The protester alleged the agency performed a slapdash cost realism assessment. GAO agreed, finding the agency hit the trifecta: (1) didn’t assess whether awardee’s rates were sufficient to retain incumbent staff, (2) ignored awardee’s failure to escalate rates for option years, and (3) couldn’t explain why it used a standard deviation analysis to assess realism. GAO recommended a do-over.
Apprio, Inc., GAO B-420627
Background
FEMA issued a solicitation to holders of GSA’s Human Capital and Training Solutions IDIQ contract. The solicitation sought training services for emergency responders. The solicitation contemplated a hybrid task order with fixed-price and cost reimbursement line items. The solicitation stated the agency would evaluate the cost reimbursement line items for cost realism.
FEMA received proposals from, among others, Apprio, Inc. and Leidos, Inc. FEMA selected Leidos for award, finding that it had a highly-rated proposal and a low price. Apprio protested.
Analysis
Cost Realism
Apprio contended FEAM didn’t properly assess the realism of Leidos’s proposal and should’ve upwardly adjusted Leidos’s rates. GAO found this argument compelling. As an initial matter, GAO noted that the contemporaneous evaluation record did not demonstrate any evaluation of the cost elements challenged by Apprio. The agency had not explained how it had evaluated Leidos’s labor rates or how those evaluations were made.
GAO found three specific errors in the evaluation. First, Leidos proposed to staff the task order with incumbent staff. But instead of proposing the actual costs for the incumbents, Leidos proposed lower, wage-determination rates. GAO reasoned that FEMA should have assessed whether those rates were realistic to retain incumbent staff.
Second, Leidos’s proposal did not apply any escalation to its proposed rates; it simply applied the wage determination rates from the base period to all option years. FEMA should have determined whether labor costs would increase over the life of the contract.
Third, FEMA used a standard deviation analysis to assess realism of proposed rates. GAO determined that FEMA had not explained why the standard deviation analysis was appropriate for this procurement and how that analysis accounted for differences in offerors’ technical approaches.
Technical Evaluation
Apprio also challenged a weakness assessed to its proposal under the technical factor for failure to demonstrate experience under any of the solicitation’s five experience projects. GAO sustained this protest ground, too, finding the weakness was directly contradicted by Apprio’s proposal, which showed that Apprio had three past projects that demonstrated the required experience.
Recommendation
GAO recommended FEMA conduct a new cost realism analysis and reassess Apprio’s experience.
Apprio is represented by John E. Jensen, Meghan D. Doherty, Robert C. Starling, and Ariella M. Cassell of Pillsbury Winthrop Shaw Pittman LLP as well as by James C. Fontana and L. James D’Agostino of Fontana Law Group, PLLC. The intervenor, Leidos, is represented by J. Scott Hommer, III, Rebecca E. Pearson, Christopher G. Griesedieck, and Allison M. Siegel of Venable LLP. The agency is represented by Joseph H. Doyle and Matthew Lane of the Department of Homeland Security. GAO attorneys Raymond Richards and Jonathan L. Kang participated in the preparation of the decision.
