BNUMBER:  B-261662.2
DATE:  December 4, 1995
TITLE:  Vitro Corporation

**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:Vitro Corporation

File:     B-261662.2

Date:December 4, 1995

William L. Walsh, Jr., Esq., Lars E. Anderson, Esq., J. Scott Hommer 
III, Esq., and Wm. Craig Dubishar, Esq., Venable, Baetjer & Howard, 
for the protester.
Jacob B. Pompan, Esq. and John J. O'Brian, Esq., Pompan, Ruffner & 
Werfel, for QuesTech, Inc., intervenor.
Capt. Arthur E. Lees, and Vera Meza, Esq., Department of the Army, for 
the agency.
Glenn G. Wolcott, Esq., and Paul Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency reasonably concluded that protester's proposed potential 
[deleted] discount would not accrue to the benefit of the government 
where the discount took effect only for labor hours beyond specified 
levels and the agency reasonably determined that the threshold 
requirements would not be achieved.

2.  Agency's adjustment of protester's proposed labor rates to reflect 
risk was permitted by the terms of the solicitation.

3.  Agency reasonably considered protester's performance of 
predecessor contract in evaluating protester's proposed rates and 
agency's across-the-board adjustment of protester's proposed labor 
rates does not provide a basis to sustain the protest where record, as 
a whole, demonstrates that adjustment did not have a significant 
impact on source selection decision.

4.  Agency conducted meaningful discussions regarding protester's 
labor rates where it advised protester that rates were unacceptably 
low, and protester's response demonstrated clear understanding of the 
minimum expected rates.

DECISION

Vitro Corporation protests the Department of the Army's award of a 
contract to QuesTech, Inc. under request for proposals (RFP) No. 
DAAB10-93-R-1017, to provide support for the Army's Intelligence and 
Electronic Warfare (IEW) activities.  Vitro contends that the agency 
improperly evaluated its cost and technical proposals and failed to 
engage in meaningful discussions.

We deny the protest.

BACKGROUND

On May 2, 1994, the Army issued the RFP seeking proposals to provide 
operational, program management, technical, engineering, integration, 
prototype development and fabrication services to support the Army's 
Intelligence and Electronic Warfare Directorate (IEWD) and its 
customers.[1]  The requirements being competed under this solicitation 
are a consolidation of activities currently being performed by 
QuesTech and Vitro, individually, under separate contracts.  The Army 
describes the new contract as one which will require a broad range of 
technical disciplines and which is intended to push the 
state-of-the-art in intelligence and electronic warfare, specifically 
ensuring the ability to jam enemy communications while avoiding 
detection.   

Consistent with the Army's description of the contract, the RFP 
emphasized technical and performance factors over cost factors.  
Specifically, the RFP stated that award would be based on three 
evaluation factors--technical, performance risk, and cost--and that 
technical factors would be significantly more important than 
performance risk, which would be significantly more important than 
cost.

The solicitation contemplated award of an indefinite 
delivery/indefinite quantity (ID/IQ) contract for a base period with 
four 1-year option periods; upon award of a contract, delivery orders 
will be issued and contract payments will be made on a 
time-and-materials basis.  The RFP listed 83 labor categories for 
which offerors were required to propose rates.  For each labor 
category, the RFP provided the agency's estimate of the number of 
hours likely to be required during each contract year.  In the 
aggregate, the agency estimated it would require approximately 434,000 
labor hours per year.  For each labor category listed, the RFP also 
specified the civil service or "GS" grade level which the agency 
considered to represent the appropriate equivalent level of experience 
and expertise sought. 

On October 24, following several RFP amendments, proposals were 
submitted by four offerors, including Vitro and QuesTech.  Technical 
proposals were evaluated by a technical evaluation committee (TEC); 
cost proposals were evaluated by a cost evaluation committee (CEC); 
and offerors' performance risks were evaluated by a performance risk 
analysis group (PRAG).  All four proposals were included in the 
competitive range, and discussions were subsequently conducted with 
each offeror.  Best and final offers (BAFO) were submitted on March 
13, 1995.  Proposals were again evaluated and final reports from the 
TEC, CEC, and PRAG were sent to the source selection evaluation board 
(SSEB), which reviewed those reports and sent them, along with its own 
report, to the source selection advisory council (SSAC).  The SSAC 
reviewed the evaluation documentation and subsequently met with the 
source selection authority (SSA).  The final ratings for QuesTech's 
and Vitro's proposals were as follows:

Offeror      Technical Rating[2]Performance RiskProposed Cost
                                       (in millions)Evaluated Cost
                                                    (in millions)

QuesTech     Blue         Low          $228.6       $228.9

Vitro        [deleted]    [deleted]    [deleted]    [deleted]
The [deleted] difference between Vitro's proposed cost and its 
evaluated cost reflected the agency's determination that Vitro's 
proposal included an illusory [deleted] discount, plus an upward 
adjustment of [deleted] for certain proposed labor rates which the 
agency believed were unrealistically low.  

On April 19, the SSA selected QuesTech for award and subsequently 
prepared a source selection document (SSD) which, among other things, 
stated: 

     "I have examined all the advantages and disadvantages found in 
     the evaluation of those offerors/proposals which conformed to the 
     solicitation.  I have weighed all those advantages and 
     disadvantages in making this decision and have selected 
     [QuesTech] as the successful offeror.  I understand that my 
     decision to award this contract to [QuesTech] results in the 
     payment of a premium of approximately [deleted]."

A contract was awarded to QuesTech on May 31.  Vitro was debriefed on 
June 6, and filed its initial protest on June 8.  Following receipt of 
the agency's response to its initial protest, Vitro filed a 
supplemental protest on July 25.  

DISCUSSION

Vitro's [deleted] Million Discount

A.  Background

In its BAFO, Vitro introduced a discount that was triggered by 
specified levels of labor hours being both ordered and delivered 
within the base period and first option period, respectively.  
Specifically, Vitro's BAFO stated: 

     "Vitro Corporation is proposing a [deleted] discount for all 
     labor in excess of [deleted] hours ordered and delivered during 
     the base year 12 month ordering period.  Additionally, we are 
     offering a [deleted] discount for all labor in excess of 
     [deleted] hours ordered and delivered during the 1st option year 
     ordering period."[3]  

Vitro states that the proposed discount was intended to provide an 
incentive to the agency to maximize the quantity of hours placed on 
the contract and to place orders early in each contract period.  

Upon reviewing the discount provisions in Vitro's BAFO, various agency 
officials expressed concern regarding whether the proposed discount 
would provide any benefit to the agency in light of the requirement 
that labor hours be both ordered and delivered in the same contract 
period.  There were various bases for this concern.  First, funding 
for this contract will come from a variety of sources and will become 
available for obligation at different times throughout the contract 
periods;[4] in this regard, overall funding for the estimated level of 
effort was never entirely certain.  Further, the agency states that, 
after reviewing the discount provisions in Vitro's BAFO, it examined 
existing data regarding Vitro's and QuesTech's performance of the 
predecessor contracts.  The agency concluded that, for quick reaction 
prototyping, only about 35 percent of the hours ordered in a given 
period were actually delivered within that same period.[5]  Thus, 
applying its most optimistic experience to the 434,000 hours per year 
estimated in the RFP, the agency concluded that only 152,000 hours (35 
percent of 434,000) were likely to be both ordered and delivered 
within a given 12 month period.  Accordingly, the agency concluded 
that the threshold requirements triggering Vitro's [deleted] 
discount--[deleted] hours ordered and delivered in the base year and 
[deleted] hours ordered and delivered in the option year--were 
unlikely to be realized.  
 
Following the agency's decision not to credit Vitro's proposal with 
the [deleted] discount,  the CEC Chairman drafted a memorandum 
summarizing this issue, which stated:

     "3.  Using actual data and extrapolating through the next 5 years 
     it became clear that there was very little chance of the 
     government expending over [deleted] hours in the first year and 
     [deleted] hours in the second year.  The current reductions in 
     funding further reduced the probability of reaching those 
     thresholds.

     "4.  It appears clear that [Vitro] also had the same historic 
     data and did the same analysis, coming up with a very low risk 
     method of lowering [its] proposal costs with little or no chance 
     of having to provide the Government any discount.  If all 
     offerors had access to the historic data or had the Government 
     more accurately predicted the anticipated hours, this discount 
     would not be an issue.  The Government felt that using the 
     average yearly hours would be fair and reasonable for evaluation 
     purposes.  It appears that [Vitro] has found a way to offer the 
     Government a meaningless, no substance discount that only gives 
     the appearance of savings to the Government, when, in fact, the 
     Government will not see a cent."

B.  Vitro's Protest

Vitro protests the agency's refusal to credit its [deleted] discount, 
asserting that the action was based on a "secret" revision by the 
agency of its estimates regarding the amounts of labor that would be 
required in the base year and first option year.  

Partially in response to Vitro's allegations that the agency's 
projected requirements changed during the evaluation process, our 
Office conducted a hearing during which testimony was provided by 
various agency officials.  At the hearing, the SSA testified that he 
believed the contract requirements stated in the solicitation were 
accurate.  Hearing Transcript (Tr.) at 37-38.  The SSA further 
testified that he was responsible for the final decision not to 
include the [deleted] discount as part of Vitro's evaluated cost and 
that this decision was based on his belief, after considering input 
from his subordinates, that Vitro's requirement that labor hours be 
ordered and delivered in the same period precluded the discount from 
having any value.  Tr. at 33-36, 82-85.  The SSAC Chairman and the 
SSEB Chairman similarly testified that they had no reason to question 
the accuracy of the RFP's stated requirements and that the [deleted] 
discount in Vitro's proposal would not have any value to the 
government on the basis of the "ordered and delivered" requirement.  
Tr. at 129, 130, 243.

In selecting an offeror for award of a cost-type contract, a cost 
realism analysis must be performed by the agency to determine the 
extent to which an offeror's proposed costs represent what the 
contract is likely to cost the government.  CACI, Inc.--Fed., 64 Comp. 
Gen. 71 (1984), 84-2 CPD  para.  542; Radian, Inc., B-256313.2; B-256313.4, 
June 27, 1994, 94-2 CPD  para.  104.  In reviewing an agency's judgment in 
this area, our Office is concerned with determining whether the cost 
evaluation had a reasonable basis.  General Research Corp., 70 Comp. 
Gen. 279 (1991), 91-1 CPD  para.  183, aff'd, American Management Sys., 
Inc.; Department of the Army--Recon., 70 Comp. Gen. 510 (1991), 91-1 
CPD  para.  492.

We find that the agency reasonably determined that Vitro's proposed 
[deleted] discount would not actually lower the cost to the government 
and thus should not be taken into account in the cost evaluation.  
Vitro does not dispute the agency's understanding that, in order for 
Vitro's offered discount to take effect, the labor hours would have to 
be both ordered and delivered (that is, performed) within the same 
period.  Vitro has not presented any persuasive evidence challenging 
the agency's conclusion that the contract performance history 
indicates that the thresholds established in Vitro's BAFO were not 
likely to be realized.[6]  In light of the manner in which this 
contract is funded, the past contract performance data, and the fact 
that Vitro, itself, would have a significant amount of control in 
determining when discount thresholds were attained,[7] the agency 
reasonably concluded there was little likelihood that the proposed 
discount would actually accrue to the benefit of the government.  

We find no merit in Vitro's assertion that the agency's decision to 
disallow its [deleted] discount was based on a revision to its stated 
requirements.  The record shows that the agency's estimates of its 
requirements were based on the agency's consideration of the levels of 
effort required under the predecessor contracts, as well as its 
estimate of anticipated requirements that had not been performed under 
the predecessor contracts.  Although the record shows that, due to the 
manner in which this contract is funded, there was some uncertainty 
regarding whether the estimated levels of effort would actually be 
realized, the SSA, SSAC Chairman, and SSEB Chairman all concluded that 
the levels of effort contained in the RFP represented the agency's 
best estimates of its requirements.  Tr. at 37-38, 129, 130, 243.  We 
will not sustain a challenge to an agency's estimated requirements 
unless those estimates are not based on the best information available 
or are otherwise defective.  Dynalectron Corp., 65 Comp. Gen. 92 
(1985), 85-2 CPD  para.  634; American Contract Servs., Inc., B-225182, Feb. 
24, 1987, 87-1 CPD  para.  203.  Based on the entire record here, Vitro has 
not shown that the agency's estimates were based on anything other 
than the best information available or that they were otherwise 
defective.

Vitro's Labor Rates

A.  Background Pertaining to the [deleted] Adjustment

In evaluating proposals, the agency established an independent 
government cost estimate (IGCE) applicable to the direct labor rates 
for each labor category; this IGCE consisted of the "Step 1" salary of 
the appropriate equivalent "GS" grade level.[8]  The agency considered 
the "Step 1" rates to reflect the lowest level of direct compensation 
necessary to attract and retain a work force with the required 
experience and qualifications.  Where an offeror's direct labor rates 
were below the government's IGCE, those proposed rates were adjusted 
up to the IGCE for purposes of the cost evaluation.

The agency explains that its adjustment of offerors' rates reflected 
the agency's quantification of the risk associated with rates below 
the IGCE.  Specifically, the agency explains that, because the 
solicitation contemplated negotiation of delivery orders following 
contract award, there was a risk to the government that lower 
compensated personnel would take longer to perform the required tasks 
or, alternatively, that the agency would be required to negotiate 
delivery orders using higher level personnel.   Based on these 
considerations, the agency determined that several of Vitro's labor 
category prices were unrealistically low, and adjusted them upward in 
an aggregate amount of [deleted].

B.  Vitro's Protest

Vitro argues that the solicitation did not permit this type of 
adjustment to its proposed labor rates.  Specifically, Vitro asserts 
"[t]he only potential adjustment to labor rates which was mentioned in 
the solicitation was [in RFP section M.5.B which provided] that 'the 
Government will adjust the proposed labor rates to reflect a 40 hour 
work week, 1920 hour work year, if necessary.'"  

Although Vitro accurately recites the RFP provision advising offerors 
that proposing uncompensated overtime would result in labor rate 
adjustments, Vitro's assertion that this is the "only" adjustment 
permitted by the RFP fails to recognize the specific provisions of RFP 
section M.5.C.  That section (which was part of RFP section M.5, 
titled "Evaluation Approach--The Cost Evaluation Factor") states 

     "The government will also examine the realism of the offeror's 
     proposed rates in terms of the requirements described in the 
     solicitation.  Rates must be realistic for securing and retaining 
     the calibre of highly trained professionals required to perform 
     the government's requirements.  The proposed rates will be 
     examined to determine their being unrealistically high or low, 
     which may affect an offeror's overall rating."  

A procuring agency is not compelled to accept as realistic labor rates 
offered for contracts where, as here, services are to be ordered and 
the labor mix set after award.  Stanley Assocs., Inc., B-232361, Dec. 
22, 1988, 88-2 CPD  para.  617.  Under an ID/IQ contract such as this, an 
agency must rely heavily on the contractor's assessment regarding the 
number of hours and type of labor that will be required to perform the 
delivery orders.  In such circumstances, an agency may reasonably 
determine that the proposed pricing structure will result in actual 
costs to the government greater than those stated in the proposal.  
Id.  

Here, the need for quick responses to highly technical requirements 
exacerbates the risk associated with potential disagreement over 
levels of effort and qualifications of personnel required for 
successful contract performance.  The agency's consideration of that 
risk was proper in determining the probable cost of a given offeror's 
proposal.  Accordingly, the agency's upward adjustment of Vitro's 
labor rates was permissible under this solicitation.

Vitro next argues that the agency "mechanically" adjusted its labor 
rates up to the IGCE and failed to consider Vitro's proposed rates in 
the context of Vitro's past experience.  Specifically, Vitro asserts:  
"the Army completely ignored the fact that Vitro, as the incumbent 
contractor, has successfully employed personnel at these same proposed 
labor rates while meeting and exceeding all Government requirements 
under the contract."

The agency acknowledges that it did not individually assess the 
realism of each Vitro labor rate in light of the personnel it 
proposed.  At the hearing the CEC Chairman testified as follows:

     "Q . . . [Was there] any instance where you made a subjective 
     judgment that [Vitro] offered something below the Step 1 rate for 
     [a] particular person . . . and you looked at it and concluded 
     that, for whatever reason, this [rate] was uniquely acceptable? . 
     . .

     "A.  No.

     "Q . . . . There isn't a single example where you subjectively 
     looked at [the proposed rates]?

     "A.  No, I was not going to do that.

     "Q . . . . [I]t would have required subjective judgment?

     "A.  Then I would be saying, gee, yeah, he probably could 
     [perform at that rate].  Maybe.  We didn't do that."  Tr. at 
     429-432.

The agency also states that it did not specifically compare Vitro's 
proposed rates to the rates being charged under the predecessor 
contracts.  Nonetheless, the agency asserts that it did, generally, 
consider Vitro's performance of the predecessor contract in its 
evaluation of Vitro's proposal.  Specifically, the agency states that 
Vitro was awarded the predecessor contract primarily on the basis of 
its low proposed rates, and that those low rates led to problems in 
staffing and performance immediately after contract award.  Contrary 
to Vitro's representations that it met or exceeded all government 
requirements under the predecessor contract, the agency submitted as 
part of the record here [deleted].  In short, the agency maintains 
that it did, in fact, give appropriate consideration to Vitro's 
performance under the predecessor contract.  

More significantly, in responding to Vitro's protest, the agency 
identified a specific portion of Vitro's cost proposal, omitted in the 
cost evaluation, which properly requires a [deleted] increase to 
Vitro's evaluated cost.[9]  The agency's explanation of this issue, as 
well as its supporting worksheets, were provided to Vitro as part of 
the agency's response to Vitro's supplemental protest.  In its 
subsequent protest submissions, Vitro did not dispute the agency's 
assertions in this regard.  

As noted above, agencies must perform cost realism analyses in 
selecting awardees for contracts where the cost to the government is 
not fixed.  CACI, Inc.--Fed., supra; Radian, Inc., supra.  Our review 
in this area is primarily concerned with determining whether the cost 
evaluation was reasonable.  General Research Corp., supra; Department 
of the Army--Recon., supra.  While a reasonably derived agency 
estimate of direct, unburdened labor rates for comparable labor 
categories can provide an objective standard against which proposed 
rates may be compared, an agency may not mechanically apply that 
estimate to determine evaluated costs.  United Int'l Eng'g, Inc. et 
al., 71 Comp. Gen. 177 (1992), 92-1 CPD  para.  122.  In order to undertake 
a proper cost realism evaluation, the agency must independently 
analyze the realism of an offeror's proposed costs based upon its 
particular approach, personnel and other circumstances.  Allied 
Cleaning Servs., Inc., 69 Comp. Gen. 248 (1990), 90-1 CPD  para.  275. 

Here, we do not resolve the question of whether the agency gave 
adequate consideration to Vitro's proposed labor rates because, based 
on the entire record, we find no potential prejudice to Vitro 
regarding this issue.  Prejudice is an essential element of every 
viable protest, Lithos Restoration, Ltd., 71 Comp. Gen. 367 (1992), 
92-1 CPD  para.  379.  We will not sustain a protest where the record, read 
as a whole, demonstrates that the protester was not prejudiced.  
Dynamic Isolation Sys., Inc., B-247047, Apr. 28, 1992, 92-1 CPD  para.  399; 
OAO Corp., B-228599.2, July 13, 1988, 88-2 CPD  para.  42.  

If we were to assume that each and every one of Vitro's proposed labor 
rates should have been accepted without adjustment, Vitro's total 
evaluated cost would have been a total of [deleted] lower.  However, 
as discussed above, Vitro has not challenged (and the record supports) 
the agency's assertion that its evaluation of Vitro's cost proposal 
improperly omitted [deleted] (unrelated to the labor rate 
adjustments), which virtually offsets the [deleted] adjustment.  In 
the context of this solicitation, which provided that cost was 
"significantly" less important than performance risk, which was 
"significantly" less important than technical factors, the adjustment 
urged by Vitro, after the offset, clearly would not have altered the 
source selection decision.  We thus have no basis to sustain the 
protest on this ground.  

Vitro maintains that the agency failed to engage in meaningful 
discussions regarding its evaluation of Vitro's proposed personnel and 
labor rates.  Specifically, Vitro asserts that the agency created a 
"secret IGCE" reflecting the Step 1 salaries, and that Vitro had no 
reason to know that its proposal to pay direct labor rates below that 
IGCE would be considered unacceptable.  The record is to the contrary.  
On January 30, 1995, the agency sent written discussion questions to 
Vitro regarding its cost proposal.  Among other things, this document 
stated 

     "Several labor categories which are unacceptably low have been 
     proposed.  The direct labor rates (not the totally loaded labor 
     rates) were compared to the minimum GS level the government feels 
     are reasonable.  [Deleted.]  The following is a list of 
     excessively low labor categories and their levels.  [The 
     discussion question then listed [deleted] labor categories.]

     "The government needs explanations as to how the offeror plans to 
     provide personnel with the required quality and skill levels at 
     the excessively low proposed labor rates."  

Vitro responded to this discussion question with the following 
statement:

     "When taken in the context of Vitro's entire proposed salary 
     structure, each category of concern to the government 
     [deleted].[[10]]

.     .     .     .     .
     "In several cases where we [deleted] deviate from the 
     Government's minimum expected salary, Vitro has recognized the 
     deviation and accepted it as a business risk."  (Emphasis added.)

In negotiated procurements, contracting agencies are required to 
conduct meaningful discussions with offerors whose proposals are in 
the competitive range.  Federal Acquisition Regulation (FAR)  sec.  15.610.  
In this regard, however, agencies are admonished to protect the 
integrity of the procurement process by balancing the need for 
meaningful discussions against actions that result in technical 
leveling, technical transfusion, or auctions.  See SeaSpace Corp., 
B-252476.2, June 14, 1993, 93-1 CPD  para.  462.  Accordingly, agencies are 
not to "spoon-feed" offerors, nor does the FAR contemplate 
"all-encompassing" discussions in which the agency identifies every 
aspect of an offeror's proposal that receives a rating below the 
maximum score.  See ITT Fed. Servs. Corp., B-250096, Jan. 5, 1993, 
93-1 CPD  para.  6.  Rather, agencies are required to lead offerors, 
generally, into the areas of their proposals that require attention.  
SeaSpace Corp., supra.

On the basis of the record discussed above, the agency clearly 
apprised Vitro of the area of its proposal that required attention, 
that is, labor rates which were below the level the agency believed 
necessary to attract and retain qualified personnel.  Specifically, 
the agency's discussion question referred to the government's "minimum 
GS rates," stating that some of Vitro's labor rates were "unacceptably 
low."  Significantly, Vitro's own response makes clear its 
understanding regarding "the government's minimum expected salary" for 
each labor category.  Having unambiguously demonstrated this 
understanding, Vitro may not now credibly complain that it was 
prejudiced by the agency's failure to specifically list each category 
in which it or its subcontractors proposed rates below the clearly 
communicated criterion.   The agency was not required to provide that 
level of specificity.

Source Selection Decision

Vitro also protests that the SSA improperly performed the 
cost/technical tradeoff in selecting QuesTech's proposal for award.  
Specifically, Vitro refers to the portion of the source selection 
decision which states that the SSA recognized that the agency was 
paying a [deleted] premium for QuesTech's technically superior 
proposal.  Vitro argues that the SSA's quantification of the premium 
erroneously focused on the difference in the total proposed costs of 
the offerors; Vitro maintains that the premium should have been 
calculated only on the difference in labor costs, since other portions 
of the cost proposals (for example, material costs) differed only to 
the extent the offerors' burden rates differed.[11]  

Section M.1 of the RFP, titled "Basis for Award," stated 

     "Offerors are advised that . . . [a] Best Value analysis will be 
     used to determine the most favorable overall value to the 
     Government.  The Best Value will be based on trade-offs between 
     the offerors' Technical and Cost proposals and the 
     evaluated/assessed Performance Risk."

Since the RFP unambiguously called for determination of the most 
favorable overall value, the SSA properly considered the offerors' 
total proposed costs in calculating the premium associated with 
QuesTech's proposal.  

Other Protest Issues

Vitro raises various other arguments, including challenges to the 
agency's evaluation of sample tasks and assertions that QuesTech's 
technical proposal was rated too high or, alternatively, that Vitro's 
technical proposal was rated too low.[12]

Regarding the evaluation of sample tasks, Vitro complains that the 
number of man-hours and type of labor proposed by QuesTech differed 
from the agency's estimates for the various tasks.[13]  In this 
regard, while Vitro's protest focuses on various areas in which 
QuesTech's proposal did not mirror the agency solution, it neglects to 
acknowledge that its own proposed approaches to the sample tasks 
similarly diverged from the agency estimates.

At the hearing, various agency officials testified concerning the 
evaluation of sample tasks.  Among other things, the officials 
explained that the agency had individually considered each offeror's 
proposed approach to accomplishing the objectives identified in the 
sample tasks and had considered the degree and efficiency with which 
each offeror's individual responses to the sample task would 
accomplish the agency's objectives.  Where offerors proposed a 
solution relying on differing levels or types of personnel than that 
assumed in the agency's solution, the proposed approach was not 
necessarily rejected; rather, the agency considered whether the 
proposed approach reflected an alternative, acceptable solution.  

In reviewing an agency's evaluation, we will not reevaluate the 
proposals; we will only consider whether the agency's evaluation was 
reasonable and in accord with the evaluation criteria listed in the 
solicitation.  CORVAC, Inc., B-244766, Nov. 13, 1991, 91-2 CPD  para.  454.  
A protester's mere disagreement with the agency's judgment is not 
sufficient to establish that the agency acted unreasonably.  United 
HealthServ Inc., B-232640 et al., Jan. 18, 1989, 89-1 CPD  para.  43.

We have reviewed the record regarding the agency's evaluation of the 
proposed sample tasks, and find that neither QuesTech's nor Vitro's 
proposed approaches mirrored the government solution.  Nonetheless, 
with one exception, each offeror contemplated generally comparable 
aggregate levels of effort.[14]  To the extent that Vitro asserts that 
its proposed approaches to the sample tasks were less divergent from 
the agency's solution than QuesTech's, we view the protest as simply 
expressing disagreement with the subjective judgments and ultimate 
conclusions of the agency evaluators.  

Similarly, Vitro's assertions that its technical proposal should have 
been rated higher in various areas, or that QuesTech's technical 
proposal should have been rated lower, merely reflects Vitro's 
disagreement with the agency's subjective evaluation judgments and 
ultimate conclusions.  For example, Vitro asserts that QuesTech's 
proposal of 14 subcontractors should have precluded its technical 
proposal from being rated "blue" with regard to the management 
subfactor of the technical evaluation factor.[15]  Vitro asserts "it 
is axiomatic that management problems increase when there are multiple 
subcontractors."  The agency responds that it considered both the 
positive and negative aspects of QuesTech's proposed subcontractors 
and concluded that the depth of resources and flexibility afforded by 
the multiple subcontractors was a positive aspect of QuesTech's 
proposal.  Vitro has not shown that the agency's judgment in this 
regard was unreasonable.  In summary, we do not find Vitro's 
disagreements with the agency regarding the technical evaluation of 
proposals to provide a basis for sustaining the protest.  

The protest is denied.

Comptroller General
of the United States

1. The IEWD performs work for the Marine Corps, the National Security 
Agency, the Federal Bureau of Investigation, Customs Service, the 
Department of State, and others.  

2. Technical proposals were evaluated under a color-coded rating 
             scheme, in which blue was outstanding, green was 
             acceptable, yellow was marginal, and red was 
             unacceptable.

3. Vitro's proposal quantified the value of the discount at [deleted].

4. Efforts under this contract are funded by several customer agencies 
as well as through the Army's appropriated funds.

5. The percentage of hours delivered within the ordering period for 
activities other than quick reaction prototyping were lower.  For 
example, for prototyping activities generally, approximately 22 
percent of hours ordered were delivered in the same period; for 
service activities, approximately 15 percent of the hours ordered were 
delivered in the same period.

6. Although Vitro has criticized various aspects of the agency's 
analysis, it has not presented evidence, based on its own performance 
of the predecessor contract, that the agency's conclusions were 
fundamentally flawed.  Clearly, if Vitro's own performance of its 
predecessor contract contradicted the agency's conclusions in this 
regard, Vitro could have made that data available during the protest. 

7. Performance of delivery orders under an ID/IQ contract may span 
more than one contract period, and a contractor, of necessity, has 
some latitude in determining when hours that are ordered will actually 
be performed.  Thus, in performing the contract, Vitro would know that 
labor hours delivered prior to the end of a contract period would 
trigger the discount and, thus, be billed at a considerably lower rate 
than those same labor hours if delivered immediately after the end of 
the contract period.  Thus, during the first two contract periods, 
there would be a significant disincentive for Vitro to perform work 
that could be reasonably postponed.

8. Each "GS" grade level contains 10 levels of compensation, referred 
to as "Steps."  

9. Section L.39.9 required that offerors identify all indirect costs.  
RFP section B included contract line item numbers (CLINs) 0004, 0012, 
0020, 0028 and 0036, labeled "Other Indirect Charges," applicable to 
each of the five contract periods respectively.  Prior to submitting 
its BAFO, Vitro did not include any amount in the "Other Indirect 
Charge" CLINs.  In one of the written discussion questions sent to 
Vitro prior to BAFO submission, the agency noted that Vitro's proposal 
appeared to contemplate certain costs which should have been included 
in the "Other Indirect Charge" CLINs.  In its BAFO, Vitro for the 
first time included "Other Indirect Charge" entries for each contract 
period in the appropriate CLINs.  The total of these entries increased 
Vitro's proposed cost by approximately [deleted].  Nonetheless, in its 
final evaluation of Vitro's cost proposal, the agency neglected to 
include any amount for the "Other Indirect Charge" CLINs.

10. The attached graphs plotted the [deleted] each of the labor 
categories, labeling each graph [deleted].

11. Section L of the RFP identified various amounts for material costs 
and other charges that offerors were to assume would be incurred, and 
to which each offeror was to attach its burdened rates.

12. Among other things, Vitro also asserts that the agency failed to 
comply with its source selection plan, failed to properly consider 
Vitro's proposed fringe benefit package, failed to amend the 
solicitation to specifically include its IGCE for direct labor rates, 
and applied unstated evaluation criteria.  We have considered all of 
these arguments and find them without merit.

13. Agency personnel responsible for preparing the sample tasks for 
inclusion in the RFP also prepared proposed solutions; these solutions 
were not disclosed to the offerors. 

14. With regard to sample task No. 4, QuesTech's proposed level of 
effort was significantly higher than the agency's estimate.  In 
reviewing QuesTech's proposal, the agency determined that QuesTech's 
proposed solution contemplated activities beyond those included in the 
agency's solution to this specific task.  Accordingly, the agency did 
not view QuesTech's proposed solution as unreasonable, inefficient or 
unacceptable. 

15. Vitro proposed substantially fewer subcontractors than QuesTech.