Scenario 5.0: 2
The buyer issued a request for proposals (RFP) for various support services. As part of these services, the seller would need to review the work of other contractors on existing and future programs. The RFP noted the potential for impaired objectivity or unfair competitive advantage organizational conflicts of interest (OCIs), and specified that the seller would be ineligible for involvement at any level on specifically identified contracts. The RFP also specified a second set of contracts-one of which was identified as "LKS"-that presented potential OCIs, and directed any seller performing work under these latter contracts to provide notice and an OCI mitigation plan that would be analyzed by the buyer.
The buyer intended to award a single cost-plus-fixed-fee, level-of-effort contract for a two-year base period with three option years to the offeror whose proposal provided the best value. This determination was to be based on an evaluation of proposals under the following three factors, in descending order of importance:
o Cost
o Mission suitability
o Past performance
For this contract, mission suitability and past performance, when combined, were to be approximately equal in importance to cost.
The RFP provided that the evaluation of cost proposals would assess both reasonableness and realism. To determine cost, the RFP provided estimates for both estimated level-of-effort hours and optional flex hours for nine labor categories, specifying the experience, skills, and description for each category. Under the mission suitability factor, the RFP included various management approach subfactors. These included a phase-in approach subfactor, which required offerors to specify an incumbent capture rate as a percentage of the total workforce and to justify the rate and methods used to achieve it. Both offerors in the competitive range indicated high incumbent capture rates. The proposed staffing approach was to be assessed under the technical approach subfactor.
The source selection plan provided a table that described how point scores would be assigned and which corresponding adjectival ratings would result from the scores. During the first evaluation, the buyer assigned a weakness to one of the two offerors in the competitive range, Offeror A, based on the fact that Offeror A offered at or below the average compensation for the low end of the required experience level, as well as the risk associated with Offeror A's ability to capture a qualified workforce. In response, Offeror A showed the buyer that it had used commercial compensation rates to determine its compensation rates. As such, the compensation rates Offeror A had submitted in its proposal were less than the company's engineers were currently being compensated.
After establishing the competitive range, the buyer held discussions with Offeror A and Offeror B. The buyer then requested final proposal revisions (FPRs).
In its FPR, Offeror A noted that its major subcontractor, Sub A, was the prime contractor on the "LKS project" mentioned in the RFP, and submitted an OCI mitigation plan that included a labor distribution and mapping template showing that the program supported by Sub A's LKS project would not be overseen by Sub A's staff performing work on the new contract. Contemporaneous records indicated a brief discussion by the evaluators of this approach, but did not discuss OCI mitigation directly and provided no indication that the potential OCI was analyzed.
After reevaluation, Offeror A had slightly higher scores in the technical approach and mission suitability subfactors, a lower past performance rating, and a lower probable cost. After receiving and evaluating the FPRs, the buyer awarded the contract to Offeror A.
Question:
Why did the buyer need to analyze cost reasonableness and realism for this solicitation?