Free Administrative Record - District Court of Federal Claims - federal

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 1 of 30

~AR, ?,2006 II:)IAM OLYPU£ BUILDING SVR

NO. 522 P, 20

OLYMPUS BUILDING SERVICES~, ING. DEFENSE INTELLIGENCE AGENCY OPTION YEAR 2 LABOR COST BRIFA.KDDWN JANITORIAL SERVICES

1201

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 2 of 30

MAR, ?. 2006 11'31AM

OLYPUS BUILDING SVR

N0,522

P. 21

OLYMPUS BUILDING SERVICES, INC. DEFENSl~ INTELLIGENCE AGENCY OPTION YEAR 2 ~,ABOR COST BRE,',KDOWN JANITORIAL SERVICES

TOTAL COST SUMMARY';

1202

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 3 of 30

MAR. 7,2006 11'32AM

OLYPUS BUILDING SVR

N0.522

P. 22

OLYMPUS BUILDING ~ERVICES, INC. DEFENSE INTELLIGENCE AGENCY OPTION YF_A.R 2 LABOR, COST BREAKDOWN JANITORIAL SERVICES

cONTRACT MANAGEMENT

1203

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 4 of 30

MAR. ~.2006 11:32AM

OLYPUS BUILDING SVR

N0.522

P, 23

OLYMPUS BUILDING SERVICES, INC, D~FENSE~ INTELLIGENCE AGENCY OPTION YEAR 2 LABOR COST BREAKDOWN JANITORIAL SERVIOES
ESCORT SI~RV|CES

1204

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 5 of 30

MAR. 7.2006 II:32AM

OLYPUS BUILDING SVR

N0,522

P. 24

OLYMPUS BUILDING SERVICES, 1NC. DEFENSE INTItLLIGENCE AGENCY OPTION YEAR 3 LABOR COST BREAKDOWN JANITORIAL SERVtCF.,S

'tO

1205

9SO'&

188~ IEZ ZOE

VE-ffV

IZ:gl

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 6 of 30

MAR. 7. 2006 11'32AM

OLYPUS BUILDING SVR

NO, 522

P. 25

OLYMPUS BUILDING SERVICES, INC, DEFENSE INTI~LLIGENCE AGENCY OPTION YEAR ~ t..&BOR COST BREAKDOWN JANITORIAL SERVICES

=o

1206

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 7 of 30

MAR. ?,2006 11:32AM

OLYPUS BUILDING $,VR

N0,522

P, 26

OLYMPUS BUILDING SERVICES, INC. DEFENSIF. INTELLIGENCE AGENCY OPTION Y~AR 8 LABOR COST BREAKDOWN JANITORIAL SERVICES

1207

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 8 of 30

MAR. 7,20i6 II:~2AM

OLYPUS BUILDING SVR

N0.522

P, 27

OLYMPUS BUILDING SERVICES, INC. DEFENS E INTELLIGENCE AGENCY OPTION YEaR 3 L~BOR: COST BREAKDOWN
TOTAL COST SUMMARY:

~Z

1208

RZn'~

I~RZ I~Z znZ

VZ-RV

IZ:qI ~.nn~-~-~,~

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 9 of 30

MAR. 7. 2006 11:32AM

OLYPUS BUILDING SVR

N0.522

P, 28

OLYMPUS BUILDING SERVICE~, INC, DEFENSE INTELLIGENCE AGENCY OPTION YF.~R 3 LABOR COST BP.F_AKDOWN JANITORIAL SERVICES SALARIES CONTRACT MANAGEMENT

1209
M~R-87-208G 11:52 GZO'~ 188Z ISZ ZOZ 98% P.2B Iz:gI £OOZ-~I-8~I

VZ-~V

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 10 of 30

MAR. 7,2006 ll;32AM

OLYPUS BUILDING SVR

NO, 522

P. 29

OLYMPUS BUILDING SI~R,VICF...S, INC. DEFENSE INTELLIGENCE AGENCY QPTION YEAR 3 L&BOR COST BRF.A~DOWN JANITORIAL ~ERVICF.,,~ ESCORTSERVlCE~

1210

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 11 of 30

MAR. 7,2006 II:32AM OLYPUS BUILDING SVR

NO. 522 P, 30

OLY~IPUS BUILDING SERVICES, INC. DEFENSE INTELLIGENCI~ AGENCY OPTION YEAR 4 LABOR COST BREAKDOWN JANITORIAL SERVICE,~

1211

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 12 of 30

MAR. 7.2006 11'32AM

OLYPUS BUILDING SVR

NO. 522

P. 31

OLYMPUS BUILDING SERVICES, INC. DEFENSE INTELLIGENCE AGENC~ OPTION YEAR 4 LABOR COST I~,RE~H~DOWN JANITORM~L SERVICES

1212

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 13 of 30

MAR, 7,2006 11:32AM

OLYPUS BUILDING SVR

NO, 522

P, 32

OLYMPUS BU1LDING SERVICES. INC. DEF~'lq,~E INTELLIGENCE AGENCY OPTION YEAR ~ LABOR COST BRrr..AKDOWN JANITORIAL SERVICES OTHER DIRECT COSTS:

Z7

1213

Case 1:07-cv-00243-LMB

Document 15-48

MAR, 7,2006 11:32AM

0LYPUS BUILD[NG SVR

Filed 05/12/2007

Page 14 of 30

N0,522

P, 33

OLYMPUS BUILDING SERVICES, IN(:;. DEFENSE INTELLI{3ENCE AGENCY OPTION yE~,R ,~ LABOR COST BREAKDOWN JANITORli~L SERV1CE~ TOTAL COST SUMMARY:

1214

Case 1:07-cv-00243-LMB MAR. 7.2006 II'33AM

Document 15-48 OLYPUS BUILDING SVR

Filed 05/12/2007

Page 15 of 30 N0,522 P, 35

MAR. 7, 2006 II:33AtvI

OLYPUS BUILDING £VR

NO, 522 P, ~4

OLYNIPUS BUILDING ~;~RVLCE~, INC. DEFENSE INTELLIGENCE AGENC't" OPTION Y~ 4 ~BOR COST BR~KbOWN JANITORIAL S~RvIC~ SALARIES CONTRACT MANAGEMC::NT

1215

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 16 of 30

OLYPUS BUILDING SVR

N0,522

P. 36

OLYMPUS BU{LDING DEFENSE INTELLIGENCE ~GENCY ~UMMARY ~BOR CO~T BR~KDOWN JANITORIAL

~UMMARY

1216

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 17 of 30

EPSTEIN BEAKER & 13REEN~

FACSIMILE COVER SHEET PRIVILEGED AND CONFIDENTIAL To: LTC Frank A. March Fax Number: 703-696-l'537 Telephone Number: 703-696-2826

From: Date;

Kenneth B. Weckstein February 20, 2007

Atty. No. 00052

Pages (in,eluding cover):

PROTECTED MATERIAL TO BE DISCLOSED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

NOTICE OF PRI,V|LEGE AND CONFIDENTIALITY THIS TELECOPY IS PR.IVILEOED AND CONFIDENTIAL, rr IS INTENDED SOLELY FOP. THE ADDRgSSEE. ANY UNAUTHORIZED DISCLOSURE, REPRODUCTION, DISTKIBUT[ON OR THE TAKINO OF AN~Y ACTION 1N R.ELIANC~ ON THE CONTENTS (')F THIS INFORMATION IS PROHIBITED, 1F YOU RECEIVED THIS 'I']~LECOPY IN ERROR, PLEAS.~ NOTIFY [IS IMMEDIATELY. THIS COMMUNICATION DOI~S NOT CONFORM TO THE STANDARDS OF A COVERED OPINION WITHIN THE MI3ANING OF CIRCULAR. 230 ISSUED BY THE UNITED STATES ~;ECRETAP,¥ OF THE TREASURY., ACCORDINGLY, ANY TAX ADVICE CONTAINED JN THIS COMMUNICATION CANNOT BI~ USED, AND WAS NOT INTENDED OR WP, ITT~N TO BE USED, FOR THE PUP, POSE OF AVOIDING UNITED STATES TAX PENALTIES. IN ADDITION, ANY TAX ADVICE CONTAINED IN" THIS COMMUNICATION MAY NOT BE USED TO PROMOTE, MARKET OR RECOMMEND A TRANSACTION TO ANOTHER PERSON. IF YOU DO NOT.RECEIVE ALL PAGES OR HA VE ANYP.ROB, LEMS JN RECEIVING TI:t'I,~ TELECOPI", PLEASE CALL THE SEN.D~R IMM.ED¢A TEL Y.

1217

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 18 of 30

February 20, 2007

VIA TELEFAX Mary G. Curcio, Esquire Procurement Law Division U.S. Government Accountability Office 441 G Street, N.W. Washington, D.C. 20548
Re:

PROTECTED MATERIAL TO BE DISCLOSED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Comments of Rowe Contracting Services, Inc. on Supplemental Agency Report Protest of Olympus Building Services, Inc. B-296741.14 Solicitation No. HHM402-05-R-0017

Dear Ms. Curcio: Rowe Contracting Services, Inc. ("Rowe"), is the awardee under the referenced solicitation and has intervened in this protest. Rowe, through its undersigned counsel, hereby subrhits the following Comments on the Supplemental Agency Report filed on Monday, February 14, 2007 by the Defense Intelligence Agency ("DIA" or "Agency" or "Governmerit"). These Comments are timely filed by February 20, 2007 as requested by the GoVernment Accountability Office ("GAO"). As discussed in Rowe's prior Request for Dismissal, Olympus Building Services, Inc. ("Olympus" or "Protestor") has not been prejudiced by the award of the above-referenced contract to Rowe. Olympus'

Proteeted:480v2

1218

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 19 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 2 Protest, therefore, should be dismissed. In addition, as set forth in the Supplemental Agency Report ("AR") and in these Comments, Olympus' Protest is without merit. DIA's evaluation of proposals was proper, Background As previously noted, the Solicitation was for janitorial/custodial so,ices for the DIA at Boiling Air Force Base under Solicitation No. HHM402-05-R-0017 ("Solicitation" or "RFP"). The Solicitation stated that the resulting contract would be awarded as a firm fixed price contract. AR, Tab 3 at 27. Nine offerors submitted proposals to this Solicitation. The facts surrounding the evaluation of the proposals are provided in more detail in the Agency Report filed on January 29, 2007 and in the Supplemental Agency Report filed on February 14, 2007. In the most recent evaluation of proposals, the Source Selection Authority ("SSA") determined that Rowe was the best value for the Government and would be awarded the Contract. AR, Tab 32 at 3. The independent government cost estimate ("IGCE") for this Solicitation was 43 for the base and option

years. See AR, Tab 32 at 3. The SSA stated that because "the IGCE is over a year old and does not adequately reflect the prices received for this solicitation . . price reasonableness is established by adequate price competition in accordance with FAR 15.404~1(b)(2)(i)." See id. Rowe proposed a total price 2,36. See id. at

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 20 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 3 13. The breakdown of Rowe's final proposed pricing for the base year and each option year was as follows: Period of Performance ~Base 9ear Option Year I Op----{ion Year II Option Year Option Year IV 1 April 2006- 30 October 06 31 Oc't~ober 06 30 Qctober ~7 31 October 07 - 30"6ctober08 31 October 08 - 3(J"Octobe~'b9 31" October 09 - 30 (~ctober'l 0 Amount

AR, Tab 32 at 3. The SSA noted that "[a]lthough Rowe's offer is higher than the Government's estimate (which contemplated a four-month base period rather than a seven-month base period), Rowe's price is the lowest among the remaining competitors." See id. at 4 (emphasis added). Rowe's total proposed price was proposed price of less than Olympus' total

. See id. at 13. The SSA found that Rowe had

"adequate financial resources to perform the contract, or the ability to attain them." See id. at 16. The SSA also found that Rowe had submitted "the lowest priced offer and is capable of performing excellent quality work." See id. at 14. in its Supplemental Protest, Olympus argues that Rowe's price was so low that it posed a "substantial performance risk" and Rowe should not have been awarded this

Protr'cted:480v2

1220

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 21 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 4 contract. See Supptemental Protest of Olympus Building Services, Inc., B-29674.11 (Feb. 2, 2007) at 9 ("Supplemental Protest") In making this argument, Olympus ignores the facts and the law. In effect, Olympus is arguing that Rowe will be performing this fixed-price contract at a loss and does not have the financial resources to absorb such loss. Even if that were true, which it is not, Olympus' protest is a challenge to an affirmative finding of responsibility, which GAO will not hear. Factually, Rowe will not be performing the contract at a loss. Rowe's price proposal shows that the contract will be profitable for Rowe. The price proposal also shows that the price for the initial year is higher than the price for the out years because at the beginning of the contract Rowe will be incurring one-time costs to purchase equipment and pay recruitment bonuses. Finally, according to Federal Acquisition Regulation ("FAR") 15.404-1(b)(2)(i), "[n]ormally, adequate price competition establishes price reasonableness .... Here, the " fact that there was adequate price competition, and that the total prices of Olympus and Rowe were in the same range ( ), is further evidence that Rowe's price is reasonable and does not pose any risk to the Government. Olympus' argument that Rowe's price poses a performance dsk also collapses when Rowe's proposed costs are compared to those of Qlympus. Rowe's proposed labor costs were equal or greater than Olympus' proposed labor costs. Rowe's budgeted amounts for supplies and equipment were greater than the amounts budgeted

221

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 22 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 5 by Olympus. And, at the same time it argues

. The only difference between the proposals of both

. Olympus' argument that Rowe's proposal creates a risk of non-performance lacks merit. In its Supplemental Protest, Olympus also alleges that (1) Rowe's final proposal is incomplete, incoherent, and unresponsive and cannot form the basis of a valid government contract; (2) the SSA considered an unstated evaluation criteria when he used the number of employees offerors proposed to perform the contract as a discriminator in the best value decision; and (3) the DIA's past performance evaluation of Olympus' proposal was irrational. See Supplemental Protest, at 2. For the reasons discussed in the prior submissions of the parties (which already addressed the propriety of Olympus' past performance evaluation) and in the Supplemental Agency Report, these supplemental protest grounds all are without merit.

1222

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 23 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 6 I. DIA's Evaluation of Rowe's Price Proposal was Reasonable. A, in awarding a fixed.price contract, the DIA was not required to evaluate budgeted costs. I.n its Supplemental Protest, Olympus argues that the award to Rowe should be set aside because the DIA failed to consider Rowe's failure "to make allowance for increases in the cost of janitorial supplies and increased costs associated with maintaining an experienced staff of employees .... See Supplemental Protest at 10. " In making this argument, Olympus ignores the fact that Rowe's price included more than enough cost and profit to retain staff and pay for increased costs (if any) of janitorial supplies. Similarly, Olympus fails to include any surveys or other evidence to support its ~irgument that the cost of janitorial supplies will increase above the costs allocated by Rowe. Olympus ignores the fact that Rowe has allocated amounts for labor costs in the option years that far exceed the market rates for janitorial labor. And Olympus fails to mention that Rowe Olympus. olympus also is wrong to suggest that the DIA was required to consider whether Rowe's price would result in a loss for the contract. Although it did not do so, Rowe was entitled to offer, and the DIA was entitled to accept, an "unreasonably" low offer. "~]here is do prohibition against a procuring agency's accepting an unreasonably low or below-cost offer on a fixed-price contract." Property Analysts, Inc., B-277,266, 97-2 CPD ¶ 77 (Comp. Gen. Sept. t2, 1997). for supplies than did

223

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 24 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 7 Before awarding a fixed-price contract, all that is required of an agency with regard to the price offered is to determine whether it is fair and reasonable. FAR § 15.402(a). Rowe's price was fair and reasonable because it was the lowest priced offeror and its price was not considered higher than warranted. See All Phase Environmental, Inc., B-292919.2, 2004 CPD ¶ 62 (Comp. Gen. Feb 4, 2004) (stating that reasonable price determination focuses on whether the price is higher than warranted). Here, the SSA determined that price reasonableness would be determined by adequate price competition in accordance with FAR 15.404~1(b)(2)(i) (stating that adequate price competition may also establish price reasonableness). Here, there was adequate price competition and Rowe's price was consistent with the prices of the other competitors (including that of the protester). Therefore, Rowe's price is considered reasonable. But Oiympus's argument is not that Rowe's price was higher than warranted, but that it was toe low. As discussed above, an agency may accept an unreasonably low offer when awarding a fixed-price contract. That did not happen here. The price Rowe offered was higher than the IGCE, suggesting that Rowe's price was not unreasonably low. Moreover, Olympus offered to perform this contract more

than Rowe. That further suggests that Rowe's price was not unreasonably low. Aside from price reasonableness, the Contracting Officer is also required to determine that a prospective contractor is responsible. See FAR 14.408-2(a). Here,

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 25 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 8 the SSA made a responsibility determination when it found that Rowe was capable of performing the work atthe price offered..See AR, Tab 32 at 14. In any event, responsibility determinations generally are not reviewed by GAO absent a showing that definitive responsibility criteria have not been met or a statute or regulation has been violated. 4 C.F.R. § 21.5(c). Olympus has not alleged any facts to suggest that GAO should review the responsibility determination here, B. Rowe's pricing does not present a risk of nonperformance. Olympus argues that because Rowe'S price proposal did "not provide for price increases over the five-year period of the contract performance" Rowe poses a "substantial performance risk." See Supplemental Protest at 9.1 The mere fact that Rowe°s price proposal offers that Rowe presents a performance risk. As noted below, does not mean

. Moreover, by attacking Rowe's

Olympus notes that prior to the last corrective action, the Agency "recognized the performance risk associated with R~we's price proposal. ,...." See Supplemental Protest, at 11. Rowe protested that finding and the Agency took corrective action. The corrective action required reevaluation of proposals, A reevalLlation was performed and led to the selection of Rowe for award. As long as an

1

award decisioh is rational and consistent with the stated evaluation criteria, an agency is entitled to make different findings based on a reevaluation, See SoL Applications Int'l Corp,, B.29097t, 2002 CPD ¶ 184 (Comp. Gen. Oct. 16, 2002) (stating that source selection officials have broad discretion and are "sLlbject only to the test of rationality and consistency with the established evaluation criteria"). Here, in both evaluations, the Agency found that Rowe's proposal.was "E×cellent". And, in any event, the ultimate decision that Rowe's proposal did not present a performance risk was rational and consistent with the
evaluation criteria.

225

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 26 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 9 price in this competitive evaluation of fixed-price proposals, Olympus is asking the Agency and GAO to perform a cost analysis of Rowe's price proposal. That, of course, is not required by the FAR. Nonetheless, an analysis of Rowe's and Olympus' proposed costs shows that Rowe's price does not pose any risk of non-performance to the Government. Indeed, a simple comparison of the pdces proposed by Rowe and Olympus shows that both companies proposed to pay janitors with that Olympus, like Rowe, did not escalate and

0 rate for any of the option years.

Compare AR, Tab 40 ("Rowe Price Proposal") at "Direct Labor" line items Janitor (F-I') and Janitor Evening Shift (PT) for base year and all option years with AR, Tab 4! ("Olympus Price Proposal") at line item Janitor- Top Secret / SCI Clearance at 7, 13, 19, 25, 31. A comparison also shows that for most other positions, the rates proposed by Rowe for all contract years exceeded the rates proposed by Olympus. For example, Olympus proposed to pay its janitors who did not have clearan an hour--

without any increase for any of the four option years in the contract. See Olympus Price Proposal, line item Janitor- Non Cleared Personnel at 7, 13, 19, 25, 31. Rowe proposed to pay those same janitor an hour. See Rowe Price Proposal at "Direct

Labor" line items Janitor (FT) and Janitor Evening Shift (PT) for base year and all option. years. Similarly, Olympus proposed to pay its night managers a maximum 40 an

hour in the fourth option year. See Olympus Price Proposal "Salaries & Wages" line

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 27 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 10 item Night Supervisors at 34.2 Rowe proposed to pay its night manag 24 an hour.

See Rowe Price Proposal at "Direct Labor" line item Supervisor/Night Shift for base year and all option years. And Rowe's proposal show to

retain and attract qualified employees. See [d. at "Other Operating Costs" line item Retention/Recruiting Bonuses for base year and all option years? Had Olympus bothered to compare its labor rates with those of Rowe before it filed its Supplemental Protest it would have seen that it had no basis to protest that Rowe's proposal presented performance risk. Olympus also would have seen that Olympus' own proposed labor rates were, in fact, lower than those of Rowe and, accordingly, Olympus' rates had to present more risk of nora performance than did Rowe's rates. The same story is true regarding equipment and supplies. Rowe proposed equipment costs of to Olympus' costs 7,696. Compare Rowe Pdce

Proposal at "Other Operating Costs" line item Equipment for base year and all option years with Olympus Price Proposal line item "Equipment Cost" at 9, 15, 21,27, 33. And

~ For fLIll time positions, the hourly rate Is calculated by dividing the annual salary proposed by Olympus by 2080 hours. In the case of the Night Supervisor r, Rowe's price proposal separates out the DIAC expansion costs for the base year and all option years. Therefore, the total cost in a particular year for a given line item is calculated by adding the base corltraot amount and the DIAC expansion amount, For for the DIAC expansion. See Rowe Price Proposal "Other Operating Costs" line item RetentionfRecruiting Bonuses, at pp 1-2 (Base Year).

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 28 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq, February 20, 2007 Page 11 for supplies, Rowe proposed costs of to Olympus' costs of .

Compare Rowe Price Proposal at "Other Operating Costs" line item "Supplies" for base year and all option years with Olympus Price Proposal line item "Supply & Material Cost" at9, 15, 21,27, 33. Again, to the extent there is any performance risk, the risk is created by Olympus' proposal, not Rowe's proposal. Had Olympus bothered to look further at the basis for its Supplemental Protest it would have seen the actual reason for the price difference between the Rowe and Olympus proposals. Specifically, by performing the cost analysis that was not required in this procurement but which Olympus demands, we can answer the question as to why Rowe could propose a lower total price than Olympus but still pay employees higher labor rates. The answer is that Olympus included substantially more profit and overhead in its proposal than did Rowe. Olympus proposed a bloated overhead structure that of management salaries for this two building

contract. See Olympus Price Proposal line item "Total Management Salaries" atg, 15. 21, 27, 33. Rowe, a family owned business, proposed to manage the contract with a less costly s{ructure that relied on supervisors, project managers and a Quality Control Manager. See Rowe Price Proposal "Direct Labor Categories" for base year and all option years. In addition to paying an unnecessary layer of management, Olympus' proposal included approximately more for profit than did Rowe's proposal.

Protect~d:480v2

1228

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 29 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 12 Compare Olympus Price Proposal line item "Profit" at 9, 15, 21,27, 33 with Rowe Price Proposal at line item "Profit" for base year and all option years. As discussed above and below, Rowe's proposal did not present any risk of nonperformance. Rowe's proposed price was reasonable. And a comparison of Rowe's proposed costs to the proposed costs of Olympus shows that if there is any risk of nonperformance, that risk is created bythe labor rates, equipment costs and supply costs proposed by Olympus--all of which generally were less than that proposed by Rowe. 1. Rowe's labor rates were reasonable and did not pose a performance risk. Olympus argues that Rowe's price proposal must pose a performance risk to the Government because See Supplemental Protest at 10. of the Contract.

.

229

Case 1:07-cv-00243-LMB

Document 15-48

Filed 05/12/2007

Page 30 of 30

PROTECTED MATERIAL TO BE RELEASED ONLY IN ACCORDANCE WITH GOVERNMENT ACCOUNTABILITY OFFICE PROTECTIVE ORDER

Mary G. Curcio, Esq. February 20, 2007 Page 13 we

Compare Rowe Price Proposal "Direct Labor" for base year and all option years with Olympus Price Proposal at 31,34 (Option Year 4 wage rates). As can be seen, Rowe's proposed rates are higher or comparable to the rates proposed by Olympus.

Prot¢ctcd:480v2

1230