Concur Protest

VEATABLELLP 8010 TOWERS CRESCENT DRIVE SUiTE 300 TYSONS CORNER, VA 22182 1203160.1600 F703.821.8949 www.Venable.com

June 15, 2012

Office of the General Counsel U.S. Government Accountability Office 441 G Street, N.W. Washington, D.C. 20548

Lars E. Anderson

T 703.760.1605 F 703.821.8949 [email protected]

CICA Stay Required Immediate Notification

of Agency Requested Attn: Procurement Law Control Group

Re: Protest of CW Government Travel, Inc. d/b/a CWTSatoTravel Under Solicitation No. QMAD-JM-100001-N (ETS2)

Dear Sir or Madam:

CW Government Travel, Inc. d/b/a CWTSatoTravel ("CWT"), 4300 Wilson Boulevard, Suite 500, Arlington, Virginia 22203-4167, telephone: (703) 682-7201, facsimile: (703) 682-7282, through the undersigned counsel, submits this protest under Solicitation No. QMAD-JM-10000 1 -N ("Solicitation") issued by the General Services Administration ("GSA" or "Agency") for E-Gov Travel Service 2.0 ("ETS2"). CWT protests the GSA’s evaluation of proposals and award of a single IDIQ contract to Concur Technologies, Inc. ("Concur"). This creates a 15-year monopoly for Concur to provide end-to-end electronic (web-based) travel management services to all federal civilian agencies subject to the Federal Travel Regulation ("FTR"). The total contract price is more than $1.3 billion. More than $200 million of this price represents the Industrial Funding Fee that GSA will charge various customer agencies to use the ETS2 service.

FAR Part 16 not only establishes a preference for multiple awards, but also prohibits the award of a single IDIQ contract that is valued in excess of $103 million unless the head of the agency determines in writing that certain limited exceptions are present. The reasons for such precautions are obvious. Winner-take-all single-award scenarios are by definition non-competitive. It is rarely in the Government’s best interest to award a single IDIQ contract because there is substantial risk associated with relying on one contractor to perform all of the tasks. That contractor has no incentive to improve services or lower its ceiling prices because it faces no competition at all. If performance problems arise, the likelihood of which is increased here given the complexity and scope of ETS2, the Government is left with no alternative contractor.

In this procurement, there was simply no reasonable or rational basis for GSA to give Concur a monopoly on a major services contract valued at more than a billion dollars�particularly because the period of performance is an unprecedented 15 years. Concur has never provided end-to-end electronic travel services to the agencies that would be required to use the

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system and has proposed a developmental solution that has not yet been fielded in support of a Government agency. In contrast, the team consisting of CWT and Northrop Grumman (both ETS 1 incumbents collectively servicing approximately 70% of civilian agency travelers) is currently and successfully providing the electronic travel services called for in the Solicitation. GSA cannot justify its refusal to award a second IDIQ contract to this incumbent team.

In addition to this major concern, CWT protests other aspects of the evaluation and award decision. GSA’s defective Solicitation permitted each offeror to impose unique parameters and limitations on the amount of work that they would be required to perform. There is no indication that GSA evaluated these limitations on a comparative basis so as to ascertain the true price and extent of work to be performed by each offeror, or considered them in the final source selection decision. Agencies must evaluate offers on a common, "apples-to-apples" basis. GSA failed to do this.

Additionally, CWT protests the unreasonable, unequal and unfair evaluation of its proposal and Concur’s proposal. GSA’s overall rating of Concur, which has no prior experience in servicing the federal agencies that are required to use the ETS, as "Very Good" while rating the incumbent team as only "Marginal" is highly suspect and calls into question the fairness of the evaluation. For these and other reasons stated herein, CWT respectfully requests that the GAO sustain this protest.

The Contracting Officer is Mr. Ernesto Martinez, 2200 Crystal Drive, Suite 300, Arlington, VA 22202; telephone (703) 605-9223; facsimile: (703)-605-9935; and e-mail address: ernesto.martinezgsa.gov . Pursuant to FAR 33.104(a) and 4 C.F.R. § 21.1(e), a copy of this protest is being timely served on the Contracting Officer.

INTERESTED PARTY STATUS

CWT is an interested party to protest because it is an actual offeror whose direct economic interest is adversely affected by the award of the contract under the Solicitation. But for the errors and unreasonable evaluation alleged in this protest, CWT would have represented the best value to the GSA and been selected for award. CWT is therefore an interested party pursuant to 4 C.F.R. § 21.0(a) and is authorized to file this protest by 4 C.F.R. 21.1(a).

TIMELINESS

In accordance with 4 C.F.R. § 21.2(a)(2), this protest is timely because it is being filed within ten days of June 11, 2012, the date when CWT received its timely requested and required debriefing, and during which information regarding the nature of the evaluation was first

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disclosed to CWT and the basis of the protest was known or should have been known to CWT. See Exhibit A.

CICA STAY REQUIRED

In accordance with 31 U.S.C. § 3553(d)(3)(A), GSA is required to suspend performance of the contract pending the United States Government Accountability Office’s ("GAO") resolution of this protest because this protest is being filed within five days of June 11, 2012, the date GSA provided CWT its requested and required debriefing. CWT respectfully requests that the GAO promptly notify the Contracting Officer of the filing of this protest.

STATEMENT OF RELEVANT FACTS

A. The Solicitation.

1. E-Gov Travel Service 2.0.

Since 2003, CWT has been one of three GSA incumbent contractors providing electronic, web-based end-to-end travel management services to the Government under the first generation E-Gov Travel Service 1.0 ("ETS1") program. The E-Gov Travel Services Program is sponsored by GSA, and was chartered through a cross-agency collaborative task force that included GSA, the Office of Management and Budget ("OMB"), and over 70 additional federal civilian agencies.

On August 23, 2010, GSA issued the subject Solicitation which contemplated the award of a firm fixed-price, Indefinite-Delivery, Indefinite-Quantity ("IDIQ") master contract to one or more contractors for the provision of travel services under ETS2. The Solicitation was issued as a FAR Part 12 commercial services procurement. The ETS2 acquisition is a follow-on procurement for the next generation of automated travel management contracts and will have a 15-year period of performance. Like its predecessor, ETS2 is intended to include all aspects of official federal business travel, including travel planning, authorization, reservations, ticketing, fulfillment, expense reimbursement, and travel management reporting. Use of an ETS is required by the FTR for civilian agency travel.

Under the contract awarded to Concur, more than 70 civilian agencies can issue task orders to provide the ETS2 system to each ordering agency. Since GSA only awarded a single contract under the Solicitation, Concur will have a monopoly and thus will not have to compete for any of these task orders for the next 15 years. This also may compel each agency to switch from the electronic travel system they have been using for years and incur millions of dollars in transition and re-training costs for tens of thousands of federal employees.

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The Solicitation required offerors to provide "a full range of ETS2 official Federal travel-related functionality and service," including the following: deployment and implementation services, including training; customer support services; travel planning and cost - estimating; creation, routing, and approval of travel authorizations; domestic and international online and agent-assisted official travel reservations; provision for Embedded Travel Management Center ("ETMC") fulfillment services; provision for Accommodated Travel Management Center ("ATMC") fulfillment services; creation, routing, and obtaining approval of official travel claims to ensure timely and consistently accurate reimbursement; drafting standard and customized reports and queries; assisting with data exchange, including secure data transmission and delivery to the GSA (upon approval by the agency) or, as directed by GSA, to designated third-party vendors for the purpose of data aggregation; coordinating VIP travel; ensuring ETS2 compatibility with mobile devices; transition assistance from ETS1 to ETS2; and transition to a future successor Government-wide travel management service.

Many of the services and functionalities required by the Solicitation are to be provided through an Online System, including an Online Booking Engine ("OBE"), accessible through the Internet. To meet the requirements of the Solicitation, the Online System must be designed and programmed to meet the FTR, the Joint Federal Travel Regulation ("JFTR"), and numerous other Government policies and regulations.

The lengthy and highly complex Solicitation was roundly criticized by the industry. Even though ETS2 is a commercial services contract, the Performance Work Statement ("PWS") contained more than a thousand individual technical requirements. GSA received hundreds of questions during the pre-proposal phase. Of the more than 150 industry participants in pre-proposal industry briefings, only one submitted an offer in response to the Solicitation�but not any of the three ETS 1 incumbents. Two of these incumbents, CWT and Northrop Grumman, subsequently teamed and submitted an offer, but only after CWT protested the terms of the Solicitation as unlawful and restrictive of competition and reserving the right to withdraw its proposal depending upon the outcome of the protest.

2. Evaluation Criteria.

Section F of the Solicitation included the evaluation criteria and basis for award. Paragraph F. 1 stated that the "Government will award a contract resulting from this solicitation to the responsible Offeror(s) whose offer(s) conforming to the solicitation will be most advantageous to the Government, price and other factors considered."

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The evaluation consisted of two phases. For Phase I, Section F.3 stated that "[t]his is a best value source selection," and that "best value" will be based on the following evaluation factors:

Technical Factors

. Performance Work Statement (PWS)

� Project Management Plan

� Demonstration

� Key Personnel/Resumes

Non-Technical Factors

Socio-Economic

� Past Performance

Price Factors

� Price

The combined Technical factors were considered "more important" than the Non-Technical factors. The Technical and Non-Technical factors combined were "worth more than Price Factors." For the Price factor, Section F.3.2.7 explained that GSA would evaluate three potential award scenarios: Single Award, Dual Award, and Single Award vs. Dual Award Variance.

Section F.4 indicated that GSA would assign adjectival ratings for each evaluation factor, and then a single adjectival rating "that most clearly reflects the assessment of the overall proposal(s)." Possible ratings were Outstanding, Very Good, Acceptable, Marginal, and Unacceptable. A Very Good rating was defined as:

A very good proposal contains significant strengths, and only a few minor weaknesses. The proposal meets the performance and technical capability

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requirements as defined in the SOW. The evaluator has a high degree of confidence that the Offeror can successfully achieve the requirements in the SOW if the technical approach proposed is followed. The Offeror acknowledges technical or schedule risk and develops an approach capable of mitigating all apparent risks effectively.

A Marginal rating was defined as:

A marginal proposal does not meet Government requirements necessary for acceptable contract performance, but issues are correctable. The Offeror’s proposal contains one or more significant weaknesses.

Section F.5 established the criteria for the Phase II evaluation, which consisted of Independent Verification & Validation ("IV&V") of the proposed ETS2 solutions. The Solicitation explained that at the end of the Phase I evaluation, the Government may establish a competitive range consisting of the most highly rated proposals. The Solicitation stated that the "determination of which Offeror(s) moves forward to IV&V will depend on the outcome of Phase I evaluations and will be based on the evaluation team’s consensus ratings."

The criteria for the IV&V were as follows:

IV&V Technical Factors

Computational Ratings

Functional/Usability

Security

. Section 508/Accessibility

IV&V Non-Technical Factors

. Price

The IV&V Technical sub-factors were equally important and when combined were "more important than price." The Solicitation provided for the same adjectival ratings for the Phase II IV&V evaluation. For the Price factor, Section F.6.2.5 explained that GSA would evaluate three potential award scenarios: Single Award, Dual Award, and Single Award vs. Dual Award Variance.

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B. Procedural History.

During the pre-proposal phase of this procurement, GSA held a number of conferences with prospective offerors to discuss the Agency’s vision for ETS2 and the scope of the Solicitation. Throughout 2010, prospective offerors submitted hundreds of questions/comments covering all aspects of the SOW, and GSA provided answers in a series of "Q&As." Despite many concerns raised by the industry that the Solicitation contained noncommercial terms or imposed unreasonable risks on offerors, GSA refused to revise any of the questioned Solicitation terms.

On November 10, 2010, and again on January 12, 2011, CWT filed pre-award bid protests at the GAO in which CWT challenged various terms of the Solicitation as unlawful and inconsistent with customary commercial practice in violation of FAR Part 12. For example, CWT argued that many Solicitation provisions improperly required the ETS2 contractors to change their electronic travel systems in response to direction from unidentified personnel in the GSA’s ETS2 Program Management Office ("PMO") to maintain compliance with their interpretation of any future changes in Government information technology ("IT"), security standards and requirements, and federal travel regulations and policy. CWT also argued that the Solicitation improperly required ETS2 contractors to integrate and maintain connectivity to multiple, unknown third-party contractors providing travel management services to individual agencies or collecting travel data for GSA�all at no cost to the Government over the next 15 years.

On April 22, 2011, the GAO issued a decision sustaining one of CWT’s protest grounds with respect to ambiguous Solicitation terms, but denying the remainder of the grounds.’ The ambiguous terms related to the inconsistent treatment of "mandatory" and "optional" objectives stated in the PWS. In its decision, the GAO recommended that the GSA amend the Solicitation to clarify these ambiguous terms. See CWTSatoTravel, B-404479.2, Apr. 22, 2011, 2011 CPD ¶ 87.

On May 13, 2011, CWT filed a bid protest action in the United States Court of Federal Claims that alleged many of the same grounds previously raised before the GAO. On May 31, 2011, the Government filed a notice with the Court explaining that GSA was amending the

In denying CWT’s other protest grounds, the GAO did not address CWT’s fundamental allegation that the terms of the Solicitation were inconsistent with customary commercial practice and that, by law, GSA cannot incorporate such terms without an authorized waiver. See FAR 12.302(c).

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Solicitation to clarify the ambiguous terms consistent with the GAO’s decision, and would permit all "in-house offerors" (which consisted solely of Concur) and CWT to submit a proposal by July 6, 2011. During the pendency of the second GAO protest, GSA had accepted and began evaluating proposals from CWT and Concur, but agreed not to make an award decision pending the outcome of the case.

On August 26, 2011, the Court of Federal Claims issued a decision in which it found that the Solicitation’s use of a 15-year, fixed-price contract was unlawful because it was contrary to customary commercial practice. See CW Government Travel, Inc. v. United States, 99 Fed. Cl. 666, 679-80 (2011). The Court observed that while GSA had properly obtained a waiver under FAR 17.204(e) to include a contrary term longer than five years, the Agency had not obtained a waiver under FAR 12.302(c) to require contractors to propose fixed-prices upfront over a 15-year period.

On September 19, 2011, the Contracting Officer notified CWT that GSA took corrective action consistent with the Court’s decision by obtaining a valid waiver under FAR 12.302(c) to justify the use of a 15-year contract term at fixed prices. Despite multiple requests, GSA refused to produce a copy of the purported waiver to CWT, and instead directed CWT to use the Freedom of Information Act to obtain a copy of the waiver. On September 28, 2011, CWT filed a motion at the Court of Federal Claims to enforce the Court’s judgment, which resulted in the Court ordering GSA to produce a copy of the waiver. Once received, CWT then challenged the validity of the waiver, which was dated September 16, 2011. A subsequent Court order found the original waiver invalid. GSA then cured the deficiencies and re-issued the waiver on December 20, 2011. However, GSA did not produce a copy of the revised waiver to CWT until March 6, 2012. See Exhibit B.

C. The Solicitation’s Allowance for Pricing Assumptions.

Section E.6.3.5 of the Solicitation included the following instructions to offerors for preparing the price proposals:

Pricing assumptions used by Offeror to include limits or other parameters around meeting the Government’s requirements. This should include all assumptions associated with meeting technical refresh requirements, changes in report development (e.g., Section C.9.1 #10), policy updates, and security changes (e.g., Section C.6.1.1). For example, if the CLIN pricing assumes XX number of programming hours or XX number of policy or security changes over a defined period to accomplish major and minor releases, these assumptions should be identified so that they may be evaluated in accordance with Section F.

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In its Court of Federal Claims protest, CWT argued that the Solicitation was ambiguous with respect to the impact of pricing assumptions based on statements made by the Contracting Officer during the GAO protest proceeding interpreting this Solicitation provision.

Specifically, the Contracting Officer stated that the "Government expected offers to define what pricing assumptions and parameters they believe are necessary to accomplish the work," and that "nothing prohibits any offeror from identifying parameters around its offered pricing (e.g., xx number of changes per year or xx number of programming hours over the life of the contract) . . . or using a number of standard commercial pricing practices and strategies such as offering annual price escalations or price escalations to be effective during optional periods of performance. . ." In a supplemental statement, the Contracting Officer further indicated that GSA could decide it "could live with an assumption/exception" and that the contractor would only be required to perform the contract as proposed. He also indicated that if GSA found the pricing assumptions unacceptable, "GSA would negotiate the assumption," and that "[a]greement would be reached throughout the negotiation process and the awarded contract would reflect the negotiated agreement."

The Court of Federal Claims disagreed with CWT’s argument, ruling that the Solicitation was not subject to more than one reasonable interpretation. See CW Government Travel, 99 Fed. Cl. at 674-75. The Court stated that the "Solicitation language relating to the effect of pricing assumptions adequately advises offerors that they can, by making their pricing assumptions explicit, establish limitations on the work they can be required to perform." Id. at 674. Thus, each offeror was able to limit the extent to which it was required to perform any of the mandatory PWS requirements. This interpretation on the effect of any offeror’s pricing assumptions appeared to be directly contrary to a number of PWS requirements stating that the contractor would make any changes necessary over 15 years "at no additional cost."

In light of this Court ruling, CWT submitted pricing assumptions as part of its final proposal revisions that capped the amount of work it would perform to meet certain PWS requirements. It is believed that Concur also utilized pricing assumptions to significantly limit the extent of work it could be required to perform over the 15-year contract period.

D. Discussions and Evaluation.

Throughout this time, GSA proceeded with the evaluation of proposals. On September 30, 2011, GSA notified CWT that its proposal was included in the competitive range and that GSA was opening discussions and inviting CWT to participate in the IV&V Phase II testing. On December 6, 2011, GSA provided CWT a list of questions relating to the Phase I evaluation,

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including weaknesses, significant weaknesses and deficiencies. CWT provided a detailed written response to each discussion item on December 13, 2011.

On December 22, 2011, GSA provided a similar list of weaknesses, significant weaknesses, and deficiencies resulting from the Phase II evaluation. These issues were addressed by CWT in discussions held in January 2012. There were a number of minor new requirements for ETS2 that CWT indicated would be included in a revision to the ETS scheduled for release in November 2012. At GSA’s request during discussions, CWT offered compensation in the unlikely event the November 2012 release did not incorporate all of the ETS2 PWS features.

E. Notice of Award and Debriefing.

On June 1, 2012, and pursuant to FAR 15.503(b), GSA notified CWT that its proposal was not selected for award. See Exhibit C. The notice identified Concur as the only awardee, with a total contract price of $1,397,225,201. The notice also stated CWT’s overall technical adjectival rating was Marginal and it was the highest priced offer for both Single and Dual Award scenarios, and that "CWTSatoTravel is not technically acceptable for contract award." Id. GSA further stated that the CWT "failed to improve its offer to an acceptable level and, therefore, did not offer the Government the most advantageous offer." Id.

Later on June 1, CWT submitted a written request for a debriefing. On June 11, 2012, the Contracting Officer provided CWT with a written debriefing. See Exhibit A. The debriefing identified the "significant weaknesses" and "deficiencies" assessed against CWT’s proposal under the various evaluation factors. Essentially, ETS2 features that CWT and Northrop Grumman planned to include in the scheduled November 2012 release were deemed to be deficiencies or weaknesses. GSA identified one alleged deficiency in security features that is erroneous, as explained below.

Overall, the following represents the ratings and overall evaluated price for CWT and Concur stated in the debriefing:

Factor CWT Rating Concur Rating TF - Performance Work Statement -- TF 2 Project Management Plan -- TF 3 - Demonstration -- TF 4 - Key Personnel/Resumes -- NTF 1 - Socio-Economic Plan -- NTF 2 - Past Performance I -

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IVVF I - Computational -- IVVF 2 - Functional/Usability IVVF 3 - Security -- IVVF 4 - Section 508/Accessibility -- Overall Rating Marginal Very Good Total Evaluated Contract Price (Single Award)

51,196,549,911 2

Id. With respect to pricing assumptions, the debriefing notices states that the "Government evaluated CWT’s assumptions in accordance with the RFP to ascertain CWT’s level of understanding of the Government’s requirements and the degree of risk those assumptions pose to the Government. CWT’s pricing assumption did not alter the Government’s technical rating or CWT’s total evaluated contract price." Id. In response to a question from CWT regarding how GSA evaluated its assumptions pertaining to proposed software adapters, GSA stated that the "adapter was not evaluated as part of the total evaluated contract price." Id.

When asked to identify the rational for the award decision, GSA stated that CWT’s proposal had the lowest technical rating and highest price under both single and multiple award scenarios. GSA explained that CWT’s overall Marginal rating "reflected the Government’s determination that the evaluated deficiency in IV&V Factor Three (Security) and the weaknesses, several of which were significant, in various of the factors including Technical Factor One - Project Work Statement (PWS) and Technical Factor Two - Project Management Plan (PMP), outweighed the proposal’s strengths and did not offer a compelling reason to make a dual award decision." Id. GSA then noted that the Agency had identified a total of � separate requirements that CWT indicated would not be available until November 2012, which GSA considered "a date long after the date of award and does not meet requirements for contract award." Id.

GROUNDS OF PROTEST

A. GSA’s decision to make a single award instead of a dual award was fundamentally unreasonable and in violation of FAR 16.504(c)(1)(ii)(D)(1).

2 The debriefing letter explained that Concur’s overall price of $1,196,549,911 did not include the Industrial Funding Fee that GSA intends to charge the various customer agencies for its management of the ETS2 procurement. Since GSA’s June 1, 2011 notice stated that Concur’s total price was $1,397,225,201, it follows that the total Industrial Funding Fee to be paid to GSA by the civilian agencies amounts to $200,675,290.

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The FAR establishes a strong preference in favor of multiple awards of IDIQ contracts. FAR 16.504(c)(1)(i) states that the "contracting office must, to the maximum extent practicable, give preference to make multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources." The FAR mandates that agencies determine whether multiple awards are appropriate as part of their acquisition planning, and lists several factors that must be considered when determining the number of contracts to award:

(1) The scope and complexity of the contract requirement.

(2) The expected duration and frequency of task and delivery orders.

(3) The mix of resources a contractor must have to perform expected task or deliver order requirements.

(4) The ability to maintain competition among the awardees throughout the contracts’ period of performance.

FAR 16.5 04(c)( 1 )(ii)(A). Moreover, FAR 16. 504(c)( 1 )(ii)(D)( 1) prohibits the award of an IDIQ contract valued at more than $103 million to a single source unless the head of the agency determines in writing that certain exceptions exist (e.g., that tasks are so integrally related that only a single source can reasonably perform the work, or only one source is qualified and capable of performing the work at a reasonable price).

Here, CWT and Northrop Grumman have been providing electronic travel services to more than 70% of federal civilian employees for eight years under task orders that were hotly competed by each agency among three IDIQ contractors (CWT, Northrop, and Hewlett Packard). Their ETS 1 system already contains the vast majority of the features required by the ETS2 Solicitation. In contrast, Concur is offering a new system that has not been used by federal travelers. Given the proven performance of CWT and Northrop, it simply defied credibility for GSA to determine that it is in the best interest of the Government to exclude the team of CWT and Northrop from even competing for the agency task orders that will be issued over the next 15 years.

The GAO will sustain a protest like this one where the agency does not have a reasonable basis for overcoming the statutory preference for multiple awards. In Information Ventures, Inc., B-403321, Sept. 27, 2010, 2010 CPD ¶ 223, the GAO sustained a protest where the agency determined that only a single award under a follow-on IDIQ contract was in the Government’s best interests, after the prior IDIQ contracts had been awarded to several companies. In its ruling, GAO rejected the agency’s argument that the "expected costs of administering multiple

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contracts will outweigh the expected benefits." Id. at 2. The GAO was not persuaded by the agency’s arguments, noting in part that:

[I]t simply is not clear from the record that the problems that the agency encountered during the first procurement cycle ... were a result of its decision to award multiple contracts, as opposed to problems attributable to the novelty and complexity of the requirement when the first awards were made-that is, problems that it might well have encountered even if only a single contract had been awarded.

Id.

In the debriefing, GSA stated that CWT’s proposal "did not offer a compelling reason to make a dual award decision, given CWT’s low technical rating and high price." Exhibit A. Notwithstanding the technical ratings of CWT and Concur (which we challenge below), GSA’s decision to make only a single award under these circumstances was fundamentally unreasonable and in violation of the FAR. The FAR places the burden on GSA to justify that creating a billion-dollar monopoly over a 15-year period is in the best interest of the United States.

The ETS2 procurement is a billion dollar program with an unprecedented 15-year contract period at fixed ceiling prices. Although CWT succeeded in the Court of Federal Claims in establishing that such a contract terms were unlawful as contrary to customary commercial practices, GSA avoided the Court’s judgment by issuing a waiver under FAR 12.302(c) to move forward with the original contract terms. More than 70 civilian agencies will use ETS2 to obtain electronic end-to-end travel services over the next 15 years. By awarding a single IDIQ contract to Concur, GSA handed Concur an absolute monopoly over these travel services for 15 years, which agencies may be compelled to use in accordance with the FTR. In addition to eliminating any price competition by this monopoly, GSA has eliminated any competitive pressure on Concur to continue to develop innovative technology for these agencies. Furthermore, in the event Concur has any performance problems over the 15-year period, the Government will have no available alternative contractor. GSA bears a heavy burden of justifying such a decision under the FAR.

In stating that there was not a compelling reason to award a second IDIQ contract to the CWT/Northrop Grumman team, GSA improperly implies that it is CWT that had the burden of establishing the benefit of a second contract award, as if there was a preference for a single award that CWT must overcome. In actuality, it is GSA that has an obligation to justify why a dual award would not be advantageous to the Government. The FAR establishes a clear

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preference for multiple awards and identifies four factors that GSA must consider when determining the number of awards to make. The evidence indicates that GSA failed to follow any of these FAR provisions.

A simple analysis of the three of the four factors indicates that GSA had no legal justification for making only a single award.

(1) Scope and Complexity. The ETS2 procurement is a major program that is highly complex and has an enormous scope covering all electronic travel services for all federal civilian agencies. Development of ETS 1 for Government travelers required years of effort and tens of millions of dollars of investment. This factor clearly weighs in favor of at least two awards.

(2) Duration. As noted, GSA obtained a waiver to establish a 15-year period of performance. The duration of ETS2 is probably one of the longest, if not the longest, of any other federal contract for services today. Once the ETS 1 contracts expire, the Government will have no available alternative to Concur’s unproven system. Given the extraordinary duration, GSA cannot justify making only a single award.

(3) Ability to Maintain Competition. GSA’s decision to award a single contract to Concur creates a monopoly over the entire 15-year contract period. Thus, there will be absolutely no competition throughout the contract’s period of performance. There is no question the final factor weighs in favor of multiple awards.

In addition to the FAR 16.5 04(c)(ii)(A) factors (which provide a separate basis for sustaining this protest ground), GSA was separately obligated to consider the facts of this procurement in determining whether more than one award would be most advantageous to the Government. GSA’s determination that there was not a "compelling reason" to award a second contract was fundamentally erroneous for the following key reasons:

(1) Risk. There is inherent risk associated with having only one JDIQ contractor available to perform work. This risk is especially present in this case because Concur is a totally inexperienced federal travel service contractor, has no actual familiarity with the unique systems and travel requirements of the 70+ federal agencies that it will be serving, and has never integrated travel management system with a single agency. Each agency has unique IT, financial, and business systems that require customization by the ETS2 contractor and Concur, unlike CWT and Northrop Grumman, has never faced such problems in the Government environment or implemented effective solutions. The risk is further compounded by the fact that the contract period is for 15 years at fixed prices,

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which means that Concur bears all of the risk associated with any unforeseen challenges or changes. Concur will be the only contractor available to provide the travel services for a very long time. If Concur encounters problems, the Government will have no other option, such as shifting work to another IDIQ contractor holder. GSA did not evaluate or even consider the inherent and numerous risks associated with having only one ETS2 contractor.

(2) No Competition. By giving Concur a monopoly over all civilian agency travel services, Concur will have absolutely no incentive to lower its prices or improve technology and services throughout the 15-year contract period. Under ETS 1, three contractors (CWT, Northrop Grumman, and Hewlett Packard) competed against each other to win task orders from each agency. GSA’s decision to award only one contract to Concur (and exclude the incumbent CWT/Northrop Grumman team) is a significant and suspect departure from prior practices. It defies all reason and common sense for GSA to argue that giving Concur a monopoly on the ETS2 program is "most advantageous" to the Government. Even though CWT received a lower rating and had a higher evaluated price, CWT would not be guaranteed a single task order by virtue of receiving an ETS2 IDIQ contract. CWT would have to compete against Concur for each and every task order. If Concur is as superior and capable as GSA claims, then individual agencies should be able to make that decision when evaluating proposals and awarding task orders. In a competitive dual award environment, Concur and CWT would have an incentive to continually improve their services over the next 15 years above and beyond the minimum required under the IDIQ contract. The improved performance associated with this competition would clearly be advantageous to the Government. GSA’s failure to consider the negative impact associated with the lack of competition for task orders was unreasonable and inexcusable.

(3) Transition Costs. The CWT team consisting of ETS 1 incumbents CWT and Northrop Grumman is currently integrated with the travel systems of approximately 70% of the Government travelers in civilian agencies. Concur has absolutely no relationship, experience, or integration with any of the agencies. By giving Concur a monopoly on ETS2, each customer agency will have no choice but to switch contractors and in the process incur millions of dollars in transition related costs (e.g., training, change management, etc.). GSA’s award decision will not allow any of the customer agencies to factor the substantial transition costs into any task order decision. Essentially, GSA is mandating the expenditure of millions of additional travel funds at a time of extreme austerity. This flies in the face of OMB’s recent mandate that agencies substantially reduce travel expenditures for each of the next three years. It is unquestionably in the Government’s best interests to give the customer agencies an opportunity to evaluate

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more than one task order proposal and decide which proposal is in their best interest. In other words, it would be advantageous for individual agencies to have a choice between (a) transitioning to Concur and (b) retaining an incumbent and saving the Government the substantial transition related costs. GSA’s determination that there was no compelling reason to award a second IDIQ contract is flawed because the Agency did not take any transition costs into consideration.

GSA’s failure to consider any of these factors renders its source selection decision unreasonable. 3 CWT recognizes that the Solicitation contemplated the possibility of only a single award. However, the mere fact that GSA indicated it might make only one IDIQ contract award does not, in itself, make the decision reasonable. FAR 16.504(c) creates a preference for multiple awards and GSA has not provided any basis for disregarding that preference. The FAR also mandates that GSA consider key factors, such as scope, complexity, duration, and opportunities for competition, when determining the number of awards to make. GSA failed to consider any of these factors. To our knowledge, the head of GSA has also not approved the award of a single ETS2 IDIQ contract, which is far in excess of $103 million, in violation of FAR 16.504(c)(1)(ii)(D)(1), nor would GSA have a valid justification for doing so.

Finally, as part of the required "most advantageous" analysis, GSA had an obligation to consider the entire circumstances of the procurement, including the fact that this is a major program with an unprecedented 15-year term. GSA cannot ignore the inherent risk associated with having only one IDIQ contractor holder or the negative effect of eliminating all task order competition. There is no evidence that GSA took any of this into consideration when deciding that a 15-year monopoly was in the Government’s best interests or would be "most advantageous."

B. GSA’s evaluation and source selection decision was unreasonable because GSA failed to evaluate the impact of the offerors’ pricing assumptions and thus failed to evaluate offerors on an equal and common basis.

As made clear by the Court of Federal Claims decision, offerors under the ETS2 Solicitation were free to establish any limits they desired on their obligations to perform requirements in the PWS. The ETS2 contractor cannot be required to perform any requirements

The GAO has recognized that there are "benefits" provided by the award of multiple IDIQ contracts because such "ID/IQ contracts mitigate against a consolidated ’winner-takes-all’ situation that would preclude additional contractors from performing some of the government’s requirements." TRS Research, B-290644, Sep. 13, 2002, 2002 CPD ¶ 159 at 4 n.4.

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that would exceed its unique pricing assumptions. Thus, such pricing assumptions result in offerors having significantly different contractual performance obligations. These pricing assumptions can also have a significant impact on the relative cost to be incurred by Government agencies. If an essential requirement, such as IT security, changes during the contract period to the extent compliance would exceed a contractor’s price assumption, the Government will be compelled to negotiate whatever cost increase is desired by the contractor before it is required to perform the changed requirement. 4

When evaluating proposals, the awarding agency must "evaluate offerors on an equal basis and in a manner such that the total cost to the government for the required services could be meaningfully assessed." Symplicily Corporation, B-291902, April 29, 2003, 2003 CPD ¶ 89 at 5. In Symplicity, the GAO sustained the protest because the agency’s cost evaluation was based on an improper "apples and oranges" cost comparison. Despite language in the RFQ indicating that systems integration costs would be awarded under a separate blanket purchase agreement, the protester in Symplicity incorporated such costs into its quote, but the awardee did not. When evaluating total costs, however, the agency did not adjust the offerors’ quotes to take into account the fact that only one of the quotes included systems integration costs. The GAO concluded that, regardless of whether the protester was misled into believing it had to include systems integration costs in its quote, the agency’s conduct resulted in an unequal evaluation and prevented the Government from meaningfully assessing the total cost of each offer. See id, The GAO explained:

OPM’s evaluation approach here created a situation where OPM was in effect comparing "apples and oranges," in that it permitted vendors to choose whether or not to include in their quotations a price for systems integration, which did not provide a basis for the total cost of each vendor’s approach to be meaningfully compared. Accordingly, we sustain the protest on this basis as well.

Id. See also Lockheed Aeronautical Sys. Co., B-252235.2, Aug. 4, 1993, 93-2 CPD ¶ 80 at 7 (protest sustained because "the Air Force created a situation where it was faced with comparing ’apples and oranges’ [and] offerors’ dramatically different unexplained, unevaluated assumptions resulted in cost figures that could neither be meaningfully compared nor assessed for purposes of determining the likely ultimate cost to the government").

The ETS2 contract is subject to the commercial changes clause under FAR 52.212-4(c), which means that changes are only authorized by mutual agreement.

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Like the agencies in Lockheed Aeronautical and Symplicity, GSA in this case created an "apples and oranges" situation by allowing each offeror to submit unique pricing assumptions, limitations, and parameters on the amount of work that they would be required to perform. As a result, GSA could not meaningfully compare the proposals of each offeror, including the extent of work that each proposed to perform and the total price of their respective proposals. GSA’s evaluation was inadequate and unreasonable because it did not consider the relative impact of the assumptions on performance, total price, and risk, thereby resulting in an unfair and unequal evaluation.

One of the major problems with respect to the evaluation of pricing assumptions is that GSA provided no uniform manner for offerors to propose caps or "parameters" on the amount of work that they would perform, and thus there is no uniform process for evaluating offerors on an "apples to apples" basis. Moreover, it was left up to each offeror to determine what PWS requirements it would limit as well as the nature of such limits. 5 CWT timely argued in its pre-award protest at the Court of Federal Claims that the Solicitation did not actually allow offerors to limit the amount of work they would be required to perform because doing so would be inconsistent with the requirements of the PWS and result in a defective Solicitation. Indeed, it would appear unreasonable for the Solicitation to include on one hand numerous mandatory requirements stated in the PWS, but then on the other hand, allow each offeror to limit how much of the PWS it would be required to perform. The Court, however, disagreed with CWT’s concerns, clearly ruling that offerors can, "by making their pricing assumptions explicit, establish limitations on the work they can be required to perform." CW Government Travel, 99 Fed. Cl. at 674.

In light of the Court’s ruling, which was issued after the original proposal due date (and thus after the deadline for filing any additional challenges to the terms of the Solicitation), GSA had an obligation to evaluate the "limitations" included in each proposal on an equal and fair basis. The evidence indicates that GSA failed to do this. Since GSA has not indicated that it developed and used a template or standard form for evaluating assumptions and limitations, CWT questions how GSA was capable of comparing the relative merits and value of the Concur and CWT proposals so as to ensure that both offerors were evaluated on a common basis. This raises several specific concerns.

Thus one offeror might limit performance of certain requirements by man-hours of work over a period of time while another offeror might limit performance to a certain number of changes in a given period of time. Offerors could also choose to limit performance of certain requirements to a dollar amount.

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First, there is no indication that GSA considered the relative impact of offerors’ limitations on performance as part of the Agency’s overall ratings and source selection decision. It is impossible to conduct a reasonable "best value" analysis or otherwise determine which offer is more favorable without comparing the work each offeror is agreeing to perform. The Court of Federal Claims confirmed that the Solicitation permitted offerors to impose limits on how much work they would perform, including compliance with the PWS. In order to meaningfully evaluate, rate, and compare technical proposals, GSA must compare the relative assumptions and parameters proposed by each offeror. Moreover, GSA would necessarily have to determine the extent to which each assumption would result in a contractor not being required to perform an essential PWS requirement at some time during the 15-year contract period.

Second, GSA’s debriefing letter admits that the Agency did not consider any of the pricing assumptions in the total evaluated price of each offeror. This was inherently unreasonable because pricing assumptions will directly impact the price the Government will pay for certain services and therefore must be considered in any "best value" or "most advantageous" determination. Since each offeror decides how much of requirements they want to perform for their fixed prices, GSA cannot simply utilize a straight, bottom line price comparison for purposes of determining the "most advantageous" offer.

Third, there is no indication that GSA evaluated the relative degree of risk posed by the assumptions of each offeror or considered the relative risk when selecting only Concur for award. For example, if Concur proposed very few or no assumptions to limit its liability or amount of work required to be performed, GSA should have assigned substantial risk to Concur since it would mean that Concur would bear all of the risk associated with unpredictable, frequent and costly changes to such things as federal IT security requirements, Federal Enterprise Architecture, mobile devices, or third-party Accommodated Travel Management Centers. Since pricing assumptions directly impact how much additional, unanticipated work an offeror may have to perform, GSA was obligated to determine the extent of risk associated with the assumptions and consider that risk in the source selection decision.

Ultimately, GSA’s determination that there was not a compelling reason to award a second ETS2 contract to CWT was unreasonable because GSA did not evenly or meaningfully evaluate the various pricing assumptions and limitations on work to be performed contained in each offer. More significantly, the Source Selection Authority did not compare and contrast the various assumptions offered by Concur and CWT when determining whether a second offer would be advantageous to the Government.

C. GSA’s evaluation of CWT’s proposal was unreasonable.

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It is fundamental that evaluations must be reasonable and consistent with the evaluation criteria. Although the GAO will not substitute its judgment for that of the agency, the GAO "will question the agency’s conclusions where they are inconsistent with the solicitation criteria, undocumented, or not reasonably based." DRS ICAS, LLC, B-401852.4, Sept. 8,2010,2010 CPD ¶ 251 at 4; see also Public Communications Servs., Inc., B-400058, B-400058.3, July 18, 2008, 2009 CPD ¶ 154 at 17 ("Although we will not substitute our judgment for that of the agency, we will question the agency’s conclusions where they are inconsistent with the solicitation criteria, undocumented, or not reasonably based."). In DRS ICAS, the GAO explained:

Agencies are required to evaluate proposals based solely on the factors identified in the solicitation, and must adequately document the bases for their evaluation conclusions. While agencies properly may apply evaluation considerations that are not expressly outlined in the RFP where those considerations are reasonably and logically encompassed within the stated evaluation criteria, there must be a clear nexus between the stated criteria and the unstated consideration.

Id. at 9. In sustaining the protest in DRS ICAS, the GAO explained that the weaknesses assigned to the protester’s proposal "were beyond those contemplated by the RFP’s evaluation factors." Id.

Although CWT disagrees with the weaknesses and deficiencies evaluated in CWT’s proposal, CWT limits its protest to the following key areas of concern:

(1) Data Recovery Center. The only deficiency identified in the written debriefing was related to the security assessment of a subcontractor to CWT and its lack of a Disaster Recovery Plan and the fact that backup tapes were not stored offsite. In its written debriefing, GSA stated that it advised CWT that it was required to flow down all security requirements to its subcontractors per Paragraph C.6. 1.1. At the time of discussions, CWT had included its subcontractor within the accreditation boundaries, which would have required its subcontractor to comply with more stringent Government security requirements required for accreditation. However in the final proposal revision, CWT removed its subcontractor from the "accreditation" boundaries as was permitted by the PWS. In so doing, this changed the nature of the security requirements to be used to commercial security standards and required CWT, as the prime contractor, to monitor its subcontractor’s security plans based on commercial security standards mapped back to GSA Program Management Office scoping guidance and the security control objectives from NIST 800-53 Revision 3. CWT’s ETS2 Security Compliance Management Plan outlined the tasks required to apply commercially accepted security risk management standards, processes, and frameworks (e.g., ISO

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27000, PCI, COBIT, SAS70 Type II,/SSAE No. 16, etc.) to achieve the intent and objectives of Government A&A requirements for all components outside the accreditation boundary.

CWT removed ________from within the accreditation boundaries since CWT determined that , which is the ,was not a critical component for disaster recovery as the data "stored" in the databases could be restored or recovered from other sources. These other sources included either the Global Distribution System ("GDS") in which all reservation information is stored and which GSA in the PWS exempted from all security requirement or from CWT databases, some of which are included within the CWT ETS2 accreditation boundaries. CWT noted in its final proposal revision that its subcontractor has a Disaster Recovery Plan and continuity processes in place to allow for the necessary preparation and recovery from catastrophic failures as a result of natural or manmade disasters affecting the physical data centers. From the debriefing information, it does not appear that GSA properly applied and evaluated the changed status of from within the security accreditation boundaries to outside the security accreditation boundaries nor does it appear that GSA fully understands recovery operations and the data which is stored in both the GDS and

(2) IV&V Technical Factor Two�Functional/Usability. GSA stated that the PWS required the contractor to "provide agencies and subordinate organizations the capability to set sampling parameters for the their travel vouchers for audits, information requirements, or other purposes based on or other purposes based on criteria determined by the customer agency. These parameters may include random sampling, cost thresholds, travel type, traveler identity, and so on.. .. During discussions, GSA stated that its tester was unable to set sampling parameters. 6 CWT was asked by GSA to provide instructions for setting up a random sample routing for retest and was asked by GSA to provide a person to be available by telephone for clarification of the instructions during the retest. CWT provided both the instructions and had a person available for any additional instructions or clarification. At no time during the retesting did GSA seek any additional instructions or request clarification from CWT. Instead, GSA in its written debriefing stated that it had "conducted a retest of CWT’s system to determine if it allowed for the setting of sampling parameters. CWT’s system failed again." GSA stated that this was a significant weakness. However, CWT’s system does provide for random testing so it appears that

6 The GSA tester had received no training on the use of the system prior to it being used in the testing environment. Under the contract, however, Government personnel would have such training on the use of ETS2.

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the system was not properly evaluated or that the tester failed to follow the instructions provided in order to properly test this capability.

In this regard, CWT questions the qualification of GSA’s Subject Matter Experts to effectively perform system configuration of CWT’s system. Some of GSA’s evaluators tested the ease of use of the system to book reservations. Others tested system administration and configuration of the system to perform setting up of entities and hierarchies (i.e., which entity is subordinate to whom) or to set up random sampling and test the audit capabilities. System administration and configuration requires a better understanding of the system and additional instruction than the "intuitive" reservation process. Approximately 80 percent or more of GSA’s IV&V test scenarios needed to be retested in February because of GSA’s inability to effectively configure the application. During the evaluation stage, GSA only allowed for one day of training for system configuration/administration and less than 30 minutes of orientation for testers�an amount of training that is ineffective for such a complex system. GSA’s evaluators were not able to effectively configure and properly test the application for random sampling, which prevented a proper evaluation of CWT’s system.

(3) Technical Factor One�Performance Work Statement. GSA cited in the written debriefing that CWT "failed to satisfactorily address whether the reports it proposed to deliver were for ’government-wide’ data, as required, or only in an agency-by-agency format. This failure was determined to remain a significant weakness." In its final proposal revision, CWT stated "All users have access to a series of reports about their own travel. In addition, approving officials have access to reports on all travel they have approved. The suite of reports available for reports administrators comprehensively covers all data flowing through the ETS2 E2 Solutions system (process and operational information). Report data is available to individual client agencies, as well as to GSA, as required. (C.9.1 Ml)." (Emphasis added). CWT committed to the PWS requirements and GSA’s evaluation in this regard was flawed.

(4) Technical Factor Two (IV&V)�FunctionallUsability. GSA twice in the debriefing cited the alleged failure to provide read only access to ETS2 functions and travel documents as a significant weakness. The Test Case references two requirements in separate sections to define a "read-only" audit role. Section C.4.2.20 defines the requirements for Travel Document Auditing. Neither of the requirements cited by GSA actually defines the audit function as "read-only." CWT did state in its proposal that its "E2 Solutions provides the configurable ability to control and manage read-only access to ETS2 functions and travel documents as approved by the customer agencies. User privileges and permissions include a view document privilege. This privilege, available at any hierarchical level,

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allows the authorized user the ability to view vital document information for other users at the allowed hierarchical levels, including but not limited to: Trip begin and end dates; Trip status; History information; and Attachments. (C.4.2.25.1 M2)." GSA’s evaluation of this capability was flawed.

(5) Requirements Not Yet Available. GSA states in the written debriefing that there were separate requirements which CWT proposal’s proposal stated would not be available prior to November 2012 (Volume 2, Tab 4, page 3). This is incorrect. Of the requirements (all apparently pulled from the PWS Requirements Matrix Mapped to Roadmap Phase table in the PMP), 30 requirements are related C.8 Agency Business Systems Data Integration Capabilities and Characteristics. As part of IV&V, CWT delivered 262 transactions in standard XML and Flat File formats for review by GSA. GSA identified no issues with the interface transactions.

Also included in thee separate requirements identified as available in November 2012 are 8 requirements in C.7. 1.1 Electronic and Information Technology Accessibility. Section 508 testing was performed by GSA and remediation items were addressed and available for retest in February 2012. GSA provided no information in the debriefing regarding Section 508 weaknesses; yet this evaluation factor was rated as "Marginal." GSA has provided no support for this rating.

For the reasons stated, none of the above items warranted a "significant weakness" or "deficiency."

D. GSA’s evaluation of Concur’s proposal and CWT’s proposal was unequal and unfair.

"It is a fundamental principle of government procurement that competitions must be conducted on an equal basis, that is, offerors must be treated equally and be provided with a common basis for the preparation of their proposals." Navistar Defense, LLC; BAE Systems, Tactical Vehicle Systems LP, B-401865, Dec. 14, 2009, 2009 CPD ¶ 258 at 18. Additionally, when "reviewing protests against allegedly improper evaluations, [the GAO] examines the record to determine whether the agency’s judgments are reasonable and consistent with the solicitation’s evaluation factors and applicable statutes and regulations, as well as whether the agency has treated offerors equally in its evaluation." Raytheon Technical Services Company LLC, B-404655.4, Oct. 11,2011,2011 CPDJ236at9.

CWT questions the reasonableness and fairness of the overall ratings assigned to Concur and CWT. Although the specific factor and sub-factor ratings for Concur were not included in

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the debriefing, it is apparent that GSA rated Concur substantially higher than CWT under a majority of factors in order for Concur to earn an overall Very Good rating compared to CWT’s rating of only Marginal. The evidence indicates that GSA’s evaluation was unequal and unfair.

The CWT/Northrop Grumman team is vastly more experienced, knowledgeable, and capable than Concur in the provision of electronic travel services to federal agencies. Together, the CWT/Northrop Grumman team successfully served approximately 70% of civilian agency travelers under ETS 1. Concur does not have any experience with the ETS 1 program and has never integrated its developmental system with another agency. As such Concur is unaware of the special challenges of integrating with each agency’s unique systems. See Exhibit D (list of PWS requirements that would pose a particular challenge to Concur).

It is highly questionable that Concur’s proposal consisting of a system that has never been implemented and required more than one thousand specific features warranted an overall Very Good while the successful incumbents whose proven systems currently provide the vast majority of the required features were only able to earn a Marginal rating. The Marginal rating for CWT is so low as to indicate that GSA subjected CWT to a more stringent evaluation standard than Concur, resulting in many issues that at most should have been considered "weaknesses" to be evaluated as "significant weaknesses" or "deficiencies." Moreover, the team of CWT and Northrop Grumman had committed to incorporating the remaining minor features in the next scheduled upgrade of their ETS in November 2012. None of the items listed in CWT’s debriefing are significant or rise to the level of significant deficiencies. In contrast, it is believed that GSA treated many issues that should have been "significant weaknesses" or "deficiencies" in Concur’s proposal as merely "weaknesses" or none at all. Many of the features contained in the existing ETS 1 are rendered more complex by the customization necessitated by each agency’s IT financial and business systems. It is simply not credible to believe that Concur has solved such complexities without actual experience.

E. GSA’s discussions with CWT were misleading.

It is a fundamental principle that discussions, when conducted, must be meaningful. See, e.g., AT&T Corp. B-299542.3; B-299542.4, Nov. 16, 2007, 2008 CPD ¶ 65 at 12; Cotton & Co., LLP, B-282808, Aug. 30, 1999, 99-2 CPD ¶ 48 at 6; SRS Techs., B-254425.2, Sept. 14, 1994, 94-2 CPD ¶ 125 at 6. While an agency is not required to conduct discussions when making an award, "[d]iscussions occur when an offeror is given the opportunity to revise or modify its proposal, or when information requested from and provided by an offeror is essential for determining the acceptability of its proposal." JA. Jones/ IBC Joint Venture; Black Rock Constr. Co., B-285627.2, Sept. 18, 2000, 2000 CPD ¶ 161 at 5. "[F]or discussions to be meaningful, agencies must advise an offeror of weaknesses, excesses, or deficiencies in its

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proposal, correction of which would be necessary for the offeror to have a reasonable chance of being selected for award." Creative Info. Tech., Inc., B-293073.10, Mar. 16, 2005, 2005 CPD ¶ 110 at 7; see also FAR 1 5.306(d)(3). Furthermore, "discussions should be as specific as practical considerations will permit." Biospherics, Inc., B-278278, Jan. 14, 1998, 98-1 CPD ¶ 161 at 6. The GAO has also held that "an agency may not mislead an offeror�through the framing of a discussion question or a response to a question�into responding in a manner that does not address the agency’s concerns; misinform the offeror concerning a problem with its proposal; or misinform the offeror about the government’s requirements." Multimax, Inc. et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD ¶ 165 at 12 (quoting Metro Mach. Corp., B-281872 et al., Apr. 22, 1999, 99-1 CPD ¶ 101 at 6); Cotton & Co., LLP, B-282808, Aug. 30, 1999, 99-2 CPD ¶ 48 at 9.

In the rationale for award included in the debriefing, GSA states that there were � separate requirements that CWT indicated would not be available prior to November 2012. GSA in discussions noted that CWT in either its Program Management Plan that had been submitted or as part of the discussions had identified various timelines for delivery of these requirements. GSA asked CWT to consider some form of incentive/disincentive if these timelines were not met as committed to by CWT. GSA sought assurances in the form of monetary incentives from CWT to ensure all requirements would be met. 7 GSA stated that such incentives would be "helpful." GSA and CWT discussed the form such incentives could be offered, such as reduced fees for certain contract line items, until the capability was provided. CWT believed that such incentives it offered would be considered and accepted by GSA. CWT did offer reduced prices

for requirements that would not be fully operational by November 2012. In light of the debriefing, it appears that GSA did not, after all, consider CWT’s reduced prices to be an acceptable substitute, despite leading CWT to believe they would be.

F. GSA’s evaluation was prejudicial to CWT.

For instance, one of the SOW requirements, which GSA cited in its debriefing, required the contractor to "create/ modify/ delete or mass update CBAs [in ETS2] and manage permissions/access to this function.. .. " GSA stated that CWT did not meet this requirement. During discussions, CWT stated that this capability was available through the services of CWT’s system administrators who could create/modify/delete or mass upload CBA. GSA stated that the requirement was for the agency personnel to be able to do this task. CWT stated and included in its final proposal revision that as an interim step it would provide this service at no cost to the federal agencies and with a service level agreement. Furthermore CWT provided the Government with a monetary incentive if CWT did not provide the Government personnel with this capability by the November 2012 timeline.

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Each of the flaws and improprieties discussed above were prejudicial to CWT. The unreasonable and unequal evaluation resulted in CWT receiving a Marginal technical rating and Concur receiving a Very Good rating. Furthermore, there is no indication that GSA considered the impact of Concur’s assumptions in such a technical rating. Since GSA only received offers from Concur and CWT, the successful incumbent team of CWT and Northrop Grumman stood a substantial chance of receiving an IDIQ contract award. Indeed, GSA is required to prefer multiple awards, especially in a major procurement like this one with an unprecedented 15-year term. And in fact, GSA was required to award more than one ETS2 contract because it is valued in excess of $103 million (absent written justification from the head of GSA based on certain enumerated exceptions that are not present here). Had GSA simply followed the FAR, CWT would have received one of the ETS2 contract awards and then could have competed against Concur for individual task orders from the more than 70 civilian agencies. But for GSA’s unreasonable evaluation, failure to follow the FAR, and failure to consider the impact of pricing assumptions and parameters, at a minimum it would have been advantageous and in the best interest of the Government to award a second contract to CWT.

REQUEST FOR A PROTECTIVE ORDER

In accordance with 4 C.F.R. § 21.1(d)(1), CWT requests that the GAO issue a protective order to protect confidential and proprietary information in this protest document, as well as confidential source selection information that will be included in the Agency Report.

REQUEST FOR DOCUMENTS

Although these documents are already required to be included in the Agency Report as relevant to the protest grounds, CWT requests that, in accordance with 4 C.F.R. § § 21.1(d) and 21.3, GSA produce the following documents, the relevance of which is self-explanatory:

The complete evaluation record of CWT and Concur, including the individual evaluation ratings made on the factor and subfactor levels, the contemporaneous notes and worksheets of each evaluator and the technical evaluation report. (This information is relevant to CWT’s protest grounds, including those regarding GSA’s decision to award only a single contract, GSA’s failure to reasonably evaluate pricing assumptions and limitations on work to be performed proposed

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by each offeror, GSA’s unreasonable evaluation of CWT’s proposal, and GSA’s unequal evaluation of proposals).

2. The complete proposals of CWT and Concur. (The complete proposals of both offerors is relevant to CWT’s protest grounds, including those regarding GSA’s decision to award only a single contract, GSA’s failure to reasonably evaluate pricing assumptions and limitations on work to be performed proposed by Concur and CWT, GSA’s unreasonable evaluation of CWT’s proposal, and GSA’s unequal evaluation of CWT’s and Concur’s proposals).

3. All communications among the Source Selection Board, Source Selection Authority, and other evaluators regarding the evaluation of CWT and Concur. (These communications are relevant to CWT’s protest grounds regarding GSA’s unequal evaluation of proposals).

4. All documents which relate to or refer to any best value determination performed by the Source Selection Authority, including the rational for making only a single award to Concur. (These documents are relevant to CWT’s protest grounds regarding the evaluation of proposals, determination to make only a single award, and consideration of pricing assumptions and parameters).

GSA’s Source Selection Decision (This document is relevant to CWT’s protest ground regarding the decision to award only a single contract and GSA’s failure to consider and compare the impact of pricing assumptions and performance parameters).

6. The written authorization signed by the head of GSA authorizing the award of the ETS2 IDIQ contract to a single source. (If this document exists, it would obviously be relevant to CWT’s protest challenging the decision to award only a single contract).

7. GSA’s market research, acquisition plan, and other procurement planning documents (Such documents are relevant to CWT’s protester regarding GSA’s decision to award only a single contract, since it is believed that such a decision was contrary to GSA’s acquisition plan).

8. A copy of all documents relating to or reflecting communications between GSA and CWT and Concur, including but not limited to, any clarifications, discussions, or questions issued (Such documents are relevant to CWT’ s protest grounds

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relating to the unequal evaluation of proposals, as well as GSA’s misleading discussions with CWT).

9. All documents relating to the training provided to GSA evaluators (Such information is relevant to CWT’ s argument that GSA testers were not adequately trained and their unfamiliarity with administrative features of CWT’ s system resulted in unjustified weaknesses).

10. All documents relating to GSA’s evaluation of price, including the instructions provided to its price evaluators and the various assumptions made by the price evaluation team. (Such documents are relevant to CWT’s protest allegation regarding GSA’s failure to consider and compare the impact of each offeror’s unique pricing assumptions).

11. All documents relating to GSA’s evaluation and consideration of the pricing assumptions proposed by CWT and Concur, including the pricing assumptions proposed by each offeror. (Such documents are relevant to CWT’s protest allegation regarding GSA’s failure to consider and compare the impact of each offeror’ s unique pricing assumptions).

PUBLIC VERSION

AB *1.’ .-J; E ~~L‘ LP


REQUEST FOR RULING AND RELIEF

For the reasons set forth above, CWT respectfully requests that the Comptroller General sustain this protest, and recommend that GSA:

1. Award a second IDIQ contract to CWT; or

2. Reevaluate proposals and make a new best value decision;

3. Make a new determination regarding the number of contract awards in compliance with FAR 16.504; and

4. Reimburse CWT the costs of filing and pursuing this protest;

5. Provide any other relief that the GAO considers appropriate.

Respectfully Submitted,

Lars E. Anderson James Y. Boland Christina K. Kube VENABLE LLP 8010 Towers Crescent Drive, Suite 300 Tysons Corner, Virginia 22182 Telephone No. (703) 760-1605 Protected Fax No. (703) 760-1644

Counsel for CWT Government Travel, Inc., d/b/a CWTSato Travel

Enclosures

cc (via email):

Ernesto Martinez, Contracting Officer (ernesto.martinezgsa.gov ) Virginia Grebasch, Esq., GSA Counsel (virginia.grebaschgsa.gov )

MCl/35071 5

PUBLIC VERSION

Exhibit A

REDACTED IN ITS ENTIRETY

PUBLIC VERSION

Exhibit B

FINDINGS

I. The customary commercial practice of pricing options at the time of the renewal is insufficient

to meet the Government’s needs required under Solicitation QMAD-JM-100001-N for E-Gov

Travel Services (ET52). The Solicitation provides end-to-end travel management services for all

Federal civilian Executive Branch agencies for a period of 15 years. The ETS2 solicitation Is

structured with a 3-year base period and three, 4-year option periods. Offerors are required to

submit firm fixed prices for all four periods of the contract.

2. GSA sought and obtained a waiver from the Senior Procurement Executive to exceed the five

year period of performance limit set by the Federal Acquisition Regulation (FAR) 17204(e) (Attachment 1). The waiver outlines the advantages to the Government in establishing a 15 year contract.

3. FAR 12.302(c) states that "(the] contracting officer shall not tailor any clause or otherwise

Include any additional terms or conditions In a solicitation or contract for the item being

acquired unless a waiver Is approved in accordance with agency procedures. The request for

waiver must describe the customary commercial practice found In the marketplace, support the

need to include a term or condition that is inconsistent with that practice and Include a

determination that use of the customary commercial practice is inconsistent with the needs of

the Government. A waiver may be requested for an Individual or class of contracts for that

specific Item." The ETS2 solicitation contemplates up to two awards; therefore, this

determination will apply to all contracts awarded from the solicitation.

4. GSAR 512.301(c) requires approval by the Senior Procurement Executive the use of a provision

or clause that Is not consistent with customary commercial practice.

S. The ETSZ contract(s) will provide end-to-end travel management services for federal agencies.

ETS2 is a follow-on acquisition to the current E-Gov Travel Service Contracts (ETS1), a firm fixed

price ten-year commercial contract set to expire in 2013.

6. All of the five major components of the ETS2 system, and the current ETSI contract, listed

below, are part of or integrated to end-to-end travel management services. These are acquired

commercially and integrated in various configurations with various agency business systems by

either the buyer or the seller. The Government is not changing how these servi ces are acquired

or provided, only the pricing of them over the life of the contract:

a. Global Distribution System (GDS)

b. Online Booking Tool (OBT)

c. Automated Mid-office Quality Control (AQC)

d. Corporate Charge Card (CCC)

e. Expense Reporting Software (ERS)

GDS role In the travel industry is to serve as a distributor for travel suppliers, such as airlines,

hotels, and rental cars. There Is no direct contractual relationship between a GDS and the

Government’s E-Gov Travel Service (ETS1). The relationship is through the Government’s ETS

contractors. GDSs derive revenue from fees paid by suppliers for the distribution/sales of their

products. In turn, GOSs pay a portion of their revenue to travel agencies as an Incentive to use

their GDS for sales to travelers.

The GDS role in ETS2 is to distribute air/rail passenger transportation rates and Information,

along with hotel and car rental Information, Distribution of these products and services

generally occur through an OBT or through a Travel Management Center (TMC). ETS2 will

obtain GDS services from either the ETS2 contractor or a separate TMC. ETS2 and TMC

contractors rely on their GSA relationship to exchange travel Information among the travel

suppliers in order to meet the Government’s contractual requirements.

8. QBTs permit end users to research and book travel reservations. OBTs can be used on a self-

service basis by travelers or can be used by ETS2 contractors and/or TMCs to research and book

travel. OBTs are often developed and sold by a GDS but there are also non-GDS based OBTs.

The OBT’s role in ETS2 is to display the travel information obtained via the GDS in accordance

with the Federal Travel Regulation (FTR) and any agency-specific policies associated with Federal

travel. ETS2 will rely on their OBT relationship to exchange travel information among the travel

suppliers and perform to the requirements of the Government’s contract.

9. AQC uses automated robotic quality control commands to perform over 200 quality verifications

on reservations made through the GDS and OBT. Use of AQC reduces inaccuracies, necessary

rework, and service fees. It also ensures that proper corporate travel parameters are applied to

the bookings. The AQC role in ETS2 is to ensure accurate and cost-effective travel and

compliance with the FTR. ETS2 is required to deliver a quality control program to perform the

Government’s contractual requirements.

10. CCCs are used to reserve and pay for travel with airlines, rail companies, hotels and car rental

firms. In addition, CCCs also help businesses control and manage their traveler’s spend. The

ETS2 contractors are required to capture and maintain the charge card number provided by

agencies to facilitate the payment of travel. ETS2 contractors have no direct relationship with

the charge card providers.

11. ERS is used to voucher, reimburse, manage and report travel. ERS helps increase the accuracy of

financial transactions, comply with policy and speed reimbursement. ERS’ role in ETS2 is to

ensure accurate and compliant expense management for travel. The ETS2 contractors are

required to provide an ERS to facilitate the payment and reporting of travel.

2

Customary Commercial Practices Found In the Marketplace

Market research Indicates It Is customary in the commercial marketplace to have fixed price contracts

for a base period of 3-5 years for GDS, OBT, AQC and ERS services and It) years for CCC with details for

each service provided below. Pricing Is adjusted at the time the contracts are renewed. Market research reveals it is also common to have the same TMC, OBT, AQC, CCC and ERS provider for 15 years or longer (A.D. Brown), to avoid the increased costs of establishing new contractual relationships. Re-competes are usually pursued only If the Incumbents fail to maintain the service level or functionality,

Q& Commercial GDS contracts are generally 5 years In length. Pricing Is based on volume and

frequency of use and what percentage of the GDS’ overall business comes from the customer (the

greater the volume and frequency, the lower the pricing). These prices will typically be fixed for the

duration of the contract, though some broad ’Vere of pricing may exist In the contract based on volumes. However, a client will rarely experience a volume shift that merit a change in tiers. The 605

does not have the ability to Impose unilateral changes without re-negotiating the entire contract. Market adjustment terms are generally not included. There may be general statements that allow for

change if special circumstances dictate a renegotiation of the agreement, but contracts typically do not

provide specific rationale. Contracts are generally designed to protect the GDS from drastic industry change such as when the airlines renegotiated their distribution agreements with 6D55. (R.D.Brown 1,

09/2011)

Commercial GDS relationships normally last through several contract terms which could be two to three

5-year terms. In many cases, the relationship will last 20 plus years. When It comes to contract renewals,

the buyer is always interested In how much of the content the 605 is aggregating. Pricing for the

contract renewal Is based on the marketplace, and there would usually be no changes to the period of

performance. Buyers typically would not renew the contract If the GDS were falling to deliver the core

services: booking air, hotel and cars. Content concerns may be another cause for non-renewal (Ibid.). Current market research also indicates that shorter term 605 contracts may result from "rapid changes

In the technology and the marketplace" (GDS Automation Negotiations: 2011, p. 4) and 1 to 7 year alternatives are being offered by some GDS providers (ibid.)

Commercial 081 contracts are generally 3 to 5 years In length for the base period. Pricing terms

include one-time ’start-up’ fees for implementation centrally and at each regional site. Separate

monthly fees exist for site maintenance and management. All other fees are fixed and based on transactions (e.g., on-line bookings). Additional one-time and/or fixed transaction fees provide for

optional features, including booking data exchange and profile data exchange (one-time fees), and

advanced pre-trip authorization and travel Intelligence (per booking fees). (R.D. Brown, 09/2011)

R.D. Brown Company Is an Illinois corporation formed in 1983 to provide consulting services within the travel Industry. Their consultants work with Fortune 1000 companies, partnerships, universities and government agencies to Implement "Best Practices" In travel management. 2 Based on an analysis of current and former Fortune 500 clients and Includes such firms as

Commercial OBT sellers do not typically have the ability to adjust prices due to market conditions or

industry events. Terms can only be renegotiated at renewal. Generally, there are no provisions for

unilateral price changes. OBT imposed, unilateral price changes would be very difficult to implement In

the competitive booking tool market. Most buyers would remove any language related to unilateral

price Increases. (Ibid.)

Buyers normally have at least a 5-year relationship with its commercial OST provider. Pricing can change

during contract renewals and can vary depending on volumes, which may be built into the agreement

upfront with tiered pricing. Only added functionality In the OBT would typically justify an increased fee

from the OBT provider. Drastic pricing changes or unilateral service Issues would be grounds for not

renewing the contract. if a competitive tool was available, which provided unique enhancements, a

buyer might also consider a change. (ibid)

Large corporations typically rely on a TMC to provide mid-office quality control services, which

may vary by global region. The typical AQC seller has a 5-year agreement. Pricing is based on a fixed

price per unique Passenger Name Record (PNR). The PNR is the GDSs’ file or record that contains

information about a passenger’s travel plans, including flight itinerary, hotel booking segments, car

rental booking segments, and related details. When the contract begins there Is significant start-up fee

and an equally significant training fee. These up-front costs are not repeated at renewal. There are

typically no market adjustment provisions for AQC in commercial contracts and if there are, buyers

simply remove them. There will typically be no pricing changes over the contract term. The only

circumstance that could justify the AQC seller to Impose a unilateral price change would be a change in

the entire fee structure away from PNR-based fees to a monthly flat fee. However, that would be a

negotiable item. (RD, Brown, 09/2011)

Commercial buyers of AQC services will usually have a 5-year relationship or longer If the technology

continues to be leading edge. Any switch from PNR-based pricing to a flat fee would dramatically affect

pricing at contract renewals, but it would not affect the term of the contract. It is unlikely that a change

In fee structure would happen. A breach in PNR confidentiality would be cause for not renewing with an

AQC provider. In addition, marketplace alternatives with enhanced functionality may be cause for a

change or non-renewal (lbid).

çç Commercial charge card contracts are typically provided at no cost, and In fact, give rebates as an

incentive to use the card. Commercial contracts generally offer clients a rebate payment based on actual

charge transactions. Commercial charge card contracts are typically provided long term �10 years or

longer. The Government’s charge card program is also provided at no cost for a period of up to 10 years.

Changes to the Government’s travel charge card requires ETS2 contractors to update the traveler’s

charge card number in the ETS2.

f The ERS component of the industry is relatively new (15 years) with no long-term history.

According to the BIN 2011 Expense Manager Survey (July 18, 2011), among companies that use an

automated expense system, 53% Indicated that corporate card data Is integrated to those systems while

only 34% had integrated ERS to their OBI. Large corporations strive to have one ERS supporting the

entire company, though less integrated travel programs may still have multiple reporting systems In different regions.

Typical ERS contracts are for an initial base period of 3 years. Pricing Is handled on an Incremental

transaction fee basis (e.g., 1,800 transactions at $12.61 per transaction). A significant one-time initial

set-up fee also applies. Pre-production system fees are also sometimes implemented. As an alternative,

a fee based on revenue commitment (rather than transactions) can also be used. Market adjustment

terms can be factored into the contract within a price point or as a trigger to reopen the contract. There

are typically no circumstances that would allow the ERS provider to Implement a unilateral change. Any

ramifications of major volume changes should be built into the agreement upfront. (R.D. Brown, 09/2011).

Commercial buyers, having made a substantial investment in the ERS toot, will typically have a long-term

relationship for at least 5 and sometimes up to 10 years. There would usually be no significant change to

the period of performance in contract renewals, and it Is likely pricing will be continued for a second

term. However, in some cases, incremental cost increase can be built Into subsequent periods based on

Indices, depending on the service arrangement and enhancements to the tool. the massive effort

Involved in Integrating a new system encourages companies to maintain long-term relationships and

due to the difficulty of switching to new contractors, normally only drastic circumstances would cause

non-renewal. Such circumstances include poor service support and/or failure to meet promised

functionality. In addition, marketplace alternatives with enhanced functionality may be cause for non-renewal. (Ibid)

Government’s Requirements/or ET32 that are Inconsistent with Customary Commercial Practices

Although the Government does have a single Federal Travel Regulation, unlike the commercial

marketplace, the Federal Government does not operate as a single, integrated enterprise. Federal

agencies do not share the same versions of financial systems, charge card service providers, TMCs, OBTs,

etc. Typically, Federal agencies have many contractors supporting their travel�from over a dozen

airlines under GSA’s City Pair Program, to thousands of hoteliers participating in GSA FEDROOMs

program, to several car rental entities participating in the Department of Defense’s Government-wide Car Rental Program.

The Government requires Integrated, end-to-end travel services, not typically required by commercial

entitles. The integration of these services is currently being provided under the ETS1 contract through a

10-year fixed price vehicle. Under ETS1, minor modifications were made to commercial applications to

provide the necessary integration at fixed prices:

� Through the travel authorization process, the Government requires a level of pre-trip internal controls over travel expenses, including budget policy compliance, not required by commercial

entities. Established fixed prices enable government agencies to comply with government fiscal

law.

Through Emi, the Government Integrates nearly 50 travel agencies. These travel agencies use

multiple 605, 081, AQC, CCC, ERS, numerous versions of the Government’s 3 primary financial

systems and more than a 100 unique expense reporting platforms. ETS1 provides a common

expense reporting platform making integration possible.

Established prices assist Government in budget planning purposes. Travel expenses are

budgeted annually, at least 2 years in advance.

’ The Government must remain compliant with the travel and security laws and regulations.

Established fixed prices enable government agencies to comply with the Federal Travel

Regulation and various security laws and regulations.

only one or two awards resulting from this solicitation, an ETS2-contractor initiated price adjustment feature has significant potential to greatly increase total price to the Government overtime. Locking prices from the outset guards against this possibility.

FAR 16.103 requires the use of fixed price contracts when the risk involved is minimal or can be

predicted with an acceptable degree of certainty and Is the preferred method for commercial

acquisitions. Factors In selecting the contract type include the period of performance. The selected

firm-fixed price contract type also aligns with the requirement of FAR 12.207 which instructs contracting

officers to use firm-fixed price or fixed price with economic price adjustment contracts when acquiring

commercial Items. Further, based on GSA’s market research and in support of FAR Part 17 and GSAR

517.202(3), GSA does not believe that the pricing Is likely to change substantially over the course of the

contract. For the sound reasons detailed In Attachment 1, the Government sought and received

approval for a 15 year period of performance for ETS2 and now seeks to fix price each period of the

contract. An examination of the potential risk this poses to potential awardees reveals the following:

The work required for GDS, AQC, 081, CCC, ERS did not change over the 10 years of the current

ETS contract. Therefore, steady state conditions point to a fixed price arrangement.

Fixed prices were quoted under the current contract and the price analysis reveals that under

ETS1, the pricing was actually stable or lowered under the 10-year period of performance for

many of the Contract Line item Numbers (CL1Ns). It is expected that standard escalation rates

will be used by industry to price all 15 years of the ETS2 contract(s).

Two requests for equitable adjustment were received or processed during the entire contract

period, which was remarkable given the complexity of the procurement. As stated in

Attachment 1, Industry wishes to see a longer period of performance for the ETS2 in order to

recover upfront costs and maximize their investment In time, money and resources. The

Government expects through a longer period of performance will lower prices for the last 5

years of ETS2.

6

� Government has provided all historical data to industry and has included reasonable

assumptions for Government usage under the E752, This will enable ETS2 contractors to

reasonably price the effort, particularly In the last 5 years of the contract.

� Experience under GSA’s Travel Services Solution (TSS), offering similar TMC services, are 20 year

fixed price contracts. Although the contracts contain a price adjustment clause, experience has

shown that TSS contractors do NOT routinely exercise their right to do 4T Many In fact, have

never exercised their right to an adjustment.

Due to technological advances, OBT prices have gone down during the course of ETS1

performance. S

Fixed pricing arrangements require stability of work to be performed. The current contract and the TSS

contracts demonstrate little change in either the nature of the services provided or the pricing structure

over the years of the contracts. Therefore, there should be no impediment for industry to establish fixed

prices for the 15 years of the ET$2 contract(s).

To mitigate potential risk to offerors, the ETS2 contains a Market Adjustment clause (Section D.41) to

provide relief should unexpected Industry-wide changes affect awarded prices. The Market Adjustment

clause states:

"The Government recognizes the potential impact of unforeseeable major changes in market conditions. For those cases where such changes do occur, the contracting officer will review requests to make adjustments, subject to the Government’s examination of industry-wide market conditions and documents requested by the contracting officer to support the reasonableness of the price adjustment. if adjustments are accepted, the contract will be modified accordingly. The determination of whether or not extra-ordinary circumstances exist rests with the contracting officer. The determination of an appropriate mechanism of adjustment will be subject to negotiations."

DETERMINATION Based on the findings above, the use of the customary commercial practice of pricing options at the

time of renewal Is Inconsistent with the fixed pricing needs of the Government. Therefore, pursuant to

FAR 12.302(c) and GSAR 521.301(c), it is determined to be In the best Interest of the Government to fix

price all fifteen years of the ETS2 contract(s) at the time of award, contrary to customary commercial

practices.

Prepared by: -

_____ 12- ("i’ I 2.Q(

Ernesto Martin

Contracting Officer

Conc

lot hylaoet

Rebe?ca Director

Concur (Legal):

fL.lf

Virginia Grebahh

Approved:

/ 2

Joseph Neurar

o Senior Procurement Executive

4 Zo,10’!

* Annotations for clarification - the original of this document did not bear page number, nor did It bear the legend at the bottom of each page (that has now been redacted). In addition, while actual signatures have been obscured to protect against identity theft, it Is noted that the penultimate signature is that of Rodney Lantier, dated 18 Dec 2011, and the final signature, dated December 12, 2011, Is that of Joseph Neurauter.

Exhibit C

GSA Federat Acquisition Service

June 1, 2012

CWTSatolravel A1TN: Mr. Marc Stec, Vice President, Global Program Management 4300 Wilson Blvd., Suite 500 Arlington, VA 22203-4167

Dear Mr. Stec:

This letter is to Inform you that your firm’s proposal In response to Request for Proposal (RFP) No. QMAD-JM-100001-N was not selected for award. As stated in the RFP, the Government will award a contract resulting from this solicitation to the responsible Offeror(s) whose offer(s) conforming to the solicitation will be most advantageous to the Government, price and other factors considered.

As required by FAR 15.503(b), this notice provides the following:

� The number of offerors solicited: N/A (Full and open competition)

� The number of proposals received: 3

� The name and address of each offeror receiving an award:

Concur Technologies, Inc. 18400 NE Union Hill Road Redmond, WA 98052

Total contract price: $1,397,225,201

The following is from Section F, Evaluation Criteria and Method of Award;

RFP Section F.3 Phase I - Evaluation Criteria identifies the factors (technical, non-technical, and price) used to evaluate offers for Phase I. RFP Section F.6 Phase II (IV&V) - Evaluation Criteria Identifies the factors (technical and price) used to evaluate offers for Phase II. CWrSatoTravel was subject to Phase U (lV&V) of its ETS2 based on the Government-developed test scenarios designed to validate the ETS2 solution offered and reach the final award decision(s). The purpose of IV&V was to provide an unbiased review of the prospective ETS2 service against the stated requirements and objectives in the solicitation.

The Phase I Technical Factors are Performance Work Statement (PWS), Project Management Plan (PMP), Demonstration, and Key Personnel/Resumes. These are equally important. The

Phase I Non-Technical Factors are Soda-Economic and Past Performance. Soclo-Economic is more Important than Past Performance. When combined, Technical Factors are more Important than Non-Technical Factors and Technical and Non-Technical Factors combined are worth more than Price Factors, As technical merit becomes more equal, price becomes more important.

The Phase II (IV&V) Technical Factors are: Computational Ratings, Functional/Usability, Security, and Section 508/Accessibility. These are equally important. When combined, Technical factors are more important than price. As technical merit becomes more equal, price becomes more Important.

In general terms, the reasons CWTSatoTravel’s proposal was not accepted are as follows:

The Government evaluated CWTsatoTravers offer and determined that the overall technical adjectival rating of Its offer was Marginal and it was the highest priced offer for both Single and Dual Award scenarios. The Government determined that CWTSatoTravel is not technically acceptable for contract award. Despite being Informed of the shortcomings of its proposal during negotiations, CWTSatoTravel faIIe4 to lmmove Its offer to an acceptable level and, therefore, did not offer the Government the most advantageous offer, price and other factors considered.

If you have questions, please feel free to contact me at 703-605-9223 or [email protected] . Thank you for your interest in the E-Gov Travel Services 2.0 (ETS2) program.

Sincerely, Og!ynd by bRNESTO MAR11NFZ W. ON ERNE3!OMM11NEZ

4Z. a US o U.S. Cob,mmnt CU Sr,i Aætmb,

Dó,o,2U12.00.OI t140’G4 OSIS

Ernesto Martinez Contracting Officer Office of Acquisition Operations

Exhibit D

Section Reference Summary C.4.2.18. ACCOUNTING CAPABILITIES 4.2.18.3 Configurable financial systems

within an agency

Variable segment counts

4.2.18.8 Dynamic/Dimensional Account

Codes

List of values by segment

4.2.18.9 Split Funding by Date and

Expense Category

Support for CGAC having

15 or more segments

Real-time Funds validation

integrated into workflow

Prepaid expenses

C.4.2.5. TRAVEL PLANNING AND

RESERVATION SERVICES C.4.2.5 Explanatory Codes

PNR Documentation

Requirement

ETS2 shall allow for the creation/modification/deletion of funding sources or LOAs in

accordance with Section C.4.2.25, ETS2 Customer Configuration and Administration.

ETS shall allow, at a minimum, 500 alphanumeric characters per accounting string.

ETS2 shall provide the capability for configuring the LOA format to match customer

agency accounting financial system requirements at the department, agency, or

subordinate agency levels. For example, one agency may require 10 different fields or

elements in its LOA that are up to 50 alphanumeric characters and a subordinate agency

level may require 50 different fields or elements in Its LOA that are up to 10

alphanumeric characters. The example provided is for illustration purposes only. These

LOA structure requirements are expected to vary at each agency and sub-agency based

on the financial systems used;

ETS2 shall provide the option of "dynamic accounting," defined as the ability for users to

build LOAs in the travel document dynamically by selecting a value for one or more

accounting field(s)/element(s) as determined by the customer agency’s LOA format.

Some examples of LOA fields/elements may include, but are not limited to object class

codes, expense codes/categories, and outside continental U.S. (OCONUS)/continental

U.S. (CONUS) travel designations. ETS2 shall allow for the selection of the same

funding source on the same document to allow for the creation of dynamic LOAs. ETS2

shall retain previously built LOAs as validated with the financial system for the

user/traveler’s use on future travel documents;

ETS2 shall provide for the capability to allocate expense(s), among and between

selected funding sources, by percent, date, amount, individual expense, and expense

category;

13) ETS2 shall support and accommodate Customer agency accounting classification

changes and data conversions when the agency converts from existing accounting data

elements and structure to the Common Government-wide Accounting Classification

(CGAC) structure;

14) ETS2 shall support synchronous funds validation/certification and

commitment/obligation within its standard data exchange and application integration capabilities;

17) ETS2 shall provide the ability to reduce subsequent vouchers by the prepaid voucher

amount, such as prepaid lodging or registration fees;

10) ETRS shall comply with all documentary requirements, Including FTR and Attachment

11, PNR Documentary Guidance, and document all applicable explanatory codes (see

Attachment 10, Explanatory Codes), in each GDS PNR processed by ETS2, regardless

If such reservation was created manually or by the OTRS;

11)The Contractor shall implement and maximize the use of software features and

functionality at all points of sale, including the Travel Portal and all agent desktops

utilized by Contractor-provided personnel, to ensure that all requirements relating to

Travel Options offered, documentary requirements (see Attachment 11, PNR

Documentary Guidance), and quality control (see Attachment 6, Fulfillment Automation

Basic Quality Control Checks) are consistently and continuously applied to all

Section Reference Summary Requirement

reservations processed under the contract, regardless of the means (OTRS or ATRS); C.4.2.13. TRAVEL AUTHORIZATIONS AND

VOUCHERS C.4.2.13 Post Voucher Amendment 27) ETS2 shall allow an unlimited number of corrections and/or amendments to travel

authorizations, vouchers, and local vouchers, including vouchers and local vouchers

that have been paid; C.4.2.15. TRAVEL ADVANCES C.4.2.15 Retained Advances 9) ETS2 shall provide the capability, configurable by agency business rules, for a traveler

to retain the excess travel advance, such as for future trips, when authorized in

accordance with FTR 301-52.14; C.4.2.15. TRAVEL VOUCHERS C.4.2.16 Reclaim Vouchers 11) ETS2 shall process amended vouchers and reclaim vouchers with appropriate review

and approval controls; C.4.2.19. TRAVEL DOCUMENT ROUTING AND

APPPROVAL C.4.2.19 Configurable Routing 3) ETS2 shall support conditional routing and notifications as configured at the customer

agency and subordinate agency levels. ETS2 shall provide electronic routing and

workflow of travel actions and notifications to the desktops of ETS2 users/travelers for

information, coordination, review, and approval/rejection based on customer agency or

subordinate agency policy and criteria. This includes the ability to:

a. Manually or automatically, according to configurable customer agency business

rules, delegate approval actions to other users in the event of absence or routing

delays; and

b. Route travel actions for approvals/rejections based on specific characteristics,

configurable by customer agency, such as international travel, conferences,

requests for actual expenses, specific funding citations, and others called for by

the FTR 301-2. ETS2 shall include the ability to define different levels of approval

based on customer agency configurable criteria for routing travel actions, such as

routing for actual expenses based on a tiered percentage, for example, up to

150916’ to supervisory approval, 150% to 200% to agency head, and 200% to

300% to agency CFO. C.4.2.23. NONFEDERALLY SPONSORED

TRAVEL C.4.2.23 Non Federally Sponsored Travel 4) ETS2 shall provide the capability to indicate on the non-Federally sponsored travel

authorization and voucher one or more non-Federal sponsors. In accordance with FTR

304-5.1 thru 304-5.3, ETS2 shall provide the capability to indicate the purpose of travel

per each non-Federal sponsor listed on the document and shall provide the capability to

indicate if a spouse will be in attendance as well. ETS2 shall display, along with

standard TDY functionality, the non-Federal sponsor, purpose, and spousal attendance

to any and all electronic routing approvers. This information shall be captured in a

reportable field, not a general free-form text field for all travel document comments;

5) ETS2 shall allow the user/traveler to create and designate each expense on the

authorization and voucher as being paid by the traveler’s agency, but reimbursed by the

non-Federal sponsor; or as being provided by the sponsor as "payment in-kind." If the

expense is allowable and paid for by the traveler’s agency, then it shall follow the

standard TDY process for reimbursement based on method of payment, such as CBA,

BA, and so on. If the expense is being paid by the traveler’s agency, but reimbursed by

the non-Federal sponsor, then it shall follow the standard TOY process for

reimbursement based on the method of payment, such as CBA, IBA, and so on, and

Section

C.7. ELECTRONIC AND INFORMATION

TECHNOLOGY ACCESSIBILITY

C.8.3. DICTIONARY SUPPORT

Reference Summary Requirement

shall notify the customer agency to seek reimbursement for this expense from the non-

Federal sponsor via a report or in the standard data input/output file as defined by the

agency’s interface requirements, if applicable. If the expense is provided by the non-

Federal sponsor as "payment In-kind," then it shall not be reimbursable to the traveler

and/or agency;

C.7 508 Compliance 1) ETSZ shall meet applicable accessibility standards of 36 CFR 1194, "Electronic and

Information Technology Accessibility Standards," that can be met with supplies,

services, or assistive technologies that are available in the commercial marketplace

(See Attachment 5, Voluntary Product Accessibility Template (VPAT), which must be

completed by the Contractor); C.8.3 Data Exchange per 6) The Contractor shall create and maintain ETS2 standard XML schema set and XML

Federal Standards instance documents that shall comply with Federal XML guidelines as described in the

and support for Attachment 14 draft Federal XML Developer’s Guide (see Appendix B, Definitions); The schema set

elements shall include all ETS2 standard data elements (required and optional) in Attachment

14, E-Gov Travel Service Standard Data Elements, and any other elements added In

ETS2 to meet requirements; and

7) The Contractor shall maintain a corresponding Data Dictionary. All elements and XML

tags from the schema set shall map to this Data Dictionary.

Documents

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