposal states that all key personnel have signed letters of commitment acknowledging a willingness and intent to work 100 percent on the project for the protester. Id., Exhibit 14 at II-49 ( 2.2.3). For each key personnel position, the proposal contains two letters on the protester's stationery. A "contingency offer letter" which establishes an initial salary and benefits, and is contingent upon the Government awarding the contract at the level projected in the solicitation, is dated March 17, 1994, to each proposed key employee. Id., Appendix B (pages following II-90). Each employee has "accepted and agreed to" the terms of the letter with a signature and date of either March 19 or 21. However, each proposed key employee has also signed (without a signature date) a letter also on the protester's stationery and dated March 18, which states: "I intend to accept this position if I am available for employment and under mutually agreeable terms of employment between [the protester] and me." Id. 25. Consistent with the information contained in the resumes and proposal, the SEB report also identifies in four paragraphs other weaknesses in the key personnel portion of the protester's proposal; the weaknesses reflect concerns about what the individuals have actually done and how relevant their experience is to the contract. Protest File, Exhibit 14 at II-42 to II-49, II-79 to II-88, Exhibit 21 at 106. 26. The final two paragraphs of the protester's weaknesses state: "None of the key personnel currently work for the proposer," and "None of the key personnel have worked in a support services environment similar to ORO." Protest File, Exhibit 21 at 107. Similarly, for other offerors, in its report the SEB identifies as a weakness that proposed key personnel do not and have not worked for the offeror (or subcontractor). Id. at 31, 68, 112. Other weaknesses are identified for each such offeror. Id. No SEB evaluator gave such an offeror a perfect score. Id. at 151. The rationale of the SEB in support of treating as a weakness a key employee's lack of work experience with the employer is that working with the employer brings particular knowledge (e.g., the philosophy of the organization) to the process. Transcript at 305-09, 407-08. criterion 3.a 27. The SEB's final evaluation of the "experience of offeror" portion of the protester's proposal resulted in a score of 5. Protest File, Exhibit 21 at 151. The SEB report identifies four paragraphs of weaknesses, one related to each project identified by the protester: [One] contract appears to provide project management and planning expertise for a major software ($500 million) project. There is not enough detail to determine the specific project duties or relevance to the ORO SOW. Also, the number of personnel or the size of [protester's] portion of this large project is not clear. [Another] project is relevant in some respects, but is smaller in size [a full-time staff of eleven employees] than the ORO project [and] does not include computer operations, or software development. The number of personnel provided and the size of the network for the [third contract] is not clear. Computer operations is not addressed in the proposal, nor is the number of people provided as staff addressed. (pg. 58-60) [The fourth] project does not provide experience in software engineering. Id. at 107. The weaknesses relate to the eight tasks of the solicitation, Finding 2. 28. For one offeror within the competitive range, the SEB awarded a higher score in this area, identifying only one weakness in the identified projects: The contract with [] only required 3-4 analysts and was not very similar in several respects to the Oak Ridge project (service desks too narrow a task, security, hardware and software support not that similar). Protest File, Exhibit 21 at 32, 151. The comments characterize as strengths the offeror's other two identified projects. However, the offeror specifies no price for the value of one contract which utilizes a technical staff of ten; the other contract value is specified as less than $800,000, with the offeror utilizing a staff of twelve on-site personnel. Id., Exhibit 35 at 78-85. criterion 4.a 29. The SEB final report gives a perfect score under criterion 4.a to one offeror within the competitive range. Protest File, Exhibit 21 at 152. The offeror's proposal, however, contains a staffing plan for the base year only, and not any of the option years. Id., Exhibit 35 at 91-96. Although the report identifies some weaknesses in the proposal, the lack of a staffing plan for the entire period is not a noted weakness. Id., Exhibit 21 at 32. cost evaluations 30. The SEB relied upon the analysis of the cost committee revealed in the committee's report and through a presentation by the committee. Protest File, Exhibit 21 at 2, 11-12; Transcript at 177. 31. The proposal of one offeror within the competitive range fails to identify salaries and burdened rates for key employees; the section B pricing table includes no cost for key personnel as a direct charge. Protest File, Exhibit 34 at 11-20 (Exhibit B), 28-37 (Exhibit D). The proposal specifies that the project director (one of the proposed key employees) will not be directly charged to the DOE ORO contract. Id., Exhibit 35 at 7, 92, 98. Given the proposed level of effort for non-key personnel, the staffing plan submitted for the first year suggests that key personnel will fall under specified non-key personnel labor categories; however, no specific hours or burdened rates are provided for key personnel. Id. at 96, Exhibit 34 at 11. 32. In evaluating the cost volume of proposals, the cost committee recognized that some offerors calculated a price based on DPLH at variance with those identified in the solicitation and not every offeror specified the rates for key personnel. The cost committee attempted to establish a probable cost to the agency for each proposal. However, the probable cost intends to focus only on costs of non-key personnel and not costs of key personnel. Protest File, Exhibit 19 at 2-3, 5-6, 12-15; Exhibit 21 at 164-65. 33. The protester proposes a fringe rate below that of the incumbent; the cost committee calculated the "proposed cost" to the agency with the higher fringe. The committee was under the impression that the solicitation required the offeror to propose a fringe rate at least equal to that of the incumbent. Transcript at 88. The SEB repeated this notion in relating its cost consideration. Protest File, Exhibit 21 at 125. Competitive range determination 34. The SEB determined the competitive range. Protest File, Exhibit 23. The SEB states in its competitive range report: The Cost Committee evaluated the financial aspects of the proposals, with emphasis on determining probable evaluated cost. . . . Adjustments were performed to provide a level basis for comparison based on the requested core labor hours. Due to the number of technically adequate proposals and the lack of significant deviation in cost from the adjusted average, cost was not considered in establishing the competitive range. Further clarification of cost data is required prior to concluding reasonableness of cost. Id., Exhibit 21 at 2 (emphasis added). The SEB report does not explain or attempt to reconcile the proposed costs with the net adjusted prices for the various offerors. Id. at 161-65. The members of the SEB credibly testified that despite the language in the report, the SEB did consider cost; to convey the notion more properly, the report could have stated that no offeror was excluded from the competitive range because of the cost of its proposals. Transcript at 172-74, 240, 361, 382-83, 389-90. 35. The SEB placed neither the protester nor the intervenor within the competitive range. The letters of notification provide the following explanation: "Other proposals were deemed to be superior to such a degree that there is no real possibility that your proposal can be improved to the point that it could become the most acceptable." Protest File, Exhibits 23, 24. 36. As determined above, the scores utilized in making the competitive range determination are not consistent with the SEB rating plan and are not fully consistent between the offerors. Findings 22, 27-29. The testimony of the SEB members that the competitive range contains only those with a reasonable chance for award is not borne out by the record when one allows for adjustments in scoring to achieve consistency and recognizes the strengths and correctable weaknesses of the offerors. 37. In a document relating to the competitive range presentation to the SSO, the SEB described the procurement as having an estimated dollar value of $15.4 million. Protest File, Exhibit 22 at 3. The basis for this figure is not apparent in the record. The actual proposed prices clearly enable the agency to award a contract for the solicited requirement (inclusive of key personnel costs) for less than $15 million. Id., Exhibit 21 at 161. Procurement authority 38. Pursuant to the Brooks Act, 40 U.S.C. 759(b)(2) (1988), and the regulations implementing the Act, the Federal Information Resources Management Regulation (FIRMR), 41 CFR 201- 305-2 (1993), by memorandum dated and effective September 30, 1991, the General Services Administration (GSA) granted to the Department of Energy a specific agency delegation of procurement authority to contract for federal information processing (FIP) resources without further approval by GSA. The granted authority enables the agency to contract for ADP [automatic data processing] equipment, software, services, maintenance and support services when the aggregate dollar value of such resources including all optional quantities and periods over the life of the contract does not exceed $15,000,000 for fully competitive actions . . . . Protest File, Exhibit 38. 39. A cost estimate dated December 6, 1993, is premised on a total of 460,315 hours of direct labor over a five-year period. The particular categories and related labor hours do not precisely match those in the solicitation; however, there are hours for key personnel type positions, such as managers and directors. The analysis, which projects costs (consisting of direct labor, fringe, overhead, other direct costs, general and administrative costs, and fee) for four existing contractors, results in total estimated costs of $13,096,001, $14,488,550, $15,450,043, and $18,024,899, for the four companies, and an average total estimated cost of $15,264,873. Protest File, Exhibit 42. 40. A cost estimate dated January 21, 1994, is premised on a total of 385,316 hours of direct labor over a five-year period. The particular categories and related labor hours do not precisely match those in the solicitation; however, there are hours for key personnel type positions, such as managers and directors. The analysis, which projects costs (consisting of direct labor, fringe, overhead, other direct costs, general and administrative costs, and fee) for four existing contractors, results in total estimated costs of $17,106,997, $14,121,572, $13,150,810, and $11,928,810, for the four companies, and an average total estimated cost of $14,076,956. Protest File, Exhibit 39. The high estimate of $17,106,997, is calculated using salary escalation rates slightly greater than those used for the other three contractors, and different from those stated on the summary sheet. 41. After the solicitation in this procurement had been released, the agency's ORO Deputy Director, Information Resources Management Division, sought from within the agency a redelegation of the GSA procurement authority. This was done through a memorandum dated February 1, which specifies that the proposed contract will cover a five year period at a total estimated cost of $11,928,809 for 385,316 direct production labor hours. . . . Services provided under the proposed contract include computer center operations; installation and maintenance of personal computers and related software; installation, operation, and maintenance of networks; software and data base development/maintenance; and general computer hardware/software user support. Protest File, Exhibit 5. 42. By memorandum dated April 4, to the agency's ORO Director, Procurement and Contracts Division, the agency redelegated the specific agency delegation of procurement authority previously granted by GSA, Finding 38. This redelegation is expressly based on the review of the information in the agency procurement request which estimates the cost at $11,928,809. The redelegation does not specify that the authority is limited to purchasing or contracting for only up to that amount. Protest File, Exhibits 7, 46. The protest 43. Following its debriefing, the protester filed this protest with the Board on October 3. It formally supplemented the protest, adding counts of protest, with filings on October 31, November 1 (corrected on November 3) and November 4. On the first day of the hearing on the merits, the protester withdrew two counts of protest. Transcript at 19, 165. Discussion The protester contends that the agency lacks the procurement authority to conduct the procurement, improperly evaluated various aspects of the proposals, and incorrectly made the competitive range determination so as to exclude the protester from the competition. Procurement authority from GSA (statutory) The protester contends that the agency lacks procurement authority for this procurement and concludes that the procurement is void under CACI, Inc. v. Stone, 990 F.2d 1233 (Fed. Cir. 1993). The protester contends (count XIII) that the amount of the procurement exceeds the $15 million specific agency delegation from GSA to the agency, Finding 38.[foot #] 4 The record does not support the protester's contention. The agency estimate of December 1993, Finding 39, utilizes more total hours (460,315) than reasonably anticipated under the actual solicitation--the sum of non-key personnel hours (410,562.5) and five key personnel over five years (1875 x 5 x 5 = 46,875) totals 457,437.5. Even so, the dollar values determined in the estimating process (which includes costs for key and non-key personnel) reveal two estimates within the $15 million threshold. The agency estimate of January 1994, Finding 40, utilizes a total number of labor hours below the requirement in the solicitation. The hours utilized are erroneous and low. However, key and non-key personnel costs are reflected in the overall estimates. The protester's "correction" of the estimate prices key hours separately, and prices the non-key hours at the agency's average estimated hourly cost--a rate that includes costs for key and non-key personnel. Hence, the "correction" does not consider the hourly costs of those labor categories omitted from the estimate. Moreover, the dollar values determined in the estimating process reveal three potential sources within the $15 million dollar threshold. Making adjustments for missing hours results in two estimates within the $15 million threshold. ----------- FOOTNOTE BEGINS --------- [foot #] 4 Although, in its post- hearing brief, the protester urges the Board to draw inferences against the agency regarding the cost estimates, because the agency failed to call witnesses with personal knowledge regarding some of the estimates, the protester has not identified a specific discovery request which required the agency to produce material relating to the estimates or to identify an individual with the specific knowledge. The protester did not seek additional discovery on this matter and did not request to keep the record open to pursue the matter. Accordingly, the Board declines to follow the suggestion of the protester. ----------- FOOTNOTE ENDS ----------- The $15.4 million estimate found in materials used in the presentation to the SSO is not in line with the actual proposals then before the agency. The proposals clearly enable the agency to award a contract for the solicited requirements for less than $15 million. Finding 37. As early as February, when the agency formulated its internal procurement request, Finding 41, it utilized the low estimate from January, Finding 40, apparently believing that such represented a reasonable cost for the procurement. The value, when adjusted for the solicited requirements is below $1 million. Thus, at all times, the agency could validly and reasonably have concluded that it could procure its requirements for a cost within the $15 million authority.[foot #] 5 internal (within the agency) The protester also contends (counts IV, XIV) that the agency lacks the internal procurement authority to conduct the procurement. In reaching this conclusion, the protester asserts that the internal redelegation of the procurement authority from GSA was premised on and limited to the incorrect and low hour and dollar estimates. The protester's argument fails given the language of the internal delegation which redelegates the authority from GSA. Finding 42. The internal delegation is not limited to the specific hour and dollar estimates in the request; hence, the low figures do not invalidate the authority which the procuring activity received before the submission of initial proposals. Cost and price evaluations The protester maintains (count V) that, in several respects, the agency improperly evaluated an offeror within the competitive range which has failed to provide the labor hours and direct costs for its key personnel, Finding 31. ----------- FOOTNOTE BEGINS --------- [foot #] 5 Further, the protester has assumed that all labor hours under the contract are ADP or FIP resources within the meaning of the Brooks Act. 40 U.S.C. 759(a) (1988); 40 CFR 201-4.001 (1993). The delegation and dollar limitation relate to "the aggregate dollar value of such resources" where the identified resources are "ADP equipment, software, services, maintenance and support services." Finding 38. The record does not demonstrate that two of the positions (secretary and switchboard operator-receptionist), Finding 3, are "such resources" to be used in calculating the dollar value of the procurement. Hence, the estimated dollar value of the ADP or FIP resources being procured appears to be below the values discussed by the agency and the protester. ----------- FOOTNOTE ENDS ----------- The protester contends that the agency should have found that the offeror "failed to meet a mandatory requirement of the solicitation by not pricing its five key personnel. By not doing so, [the agency] accepted a proposal which failed to meet the minimum requirements stated in the solicitation." First Supplemental Protest at 4 ( 40). The agency has not "accepted" the offeror's proposal. Rather, the agency has placed the offeror within the competitive range. Although the offeror failed to meet a solicitation requirement, the protester has not referenced any statute, regulation, provision of procurement authority, or portion of the solicitation which the agency's actions may have violated. The protester also maintains that the agency should have adjusted the proposed price significantly upwards. Again, the protest fails to cite a provision which the agency's actions violate. Moreover, the protester has not suggested in its protest that the adjustment would have made a difference for purposes of the competitive range determination, where technical is more important than cost in the selection process, and an upward adjustment would not have removed the offeror from the general price range of offers. Finally, the protester asserts that by not properly evaluating the proposed price of the offeror, the agency failed to conduct a proper cost realism and price analysis and thereby violated the Federal Acquisition Regulation (FAR), 48 CFR 15.805 (1993), and applicable (but unstated) case law. The referenced regulation does not direct the agency to conduct a more thorough cost realism and price analysis at the time of the competitive range determination. The record does not demonstrate that a different analysis would have led to a different result with respect to the offeror. The protester further contends (count VIII) that the agency improperly evaluated its price proposal by adjusting upwards its fringe rate, Finding 33. The adjustment by the agency is premised on an apparent misinterpretation of the solicitation. The agency has pointed to no solicitation provision which requires an offeror to establish its fringe rate no lower than that of the incumbent. Although an offeror is required to provide retained non-key incumbents with compensation and benefits equivalent to those provided by the predecessor, the provision does not require the offeror to directly charge the agency for these costs as an element of the fringe rate. Finding 12. Accordingly, the agency's adjustment is improper. However, for purposes of the competitive range determination, the adjustment was not relevant. Technical and business management evaluations The protester maintains that the agency improperly scored some of the evaluation criteria and applied unstated criteria in the evaluation process. criterion 1.b The protester contends (count I) that the agency misapplied the outreach and community involvement area by making it outweigh all other subfactors contained in this criterion. The solicitation specifies that a portion of the proposal responding to this criterion is to address "past, present or future planned initiatives or activities which demonstrate a commitment to innovative affirmative actions affecting direct- hire work force, subcontractors, and any community involvement/outreach activities." Finding 6. This element of evaluation falls within the evaluation criterion stated in section M, Finding 14. Given the language in its proposal, Finding 23, the protester has not demonstrated that its proposal is not weak in this area or otherwise must have obtained a higher score. criterion 2.a The protester contends (count VII) that the agency improperly down-graded its proposal for proposing key personnel who were not employed by it and who had never worked together. The protester also alleges (count XI) that the agency-identified weaknesses are inaccurate and not reflected in protester's key personnel. The protester claims inconsistent treatment, in alleging that others were not down-graded; however, the agency did not treat the protester any differently than it treated other offerors in this matter. Finding 26. The protester correctly asserts that the solicitation does not require (or express a preference for) key personnel being employed by the offeror or key personnel to have worked together. Neither the proposal preparation instructions, Finding 7, nor the related evaluation criterion, Finding 14, contain such indications. The rationale urged by the SEB in support of the evaluated weakness is not persuasive. Finding 26. Thus, it was improper to treat these aspects of the proposals as weaknesses. The other weaknesses identified by the SEB are fully consistent with the terms of the protester's proposal. Findings 24, 25. Given the strengths and weaknesses of the protester's proposal and of the other proposals, the protester has failed to establish that it was improperly or inconsistently scored. Its proposal has significant (albeit potentially correctable) weaknesses regarding the commitments and the relevant experience of its proposed key personnel. The record does not demonstrate that the agency acted improperly by rating this aspect of the proposal as a 5. criterion 3.a The protester contends (counts II, IX, XI) that the agency departed from the solicitation in evaluating this criterion, and inaccurately identified weaknesses in its proposal. As portions of the latter two counts, the protester also maintains that the agency evaluated the protester inconsistently with its evaluation of one offeror within the competitive range. The protester faults the agency for categorizing as a "weakness" instances where the protester-identified projects allegedly fail to involve all aspects of work required under this procurement or are dissimilar in terms of size and dollars. The solicitation expressly instructs offerors to provide information regarding relevant experience, technical competency, and services comparable to those required by the statement of work. Finding 8. Section M similarly describes the evaluation criterion. Finding 14. The solicitation permits the agency to evaluate different projects as meriting higher (or not so high) scores because of the relevancy of work and similarity of size and value. The protester has pointed to no provision which mandates a different evaluation approach. It is not unreasonable, irrational, or inconsistent with the terms of the solicitation for the evaluators to distinguish in the scoring between the comparability to the procurement of the offeror-identified projects. The protester, however, is correct that the agency has not consistently evaluated the proposals of the protester and an offeror within the competitive range. The SEB failed to describe as weaknesses aspects of that offeror's identified projects which were dissimilar in size and dollar value from the procured requirements. Finding 28. criterion 4.a The protester contends (count XI) that the agency improperly scored an offeror within the competitive range in this criterion, because the offeror received a perfect score despite providing a staffing plan for only the base year of the requirements. The solicitation requires proposals to contain a comprehensive staffing plan and to describe the organization to ensure that all requirements of the statement of work are met. Finding 9. These elements are to form a portion of the evaluation. Finding 14. The offeror's proposal fails to demonstrate how requirements of the solicitation will be satisfied over the contract period. The proposal does not warrant a perfect score. The agency should have identified the matter for discussions. Competitive range determination The protester contends (count XII) that the agency failed to consider cost in establishing the competitive range and, therefore, violated FAR 15.609(a). Despite the language in the SEB report, Finding 34, the agency did consider cost in the competitive range determination. The agency was aware of the proposed costs and prices of the various offerors and of the general range of such costs. The agency did not use cost or price as a basis to keep offerors outside the competitive range. The protester maintains (count III) that the agency improperly constituted the competitive range because it has a reasonable chance for receiving the award. In section M, the solicitation specifies that the proposals will be evaluated in accordance with the applicable federal and agency policies and procedures. Finding 13. Regarding written and oral discussions, the FAR states that "the contracting officer shall conduct written or oral discussion with all responsible offerors who submit proposals within the competitive range. The content and extent of the discussions is a matter of the contracting officer's judgment, based on the particular facts of each acquisition (but see paragraphs (c) and (d) below)." 48 CFR 15.610(b) (1993). The agency's regulations supplementing the FAR state, regarding the written and oral discussions with those within the competitive range: "Where the proposed award is not for research, development, or demonstration, (e.g., supplies and services) the contracting officer should point out instances in which aspects of a proposal contain a weakness in relation to the Government's requirements." 48 CFR 915.610(c) (1993). Under the agency's implementing regulations, the agency is required to utilize the discussion process to point out weaknesses in proposals. The nature of the weaknesses in the protester's proposal are susceptible to elimination or reduction. Findings 23-27. With consistent scoring of the proposals, and the opportunity to engage in discussions, the protester's proposal has a reasonable chance for award. Finding 36. Decision The Board GRANTS the protest with respect to count III and portions of counts IX and XI, and DENIES all remaining counts of the protest. The Board revises the procurement authority of the agency as follows: before proceeding with the procurement, the agency must make a competitive range determination consistent with the above findings and conclusions. 40 U.S.C. 759(f)(5)(B) (1988). The Board-entered suspension of the agency's applicable procurement authority lapses by its terms. 40 U.S.C. 759(f)(2) (1988); Order (Oct. 12, 1994). _________________________ JOSEPH A. VERGILIO Board Judge We concur: _________________________ _________________________ ROBERT W. PARKER CATHERINE B. HYATT Board Judge Board Judge