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Vern Edwards

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An Air Force office recently lost a big bid protest: Guidehouse LLP; Jacobs Technology, Inc., B-420860.1, October 13, 2022.

Here is the GAO's digest:


Guidehouse LLP, of Falls Church, Virginia, and Jacobs Technology, Inc., of Tullahoma, Tennessee, protest the award of an integration support contract (ISC) to BAE Systems Technology Solutions & Services Inc., of Rockville, Maryland, under request for proposals (RFP) No. FA8207-21-R-0001. The Department of the Air Force issued the solicitation for systems engineering and integration services in support of the Intercontinental Ballistic Missile (ICBM) organization. Guidehouse and Jacobs challenge the agency's evaluation of professional employee compensation plans, the assessments of cost realism, and the resulting award decision. Jacobs also alleges that the agency unreasonably failed to identify risk in BAE's proposal.

We sustain the protests.

Now here are the scariest four sentences I have ever read in a bid protest. They are the very first sentences in the decision:


The mission of the ICBM organization at Hill Air Force Base, Utah, is to manage 400 combat capable nuclear missiles that are safe, secure, and effective. Contracting Officer's Statement (COS) at 2. The ICBM organization includes the program office for the current nuclear deterrent force, the Minuteman III (MMIII), and the program office for the next generation weapon system, the Ground Based Strategic Deterrent (GBSD). Agency Report (AR), Tab 4b, Performance Work Statement (PWS) at 3.

Footnote omitted.


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One can assume that the 52.222-46 Evaluation of Compensation for Professional Employees imperative to conduct "...an assessment of the offeror's ability to provide uninterrupted high-quality work" and  to compare proposed to historical compensation rates "...on the basis of maintaining program continuity, uninterrupted high-quality work, and availability of required competent professional service employees", is in the belief that doing so will materially lower the Government's contract risk?  Yeah; right.  If there is one thing this pandemic has shown, it's that people are willing to trade compensation for work/life balance, and that 52.222-46 is merely a result of government employee bias regarding a higher paycheck and/or grade as the sole measure of employee satisfaction and retention.  This delusional, arrogant, utter stupidity of "better living through Government contracting" just piles up day after day, with the Covid clauses at the top of this dung heap.

I do agree that [p]rofessional compensation that is unrealistically low or not in reasonable relationship to the various job categories . . . may be viewed as evidence of failure to comprehend the complexity of the contract requirements” is a valid criterion, but I don't need a separate FAR clause to tell me about the importance of cost realism.  

The simple matter of what constitutes a "labor rate" when comparing each offeror to the incumbent also demonstrates the absurdity of this clause:


"Here, the Air Force’s comparison appears to have relied on the following: (1) BAE’s blended direct labor rate, which was at least partially burdened with subcontractor indirect costs; (2) unburdened direct labor rates from the agency’s market research of salaries; and (3) the protesters’ unburdened blended direct labor rates."

"As the agency’s evaluation relies on a comparison between rates that contain subcontractor indirect costs and rates that do not, offerors were not evaluated for cost realism on a common basis. As a result, we cannot find that the agency’s method reasonably established whether offerors’ proposals would be realistic."

The fact that the Air Force found that the 52.222-46 requirement to compare proposed to incumbent rates practically unworkable is very telling:


"According to the Air Force, however, because ISC 1.0 was a fixed-price-level-of-effort (FPLOE) type contract, it could obtain only the “fixed price labor matrix for the ISC 1.0 contract,” which includes “fully loaded rates[.]” MOL at 6-7.[7] In other words, the agency did not have the actual compensation levels for the incumbent contract; it had only the fully loaded labor rates the contractor charged the government."

"...the Air Force determined that “[d]irect [l]abor on the ISC 1.0 contract was not reasonably and readily available for comparative evaluation,” AR, Tab 14a, SSEB Evaluation at 49, and “a predecessor rate analysis could not be made from equal points of comparison.” MOL at 6. The agency therefore concluded that such a comparison would not be meaningful."

"We find that the agency’s approach here produced a misleading result, in that the agency simultaneously concluded that a comparison to the FPLOE labor rates from the incumbent contract was not helpful in determining if offerors were paying less compensation than the incumbent contract, but, at the same time, relied on that comparison to conclude that the awardee was not proposing lower compensation for essentially the same work under the proposed contract."

Again, what does any of this subjective nonsense have to do with the Government's contract risk?

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