Protest challenging the agency’s technical and cost realism evaluations is dismissed in part and denied in part. The protester contended that the agency misevaluated the awardee’s proposal, but that argument was speculative, and GAO declined to allow the protester to substantiate it with a supplemental declaration. The protester also argued that the evaluation of its own proposal was unreasonable, but GAO found the evaluation consistent with the RFPs’ criteria. GAO further found the agency’s upward adjustment of the protester’s costs appropriate.
Raytheon Blackbird Technologies protested the decision of the Department of the Navy to award a contract to BAE Systems Technology Solutions & Services Inc. The contract was for tagging, tracking, and locating services—i.e., installing position location devices on vehicles and aircraft. Raytheon alleged that the Navy had unreasonably evaluated offerors’ technical proposals and conducted a flawed cost realism analysis.
Raytheon argued that the Navy had unreasonably determined that BAE’s proposal was acceptable under an operating plan factor because BAE relied on independent contractors and subcontractors instead of current employees. BAE requested dismissal of this protest ground, contending it was speculative. In response to the request for dismissal, Raytheon submitted a declaration from one its employees who said that she and others had been offered jobs with a BAE subcontractor.
GAO agreed with BAE that Raytheon’s allegation was not supported by any evidence that BAE was relying on subcontractors. Moreover, GAO explained that the speculative allegation could not be cured by the subsequent declaration. Protesters must set forth the legal and factual grounds supporting their protests in the initial protest filing. It was apparent that Raytheon was aware of the evidentiary basis of this argument when it filed the initial protest, but it did not include the declaration with the protest. GAO refused to consider the declaration because Raytheon should have submitted it with the initial protest.
Raytheon also challenged the Navy’s evaluation of its own proposal under the operating plan factor contending the agency improperly applied a “holistic” evaluation, assigned an unreasonable acceptable rating on this factor, and unreasonably evaluated Raytheon’s staffing and transition plans.
GAO disagreed. First, the Navy did not evaluate this factor under an improper “holistic” approach. The agency only used a holistic approach in the sense that it took into account each of the operating plan elements when deciding which rating to assign.
Second, Raytheon’s acceptable rating was appropriate. An acceptable rating was warranted for an adequate technical approach and moderate performance risk. The Navy had determined that Raytheon’s operating plan presented a very low risk of unsuccessful performance, but it also determined that Raytheon’s plan only demonstrated an adequate technical approach. This fit the RFP’s definition of acceptable.
Third, GAO found no problem with the evaluation of Raytheon’s staffing and transition plan. The RFP stated that any firm proposing to use current employees would be evaluated more favorably under the staffing plan subfactor. Raytheon had received a strength on that basis. But that strength was offset by other portions of Raytheon’s approach.
Next, Raytheon challenged the Navy’s cost realism analysis, arguing that the agency had unreasonably increased the proposed amount of “other indirect costs.” The RFP required offerors to enter estimates for certain Defense Base Act and Insurance and Medical Preparation costs on a worksheet. Raytheon elected not to include those costs on the worksheet, believing they were included in the proposed fringe benefits.
GAO noted that it was not clear the omitted costs were captured in other portions of the cost proposal. Moreover, the RFP required offerors to provide a detailed explanation of the indirect cost estimates, and Raytheon had not explained why it had not charged the Defense Base Act and Insurance costs directly. Raytheon failed to submit a well-written proposal and thus bore the risk that the agency would evaluated it negatively.
Finally, Raytheon argued that the cost realism analysis was flawed because the Navy had improperly rejected its proposed labor escalation rate. But GAO concluded that the Navy had reasonably found the proposed escalation rate low based on major escalation indices. What’s more, Raytheon never explained why its proposed rate was realistic despite being much lower than the major indices.
RBT is represented by Robert M. Moore, Richard O. Wolf, and John Bertino of Moore & Lee, LLP as well as Gregory Moffatt of Raytheon Company. The intervenor, BAE, is represented by Jamie F. Tabb, Elizabeth Krabill McIntyre, and John M. Satira of Vinson Elkins LLP as well as Catherine K. Ronis of BAE Systems Inc. The government is represented by Scott McGuigan and David D. Perrone of the Department of the Navy. GAO attorneys Todd C. Culliton and Tania Calhoun participated in preparation of the decision.