Patronus Systems, Inc. protested a contract awarded to W&W Protection, LLC by the Department of the Navy, Naval Facilities Engineering Command for guard services. Patronus argued the Navy failed to conduct a price realism analysis, unreasonably concluded W&W Protection’s final proposal resolved a deficiency identified in its initial proposal, and ignored inconsistencies between the labor hours proposed in the awardee’s technical and price proposals.
In July 2019, the Navy issued the solicitation as a service-disabled veteran-owned small business (SDVOSB) set-aside using the procedures described in the Federal Acquisition Regulation (FAR). The award contract was to be made to the lowest-priced technically acceptable offeror. The solicitations were evaluated based on corporate experience; management and technical approach; safety; and past performance. Proposals deemed unacceptable under any technical evaluation factor would be considered technically unacceptable overall. Offerors’ prices were to be evaluated based on reasonableness and balance.
The agency received nine proposals. One of the offerors submitted an agency protest after Patronus received the contract award. The Navy responded by reevaluating its initial proposals and created a competitive range that included four of the nine offerors. Technical evaluators concluded Patronus’ final revised proposals (FRPs) was technically acceptable. Its final proposed price was also found reasonable and balanced.
The source selection board (SSEB) recommended the contract awarded to Patronus be terminated and instead be given to WWP, the lowest-priced technically acceptable offeror. Patronus filed two status protests with the Small Business Administration (SBA). It challenged WWP’s SDVOSB status and its small business status. The SBA denied both protests. This was followed by Patronus’ protest to the Government Accountability Office (GAO).
Patronus made three arguments in its protest. It argued the Navy failed to conduct a price realism analysis. GAO denied this argument because the solicitation did not require the agency to perform a price realism evaluation. It sustained two of Patronus other arguments. It asserted the Navy unreasonably evaluated WWP’s proposal as technically acceptable and stated a deficiency in its initial proposal was unresolved. The second argument sustained was the Navy unreasonably evaluated inconsistencies between the labor hours proposed in WWP’s technical and price proposals
Evaluation of WWP’s Proposal
GAO noted it would not reevaluate proposals. It instead reviews the record to determine whether the agency’s evaluation was “reasonable, consistent with the solicitation’s evaluation criteria, adequately documented, and in accordance with applicable procurement statues and regulations.” It concluded the Navy “lacked a reasonable basis for concluding WWP’s proposal revisions resolved the deficiency assessed for provision of insufficient managerial and administrative time.”
GAO noted the Navy prepared an independent government estimate (IGE). The IGE did not include labor hours for managerial and administrative tasks. The Navy stated it considered the “Training Hours” in the IGE for these tasks. It added that overhead costs included hours of project management time. GAO found the management and technical approaches required offerors to include an organizational chart identifying “the direct and indirect labor hours and associated trade classification required to meet all requirements of the RFP.” The solicitation stated the management and technical approach evaluation factor would be “unacceptable if the scheduling procedures do not adequately address productive and non-productive time; or staffing levels for each trade classification are 5% lower than what the Government anticipates.”
Technical evaluators found WWP’s initial proposal unacceptable. WWP’s initial technical proposal stated how its training program would comply with the training requirements in the performance work statement (PWS). Technical evaluators found its initial proposal had a deficiency because the hours proposed for a project manager were insufficient to meet IGE’S estimation. Evaluators found WWP’s failure to provide adequate staffing increased “the risk of unsuccessful contract performance to an unacceptable level.” A second deficiency in WWP’s initial proposal was its failure to explain how scheduling procedures address non-productive time. Examples include breaks, shift changes, sick leave, and training. This deficiency was considered a “material failure.” WWP’s proposal was deemed unacceptable overall.
WWP revised its proposed staffing plan after the initial proposals were reevaluated. WWP reduced its hours for the project manager. It indicated these hours were non-billable and included zero hours for training. It also reduced the guard hours. It stated the proposed relief staff hours were to ensure that guards would be provided breaks and relief staff would be “fully trained and certified to stand post.” Evaluators found WWP’s proposed hours sufficient because they met or exceeded IGE’s benchmarks. Technical evaluators found WWP’s deficiencies “were resolved in the FRP” and met the minimum requirements of the solicitation. GAO disagreed with the Navy’s evaluation and sustained Patronus’ protest. It found the description of the work WWP was to provide did not reference project management, time spent training, or the performance of other managerial or other administrative tasks.
Patronus also argued the Navy unreasonably ignored inconsistencies in the number of labor hours proposed in WWP’s technical and price proposals. GAO noted that any inconsistency between proposed performance and price must be clearly explained in the price proposal. It stated that the record showed the SSEB found the labor hours proposed in the technical portion of its FRP inconsistent with that proposed in the price portion of its FRP. SSEB recognized the inconsistency between the staffing levels, but found they “do not result in a change to the results of the evaluation.” GAO found the Navy and technical evaluators arguments unpersuasive.
The Navy asserted Patronus did not suffer competitive harm from its treatment of discrepancies in WWP’s FRP. It stated SSEB found a similar discrepancy in Patronus’ FRP, which also did not raise any concerns. GAO disagreed with the Navy’s assertion. It found that without resolution of the discrepancies between the offerors’ proposals, it is unclear how the agency and each offeror “could reach a meeting of the minds regarding the terms of anything resulting contract.”
GAO sustained Patronus’ protest challenging the Navy’s evaluation of WWP’s proposal and inconsistencies. It recommended the Navy reevaluate proposals and make a new source selection decision. If you find yourself in a similar situation. Call Whitcomb Selinsky PC for government contract help at (303) 529-6858.