Deposit Insurance: Observations on Approaching Reform

Published by the Government Accountability Office on 1990-02-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

    Comptroller General
    of the United States
    Washington,   D.C. 20548


    Uatter        of:    Abt Associates       Inc.
    File:                B-237060.2
    Date:                February     26,   1990

    Craig G. Coelen, for the protester.
    Robert C. Granger,       for Manpower Demonstration       Research
    Corporation,     an interested   party.
    James Trickett,      Department  of Health & Human Services,          for
    the agency.
    Guy R. Pietrovito,       Esq., and James A. Spangenberg,        Esq.,
    Office    of the General Counsel,       GAO, participated    in the
    preparation     of the decision.

    1.    Procuring       agency properly     determined      that the
    protester's       initial   proposal     was unacceptable       and not in the
    competitive       range where the request         for proposals     sought the
    evaluation      of specific     selected     state Job Opportunities        and
    Basic Skills        programs and the protester          offered   to perform    a
    generalized      nationally     representative       survey based upon a
    random sample.
    2. Procuring    agency            need not include   the protester's
    unacceptable  initial             proposal in the competitive       range
    where major revisions              would be required    to make the proposal
    3.     Protest      that agency did not invite        the protester     to a
    research       workshop,    which concerned      the methods of
    evaluating        the Family Support Act and Job Opportunities             and
    Basic Skills         programs,   is untimely     where the protester      had
    known about the conference            since the issuance      of the
    solicitation         and only protested      this matter after      the
    exclusion       of its proposal     from the competitive        range.
    Abt Associates   Inc.           protests the exclusion    of its proposal
    from the competitive             range under request   for proposals    (RFP)
    No. RFP-26989-HHS-OS,        issued by the Department     of Health &
    Human Services    (HHS) for the study of the Job Opportunities
    and Basic Skills     (JOBS) program.       Abt also protests   that HHS
    conducted  a pre-solicitation       conference    to which Abt was not
    We deny the       protest     in part    and dismiss       it    in part.
    The Family Support Act of 1988, Pub. L. No. 100-485, 5 201,
    102 Stat.      2343, 2356 (to be codified                at 42 U.S.C. fs 602),
    established      the JOBS program which is a new education,
    training,      and employment program for recipients                     of aid to
    families     with dependent children                (AFDC) payments.          The
    purpose of this new program is to assure that needy families
    with children       obtain      the necessary         support     to help them
    avoid long-term        welfare      dependence.          102 Stat.      2360, at
    3 481.      The Act requires         each state which participates                   in
    the federal      AFDC program to have a JOBS program.                        While each
    state     is given considerable           flexibility          in designing       a JOBS
    program,     it must offer         educational        activities      (including
    high school or equivalent             education),          job skills      training,
    job readiness       activities,        and job development            and placement.
    102 Stat.      2360-63,      at S 482.       The Act also requires              HHS to
    conduct a study to assess the effectiveness                         of the state's
    JOBS programs.         102 Stat.       2379, at S 487.
    The RFP issued on June 23, 1989, contemplated                  the award of
    a cost-plus-fixed-fee         contract     for the necessary        services   to
    assess the impact and cost of selected                JOBS programs on AFDC
    recipients.        The RFP contained       a detailed     statement     of work
    which specified       a variety     of tasks that the contractor
    would be required       to perform,      including     process evaluations,
    recipient      impact analysis,       and cost-effectiveness         analysis
    of the JOBS program at selected              sites.
    The RFP stated       that award would be made to the responsible
    offeror    whose offer      conforming     to the solicitation     would be
    most advantageous        to the government.        Offerors    were also
    informed    that the technical         evaluation   would be of greater
    importance     than the cost evaluation.           The RFP stated    the
    following     weighted     evaluation    criteria:
           1.    Technical      understanding                       10
           2.    Technical      approach                            45
           3.    Staff    capabilities                              25

           4.   Management plan                              10
           5.   Corporate     experience                     -10
                TOTAL                                        100

    HHS received      three proposals        by the August 7, 1989, closing
    date.    After    evaluation      of initial     proposals,      the agency
    determined     that the proposals          of two offers      were technically
    acceptable     but that     Abt's proposal       was technically
    unacceptable.        HHS found that while Abt was a good firm with
    strong corporate        and staff    capabilities,       Abt's technical
    approach to accomplishing           the solicitation         requirements     was
    flawed and evidenced a lack of understanding                   of the purposes
    and objectives       of the JOBS program study.              Specifically,     HHS
    determined     that Abt had proposed a nationally,                generalized
    representative       study approach rather          than an approach which
    focused on selected        state JOBS welfare-to-work             programs as
    contemplated      by the RFP.l/        HHS concluded       that Abt's
    proposal     was not susceptible         of being made acceptable
    without    major revisions        and accordingly       excluded Abt from
    the competitive       range.
    Upon learning       of its exclusion     from the competitive   range,
    Abt initially       protested    on September 22 to our Office,     but
    withdrew      its protest     to file  an agency-level  protest  with
    HHS. On October 17, within            10 working days of its
    rejection       of the denial    of its agency-level   protest,  Abt
    filed    this protest      with our Office.
    Abt protests     that HHS failed    to properly     evaluate    its
    proposal   since the technical      weaknesses identified         by HHS
    were not related      to the RFP evaluation     criteria      and that Abt
    should have been included        in the competitive       range since it
    could have addressed HHS' concerns without             "completely
    rewriting"    its proposal.
    The evaluation      of proposals       and the resulting    determination
    as to whether      an offeror    is    in the competitive    range are
    matters  within     the discretion       of the contracting     activity,

    1/A    "nationally  generalized   study,"  in the context       of the
    RFP requirements,    is a study in which research       results    from
Y   randomly assigned sites      can be, by the nature of the
    research methods, used, extrapolated       or projected     on a
    national     basis.

    3                                                                  B-237060.2
    since it,is     responsible    for defining     its needs and for
    deciding    on the best methods of accommodating them.            Rainbow
    Technology,     Inc.,   B-232589.2,    Jan. 24, 1989, 89-l CPD l[ 66.
    In reviewing      an agency's    evaluation,    we will  not reevaluate
    the technical      proposals,    but instead    will  examine the
    agency's    evaluation     to ensure that it was reasonable       and in
    accordance    with the RFP criteria.         g.
    HHS, in its report on this protest,       has identified     numerous
    technical     weaknesses in Abt's proposal    which it states
    resulted    in Abt being found outside    the competitive     range.
    However, the record shows that Abt's proposal          was found
    technically     unacceptable   primarily because Abt had proposed
    a generalized     study approach rather than an approach that
    focused on selected      state programs.
     Abt admits that it proposed a generalized      study            of the JOBS
     program but argues that such an approach is not                 prohibited
     by the RFP. Specifically,     Abt contends that the               RFP did not
     state that "a generalized    study was undesirable"               and that
     the RFP is ambiguous and misleading     with regard             to whether a
    .generalized  study was desired.
    We do not agree that the solicitation                is ambiguous or
    misleading     on this point.         The very nature of the study
    sought by the RFP is an evaluation               of the effectiveness       of
    selected    state JOBS programs and not a generalization                 of a
    nationally     representative       sample.      The RFP statement      of work
    repeatedly     emphasized that it sought a study of the impact
    of "selected"      JOBS programs.         For example, under the heading
    "Purpose of the Evaluation,"            the RFP stated that "[t]he
    study is to describe         and evaluate      the impact and cost of
    selected    JOBS welfare-to-work          programs on recipients        of
    [AFDC] and their       children.        Also, under the heading
    "Process Evaluation,*'        the RFP states       that "this    evaluation
    will   focus on JOBS programs that are comprehensive                 in scope,
    already    operating,     and relatively       mature,   rather than
    programs that are making major changes during the early
    stages of implementing          JOBS."     Furthermore,     the Family
    Support Act, which was attached              to the RFP, indicates       that
    the study mandated by Congress should be site specific.                       The
    Act states     in pertinent      part:
          "[HHS] shall      conduct a study in accordance with
          this paragraph       to determine    the relative
          effectiveness       of the different     approaches for
          assisting     long-term   and potentially       long-term
          recipients      developed by States       [under the JOBS
          program]."       [Emphasis supplied.]

    4                                                                  B-237066.2
1   .

           Abt argues that attached to the RFP was the discussion              draft
           for an April    14, 1989, workshop on evaluating        the Family
           Support Act which indicates        that a generalized     study of the
           JOBS program was desirable.          However, the cover page of this
           document states:     '*IMPORTANT NOTE: Since this paper was
           written,    the Government's thinking      has changed.      The scope
           and purpose of the JOBS evaluation         is reflected    in the RFP,
           not this document."       W e think that,    in the context    of the
           RFP statement    of work and the requirements        of the Family
           Support Act, it is clear that the RFP sought an
           effectiveness    study of selected,      mature state programs and
           not a national    view of the JOBS program.
           In this regard, HHS states that Abt is presently           conducting
           a national    evaluation   of the Food Stamp Employment and
           Training   Program using randomly selected       sites,   which is the
           same approach that Abt proposed in response to the RFP.
           However, unlike the JOBS program, the Food Stamp program is
           a more uniform program, using interventions          that have been
           tested over the last decade.        HHS states that Abt's approach
           would not be appropriate      to JOBS, which is a more diverse
           program, whose treatments       and approaches are more innovative
           and require more local site testing.         W e think that it
           should have been clear to Abt that this document was
           provided as background material       to the RFP and not to amend
           or contradict     the requirements   of the KFP.
          Abt further     argues that the solicitation          requires     the
          contractor     under the RFP to obtain clearances            from the
          Office    of Management and Budget (OMB) of its survey plans
          and data collection           forms.  Abt contends that since OMB's
          official    policy     is to disapprove     any collection      of
          information      "that    is not designed to produce results           that
          can be generalized          to the universe of study,"         see 5 C.F.h.
          S 1320,6(g)      (19891, this would indicate        that theFP
          contemplated       a generalized     study.
          W e agree with HHS that the "universe     of study" sought by the
          RFP is the specific   treatment  approaches of particular      sites
          and not JOBS programs throughout     the United States,   and thus
          find that the RFP requirement    that the contractor    obtain
          OMB clearance  of the proposed survey plan did not imply
          that the RFP study be generalized      to the nation as a whole.
          Based on our review,     we find a generalized    study is not what
          the RFP sought or what HHS was required        to perform by the
          Family Support Act.      Thus, we conclude that the services      Abt
          offered   to perform (a national   review)   is fundamentally
          different    from what the FFP sought (an evaluation       of
        w specific    JOBS programs) and evidenced a basic lack of
          understanding    of the agency's requirements.       Accordingly,  we
          5                                                                B-237060.2
 find that HHS properly   determined              that Abt's proposal,         which
 offered   to perform a generalized             study,  was technically
Abt also argues that the revision                  of its proposal        would not
have required       a complete rewrite           and, therefore,        its
proposal    should have been included                in the competitive         range,
and its proposal         deficiencies        identified     during discussions.
We do not agree.          A procuring        agency is not required          to
include   an offeror's         technically       unacceptable     initial
proposal    in the competitive            range and permit revisions             where
the deficiencies         are so material         that maior revisions          would
be required     to make the proposal             acceptable.      See S.T.
Research Corp., B-232264, Nov. 3, 1988, 88-2 CT11 435.
Here, Abt admits that "revising                 what is covered in 25 pages
of its proposal        is not a minor revision.             . . .)I
Furthermore,      the study Abt has proposed to conduct is so
fundamentally      different       from what is sought by the RFP that
we find that a major revision               of Abt's proposal         would have
been required      to make it acceptable.                Under the
circumstances,       we conclude       that HHS acted reasonably              in
excluding    Abt from the competitive                range.
Abt also protests         that HHS failed        to invite      Abt to the
April   14, 1989, workshop on evaluating                the Family Support
Act, which was conducted by the Institute                    for Research on
Poverty at the University            of Wisconsin.         Abt contends that
this workshop,        which a representative           of one of its
competitors       attended,     is a pre-solicitation           conference    and
that HHS, by failing          to invite      Abt, had unfairly        provided
Abt's competitor        with procurement         information      not available
to Abt.      HHS contends that the workshop,               which was conducted
prior   to the definitization           of the RFP requirements,           was not
a pre-solicitation          conference      but a research       workshop which
was attended       by government officials,            academicians      and other
experts    in the field.          HHS states     that planning       for the
workshop began immediately             after   the passage of the Family
Support Act and was intended              to provide     HHS with guidance on
how to satisfy        HHS' study requirement           under the Act.
HHS argues that Abt's protest            of its exclusion     from the
conference     is untimely    since Abt had known about the
conference     since the June 23 issuance of the RFP and did not
protest    this matter until       after   its exclusion    from the
competitive      range.   Abt argues that it'did         not know the
basis of this protest       issue until       it had learned that its
competitor     had attended     the workshop.

.6                                                                      B-237060.2
    . i


              We find that Abt's protest            on this issue is untimely.               Our
              Bid Protest      Regulations      require    protests     to be filed      within
               10 working days after        the basis of the protest            is known or
              should have been known, whichever                is earlier.      4 C.F.R.
              ยง 21.2(a)(2).         The record is clear that Abt knew of this
              workshop but did not pursue information,                  concerning     the
              workshop conducted more than 5 months earlier,                    until    its
              proposal      had been excluded from the competitive                range.      In
              this    regard,    a key member of Abt's subcontract              team
              attended      the workshop.       Under the circumstances,           we do not
              think     that Abt has satisfied         its obligation      to diligently
              pursue the information         that forms the basis of this protest,
              and therefore       it is untimely       and will     not be considered
              here.       See Space Applications         Corp.,   B-233143.3,      Sept. 21,
              1989, 89-2 CPD l[ 255.          In any event,       it is speculative
              whether this conference,           some 3 months prior         to when the
              solicitation       was planned and issued,          would have affected
              Abt's     approach.
              The protest      is denied     in part    and dismissed       in part.

              General    Counsel


              7                                                                     B-237060.2