Statistiea, Inc. appeals the decision of the General Services Administration Board of Contract Appeals in
Statistica, Inc. v. Department of State,
GSBCA No. 13426-P,
Background
On January 20, 1995, the Department of State (“State Department” or “agency”) issued Request for Proposals S-OPRAQ-95-
The solicitation set forth ten contract line item numbers (CLINs) for ten personnel positions or categories. It contained an estimated number of hours for each CLIN and required offerors to propose an hourly rate for each. The RFP contained four additional CLINs not here relevant. Among the many Federal Acquisition Regulation (FAR) clauses incorporated by reference in the solicitation was the provision entitled “Service Contract Act of 1965, as Amended,” 48 C.F.R. § 52.222-41. However, the RFP did not contain or reference the FAR provision found at 48 C.F.R. § 52.222-46, entitled “Evaluation of Compensation for Professional Employees.” That clause is required to be inserted in RFPs for contracts expected to exceed $500,000 when the service to be provided “will require meaningful numbers of professional employees.” 48 C.F.R. § 22.1103. Because the contracting officer had decided that the contract would not involve meaningful numbers of professional employees, he did not include the. clause. Finally, Section J of the RFP contained the Wage Determination issued by the Department of Labor, which established minimum hourly wage rates and fringe benefits for this service contract.
Four firms submitted offers in response to the RFP. The agency evaluated the four initial proposals but included only Statistica and Orkand in the competitive range, thereby eliminating the other two firms from further negotiations. In reviewing their respective cost proposals, the contracting officer became concerned with the base labor rates offered by each firm. Some of the rates were less than the wages specified in the Wage Determination for the personnel category the contracting officer thought corresponded to the pertinent CLIN. He was concerned further with the disparate mark-up of these rates for overhead.
In-an effort to allay these concerns, the contracting officer issued Amendment Three to the solicitation, which added clause “H.14 Correlation of Contract Positions,” listing the ten contract labor categories and the Wage Determination classification he thought corresponded to each category. That provision also reflected the contracting officer’s opinion that two of the positions were exempt. Amendment Three also replaced the original Wage Determination with a new one, which contained a footnote stating that the classifications do “not apply to employees employed in a bona fide executive, administrative, or professional category as defined and delineated in 29 CFR 541 (See 29 CFR 4.156).” The contracting officer also sent Orkand and Statistica substantively identical deficiency reports explaining that the Service Contract Act requires that employees in nonexempt labor categories (categories that are not bona fide executive, administrative, or professional) be reimbursed at or above the rate contained in the Wage Determination. Because significant percentages of Statistica’s and Or-kand’s proposed labor rates were below the rates in the Wage Determination, each firm was directed to confirm its compliance with the Service Contract Act and to identify any categories it had determined were exempt from the Act.
Both firms confirmed their compliance with the Service Contract Act and the Wage Determination. Statistica believed that some of the eight positions not identified as exempt were, in fact, exempt, including the “Documentation Specialist” position. Or-kand also thought that some of these positions were exempt, but not “Documentation Specialist.” The contracting officer deemed
Statistica interpreted this instruction and Amendment Four as a rejection of its position on the exemption of the CLIN positions from the requirements of the Service Contract Act. The cost proposal manager testified that Statistica “did not understand what the Government was doing” but felt that the agency had directed it to use at least the Wage Determination figures in pricing its offer. Orkand, in contrast, did not interpret Amendment Four as mandating that offerors price their proposals using the figures in H.14. Rather, it based its BAFO prices not on H.14 but on its position that a specified number of the ten CLIN positions were exempt.
Neither the contracting officer nor any other agency personnel informed Statistica or Orkand whether the agency accepted their exemption arguments or deemed them reasonable. Nor did either firm ask whether its exemption arguments had been accepted by the agency. Indeed, the contracting officer testified that he never intended to reach agreement with the offerors as to which categories were properly exempt, for it was not his decision to make.
Statistica had the higher-priced, technically-superior proposal. More specifically, its price was $7,256,689, or 37%, higher than Orkand’s, while its technical score was just 15% higher. The contract specialist drafted a source selection memorandum, in which he concluded that Orkand’s offer met the government’s needs and that the additional technical merit of Statistica’s proposal did not warrant paying the significantly higher price. Thus, he recommended that the agency award the contract to Orkand. The Source Selection Advisory Council (SSAC) members concurred with his conclusion and recommended to the Source Selection Authority (SSA) that the award be made to Orkand. The SSA accepted the SSAC’s recommendation and Orkand was awarded the contract on September 22,1995.
On September 29, 1995, Statistica protested the award to the General Services Administration Board of Contract Appeals (GSBCA). As amended, Statistica’s protest contained three counts pertinent to this appeal: (1) Orkand’s proposal was technically unacceptable for failing to comply with the mandatory requirement that offerors bid using the correlation matrix in clause H.14 (Count III); (2) the agency conducted misleading discussions with it regarding the mandatory nature of clause H.14 (Count IV); and (3) the agency conducted an unreasonable price analysis of the proposals and erred by failing to include FAR § 52.222-46 in the RFP (Count II). The board denied the protest, holding that the State Department had committed no error. The board also stated that even had Statistica prevailed on Count II, any error would have been harmless based on the SSA’s “thoughtful,” “well-reasoned,” and “convincing testimony” that Statistical technical superiority would not have justified awarding it the contract even if the price difference had been as small as $4 million. That is the difference Statistica’s expert testified would have existed had Sta-tistica priced its offer using base wage rates below those in the Wage Determination and contractor-site overhead instead of home-site overhead. Statistica appeals.
Discussion
This case, one of the last vestiges of the now-repealed Brooks Automatic Data Processing Act, 40 U.S.C. § 759,
see Grumman Data Sys. Corp. v. Dalton,
Statistica argues that the board erred in concluding (1) that Orkand's proposal complied with the requirements of the RFP, namely the H.14 clause (Count III); (2) that the State Department's discussions of the offeror's base labor rates were proper (Count IV); (3) that the contracting officer did not abuse his discretion by failing to include the FAR's Professional Employee Compensation Clause in the RFP (Count II); and (4) that the State Department's cost evaluation was proper (also Count II). The government and Orkand urge us to affirm the board's decision on the sole basis that even assuming the existence of the alleged procurement errors, Statistica did not establish that it was harmed or prejudiced by the errors.
A protester must show not simpiy a significant error in the procurement process, but also that the error was prejudicial, if it is to prevail in a bid protest. See Data Gen. Corp. v. Johnson,
In Data Genera4 this court said that "th appropriate standard is that, to establisi prejudice, a protester must show that, had I not been for the alleged error in the procure ment process, there was a reasonable likeli hood that the protester would have beei awarded~the contract."
The "variations" it cited were from thE Claims Court and the GSBCA. However those tribunals are required to follow thE "substantial chance" standard, as indeed they have. See, e.g., TRW, Inc. v. United States,
The Data General court stated that the "reasonable likelihood" standard was simply a "refinement and clarification" of the Morgan Bnsiness and CAGI decisions.
Statistica first argues that Orkand failed to comply with the allegedly mandatory requirement of the RFP that offerors price their proposals in accordance with the H.14 correlation matrix, thereby rendering its proposal unacceptable. But for the State Department's improper waiver of this requirement it `Would have received the contract as the only other offeror in the competitive range. We disagree.
The government did not intend that 11.14 be mandatory, nor did Orkand interpret it that way. Statistica points to no provision in the RFP that expressly mandates the use of the pricing matrix or explicitly rejects the parties' respective exemption arguments. But even assuming the reasonableness of Statistica's interpretation that it was mandatory, Orkand's contrary interpretation was at least equally reasonable. Statistica's own cost proposal manager testified that it is the contractor's responsibifity, not the agency's, to determine whether particular employees are covered by the Service Contract Act. 96-1 BOA at 140,483. Consequently, the solicitation was at most ambiguous. Grammam Data,
ij'or the same reason, we reject ~tatistica's argument that the government engaged in improper and misleading discussions about whether clause H.14 was mandatory. Even if we were to assume that the State Department's discussions were misleading, Statistica had a duty to seek clarification. It argues that it could not because discussions had closed, and that any further communications with the State Department would have necessitated the issuance of an RFP. amendment, which would have delayed the procurement. This concern is misplaced.
While the FAR prohibits agencies from reopening discussions after the receipt of BAFOs unless it is clearly in the government's interest to do so, 48 C.F.R. § 15.611(c), Statistica points to no provision precluding an offeror from seeking clarification of a patently ambiguous solicitation after an agency has requested BAFOs but prior to their receipt. Indeed, the GSBCA's bid protest rules mandate that in a negotiated procurement, alleged solicitation improprieties, including ambiguities, absent from the initial
Finally, again assuming the board erred in holding that the State Department’s cost evaluation was proper and that the contracting officer did not abuse his discretion by failing to include the FAR’s Professional Employee Compensation Clause in the RFP, Statistica has not demonstrated that the errors were prejudicial. Its expert testified that the difference between the two BAFO prices would have been only $4 million had Statistica priced its offer using base wage rates below those in the Wage Determination and contractor-site overhead instead of home-site overhead. The SSA testified, however, that that price difference would not have changed his award decision because Statistical technical advantage was slight. The board found the SSA’s testimony credible, calling it “thoughtful,” “well-reasoned,” and “convincing.”
In support of its argument that it was prejudiced by these assumed errors, Statisti-ea points to testimony from one of the four SSAC members that he would have “argued much stronger for Statistica” had the price difference been just 25% instead of 37%. It also points out that the SSA agreed that the SSAC recommendation, and consequently his decision, might have been different had the price gap been smaller than it was. While this testimony raises the chance that Statisti-ca might have received the award, the chance was not substantial. Statistica has cited no record evidence that the contract specialist, who drafted the source selection award recommendation memorandum, would have changed his recommendation, nor that the other three members of the SSAC were inclined to change their recommendation to the SSA. As seen, even that small price differential would not have changed the award.
Conclusion
Accordingly, the decision of the General Services Administration Board of Contract Appeals is affirmed.
AFFIRMED.
