ITT Federal Services International Corporation

B-283307; B-283307.2

November 3, 1999

DECISION

ITT Federal Services International Corporation protests the award of a contract to Combat Support Associates (CSA) by the Department of the Army, pursuant to request for proposals (RFP) No. DASA02-98-R-5000, issued to procure base operations and combat support at Camp Doha, Kuwait.  ITT argues that the Army's selection of CSA was unreasonable and violated the terms of the solicitation because CSA's and ITT's proposals were essentially equal technically, while CSA's costs were significantly higher than ITT's costs.  In addition, ITT argues that the Army's evaluation of past performance was unreasonable.

 We sustain the protest.

BACKGROUND

Camp Doha, Kuwait, is a large logistics base located 20 miles west of Kuwait City that serves as the Army's forward presence in the Middle East.  Camp Doha has a working population of over 2,000 personnel including U.S. military personnel, as well as U.S., Kuwaiti, and third-country national contractor personnel.  This RFP, for Camp Doha's base operations and management support services, was issued October 30, 1998, and anticipates the award of a cost-plus-award-fee contract for a base year, followed by nine 1-year options.  RFP § B.  Among other things, the contractor is required to provide and maintain supplies and equipment for military exercises, and for contingency and combat operations, including heavy combat vehicles, tactical vehicles, and related armaments, ammunition, electronics and repair parts.  Initial Agency Report, Aug. 25, 1999, at 1-3. 

The RFP's evaluation scheme advised that award would be made to the offeror whose proposal represented the best overall value to the government.  RFP § M.3.  To determine which proposal offered the best value, the RFP identified three evaluation factors, in descending order of importance:  quality (also referred to in the record as technical), past performance, and cost.  RFP § M.5.  Under the quality and past performance evaluation factors, the RFP identified subfactors, elements, and subelements; however, most of these details are not relevant to this decision and will be set forth below only as needed.  With respect to proposed costs, the RFP advised that the government would calculate a most probable cost (MPC) estimate for each proposal.  RFP § M.5.4.c.1.  In addition, offerors were advised that the "degree of importance of the Cost/Price factor will increase as the quality differences in the proposals decrease."  RFP § M.5.3.

The Army received four proposals in response to the RFP, and evaluated each under the factors of quality and past performance.  . . . . .  At the conclusion of the initial evaluation, all four proposals were included in the competitive range, discussions were conducted, and each offeror was asked to submit a final revised proposal.

Upon receipt of the final revised proposals (referred to at most points in the record--and hence in this decision--as best and final offers (BAFO)), the Army reevaluated each proposal under the quality and past performance evaluation factors.

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On June 18, the contracting officer and several members of the evaluation team provided the source selection authority (SSA) with a briefing on the results of the competition.  In addition to the briefing slides, the SSA was presented with two proposed source selection statements--one selecting CSA, one selecting ITT.

The SSA did not make his selection decision at the end of the June 18 briefing, but instead left the meeting and considered his decision for several days.  Tr. at 40, 42.  During that time, he sought additional information from Army staff regarding the cost of the current contract, Tr. at 43-44, and studied the briefing slides, the alternate selection statements, and a list of the strengths and weaknesses of the offerors that he also took from the briefing.  Tr. at 40-43.  At a hearing convened by our Office to consider this protest, the SSA testified that he eventually concluded that CSA had the best technical proposal, and a realistic MPC estimate.  Tr. at 44.

On June 29, the SSA selected CSA for award, and signed the selection statement provided during the briefing 11 days earlier, without making substantive changes to its text.  Tr. at 50-51.  With respect to ITT, the selection decision states:

[ITT]'s overall quality proposal was outstanding and was determined to   be technically equal to [CSA].  However, [ITT]'s Most Probable Cost (MPCE) without Contractor Acquired Property (CAP) at $[deleted] was lower than both [CSA] and Yellow.  [ITT]'s revised proposal lowered proposed costs which was of concern since as [sic] [ITT]'s cost pricing discussion were [sic] mainly centered on items (to include apparent non compliance with a portion of Kuwait Labor Law) that should have increased costs.  [ITT]'s proposal also offered no significant weaknesses and no performance risks. 

Selection Statement, June 29, 1999, at 2.  With respect to CSA, the selection statement indicated that CSA was the only offeror whose proposal was outstanding in both quality and past performance,[1] that the technical proposal was detailed and included an excellent analysis of the contract's requirements, that CSA's proposed costs were reasonable, and, that the quality of the CSA proposal outweighed its higher cost.  Id. at 1-2.  Thus, the SSA selected CSA for award, and these protests followed.

ITT'S CHALLENGE TO THE SELECTION DECISION

ITT argues that the SSA did not have a reasonable basis for selecting CSA's significantly higher-cost proposal over ITT's, given the SSA's finding that the two proposals were technically equal.[2]   ITT complains that:  (1) the SSA's concern about ITT's costs is not reflected in the underlying cost analysis materials; (2) the Selection Statement fails to identify any particular technical differences that might have merited the cost difference between the proposals; and, (3) the SSA wrongly concluded that ITT's BAFO costs should have increased, rather than decreased, as a result of discussions. 

The Army disputes each of ITT's contentions about the selection decision here, even though the SSA readily admits that many of his concerns are not reflected in the decision document he signed.  Tr. at 50, 98-99.  The Army responds, however, that the basic principle underlying the decision is identified by the Selection Statement--i.e., that the SSA considered ITT's costs to be too low, and that he expected ITT's BAFO costs to increase, rather than decrease, as a result of the issues covered during discussions, including the requirement for compliance with Kuwaiti labor law.

Before turning to a substantive analysis of the SSA's reasons for selecting CSA over ITT, we must first address a series of threshold issues raised by the parties and the record.  First, given the relative paucity of analysis in the Selection Statement, the Army seeks consideration of additional materials and testimony to further explain the selection decision; ITT argues that this supplemental information should be given little weight in our review.  Indeed, ITT argues that our Office should uphold its protest based on the Army's failure to adequately document the selection decision.  Finally, we also consider the impact on the selection decision of the evaluation team's failure to calculate an MPC estimate for ITT's BAFO.

Supplemental Materials and Testimony

To buttress the written Selection Statement, the Army urges our Office to consider information found in:  (1) a price negotiation memorandum prepared by the contracting officer 1 day after the selection decision; (2) a declaration from the SSA, dated August 18, 1999, provided to the protester as part of the agency's document production; and (3) testimony from the SSA at a hearing before our Office on October 5, 1999, in which the SSA further explains his rationale for the selection decision.  ITT responds that our review should be limited to the Selection Statement itself, and that our holding in Boeing Sikorsky Aircraft Support, B 277263,

B-277263.2, Sept. 29, 1997, 97-2 CPD ¶ 91, bars consideration of any of these other materials.  As set forth below, we conclude that, in most areas, ITT misreads our decision in Boeing, although we agree that Boeing does control our consideration of a hypothetical redetermination of the award decision offered by the Army during the course of this protest.

Our decision in Boeing involved an agency's post-protest hypothetical cost/technical tradeoff presented to demonstrate a lack of prejudice from any alleged agency errors.  Prejudice to the protester is critical to our decisionmaking, since our Office will not sustain a protest unless the protester demonstrates a reasonable possibility of prejudice, that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving the award.  McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD ¶ 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996).  In responding to Boeing's challenges to the propriety of the technical and cost evaluations, the agency there answered that even if Boeing were to prevail on its protest grounds it would still not be awarded the contract because of the awardee's superior management evaluation.  In this regard, the agency submitted a new cost/technical tradeoff analysis prepared during the pendency of the protest which assumes the validity of many of Boeing's allegations, but concluded that the award decision would not change.  Boeing Sikorsky Aircraft Support, supra, at 14.

In deciding what weight to accord the agency's reevaluation, our Office held that "[w]hile we consider the entire record, . . . we accord greater weight to contemporaneous source selection materials rather than judgments, such as the selection officials' reevaluation here, made in response to protest contentions."  Id. at 15.  We further reasoned that the "lesser weight that we accord these post-protest documents reflects the concern that, because they constitute reevaluations and redeterminations prepared in the heat of an adversarial process, they may not represent the fair and considered judgment of the agency, which is a prerequisite of a rational evaluation and source selection process."  Id.

A counterpoint to Boeing is our decision in NWT, Inc.; PharmChem Labs., Inc., B 280988, B-280988.2, Dec. 17, 1998, 98-2 CPD ¶ 158, where we distinguished post-protest reevaluation and redetermination from memorialization of contemporaneous analysis.  In NWT; PharmChem, we stated that "[p]ost-protest explanations that provide a detailed rationale for contemporaneous conclusions, as is the case here, simply fill in previously unrecorded details, and will generally be considered in our review of the rationality of selection decisions, so long as those explanations are credible and consistent with the contemporaneous record."  Id. at 16.

In analyzing the challenged documents and testimony in the instant protest within the context of Boeing and NWT; PharmChem, the easiest document to address is the negotiation memorandum prepared the day after the SSA signed the Selection Statement.  Of relevance here, this document contains a contemporaneous recitation of the Army's understanding of the reasons ITT lowered its BAFO costs, and reflects the same concern as the Selection Statement regarding the fact that ITT's BAFO costs went down rather than up.  Since this document is, in effect, contemporaneous, and was not prepared in the "heat of the adversarial process," we have none of the concerns we expressed in Boeing.

With respect to the SSA's declaration prepared in response to the protest, we view the bulk of the information here as similar to the statements at issue in NWT; PharmChem.  The declaration addresses the lapse of time between the selection briefing and the date on the decision document, and provides information regarding the contemporaneous concerns of the SSA.  Specifically, the SSA recounts his concern about the drop in ITT's BAFO costs against the backdrop of an orientation briefing he received at Camp Doha in August 1998, where he was advised that the new contractor would have to add aviation support services not currently contained in the contract, and begin complying with Kuwaiti labor law.  Declaration of Maj. Gen. Robert D. Shadley, Aug. 18, 1999, at 2.  Thus, he states that he was concerned that ITT's drop in proposed costs meant that it "intended to either reduce the quality of the services to be provided, or to seek a contract price increase after award."  Id.  This information is consistent with the written Selection Statement, and in our view, constitutes further explanation of the SSA's contemporaneous thought process, not memorialized there. [3]

Consistent with our approach to the SSA's declaration, we convened a hearing in this protest to further explore the SSA's rationale for his decision.  As in NWT; PharmChem, we concluded that the SSA's testimony was credible and generally consistent with the underlying evaluation materials and the Selection Statement. Notwithstanding the SSA's credibility, however, we conclude, for the reasons set forth below, that the selection of CSA over ITT lacked a reasonable basis.

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RECOMMENDATION

We recommend that the Army reopen the procurement, and reevaluate the BAFO cost proposals submitted--to include an appropriate cost realism analysis pursuant to FAR § 15.404-1(d) and calculation of a BAFO MPC estimate for those offerors who revised their proposed costs in their BAFOs, in accordance with the stated evaluation scheme.  We also recommend that the agency perform a new best value determination.  If, after reevaluation, CSA's proposal does not represent the best value to the government, we recommend that the agency terminate the award to CSA, and award to the offeror whose proposal presents the best value under the evaluation scheme.

We also recommend that the protester be reimbursed the reasonable costs of filing and pursuing its protest, including attorneys' fees.  4 C.F.R. § 21.8(d)(1) (1999).  In accordance with 4 C.F.R. § 21.8(f)(1), ITT's certified claim for such costs, detailing the time expended and the costs incurred, must be submitted directly to the agency within 60 days after receipt of this decision.

The protest is sustained.