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A-76 (Rev.), Attachment B: D. Standard Competition
Procedures |
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Comptroller General - Key Excerpts |
Where, as here, an agency has
conducted a cost comparison under OMB Circular A‑76 and,
in the process, used the procurement system to determine
whether to contract out or to perform work in-house, our
Office will consider a protest alleging that the agency
has not complied with the applicable A-76 procedures in
its selection process, or has conducted an evaluation that
is inconsistent with the solicitation criteria or is
otherwise unreasonable. Frontier Tech., Inc., B-294061,
Aug. 12, 2004, 2004 CPD para. 176 at 4.
In its protest, New Dynamics argues that the agency failed
to reasonably evaluate the MEO's Line 2 costs for
materials and supplies for realism as required by the
solicitation and the A-76 procedures. We agree.
As noted above, the solicitation required the ATO to
submit a cost proposal using the A-76 COMPARE software.
The RFP provided that the information contained therein
was to be used to assess whether the MEO's costs were
realistic. This is consistent with the requirements set
forth in OMB Circular A-76, which requires contracting
officers to perform price analysis and cost realism
analysis with respect to MEO costs, including, among other
costs, the MEO's Line 2 costs for materials and supplies.
OMB Cir. A-76, Attach. B, paras. D.5.b(1), c(4).
In its initial cost proposal, the ATO represented that the
MEO's Line 2 cost for materials and supplies was based on
the incumbent MEO's [DELETED] material and supply costs
for [DELETED]. The ATO calculated its total Line 2 cost as
[DELETED] using an annual cost of [DELETED] as the base
for calculating the cost of each performance period as
well as a 4.5 percent yearly inflation rate.
Notwithstanding the fact that the Army sought further
clarification regarding the ATO's Line 2 cost--the Army
noted during discussions that there was no specific
breakdown of the ATO's Line 2 cost as it related to the
supply list provided in the solicitation--in its second
cost proposal, the ATO merely reiterated the fact that its
cost was based on the incumbent MEO's [DELETED] costs and,
without any explanation, reduced its annual base cost from
[DELETED] to [DELETED]. As a result, the ATO's total cost
for Line 2 was reduced to [DELETED]. In its final cost
proposal, the ATO again changed its Line 2 cost without
explanation, reducing the total cost to [DELETED].[8] In
this regard, the ATO used an annual cost for materials and
supplies of [DELETED] to calculate its total cost. This
amount, however, was inconsistent with the narrative
section of the ATO's cost proposal, which indicated that
the base amount used to calculate the MEO's Line 2 costs
was [DELETED].
The documentation in support of the Army's price
evaluation reflects the Army's conclusion that the MEO's
Line 2 costs were realistic. The sole basis for this
conclusion was the ATO's representation that the Line 2
costs were based on [DELETED] actual costs--the Army did
not have any independent knowledge of the [DELETED]
material and supply costs, nor was this information
provided in the ATO's cost proposal or through its
response to the Army's request for additional information
during discussions. As noted above, when the Army sought
additional information regarding the ATO's Line 2 costs
during discussions, the ATO simply reiterated the
representation from its initial proposal that the costs
were based on [DELETED] costs, and proceeded to reduce its
Line 2 costs without explanation. Without any insight into
the actual [DELETED] costs, it was not possible for the
Army to have reasonably assessed the validity of the ATO's
representations. Rather, the Army simply assumed that the
ATO's assertions were accurate, notwithstanding the fact
that they were entirely unsupported as a consequence of
the ATO's failure to provide additional information
concerning the Line 2 costs, as the agency had requested
during discussions.
The Army's assumption in this case was also inherently
unreasonable given the puzzling nature of the reduction to
the ATO's Line 2 costs with each revision of its cost
proposal. Since the costs were purportedly based on a
historical figure, a value that presumably would have been
fixed, and because there were no changes to the
solicitation requirements with respect to materials or
supplies which could have supported any Line 2 cost
changes, one would not have reasonably expected the ATO's
Line 2 costs to change each time it submitted a new cost
proposal. Moreover, the ATO's Line 2 costs in its final
proposal were internally inconsistent--the narrative
section specifies that they are calculated using a base
value of [DELETED], while the Line 2 costs were in fact
calculated using the lesser amount of [DELETED]. (New
Dynamics Corporation, B-401272, July 8, 2009) (pdf) |
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Comptroller
General - Listing of Decisions |
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For
the Government |
For
the Protester |
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New Dynamics Corporation, B-401272,
July 8, 2009 (pdf) |
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