B-229558.2, B-229558.3, October 4, 1988 Procurement Contractor Qualification Responsibility ■■Contracting officer findings Negative determination ■■■■ Propriety Agency's negative determination of responsibility lacks a reasonable basis where the agency's sole basis for its determination is that protester's estimated manning level is lower than what agency believes is necessary and where agency does not find that the protester is unable or unwilling to stand by its commitment to perform the contract as required. Matter of: Department of the Navy-Request for Advanced Decision, Holmes & Narver Services, Inc. The Department of the Navy requests our advance decision on the propriety of its determination that Holmes & Narver Services, Inc. (H&N), a large business bidder, under invitation for bids (IFB) No. N62477-83-B-6045 was not responsible. The Navy states that it found H&N non-responsible because the firm failed to demonstrate that it has proposed sufficient staffing to perform the services under the fixed price portion of the IFB. H&N has protested the Navy's nonresponsibility determination. Because both cases involve the issue of H&N's non-responsibility, we have consolidated the Navy's request for advanced decision with H&N's protest. We find that the Navy's determination of non-responsibility lacks a reasonable basis and sustain the protest. The IFB solicited fixed price lump-sum and indefinite quantity bids for an 8 month base period and 3 option years to perform base maintenance, operation and repair services at various naval facilities, and provided that, for the purposes of award, the bids would be evaluated by adding the total price for all options to the price for the base period requirement. The IFB also stated that a cost comparison would be conducted in accordance with Office of Management and Budget (OMB) Circular A-76. The solicitation required bidders to submit prices for the monthly performance of various services but did not state minimum manning levels or require bidders, as a part of their bids, to describe their proposed staffing. Bidders were merely required to agree to provide all labor, supervision, tools, materials, equipment and transportation necessary to perform the contract. The Navy received the following nine bids: The first and second low bids were rejected by the Navy, leaving the protester's bid low. The Navy, in conjunction with the Defense Contract Administrative Services Management Area (DCASMA), conducted a pre-award survey of H&N. The survey team determined that H&N had not proposed sufficient personnel to perform the contract and concluded that H&N did not fully understand the terms of solicitation. The Navy and the protester then engaged in discussions regarding the protester's estimated staffing. The Navy states that H&N failed to demonstrate that it would provide sufficient manning to perform the IFB services satisfactorily and found H&N non-responsible. The term "responsibility" relates to a potential contractor's ability to meet certain general standards set forth in the Federal Acquisition Regulation (FAR), § 9.104-1 (FAC 84-18), as well as any special standards set forth in the solicitation. The determination of a prospective contractor's responsibility rests within the broad discretion of the contracting officer who, in making that decision, must necessarily rely on his or her business judgment. We therefore will not question a negative determination of responsibility unless the determination lacked any reasonable basis. Oertzen & Co. GmbH, B-228537, Feb. 17, 1988, 88-1 CPD ¶ 158. The Navy states that H&N has proposed fewer man-years of effort to perform the fixed price portion of the IFB than the 92.4 man-years of effort that the Navy estimates is necessary.1 The Navy contends that H&N has not shown how it can adequately perform the contract with significantly fewer man-years of effort than what the Navy estimates is necessary.2 The bidder's promise in a sealed bid procurement is to perform the specification requirements at the price bid irrespective of whether compliance with the specifications actually requires more effort than was anticipated by the bidder. Thus, the Navy's inquiry should be whether H&N has the technical and financial capability to fulfill its commitment and not whether H&N plans to perform the fixed price portion of the IFB with the number of man-years that the Navy believes is necessary. In this regard, H&N argues that while its pricing of the 1 H&N considers its estimated staffing figures to be proprietary and requests that we not disclose their figures. 2 H&N contested the Navy's computations in calculating the difference between the protester's and the government's manning levels. Because we find that the Navy's negative responsibility determination lacked any reasonable basis apart from the question of the Navy's computation of manning levels, we do not deal with this issue. fixed-price portion of the IFB is based on an estimated number of man-years, H&N is committed to provide whatever staffing is needed to perform the contract as set forth in the specifications. Since the Navy did not find that H&N is unable or unwilling to stand by its commitment to perform the contract as required, we do not think the Navy has a basis to conclude that H&N is non-responsible. The Navy suggests that H&N's level of staffing indicates that the protester may misunderstand the contract requirements. The record, however, indicates that the difference in staffing estimates is attributable to H&N's belief that certain labor saving techniques will enable it to perform the contract with fewer people than the Navy estimates. Apparently other bidders share H&N's belief as to the staffing required to perform. We note that H&N, Burns & Roe, and Intelcom all bid between $17.02 and $17.94 million and that these bidders were consistent in their bidding of the fixed price portion of the IFB. The 3 bidders bid between $8.7 and $9.1 million for the fixed price portion (which was approximately 50 percent of their total bid price). We may reasonably assume that these 3 bidders based the fixed price portion of their bids on using fewer than 92.6 man-years of effort. While the Navy disagrees with H&N's estimate of the staffing required, we are not persuaded from the record before us that H&N misunderstands the contract requirements. Finally, the Navy argues that in a solicitation issued for A-76 cost comparison purposes, such as here, bidders are required to bid on a break-even basis, which the Navy believes H&N has not done. We have held that a below-cost bid in an A-76 cost comparison procurement is not a legal impediment to award so long as the bidder is found otherwise responsible. See Contract Services Co., Inc., 66 Comp. Gen. 468 (1987), 87-1 CPD ¶| 521 at 5. In an A-76 cost comparison procurement, the government is primarily concerned with the price it will pay for the contract services and not necessarily the cost of performance to the contractor. Because the Navy's determination that H&N was non-responsible lacked a reasonable basis, we sustain the protest and recommend that the Navy reconsider H&N's responsibility in accordance with this decision and if the Navy finds H&N responsible, we recommend that the Navy award a contract to H&N based upon H&N's bid. 3 We also find the protester to be entitled to the costs of filing and pursuing the protest, including attorneys' fees. Bid Protest Regulations, 4 C.F.R. § 21.6(d)(1) (1988). H&N should submit its claim for such costs directly to the Navy. 4 C.F.R. § 21.6(e). The protest is sustained. 3 We are not recommending immediate award to H&N because an affirmative determination of responsibility must be made by the contracting officer before H&N can be awarded a contract. See FAR § 9.103(b). B-231579, October 4, 1988 Competitive Negotiation Conflicts of interest ■■■ Post-employment restrictions ■■■■ Allegation substantiation Protest that proposed awardee's employment of a former agency employee as its program manager constitutes a conflict of interest which should disqualify the firm from the award is denied where the record does not show that any action by the former agency employee resulted in prejudice for, or on behalf of, the proposed awardee or establish violation of post-employment restrictions on government employees. Matter of: Dayton T. Brown, Inc. Dayton T. Brown, Inc. (DTB) protests the award of a cost-plus-fixed-fee contract to National Technical Systems (NTS) under request for proposals (RFP) No. N00123-87-R-0998, issued by the Naval Regional Contracting Center, Long Beach, California, for the acquisition of services to test aircraft suspension and release systems, components, and associated support equipment. DTB contends that award to NTS violates the conflict of interest statutes and that discussions were held solely with NTS, making award on the basis of initial proposals improper. We deny the protest. The solicitation was issued September 3, 1987, as a small business set-aside. The testing is required to support test programs required under various other government contracts as well as development and engineering support efforts by the Pacific Missile Test Center (PMTC), Point Mugu, California. The requirement is for a 1-year base period with two 1-year options. The services required by the solicitation are a continuation of services currently being performed by DTB under a contract awarded in 1984. The RFP included four technical evaluation criteria, with these factors combined weighted more than cost. Technical was weighted 60 percent; cost was weighted 40 percent. The RFP also stated that as offers became more equal technically, cost would become more important. Offers were received from DTB and NTS. NTS proposed the employment of a former Navy employee as its program manager for the procurement. Prior to his retirement, the former Navy employee was the branch head of Integrated Systems in the Armament Systems Division of the PMTC, the requiring activity for this acquisition. DTB received a higher technical score than NTS, but both proposals were determined technically acceptable, and NTS, with the lower-cost proposal, was determined to have the more advantageous offer after it received the highest combined technical and cost score. On March 17, 1988, a preaward survey was conducted at NTS with the former government employee present. No award was recommended. The survey found that, although NTS possessed the technical capability to perform the required engineering function, NTS currently lacked in-house capability to perform certain testing required by the RFP and questioned therefore its ability to timely perform the testing. The contracting officer apparently concurred with the no award recommendation and referred NTS' nonresponsibility to the Small Business Administration (SBA) which issued a certificate of competency (COC) on April 26. Based on information NTS provided to the SBA concerning NTS' alleged lack of testing capability, the SBA found that NTS had the necessary experience and could meet the specified requirements, that it could build the testing equipment in a timely manner, and that it had adequate facilities. By letter dated April 27, the contracting officer formally advised DTB of the selection of NTS as the successful offeror. Subsequently, DTB filed a protest against NTS' status as a small business with the SBA. The SBA affirmed NTS' small business size by decision dated May 26. DTB was advised on May 31 of the agency's decision to award to NTS. DTB filed this protest with our Office on May 31. DTB claims that the former Navy employee proposed by NTS was involved in the drafting of the instant RFP including the statement of work (SOW) and that he left the government in July 1987 to join NTS just weeks before the RFP was released. DTB further claims that the employee was a member of the evaluation team that reviewed the proposal of DTB under the predecessor contract. The protester is concerned that in evaluating DTB's proposal, the former employee had access to DTB's highly sensitive and proprietary information under the prior contract, including, for example, DTB's management approaches to the work, the cost impact of such approaches, facilities, employee expertise, direct labor pricing, overhead and other costs and profits. Therefore, DTB contends that award to NTS would prejudice the protester and would result in a violation of 18 U.S.C. §§ 207(a) and 207(b) (1982), implemented by 5 C.F.R. §§ 737.5 and 737.7 (1988).1 The Navy responds that the SOW in the instant RFP and the two previous contracts are similar and that the employee's involvement, if any, in the preparation of the SOW must necessarily have been very limited. The Navy argues that because the employee was not the contracting officer for these requirements and left the government before the issuance of the RFP, 18 U.S.C. §§ 207(a) and (b) do not apply. 15 C.F.R. § 737.5(a) summarizes the basic prohibition of 18 U.S.C. § 207(a) as follows: "No former Government employee, after terminating Government employment, shall knowingly act as an agent or attorney for, or otherwise represent any other person in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of any other person (1) to the United States, (2) in connection with any particular Government matter involving a specific party, (3) in which matter such employee participated personally and substantially as a Government employee." 5 C.F.R. § 737.7(a) summarizes 18 U.S.C. § 207(b) as follows: "No former Government employee, within two years after terminating employment by the United States, shall knowingly act as an agent or attorney for, or otherwise represent any other person in any formal or informal appearance before, or with the intent to influence, make any oral or written communication on behalf of any other person (1) to the United States, (2) in connection with any particular Government matter involving a specific party (3) if such matter was actually pending under the employee's responsibility as an officer or employee within period of one year prior to the termination of such responsibility." |