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4t' d THE COMPTROLLER GENERAL DECISION O OF THE UNITED STATES C g WWASH INGTO N. D. C. 20546 FILE: B-197245 DATE: February 19, 1981 MATTER OF: Pioneer Contract Services, Inc. DIGEST: 1. Protester has burden of provingrias on part of proposal evaluators and prejudicial mmotives will not be attributed on basis of _nference or supposition. 2. GAO finds that agency had rational basis for @ evaluating selected firm's management plan and key personnel. 3. Protester's allegation that agency improperly, evaluated protester's compensation plan for professional employees is not supported by record. 4. Where solicitation calls for certain detailed information, agency need not remind offeror to furnish necessary information with its final proposal. Record shows that, in technical areas where protester contends that agency did not conduct adequate negotiations, solicitation had specified information and substantiation offeror had to submit with its proposal. 5. Agency's cost-plus-award fee guide does not limit use of this type of contract only to level-of-effort contracts. 6. Agency's criticism that protester's management system and processing of work system for pro- viding maintenance and support services involved extensive Government involvement is reasonable. RFP cautioned offerors that Government direction should be kept to minimum since agency intended that contractor's management would be operating independently. I~~~~~~~~~~a >4>r|1 2

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4t' d THE COMPTROLLER GENERALDECISION O OF THE UNITED STATES

C g WWASH INGTO N. D. C. 20546

FILE: B-197245 DATE: February 19, 1981

MATTER OF: Pioneer Contract Services, Inc.

DIGEST:

1. Protester has burden of provingrias onpart of proposal evaluators and prejudicialmmotives will not be attributed on basis of_nference or supposition.

2. GAO finds that agency had rational basis for @evaluating selected firm's management planand key personnel.

3. Protester's allegation that agency improperly,evaluated protester's compensation plan forprofessional employees is not supported byrecord.

4. Where solicitation calls for certain detailedinformation, agency need not remind offeror tofurnish necessary information with its finalproposal. Record shows that, in technical areaswhere protester contends that agency did notconduct adequate negotiations, solicitation hadspecified information and substantiation offerorhad to submit with its proposal.

5. Agency's cost-plus-award fee guide does notlimit use of this type of contract only tolevel-of-effort contracts.

6. Agency's criticism that protester's managementsystem and processing of work system for pro-viding maintenance and support services involvedextensive Government involvement is reasonable.RFP cautioned offerors that Government directionshould be kept to minimum since agency intendedthat contractor's management would be operatingindependently.

I~~~~~~~~~~a >4>r|1 2

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7. Determination of relative merits ofofferor's technical proposal is primarilyresponsibility of procuring agency and GAOwill not disturb agency evaluations unlessarbitrary or in violation of procurementlaws and regulations. Based on review ofrecord, it does not appear that agency'sevaluation of protester's proposal wasunreasonable.

8. In cost-reimbursement procurements, evaluatedrather than proposed costs provide sounderbasis for determining the most advantageousproposal. Conclusions reached by agency inevaluating proposed cost are entitled to greatweight and GAO will not question agency's costrealism determination unless it is not supportedby reasonable basis. Record shows that agency'sdetermination that evaluated costs of protesterand firm selected for award were essentiallyequal was reasonable.

Pioneer Contract Services, Inc. (Pioneer),protests the selection of S.F.& G., Inc., d/b/aMercury (Mercury), as the successful offeror underrequest for proposal (RFP) Nd. 8-3-9-AB-30902 issuedby the National Aeronautics and Space Administration,George C. Marshall Space Flight Center (NASA). TheREP was for maintenance and support services at theMarshall Space Flight Center (MSFC).

Subsequent to filing this protest, Pioneerbrought suit in the United States District Court forthe Northern District of Alabama against NASA (CivilAction No. CV80-PT-5223-NE). The court has issued anorder expressing an interest in receiving our viewson the protest and has stayed its decision pendingour resolution of Pioneer's protest. No award hasbeen made under the RFP by NASA.

Pioneer raises the following grounds of protest:

(1) NASA's failure to select Pioneer was theconsequence of persistent bias and prejudice againstPioneer because the company provides pension benefits

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to its employees through an employee stock ownershipplan (ESOP).

(2) Mercury lacks the capability to developand. implement the management information system forthe processing and control of the contract work. Inthis regard, Pioneer alleaes that Mercury has engagedin an effort to "raid" Pioneer's staff for the purposeof obtainina the necessary expertise to complete themission described in the RFP.

(3) NASA violated its Procurement RegulationDirective (PRD) 78-8 (May 12, 1978) under the RFPevaluation criterion of Total Compensation Plan(Professional Employees) based upon an erroneousdefinition of "professional employee."

(4) NASA violated its PRD 70-15 (December 3,1975) during the course of written and oral discus-sions by failing to identify various aspects ofPioneer's proposal that were either not- clear orlacked adequate substantiation, and which aspectswere later cited by NASA's Source Evaluation Board(Board) as major weaknesses in Pionee-r's proposal.

(5) NASA violated its Cost-Plus-Award FeeContracting Guide (NHB 5104.4) bX improperly down-grading Pioneer's proposal in the RFP evaluationcriteria areas of Processing and Control of Workand Management Plan.

(6) 'NASA's scoring of the RFP's MissionSuitability factors as well as NASA's evaluationof the RFP factors of Cost, Experience and PastPerformance, and Other Factors was without a rationalbasis.

We find Pioneer's contentions without merit.

Background

Prior to the release of the RFP, NASA's Boarddeveloped evaluation factors and criteria againstwhich proposals would be evaluated. The factorsincluded Mission Suitability, Experience and PastPerformance, Cost, and Other Factors. Prospectiveofferors were provided a description of these factorsin the RFP. They were further advised that theevaluation of their proposals would be conducted in

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accordance with the NASA Source Evaluation Manual(NHB 5103.6A, December 1975 Edition) and thatwritten and oral discussions would be conductedpursuant to NASA's PRD 70-15. In addition, theBoard developed a Source Evaluation Plan for useby its members and the members of the Mission Suit-ability Team, the Cost Team, the Experience and PastPerformance Team, and the Other Factors Team. NASAhas provided us with a copy of the evaluation planas an attachment to the Board report itself.

Proposals under the RFP were received fromseve-al firms. Pioneer and Mercury were placed inthe competitive range following the initial evalua-tion of the proposals submitted. The companieswere invited to participate in written and oraldiscussions and subsequently each company submitteda revised proposal after which the Board completedits final evaluation. The Board Findirnas were thenpresented to the NASA Source Selection official whoselected Mercury for final negotiations. Immediatelyafter the selection of Mercury, Pioneer filed itsprotest with this Office.

Bias In Evaluation

Pioneer alleges that NASA officials involved inthe award selection have stated both directly andindirectly and have indicated by their conduct thatno small closely held company having an ESOP can dobusiness with NASA. According to Pioneer, the selec-tion of Mercury rather than Pioneer is the result ofbias against Pioneer's ESOP which the company adoptedin 1977. In this regard, Pioneer emphasizes that itsresponse to the RFP proposed the continuation of itsESOP while Mercury's response did not propose an ESOP.

More specifically, Pioneer alleges that NASA'sbias can be dated to March 1977. Pioneer also allegesthat, at that time, the NASA contracting officer atMSFC who was responsible for administering Pioneer'sexisting contract for support services began to reactto the fact that Pioneer adopted an ESOP after awardof the contract and that the costs for the ESOP werebeing billed to NASA. Such actions in Pioneer'sopinion caused the contracting officer to becomeconcerned because they increased performance costs.

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NASA eventually took the position that ESOP costsunder the contract would be disallowed because theywere of questionable allowability and reasonableness.Pioneer points out that when negotiations failed toproduce any resolution of the matter, Pioneer filedappeals in May 1978 with the NASA Board of ContractAppeals challenging the contracting officer'sdisal2owance of ESOP costs.

Consequently, Pioneer contends that the allegedanimosity of the NASA contracting personnel at MSFCresultina from the foregoing dispute over the allowanceof ESOP was a factor here in Mercury being selectedover it. Pioneer has submitted several affidavitsand depositions taken in conjunction with its courtproceedings against NASA which it believes demonstratethat the NASA officials at MSFC have "memories likeelephants" and that NASA "retaliated" against thecompany by downgrading its fee awards for workperformed under the current support service contractat MSFC.

In addition, Pioneer has submitted affidavitsfrom several of its employees indicating that theseemployees were directly informed by NASA officialsthat Pioneer had to get rid of its ESOP if it everexpected to do business with the ~Government againand that the ESOP "did Pioneer in." Pioneer there-fore contends that, either in the drafting of theBoard Findings or report to the NASA source selectionofficial or in between, the procurement process wasmanipulated in order to eliminate Pioneer as thesuccessful proposer. In this regard, Pioneeralleges that at one point in the procurement certainNASA officials had stated to Pioneer officials that,during the period when the Board was acting and afterthe best and finals, Pioneer was the strongest ofthe proposers and that Pioneer was "going to get thejob."

Finally, Pioneer asserts that NASA was given anew transfusion of anti-Pioneer/ESOP resolve afterPioneer had submitted its best and final offer underthe RFP when on January 14, 1980, the Department ofLabor filed suit against Metropolitan ContractServices, Inc., for alleged negligence of the membersof that company's ESOP administrative committee.

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Pioneer alleges that until mid-February 1977 itwas owned by the same individual who also ownedMetropolitan Contract Services, Inc., but thatthe two companies were unrelated. However, Pioneercalls our attention to excerpts from depositionsthat NASA misconstrued the Department of Laborlawsuit to be against Pioneer for fraud. Pioneerargues that NASA's misconceptions had a prejudicialeffect on the agency's evaluation of and willingnessto select Pioneer.

NASA denies that there was or is an ESOP biasaaainst Pioneer. While acknowledging that since 1977there has been an ongoing dispute concerning thereasonableness of ESOP costs incurred by Pioneer underthe current MSFC support contract and that some NASAofficials connected with the evaluation of proposalsunder the RFP were probably aware of this dispute,NASA asserts that the procurement record clearly showsa sound and fair selection process. NASA furtherasserts that both the Board report and the SourceSelection statement fully demonstrate that Mercury'sproposal was unanimously evaluated as superior toPioneer's and that the probable costs of performancefor the two companies were essentially equal. NASAcontends that the fact that the question of reasonable-ness of ESOP costs on other NASA contracts is on appealis not evidence of bias or prejudice. in short, NASAargues that Pioneer has failed to prove that bias waspresent in the procurement process.

With regard to Pioneer's allegation that NASAofficials stated that if Pioneer wanted future NASAcontracts it had to aet rid of its ESOP, NASA cate-gorically denies that any such statements were madeby NASA officials.

Analysis

The critical test for determining bias in theagency's evaluation of proposals is whether allofferors in the competition were treated fairly andequally. See Servo Corporation of America, B-193240,May 29,1979, 79-1 CPD 380. However, the protesterhas the burden of affirmatively proving its case andunfair or prejudicial motives will not be attributedto procurement officials on the basis of inference

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or supposition. See A.R.F. Products, Inc., 56 Comp.Gen. 201, 208 (1976), 76-2 CPD 541. Where the writtenrecord fails to demonstrate bias, the protester'sallegations are properly to he regarded as merespeculation. Sperry Rand Corporation, 56 Comp. Gen.312, 319 (1977), 77-1 CPD 77. In this respect, wemust note that, where the subjective motivation of anagency's procurement personnel is being challenged,it may be difficult for a protester to establish--onthe written record which forms the basis for ourOff-ice's decisions in protests--the existence of bias.See Joseph Legat Architects, B-187160, December 13,1977, 77-2 CPD 458.

We agree with NASA that the mere fact that adispute with Pioneer exists over the allowance ofESOP costs on another NASA contract is not sufficientin itself for an inference that the agency was biasedagainst Pioneer in the instant procurement. As acorollary, we think that no inference of bias ispossible from the sole fact that the MSFC personnelinvolved in this procurement may also have-beenfamiliar with Pioneer's contract dispute over theallowance of ESOP costs. Furthermore, in view ofNASA's denial that any of its officials ever toldPioneer officials or employees that the ESOP causedPioneer to be eliminated from sejection, we haveno basis to conclude otherwise.

As to the Department of Labor suit, which Pioneeralleges refueled NASA's ESOP bias, that contentionrests on alleged information given to Pioneer thatit was in the lead and apparently successful up tothe time of the filing of the suits. However, NASApoints out that the record shows that the Mercuryinitial proposal was evaluated higher than Pioneer'sinitial proposal and thus Mercury was in the leadfrom the start. Therefore, Pioneer's argument con-cerning the effect of the above-mentioned suit isnot persuasive.

Ability of Mercury to Perform

Pioneer asserts that the most important criterionof Mission Suitability in the RFP was the processingand control of work including a management informationsystem. Pioneer alleges that it is presently operating

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a work control and information management systemto the fullest extent possible under the terms ofits existing contract with NASA. In view of theeffort needed to implement an information manage-ment system, Pioneer believes that Mercury neitherhas such a system nor the capability to developsuch a system in the time span available to thatcompany for development.

As evidence of Mercury's inability to implementor develop an information management system, Pioneeralleces that, since being selected by NASA, Mercuryhas engaged in an effort to raid Pioneer's staff forthe purpose of obtaining the necessary personnel.According to Pioneer, Mercury has made offers ofemployment to numerous key employees of Pioneer.Thus, Pioneer argues that it is clear that Mercurylacks the necessary management and experience andthat Mercury is acquiring Pioneer's expertise byhiring Pioneer's highly trained staff. Pioneercontends that the net result is that NASA failed toselect a firm that possessed the requisite experience,expertise and management skills necessary to performa new contract for support services at MSFC.

In response, NASA states that the Board reportprovides an adequate basis for the Board's evalua-tion and selection of Mercury. NASA states that theBoard considered Mercury's management system to bea strength in Mercury's proposal in that it provideda good method of controlling and managing resources.

As to the use of Pioneer's employees, NASA statesthat Mercury, in its proposal, indicated that it wouldpick up a few of Pioneer's key personnel. Neverthe-less, in the area of Key Personnel, NASA states thatMercury was rated high because its proposed keypersonnel met or exceeded the position requirements.The evaluation included checks of past performanceon the individuals proposed by Mercury which confirmratings of "outstanding" performance for all but oneindividual who was rated "qualified." Moreover, NASAbelieves that it is significant to note that all ofMercury's key personnel have signed employment commit-ment statements. Finally, NASA points out that theBoard viewed as a strength Mercury's clear definitionof all position requirements in its proposal.

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Analysis

The record shows that under the MissionSuitability Criterion, entitled "Management Plan,"Mercury proposed an automated resources managementsystem known as IKOR (Integrating Key OperationalResources). Mercury's proposal emphasized that IKORwas based on Mercury's previous experience with basemaintenance service contracts and the system focusedmanagement attention on the specific problems of basemaintenance contracts. Mercury further noted thatthe IKOR system would integrate and interconnect allfunctional work areas under a management disciplinewhich enabled a centralized work control center toeffectively schedule and track the performance ofoperating units.

NASA's Board found that Mercury's proposedmanagement system had been in use and operatinu onseveral other Government support service contracts.The Board also considered Mercury's system to be astrength as it provided a more than adequate methodof controlling and managing material, work assign-ments, costs, quality assurance, and data management.

In addition, under the criterion Processing andControl of Work (including Management InformationSystem) the Board determined that Mercury's basis forits proposed processing and control of work systemincluding the selection of comput'er equipment and pro-grammina was logical and thorough. More specifically,the Board found that Mercury's lease of a CDC CybernetComputer would provide unlimited expansion and histori-cal data storage capability. Moreover, alert notifica-tion for critical work assignments and equipment/systemoutages, backlog computations on work-in-process, andperformance displays would be centrally located foruse by Mercury's managers and supervisors.

In view of the foregoing, we believe that NASAhad a reasonable basis to consider that Mercury hadthe capability, experience and management skillsnecessary to implement the contract.

With reaard to Pioneer's contentions regardingMercury's key personnel, the record shows that NASA'sBoard found that they were well qualified for theirpositions and that all of Mercury's position require-ments were well defined. Our review of Mercury's

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proposal shows that the most important key position,Project Manager, was not 'a Pioneer employee. More-over, this individual had 8 years of experience asproject manager on base maintenance support servicescontracts. With regard to the processing and controlof work, Mercury's proposed Work Control Manager hasover 9 years of experience as either an assistantwork control manager or chief work control manager.This individual was also not an employee of Pioneer.Finally, we cannot ignore the fact that Mercury pro-vided NASA with signed commitment statements for allof its proposed key personnel. Consequently, we findthat NASA's evaluation of Mercury's proposal in thearea of Key Personnel was also reasonable.

Professional Compensation Plan

Pioneer contends that NASA violated its PRD 78-8and the terms of the RFP by using an erroneous defini-tion of the term "professional employee" in evaluatingPioneer's total compensation plan (salaries and fringebenefits) for professional employees. Pioneer arguesthat rather than using the precise Definition of bonafide professionals as contained in Department of Laborregulations (29 Code of Federal Regulations (C.F.R.)part 541), NASA used a looser and broader definitionwhich encompassed Pioneer's nonprofessional managersand supervisors.

Specifically, Pioneer asserts that NASA erroneouslyincluded some of Pioneer's management supervisors asprofessional employees and that NASA unreasonably down-graded its proposal for failure to provide salaryranges for professional employees when the company pro-posed to use only two such employees. Also, Pioneeralleges that NASA stated to it during the debriefingthat a professional employee was defined as any personnot covered by the Davis-Bacon Act or the ServiceContract Act of 1965, a definition much broader thanthe definition under the Department of Labor regula-tions.

NASA asserts that the foregoing issue has beenuntimely raised by Pioneer. In support of this asser-tion, NASA states that the RFP presented a detailedexplanation of how the compensation plan for profes-sional employees would be evaluated. Further, NASA

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states that the RFP made it clear to all offerorsthat their professional compensation plan would beconsidered under the Mission Suitability Factor,entitled "Understandinq the Requirement." Therefore,NASA takes the position that Pioneer is challengingthe propriety of these RFP provisions. NASA arguesthat under our Bid Protest Procedures, 4 C.F.R.part 20 (1980), the time to object to apparentinmp roprieties in the solicitation is prior to thereceipt of proposals, not after as Pioneer has donehere.

With regard to the merits, NASA questionsPioneer's statement that it has only two professionalemployees when in its proposal the company specificallystated that it employed "ten personnel * * * consideredas professionals" within the meanina of the Departmentof Labor regulations. In addition, NASA points outthat the RFP clearly defined what constituted a pro-fessional employee and directly referred to the Depart-ment of Labor regulations for elaboration.

Analysis

We do not agree with NASA that this professionalcompensation issue is untimely raised by Pioneer.Rather than being a protest against the RFP specifica-tions, Pioneer is protesting tha't NASA 's evaluationof its proposal was erroneous because NASA improperlydetermined certain Pioneer personnel to be professionals.

However, we find that Pioneer's protest on thisissue is without merit.

In its proposal, Pioneer stated the followingregarding professional employees:

"[Pioneer] employees ten personnelthat are considered as professionalswithin the meaning of 29 C.F.R. 541.Eight of the ten professionals areAppendix E Engineering Design servicespersonnel who are affiliated with theUnit and are essentially covered for'compensation' by Union bargainingagreements."

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The Board found that Pioneer did not providesalary ranges for its professional employees andthat Pioneer's annual salary rates did. not recog-nize distinct differences in professional skillsfor the Plant Maintenance and Construction DeputyProject Manager, the Vehicle Operations Manager,the Operations and Maintenance Supervisor, and theRenovation, Modification and Construction Supervisor.WIhaIe it appears that NASA did consider other manage-ment personnel in addition to the 10 listed byPioneer to be professional employees, it is alsoclear from the language of Pioneer's proposal thatthe company believed it had more than two professionalemcloyees. Furthermore, Pioneer has offered littleargument to show that the above-mentioned manacerswere not professional employees under the meaning ofthe applicable Department of Labor regulation. Theonly argument that Pioneer makes in this regard isinconsistent with the statement it made in its pro-posal; that is, Pioneer argues that its eight Appendix

E"E personnel were not paid on a salary basis and,therefore, do not meet the Department cf Labor re-quirements for being professional erployees. Underthe circumstances, then, we are unable to concludethat the Board evaluation of Pioneer's total compensa-tion plan was improper or inconsistent with the termsof the RFP.

Discussions

Pioneer contends that, in conducting written andoral discussions with it, NASA violated PRD 70-15, whichrequires the contracting officer to point out duringdiscussions instances in which the meaning of aspectsof an offeror's proposal is not clear and instancesin which some aspect of the proposal fails to includesubstantiation. According to Pioneer, NASA disregardedthese requirements of PRD 70-15 as to certain partsof its proposal which NASA later determined were notclear or substantiated and for which NASA severelypenalized the company by finding such parts of thecompany's proposal represented major weaknesses. Morespecifically, Pioneer asserts that NASA determinedthat its proposal failed to provide clear or adequatesubstantiation under the criteria of Organization,Staffing Plan, and Processing and Control of Work.Had NASA followed the procedures of its own regulation

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on discussions, Pioneer believes it could have clarifiedambiguities and provided mission substantiation.

Pioneer alleges that NASA downgraded its proposalunder the criterion of Organization because a completerationale for organizational elements was not provided.According to Pioneer, NASA informed it that organiza-tional element responsibilities were clearly definedbut that no substantiation of the proposed combiningof Appendices "B," covering Operations Maintenance,and "D," covering Renovation and Construction, wasprovided. In Pioneer's opinion, the essence of NASA'sdeterrination under the Organization criterion forwhich Pioneer was assigned a major weakness was thatPioneer did not substantiate its proposed combinationof the work requirements of Appendix.B" with Appendix"D.

Pioneer alleaes that NASA did not requestsubstantiation or a rationale from it on the matter.If NASA had made such a request, Pioneer contendsthat the agency would have learned that Pioneer didnot propose to combine the work elerrents of Appendices"B" and "D." Rather, Pioneer proposed that a GeneralSuperintendent have overall responsibility for Appen-dices "B" and "D" and that such person be designatedas the Deputy Project Manager.

With regard to the evaluation criterion StaffingPlan, Pioneer alleges that NASA assigned a major weak-ness to its proposal because Pioneer's proposed staffingof each organizational element was not substantiated.Pioneer further alleges that this assessment was ex-plained by NASA to mean that Pioneer provided onlya brief summary highlighting the basis for continuationof Pioneer's existing contract with incumbent personnelwithout providing the rationale for the continuation.More specifically, Pioneer alleges that NASA informedPioneer that it failed to substantiate the number ofemployees, skills, and skills mix within each organ-izational element. According to Pioneer, NASA madeit clear that it was not criticizing Pioneer's staffpersonnel, but only the failure to substantiate thestaffing plan with details NASA believed were necessary.

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Pioneer asserts that NASA's rationale isdifficult to follow because the agency asked onlythat Pioneer provide "summary level substantiation"for the staffing of each proposed organizationalelement. In Pioneer's opinion, the only conclusionwhich can be drawn from the NASA determination thatPioneer's proposed staffing was not substantiatedis that NASA did not comply with PRD 70-15. Pioneerasserts that the written and oral questions asked byNASA were not designed to elicit the detailed sub-stantiation that NASA deemed important. If NASAbelieved that it did not have enough details aboutPioneer's staff, Pioneer argues, such details couldhave easily been obtained through a request forclarification by NASA.

Turning to NASA's evaluation of its proposedprocessing and control of work system, Pioneeralleges that NASA found that the basis for Pioneer'ssystem was not provided. According to Pioneer, NASAfurther elaborated on this finding in informing thecompany that "the basis for the proposed processingand control of work system including the. IBM 32computer and related software was not. provided."Pioneer, however, contends that NASA asked only twoquestions for clarification in this area neither ofwhich complied with the letter or spirit of PRD 70-15.Moreover, neither question sought clarification ofthe cost effectiveness of Pioneer's processing andcontrol of work system.

In addition, Pioneer believes that there is aclear indication of inequity in NASA's written ques-tion on processing and control of work that was posedto Pioneer versus the one posed to Mercury. Bothquestions asked the firms to provide further rationalefor their proposed processing and control of worksystem but the question to Mercury provided, as anexample, that Mercury should submit an estimate withsupporting information of the anticipated economicbenefits to be derived from implementing Mercury'ssystem. Pioneer assertsthen,that NASA asked Mercury,but not it, for a specific clarification on a particularmatter that NASA believed was important. Thus, Pioneerasserts that this action by NASA violated the provi-sions of PRD 70-15 as well as the overall Government

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policy of affording all offerors equal treatmentduring the conduct of written and oral discussions.

NASA argues that, where its Board did findinstances in which some aspect of Pioneer's proposalwas either not clear or lacked substantiation for aproposed approach, specific clarification and sub-stantiation were sought. NASA states that during thecourse of the discussions Pioneer was asked a totalof 24 written questions, many of which sought bothclarification as well as substantiation of Pioneer'sproposal. NASA believes that these questions showful 7compliance with both the letter and spirit ofthe requirement of PRD 70-15 to conduct meaningfulnegotiations.

NASA also points out that PRD 70-15 placesdistinct limits on the breadth and nature of thewritten or oral discussions to be conducted.Specifically, NASA cites the following languagefrom this regulation:

"However, where the meaning of a proposalis clear, and where the Board has enoughinformation to assess its validity, andthe proposal contains a weakness whichis inherent in a proposer's management,engineering, or scientificljudgrent, oris the result of its own lack of competenceor inventiveness in preparing its proposal,the contracting officer shall not pointout the weaknesses * * *. Proposers shouldnot be informed of the relative strengthsor weaknesses of their proposals in rela-tion to those of other proposers. To doso would be contrary to other regulationswhich prohibit the use of 'auction tech-niques.' In the course of discussions,Government participants should be carefulnot to transmit information which couldgive leads to one proposer as to how itsproposal may be improved or which couldreveal a competitor's ideas.

"The foregoing guidelines are not all-inclusive; careful judgment must beexercised in the light of all the

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circumstances of each procurement topromote the most advantageous selec-tion from the standpoint of the Gov-ernment while at the same time main-taining the fairness of the competitiveprocess." Section III (e)(2).

Therefore, NASA contends that Pioneer wasprovided with the requisite opportunity to furtherexplain, elaborate, clarify or provide amplification.In the agency's opinion, both the written and oralquestions asked of Pioneer permitted clarificationand amplification without transmitting informationwhich could give leads to Pioneer as to how itsproposal could be improved, or which would lead totechnical transfusion by revealing another competi-tor's ideas to Pioneer.

In response, Pioneer asserts that NIASA has merelyprovided a laundry list of questions but that thequestions asked of it were not reasonably designedto elicit the type of substantiation which NASA feltthat the company's proposal lacked.

Analysis

The governing statute, 10 U.S.C. § 2304(g) (1976),requires that oral or written discussions be heldwith all offerors in a competitive rance. As to theexact content and extent of the discussions, we haveheld that this is essentially a matter of judgmentprimarily for decision by the agency and not subjectto question by our Office unless the judgment isclearly arbitrary. See Washington School of Psychiatry,B-189702, March 7, 1978, 78-1 CPD 176; Systems Engineer-ing Associates, B-187601, February 24, 1977, 77-1 CPD137. Further, we have specifically rejected the notionthat agencies are obligated under the above-citedstatute to afford offerors all-encompassing negotia-tions. Gould Inc., B-192930, May 7, 1979, 79-1 CPD311. Such all-encompassing negotiations may unfairlyprejudice the rights of other competing offerors.

PRD 70-15 (Revised) reflects our caveat againstall-encompassing negotiations by providing for re-stricted discussions in cost-type contracts. Speci-fically, the regulation contains several exceptions

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to the general requirement that weaknesses in theoffers be pointed out. One exception applicablehere is where the meaning of the proposal is clearand the proposal contains a weakness which is theresult of the proposer's own lack of competence orinventiveness. In that case, we recognize that thecontracting officer should not be required to pointout such a weakness. See Raytheon Service Company;Informatics Information Systems Company, Inc.,B-19X928, March 25, 1980, 80-1 CPD 214.

In the RFP. sectionentitled "Proposal Content,"detailed instructions were set forth advising pro-spective offerors as to what information was requiredto be furnished with their proposals. NASA cautionedofferors that since the evaluation of the informationit was requesting would constitute a sianificant basisfcr selection, the offeror should present the informa-tion in a clear, concise and understandable manner.

In the areas which Pioneer contends that NASAshould have specifically advised Pioneer that itsproposal failed to include substantiation, sectionII of the RFP provided:

"b. Organization

Organizational charts which.show the entire proposed organizationalstructure, including project relationshipto the corporate and/or division organiza-tion should be furnished. Provide com-plete rationale including delegations ofauthority for the proposed organizationalgroupings shown on the chart(s). Organi-zational, planning, operational, and manage-ment responsibilities of the various segments,as well as individual sizes, and the methodsfor maintaining flexibility and efficiency,for the complete effort must be addressed.* * *

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"a. Staffing Plan

For each element of the proposer'sorganization, a comprehensive plan whichintegrates qualified prime contractor andproposed subcontractor personnel from theinitial staff through build-up to fullstaff by labor classification must beprovided. The rationale for proposedstaffing of each organizational elementmust be included. The sources from whichthe staff will be obtained, the arrange-ments and commitments for that purposemust be identified. * * *

"An adequate initial staff or nucleusof qualified personnel is required. Initialstaffing should include essential ranagementand planning personnel to adequately performthe specialized and first priority effort.* * *".

With regard to Pioneer's arcurent concerningNASA's alleged failure to request substantiation forPioneer's proposed organizational elements, it is clearfrom the above-cited language that. the RFP specificallyrequested the offeror to provide a complete rationaleincluding delegations of authority for the offeror'sproposed organizational groupings. We have recognizedthat, where a solicitation specifically calls forcertain information, the agency should not be requiredto remind the offeror to furnish the necessary informa-tion with its final proposal. Value Engineering Company,B-182421, July 3, 1975, 75-2 CPD 10.

In any event, the record shows that Pioneer wasasked during.written discussions to explain its pro-posed organizational elements. Pioneer argues that thequestion was not specific enough because NASA did notdirect the company's attention to Appendices "B" and"D." However, we think that the NASA request thatPioneer provide a rationale for all its organizationalgroupings, if properly complied with, should have ledPioneer to provide NASA with substantiation for itsorganizational groupings for these two RFP Appendices.Moreover, we note that NASA also asked Pioneer duringwritten discussions to provide a summary for its

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rationale for establishing the Appendix B/D GeneralSuperintendent as the Deputy Project Manacer.

Like the instructions in the area of Organization,the RFP instructions for the offeror's staffing planspecified that the rationale for proposed staffingof each organizational element was to be included inthe proposal. Further, this portion of the RFP goesinto extensive detail regarding the proper preparationand formatting of the staffing plan in order for theproposer to show personnel sources and personnel skilllevels and skill mix. Therefore, as in the area ofproposed organizational elements, we do not think thatNASA was required to remind Pioneer to furnish informa-tion already called for by the RFP. Finally, we donot believe, as Pioneer contends. that NASA's writtenrequest that Pioneer provide summary level substantia-tion for its staffing level was ircorssistent with theagency's determination that Pioneer's brief summaryfailed to provide the rationale for the company'scontinuation with complete incurmbent personnel. Inour opinion, NASA's request for even a summary levelof substantiation should have t ricere6 Pioneer torespond by giving NASA some type of brijef explanationfor its proposed staffing plan.

As to Pioneer's proposed system for the processingand control of work, we cannot agree with the protester'sargument that NASA's questions in'this area failed tocomply with PRD 70-15, especially in view of the factthat during written discussions NASA clearly askedPioneer to provide a rationale for its system. More-over, we fail to understand Pioneer's objection toNASA's not seeking clarification of the cost effective-ness of Pioneer's system when the protester indicatesthat it provided a statement in its best and finalproposal which reviewed the increased efficiency thatwould result from the upgrading of its IBM 32 computer.

Further, we do not think that the question NASAasked Mercury regarding that company's proposed proc--essing and control of the work system evidences anyunfair or unequal treatment among offerors by NASA.The RFP specified that proposers offering processingand control of work plans which are deemed more costeffective and efficient than past practices must fullysupport the plans. Since both Pioneer and Mercury were

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asked to provide further support for their proposedsystems, we see no advantage to Mercury because itwas also asked to provide an estimate of the economicbenefits to be derived from implementation of itssystem.

Cost-Plus-Award-Fee

Pioneer contends that NASA violated The Cost-Plus-Award Fee Contracting Guide (NHB 5104.4) by improperlydowngrading Pioneer's proposal in the areas of Manage-menrt Plan and Processing and Control Work as "level ofeffort" oriented. Pioneer alleges that its proposalwas designed to perform all reauirements Listed inthe REP. According to Pioneer, NASA did not determinethat its proposal, if accepted and implemented, wouldfail to achieve the performance levels stated in theRFP. Rather, it believes that NASA concluded thatPioneer's proposal in the above-described areas wasbetter suited for a level-of-eff'ort type of contractthan the "mission" type of contract sought by the RFP.

Pioneer argues that NASA's contracting guideexplicitly states that a cost-plus-awa-rd-fee contractwas envisioned for use only in level-of-effort typesof contracts. Pioneer further argues that the degreeof Government involvement required by the RFP wasthat of a level-of-effort contract. In this regard,Pioneer alleges that the RFP specifies Governmentinvolvement in processing and control of work planapproval, work initiation, monitoring, completion,and inspection. More specifically, Pioneer allegesthat the RFP requires a contractor to submit numerousdata reports to NASA and that NASA will issue workdirectives to the contractor.

Consequently, Pioneer asserts that the degreeof Government involvement required by the RFP isapproximately the same as that of the current MSFCbase support contract that Pioneer is currentlyperforming. As further evidence of this assertion,Pioneer has submitted a written comparison trackingthe provisions of the RFP with the previous level-of-effort solicitation under which Pioneer wasawarded its existing contract. According to Pioneer,this comparison shows that the required level ofinvolvement and interface between contractor andNASA is essentially the same.

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Therefore, Pioneer takes the position that the"mission" characterization of the protested RFP byNASA is nothina more than a label. Whether it occurswhen work directives are issued, or when processingand control of work plans are approved, or whenmonitoring by NASA is performed, Pioneer argues thatthe fact of the matter is that the RFP called forextensive Government involvement and interface ascontemplated by NHB 5104.3A. Thus, Pioneer contendsthat if its proposal is deemed to be oriented moretoward a level of effort approach, so must the RFP.

In response, NASA asserts that Pioneer was awareof the agency's decision to conve-rt to a mission-typeprocurement at the time the RFP was released. Further,NASA states that the mission nature of the procurementwas highlighted to all attendees daring the proposalconference. NASA points out that the REP specificallystated:

"2. The current contrrct for thebase maintenance support services is a'level-of-effort' contract, under whichthe Government issues Schedule Orders andTechnical Directives to authorize and/orlimit the number of hours used and thedollars expended. It is intended that thecontract resulting from this RFP will bea mission contract. The proposers shouldrecognize that Government directionwill be kept to an absolute minimum."(Page 10).

In addition, NASA calls our attention to thefollowing introductory language of Pioneer's proposalwhich NASA believes should dispel any doubt thatPioneer did not fully understand NASA's changeoverto a mission procurement:

"The new proposal intends to institutea. 'mission' contract clearly recognizingthat in contrast to a directed level-of-effort, Government direction under themission concept will be kept to an abso-lute minimum. [Pioneer'sl managementapproach, in adjusting to the mission

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effort, will be to provide a more inde-pendent yet fully responsive totalsupport to all specific requirementsof the RFP, and to adjust organizationalstructures and staffing to better accom-modate work described in Appendices.[Pioneer] is more conscious of the Gov-ernment's need for expanded managementvisibility under the mission concept."(Page 1-1 of Volume I of Pioneer's pro-posal.)

Finally, NASA asserts that Pioneer admitted earlyduring the course of this protest that NASA contem-plated a mission contract under the RFP. NASA citesthe following language from Pioneer's initial protestletter to our Office:

"* * * Pioneer already madce plansand schedules, ordered necessarv hard-ware, and developed software In orderto be able to completely and quicklyimplement the system upon notif=icationthat the mission concept of the c~era-tion presented in the RFP is to beimplemented." (Emphasis added.)

.Analysis

To the extent that Pioneer may be arguing thatNASA improperly proposed to award a cost-plus-award-fee contract under the RFP, we do not agree with theargument. It is clear that the use of the cost-plus-award-fee contract has been broadened since the early1960's when it was used only on level-of-effort typesof contracts. Indeed, NHB 5104.4 specifically providesthat the application and use of cost-plus-award-feecontracts has been expanded to cover mission, hardwareand support services. Therefore, we believe that NHB5104.4 does not limit in any way the use of cost-plus-award-fee contracts to only level-of-effort contracts.

We assume that Pioneer's major argument is thatthe RFP references to making an award on a cost-plus-fee basis, along with other RFP requirements, ledPioneer to the conclusion that extensive Governmentdirection was not only contemplated but was required.

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In this regard, Pioneer asserts that NASA's criticismof its proposal for merely responding to the RFPrequirements was irrational and unfounded.

More specifically, Pioneer arques that NASA'smajor weakness categorization of Pioneer's overallmanagement concept because of extensive Governmentdirection is unfounded. According to Pioneer, itsproposal followed precisely the work flow dictatesof the various RFP Appendices and was responsive tothe RFP requirements. Further, Pioneer pointsout that NASA identified as a major strength itsexcellent management techniques and procedures forinmi1ementation of a level-of-effort concept. InPioneer's opinion, NASA's categorization of Pioneer'sproposal on this criterion as both a major strengthand a major weakness was inconsistent.

The record shows that NASA founa Pioneer's proposedmanagement concept would require extensive Governmentinvolvement because MSFC would be ap~proving all generalplans, budgets and schedules anc assioning all tasks.Also, MSFC would continue to provzae existing interfaceswith Pioneer, including weekly rmeer-i-ns to "Define newproblems and resolve old problers." w^Jith respect toPioneer's processing and control of work system, NASAfound that the system would necessitate continuousGovernment approval for all phases of work initiation,planning, and completion.

From our review of Pioneer's proposal, we believethat the foregoing evaluation was reasonable. At para-graph 1.1.4 of Volume 1 of its proposal, Pioneer stated:

"[Pioneer's] management and workinterfaces with MSFC Responsible Officialsand Monitors are well established underour current contract effort, as reflectedthroughout the proposal. MSFC/[Pioneer]interface relationships are shown infigure 1-2."

In the same paragraph, Pioneer went on to state:

"General Superintendents andSupervisors will meet with theirrespective MSFC Monitors frequently

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to discuss broad operational matters.Experience has demonstrated thatsubstantial daily coordination andcontact will exist between [Pioneer]personnel at all levels of managementand their corresponding MSFC Respon-sible Officials. [Pioneer's] proposedorganization has been specificallydesigned to facilitate this highlevel of communication and contractorresponsiveness."

As to Pioneer's processing and control of worksystem, the company stated at paragrazh 3.0 ofVolume 1 of its proposal that its centralized con-trol system serves as an information center for MSFCMonitors and that its processinr anr-' control of worksystem was available and operat-i. on the comnany'scurrent MSFC contract. In our orionion, this state-*ment implies that Pioneer conterplat-ec little changein the processing and control orf work system it wasusing in performing its leveL-or- ec"- contract atMSFC. Furthermore, at paragraph .3-! covering thereceipt of work assignments, Pioneer stated:

"All large scale or special workassignments received from MSFC, whetherin the form of approved bro&d-scopegeneral schedules/plans, FacilitiesWork Requests, or other specific writtenrequests, will be coordinated throughthe WCC * * *. Other work directivesmay be received from a MSFC ResponsibleOfficial, Monitor, direct NASA/MSFCcustomer or from MSFC computer output(ADP PM Cards) by any appropriate memberof the [Pioneer] management team as ispresently done and as specified in theRFP."

Turning to Pioneer's assertion that the termsof the RFP led it to believe that extensive Governmentsupervision was contemplated, we note, as pointed outby NASA, that, in the section entitled "Instructionsto Proposers," the RFP advised offerors that Govern-ment direction would be kept to an absolute minimum.This was repeated at the beginning of the section of

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the RFP entitled "Background and Historical Data."Further, the fact that, during performance, numerouscontractor reports will be required does not in itselflead to the conclusion that extensive Governmentinvolvement was contemplated by the RFP. Our reviewof the record shows that, except for the reports whichinvolve approval of the contractor's basic operationalplans, reports are unrelated to the processing andcontrol of the contract work. Finally, we also notethat each of the RFP scope of work appendices statedat the beginning that the contractor's "mission" wasto provide the requirements specified therein.

Selection Under RFP Evaluation Factors

Before discussing the details cf Pioneer'sarguments in support of its contention that there wasno rational basis for the select-crn of Mercury, it isnecessary to set forth several eeneral principles whichbear upon our review in this area.

The determination of the relative merits of aproposal, particularly with respect to technical con-siderations, is primarily a matter of administrativediscretion. Dynamic Science, Inc., B-188472, July 20,1977, 77-2 CPD 39. Our function is not to evaluateanew proposals submitted and make~our own determina-tions as to their relative merits. Houston Films, Inc.(Reconsideration), B-184402, June 16, 1976, 76-1 CPD380. That function is the responsibility of the con-tracting agency which must bear the burden of anydifficulties resulting from a defective evaluation.Macmillan Oil Company, B-189725, January 17, 1978,78-1 CPD 37. In light of this, we have repeatedlyheld that procuring officials enjoy a reasonable degreeof discretion in evaluating proposals and that thiswill not be disturbed unless shown to be arbitraryor in violation of the procurement laws and regulations.Piasecki Aircraft Corporation, B-190178, July 6, 1978,78-2 CPD 10.

Additionally, the protester has the burden ofaffirmatively proving its case. C. L. Systems, Inc.,B-197123, June 30, 1980, 80-1 CPD 448. The fact thatthe protester does not agree with the agency's eval-uation of its proposal does not in itself render theevaluation unreasonable. Kaman Sciences Corporation,B-190143, February 10, 1978, 78-1 CPD 117.

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With these general principles in mind, we willnow examine Pioneer's arguments.

A. Key Personnel

Pioneer alleges that NASA assigned a major weaknessto its proposal under the evaluation criterion of KeyPersonnel because NASA determined that Pioneer's pro-posal had stated position responsibilities but notposition requirements. In Pioneer's opinion, thisevaluation is irrational because, at most, there is onlya difference in semantics between the term "positionresoonsibilities" and the term "position requirements."In any event, Pioneer alleges that its proposal morethan adequately defined position requirements becauseits description of each position's responsibilitiesalso details such position's requirements.

NASA states that the key personnel proposed byPioneer were evaluated based on data and resumessubmitted. NASA further states that the Board judgedPioneer's overall key personnel tear to have strongqualifications and considered the team adecuate froman overall point of view. However, NASAS also takes theposition that any claim by Pioneer that it is the onlyfirm possessing the requisite expertise, experienceand management skills necessary to perform is bothunfounded and unsupported.

B. Staffing Plan

Pioneer alleges that NASA also assigned a majorweakness to its proposal under the evaluation criterionof staffing. According to Pioneer, NASA found that thecompany's provisions for staffing (Appendix D, Renova-tion, Modification, and Construction) were "marginal."Pioneer argues that NASA's evaluation of its staffingplan in general was without a rational basis becausePioneer's proposal did provide for adequate staffinglevels based upon "the historic data available and thepresent accomplishment of work in the several areasof responsibility." With regard to the staffing ofAppendix "D," in particular, Pioneer alleges that asthe incumbent contractor it was well aware of theconstant work fluctuations in this area and firmlyaddressed the method of accommodating the situation in

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its proposal. Moreover, Pioneer alleges that staffingfor Appendix "D" was further addressed in its answerto Question 16 of NASA's written discussions.

C. Organization

Pioneer asserts that the essence of NASA'sdetermination under the evaluation criterion ofOrganization, for which NASA assigned Pioneer amanor weakness, was that Pioneer proposed to combinethe work requirements of Appendices "B" and "D," andto cross-utilize employees, without providing adequatesubstantiation. Pioneer further asserts that it didnot propose to combine the work elements of Appendices"B" and "D." Instead, Pioneer alleges that it proposedthat a General Superintendent have overall responsibilityfor Appendices "B" and "D." Pioneer takes the positionthat NASA's misunderstanding of its proposal reflectsan irrational evaluation by NASA.

Furthermore, Pioneer alleges that NASA determinedthat Mercury's proposal earned a strength because ofcross-utilization. Specifically, Pioneer. allegesthat NASA stated that Mercury's sta-fing feasibilitywill be achieved through a logical cross-utilizationprogram. While acknowledging that it does not have thebenefit of Mercury's proposal to determine 'the contextin which the cross-utilization was proposed by Mercury,Pioneer, nevertheless, argues that the apparent unequaltreatment between it and Mercury raises a presumptionof an irrational evaluation on the part of NASA.

D. Processing and Control of Work

Pioneer alleges that NASA assigned a majorweakness to its proposal because the proposal lackedsubstantiation under the RFP evaluation criterion ofProcessing and Control of Work. Pioneer argues thatthe basis for its proposed processing and control ofwork system was clearly delineated in its proposal.According to Pioneer, the system was completelydetailed in section 3 of Volume I of its proposal,including, but not limited to, the planning, costestimating function, MSFC interface relationships,and the proposed Management Information System.Pioneer further alleges that this criterion was alsoelaborated on in the company's answer to Question

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12 of the written discussions which provided NASAwith the rationale for the proposed processing andcontrol of work system.

E. Cost, Experience and Past Performance andOther Factors

Pioneer alleges NASA informed it that the selectionof the contractor was not influenced in any manner byNASA's evaluation of experience and past performance,cost, and other factors. According to Pioneer, NASAfound these factors "not to be discriminators." Pioneercontends that NASA's determination in this regard iswitnout a rational basis. In particular, Pioneer urgesthat its superior experience and past Performance rela-tive to Mercury should have influenced NA SSA's selectionof the contractor in favor of it. In support of thiscontention, Pioneer refers to the fact that it hasperformed the base maintenance support services con-tract at MSFC for over 4 years. Pioneer also arguesthat NASA's determination that experience and pastperformance was not a factor is even rcre suspectbecause of the alleged fact that Mercury has neverperformed a NASA support services contract of thescope, manpower, and costs involved here.

Pioneer also contends that it should have beenclearly favored over Mercury with respect to thecriterion "significance of effort to corporate man-agement." Pioneer submits that the current Dunn andBradstreet report on Mercury indicates annual salesof $4 million. Adding the contract under the protestedsolicitation to this total, Pioneer argues that Mercurywould have annual sales of $11 million. Thus, Pioneerconcludes that the contract to be awarded here repre-sents a much greater percentage of total companyrevenue to Pioneer than to Mercury so that thesignificance of the contract effort to corporatemanagement is greater for Pioneer than for Mercury.

With regard to the factor of cost, Pioneer callsour attention to the statement in NASA's source selec-tion statement that the Mercury and Pioneer probablecosts were essentially equal in amount. Pioneerquestions this statement. For example, Pioneerbelieves that in the adjustments allegedly made tocorrect "fringe benefit conflicts with the Department

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of Labor wage determination." It argues that NASAeliminated a credit for insurance premium costs thatPioneer would have received under the new contract asa result of its insurance claims history. In addition,Pioneer argues that any adjustment of its proposed coststo correct direct labor rate conflicts with unspecifiedDepartment of Labor wage determinations is suspectbecause a review of Pioneer's proposal would show thatno such conflicts existed.

As another example, Pioneer cites NASA's costadjustment to provide for Appendix "D" option year(s)escalation for inflation. Pioneer alleges that, con-sistent with the data set forth in the RFP, its pro-posal estimated the direct labor costs for each of the3 contract years at $700,000 per year. According toPioneer, its extensive past experience revealed thatthe direct labor costs for the Appendix "D" work didnot exceed $400,000 annually. As a consequence, Pioneeralleges that it did not propose an escalation factorfor each of the 2 option years because actual require-ments plus actual inflation would not ecual the $700,000stated in its proposal. Therefore, Pioneer takes theposition that any adjustments by NAkSA> of its cost pro-posal for Appendix "D" to give effect to a projectedinflation factor would be irrational.

Finally, Pioneer argues that any adjustment ofPioneer's labor rates to reflect a "recently" nego-tiated union agreement would likewise be irrationalbecause its proposal reflected direct labor ratesconsistent with "all" union agreements.

Analysis

(Keyed to above-lettered paragraphs)

A. Section III of the RFP, Evaluation of Proposal,specified under Key Personnel that the adequacy of eachkey person's position requirements and the individual'squalifications (experience, performance, education, andtraining) relative to those requirements would be eval-uated. The section also stated that the relativeimportance of each key position and correspondingappropriate level of authority and responsibilitieswould be assessed. In addition, section II, ProposalContent, stated offerors were to establish requirements

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for each key position and provide a rationale foridentifying each key position.

Based on language of the above-cited RFP provisions,we believe that NASA contemplated a definite distinctionbetween position requirements and position responsibili-ties. Position requirements under the terms of the RFPreferred to the educational and experience qualificationsthat would be needed to fill the position while positionresponsibilities referred to the tasks and duties thatthe individual in the particular position would beperforminc .

Our review of the record shows that in the KeyPersonnel section of its proposal 1Miercury set fortha key personnel table showing in cetail the reauiredqualifications for each key position a-lnaside theactual qualifications possessed ,. Ate individual thatwould be filling the key position. Pioneer, however,devoted only one paragraph to ky is -ion requirementsin its proposal. In this paragrerph 'Pioneer listed10 key positions and then made thee general statementthat "Education, background, experi.enceand leadershipqualities required by these 10 positicns establish thebasis for [Pioneer's] selection ann emplcynent of itsmanagement key personnel." There-ce, wse think thatNASA's determination that Pioneer failed to defineposition requirements was reasonable.

B. The record shows that NASA rated Pioneerand Mercury essentially equal under the evaluationcriteria of the staffing plan. Pioneer received astrength because its staffing source would be thecomplete workforce under the current MSFC base main-tenance contract. Also, Pioneer received a strengthbecause the staffing it proposed was found to be inconsonance with its proposed operations. In additionto finding a weakness for Pioneer's failure to sub-stantiate its proposed staffing of each organizationalelement and Pioneer "marginal" for staffing Appendix"D," NASA found that project management responsibilityfor skills maintenance was not identified and thatPioneer's proposed skill mix for Appendix "B" wasslightly defective.

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While Pioneer's proposal did indicate that itsstaffing plan was based upon experience as theincumbent contractor, we believe that little otherjustification for its staffing plan was provided byPioneer. As to Pioneer's response to NASA's writtenrequest to provide summary level substantiation forstaffing levels (Question 16 of the written discus-sions), it is our opinion that the company's responsegave NASA only a general indication that the establishedstaffinq levels were "based upon historic data availableand the present accomplishment of work in the severalareas of responsibility." Pioneer did not summarizethe historical data it relied on or otherwise highlightwhat areas of responsibility to w;.hich i- was referring.

In view of the foregoing, we believe that NASA'sevaluation of Pioneer's staf.'rc.- nlan hnar2 a rationalbasis.

C. The record shows that. the P-care found thatPioneer's initial proposal provided a ratiornale onlyfor its top project organizatio add ro -for itssubordinate elements. After written an, Opal dis-cussions and Pioneer's submission of a best andfinal offer, the Board found that, witn the exceptionof combining Appendices "B" and "D, "fthe subordinateorganizational elements and arrangements had beensubstantiated.

With respect to whether Pioneer proposed tocombine Appendices "B" and "D," we believe that thecompany's proposal clearly demonstrates that it did.Under paragraph 1.2.1.3 of the portion of its proposalentitled "Organization," Pioneer stated:

"The structure to support Renovation,Modification and Construction, Appendix Dis depicted in Figure D-1 showing amajor element functionally aligned toRFP requirements and organizationallyresponsible for contract performance ofall renovation, modification and con-struction services. Both Appendices Band D, in selected areas of facilitiesmaintenance, repair, renovation, modi-fication and construction require highlytrained draft personnel with common skills

B-197245 32

and trades working in an environment offluctuating workloads in many cases withchanging priorities. Metro [Pioneer]has chosen to combine Appendix D andAppendix B under the single leadershipof a General Superintendent, therebyproviding a high degree of managementefficiency in administering technical,safety, QA, and training programs forPersonnel in similar disciplines. Thisarrangement also assures managementflexibility in the application ofsimilarly trained personnel to fluc-tuating workloads in critical areas atcritical times, with more effectiveutilization of personnel and overallgreater efficiency in operations."

As to Pioneer's arcument tnats NAS gave Mercury astrength because of cross-utilizetion, -he record showsthat Mercury's initial proposal recei' ed a weaknessbecause subordinate organization=l elements were notsubstantiated. More importantlvz the Board found thatMercury should have supported it proposal to combineAppendices "B" and "D" under one e After receiptof Mercury's best and final offer, ne oard foundthat Mercury had substantiated the proposed combiningof Appendices "B" and "D" but that other subordinateorganizational arrangements had not been furthersubstantiated. Overall, Pioneer and Mercury receivednearly the same technical rating under the evaluationcriterion of Organization. Under the circumstances,we fail to see any evidence of unequal treatment onthe part of NASA.

D. The record reveals that the Board assianedPioneer's processing and control of work system severalweaknesses. More specifically, it found that Pioneer'sbasis for the proposed system, including an IBM 32computer and related software, was not provided andthat Pioneer's proposed planning, cost estimating,scheduling, processing, controlling, and completingwork system was not efficient.

Pioneer asserts that its proposed IBM computersystem is presently in use and can be adapted easilyto meet the requirements of the RFP. In addition,

B-197245 33

Pioneer argues that the cost of the system, aspointed out in its best and final offer, would beattributed to general overhead and would not be adirect cost of the contract. Consequently, Pioneerbelieves that NASA criticism regarding cost effect-iveness was not rational.

However, we do not think that the foregoingargument by Pioneer reflects the correct basis ofthe NASA findings. NASA determined that the basisfor Pioneer's proposed system was both control andcost effectiveness but that Pioneer's basis was onlya general expression without supporting facts anddata. Pioneer did not substantiate the prop:osed modi-fications to the computer presently irn use. NASAalso found that Pioneer did not substarn-ate ultimatereplacement of the IFB 32 computer wit; an IBM 34.

Furthermore, the record shows that NASA did givePioneer credit in its evaluati..rn fcor the expertiseof the company's Project Manager and the experienceof incumbent personnel with the ps- Prsec` system.Also, Pioneer was given general creoit --or havina"an adequate computer system,."

Therefore, we believe that NP.ASA's evaluationof Pioneer's processing and control of work systemwas reasonable.

E. Under the RFP evaluation criteria the NASABoard was supposed to evaluate and numerically scorethe above-discussed Mission Suitability Factors. Allother significant aspects of each offeror's proposal,including Cost, Experience and Past Performance, andOther Factors would only be evaluated, summarized andpresented to the NASA Source Selection Official forconsideration in makina a decision. The Experienceand Past Performance Factors included the offeror'soverall experience and past performance, especiallycomparable or related procurement/project efforts.The Other Factors included the offeror's phase-inplan, make-or-buy plan, financial capability, sig-nificance of effort to corporate management, laborrelations history, equal employment opportunitycompliance, extent of proposed deviations to RFP,and policies and procedures affecting cost orperformance.

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With regard to the Experience and Past Perfor-rmance Factors, the Board determined that both Mercuryand Pioneer had related technical/project managementexperience and cost-plus-award-fee/cost-plus-fixed-fee experience. Wle find no basis with which to dis-acree with this evaluation. Pioneer has provided uswith a list of all the contracts that Mercury haswith NASA. While this list does show that Mercuryhas not had a contract of the dollar value that isinvolved here, we do not believe that it shows thatMercury has not had significant technical experiencein providing support services to NASA installations.Moreover, we think that NASA has adea-u-ely takeninto account Pioneer's experience as tre incumbentcontractor at MSFC in several arenas or the MissionSuitability Factors.

Under the Board's Other Factors evaluation,Mercury's phase-in plan was detcrr-2in-ne- to be"realistic" and Pioneer was not* as ner-o the"incumbent." Also, Mercury's Ia'e-or--buv plan wasfound acceptable while Pioneer w_-- _toted as nothaving provided such a plan. tUncr _ke factors offinancial capability, labor rela onrs, significanceof procurement, and policies and prccedures, bothPioneer and Mercury were determined to be "acceptable."

Pioneer has challenged only one of the ninefactors listed in the RFP under Other Factors. Further,we do not understand how Pioneer's percentage could be"much greater" than Mercury's since (using Pioneer'sfiqures) this contract would constitute more than 60percent of Mercury's total revenues. In any event,the RFP only provides that significance of effort tocorporate management was a factor. It did not statehow this factor was measured. In view of this, wecannot conclude that this factor was to be appliedsolely on the basis of a comparison of percentagesof effort to each company's total revenue.

As to the evaluation factor of cost, the RFPprovided that cost factors would not be numericallyscored but would be reported to the Source SelectionOfficial. Also, the importance of cost factors in

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the selection would depend on the magnitude of thecost differentials between the proposals, the credi-bility of such differentials, the extent of the com-petition in mission suitability factors, and theimpact of experience and past performance and otherfactors.

The RFP further provided that the adequacy andrealisrm of the cost proposal and the probable incurredcost tould be evaluated. In cost-reimburserent pro-curements, evaluated costs rather than proposed costsprovi6e a sounder basis for determining the mostadvantageous proposal since the Government is required,within certain limits, to pay the contractor's actual,allowable and allocable costs. 52 Ccrrp. Gen. 270, 874(1973). We have also stated that t4e procure-entagency's judgment as to the methods Uses in develop-ing the Government's cost estimate ranc the conclusionsreached in evaluating the proposed costs are entitledto great weight since the proctrerent a-encies are inthe best position to determine realism c- costs andmust bear the major criticism fcr cost overrunsbecause of defective cost analyses. L.-natrend, Inc.,B-19203P, January 3, 1979, 79-1 CPD 4! nhus, we willnot second-guess an acency's cost realist determinationunless it is not supported by a reasonable basis.Grey Advertising, Inc., 55 Comp. Gen. 1111 (1976),76-1 CPD 325.

The record shows that Pioneer's basic contractyear proposed costs including fee were $6,675,221 whileMercury's were $6,614,A99. Adjustments of $170,480were added to Pioneer's proposed basic contract yearcosts giving an evaluated cost of $6,845,701. Adjust-ments of $172,053 were added to Mercury's costs givingan evaluated contract year cost of $6,796,552. Inaddition, a phase-in cost of $322,654 was assessed fora total basic contract year cost of $7,119,206 forMercury.

The RFP also gave NASA the option to extend theterm of the basic 1-year contract provided the totalduration of the contract through the exercise of op-tions did not exceed 3 years. Consequently, extended3-year cost totals were also prepared by NASA. Anadjustment of $685,000 was added to Pioneer's 3-yearfigure giving a revised 3-year total of $21,930,297.

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An adjustment of $684,000 was added to Mercury's3-year figure giving a total evaluated cost of$21,948,667.

From our review of the Board's analysis of thecost proposals, we find no grounds for objection.The Board determined that Pioneer did not includecomputer lease costs in its proposal. The Boardfurther noted that the Defense Contract AdministrationService confirmed that adequate computer lease costwas not included in Pioneer's overhead ceiling rates.Because Pioneer's IBM 32 and 34 computers would havebeen Dedicated to the MSFC contract, the Board foundthat computer lease costs should have been proposedas direct charges. And, as the rest of a negotiatedagreement with the North AlabamNazi icr TradesCouncil on May 15, 1980 (after tlne date- for submissionof best and final offers), the bToarc made a 3-yearcost adjustment of `295,000 to Pforeer's proposedcosts.

Conclusion

Pioneer's protest is denier.

e4,

Acting Comptroller Ge ralof the United States