In re Consolidated Services, Inc., B-276111.4

• Court: Comptroller General of the United States
• Decision Date: 29 December 1997
• Docket Number: B-276111.4
• Parties: Matter of: Consolidated Services, Inc.

Matter of: Consolidated Services, Inc.

No. B-276111.4

Comptroller General of the United States

December 29, 1997^[*]

REDACTED DECISION

DIGEST

Attorneys

DECISION

Consolidated Services, Inc. (CSI) protests the award of a contract to American Service Contractors (ASC) under Department of the Army request for proposals (RFP) No. DABT10-95-R--0010, for dining facility operations at Fort Benning, Georgia and two other locations. The award followed a reevaluation undertaken by the Army in response to an earlier protest by CSI against the award to ASC (B-276111.2, which we dismissed as academic by decision dated August 4, 1997). Based on the reevaluation, the agency affirmed its original decision and made award to ASC on September 5. CSI challenges the adequacy of the price evaluation. We deny the protest.

The RFP contemplated the award of a fixed-price, indefinite quantity, award fee type contract for a base year, with 4 option years. It sought unit and extended prices for estimated days of food service or number of feedings, by building or field area, for a total of more than 250 line items. The RFP listed various technical evaluation factors, including comprehension of the RFP requirements, which included the subfactor staffing/methodology, and provided that award would be made to the offeror whose proposal was technically acceptable and whose aggregate price for all items (base and option years) was low.

Offerors were to submit separate technical and cost proposals. Cost and pricing data were not required, but offerors were to "submit information other than cost and pricing data to help establish price reasonableness or price realism." This information--including price breakdowns for each performance period showing cost elements such as direct and indirect labor rates/salaries, fringe benefits, overhead and total cost per position--was to be submitted on standard form (SF) 1448, "Proposal Cover Sheet (Cost and Pricing Data Not Required)." The RFP required that cost proposals "present a clear audit trail to all elements of cost" and that "all cost elements [be] fully explained and justified." The RFP further advised as follows:

Cost realism will be used as an aid to determine the offeror's comprehension of the requirements of the RFP as well as to assess the validity of the offeror's approach. Proposals will be evaluated to assess the degree to which proposed price accurately reflect[s] proposed performance. A price which is found to be either unreasonably high or unrealistically low in relation to the proposed work will result in the overall proposal being considered unacceptable, and further evaluation will be discontinued.

The agency reevaluated the five proposals at issue and confirmed their technical acceptability. In its price evaluation, the agency used the average total price of the five low proposals--[deleted]--as a baseline for comparison purposes.^[1]ASC's total price of [deleted] was [deleted] percent under the average price, while CSI's price of [deleted] was [deleted] percent above the average. The difference in the two prices was [deleted] or [deleted] percent. The remaining three offers [deleted] and [deleted] ranged from [deleted] percent under to [deleted] percent above the average price. In light of the competition received--12 proposals, 8 of which were technically acceptable--the agency concluded that the price differences among the proposals and the average price "supported cost realism, " and that a detailed analysis of the individual cost elements was not necessary. Nonetheless, the agency reports it did proceed to use a "[c]ost analysis... to compare various individual cost elements (productive man-hours, wage rates including benefits, profit and [general and administrative])." While the agency noted a few areas of "pricing fluctuations, " it considered them to be "based on the unique composition of an offeror's organization and how the offeror propose[d] to accomplish the work, " and concluded that "none of the prices were found to be either unreasonably high or unrealistically low to the degree where the overall proposal was considered unacceptable and further evaluation was discontinued."^[2]

CSI argues that the Army improperly failed to perform a detailed line item cost analysis of offered pricing, which it maintains was required by the RFP.^[3]According to the protester, a proper cost analysis would have revealed that ASC's proposed prices for certain line items were unrealistically low, indicating inadequate staffing and/or inadequate fringe benefit rates to support the estimated work load, and therefore demonstrating a lack of comprehension of the requirements.

Specifically, CSI alleges that ASC's line item pricing was understated in [deleted] for a total of [deleted] (including options) and at least four dining facility attendant line items (which facilities the protester alleges [deleted] for a total of [deleted]. CSI reaches its conclusion by comparing ASC's line item prices with the IGE, the protester's own prices, and the prices of the three other offerors submitting total prices lower than CSI's. The protester specifically contends that in the area of the greatest alleged underpricing--[deleted]--ASC's productive hours indicates that the firm did not base its unit prices on the estimated requirements.^[4]Additionally, CSI contends that ASC's proposed fringe benefit rate was understated because it was based on an erroneous...