THIS OPINION WAS INITIALLY ISSUED UNDER
                 PROTECTIVE ORDER AND IS BEING RELEASED
            TO THE PUBLIC IN REDACTED FORM ON MARCH 23, 1995
                 ______________________________________
        
                     GRANTED IN PART: July 15, 1994
                 ______________________________________
 
 
                             GSBCA 12824-P
 
 
                      COMPUTER DATA SYSTEMS, INC.,
 
                                                Protester,
 
                                   v.
 
                         DEPARTMENT OF ENERGY,
 
                                                Respondent,
 
                                  and
 
                                DYNCORP,
 
                                                Intervenor.
 
        Marcia G.  Madsen,  Andrew D.  Ness,  Brian W.  Craver,  and
   David F.  Dowd of  Morgan, Lewis &  Bockius, Washington,  DC; and
   Charles B.  Machion and Peter  A. Fish of Computer  Data Systems,
   Inc., Rockville, MD, counsel for Protester.
 
        Patricia  D. Graham  and  Ralph C.  Oser, Office  of General
   Counsel,  Department  of  Energy,  Washington,  DC,  counsel  for
   Respondent.
 
        David S. Cohen, G. Brent  Connor, C. Patteson Cardwell,  IV,
   Laurel A.  Heneghan, and  William F. Savarino  of Cohen  & White,
   Washington, DC;  and Stuart Young of DynCorp, Reston, VA, counsel
   for Intervenor.
 
   Before Board Judges DANIELS (Chairman), WILLIAMS, and GOODMAN.
 
   WILLIAMS, Board Judge.
 
        On May 2, 1994, Computer Data Systems, Inc. (CDSI) protested
   the award of  a contract  by the  Department of  Energy (DOE)  to
   DynCorp  for  information  resources  management  (IRM)   support
   services.  DynCorp intervened.   CDSI is the incumbent contractor
   for most of the services being acquired.
 
 
        In its  original fifteen-count complaint,  CDSI alleged that
   DOE  had  relaxed  the   mandatory  experience  requirements  for
   DynCorp, conducted  an  improper  technical  evaluation  of  both
   proposals, failed to conduct meaningful discussions, performed an
   improper responsibility determination for  DynCorp, and conducted
   an  arbitrary  and  capricious cost  evaluation.    Further, CDSI
   alleged that  there was an impermissible  organizational conflict
   of interest between DynCorp and  DOE, and that the award decision
   was tainted  by bias.1   On  May 11, 1994, CDSI  filed its  first
   amended   complaint,   adding    an   allegation   of   technical
   transfusion/leveling.  Subsequently, CDSI filed  second and third
   amended complaints adding further factual allegations.2
 
        For the reasons stated below,  we grant the protest in part.
   We  agree with  CDSI  that DOE  conducted  an improper  technical
   evaluation of  CDSI's and  DynCorp's proposals  in the  following
   respects.  The  agency had  no objective  standards for  defining
   strengths and  weaknesses in  proposals.   The Source  Evaluation
   Board (SEB)  had no  consistent definition of  "similar size  and
   scope" of reference contracts.  The reference check for CDSI's   
                                          contracts  was  inadequate
   and resulted  in an  unfair evaluation of  those contracts.   The
   evaluation of DynCorp's reference contracts was also erroneous in
   that  DOE  improperly   credited  DynCorp  with   more  corporate
   experience than was warranted.
 
        We grant two aspects of CDSI's complaint regarding  the cost
   evaluation, concluding  that DynCorp's and CDSI's  proposals were
   not  treated equally.  First, DynCorp  was told that a Wyatt Data
   Services Survey would be used in evaluating its cost proposal, in
   particular  in assessing  the  realism  of  direct  labor  rates;
   DynCorp was further told that any rates below the 50th percentile
   in the  survey would be  deemed unrealistically low and  that the
                       
   ____________________
 
        1    In a  motion filed on  May 24,  1994, protester  sought
   summary relief on  two grounds.  First, protester  contended that
   DynCorp's  proposal   failed  to   comply   with  the   mandatory
   requirement that offerors  describe their experience on  at least
   three  contracts  similar  in  size  and  scope  to  the  instant
   contract.    Second,  CDSI  claimed  that  one  of  DynCorp's key
   personnel,  its proposed administration manager, did not have the
   requisite two years of experience  in administering a contract of
   similar size  and scope within the  last five years.   Because we
   determined  that  these  allegations  raised  genuine  issues  of
   material fact, we denied the  motion on June 2, 1994.  Conference
   Memorandum (June 3, 1994).
 
        2    By letter dated June 20,  1994, CDSI withdrew Count XIV
   and paragraphs 56,  57, 82, and the second  sentence in paragraph
   114 of the third amended complaint.
   agency would  look to  the 50th percentile  rates to  establish a
   probable  cost.   CDSI was  not given  this information,  yet the
   agency utilized  the Wyatt Data  Survey to evaluate  direct labor
   rates  for  cost realism.    Second,  the  agency gave  disparate
   treatment  to uncompensated overtime offered by DynCorp and CDSI.
   DOE, relying on conclusions of  the Defense Contract Audit Agency
   (DCAA),  indicated that CDSI  should offer  a diluted  rate based
   upon a work week of        hours because it paid its employees if
   they worked overtime.  Although DynCorp had a similar system, DOE
   suggested  no adjustments  for  DynCorp's proposed  uncompensated
   overtime.
 
 
        The  Board  denies CDSI's  allegation  that the  contracting
   officer improperly forced CDSI to                             its
   direct labor  rates when CDSI  offered                         as
   permitted by the  request for proposals (RFP).   We conclude that
   the  contracting   officer's  efforts   in  seeking   information
   regarding CDSI's                                 were directed at
   assessing the  cost realism of  CDSI's proposal by  ensuring that
   the individual salaries proposed for CDSI's            rates were
   representative.   In so  concluding, we recognize  the discretion
   accorded to  contracting officers  in performing  a cost  realism
   determination.    We   also  deny  CDSI's  allegation   that  the
   contracting officer  forced CDSI to "prequalify"  individuals for
   positions regardless  of the  fact that the  RFP did  not require
   offerors to identify specific individuals for non-key positions.
 
        We  find that the  agency conducted improper  discussions in
   three  regards:  it  failed to advise  CDSI that it  only had    
   contract of similar size and scope; it failed to advise both CDSI
   and DynCorp that  one of each firm's  key personnel did not  meet
   the mandatory requirements  of the RFP; and it  gave DynCorp, but
   not CDSI, beneficial information with regard to the evaluation of
   its cost proposal.
 
        We  deny CDSI's contention  that there was  an impermissible
   organizational conflict  of  interest between  DynCorp  and  DOE,
   finding the relationship cited -- the performance of an unrelated
   maintenance  and operations  (M&O) contract  by  a subsidiary  of
   DynCorp  in Louisiana  -- to  be  tenuous and  the potential  for
   conflict speculative.   Importantly, if a conflict were to arise,
   we conclude  that it  could be mitigated  after award  by denying
   DynCorp access to certain data.
 
        We  also  deny  CDSI's  contention  that  DOE  performed  an
   improper   responsibility  determination   for  DynCorp   due  to
   DynCorp's  alleged  lack  of  financial  stability  and  lack  of
   business  integrity.   The  record  supports  a  conclusion  that
   DynCorp has  the financial  capability to  perform the  contract.
   The contracting officer was not required to conclude that        
                                                                    
                 warranted    a    finding    that    DynCorp    was
   nonresponsible.
 
        Nor do  we conclude that  the award decision was  tainted by
   bias.  CDSI has not proffered "well nigh irrefragable proof" that
   the evaluators failed  to act in good faith.  Finally, we find no
   violation of  statute or  regulation by virtue  of the  fact that
   DynCorp had internal CDSI data reflecting CDSI's organization and
   staffing of  its incumbent  contract.   These documents  were not
   utilized by  DynCorp  in its  proposal,  and it  is  questionable
   whether these materials remained proprietary.
 
        With regard to the remedy, we revise the agency's delegation
   of procurement authority (DPA) by  directing DOE to empanel a new
   SEB, establish  objective standards  for evaluation,  clarify its
   minimum needs and  its cost evaluation mechanism, and  proceed in
   accordance with statute and regulation.
 
                            Findings of Fact
 
   The Solicitation
 
        On  August 25, 1992, DOE issued request for proposals number
   DE-RP01-92AD32229.     Consolidated  RFP.3     The   solicitation
   requested  IRM support  services for  the  Office of  Information
   Technology Services and Operations (ITSO) and  contemplated award
   of a  cost-plus-award fee  contract for  a thirty-six  month base
   period with two twelve-month option periods.  Id. at C 012607-08.
 
        Section B.007  advised offerors that cost proposals would be
   evaluated on  the assumption  that the  contractor would  provide
   4,185,000  total direct  productive labor  hours  (DPLH) for  the
   thirty-six-month base period.  Consolidated RFP at C 012613.   In
   addition,  paragraph B.011 provided the estimated level of effort
   for  the option period as follows:   1,488,000 DPLH for the first
   twelve-month option  and 1,581,000  DPLH for  the second  twelve-
   month  option.   Id. at  C 012617-18.   Offerors were  to provide
   their total estimated base fee and maximum award fee for the base
   and option periods.
 
        The RFP in Section C described the twenty-four IRM functions
   required to be supported:
 
         1. Application Systems Development
         2. Application Systems Maintenance
         3. Automated Office Support System (AOSS) Services
         4. Management Analysis
         5. Secure Automated Communications Network (SACNET)
            Support
         6. Computer System Software Support
                       
   ____________________
 
        3    By agreement of the parties, protester submitted at the
   hearing  a "consolidated" RFP  which incorporated all amendments.
   This RFP shall  be referred to as "Consolidated  RFP."  Citations
   to  pages in  the  RFP  shall be  to  the Bates-stamped  numbers,
   consistent with practice during the hearing.
 
         7. Computer System Operations, Maintenance and Customer
            Services
         8. Communications Center
         9. DOE Crisis Management and Emergency Management
        10. Data Entry Support
        11. Teleprocessing Services
        12. Network Services
        13. Video Teleconferencing Management
        14. Radio Communications and Frequency Management
        15. National Security/Emergency-Preparedness
        16. DOE Open System Standards Program
        17. Headquarters Telephone Switchboard Operations
        18. Field IRM Support
        19. Records Management
        20. IRM Planning
        21. Technical Training
        22. Information Systems Security
        23. Technology Assessment
        24. Oversight Activities
 
   Consolidated RFP at C 012627-42.
 
        Paragraph H.012, Contractor Personnel, provided in pertinent
   part:
 
        (a)  The contractor shall provide the skilled personnel
             and the supervision, management and administrative
             services  necessary   to  meet   the  Government's
             requirements successfully.   Personnel assigned to
             work  on  the  contract  must  meet   the  minimum
             qualifications for  the applicable  labor category
             as stated in  Part III, Section J, Attachment M of
             this  contract   except  as   authorized  by   the
             Contracting Officer.
 
   Consolidated  RFP at C 012705.  Paragraph H.012(e) also expressly
   provided  that "[a]ll personnel shall be dedicated (assigned full
   time to this DOE contract only) in support of this contract . . .
   No overtime,  compensated or uncompensated  shall be accomplished
   without   prior   COR  [contracting   officer's   representative]
   approval."  Id. at C 012706.
 
        Paragraph H.014 of the solicitation, Key Personnel, required
   offerors  to identify  six  key  personnel,  i.e.,  the  contract
   manager,  the   oversight  activities  manager,   the  operations
   manager,  the systems  development  and maintenance  manager, the
   network manager,  and the  administration manager.   Consolidated
   RFP  at  C 012708.    No  substitutions  of  key  personnel  were
   permitted in the  first 365 days of the  contract absent illness,
   death, or termination.  Id.
 
        Paragraph H.024, Position Qualifications, provided:
 
        Contractor  direct  labor  personnel  assigned  to  the
        performance of this contract shall satisfy as a minimum
        the  applicable  labor  category  qualifications,  both
        education  and experience,  set  forth in  the "Generic
        Position Descriptions" attachment  J to this  contract,
        except as the Contracting Officer may authorize.
 
   Consolidated RFP at C 012716.
 
        The position description for  the administration manager set
   forth  in  Attachment J   of  the  RFP  mandated   the  following
   experience:
 
        A  minimum  of 10  years progressive  responsibility is
        required  in contract administration.  At least 2 years
        of recent experience must be in the administration of a
        contract of similar size and scope.
 
   Consolidated RFP, Attachment J  at C 012862.  In the  body of all
   of the other position descriptions  for key personnel in the RFP,
   the  term "recent"  in  the context  of  "recent experience"  was
   expressly stated to mean "(within the last five years)."  Id.  at
   C 012857-61.
 
        The  position description  for  the systems  development and
   maintenance  manager mandated that this individual have "at least
   4  years  experience  managing a  functional  area  staffed  by a
   minimum of 100 people."  Consolidated RFP at C 012860.
 
        The RFP in paragraph L.046(j), instructions  for preparation
   of  the  offer,   permitted  offerors  to  take   exceptions  and
   deviations to the model contract but stated:
 
        (2)  Any   exceptions,   etc.,   taken   must   contain
             sufficient  amplification  and   justification  to
             permit evaluation.   The benefit to the Government
             shall be explained for each exception taken.  Such
             exceptions will not,  of themselves, automatically
             cause a  proposal to  be termed  unacceptable.   A
             large  number  of  exceptions,   or  one  or  more
             significant  exceptions not  providing benefit  to
             the Government,  however, may result  in rejection
             of your proposal(s) as unacceptable.
 
   Consolidated RFP at C 013052.
 
        Paragraph L.048, proposal  preparation instructions for  the
   technical proposal, provided in pertinent part:
 
        Part B.   Technical  Discussion.   This section  .  . .
        should  clearly address each  of the Technical Proposal
        evaluation criteria  in Section  M, and  at a  minimum,
        cover  the  subordinate factors  or  subcriteria listed
        thereunder, if any. . . .
 
                  Section   1.      The   offeror's   corporate
        experience with contracts of similar scope and size.
 
                  A.   The  offeror  must   describe  corporate
        experience  on not less than  three, nor more than five
        IRM Support  Services contracts  similar  in scope  and
        size  to  this   proposed  contract.    The   corporate
        experience presented should reflect support services in
        ADP and Telecommunications as well as  other functional
        areas  described in the  definition of IRM.   Contracts
        submitted to describe company experience must have been
        performed  within the  last 5  years  by the  proposing
        entity.     Give  the  following  information  on  each
        contract:
 
                  1.   Contracting entity -- name, address, and
                       phone  number of  the Technical  Officer
                       and the Contracting Officer.
 
                  2.   Contract   number,   type,   and   total
                       contract value.
 
                  3.   Period and place of performance.
 
                  4.   Two page summary of scope of work  which
                       includes a section on  how that contract
                       is, or was, similar in scope and size to
                       this proposed  contract.  Attach  a list
                       of   the   ADP   and  telecommunications
                       hardware and software supported.
 
                  B.   Subcontractors  proposed  for  whom  the
        DPLH   equals  or  exceeds  10  percent  of  the  total
        estimated  DPLH for this solicitation shall provide one
        contract  reference.    This  reference  shall  reflect
        technical  experience,  performed  within  the  last  5
        years, similar in scope to the work proposed.  Give the
        following information on the contract reference:
 
        . . . .
 
                  5.   A summary of  the scope of work,  not to
                       exceed  two  pages,   which  includes  a
                       section on how  that subcontract is,  or
                       was,  similar  in  scope  to  the   work
                       proposed.   Attach a list of the ADP and
                       telecommunications hardware and software
                       supported   in   performance   of   this
                       subcontract.
 
        The  following   notes   apply  to   both   prime   and
        subcontractors:
 
        1.   Prime contractor versus  subcontractor performance
             should be clearly indicated.
 
        2.   The  Technical Officer,  Contracting Officer,  and
             other  associated   with  any   of  the   supplied
             references   may  be  contacted  as  part  of  the
             evaluation process.
 
        Section 2. Capabilities and Experience.
 
        The offeror must describe the capabilities and directly
        related experience for performing  the functions in the
        Statement  of Work.    The  offeror  must  address  all
        functions specified in the Statement of Work.  For each
        function addressed  the offeror  shall cross  reference
        the submitted  contract references (i.e.,  Reference 1-
        5).   The offeror's  management and approach  should be
        addressed in section 3 and not in this section.
 
   Consolidated RFP at C 013053-55.
 
        Section  3  addressed  the   offeror's  plan  for   contract
   management  and mandated that  the offeror discuss  its staffing,
   quality  management  program,   management  approach,  oversight,
   management  reporting, cost  management, and  phase-in.   Id.  at
   C 013055-56.    That  section  included  the  following  specific
   instructions:
 
        b.   Quality Management Program
 
             The  offeror  must  describe,  in  a  concise  and
             comprehensive  manner,   the  processes   used  to
             (1) detect   problems   and  errors   during   the
             performance  of  assigned  tasks  and  (2) deliver
             quality  products  and  services  on schedule  and
             economically.
 
        c.   Management Approach
 
             The  offeror  must  describe,  in  a  concise  and
             comprehensive manner,  the organization  structure
             and plan to manage all  facilities, equipment, and
             subcontractors   used    in   support    of   this
             contract. . . .
 
        d.   Oversight
 
             The  offeror must describe  . . .  the authorities
             and management reporting  of the Oversight Manager
             and his supporting staff.
 
   Id.  at  C 013056.    None  of  these  paragraphs  referenced  an
   offeror's  "corporate"  quality management  program  or oversight
   program.  Id.
 
        Section 4,  "Key Personnel,"  required that offerors  submit
   resumes for the  six key  personnel and  specified, in  pertinent
   part:
 
             b.   Candidates'  resumes  must   demonstrate  the
        management,  experience,  and expertise  necessary  for
        managing complex IRM systems.
 
             c.   Candidates  shall  meet  at  a  minimum   the
        required position description qualifications in Section
        J.
 
   Consolidated RFP at C 013056-57.
 
        Paragraph L.049 set forth proposal preparation  instructions
   for  cost proposals.    The  primary element  of  cost under  the
   solicitation was direct productive labor hours.  The solicitation
   in Attachment 4,  Exhibit I, listed thirty-nine  labor categories
   and set out  the estimated number of DPLH which  would be ordered
   for  each  labor  category   for  each  year  of   the  contract.
   Consolidated  RFP at  C 012985.   The  labor  category of  senior
   systems  analyst contained  the most  hours  under the  contract,
   1,404,300.  A  significant number of  hours were attributable  to
   the  programmer  analyst,  697,500 hours,  the  systems  analyst,
   558,000  hours, and the  senior AOSS support  specialist and AOSS
   support specialist, each  of which required  306,900 hours.   Id.
   The DPLH for the  entire five-year period of performance  totaled
   7,254,000 hours.   The hours listed in  Exhibit I were mandatory,
   for purposes of estimating, and no deviations could be taken from
   those hours.  Id.
 
        Section L.049 1.(a), paragraph L.049, included the following
   section on direct labor hours:
 
             (c)  Direct Labor Hours:  Direct labor hours shall
        be proposed in accordance with the labor categories and
        labor  hour  requirements  described in  Attachment  4,
        Exhibit-I   of   the   solicitation.     The   manpower
        requirements are  summarized in Attachment  M.   Direct
        labor   shall  be  proposed  on  the  basis  of  Direct
        Productive Labor Hours  (DPLH), i.e., estimated  number
        of hours  on the job.   Should an  offeror's accounting
        system  require nonproductive  labor hours  (vacations,
        holidays, sick  leave, etc.)  to be  charged as  direct
        labor, all  such costs  shall be  separately identified
        and priced.   Each offeror  must propose the  number of
        labor  hours   by  labor   category  as   specified  by
        Exhibit-I.
 
        . . . .
 
             NOTE:  Modification of the  DPLH or the labor  mix
        is  not  permitted,  except  for  (1)  clerical  and/or
        administrative  hours, as  discussed above  or (2)  any
 
        additional   labor  categories   or  DPLH   above  that
        identified in Attachment 4, Exhibit I.
 
   Consolidated RFP at C 013058.
 
        Further,   the  RFP  advised  offerors  to  submit  separate
   exhibits A through L as part of their cost proposals, including:
 
                  1.   Exhibit-A: Standard Form 1411
 
        . . . .
 
                  3.   Exhibit-B:  Labor  Rates   for  Proposed
                       Individuals and Categories
 
             This  exhibit  shall  be prepared  showing  direct
        labor rates only.   All named personnel,  including key
        personnel . . . shall be separately identified on  this
        exhibit.    In those  instances  where  the DPLH  or  a
        portion  of  the DPLH  is  to be  performed  by unnamed
        individuals,  a category or composite rate may be used.
        The  following   applies  when  proposing   other  than
        individual rates.
 
                  (i)  The  proposed   category  rates   should
        reflect those identified in your accounting system.  If
        your  category  titles  do not  correspond  to  the RFP
        categories  and  their  applicable  qualification  then
        enter your corresponding category  title in the  second
        column of  the Exhibit-B  along with  the RFP  Category
        name in the first column.
 
                  (ii) If it is necessary  to propose more than
        one of your category titles  to satisfy a required  RFP
        Labor  Category, then provide  more than one  (1) entry
        for each of  the RFP category titles.   For example, if
        you intend to  satisfy a RFP Labor  category of "Senior
        Analyst"  with  your  categories   of  "Analyst-I"  and
        "Analyst-II",  then  you  would  enter  the  RFP  labor
        category  of "Senior  Analyst" twice,  and provide  the
        category rates for both  "Senior Analyst/Analyst-I" and
        "Senior Analyst/Analyst-II".
 
                  (iii)  If  your  accounting  system does  not
        maintain  or use true  category rates for  proposal and
        cost  accounting purposes,  then category  rates should
        not be proposed.  Instead, the development and use of a
        composite  rate  composed  of  individual  rates  which
        correspond to the RFP labor category requirements would
        be  acceptable.   If it  is not  possible to  develop a
        composite RFP  category  rate,  then  individual  rates
        should be proposed for each of the RFP categories.
 
        List the RFP  labor category, the individual's  name or
        the  offeror's category/composite  rate title,  current
        hourly rate,  "actual as of"  date (the "actual  as of"
        date  for the current actual hourly rate identifies the
        date the last  increase was given  to an individual  or
        category),  the   yearly  escalation  rates,   and  the
        projected rate for each year for the proposed contract.
 
        . . . .
 
             In  an  attachment  to  Exhibit-B  show  how   any
        proposed category or composite rates were developed for
        each labor category and how the key/named personnel and
        the  other  personnel in  the  category  were weighted.
        Also  identify and discuss the basis and development of
        the rate and its application  for the initial year  and
        each year of use thereafter.
 
   Consolidated RFP at C 013059-61.
 
        On  Exhibit B1 to the cost  proposal, offerors were required
   to provide a  summary of the direct labor  cost for each contract
   year by  listing  the  RFP labor  category,  composite  rate,  or
   individuals' rates from  Exhibit-B, the number of  hours per year
   per   individual/category,  and  the  cost  (rates  x  hours)  by
   category.  Consolidated RFP at  C 012975.  A summary page showing
   total labor dollars by year was also required on the last page of
   Exhibit B1.  Id. at C 012976.
 
        The pricing tables also contained another mandatory exhibit,
   Exhibit E,  entitled "Reconciliation  of  RFP  and Offeror  Labor
   Categories," which provided:
 
        If the offeror's  labor categories differ from  the RFP
        labor  categories,  the offeror  shall  supply  a cross
        reference  between  the  RFP labor  categories  and the
        offeror's labor  categories.  If  specific individuals,
        rather than  an offeror's  labor category  are proposed
        (named  within   Exhibits-B,   or   B1),   then   those
        individuals shall be identified.
 
   Consolidated RFP at C 013063.
 
        Paragraph  M.001(b) provided that  "[a]ward will be  made to
   that responsible offeror, whose offer, conforming to this RFP, is
   considered most  advantageous to the  Government, considering the
   Evaluation  Criteria in  this Section M."    Consolidated RFP  at
   C 013082-83.
 
        Paragraph  M.009,  EVALUATION  CRITERIA  - SUPPORT  SERVICES
   (SEB), provided:
 
             (a) Technical Criteria:  Technical aspects of  the
        proposals  will be  evaluated  in  accordance with  the
 
        following  criteria and  scored on  a  numerical basis.
        Criteria  1,  2,  and  3  are  approximately  equal  in
        importance.     Criterion  4   is  significantly   less
        important than criterions 1, 2, and 3.
 
             CRITERION 1:   The offeror's  corporate experience
                            in performing contracts  of similar
                            scope and size.
 
             CRITERION 2:   The   demonstrated    ability   and
                            directly  related  experience   for
                            performing  the  functions  of  the
                            statement of work.
 
             CRITERION 3:   The  adequacy  and  appropriateness
                            for   each    of   the    following
                            subcriteria of  the offeror's  plan
                            for  contract   management.     The
                            subcriteria     are    of     equal
                            importance.
 
                                 a.   Staffing
                                 b.   Quality        Management
                                      Program
                                 c.   Management Approach
                                 d.   Oversight
                                 e.   Management Reporting
                                 f.   Cost Management
                                 g.   Phase In
 
             CRITERION 4:   The  Key Personnel  qualifications,
                            and   management   experience   and
                            expertise  necessary  for  managing
                            complex IRM systems.
 
             (b)  Cost  Criteria:   The cost  proposal  will be
        evaluated  to  determine  the  probable  cost   to  the
        Government   including   all   options,   taking   into
        consideration    the     allowability,    allocability,
        reasonableness,  adequacy,  and   realism  of  proposed
        costs, and reasonableness of proposed fee.
 
             The  Cost  Proposal  will  not  be  point  scored,
        assigned  a  numerical weight,  or  adjectivally rated.
        However, an unrealistic  cost or price proposal  may be
        evidence of the offeror's lack of understanding or poor
        understanding of the project.
 
             The   cost   proposal   will  be   evaluated   for
        determination of  the probable  cost to the  Government
        for those offerors in the competitive range, subject to
        the  provisions  of  FAR  15.609,  following  technical
        evaluation.   Probable  cost will  be  based upon  cost
        analysis performed  in accordance  with the  applicable
 
        cost provisions of FAR [Federal Acquisition Regulation]
        and DEAR [Department of Energy Acquisition Regulation].
 
             (c)  Offeror's Overall  Proposal:   The Government
        will  evaluate  the  offeror's  overall  proposal  (all
        volumes) as a  representative product of  the offeror's
        quality of work and quality assurance.  This evaluation
        will not be point scored, but will be considered  where
        points  are  applied  to  technical  areas   which  are
        associated with the development of written products and
        quality assurance.
 
   Consolidated RFP at C 013084-85.
 
        Paragraph M.013,  FAR 52.222-46  Evaluation of  Compensation
   for Professional Employees (Feb 1993), provided:
 
             (a)  Recompetition  of  service contracts  may  in
        some   cases  result   in  lowering   the  compensation
        (salaries  and  fringe  benefits)   paid  or  furnished
        professional   employees.     This   lowering  can   be
        detrimental  in obtaining  the quality  of professional
        services needed for adequate contract performance.   It
        is  therefore in  the Government's  best interest  that
        professional  employees, as  defined in  29 CFR 541, be
        properly and fairly  compensated.  As  a part of  their
        proposals, offerors  will submit  a total  compensation
        plan  setting   forth  salaries  and   fringe  benefits
        proposed for the professional  employees who will  work
        under the contract.   The Government will  evaluate the
        plan  to assure  that it  reflects  a sound  management
        approach    and   understanding    of   the    contract
        requirements.     This  evaluation   will  include   an
        assessment   of  the   offeror's  ability   to  provide
        uninterrupted  high-quality  work.    The  professional
        compensation proposed  will be  considered in terms  of
        its impact upon recruiting and retention,  its realism,
        and its consistency with a total plan for compensation.
        Supporting  information  will  include  data,  such  as
        recognized national  and regional  compensation surveys
        and  studies  of   professional,  public  and   private
        organizations,   used   in   establishing   the   total
        compensation structure.
 
             (b)  The  compensation   levels  proposed   should
        reflect a clear  understanding of work to  be performed
        and  should indicate  the  capability  of the  proposed
        compensation structure  to  obtain  and  keep  suitably
        qualified personnel to  meet mission  objectives.   The
        salary  rates   or  ranges   must  take  into   account
        differences  in  skills,  the  complexity  of   various
        disciplines,   and    professional   job    difficulty.
        Additionally, proposals envisioning compensation levels
        lower  than those  of predecessor  contractors for  the
 
        same work will be evaluated on the basis of maintaining
        program  continuity,  uninterrupted  high-quality work,
        and  availability  of required  competent  professional
        service employees.  Offerors are cautioned that lowered
        compensation for essentially the same professional work
        may indicate lack of sound management judgment and lack
        of understanding of the requirement.
 
             (c)  The Government is concerned with the  quality
        and stability of the work  force to be employed on this
        contract.      Professional    compensation   that   is
        unrealistically low  or not in  reasonable relationship
        to  the various job categories, since it may impair the
        Contractor's ability  to attract  and retain  competent
        professional  service  employees,  may  be  viewed   as
        evidence of failure to comprehend the complexity of the
        contract requirements.
 
             (d)  Failure to  comply with these  provisions may
        constitute sufficient cause  to justify rejection  of a
        proposal.
 
   Consolidated RFP at C 13086-87.
 
   Vendor Questions and DOE's Answers
 
        On   October 2,  1992,  DOE  issued  Amendment  001  to  the
   solicitation   which  included   vendor's  questions   and  DOE's
   responses.  Consolidated RFP at C 012568-95.
 
        Question 1 and Response 1 stated:
 
        Question 1:
 
        REFERENCE:   L.048, PROPOSAL  PREPARATION INSTRUCTIONS,
        (b),  PART  B.  TECHNICAL  DISCUSSION  SECTION  1,  The
        Offeror's  Corporate   Experience  with   contracts  of
        similar  scope   and  size   (pg  L.22),   and  SECTION
        M.004(a)1,   CRITERION 1,   The   offeror's   corporate
        experience  with contracts  of similar  scope and  size
        (pg. M-3).
 
        If two or more companies choose to form a joint venture
        for this  program,  will the  experience of  individual
        joint venture  partners be  evaluated as  experience of
        'the proposing entity'?
 
        Response 1:
 
        Subcontractor(s)' (joint venture partner(s)) experience
        will  be   evaluated   as  experience   of  the   prime
        contractor. However,  for evaluation under  Criterion 1
        the  prime contractor (one  firm) must submit  not less
        than  three contracts of similar scope and size through
 
        its  own   corporate  experience,  i.e.,  two  or  more
        companies  with contracts not of similar size and scope
        cannot  be combined and considered as similar scope and
        size because between  them they performed the  total or
        majority of functions described within the RFP.
 
   Consolidated RFP at C 012568.
 
        Question 37 and Response 37 stated:
 
        Question 37:
 
        Part IV, Section  M.009, Evaluation Criteria  - Support
        Services  states  that proposals  will be  evaluated in
        accordance with four  criteria, including 'Criterion 1:
        The offeror's corporate experience performing contracts
        of similar  scope and  size.'  What  range of  level of
        effort or  contract  value  constitutes  similar  size?
        What is the justification for requiring similar size if
        a   firm  has  multiple  contracts  of  similar  scope,
        complexity and objective?   Is this criterion  intended
        to discourage bids from firms with corporate experience
        performing contracts of smaller size but similar scope?
        For example, will  a firm that has  performed contracts
        of similar scope but multiple contracts of one third to
        one half the size be significantly penalized under this
        criterion?
 
        Response 37:
 
        Similar  in size will  be judged against  the estimated
        level  of  effort in  Section  B  of  the RFP,  but  no
        specific range has been established so as not to unduly
        restrict  competition.   Although not solely,  scope is
        also considered in terms of volume as well as the types
        of ADP  support services, not  merely the types  of ADP
        support  services  to  be  provided.    While  specific
        ratings could not be established on undefined contracts
        at this stage of  the process, it would be  fair to say
        that contract references which depict contracts similar
        in scope  and size  would score  higher than  contracts
        non-similar in size and scope.
 
   Consolidated RFP at C 012581.
 
        Question 40 stated:
 
        Refer   to  Section   L.048   -  Proposal   Preparation
        Instructions   -   Technical   Proposal,   Section   2,
        Capabilities and Experience (page L-023).
 
        The  solicitation states  that the  offeror must  cross
        reference each  function in  the SOW  to the  submitted
        contract  references.   Does the  Government mean  that
 
        bidders  may  only   describe  their  capabilities  and
        directly  related  experience  in  accordance with  the
        contracts they provide to comply with Section 1  of the
        RFP?  Or may bidders demonstrate their capabilities and
        directly related experience  by work they  accomplished
        on  other contracts  provided that cross  references to
        submitted  contracts are  cited appropriately?   Please
        clarify.
 
        Response 40 stated:
 
        The  offerors[']  demonstrated   ability  and  directly
        related experience  shall be demonstrated  only through
        the  prime['s]  three to  five contract  references and
        subcontractor references  submitted in  accordance with
        the  instructions.     The  demonstrated   ability  and
        directly related  experience will  be verified  through
        the   Technical  and   Contracting   Officers  of   the
        referenced  contracts.     Ability  and  experience  on
        contracts other than those specified . . . in Section L
        will not be evaluated.
 
   Consolidated RFP at C 012582.
 
        Question 50 and its response by DOE provided:
 
        Question 50:
 
        Page 1 of Attachment J requires the Contract Manager to
        have  experience '. . . managing  a contract of similar
        size  and  scope.'    Can  this  management  experience
        encompass several concurrent contracts that, when taken
        in  total,  are  similar  in size  and  scope  to  this
        procurement?
 
        Response 50:
 
        Yes,  but  the  contracts must  have  been  or [be]  in
        operation  at the same time, not merely intersecting at
        completion and phase-in.  Your attention is directed to
        the  fact  that   this  response  does  not   apply  to
        Criterion 1.
 
   Consolidated RFP at C 012586.
 
        DynCorp's  proposed  administration  manager  believed  that
   DOE's response to vendor question 50,  which allowed the contract
   manager position to  have concurrent experience, also  applied to
   the position of administration manager.  Transcript at 296-97.
 
   Initial Proposals:  October 23, 1993
 
        CDSI's Initial Technical Proposal
 
        In  response  to  criterion 1  of  the  technical evaluation
   criteria, corporate experience in performing contracts of similar
 
               contract.     Transcript   at   24;   Protest   File,
   Exhibit 23.  CDSI  interpreted the solicitation to  require under
   criterion 1 that it  describe its experience performing  at least
   three but not more than five contracts similar in size and scope.
   Transcript at 21-22.  The                                     has
   a value  of over                        over a  five-year period.
   Transcript at 351; Protest File, Exhibit 80.  The                
                     has a value of                 over a five-year
   period.  Protest File, Exhibit 80.
 
        On the                                        CDSI indicated
   that                     IRM functions being requested in the RFP
   were  currently being  performed.   Protest  File, Exhibit 58  at
   48-49; Transcript  at 66.  With regard to  the           contract
   and the               contract,  CDSI endeavored to  describe all
   functions  of the twenty-four required functions which were being
   performed, and noted  that it  was performing             of  the
   twenty-four functions for          and         of the twenty-four
   functions  for             .   Protest  File,  Exhibit 58 at  68;
   Transcript at 67.   However, with respect to                     
   CDSI                  to describe  all of the IRM functions being
   performed,                           those functions             
                                      and the proposed new contract;
   CDSI wanted                                                      
                contract to  highlight those functions.   Transcript
   at 67-68, 70-71.
 
        DynCorp's Initial Technical Proposal
 
        In  its initial  and  revised  technical proposals,  DynCorp
   submitted four contract references:  (1)                         
                                                                  
   (2)                                           (3)                
                                                                    
                                                                    
                 (4)                                                
                                               Protest         File,
   Exhibits 15, 51, 70.  For its subcontractor,                     
                          DynCorp proposed                          
                     contract.  Id.
 
        DynCorp's       contract  has a value of              over a
   five-year period.   Protest File, Exhibit 51 at  000054.  DynCorp
   represented that this contract involved performance of         of
   the twenty-four IRM functions in Section C of the RFP.  Id.  The 
         contract  itself, and a representative sampling of the task
   orders issued  to DynCorp by              which were  produced by
   DynCorp during  discovery,  reference non-IRM  services  such  as
   establishing     "logistics      procedures"     for      "proper
   purchasing/leasing, receiving and  accounting and distribution of
   all supplies  .  .  ." and  putting  on  "conference  workshops."
   Protester's Supplemental Protest File, Exhibit 7 at 00310-12.
 
 
        DynCorp's           subcontract is a subcontract with       
                             which has a prime contract with        
   Protest   File,  Exhibit 51   at  000060;   Intervenor's  Hearing
   Exhibit 29.    DynCorp  stated the  value  of  the               
   subcontract to be                     Protest File, Exhibit 51 at
   000060.                   of the value of the DynCorp subcontract
   represents   IRM-related   services.       Intervenor's   Hearing
   Exhibit 29.4
 
        DynCorp   submitted   a    reference   contract   for    its
   subcontractor,              and  cited              experience in
   demonstrating experience for several functions under criterion 2,
   such as  Automated Office  Support Services  and SACNET  Support.
   Protest File, Exhibit 51 at 000070.        was proposed for      
    DPLH, out of the total of               some       of the total.
   Protest File, Exhibit 51 at 000191.
 
                       
   ____________________
 
        4    The parties stipulated that DynCorp's division  manager
   for                           the division which performed the   
         subcontract,  would have  testified as  follows  if he  had
   appeared at the hearing:
 
        DynCorp  provides range  engineering, data  acquisition
        and  reduction  (REDAR)  services, as  well  as  marine
        automotive and  aviation transportation  services [non-
        ADPE],  under  the  Subcontract.    The  total  DynCorp
        personnel  on the  Subcontract  is approximately       
        people   at  present,  and   the  number  of  full-time
        personnel  assigned  to   REDAR  functions  and   those
        assigned  to  transportation  functions  is  accurately
        stated on the attached Monthly Status Report.
 
        . . . .
 
        The  percentage of the  total value of  the            
        Subcontract  represented  by  the  REDAR  services  and
        transportation services, respectively, is approximately
        proportional to the  percentage of full-time  personnel
        assigned to those respective services.
 
   Intervenor's Hearing Exhibit  29.  The referenced  monthly status
   report indicated  that for October  1993,             out  of    
   employees  were performing  ADPE services,  and  as of  March 31,
   1994,             out of          employees were  performing ADPE
   services.
 
        DynCorp also cited the experience  of its subcontractor     
   under criterion 2.   Protest File, Exhibit 51 at  000067, 000091.
   DynCorp stated in  its proposal that both        and         were
   proposed for 10% or more of the total DPLH.  Id. at 000066.
 
        In its  initial proposal, DynCorp's  proposed administration
   manager's  resume  did  not  specifically  address  the  two-year
   requirement  for recent  experience in  the  administration of  a
   contract of similar size and  scope.  Protest File, Exhibit 15 at
   000418-22.
 
        CDSI's Initial Cost Proposal
 
        In its initial proposal, CDSI offered                    for
   each solicitation labor category other than key personnel.  These
                  were   developed   in   accordance   with   CDSI's
   estimating policy.  CDSI's vice president who developed its labor
   rates examined the RFP requirements and RFP labor categories,    
                                                                    
                                                                    
                                                                    
                                                                    
                             without any consideration of           
                                                                    
         Transript  at 653,  662-63,  669-71, 825-26;  Protest File,
   Exhibit 23.    For  the  category  senior  systems  analyst,  the
   representative sample consisted  of                       Protest
   File, Exhibit 23 at 000035.
 
        The  attachment  to  Exhibit B  sets  forth  the  RFP  labor
   category, the  names  of the  individuals  who were  selected  as
   representative of  the RFP  skills, the  current hourly rate  for
   these individuals, and  the composite "bid rate."   Protest File,
   Exhibit 23 at 000035-39.  In the notes to the cost proposal, CDSI
   stated:  "CDSI's Energy Systems Division direct labor rates  were
   derived        using the                                         
                                                                Id.
   at 000007.
 
        CDSI derived the hourly rate for each individual by dividing
   the  annual salary of representative employees who were currently
   assigned to the existing  DOE contract by        hours (    hours
   per week times 52 weeks).  Protest File, Exhibit 23 at 000040.
 
        In developing  the CDSI composite rates for the initial cost
   proposal, CDSI's vice president                                  
                                                                    
                                                          Transcript
   at   674-81,   749;   Protester's  Supplemental   Protest   File,
   Exhibit 72.  On  average, CDSI's rate for its  composite rates in
   its initial offer was close to the                               
             Transcript   at   681;    Protest   File,   Exhibit 23;
   Protester's Supplemental Protest File, Exhibit 72.
 
        As  part  of  its  initial  cost  proposal,  CDSI  completed
   Exhibit E of the RFP exhibits.  On Exhibit E, CDSI listed the RFP
   labor   categories  in  one   column,  and  for   the  "Offeror's
   Corresponding Labor Category," the possible CDSI corporate titles
   that an individual might have who possessed the skills to perform
   the DOE RFP labor category.  Transcript at 673.  CDSI did not use
   the information in Exhibit E in  development of its direct  labor
   rates.  Protest File, Exhibit 23 at 000052; Transcript at 458-60,
   673-74.
 
                                                                    
                Protest  File, Exhibit 23  at 000185.   Rather,  its
   proposal states that                                             
                                                                   
   Id. 
 
        CDSI's total estimated cost in its initial proposal was     
              Protest File, Exhibit 23 at 000023.
 
        CDSI's                                    
 
        CDSI's offer of composite labor rates                       
                                                                    
                                     Transcript at 446-47.          
                                                                    
                                                                    
                                                                    
             Id.  at   440-46,  448-50,  649;   Protester's  Hearing
   Exhibit 9.                                                       
                                                                    
                                               Transcript   at  453,
   656.                                                             
                                                                    
         Id. at 487.
 
        CDSI's Cost Estimating Manual states at Section 4.2.2.1:
 
        Mapping Employees to Labor Categories
   Protester's Hearing Exhibit 9, 1994 Manual at 7.5
 
 
        DCAA's January 1993 Audit of CDSI's Proposal
 
        DOE  requested  DCAA   to  audit  all  the   offerors'  cost
   proposals.  In  its January 11, 1993, Audit Report for CDSI, DCAA
   concluded:
 
             b.   The  proposed  contract  is  a  follow-on  to
        contract DE-AC01-88MA33222.  We compared, for six high-
        dollar  labor  categories,  the current  rates  in  the
        existing contract with the proposed rates.  
   Protest File, Exhibit 28 at 000026.
 
 
 
 
                       
   ____________________
 
        5    This provision  does not differ substantially  from the
   earlier  versions.  Protester's Hearing Exhibit 9, 1990 Manual at
   11, 1993 Manual at 4-2.
 
        DynCorp's Initial Cost Proposal
 
        DynCorp  proposed  labor  category   rates  in  its  initial
   proposal.   Protest File, Exhibit 16.  DynCorp developed its non-
   key personnel labor rates                                        
                 Id. at 000084.  DynCorp stated that                
                                                                    
                                                               
   Protest File, Exhibit 16 at 000004.  DynCorp continued:
   Id.
 
   The Evaluation Process
 
 
        The Rating Plan
 
        The SEB's internal rating plan provided that proposals would
   be  evaluated by  the SEB  in accordance  with that plan  and the
   "Acquisition  Regulations   Handbook,  Source   Evaluation  Board
   DOE/MA-0154."  Protest  File, Exhibit 30 at 22.   The rating plan
   assigned the following  maximum point scores to each  of the four
   technical evaluation criteria:
 
             Corporate experience                   points
 
             Demonstrated ability and
             directly related experience            points
 
             Contract management plan               points
 
             Key personnel                          points
 
   Id. at 000024.
 
        The rating  plan provided that  cost proposals would  not be
   point  scored.   Id.  at  000055.   The  rating  plan included  a
   "contractor technical reference check" form to be used by the SEB
   in questioning references  regarding technical criteria 1  and 2.
   Protest File, Exhibit 30 at 000058-61.
 
        Under the rating plan, which was not  disclosed to offerors,
   an  offeror could  only receive  a score  of 0,  2, 5, 8,  or 10.
   Transcript at 100.   For example, if an  individual evaluator had
   wanted  to assign a score of 6.5,  that was impossible.  Id.  The
   rating scale defined the point scores as follows:
 
 
        10 - This  proposal response  is  distinguished by  its
             excellence in  meeting the  RFP's requirements  as
             measured  against the evaluation criteria.  Such a
             response  would    normally  evidence  significant
             strength(s) and no weakness(es).
 
         8 - This   proposal   response    evidences   a   good
             understanding in meeting the RFP's requirements as
             measured against the evaluation  criteria.  Such a
             response  would   normally  evidence   significant
             strengths(s) [sic], and few, if any, weakness(es).
 
         5 - This proposal response  appears capable of meeting
             the  RFP's  requirements as  measured  against the
             evaluation  criteria.    Such  a  response   would
             normally  evidence no  significant strength(s)  or
             weakness(es).
 
         2 - This proposal response  omits major details and/or
             evidences  a lack of  understanding in meeting the
             RFP   requirements,   as  measured   against   the
             evaluation  criteria.     Such  a  response  would
             normally have few, if  any, strength(s), but would
             evidence significant weakness(es).
 
         0 - This proposal response can  not [sic] be  expected
             to meet the RFP's requirements as measured against
             the evaluation  criteria.   Such a  response would
             normally  have  no strengths,  but  would evidence
             significant weakness(es).
 
   Protest File, Exhibit 30 at 000054.
 
        The rating plan contained the following  provision regarding
   retention of documents by the SEB:
 
        The  official  SEB  file will  retain  those  documents
        containing  the  information  or  backup material  upon
        which  the  Board's  evaluation  is based,  (i.e.,  the
        rating plan  and its  attachments, and cost  evaluation
        report).  The Board member's individual  worksheets and
        notes, if any, need not be retained after the Board has
        achieved  consensus on all the evaluation criteria.  If
        an   individual   evaluator  desires   any   particular
        worksheets or  notes be  retained in  the official  SEB
        file, a memorandum from the individual evaluator should
        be attached  to the document(s) stating the document(s)
        are  to  be  retained.   This  memorandum  and attached
        document(s) are to be placed in the official SEB file.
 
   Protest File, Exhibit 30 at 000052.
 
        DOE's Acquisition  Regulations Handbook which  governed this
   procurement  included  a section  entitled  "Transfer/Disposal of
   Files" which provided:
 
        During  the course  of its  activities  the [SEB]  will
        accumulate  certain   data  or  documentation.     Such
        documentation,  or  back-up   material,  normally  will
        include:      summaries   of    board   meetings,   the
        solicitation, proposals, working papers such as  rating
        or  scoring   sheets  and  checklists,   and  committee
        reports.   These papers  constitute the  basis for  the
        board report  and will be  preserved.  After  the Board
        has  completed its  activities, the official  SEB files
        will  be purged of excess copies of material, including
        SEB   reports,  and  the  official  SEB  File  will  be
        transferred to  the  procurement office  that  will  be
        responsible for  negotiating the contract.   A complete
        copy of  each proposal received will be retained in the
        official files. . . .
 
   Protest File, Exhibit 95 at 000027.
 
        The SEB's Process
 
        There  were six voting  members and one  nonvoting member of
   the SEB (DOE counsel).  Transcript at 94-95.          offers were
   submitted initially.   Id. at 96.   When the board first received
   proposals,  each of  the  board  members  individually  read  the
   proposals and noted tentative  strengths and weaknesses.   Id. at
   99.   Proposals were maintained  and reviewed in the  board room;
   they could not be removed.  Protest File, Exhibit 30 at 000022.
 
   The Individual Evaluations
 
        The individual  members of the board were  not provided with
   scoring  sheets, but  made  their  own  informal  notes  as  they
   individually reviewed proposals.  Transcript at 100.  There is no
   record of the individual evaluations because the individual notes
   of all  members of the  SEB were destroyed.   Transcript at  100,
   193-94.  One member of the SEB testified as follows regarding the
   destruction of the notes:
 
        I don't recall why we -- we just felt we had -- once we
        had  our board report,  that represented  our findings,
        and there  was no  reason to  keep  working papers  and
        things   like  that  which  no  longer  beared  on  our
        consensus.
 
        I  mean, I  might have  notes  that might  appear as  a
        question; in other instances, a comment.  And it may or
        may not  have had anything  to do with  the evaluation.
        That was something we talked about.
 
        So once -- we didn't have any minority positions in the
        board  so  there  was  not  need.     There  were  many
        revisions.
 
   Id. at 205;  see also  id. at  100, 193, 1241-42,  1289-91.   The
   notes  were methodically destroyed  at two different  time frames
   during the evaluation -- just prior  to the receipt of BAFOs  and
   just prior  to award.  Id. at 1367-68.   The SEB worked in a very
   small room and  had a  shredder, which  was used  to destroy  the
   notes.  Id.  at 1367-68.  The contracting  officer testified that
   there  were  "official purges"  when the  SEB requested  BAFOs on
   December 13,  1993, and  when the  SEB  did its  final report  on
   February 4, 1994.  Id. at 1705.
 
        When  the board  members finished  reviewing  the proposals,
   they  met  as  a  group  to  reach  consensus  on  strengths  and
   weaknesses of  each proposal.   Transcript at 99, 1363-65.   They
   then  assessed   whether  the  strengths   and  weaknesses   were
   "significant."  Id.  After reaching consensus on the significance
   of  the strengths  and  weaknesses,  the  board  reached  another
   consensus and scored  each technical criterion of  each proposal.
   Id.   There was never  a minority position.   Protester's Hearing
   Exhibit 8 at 32.6
 
        The  SEB determined which  contracts were to  be "strengths"
   and "weaknesses" without  any agreed-upon, collective  definition
   of those  terms.  Transcript at 164-69,  209-14, 242-43.  One SEB
   member adopted  the rating scale  to determine what  a "strength"
   was.  Id. at 187, 193.   He testified:
 
        Q    What instruction  were you given in  deciding what
        was a strength and what was a weakness?
 
        A    Well, that's  what  we decided  to  do.   We  were
        following the rating  plan, and we were to  read the --
        we agreed as a group.  If I said I was told, I'm sorry.
        I don't believe that we were told.  No one told us.  We
        as a group decided that's how we were going to approach
        the evaluation.
 
        Q    The way you agreed to  approach it was each of you
        look  at the  contracts and  decide for  yourself as  a
        strength or a weakness, right?
 
        A    Note  those  sorts  of   things  using  the  model
        contract.
 
        Q    Right.   Did you  discuss what  the definition  of
        'strength' would be versus 'weakness'?
                       
   ____________________
 
        6    By stipulation, one SEB member's deposition was entered
   into the record as Protester's  Hearing Exhibit 8, in lieu of his
   testifying at the hearing.
 
        A    I don't recall.
 
   Id. at 191-92.   However, the chairman of the  SEB considered the
   rating scale to  be inapplicable to define what  a strength might
   be.  Id. at 217-18.
 
        One  member  of  the  SEB  contradicted  his  own  testimony
   regarding strengths and weaknesses.  Initially, he testified that
   there were three categories, strength, weakness,  and "adequate."
   Transcript  at  180.7     Several  minutes  later   this  witness
   testified as follows:
 
        Q    When  you were deciding whether the contracts were
        strengths or  weaknesses or  adequate, did  you have  a
        definition of adequate in your mind at the time?
 
        A    I did not do what you just described.
 
        Q    What did you do . . . ?
 
        A    As  a   board  member  identified   strengths  and
        weaknesses.
 
        Q    Did you identify which contracts were adequates?
 
        A    No.
 
        Q    So it had to go  into either strength or weakness;
        is that your testimony?
 
        A    That is correct.
 
   Id. at  189.   The  SEB  also did  not  articulate any  objective
   guideline for  determining whether  the  strengths or  weaknesses
   were significant.  Id. at 34-35, 182-83, 196-201.  "Significance"
 
                       
   ____________________
 
        7    This specific testimony was:
 
        Q    So if it's  similar in scope and size,  it may not
        be a strength; is that your testimony?
 
        A    I'm saying that it might be adequate.  It depends.
                             ____________________
        It's relative.
 
   Transcript  at 180  (emphasis added);  see  id. at  155.   ("It's
                                          ___  ___
   possible that an  offeror gave us a contract  where we determined
   that it was  adequate, given that you  will find no place  in our
   evaluation  describing   adequate  in   terms  of  strengths   or
   weaknesses.    We   addressed  on  these  sheets   strengths  and
   weaknesses not adequates.")
   was   assigned  for  the  purpose  of  discriminating  among  the
   proposals and had an impact on scoring.  Id. at 198.
 
 
        Another SEB member would adjust points for "significance" of
   strengths and weaknesses,  but he was not  sure by how much.   He
   testified:
 
        Q    Now, if . . . you make the               contract,
        which is  the first strength,  . . .  significant, what
        happens to the score?
 
        A    Based  upon what we've agreed, that would make the
        score go higher.
 
        . . . .
 
        A    [I]t would set  it as a higher number.   What that
        number is, I  don't know.  It might be -- it might have
        been a 7.5.  Or it might have been a 7.  I'd say, well,
        I think it should be a 7.5 now, in my own mind.
 
   Protester's Hearing Exhibit 8 at 38-39.
 
        One  member  of  the  SEB  testified  as  follows  regarding
   "significance" of strengths and weaknesses:
 
        Q    . . .  .  What  was your purpose in  assigning the
        significance to the strengths under criterion 1?
 
        A    That  it  was  far  more  than  just  meeting  the
        requirements would be an example.
 
   Transcript at 196.  He also stated:
 
        So it's  a tough call  when you say two  strengths that
        are not significant.   I'm not sure where  I would take
        that, and I would work with the board to work that out.
 
   Transcript at 199-200.
 
   Initial Evaluations:  Scoring
 
        The  total point  scores  and  evaluated  costs  at  initial
   evaluation  for offerors ultimately  included in  the competitive
   range were:
 
                                 MAXIMUM
                                 TECHNICAL
                                 POINTS           OFFERORS
 
                                           CDSI      CSC8    DynCorp
 
        1. Corporate Experience    
 
        2. Demonstrated Ability    
           and Directly Related
           Experience
 
        3. Contract Management     
 
        4. Key Personnel           
 
           Total Points
 
                             PROPOSED COST
 
              CDSI                CSC               DynCorp
 
    
 
   Protest File, Exhibit 30 at 000024.
 
        Evaluation of CDSI's Initial Proposal
 
        For  criterion   1,  DOE  concluded  that  CDSI's  corporate
   experience in performing contracts of similar scope and size was 
              Protest   File,  Exhibit 30   at   000029.     Initial
   evaluations did  not encompass  reference checks;  this was  done
   after  the competitive range  determination.  Transcript  at 101,
   1297-98.   DOE recognized  that CDSI's  performance on  the      
   contract was  virtually the same  scope and size as  the proposed
   contract.  However, DOE further concluded that CDSI              
                                                       DOE stated:
   Protest File, Exhibit 30 at 000029.  CDSI received a rating of   
 
        on criterion 2  because of its  experience on the           
   contract.    Id.   With  regard  to  criterion 3, DOE  found  the
   adequacy  and  appropriateness  of   CDSI's  plan  for   contract
   management to be               Id. at 000029.  DOE concluded that
                       
   ____________________
 
        8  Computer Sciences Corporation.
   CDSI had                                                         
 
                                                                    
                                                                  
   Id. at 000029-30.  With regard to criterion 4, DOE concluded that
   CDSI's key personnel were           but that its proposed systems
   development and maintenance manager's resume                     
                                                                    
              Protest File, Exhibit 30 at 000030.
 
        Citing  the DCAA's  determination,  the  SEB concluded  that
   CDSI's cost proposal                                             
                                                which    DCAA    had
   noted.   Specifically,  DOE characterized  the  DCAA findings  as
   follows:
 
        [DCAA]  has   determined  that  CDSI's   cost  proposal
        contains                                            The
        proposal contains                                      
                                    These        consist of the
        presence of                                            
                              [9]                      in labor
        category rate calculations,              indirect rates
        . .  . and failure to provide cost and pricing data for
        the                          
 
   Id. at 000030.
 
        With regard to  direct labor the SEB questioned             
   in direct labor  costs.  Protest File, Exhibit 30 at 000030.  The
   SEB concluded that CDSI                                          
                                                                    
                            Finally,    DOE    questioned     CDSI's
   estimating method for determining the  proposed labor rates.  DOE
   stated:
 
        If CDSI  were to utilize their                 it would
        result in a                             It also appears
        that CDSI has failed to include all employees currently
        working  in  a  specific  category  to  determine   the
        category average  rate therefore  the rate  may not  be
        representative of the actual average rate.
 
   Protest File, Exhibit 30 at 000030.
 
        In evaluating  the initial  cost proposals,  the contracting
   officer basically looked  at areas of inconsistency.   Transcript
   at 1595-96.   He explained that  there were three charts  that he
   used,  Exhibit B, Exhibit B-1,  and Exhibit E.   Exhibit B listed
   the   projected   labor  rates   for  proposed   individuals  and
   categories.  For example,                                        
                       
   ____________________
 
        9    Exempt employees  means employees who  are exempt  from
   the Fair Labor Standards Act.
 
                                                                    
                                                                    
                            The  attachment   to  Exhibit B,   i.e.,
   Exhibit B-1, listed the                                          
                                                                    
                    Protest File, Exhibit 23 at 000035.   Exhibit E,
   entitled "Reconciliation of Labor Categories," tracking the title
   in the RFP, indicated for                                        
                                                                    
                                                                  
   Protest File, Exhibit 23 at 000052.
 
        In  evaluating CDSI's initial offer, the contracting officer
   was  concerned  with  the  discrepancy  between  the  CDSI  labor
   categories indicated in its Exhibit B  and those indicated in its
   Exhibit E.  He testified:
 
        So,  they've  got  one  on  Exhibit  B  that's  not  in
        Exhibit E  and they have an additional three on Exhibit
        E that's not  represented on Exhibit B.   So we have  a
        disconnect.  We have a question.  There's  a disconnect
        here  [as] to what they are really offering in relation
        to their labor  categories they're going to  propose to
        meet our labor categories.
 
        Now that disconnect becomes important because now we go
        to the  question as  to  -- ok,  who now  makes up  the
        composite.  Is it the individuals from labor categories
        identified on Exhibit B  or is it individuals  from the
        diverse labor categories  identified on Exhibit E.   So
        we now  have several  issues which we  need to  resolve
        with the offeror in relation to direct labor rates.
 
   Transcript at 1600.
 
        Evaluation of DynCorp's Initial Proposal
 
        Under   criterion 1,  DynCorp's   corporate  experience   in
   performing contracts of similar scope and size was  determined to
   be              Three of its references --                       
      -- were  considered strengths.  The               contract was
   stated to have                out of twenty-four functional areas
   addressed  as to  scope,  and was  rated  a strength,  but not  a
   "significant" strength because  the SEB could not  determine what
   tasks DynCorp  was actually performing on that contract.  Protest
   File, Exhibit 30 at 000034; Transcript at 1435-41.
 
        DynCorp's   demonstrated   ability  and   directly   related
   experience  for performing  the functions  of  the State  of Work
   (SOW) plan for management were also considered            Protest
   File,  Exhibit 30  at  000035.    Under   criterion 4,  DynCorp's
   proposed  key personnel were  determined to be                its
   contract  manager's experience  was                      and  its
   administration manager                                           
 
                                             Id. at 000036.
 
        The  DCAA   found  no  deficiencies   with  DynCorp's   cost
   proposal's  estimating system and took no exceptions to DynCorp's
   direct labor rates.  Protest File, Exhibit 30 at 000036.
 
   The May 12, 1993, Competitive Range Determination
 
        Because  CDSI and  DynCorp  demonstrated previous  corporate
   experience and the capability and experience necessary to perform
   the  functions, as  well  as adequate  management plans,  the SEB
   recommended  that  they  be included  in  the  competitive range.
   Protest File, Exhibit 30 at 000041.
 
   Reference Checks
 
        After making  the competitive range  determination, the  SEB
   performed  reference  checks  of the  contracts  submitted  under
   criterion 1.    Transcript  at  1297-98.    The  purpose  of  the
   corporate  reference  checks  was  to  corroborate  the  contract
   references  contained  in  each  offeror's  proposals.    Id.  at
   104-105,  1298.   The reference  checks were  not rated  or point
   scored.  Id. at 117, 1301.
 
        In general, two members of  the SEB were supposed to perform
   reference checks  jointly "to insure the accuracy of the contract
   reference checks."   Transcript at 105; see also  id. at 239.  In
   doing   reference  checks,  the  members  of  the  SEB  preferred
   contacting  the  contracting officer's  technical  representative
   (COTR) because they  believed that the COTR could  provide better
   technical  information  concerning   technical  aspects  of   the
   contract.   Id. at 105-07.   In performing reference  checks, the
   SEB  members were  supposed to use  the same form  to insure they
   were asking  the same  questions.  Id.  at 107-08;  Protest File,
   Exhibit 30  at 000058-61.   The  "contractor  technical reference
   check" contained a  list of various tasks required  under the RFP
   to  be  verified  in  the  reference contracts.    Protest  File,
   Exhibit 30 at  000058.    In  addition, the  form  solicited  the
   principal types  of personnel  utilized and  comments on  various
   aspects of  performance.  Id.  at 000058-61.  Typically,  the SEB
   spent less than an hour  for each contract reference.  Transcript
   at 108.  The SEB members only talked to a reference once.  Id.
 
        CDSI's Reference Checks
 
        The chairman of  the SEB performed CDSI's  reference checks.
   Transcript at 219.   He did this by himself because the member of
   the SEB who was supposed  to assist him, the contracting officer,
   was starting his initial cost  evaluations and may have been tied
   up on an environmental information administration proposal at the
   time.  "His time was rather valuable," so the chairman decided to
   take the burden of the interview on himself.  Id. at 239-40.
 
        The chairman of  the SEB attempted to  contact the technical
   officer on the     contracts, but he was on leave.  Transcript at
   220.  The contracting officer  for both of those contracts agreed
   to assist him, but she was in a  hurry.  Id.  The chairman of the
   SEB and the contracting officer on the     contracts agreed to do
   both references "in tandem to save everybody a lot of time."  Id.
   At hearing  the chairman  of the SEB  initially testified  to one
   methodology  of  performing  CDSI's  reference  check,  but  then
   completely  changed his  testimony.    First,  the  SEB  chairman
   testified  that in  doing the  reference check  he used  the form
   which  everyone else  used,  which  listed  the  twenty-four  RFP
   functions and  that the form  was on his personal  computer (PC).
   Id. at 221-22.  He testified that he tailored the form to fit the
   references in the  proposal and deleted from the form  any of the
   twenty-four functions that  a contract reference said  it was not
   performing.  Id. at 223.  For some of the  twenty-four functional
   areas,  the chairman  of the  SEB went  beyond simply  asking the
   reference whether they were being performed; he asked what number
   of people were  working on that function to  test how significant
   that functional area was in the reference  contract.  Id. at 226.
   Finally, the chairman of the SEB testified that he discussed what
   was on the reference form with the     contracting  officer.  Id.
   at 232-33.
 
        Then  several days later  at the  hearing this  same witness
   testified as follows:
 
        A    Okay.  When [the contracting officer on the       
                             said she was pressed  for time and
        could I possibly do anything to speed the process up --
        . . .  I asked her to  give me a few seconds  and I was
        trying to tailor these forms. . . .  Okay.  By "tailor"
        what I meant to do was delete those functions that were
        not  in CDSI's proposal  because there  was no  need to
        discuss  functions  not  in the  proposal  with  her to
        corroborate them.
 
        Q    So you  started deleting  the ones  that were  not
        checked off by CDSI at [CDSI's proposal]?
 
        A    I  went  to that  page  in [CDSI's  proposal].   I
        started  trying to  tailor the  forms.   It became  too
        confusing  an issue  so I  just used  that page  out of
        [CDSI's proposal].
 
        Q    So  is it your testimony that you started deleting
        and you just never completed it? . . .
 
        A    Well, I started deleting, you know, and I even got
        confused as well,  maybe I didn't delete the right one.
        I  may  have added  one  or  two.   It  became a  total
        confusing mess.  You know, so I just didn't want to use
        them.  I wanted  to make sure I was being  accurate and
 
        corroborating the proper areas, so  I used the page out
        of the [CDSI proposal].
 
   Transcript  at  1322-23.   The         reference  form  which was
   described as "a total confusing mess" was included as part of the
   SEB official file for all of  the other members to utilize.   Id.
   at 1325.
 
        This witness said  he had intended to correct  the form, but
   to  his embarrassment  he "just  forgot  it" and  never did  it."
   Transcript at 1324.
 
        In performing the       and           reference  checks, the
   chairman of the  SEB corroborated more functions  being performed
   than were  indicated in the proposal.   On the       contract, he
   corroborated           functions, whereas CDSI had only listed   
         Transcript at 1312-14.   On the            reference check,
   the  SEB chairman confirmed           functions, even though CDSI
   only listed         in its proposal.  Id. at  1314; Protest File,
   Exhibit 22 at 45.
 
   DynCorp's Reference Checks
 
        In the reference check  for DynCorp's         contract,  the
   reference form indicated that  DynCorp had no experience in      
   of the  twenty-four functional  areas.  Transcript  at 114.   The
   form further  indicated  that for          of  the SOW  functions
   DynCorp's experience was limited.  Id. at 115.
 
        In   performing    the   reference   check    on   DynCorp's
   subcontractor,          the SEB was  unable to verify any  of the
   work that       was proposed to do.   Transcript at 127-28.   One
   member of the SEB testified:
 
        What we  got by talking with the  contract reference is
        that  they provided in  total a turnkey  type function,
        and obviously  they  were performing  the work  because
        where you're doing a billing function for, you know,   
         it's a complete function.  They're obviously doing the
        work.
 
        But we could not verify it, and  we tried to be factual
        in what we reported on this sheet.
 
   Id. at 127-28.
 
   DOE's June 11, 1993, Clarification Questions
 
        To CDSI
 
        In the  technical/business  management  proposal  area,  DOE
   requested that, inter alia, CDSI clarify the following:  its     
                                                      its           
                                                                    
 
                 its                                                
                          and its                                   
                        Protest File,  Exhibit 34 at 000008-9.   DOE
   also asked CDSI to clarify its directly related experience in    
                              Id. at 000008.
 
        In  the clarification  questions  regarding CDSI's  proposed
   cost, DOE stated, in pertinent part:
 
        COST:
 
        The DOE concurs with DCAA's questions  regarding CDSI's
        estimating  method for  determining the  proposed labor
        rates.   Please  submit  a schedule  reflecting  CDSI's
        labor  classifications,  individuals'   names,  current
        salaries, and  the labor  category's  average rate  for
        each  RFP  labor  category.   All  individuals  must be
        currently working within the  labor category for  which
        they are included.
 
   Protest File, Exhibit 34 at 000009.
 
        Following  receipt  of  the  contracting officer's  June 11,
   1993,  letter,  CDSI's vice  president contacted  the contracting
   officer to obtain a clearer understanding of the points for which
   DOE  needed clarification.  In these telephonic discussions, CDSI
   explained that CDSI corporate labor classifications or titles had
   nothing to  do with  CDSI's creation of  its direct  labor rates.
   CDSI   also  explained  its  understanding  that  what  DCAA  had
   requested was a comparison of the                                
                 to  the  RFP  labor  categories.     Transcript  at
   699-702.
 
        CDSI   representatives  subsequently   met  with   the  DCAA
   supervisory  auditor.     DCAA  confirmed  that  it   expected  a
   comparison of the direct labor rates                           to
   the RFP  labor categories  because CDSI  would be  performing the
   same functions if it were awarded the follow-on contract pursuant
   to the RFP.  CDSI understood DCAA to be requesting               
 
                                                                    
                                                          and
   communicated                                        Transcript at
   701-03; Protest File, Exhibit 39 at 000004.
 
        By  letter dated  June  25, 1993,  CDSI  responded to  DOE's
   request  for  clarifications  and  discussions.    Protest  File,
   Exhibit 38.  In its response  CDSI addressed all of the questions
   raised in the June 11 letter.  Id.; Transcript at 80-83.
 
        In response to DOE's question regarding                     
   CDSI detailed its                     experience in              
                                       Protest  File, Exhibit 38  at
   000003-06.   In  response to DOE's  comment that  CDSI's proposed
   systems development  and maintenance  manager did  not appear  to
   meet the  qualifications in the  position description in  that he
   did not demonstrate at                                           
                                      CDSI  substituted a  different
   individual and resume.   Id. 38 at 000026-33.   This individual's
   resume indicated that he had been employed by CDSI since         
         and  had been the program manager on  the                  
   contract, with a staff of      since              between        
         and              he was the Project Director/Deputy Project
   Director on a contract with the                                  
        supervising  between       and       CDSI  and subcontractor
   staff.  Id.
 
        In response to DOE's concern regarding the DCAA conclusions,
   CDSI stated that it                                              
   of bidding and delivering lower hourly rates.  CDSI stated:
   Protest File, Exhibit 39 at 000002.  
 
 
 
 
                               Id.
 
        In response  to DOE's  request that  CDSI submit  a schedule
   reflecting its labor classifications, CDSI submitted Attachment 2
   to the June 25, 1993, letter in which it                         
                                                   to  produce labor
   rates  on  the   new  contract.    Protest  File,  Exhibit 39  at
   000016-27.  
 
                                    Protest   File,   Exhibit 39  at
   000004, 000016-27.  
 
                                                       Id. at 00004.
                                                                    
                                                                    
                   the rate increased to           Id. at 000016-27;
   Transcript at  706-10;  Protester's  Supplemental  Protest  File,
   Exhibit 72.  CDSI contends that  it treated this submission as an
   exercise  to show  the effect of  literal compliance  with DCAA's
   directive that                                                   
                Protester's Posthearing Brief at 58-59.
 
        To DynCorp
 
        By letter dated  June 11, 1993, DOE advised DynCorp that its
   proposal was within the competitive  range and enclosed a list of
   written    questions   and    statements   for    which   written
   discussions/clarifications  were  requested.   DOE  addressed the
   issue regarding the administration manager as follows:
 
        The  proposed Administration Manager does not appear to
        meet  the  qualifications  contained  in  the   generic
        position  description  in  that he  does  not  meet the
        requirement of administering a contract of similar size
        and scope.
 
   Protest File, Exhibit 34 at 000015.
 
        On June 25, 1993,  in response to DOE's  question concerning
   the  administration   manager,  DynCorp   proposed  a   different
   administration manager.    Protest File,  Exhibit 36  at  000048.
   This  individual   had  ten  years  of   contract  administration
   experience for                                                   
                                                                    
                            He had been responsible for ADP contract
   management and administration for multiple contracts as the      
                                                    Id.    According
   to  his  qualifications  statement, this  administration  manager
   between      and      "had administrative responsibility for more
   than                                         personnel supporting
   multiple contracts generating annual revenues exceeding          
    "  Id.  at 000051.  His  efforts at DynCorp since  1992 included
   proposal efforts on the ITSO procurement.  Id. at 000050.
 
   DOE's August 6, 1993, Letters
 
        By  letter dated  August 6,  1993, the  contracting  officer
   requested each offeror in the competitive range to provide a copy
   of the company's position descriptions, to include the experience
   and  educational  requirements  for the  company's  corresponding
   labor  categories  identified  in  Exhibit E  of  each  offeror's
   proposal.  Protest File, Exhibit 41; Transcript at 1621-22.
 
        By letter dated August 18, 1993, CDSI supplied the requested
   corporate position  descriptions and explained that  its position
   descriptions  are used  only for  internal purposes  and not  for
   purposes of  proposal pricing.   Protest  File, Exhibits 42,  44;
   Transcript at 486-87, 1626-27.
 
 
        The contracting officer interpreted  CDSI's cost proposal to
   be offering  a composite  rate and  to draw  individual employees
   from labor categories listed in  Exhibit E.  Transcript at  1633.
   The  contracting  officer  believed  that  in  order  to  propose
   acceptable composite  rates, a vendor  had to use  individuals in
   deriving those  composite rates who  met each requirement  of the
   RFP for a given labor category.   Id. at 1639-40.  Therefore, the
   contracting officer looked at all of CDSI's position descriptions
   in a  given  CDSI labor  category  covering all  the  individuals
   proposed  to make  up a  composite rate  to make  sure that  each
   position  description met  all of  the requirements  for the  RFP
   labor category.  Id. at 1640.
 
        In reviewing CDSI's August 18, 1993, submission of  position
   descriptions offered for the  corresponding RFP labor categories,
   the   contracting  officer  was  concerned  that  in  the  senior
   management analyst position none of  the                      met
   the  minimum requirements  of  the  RFP's  position  description.
   Transcript at 1643-44.  The contracting officer's concern went to
   "the realism of the  composite rate, as to  how it is  developed,
   and  whether it is  really representative of  the individuals and
   labor  categories  that will  be  used,  to  fill our  RFP  labor
   categories."  Id.
 
   Oral Discussions
 
        On August 23,  1993, DOE  held oral  discussions with  CDSI.
   Intervenor's Protest File  Supplement, Exhibit 102.  Most  of the
   issues discussed with CDSI during oral discussions concerned     
   Protest File, Exhibit 44; Transcript at 1645.
 
        The contracting officer prepared a prenegotiation memorandum
   listing  the  issues  to  be  discussed  with  CDSI  during  oral
   discussions.   Protest File,  Exhibit 44 at 9-11.   He  read from
   this during discussions and made the following points:
 
        .    The  CDSI labor categories identified in Exhibit E
             of  your proposal do  not appear to  be consistent
             with the RFP labor categories.
 
             i.   Junior levels proposed for senior levels  and
                  vice versa.
 
             ii.  CDSI appears  to have  proposed corresponding
                  labor categories which  are inconsistent with
                  certain RFP labor categories such as . . . 
 
        .    CDSI appears to have used selective individuals to
             establish the average category rate instead of all
             individuals   performing   within   the  corporate
             category.   (Individuals  who  do not  possess the
             required     educational     and/or    educational
             requirements should not  be used to  determine the
             weighted or composite labor rate.)
 
   The contracting officer further stated:
 
        .    The  attachment to Exhibit B shall include the RFP
             labor  category, and  the corporate  corresponding
             labor  category title for which each individual is
             employed under CDSI.
 
        .    The      hours must  be included into the  DPLH in
             addition  to   the  minimum   DPLH  specified   in
             Exhibit-I.
 
   Id. at 000009-11.
 
        During oral discussions, CDSI stated that it did not use    
        rates and  that, by  requiring CDSI  to submit its  internal
   position descriptions, the contracting officer was essentially   
                                          Transcript     at    1646.
   Nonetheless,  the contracting officer insisted that CDSI use, for
   each labor category, individuals who met every requirement of the
   RFP labor category.   Id. at 1647.  The  contracting officer also
   raised the  concern that  it would  make the                 rate
   nonrepresentative  of  the  actual rate  being  proposed  if CDSI
   proposed   senior  level   personnel  for   junior  level   labor
   categories.  Id. at 1652.
 
        As  a result of  oral discussions, CDSI  understood that the
   following instructions  had to be followed in  development of its
   direct labor rates for the next cost proposal submission:
 
        We  were instructed  that  in  preparing the  composite
        rates  that  we  had  to  do  it  within the  following
        boundaries. You would not necessarily use the people in
        DOE;  that  you would  use  all CDSI  employees  in the
        Washington  metropolitan area; that you could not use a
        junior  CDSI titled  person  in  a  senior  DOE  titled
        position and vice versa; that you had to have  somebody
        in a  senior DOE  category -- senior  CDSI title  for a
        senior DOE category.
 
        Everybody had to  meet the minimum  DOE qualifications,
        but they couldn't be overqualified.
 
   Transcript at 714-15.
 
        With  respect to the  instructions concerning use  of senior
   titled CDSI  personnel in  the rates for  senior level  RFP labor
   categories,  CDSI  understood  from  an  example  given  at  oral
   discussions  that  the  CDSI  corporate  labor  category  minimum
   experience requirement did  not have to be an exact  match to the
   DOE  labor  category  experience  requirement  in  order  for  an
   individual's rate to be used in the composite rate for the senior
   RFP position, provided that the  CDSI individual was drawn from a
   CDSI  title  with  a  "senior"  designation  and  the  individual
   personally met the  experience and education requirements  of the
   RFP  position  description.    Transcript  at  850;  Intervenor's
   Protest File, Exhibit 102.
 
 
        CDSI  understood that it would not  have been acceptable for
   CDSI  to use an  individual in its              rate  for the RFP
   senior  systems programmer  who was  drawn from  a  CDSI position
   which did not have a "senior" title, such as the                 
    Transcript at 2087-2107.  CDSI believed this to be the case even
   if an individual CDSI                   whose rate was being used
   actually had the six years of  experience.  Id.  The  contracting
   officer denies that he was  refusing to allow offerors to propose
   individuals  simply on  the  basis  of title.    Id. at  1752-57.
   Rather, he would agree that persons could be used  for the senior
   systems programmer so long as they had the actual experience even
   if they did not have the title "senior."  Id. at 1795-1803.
 
        During  oral discussions, DOE  did not advise  CDSI that the
   agency considered that CDSI's                                    
        were not  similar in  size and scope  to the  procurement in
   question.  Transcript at 1452.  The contracting officer explained
   his rationale for this decision:
 
        Q    Okay.  And why did you not do that?
 
        A    Well, Criterion 1 for CDSI was not identified as a
        deficient  criterion.   They in  fact  were capable  of
        meeting the RFP  requirements, based  on evaluation  of
        their  corporate  experience.   The  weakness  that was
        associated  with that did  not constitute a deficiency,
        and for us  to hold  discussions, in  regards to  their
        corporate  experience, as  described  on the  reference
        contracts, would constitute  leveling, because the only
        thing we would  have been achieving was,  allowing CDSI
        to increase their score, of which they have already met
        the capability of performing the requirements.
 
        Q    Okay.  This, CDSI was a      on Criterion 1?
 
        A    They were a      on Criterion 1.  So there were no
        uncertainties,  in the board's minds, in regards to the
        evaluation  of the  proposals.   We  truly had  a clear
        understanding  of what the                             
        contract was, and  it was represented.   We clearly had
        an understanding of what                               
           contract  was, as represented.   We obviously  had a
        clear understanding of  the -- contract, and  the first
 
        contract, and  I think the  other one was  the         
        contract.  There was no uncertainty in relation to what
        those references  constitute.   So, by  not having  any
        uncertainty, in regards to the references, by not being
        deficient, for  the criterion, overall, the  only thing
        the discussions would  have served, at that  point, was
        to technically level the offeror, in Criterion 1.
 
   Id. at 1453-54.
 
        During discussions DOE did  not advise CDSI or  DynCorp that
   they  each  had proposed  key  personnel  who  did not  meet  the
   experience requirements of the RFP  -- in CDSI's case the systems
   development  and maintenance manager, and, in DynCorp's case, the
   administration manager.  Protest File, Exhibits 44, 46.
 
        During discussions, the contracting officer stated that CDSI
   was  argumentative.      Respondent's   Answer   to   Protester's
   Interrogatory  No. 122;  Protester's Supplemental  Protest  File,
   Exhibit 73.   The  contracting officer  did  not express  similar
   opinions  to the effect  that other offerors  were argumentative.
   Respondent's   Answer  to   Protester's  Interrogatory   No. 124;
   Protester's Supplemental Protest File, Exhibit 73.
 
   The August 27, 1993, Letters Following Oral Discussions
 
        On  August 27, 1993,  the contracting  officer  sent CDSI  a
   letter  confirming  his understanding  of the  oral negotiations.
   With  respect  to  direct labor  rates,  the  contracting officer
   stated, inter alia:
 
        The Attachment to Exhibit B [which shows the labor rate
        development]  shall include a new column to reflect the
        CDSI  corresponding   labor  category  for   which  the
        individuals are performing;
 
        Junior  and Intermediate Level  personnel shall  not be
        used  in  developing  the composite  rates  for  Senior
        Levels  [sic]   positions,   unless   it   is   clearly
        demonstrated that the corresponding CDSI labor category
        truly meets all the requirements;
 
        Senior  Level personnel shall not be used in developing
        the  composite  rates   for  Intermediate/Junior  Level
        positions, unless  it is clearly demonstrated  that the
        corresponding CDSI  labor category truly  meets all the
        requirements;
 
        CDSI will ensure  that individuals used to  develop the
        composite  rates  are  performing  in  corporate  labor
        categories  which  have   responsibilities  and  duties
        relevant to that of the RFP labor categories, and which
        meet   the    minimum   educational    and   experience
        requirements.
   Protest File, Exhibit 46 at 000005-6.
 
 
        The  contracting  officer's  August 27,  1993,  letter  also
   addressed uncompensated overtime:
 
        It is the DOE's position that the additional hours will
        be added to  the suggested DPLH specified  in Exhibit-I
        to establish the probable cost.  DOE advised CDSI  that
        the      additional hours per year for  those pertinent
        labor categories  or         DPLH per man year  will be
        used  to establish  the probable  cost  instead of  the
        1,860 DPLH per man year to eliminate any possibility of
        a  buy-in.  This  position is further  substantiated by
        the comments of CDSI that while they do not have 
   Protest File, Exhibit 46 at 000006.
 
 
        In its  August 27, 1993, letter  to DynCorp, DOE  stated, in
   pertinent part:
 
        DynCorp  needs   to   address   the   requirements   of
        L.049.2.(b)3.b regarding  compensation to  professional
        employees  to  assist  the  DOE  to  determine  whether
        Dyn[C]orp has a  sound management approach.   Dyn[C]orp
        will review its  methodology for developing its  direct
        labor rates and  will make a  business decision on  its
        appropriateness.  It is the DOE's position that the    
        percentile and       percentile hourly rates and annual
        salaries  of the stated wage  and salary surveys in the
        proposal  are not realistic  or reasonable rates.   The
        DOE  will  use  the 50th  percentile  to  establish the
        probable  cost in those  instances where any  rates are
        proposed below  the 50th  percentile.  Dyn[C]orp  shall
        submit  the pertinent portions  of the surveys  used to
        establish its proposed  rates.  In the  event Dyn[C]orp
        fails to submit the pertinent data (surveys or specific
        employee  salaries) the  DOE will  use  the Wyatt  Data
        Services  survey  and other  data  deemed necessary  to
        establish the  probable cost.   It  was discussed  that
        Dyn[C]orp  should   use  its  actual  labor  rates  for
        individuals  working in the  same labor  categories and
        within  this regional area to assist in the development
        of a  composite rate instead  of relying solely  on the
        survey data when historical data does exist.
 
   Protest File, Exhibit 46 at 000000-01.
 
   Revised Proposals:  September 16, 1993
 
        On  September 16, 1993,  CDSI submitted    revised cost  and
   technical proposals.   In  the cost  proposal  CDSI attempted  to
   follow  the  instructions  of the  contracting  officer regarding
   development of direct  labor rates given during  oral discussions
   and in his August 27, 1993,  letter.  CDSI's total estimated cost
   for  this proposal was                      Transcript at 856-57;
   Protest File, Exhibit 59 at 000027.
 
 
        In  developing the  direct  labor  rates  for  this  revised
   proposal,  CDSI  drew  upon personnel  from  the Washington, D.C.
   metropolitan area.  Transcript at 734-35.  
 
 
 
   understood  by CDSI  as  a  result of  oral  discussions and  the
   August 27, 1993, letter.  Id. at 736-39.
 
        CDSI's revised proposal listed the 
 
                                                            Protest
   File,  Exhibit 59 at  000047-55.   CDSI's  Exhibit E listed  only
   those corresponding CDSI  labor categories that matched  the CDSI
   corporate titles  for each RFP  labor category  contained on  the
   attachment to Exhibit B.  Id. at 000075.                         
                                                                    
                 but   was   attempting   to   comply   with   DOE's
   instructions.   Transcript at 734-37; Protest File, Exhibit 59 at
   000015.  CDSI included in its proposal a note to Exhibit E:
   Protest File, Exhibit 59 at 000076.
 
 
        In  CDSI's  view,   the  effect  of  complying   with  DOE's
   instructions, particularly the senior to senior directive, was to
   exclude  qualified individuals and drive up  the rate for certain
   senior  RFP categories.   For example, CDSI's  composite rate for
   the senior systems analyst increased from an hourly rate of      
   in the  initial proposal  to           in  the revised  proposal.
   Protest File, Exhibits 23 at 000035, 59 at 000049.
 
        In  its revised  proposal,  CDSI diluted  its  rates as  the
   contracting  officer  had  instructed  in  his  August 27,  1993,
   letter.  Protest File, Exhibit 59 at 000017.  
 
 
   Id. at 000017.
 
   The November 4, 1993, Audit of CDSI's Revised Proposal
 
        In a November 4, 1993, audit report, DCAA concluded:
 
             Our audit showed that CDSI                        
                                                               
                                                               
                  CDSI's representative first  told us that the
        reason they 
 
             In our opinion, because                           
                                   the  estimated  direct labor
        costs  for the follow-on contract may not be realistic.
        The labor rates of                                     
                                                               
               We obtained a listing of employees who worked on
        the previous contract, and we select Sr. System Analyst
        labor category  (object code  0124) for  review.   This
        category  has  the  largest  proposed  labor  cost  per
        contract year.   Our  audit showed only      out of    
        employees  who  worked for  the  previous  contract are
        included in the  rate computation.  The  proposed labor
        rate for this category is derived from the average rate
        of      employees.   This means that      employees did
        not work under this labor category.  
   Protest File, Exhibit 65 at 000008.
 
   The Evaluation of Revised Proposals:  December 7, 1993
 
 
        The  SEB  reviewed  the  revised  proposals  and  issued  an
   addendum to its SEB report dated December 7, 1993.  Protest File,
   Exhibit 67.
 
        CDSI
 
        CDSI's scoring for criterion 1 remained a      and its score
   for criterion 2  remained              For each of criteria 3(b),
   3(c),  and 3(d),  CDSI continued  to receive  a  score of        
   Protest File, Exhibit 67 at 000028-30.  CDSI received a score of 
      on its key personnel and the SEB noted as a weakness  that its
   systems  development and maintenance  manager failed to  meet the
   requirement of                                                   
                                      Id. at 000034.
 
        The  SEB determined CDSI's costs "may  not be realistic" due
   to  the  fact  that  CDSI  had  demonstrated  "uncertainties"  in
   staffing of the  contract.  Protest  File, Exhibit 67 at  000010.
   The   SEB  report  did  not  mention  the  contracting  officer's
   instructions  at oral  discussions and  in  the August 27,  1993,
   letter regarding  drawing personnel from certain  corporate labor
   categories  and using  all  personnel  in  the  Washington,  D.C.
   metropolitan  area   (as  opposed  to  Energy   Systems  Division
   personnel only) in the direct labor rates.
 
        In its December 7,  1993, report, the SEB also  conducted an
   "Analysis   of   CDSI's   Corresponding   Labor  Categories   for
   Professional  Employees"   pursuant  to   Section M.013  of   the
   solicitation   entitled    "Evaluation   of    Compensation   for
   Professional Employees."  Protest  File, Exhibit 67 at 000056-67.
   In this analysis, the SEB concluded CDSI failed                  
                             to professional compensation.   The SEB
   stated:    "CDSI's  policy  of  not  using  its  established  job
   classification system  to correlate  job titles  and develop  its
   salary structure                                                 
                     Protest File,  Exhibit 67 at 000056.   The  SEB
   compared  CDSI's   corporate  labor   categories  to   the  labor
   categories  contained  in  the Wyatt  Data  Services  Wage Survey
   (WDSWS)  dated March  1993.   Based on  this comparison,  the SEB
   concluded  that CDSI's rates for           of twenty professional
   labor categories                                                 
   Id. at 000011.
 
        For  example, the SEB determined that the RFP labor category
   senior  systems analyst corresponded with a systems analyst level
   five  in the  Wyatt  Data  Services Wage  Survey.   The  survey's
   average salary range is a minimum, middle, and maximum of $21.59,
   $27.16, and  $32.74.   Protest File, Exhibit 67  at 000056.   The
   weighted  average hourly  rate is  $27.45.   Id.   Because CDSI's
   composite rate of        included hourly rates ranging from a low
   of          to a high of           and because      of the actual
   salaries used  have hourly rates  less than  the minimum  average
   rate of  the WDSWS,  the SEB questioned  the corresponding  labor
   categories used  to develop  the rate.   The SEB  also questioned
   CDSI's composite rate for its                                    
                                                                    
                                                          Id.     at
   000066-67.  In its analysis of professional compensation pursuant
   to Section M.013, DOE questioned CDSI's failure to correspond its
   corporate labor categories  to      of the RFP  labor categories.
   Id. at 000011.
 
 
        In  its  December 7,  1993,  report,  the  SEB  stated  that
   uncompensated  overtime  was  not  mandatory  and  would  not  be
   demanded by DOE.  However, the SEB stated:
 
        Since all  employees are  required to  be dedicated  to
        this project (i.e., work a 5 day week, 8  hour day) and
        the  DOE does not require uncompensated overtime, it is
        realistic and reasonable to  assume that a professional
        employee's  full annual salary  will be billed  to this
        contract based upon  the dedicated concept.  To allow a
        diluted rate  to be  proposed based upon  uncompensated
        overtime, and not account for a professional employee's
        full salary, would  allow an offeror to  understate its
        proposal.
 
   Protest File, Exhibit 67 at 000015.
 
        DynCorp
 
        The chairman of the SEB  testified that DynCorp's score from
   initial  to revised proposal  was increased        to         for
   criterion 1  based upon  confirmation that  DynCorp was  actually
   performing the work it  was stated to be doing under the         
   contract.   Transcript  at 1317-18.   Instead  of being  simply a
   strength, the            contract was now a significant strength.
   Protest File, Exhibit 67 at 000046.  With regard to DynCorp's    
   reference,  which was  initially cited  as  a strength,  the SEB,
   after clarifying  what functional areas  the subcontractor  would
   perform rated that reference a weakness.  Id.
 
        In evaluating the revised proposals, the SEB again concluded
   that DynCorp's proposed "Administration  Manager does not  appear
   to have administered a contract  of similar size and scope within
   the last 5 years."  Protest File, Exhibit 67 at 000055.
 
        Between initial proposals and the revised proposals, the SEB
   raised  DynCorp's  technical  score  on  criterion 3(b),  Quality
   Management Program, from a       to  a      even though DynCorp's
   proposal  had  not   changed  substantively.    In   the  initial
   evaluation, DOE had noted no strengths and no weaknesses for this
   criterion.    In  the  revised  evaluation,  the  SEB  noted  the
   following significant strength:
 
        The offeror's 
   Protest File, Exhibit 67 at 000049.
 
        One member of the SEB explained that the change in DynCorp's
   scoring stemmed from a review of                                 
                                                                    
   Transcript at 1342.                                              
                                Id.  at 1463-64.  As a result of its
   struggle to attempt to understand  what             entailed, the
   SEB  reviewed all quality  management programs a  second time and
   attempted to prepare  flow charts to  aid in understanding  their
   components.  Id.  One member of the SEB testified:  
 
 
                                                            Id.   at
   1342-43.  With                           the  SEB saw less in its
   program and dropped its rating                       Id. at 1343.
   The SEB  was unable  to do  a flow  chart for  CDSI's TQM  (total
   quality  management) because "there  were individual  pieces that
   could be  put in  boxes on a  piece of paper,  but there  were no
   interrelationships  of the components  discussed."  Id.  at 1343;
   see also, id. at 1466-69.
 
        DynCorp's score under  criterion 2  remained at          its
   score under  criterion 4  was increased from        to a         
   Protest File, Exhibits 30 at 000110, 67 at 000055.
 
        The contracting  officer testified that the        reference
   went from a strength to a weakness because in doing the reference
   check the SEB ascertained that in fact       relationship with   
    was  not a  contract but  an outsourcing  of a  billing process.
   Transcript at 1474.  The  references could not attest to anything
   other than the fact that they received their bills.  Id. at 1476.
   However, this same  contract became a strength  under criterion 2
   because the SEB  found out more information about  what was being
   done.  Id. at 1477-78.  The contracting officer testified that   
    had three data centers where it does this outsourcing.  Id.   He
   continued:
 
        Their  data centers  are larger  than ours  . .  . more
        encompassing than anything we  have.  And they  in fact
        do have  all these systems  analysts, programmer,  data
        entry,  and  everything  else, and  they  actually  are
        performing  all these  functions.  They  are developing
        the  software,  and maintaining  the  software  for the
        maintenance or billing process to actually work.
 
        So, although      cannot attest to it, we know they are
        doing it, and they demonstrate  that they are doing it,
        but the weakness in criterion 1 is only associated with
        evaluating  corporate  experience   in  performing  the
        contract.
 
   Id. at 1477-78.
 
        In terms of  cost evaluation, the SEB report  noted that the
   DCAA  audit  had  disclosed  no  question  of  unsupported  cost.
   However,  the SEB  did  question  DynCorp's  direct  labor  rates
   proposed and the multiple surveys used.  Protest File, Exhibit 67
   at 000022.
 
   The December 13, 1993, Request for BAFOs
 
 
        In its request for a BAFO, DOE advised CDSI:
 
        The  following comments and  statements are provided to
        highlight areas of the revised cost proposal questioned
        by  the  Department  of  Energy  (DOE)  and/or  Defense
        Contract Audit Agency (DCAA).
 
        There are no comments or statements associated with the
        technical proposal.
 
        . . . .
 
        2.   CDSI  expended   a  large  effort   in  discussing
        uncompensated overtime and  the basis for  establishing
        its direct labor rates.  CDSI has explicitly stated    
                                                      
        However, CDSI  made a  business decision  to propose  a
        diluted  rate,  in  its revised  proposal,  based  upon
        uncompensated overtime, or a standard work  week of    
        hours.   The  DOE  has  no preference  as  to how  CDSI
        proposes its direct labor rates, or whether it proposes
        uncompensated overtime or not.  The only requirement by
        the DOE is that the offeror  propose direct labor rates
        in accordance with its disclosure statement.  To ensure
        clarity, and to assist the  DOE in its review of CDSI's
        proposed  direct labor  rates  and its  methodology for
        accumulating and  estimating direct  labor costs,  CDSI
        should submit a  copy of its disclosure  statement with
        its BAFO.   CDSI  is advised that  should it  propose a
        diluted  rate based  upon  uncompensated  hours,  or  a
        standard work week of       hours instead of  40 hours,
        the  additional hours  will be  included  in the  DOE's
        probable cost.
 
        3.   CDSI has  taken three  unacceptable deviations  to
        the contract as follows:
 
             i) The proposal to invoice the DOE a              
                                           is     unacceptable.
             The terms  and conditions regarding  the invoicing
             for payment of the total award  fee earned for the
             period evaluated remain unchanged.
 
             ii) The proposal  that the fee be adjusted for any
             variance in                                       
                              The  terms  and   conditions  for
             reducing or negotiating any increase of the  award
             fee remain unchanged.
 
             iii) The  proposal to invoice                   is
             unacceptable.    The  terms   and  conditions  for
             invoicing remain unchanged.
 
        4.   The DOE and  DCAA question the direct  labor rates
        proposed.   See the  audit report for  additional data.
        CDSI was advised at oral  discussions to use all of the
        employees  in the Washington,  DC regional area  of the
        proposing entity, be  that CDSI or a  Division thereof.
        CDSI's initial proposal proposed category average rates
        which were not  representative of the actual  rate that
        would be experienced.   The Energy Systems  Division is
        the proposing  entity, therefore,  representative labor
        rates  from that  Division should  be  used, not  labor
        rates from other Divisions.
 
        CDSI  states in  its  revised  proposal that  qualified
        individuals will  be drawn from  other labor categories
        than those identified as corresponding labor categories
        reflected in Exhibit E.   By not including  those labor
        rates  and   corresponding  labor  categories   in  the
        proposal, the DOE considers CDSI's                     
                 
 
        The  SEB evaluated  the  offeror's corresponding  labor
        categories   and   proposed  rates   for   professional
        employees   . . . .    Of  the  20  professional  labor
        categories   evaluated,   the  DOE   questions   CDSI's
        corresponding labor categories proposed for      of the
        professional labor  categories.              of  the 20
        labor  categories  evaluated   for  professional  labor
        reflected compensation levels which appear 
   Protest File, Exhibit 69 at 000010-11.   The SEB did not indicate
   to CDSI that it had used  the Wyatt Data Survey to determine  the
   reasonableness of professional compensation.  Id.
 
 
        After receiving the BAFO request, CDSI asked the contracting
   officer to identify which     corresponding labor categories were
   questionable.    CDSI  also  asked  the  contracting  officer  to
   identify which                of  the twenty  professional  labor
   categories  were  "unrealistically  low" and  "unreasonable"  and
   reflected salaries that were inadequate.  The contracting officer
   refused  to disclose  this information  to CDSI.   Transcript  at
   532-33.
   CDSI's December 21,  1993, Response to the November  4 DCAA Audit
   Report
 
 
        By letter dated December 21, 1993, and stamped "DRAFT," CDSI
   replied  to the  DCAA's audit  report.   CDSI  stamped its  reply
   letter  draft to  informally  discuss  its  concerns  with  DCAA.
   Transcript at  425-26.  In  response to DCAA's concern  that CDSI
   had bid direct  labor in a way contrary to  its normal procedure,
   CDSI explained  that it was directed to  do so.  Id. at  427.  In
   its informal response, CDSI stated, in pertinent part:
 
        The whole  issue of direct  labor costing  is a  direct
        reflection  of the government's instruction to us.  Our
        initial bid contained  representative labor costs  from
        the current contract based on the RFP requirements.  At
        subsequent oral discussions, we were instructed to only
        bid  staff who meet  the minimum qualifications  of the
        RFP,  and  to  utilize  CDSI  staff  from  the  greater
        Washington   Metropolitan    Area.       The   proposed
        individuals, which represent actual costs to CDSI, were
        used  to  determine  estimated  labor   costs  for  the
        contract.  Whether  they came from another  division or
        not is  irrelevant.   It would be  no different  had we
        used  the Webber/Hansen or the Mercer salary surveys to
        determine the estimated  labor cost. In each  and every
        proposal submission, CDSI prepared  its proposed direct
        labor  rates based  upon  personnel  who  met  the  RFP
        criteria. . . .
 
        In  addition, the Government required CDSI to bid based
        on CDSI corporate titles which CDSI had established for
        management control.   In many cases, our titles did not
        specifically match the Government's, nor were they ever
        intended  to.     This   prevented   CDSI  from   using
        individuals  who,   although  they   qualified  for   a
        particular labor  category, did  not have the  'proper'
        CDSI title.
 
   Protest File, Exhibit 75 at 000044-45.
 
        This  draft letter to the  DCAA was subsequently included in
   CDSI's BAFO.   Transcript at 425-31; Protest  File, Exhibit 75 at
   000044-45.  However, DOE did not consider this letter  as part of
   CDSI's BAFO because  it was stamped "DRAFT."   Transcript at 555;
   Protester's Supplemental Protest File, Exhibit 78 at C 012524.
 
   Best and Final Offers
 
        CDSI's BAFO
 
        On  December 30, 1993,  CDSI submitted  its  BAFO.   Protest
   File, Exhibit 75.  No changes  to CDSI's technical proposal  were
   submitted.  Id. at 000000.  In its BAFO, in discussing its direct
   labor rates, CDSI explained:
 
        [CDSI] used only those representative personnel who fit
        the correlated category by meeting the  RFP educational
        and   experience   requirements   as   well   as   your
        requirements regarding  CDSI titles and  contract labor
        categories.   CDSI has again reviewed the DOE requested
        correlation   of  CDSI   titles  to  DOE   [RFP]  labor
        categories  and has complied  with this request  to the
        best  of our  ability. . . .   CDSI's  job titles  were
        developed for CDSI corporate management purposes and we
        do not normally try to correlate them to contract labor
        categories.  However, to comply with your  instructions
        in both the  oral negotiations and the  August 27, 1993
        letter, we have developed and proposed composite direct
        labor rates.  We remain concerned that this methodology
        will  disallow a qualified employee from working on the
        contract simply  because he  does not  have a  'proper'
        CDSI title which corresponds to a RFP labor category.
 
        [S]everal [RFP] categories  fall on the cusp  of CDSI's
        title descriptions.   This  is especially  true of  RFP
        positions requiring five years of experience.
 
   Protest File, Exhibit 75  at 000055-56.  The evidence  as a whole
   leads  us  to conclude  that even  though  CDSI did  not  use its
   internal  labor categories  for  bidding and  estimating,  CDSI's
   employees  meet  the  minimum skill,  education,  and  experience
   requirements of  the CDSI positions  to which they  are assigned.
   Transcript at 485-86, 595-96.
 
        In the  BAFO, the attachment  to Exhibit B listed,  for each
   RFP labor category,  the specific individuals whose  salaries had
   been  included  in the  rate  with their  CDSI  labor categories.
   Protest  File,  Exhibit 75  at  000086-92.    Pursuant  to  DOE's
   instructions, the  rates included  only  Energy Systems  Division
   personnel who:
 
        Were   drawn  from  a   CDSI  position   whose  minimum
        requirements met  the minimum  requirements of  the RFP
        position description  and whose CDSI  title matched the
        DOE  RFP  title  'senior  to  senior'  and  'junior  to
        junior;' except  that where  the CDSI  title carried  a
        senior  designation,  CDSI  could  use  personnel  from
        corporate positions whose minimums  were less than  the
        RFP;  provided that the  individuals themselves met the
        RFP education and experience requirements;
 
        Met the minimum educational and experience standards of
        the RFP position descriptions;
 
        Were not 'overqualified;' and
 
        Were not part-time employees or consultants.
 
   Transcript at 754, 757-68.
 
        CDSI gave its employees raises between initial cost proposal
   and BAFOs.    Transcript  at  1160.   For  example,  one  of  the
   individuals in the initial cost proposal's labor pool  for senior
   systems analyst had a raise  in compensation from        per hour
   at the time of initial proposals to        at BAFO.  Id.
 
        With regard  to uncompensated  overtime, in  its BAFO,  CDSI
   stated:
 
        Even though CDSI has no 'uncompensated overtime policy'
        in that all full-time employees are  required to work a
        40-hour  week,  in  accordance  with  DOE's  letter  of
        December 13,  1993, CDSI has added additional hours per
        week for each  Exempt employee.   The additions to  the
        DPLH's  are shown  in  Exhibit  B.1  and  explained  in
        Preface section 2.6.
 
        While we  understand DOE's concern  that, without  this
        increase  the  rates  may be  diluted  during  contract
        execution,  it is  assumed that any  contractor bidding
        uncompensated overtime in  its proposal  will have  the
        additional   hours  added   to   the  evaluated   cost.
        Additionally, as personnel assigned to the contract are
        now  allowed  to work  more  than  forty hours  a  week
        without approval,  this methodology serves  to penalize
        the contractor by  inflating the number of  hours which
        need to be worked to achieve full fee.
 
   Protest File, Exhibit 75 at 000005.
 
        CDSI further stated that the dilution:
 
        creates an increase  in the proposed price,  because it
        presumes  that  all of  the  uncompensated overtime  is
        direct to the DOE contract.
 
   Protest File, Exhibit 75 at 000058-59.  CDSI uses                
                                                                    
                                                              
   Transcript at 2167.
 
        CDSI's estimated  cost at BAFO increased  by                
   over CDSI's initial proposal.  Transcript at 1003-10; Protester's
   Hearing Exhibits 5 at 10-14.
 
        DynCorp's BAFO
 
        No  changes were  made to  DynCorp's  technical proposal  at
   BAFO.  Protest File, Exhibit 70 at 000000.
 
        At BAFO, DynCorp again did not use uncompensated overtime in
   developing  its proposed  direct  labor  rates.    Protest  File,
   Exhibit 70 at 000062, 000252.                                    
                Protest  File, Exhibit 16  at 000004.   When  exempt
   employees work in excess of forty hours per week, the hourly rate
   is reduced to reflect uncompensated overtime.  Id.
 
 
        In its BAFO, DynCorp stated:
 
        We  understand the  DOE  may be  using  the 1993  Wyatt
        Survey as  a benchmark for  salary data.  We  also have
        reviewed   the   Wyatt    Survey   to   validate    the
        reasonableness  of our proposed  labor rates.   In most
        cases, our proposed labor rates are comparable to those
        in the Wyatt Survey.  In a few cases, differences still
        exist:  our   proposed  rates   are  higher   for  some
        categories   and  lower  for  others.    In  these  few
        instances, we have examined the differences and believe
        the 1993 Mercer, Washington Technical Personnel  Forum,
        and  Washington  Personnel   Association  provide  more
        realistic estimates. . . .   The salary levels cited in
        the Mercer,  Washington Technical Personnel  Forum, and
        Washington Personnel  Association tracked  closely with
        our own experience.   We examined the  participant base
        of  the Wyatt Survey and determined that the government
        contracting firms  were underrepresented in Wyatt.  The
        majority  of participants are  in other industries such
        as  banking, petroleum  refining, and  retailing.   The
        Mercer,  Washington  Technical   Personnel  Forum,  and
        Washington   Personnel   Association    have   a   high
        representation of government high-technology firms, and
        we believe they  represent a more accurate  estimate of
        salary levels.
 
   Protest File, Exhibit 70 at 000009.
 
   The Final SEB Report:  February 4, 1994
 
        Technical Proposals
 
        In evaluating similar size and  scope under criterion 1, the
   SEB did not use any standard, but rather determined that  an all-
   encompassing definition of similar scope and size was impossible.
   Transcript at 1371-74.  A member of the SEB who is  currently the
   Deputy  Office Director of  the Office of  Information Technology
   Services and Operations  testified that there were  three factors
   involved  in determining whether  a contract was  similar in size
   and scope,  i.e., number of  people, cost, and type  of contract.
   Id. at 148-49,  159-60.  The SEB had no dollar cutoff in deciding
   whether a contract  was similar in  size.  Id. at  165.  Nor  was
   there  a cutoff  of  a  particular number  of  people to  measure
   whether a contract was similar in size.  Id. at 168.
 
        With respect to scope,  the SEB looked at the  number of the
   twenty-four  functions a contractor was performing on a reference
   contract.  Transcript at 176.   However, there was no standard to
   suggest how many  functions out of  the twenty-four a  referenced
   contract had to have  in order to be similar in scope.   Id.  One
   evaluator testified  that he "lumped  scope and size  together in
   making one judgment as to whether a contract was similar in scope
   and size."  Id. at 181.
 
 
        In evaluating criteria 1  and 2 the SEB did not  look at the
   actual  reference  contracts  themselves.     Transcript  at 104.
   Rather, the only  information the SEB had was  the description in
   the  proposals  and  the  information  gathered  as  a  result of
   reference checks.  Id.
 
        DOE concluded that two of DynCorp's referenced contracts -- 
       and            contracts -- were similar in size and scope to
   the  instant contract.  The SEB evaluation criteria and worksheet
   for DynCorp's technical proposal on criterion 1 provided:
 
        Criterion 1:   The  offeror's  corporate  experience in
                       performing  contracts  of  similar scope
                       and size.
 
        Strengths:
 
        The                                                    
                        reference is similar  in size and  very
        similar in  scope with  20 of  the 24  functional areas
        addressed.  (Significant)
 
        The                                                    
                                                               
                                                reference    is
        similar in size and very similar in scope with 20 of 24
        functional areas addressed.  (Significant)
 
        Weaknesses:
 
                                                               
                                                               
                                     corporate  references  are
        very  small  in  size  and  appear  limited  in  scope.
        Neither contract is a cost type contract, although the 
          reference does include some contract line items which
        are billed as Time & Materials.
 
        The                                            contract
        reference for                                          
        is for the outsourcing of a billing process.  It is not
        representative of the scope of work proposed for      
 
        Exceptions/Deviations:  None
 
   Protest File, Exhibit 80 at 000064.
 
        The contract  reference sheet on the DynCorp        contract
   indicated that  DynCorp did not perform eight  of the twenty-four
   functions at all.  Protest File, Exhibit 33 at 000010; Transcript
   at 114.  Four of the functions were being performed by DynCorp in
   "limited" or partial fashion.   Transcript at 115;  Protest File,
   Exhibit 33  at  000010.   Nonetheless,  in  the  final evaluation
   report for criterion 1  it was stated that twenty  of the twenty-
   four  functional areas  were  being  addressed.    Protest  File,
   Exhibit 80 at 000064; Transcript  at 116.  One member  of the SEB
   explained this discrepancy as follows:
 
 
        Q    Having looked at the reference sheet  and counting
        up  the 'nones'  and the  'limiteds,' do  you have  any
        explanation  for why the  final SEB report  states that
        DynCorp's        was very similar  in scope with 20  of
        the 24 functional areas being addressed?
 
        A    No.  Why it states 20?  No.  Only the explanation,
        when we discussed  this before in deposition,  I think,
        is that we not only  looked at the reference sheets, we
        also looked at all the information that was provided at
        the time and then developed the consensus.
 
        So,  the reference sheets were .  . . we used more than
        reference sheets.  The  reference sheets only  provided
        one input.   They  were used,  I hate to  use the  word
        'verify', they were used to  now in a general sense see
        what the contract was and what was being performed. . .
        .
 
        Q    So, am I correct in thinking that the board, after
        performing  the reference  check,  to  determine  if  a
        proposal  was accurate,  could  override the  reference
        check by reading the proposal?
 
        A    And discussing it.
 
   Transcript at 116-17.
 
        The  DynCorp reference sheets  for the              contract
   indicated that of the twenty-four SOW functions, DynCorp provided
   none of  the reference work  for five functions and  limited work
   for four.   Transcript  at 120-21.   However,  in  the final  SEB
   report the board stated:  the             contract "is similar in
   size  and  very similar  in scope  with 20  of 24  function areas
   addressed."  Protest File, Exhibit 80 at 000064.  One  of the SEB
   members who performed  this reference check testified  as follows
   regarding the discrepancy:
 
        Q    Now, having .  . . gone  through the 21  functions
        listed in [DynCorp's  reference check for              
        noting there were five nones and three limiteds, how do
        you reconcile . . .  [the SEB report] which states that
        the [            contract] is  similar in size and very
        [similar] in  scope  to 20  of  the 24  function  areas
        addressed?
 
        A    I can't.  Between the twenty to twenty-four there,
        but  like  we  said  before,  we didn't  just  use  the
        reference checks.   The  reference checks  -- it  would
        have been  so simple that  we could just have  done the
        reference checks, we could have helped -- we could have
        saved a lot of time.
 
        Q    So, am I correct in  thinking that, as you did, in
        the          although the  reference check stated  that
        DynCorp did  not have the  experience set forth  in its
        proposal, you  used DynCorp's proposal  to override the
        reference check?
 
        A    We  used  the  proposal,  plus we  then  discussed
        several things, again within consensus.  How we arrived
        at the 20 out of the 24 numbers, I can't tell you today
        sitting here, what -- how we arrived at those numbers.
 
        But if you  go to other places where the  summary is in
        the proposal,  it talks  about more of  a range,  and I
        think you could get to it.
 
   Transcript at 123-24.
 
        The  SEB member who  performed DynCorp's reference  check on
   the               contract believed  that DynCorp had      people
   performing IRM work on that  contract and that the contract value
   was      million for  DynCorp's work, when in fact               
   the   contract  value   and  personnel   represented   IRM  work.
   Transcript at 118-19; Intervenor's Hearing Exhibit 29.
 
        The  SEB evaluated DynCorp's  proposed key personnel  in the
   same fashion as it evaluated the revised proposal:
 
        The Key Personnel proposed in the initial proposal were
        considered                  The offeror's  proposed key
        personnel in  its revised proposal/BAFO  are considered
        to  be                   although some  non-significant
        weaknesses  were noted as  stated below.   The proposed
        Administration  Manager does  not  appear  to meet  the
        requirement of recent experience  in the administration
        of a contract of similar scope and size.
 
   Protest File, Exhibit 80 at 000037.
 
        DynCorp's  proposed  administration manager  testified  that
   based upon his resume and  experience from 1988 until the present
   he  did  not  believe  that  he  had  experience administering  a
   contract of similar scope and size.  Transcript at 282.
 
        CDSI received  the same  technical scores  in the  final SEB
   report  as it  had in  the  December 1993  evaluation of  revised
   proposals.    Protest  File,  Exhibits 67  at  000024-34,  80  at
   000074-84.
 
        In  summarizing   the  significant  differences   among  the
   proposals, the SEB stated:
 
        CSC demonstrated      corporate experience and directly
        related experience.  CSC's contract management plan was
                        due to                                 
                                              The              
                                                               
                                                               
                                                    CSC  didn't
        reflect an                                             
                                                               
                                                  
 
        Dyn[C]orp  demonstrated           corporate experience.
        Although Dyn[C]orp was not able to translate that into 
                                    Dyn[C]orp received only an 
                in the directly related experience.   Dyn[C]orp
        presented a        contract management plan.  Dyn[C]orp
        was  the only offeror who maintained consistency in its
        methodologies  and  procedures  in  every area  of  its
        proposals throughout the competition.  Dyn[C]orp is the
        only offeror  who  submitted direct  labor costs  which
        reflect  what  may  actually   be  experienced  on  the
        contract.
 
        CDSI only had     corporate reference which was similar
        in size and scope to the model contract,               
                               Therefore, CDSI only received   
                 in the  area  of corporate  experience.   CDSI
        demonstrated         directly  related experience  as a
        result of its                The weakest area of CDSI's
        proposal  was its contract management plan.  While CDSI
        did  not  demonstrate  any  single  deficiency  in  its
        contract management plan, the  multitude of significant
        weaknesses made the plan            on the whole.  CDSI
        was the only  offeror who received a  rating lower than
        an          rating for an overall evaluation criteria.
 
   Protest File, Exhibit 80 at 000028.
 
        The final technical scores were:
 
                      TECHNICAL EVALUATION SCORES
 
          BEST AND FINAL OFFERS   MAXIMUM          OFFERORS
                                  TECHNICAL
                                  POINTS      CSC   DynCorp  CDSI
 
        1. Corporate Experience      
 
        2. Demonstrated Ability      
           and Directly Related
           Experience
 
        3. Contract Management       
 
        4. Key Personnel             
 
           Total Points            
 
   Protest File, Exhibit 80 at 000030.
 
        Cost Proposals
 
        With regard  to direct  labor, the SEB  in the  final report
   reiterated  that because  of the  uncertainty of  the outcome  of
   CDSI's  decision  associated  with  staffing  the  contract,  the
   estimated direct labor costs may not be realistic.  Protest File,
   Exhibit 80 at 000043.  The SEB report continued:
 
        CDSI used a different methodology to develop its direct
        labor costs  at each stage  of the  competition.   DCAA
        audit report [dated November 4] reflects that CDSI used
        employee  rates  from  other  than  the  Energy Systems
        Division  (ESD),  which  is the  proposing  entity,  to
        develop its direct labor rates.  The initial DCAA audit
        report  [dated  November  4,  1993]   stated  that  the
        category average rates were  not representative of  the
        actual rate that would be  experienced.  CDSI used only
        ESD personnel to develop its direct  labor rates in its
        BAFO.
 
   Id.  In the  final cost evaluation, the SEB did  not mention that
   CDSI had  been given instructions  during oral discussions  or in
   the August 23, 1993, letter.
 
        In advance of its  evaluation, the SEB cross referenced  the
   Wyatt Data Services Salary Survey  to the labor categories in the
   RFP. Transcript at  1781.  Then when the  SEB evaluated offerors'
   rates,  it compared them  to the Wyatt  Survey.   Id. at 1781-82.
   The  contracting officer  testified that  with  regard to  CDSI's
   evaluation, the SEB did not use the existing contract rates.  Id.
   at 1783.   Nor did he look to the existing contract for retention
   of professional employees or turnover rate.  Id. 
 
        With regard  to final evaluation  of CDSI's labor  rates for
   professional employees, the SEB concluded:
 
        The  SEB questions         of the  twenty corresponding
        labor categories proposed.        of  the twenty  labor
        categories evaluated  for professional  labor reflected
        compensation  levels which  appear unrealistically  low
        and unreasonable.         of the labor  categories with
        questioned rates included actual salaries ranging from 
          to       below the  average minimum  salaries in  the
        Wyatt Data Services Wage Survey (WDSWS).  The WDSWS was
        the survey  used by  the SEB  to evaluate  compensation
        levels  and corresponding  labor categories.    The    
        labor categories reflected above and        other labor
        categories reflect compensation levels that 
 
        The SEB considers  CDSI's direct labor rates not  to be
        representative of  what  would be  incurred  under  the
        contract  should  CDSI  be selected  for  award.   CDSI
        billed the  DOE against  the current  contract for  the
        period of December 1993, a higher average rate for     
         of   the  twenty  labor  categories  included  in  the
        aforementioned analysis, than  it proposed in its  BAFO
        dated December 1993.
 
   Protest File, Exhibit 80 at 000043-44.
 
        Finally,   the  SEB  report  concludes  that  CDSI  did  not
   demonstrate                                       with respect to
   establishing its compensation  levels.  Protest File,  Exhibit 80
   at 000046.  In so concluding the SEB reiterated that it was not a
                            for CDSI to develop a                   
               and then not use it to assist in determining salaries
   and correlate labor  categories to meet its client's  needs.  Id.
   at 000047.  Specifically, the SEB stated:
 
        CDSI  states the  job titles  are  used to  generically
        describe its            grade  structure which provides
        for  the differences in  education and  experience, and
        skills  required.   CDSI grade  structure provides  for
        differences   in  education,   experience  and   skills
        required  to establish job  levels.  The  jobs included
        within  the grade  structure are formally  evaluated by
        senior   CDSI  management   and  its   Human  Resources
        Division.  The  vehicle for this formal evaluation is a
        formal  job   description  outlining  the   duties  and
        responsibility  of the  position, skills  necessary and
        education/experience required.   The job levels  within
        the  grade structure  are given  a title.   CDSI states
 
        that  these  job  titles, which  include  a  formal job
        description  and  responsibilities   of  the  position,
        skills necessary and  education/experience required are
        not  used  to  correlate  CDSI's  labor  categories  to
        contract  labor  categories,  or  to develop  salaries.
        However, CDSI also  states, 'each employee  assigned to
        this  contract  will be  assigned  an  appropriate CDSI
        title.   The basis  for placement will  be individuals'
        compliance with CDSI job title requirements . . .  CDSI
        contradicts itself, and  its process appears to  be one
        of reverse correlation not one of no correlation.
 
        It  would  appear that  CDSI's  grade structure,  which
        defines job levels  in terms of education,  experience,
        skills, responsibilities,  and  duties,  would  be  the
        foundation  of its compensation plan program.  But CDSI
        elects   not  to  use   its  grade  structure   in  the
        development of salaries.  Instead it uses a contract to
        establish  its foundation.    It  does  not  appear  to
        constitute                                for a company
        to develop a  comprehensive grade  structure, and  then
        not  use it  to  assist  in  determining  salaries  and
        correlate labor categories to meet its client's needs.
 
   Id. at 000046-47.
 
        The evaluated cost for each offeror was:
 
                           CSC           DynCorp         CDSI
 
   Best & Final Offer
 
   Probable Cost
 
   Protest File, Exhibit 80 at 000030.
 
   The SSO's (Source Selection Official's) Analysis
 
        In performing the  final evaluation, the SSO  first excluded
   CDSI because it had the                                          
   Transcript at 255-56.  DynCorp and CSC                        on 
                                                                    
                                                         Id.      at
   256-61.
 
        The  SSO explained his  determination of which  proposal was
   most advantageous to the Government as follows:
 
        We're  sitting  here basically  with some  fairly equal
        contractors from a technical point, if you -- well, all
        three --  but we  had quite a  different range  in cost
        estimates.   And  if you  read  in detail  the  board's
        report  it tended  to give  a flavor  that --  that the
        DynCorp  proposal was a stronger estimate, if you will,
 
        even  though it  was  lower,  it was  still  -- it  had
        strength  behind it more  than the other  two proposals
        which, if you  read the words in the  report, the labor
        rate  problem they had,  some softness in  other areas.
        It  just  -- it  gave  your confidence  that  .  . .  .
        DynCorp,  although  being lower,  was  a stronger  more
        valid estimate.
 
   Transcript at 1562-63.
 
        The SSO had no knowledge of the directions given to CDSI  by
   the  contracting officer in  oral discussions, in  the August 27,
   1993,  letter, or the  December 13, 1993, letter.   Transcript at
   1571.
 
        On  April 22, 1994,  DOE awarded  the  contract to  DynCorp.
   Third Amended Protest Complaint   39.
 
   CDSI's Proprietary Information Which Was Allegedly Turned Over to
   DynCorp
 
        Fifteen  pages of  documents which  show  how CDSI  runs its
   incumbent   contract  came  into   the  possession   of  DynCorp.
   Transcript at 56;  Supplemental Protest File, Exhibit 76.   These
   documents  were  not  received  in  response  to   a  Freedom  of
   Information Act (FOIA)  request.  Transcript  at 289.   DynCorp's
   proposed administration  manager testified  that  he came  across
   CDSI's documents while working in  DynCorp's proposal development
   room on DynCorp's premises.  Id. at 284.  These documents reflect
   the CDSI management solution to running the existing contract and
   show who  is responsible for  which function and how  many people
   are at various sites.  Id. at 56.  CDSI considers these documents
   proprietary.   Id. at  57.  These  documents are  hard copies  of
   slides presented at  a briefing for new employees  done by CDSI's
   contract administration  manager and security manager.   Id.  The
   new  employees   are  informed   that  these  documents   include
   proprietary information and  should not be disclosed  outside the
   contract. Supplemental Protest File, Exhibit 76.  These briefings
   have  been given since 1988 to the majority of 700 people working
   on the current  contract.  Transcript at  59-60.  Over  a hundred
   people have left the contract since then.  Id. at 60.
 
        DynCorp's administration manager  testified that DynCorp did
   not use  CDSI's organizational  chart in  preparing its  proposal
   because the organization in the  chart was not what was suggested
   by DOE in the RFP.  Transcript at 316-17.
 
   The  Contracting   Officer's  Responsibility   Determination  for
   DynCorp
 
        At the time the contracting officer signed the contract with
   DynCorp, he made an  affirmative responsibility determination for
   DynCorp.  Transcript at  1209.  In concluding that DynCorp  was a
   responsible offeror,  the contracting  officer reviewed  proposal
   data, information from  DCAA and GSA, and relied  upon the advice
   of DOE counsel.  Id.
 
 
        Prior  to  making   his  responsibility  determination,  the
   contracting officer became  aware of an ongoing  investigation of
   DynCorp through an article in the Washington Post.  Transcript at
   1211.  The article concerned alleged fraudulent billing practices
   by  DynCorp at Fort Belvoir,  Virginia.  The  contracting officer
   also was aware that the Form 10-K in DynCorp's proposal provided:
   "The company  was advised in November of 1991  that it might be a
   target of  possible fraud and  false claim prosecution."   Id. at
   1218.   The  contracting officer did  not pursue any  of the open
   investigations  because until there was an indictment or a charge
   he  did   not  want  to   influence  himself  or  the   SEB  with
   inappropriate data.  Id. at 1211-12.
 
        The contracting officer  asked DCAA to assess  the financial
   capability  of the  offerors.   Transcript  at  1214.   DynCorp's
   financial  information presented  at the  hearing indicated  that
   DynCorp has a line of credit available outside of its corporation
   which would be available to finance                       of this
   contract.  Id. at 1261. In addition, DynCorp has the availability
   of additional funding,                                           
        
 
 
                                                                    
                    Id. at 1260; Intervenor's Hearing Exhibit 1.
 
        DynCorp's  financial records are  audited by Arthur Anderson
   and  Company.   Transcript at  1273.   Arthur Anderson  has never
   advised  DynCorp that  its viability  as  a going  concern is  in
   danger.  Id.  Generally accepted auditing standards would require
   Arthur Anderson to so state if that is the case.  Id. at 1274.
 
   Facts Relevant to  the Organizational Conflict of  Interest (OCI)
   Allegation
 
 
        DynMcDermott Petroleum Operations  Company (DynMcDermott) is
   a  Louisiana corporation,  60%  of  which  is owned  by  DynCorp.
   Transcript  at 1194.   DynMcDermott  is  currently operating  the
   strategic petroleum  reserve (SPRO)  for DOE  in Louisiana.   Id.
   Under  the   SPRO  contract,  DynMcDermott,   a  management   and
   operations (M&O)  contractor, operates  and maintains  facilities
   which are involved in unloading  oil from oil tankers and pumping
   it  through  pipelines,  maintaining  pumps,  and  designing  and
   maintaining  the caverns where  the oil is stored.   Id. at 1195.
   All of the sites for the SPRO are in Texas and Louisiana.
 
        Although computers  are involved in the SPRO contract in its
   wide area network and related  equipment, none of those computers
   is maintained under the ITSO contract.  Transcript at 1196.  ITSO
   does not access any data bases used by  SPRO.  Id. at 1197.  ITSO
   does not  review or  evaluate any work  conducted under  the SPRO
   contract or draft  any specifications to be used  in SPRO's work.
   Id.
 
        Within  DOE, SPRO  reports to  the  Assistant Secretary  for
   Fossil Energy,  and ITSO reports  to the Assistant  Secretary for
   Administration and Management.   Transcript at 1197.   The Office
   of the Assistant Secretary for  Fossil Energy is supported by the
   DOE ITSO contract and the  ITSO contractor could obtain access to
   computers and information on those computers at DOE headquarters.
   Id. at  1206.   The contracting  officer considered that  DynCorp
   would have access to information regarding the SPRO contract when
   he  made his  organizational conflict of  interest determination.
   Id.  at  1227.   The  contracting officer  contacted  the program
   offices  in an  effort to  ascertain whether  there would  be any
   areas of organizational  areas of conflicts of interest.   Id. at
   1226.  The contracting officer explained:
 
        It came down  to the fact that in  discussions with the
        program  officials,  and I  say  that's usually  branch
        managers, . . . that to have an organizational conflict
        of interest  with  an M&O  in  Louisiana for  the  SPRO
        contract, that the awardee would actually have to be in
        a  DOE policy  decision-making billet,  and that  would
        never happen.
 
   Id. at 1228.
 
        The  contracting  officer  further  testified  that  he  had
   specifically  considered  that  DynCorp  would  have   access  to
   confidential information  involving M&O contractors  in providing
   maintenance,  systems  development,   and  software  development.
   Transcript  at 1229.  However, he  stated that there were ways to
   avoid  a conflict  by  prohibiting access  to  certain files  and
   machines, and by using  removable hard disks.  Id. at  1229.  The
   contracting   officer  testified   that  he   would  advise   his
   contracting officer's representative to ensure that DynCorp would
   not have  access to such data involving  M&O contractors.  Id. at
   1234.   The contracting  officer understood  that perhaps  entire
   segments or sections of DOE may be "off limits" to DynCorp.   Id.
   at 1235.
 
   Testimony Relating to Purported Bias
 
 
        In the course of responding  to a question about the purpose
   of preparing a prenegotiation memorandum, the contracting officer
   offered the following comment:
 
        By the  way, here's  those -- the  notes that  I talked
        about  being on the specific CDSI document . . . that I
        had written down in relation to their discussions . . .
        .   It says 'It has come to  our attention that [a CDSI
        employee], who was proposed as the operations manager a
        key  personnel slot, has  been proposed as  a contracts
        manager for a Social Security contract.'
 
        That was a concern of  our[s] because it was an example
        of bait and switch.
 
   Transcript  at  1626-27.    No  evidence  was  adduced  at  trial
   concerning the so-called bait and switch.
 
        The  contracting officer also stated that  there was an open
   investigation of  CDSI regarding fraudulent billing.   Transcript
   at 1211-12.    When  asked  who told  him  that  CDSI  was  under
   investigation,  he  testified:  "It   was  either  a  procurement
   official  or legal  counsel."  Id.  at 1212.   He further stated:
   "Who gave me the information, I don't know.  I didn't take it any
   farther because .  . . there wasn't any  indictment, there wasn't
   any formal charge."  Id. at 1213.  He continued:
 
        Q    Do  you  know  if  it  concerned  an investigation
        regarding  CDSI  or  issues that  CDSI  brought  to the
        attention of DOE to investigate?
 
        A    I   don't    know   any   specifics    about   the
        investigation.
 
        Q    So,  as  far  as  you know,  it  could  have  been
        regarding  a   situation  that  CDSI  brought   to  the
        attention of DOE, correct?
 
        A    Could have been.
 
   Id. at 1214.
 
        This testimony prompted CDSI counsel to seek to call the DOE
   counsel to whom  the remark  might have been  made as a  rebuttal
   witness.  The Board denied this request, but directed DOE counsel
   to  make a representation regarding (1) her conversation with the
   contracting  officer  and  (2) her   personal  knowledge  of  any
   investigation  of CDSI regarding fraudulent billing.  In response
   to that request,  counsel for DOE said  that she had  no personal
   knowledge  of any  investigation  of  CDSI  involving  fraudulent
   billing.  Transcript  at 1891.  She further  represented that she
   did not disclose  the existence of any such  investigation to the
   contracting officer.  Id. at 1891-94.  No evidence to corroborate
   the  contracting   officer's  testimony   that  CDSI   was  under
   investigation for fraudulent billing was introduced.
 
   The Expert Testimony
 
        Protester's Expert on  Similarity in Scope  and Size of  the
   Reference Contracts
 
        Protester's  expert in IRM support services opined that both
   CDSI's                   reference contracts were similar in size
   and scope to the DOE model contract.  Transcript at 349-50,  369.
   In rendering his  opinion, protester's expert read  the contracts
   themselves,  a  sampling  of task  orders,  the  reference checks
   performed  by the DOE  SEB members, the  technical proposals, and
   other  information in the  SEB reports  and the  record.   Id. at
   349-51.  He also took into account his                       with
   the                  contracts -- between 1985-1991 he had served
   as                                                               
                                                                    
                   Id.  at  335-36,  2073-75, 2082.10    Protester's
   expert  first derived  a  standard  for  ascertaining  whether  a
   contract  was  similar  in  size.    Id.  at  352-53.    He  used
   principally contract value and determined that if  a contract had
   approximately one-half  of the  value  of the  model contract  it
   would be similar in size.  The  nature of the IRM contract was  a
   secondary  consideration.   Id. at  353.   Therefore, the  expert
   believed that a  contract valued at  $100 million was similar  in
   size to the DOE contract.  Id.  The expert viewed the            
                            contract as  similar in size  because it
   was approximately       million in value and was an  IRM services
   contract.  Id. at 349-51.
 
        In  looking at similarity in scope, protester's expert again
   devised his  own method for defining such similarity.  Transcript
   at  355.  He first determined the  proportion of the total number
   of hours in the RFP that were assigned to each of the twenty-four
 
                       
   ____________________
 
        10   Protester's  expert testified that  based upon his role
   as source selection official and his oversight over the          
                                                             he  did
   not view them as schedule contracts.  Transcript at 363.
   functions.    Id. at  354-62.11    He  then determined  from  the
   reference contracts and  their task orders  which of the  twenty-
   four  IRM functions were represented and  added up the percentage
   of total hours associated with each represented function.  Id. at
   356-64, 2072-74;  Protester's Hearing Exhibit 4.   He established
   50%  of total  hours as  the threshold  for similarity  in scope.
   Using this method, protester's expert determined that the        
 
                     contract,  with                 functions being
   performed,  represented      of the total  hours in the DOE model
   contract.  Transcript at 2072-73.  The                           
              contract, with           functions, covered     of the
   hours.  Id. at 2073.  Protester's expert also considered CDSI's  
                                        contract  to  be  similar in
   size with a value of      million.  Transcript at 369-71, 374-75.
 
        The    contracting   officer    reviewed   the    additional
   documentation in this  protest regarding CDSI's                  
   contracts.  He testified that even  if CDSI had provided the  SEB
   with such additional information concerning both the             
                     and the                              contracts,
   DOE's  assessment  would   not  have  changed.     Transcript  at
   1384-1426.   He  performed  this  review  personally;  the  other
   members of the SEB did not perform  such a review.  Id. at  1384,
   1412-15.
 
        Protester's  IRM expert further  opined that DynCorp's      
   contract was similar  in scope but not similar in size to the DOE
   model contract.   Transcript at  376.  With  regard to size,  the
   expert  reviewed  all  the sample   task  orders  which   DynCorp
   provided.  Id. at 378.   The expert divided the task orders  into
   three categories -- IRM,  mixed IRM and totally non-IRM.   Id. at
   379-80.  He was unable to accurately determine the value of these
   components.  The total  value of all  the sample task orders  was
   approximately $16 million, and the value  of the task orders  for
   the non-IRM services  was approximately $5 million or  one-third.
   Id. at  380.  Subtracting  out one-third for non-IRM  services of
   the total  value of the         contract, he determined  that the
   value of IRM  services was $81-$82 million,  which was under  his
   $100 million  threshold for similarity  in size.  Id.  at 376-81.
   With regard to scope of the DynCorp's       contract, protester's
   expert testified that because approximately      of similar tasks
   were being performed, the         contract was similar  in scope.
   Transcript at 381.
 
        Protester's expert opined  that the             contract was
   similar  in neither  size nor  scope to  the DOE  model contract.
   Transcript at 382.   As to  size, protester's expert  ascertained
   that even though the contract was stated to be valued at         
                       
   ____________________
 
        11   For example,  the first  function in  the Statement  of
   Work,  "Systems Development," has  727,260 hours assigned  to it,
   which  is  10%  of  the  total  hours.       Transcript  at  360,
   Protester's Hearing Exhibit 4.
       it included a number of non-IRM services being provided, such
   as  automotive  services.   Id.  at  384.12   Protester's  expert
   further  concluded that not  more than       out of       DynCorp
   personnel  at             provided IRM-related  services.  Id. at
   388, 390.  Therefore, he  believed that approximately half of the
   value of the              contract was attributable to IRM.   Id.
   With regard to scope, he  reasoned that the              contract
   represented approximately      of the requirements to be acquired
   under the DOE contract, which was significantly less than the 50%
   threshold he had established.  Id. at 393.
 
 
        Protester's  expert  agreed  with  the  SEB  that  DynCorp's
   subcontractor       was  not performing similar work  on its     
   subcontract.  Transcript  at 394.   He  reasoned that         was
   simply providing its own data  center and was essentially selling
   computer time  to        in  contrast to  actually running  DOE's
   computer center.  Id. at 394-95.
 
        Intervenor's Expert on Compensation
 
        Intervenor's compensation expert testified that  the SEB was
   reasonable in its  analysis of CDSI's cost proposal.   Transcript
   at  1837.   In  arriving  at his  opinion,  this expert  analyzed
   fifteen distinct wage surveys.  Id. at 1841-42.  
 
        In its  evaluation of CDSI's professional  compensation, the
   SEB  computed a  minimum,  middle, and  maximum  salary for  each
   composite and compared these figures  to the weighted average for
   an  analogous  labor  category  reported  in  the  Wyatt  Survey.
   Transcript at 1661.   The SEB next determined  whether any salary
   in the composite rate  was 15% or more below the  50th percentile
   for the analogous job classification in the Wyatt Survey.  Id. at
   1662.   Intervenor's compensation expert testified that he became
   concerned whenever compensation decreased more than 10% below the
   50th percentile.  Id. at 1880.
 
        Intervenor's compensation expert was also concerned with the
   range of salary rates used by CDSI to comprise certain  RFP labor
   categories.13   For  example,  in  the  category  senior  systems
   analyst, CDSI's rates ranged from a low of        to a high of   
        In converting  these hourly  rates to  annual salaries,  the
   expert testified that there was a difference from approximately  
        in annual salary to almost           in annual salary.   He,
   thus,  questioned the representation  that the persons fulfilling
                       
   ____________________
 
        12   The subcontract between  DynCorp and                   
   described both  IRM services  and  automotive aviation  services.
   Transcript at 387-88.
 
        13   Intervenor's  compensation expert  recognized that  the
   rates proposed by CDSI were diluted rates due to the treatment of
   uncompensated  overtime, whereas  the  market survey  rates  were
   undiluted.  Transcript at 1871.
   the  requirements  of  this  labor category  were  being  paid  a
   difference of as much as         in annual salary.  Transcript at
   2019.
 
 
        In his  analysis of  CDSI's BAFO,  intervenor's compensation
   expert pointed out that       categories were more than 10% below
   the pertinent 50th percentile wage rate.   Transcript at 2000-02;
   Intervenor's Hearing Exhibit 9.  The systems analyst was     less
   than  the  50th  percentile wage  rate,  the  systems programmer,
   roughly             less,  the programmer analyst,      less, the
   computer specialist,     less, the senior operator,     less, the
   electronics engineer,      the senior electronics technician,    
   the technical writer-editor,       Transcript at 2001-02.
 
        Protester's Accounting Expert
 
        Protester's   accounting   expert    testified   that   DCAA
   misinterpreted  the  use  of  uncompensated  overtime  at   CDSI.
   Transcript at 1026.   The expert testified that DCAA  and the SEB
   caused CDSI to artificially  lower its hourly rates  by requiring
   CDSI  to estimate based  upon using a         hour week.   Id. at
   1033-34.  The diluted rate which resulted from the 41.3-hour week
   was approximately         less than what it  otherwise would have
   been.   Id. at 1036.   Protester's accounting expert  stated that
   the SEB improperly compared the Wyatt Data Services Survey rates,
   which  were undiluted,  to  CDSI's  diluted  rates  in  assessing
   whether   CDSI's  individual  labor  rates  were  reasonable  and
   realistic.  Id. at 1040-41.
 
        Protester's accounting expert opined that DCAA did not treat
   CDSI and DynCorp in  the same manner in their audit  reports with
   respect to overtime.  With  respect to CDSI, the expert testified
   that DCAA calculated the hours worked by exempt employees divided
   by the  number of exempt employees to calculate a total number of
   hours worked of         hours and then  recommended that CDSI  be
   required to  use the         hours  to develop  its hourly  rate.
   Transcript at 2182-83; Protest File,  Exhibit 28 at 000025.  With
   respect  to DynCorp,  the  DCAA  auditors did  not  do a  similar
   calculation of  the number of  hours worked  by DynCorp's  exempt
   employees divided  by the number  of exempt employees to  come up
   with what uncompensated overtime there might be, despite the fact
   that DynCorp's proposal clearly indicated there was uncompensated
   overtime.   Transcript  at  2183;  Protest  File,  Exhibit 28  at
   000046-48.
 
                               Discussion
 
   Is CDSI an Interested Party?
 
        For  the  first  time  in  its  posthearing  brief,  DynCorp
   challenges CDSI's standing  to bring this protest.   Intervenor's
   Posthearing Brief at  51.  DynCorp contends that  because CDSI is
   not next in line for award, it has no direct economic interest in
   the outcome  of this protest.   DynCorp cites in  support of this
   position  United States v. International Business Machines Corp.,
   892 F.2d 1006 (Fed.  Cir. 1989), and Berkshire  Computer Products
   v. Department of Commerce, GSBCA 12172-P, 93-2 BCA   25,724, 1993
   BPD    36.  We  reject intervenor's argument.   One  of the cited
   cases   involved  a  sealed  bid   and  the  other  a  negotiated
   procurement in  which award was  to be made  on the basis  of low
   cost among  technically  acceptable proposals.   Thus,  it was  a
   simple  matter to  ascertain which  vendor was  next in  line for
   award.   Here, because  award involves  a  subjective best  value
   assessment, comparing  differing approaches to  providing complex
   IRM  services,  it  is  impossible,  as a  threshold  matter,  to
   conclude that a  particular vendor is next in line for award.  As
   we recognized in Federal Computer Corp. v. Department of Justice,
   GSBCA 12560-P, 94-1 BCA    26,442, at 131,563, 1993 BPD   264, at
   5, "[t]he existence  of a final reliable ranking  is essential to
   the application of the IBM rule."
 
 
        CDSI's  protest   allegations  challenge   the  conduct   of
   discussions and  technical and  cost rankings  of offerors.   The
   application of the  IBM rule is  inappropriate where the  protest
   allegations, if  proven, will result  in relief  which alters  or
   cancels the original ranking of offerors.  If CDSI prevails as to
   its  allegations  regarding  discussions,  the  likely remedy  is
   further,  proper  discussions.    If  CDSI  prevails  as  to  its
   allegations  regarding rankings  of  offerors, the  agency's best
   value analysis must be redone.   Federal Computer Corp., 1993 BPD
     264,  at 5  (citations  omitted).    Thus,  DynCorp's  standing
   argument must fail.
 
   The Technical Evaluation:  Overview
 
        CDSI's  challenges to the SEB's technical evaluation will be
   addressed  in turn.   We note at  the outset, however,  that this
   procurement  was characterized by  a lack of  objective standards
   for  evaluating  proposals,   inconsistent  evaluation  standards
   applied by  the individual  evaluators, a lack  of any  record of
   independent  individual  evaluations   prior  to  "consensus,"  a
   "consensus" evaluation process which remains shrouded in mystery,
   inequitable and  erroneous reference checks  for CDSI,  reference
   checks for  DynCorp which  were not accurately  reflected in  the
   evaluation, and a lack of meaningful discussions.
 
        In  particular, there  was  no  consistent  methodology  for
   determining the strengths and weaknesses of the proposals and  no
   mechanism for establishing whether  strengths and weaknesses were
   significant.  This Board has  recognized that it is inappropriate
   for evaluators to  apply their own  subjective standards such  as
   "good feelings" in evaluating proposals.  See CBIS  Federal, Inc.
   v.  Department of the Interior, GSBCA 12092-P, 93-2 BCA   25,643,
   at 127,606, 1992 BPD   386, at 13.  Although the solicitation did
   not  itself  articulate  objective  criteria to  be  used  in  an
   analysis  of strengths  and weaknesses,  the  agency should  have
   established a consistent methodology for evaluating proposals and
   failed to do so.
   Did  DOE Change  a "Mandatory"  Experience  Requirement Involving
   Contracts of Similar Scope and Size?
 
 
        In Count  I, CDSI  alleged that DOE  improperly changed  the
   mandatory  requirements  of  the RFP  by  permitting  offerors to
   submit only one  contract of similar scope and  size, rather than
   requiring  three to five  as specified in  paragraph L.048 in the
   RFP.14     CDSI  contends  that  DynCorp  failed   to  meet  this
   mandatory minimum  requirement  and, therefore,  should not  have
   received the award.
 
        As  a  threshold  matter,  we  must  ascertain  whether  the
   requirements of  the  RFP  involving  corporate  experience  were
   mandatory.    In   assessing  whether  a  given   requirement  is
   mandatory, we read the RFP  as a whole.  Hughes Advanced  Systems
   Co.,  GSBCA 9601-P,  88-3  BCA    21,115, 1988  BPD    185.   The
   solicitation  in  Section C  details  the twenty-four  functional
   areas in which IRM services must  be provided.  The provision  of
   these services is  clearly and expressly stated  to be mandatory.
   Section C  contains  no mention  that an  offeror must  possess a
   requisite level of corporate experience to be eligible for award.
 
        We next  look to  Section M.   Paragraph M.0009,  Evaluation
   Criteria, specified:
 
        Technical aspects of the proposals will be evaluated in
        accordance  with the following criteria and scored on a
        numerical   basis.     Criteria  1,   2,   and  3   are
        approximately  equal  in  importance.   Criterion  4 is
        significantly less important. . . .
 
        CRITERION 1:   The  offeror's  corporate  experience in
                       performing  contracts  of  similar scope
                       and size.
 
   There  is no  language in  this paragraph  or any  other part  of
   Section M suggesting that offerors who  do not meet the corporate
   experience requirements are ineligible for award.
 
         We turn to the section relied  upon by CDSI in urging  that
   criterion 1  experience  is  a  mandatory requirement,  paragraph
   L.048(b), contained  in the "Format  and Content" section  of the
   instructions on technical proposals.  To place those instructions
   in  context,  we  review  the  general  provisions  of  paragraph
   L.048(a).  There, the solicitation instructs:
 
                       
   ____________________
 
        14   CDSI further claimed  that if DOE had informed  it that
   it  was not  required  to describe  a  minimum of  three  to five
   contracts similar in  scope and size to the  proposed contract to
   demonstrate its  corporate experience,  CDSI would  have selected
   different  contracts   to  address   the  twenty-four   functions
   evaluated under criterion 2.
 
        Volume  II  -  Technical   Proposal  consists  of   the
        offeror's   proposal  addressing   the  technical   and
        management aspects of the procurement, capabilities and
        directly  related  experience  that  will  be  used  to
        satisfy  the requirements  of  the  Statement of  Work.
        Since the  Technical  Proposal  will  be  evaluated  to
        determine such  matters as the  offeror's understanding
        of the work  to be performed, the  management approach,
        quality,  and the ability to complete the desired work,
        it should  be specific  and complete  in every  detail.
        The proposal  should be practical,  be prepared  simply
        and economically and represent a quality product.
 
   Paragraph  L.048(b), the linchpin of  CDSI's argument, goes on to
   state in pertinent part:
 
        Technical Discussion.   This  section must  contain the
        major portion  of the  Technical Proposal.   It  should
        clearly   address  each   of  the   Technical  Proposal
        evaluation criteria  in section  M, and  at a  minimum,
        cover  the subordinate  factors  or subcriteria  listed
        thereunder, if any.  It  should be presented in as much
        detail  as practicable and  include the  following four
        major sections.
 
        Section  1.   The offeror's  corporate experience  with
        contracts of similar scope and size.
 
        a.   The offeror must describe  corporate experience on
        not  less than  three  nor more  than five  IRM support
        services  contracts similar in  scope and size  to this
        proposed contract.
 
        Reading   these  paragraphs   together,  we   conclude  that
   Section L.048  set  forth  mandatory  instructions  for  proposal
   preparation  --  something  very  different  from  dictating  the
   mandatory minimum criteria which a  contractor must meet in order
   to be  eligible for award.   This interpretation is  bolstered by
   the RFP provision "Content of Resultant Contract," which informed
   offerors that the instructions in Section L would not become part
   of the resultant contract.
 
        This case  is  thus unlike  OAO  Corp. v.  General  Services
   Administration, GSBCA 12484-P, 94-1 BCA   26,392, 1993 BPD   247,
   cited by  protester.  In  OAO, there was a  mandatory requirement
   stated  in both  Section C and  Section L that  key personnel  be
   available  on  the date  of  award.   Importantly,  the Section L
   provisions in OAO expressly advised offerors:  "To be acceptable,
   an offer must have acceptable resumes for all required positions.
   . . .  The offeror . . . shall certify that the individuals named
   shall be available . . . on  the date the contract is effective."
   OAO, 94-1 BCA at 131, 293, 1993 BPD   247, at 4 (emphasis added).
   Thus, in OAO, compliance with the Section L instructions directly
   affected the acceptability of an offer.
 
        Here,  while the  solicitation  did  "require"  offerors  to
   adhere to  instructions in  the preparation  of their  proposals,
   i.e., to  describe three to  five contracts similar in  scope and
   size, the failure  to adhere fully to those  instructions did not
   operate  to disqualify an offeror.   Rather, an offeror's failure
   to  describe contracts  which were  ultimately  determined to  be
   dissimilar  in size  and scope  would subject  the proposal  to a
   downgrading under paragraph M.0009.
 
        Nor do the answers to vendor questions 1 and 37 suggest that
   the  corporate  experience  requirements  under criterion 1  were
   mandatory.   In vendor question 1,  an offeror asked  whether, if
   two or  more  companies  formed  a  joint  venture,  their  joint
   experience would be  evaluated as that of "the proposing entity."
   DOE responded  that the  prime contractor  "must submit  not less
   than three  contracts of similar  scope and size through  its own
   corporate experience."   Consolidated  RFP at  C 012568 (emphasis
   added).  The requirement was thus one of proposal submission.
 
        In question 37, a vendor asked  the range of level of effort
   or contract value which would  constitute similarity in size.  In
   responding, DOE stated:
 
        While  specific ratings  could  not  be established  on
        undefined  contracts at this  stage of the  process, it
        would be  fair to  say that  contract references  which
        depict  contracts similar in scope and size would score
        higher than contracts non-similar in size and scope.
 
   Consolidated  RFP  at  C 012568 (emphasis  added).    This latter
   language indicates  that the  three to  five reference  contracts
   were  to be  scored  and  not used  as  a bright-line,  pass-fail
   elimination mechanism.
 
        In sum,  "[i]f respondent  had intended  that the  proposals
   meet each  specification requirement  or be summarily  eliminated
   from  the  competition,  respondent  would  have specifically  so
   stated, as agencies typically do."   Hughes Advanced Systems Co.,
   GSBCA 9601-P, 88-3  BCA at 106,602,  1988 BPD   185,  at 9.   We,
   thus,  conclude that DOE  neither changed nor  waived a mandatory
   solicitation requirement as to corporate experience.
 
   Did  DOE  Change  a  Mandatory  Experience  Requirement  for  Key
   Personnel?
 
        CDSI argues  that the RFP  contained mandatory  requirements
   for  all key personnel and that DynCorp's proposed administration
   manager  failed to satisfy the minimum mandatory requirements for
   this  position.  Protester's Posthearing Brief at 9-12.  Applying
   the   same  rationale   articulated  above   and   reviewing  the
   solicitation  as a  whole,  we conclude  that  the key  personnel
   experience   requirements  are   mandatory  and   that  DynCorp's
   administration manager does  not appear to possess  the requisite
   experience.
 
        The  solicitation required offerors to submit six resumes of
   named  individuals to  serve in  key positions  as part  of their
   technical proposals.   These  six individuals  were to  supervise
   over  700 people  involved in  performing  a contract  worth over
   $225 million.  No  substitutions of key personnel  were permitted
   within the first 365 days  of contract performance, absent sudden
   illness, death,  or  termination of  employment.   As this  Board
   recognized in OAO: "In a contract for services of this magnitude,
   it is hard  to imagine a provision  more material than one  which
   requires the offeror  to have acceptable key  personnel available
   to  work on the  contract."  OAO,  94-1 BCA at 131,297,  1993 BPD
     247, at 12-13.15
 
        The key personnel qualifications were expressly stated to be
   mandatory  in Section L  and Attachment  J.   In contrast  to the
   Section L  provision  on  describing  corporate  experience,  the
   section on key personnel was not directed to the description of a
   key  personnel's   experience,  but   rather  specified   minimum
   mandatory  experience which  the employee  had to  possess to  be
   acceptable.    Paragraph  L.048,  Section 4(c)  (emphasis  added)
   stated:   "[c]andidates  shall  meet at  a  minimum the  required
   position  description qualifications in Section J."  The position
   description in Section  J required the administration  manager to
   have  "at   least  two   years  of   recent  experience   in  the
   administration of a  contract of similar size and scope."   As we
   recognized in U.S. Sprint Communications Co. Limited Partnership,
   Networks Systems Division,  GSBCA 10684-P, 91-1 BCA    23,333, at
   117,025, 1990  BPD   264,  at 14,  solicitation language  stating
   "the  minimum  technical requirements  and  performance required"
   left no choice to the vendor.
 
        We   thus   conclude   that   the   requirement   that   the
   administration  manager  possess  at least  two  years  of recent
   experience  in the administration  of a contract  of similar size
   and  scope  was   mandatory.    DynCorp   failed  to  meet   this
   requirement.   DOE itself concluded that DynCorp's administration
   manager  did  not  appear  "to meet  the  requirement  of  recent
   experience in the administration  of a contract of  similar scope
   and size."   DynCorp's proposed  administration manager  admitted
   that he had not administered a contract of similar size and scope
   from 1988 until the present.
 
        The SEB also  concluded that CDSI's systems  development and
   maintenance manager failed to meet the requirement of four  years
   experience managing a functional area staffed by a minimum of 100
   people.    CDSI has  not  established  that this  conclusion  was
   erroneous.   Thus, we conclude  that both CDSI and DynCorp should
                       
   ____________________
 
        15   While we recognize that evaluation of key personnel was
   the fourth criteria in the  technical evaluations, and was stated
   to be significantly less important than the other three criteria,
   in  examining the  RFP as  a whole  we nonetheless  recognize the
   criticality of key personnel.
   have  been advised  during discussions  that  their proposed  key
   personnel did not meet mandatory requirements.   As we recognized
   in CBIS  Federal,  where  an  offeror was  ineligible  for  award
   because the resumes of key  personnel did not comply with minimum
   RFP requirements, the  offeror should have  been advised of  this
   through  discussions and given  an opportunity to  supplement the
   resumes or replace proposed personnel.  93-2 BCA at 127,607, 1992
   BPD   386, at 15.
 
   Did DOE Improperly Evaluate CDSI's Corporate Experience?
 
 
        CDSI contends  that DOE's  determination that  only       of
   CDSI's reference  contracts   was similar in  size and  scope was
   erroneous  and adversely affected  CDSI's evaluation.   We agree.
   DOE's reference  checks on  CDSI were flawed.   It  is undisputed
   that  for  all  offerors  except  CDSI two  members  of  the  SEB
   performed the reference  checks to insure  their validity.   With
   CDSI,  however,  only  one  member  of  the  SEB,  the  chairman,
   performed the reference check.  Furthermore, when this individual
   contacted  the  reference, he  did not  speak with  the technical
   officer,  the  preferred  contact.    Rather,  he  spoke  with  a
   contracting  officer  who  was  admittedly  in  a  hurry.    This
   contracting officer was the contracting officer on               
                                     contracts,       and  to  speed
   things up, she performed      reference checks simultaneously.
 
        The  chairman  of  the  SEB  admitted  that  in  doing  this
   reference check he  did not use the  form used for all  the other
   reference checks  because he was  attempting to hurry and  it got
   too confusing  when he did  the reference  simultaneously on  two
   contracts.  He testified:
 
        A    Okay.  When [the contracting officer on the       
                             said she was  pressed for time and
        could I possibly do anything to speed the process up --
        .  . . I asked her  to give me a  few seconds and . . .
        what I meant to do was delete those functions that were
        not in CDSI's proposal . . . .
 
        . . . .
 
        Well,  I started  deleting, you  know, and  I even  got
        confused as well, maybe I didn't delete  the right one.
        I  may  have  added one  or  two.   It  became  a total
        confusing mess.  You know, so I just didn't want to use
        them.   I wanted to make sure  I was being accurate and
        corroborating the proper areas, so I  used the page out
        of the [CDSI proposal].16
                       
   ____________________
 
        16   Transcript  at 1322-23.  In this colloquy, the chairman
   of the  SEB  contradicted his  earlier testimony  at the  hearing
   regarding his reference checks on CDSI's                         
       Transcript at 218-28, 1318-25.
 
        Then he included the      reference form, which was "a total
   confusing mess," as part of the SEB  official file for all of the
   other SEB  members to utilize,  and never mentioned  the problem.
   This witness said he had intended to correct the form but, to his
   embarrassment,   he  "just  forgot   it"  and  "never   did  it."
   Transcript at 1324.
 
        The bottom line, of course,  is that the procedure which DOE
   utilized in  performing the reference  checks on CDSI's          
   contracts was woefully deficient and unfair.
 
        The entire  process of  ascertaining whether  contracts were
   similar in size and scope was flawed by the failure of the SEB to
   follow  an  objective  standard defining  similarity  in  size or
   similarity in scope.  "Similar" is not defined in the RFP, and no
   parameters  for determining  similarity of  size  and scope  were
   stated in the RFP or in instructions to evaluators.17
 
        For size,  one member  considered dollar  value, numbers  of
   personnel, and "type" of contract (e.g., whether it was cost plus
   award fee  -- like the  model contract).18  The  SEB chairman, on
   the  other hand,  considered  value,  number  of  people,  scope,
   "complexity,"  and "location."   Another  member  took number  of
   people and dollar value  into account.  The  SEB members did  not
   utilize any  cutoff  in determining  the size  of the  contracts.
   Where dollar value was considered, no particular dollar value was
   established as a baseline for assessing similarity.
 
        In  determining  similarity  of   scope,  the  SEB   members
   considered  the extent to which the  twenty-four IRM functions in
   Section C  of  the   RFP  were  performed  under   the  reference
   contracts.   However, no  cutoff was established  for determining
   how many or  which functions had to  be performed in order  for a
   reference contract to be similar.
 
 
                       
   ____________________
 
        17   We recognize  that the response  to vendor  question 37
   advised  offerors that similarity in size would be judged against
   the level of effort  in the RFP and similarity in  scope would be
   considered  in  terms  of  volume  and  types  of  ADP  services.
   However,  we conclude that  this guidance  does not  establish an
   objective standard for assessing similarity.
 
        18   CDSI  contends  also  that  the use  of  the  "type  of
   contract"  in assessing  similarity  of  size  was  an  improper,
   undisclosed evaluation criterion.  Protester's Posthearing  Brief
   at  27.   We  agree with  CDSI.   The  type  of  contract is  not
   rationally related  to the size and scope of a contract.  It is a
   distinct,  new consideration which  cannot reasonably be subsumed
   into the overall inquiry on similarity in size and scope.    This
   adds support  to our  conclusion  that the  evaluation of  CDSI's
   proposal under criterion 1 was improper and should be redone.
 
        DOE and  DynCorp attempt to  minimize the adverse  effect of
   this  irregularity on  the evaluation  of CDSI's        reference
   contracts.  First, they contend that because CDSI's  own proposal
   only identified                                                  
                                                                    
                                                Second, they contend
   that the contracting officer's testimony conclusively established
   that the                              were not in fact similar in
   scope  and  size to  the  DOE contract.   We  disagree  with both
   analyses.  First, if the reference check had been done properly, 
                                    would  have  been  identified as
   having  been performed, just as occurred  in the reference checks
   of                            contracts.  Second, the contracting
   officer is not himself the entire SEB.   The fact that he thought
   the  contracts were dissimilar  does not mean  that the  SEB as a
   whole would have so concluded.
 
        CDSI would  have the Board  determine that CDSI  should have
   received additional points  due to the similarities  in scope and
   size  of the     contracts  and the proposed DOE contract.  While
   it appears to the Board that DOE overlooked  certain similarities
   between  the contracts, the  Board declines CDSI's  invitation to
   usurp  the SEB's  function and  point  score a  proposal.   E.g.,
   Sperry Corp., GSBCA 8208-P et al.,  86-1 BCA   18,704, at 94,081,
   1986 BPD   9, at 3.
 
   Did DOE  Perform an  Improper Technical  Evaluation of  DynCorp's
   Experience?
 
        CDSI alleges  that DynCorp  did not  describe any  reference
   contracts that would qualify as similar in  scope and size to the
   proposed contract.   DOE had concluded that  DynCorp's           
   contract  was  similar in  size  and  scope.   However,  although
   DynCorp indicated in its proposal that the contract value of the 
           contract  was                and that      employees were
   performing on  that contract,  in fact,                       the
   employees were performing IRM work,  and                  of  the
   contract amount  related to  IRM  work.   Thus, the  SEB did  not
   possess  crucial information in evaluating the  size and scope of
   the           contract.
 
        An  incomplete evaluation  was  also  performed  as  to  the
   similarity  in size and scope of the        contract.  The record
   indicates   that  there  were   non-IRM  functions  and  services
   performed under  the         contract  which were not  taken into
   consideration by the SEB.   Specifically, the contract itself and
   task  orders  issued   under  it  referenced  services   such  as
   establishing logistical procedures or "proper purchasing/leasing,
   receiving  and accounting and  distribution of all  supplies" and
   putting  on  "conference workshops."    While  we  do  not  adopt
   protester's expert's  conclusions that  IRM-related services  and
   functions  represent only two-thirds  of the  total value  of the
   contract, we  are persuaded  that there  are significant  non-IRM
   functions  in that  contract which  should have  been taken  into
   account.
 
 
        Moreover, in translating contract reference scores into  the
   SEB  report,  the  SEB  improperly  raised  DynCorp's  scores  as
   compared to its reference form with regard to both the       and 
           contracts.   The SEB  members were unable  to explain why
   the  number of  functions being  performed was  far fewer  in the
   actual reference contracts than in  the SEB report with regard to
   both these references.  The post hoc vague explanation that these
   scores were developed  in consensus and the  proposals themselves
   were  reviewed does  not persuade  us  that the  SEB reports  are
   accurate.
 
        In  sum, DOE's  conclusion that the          and            
   contracts  were significant  strengths is  not  supported by  the
   record.
 
   Did DOE Improperly Evaluate Offers Under Criterion 2?
 
        Under  criterion 2, offerors  were  required to  demonstrate
   their capabilities and directly related experience for performing
   the twenty-four functions  in the RFP.  Only references submitted
   under criterion 1,  including subcontractor references,  could be
   relied  upon  under  criterion 2.   In  addition,  offerors could
   propose a contract reference for a proposed subcontractor if  the
   direct productive labor hours for that subcontractor exceeded 10%
   of the total  DPLH in the proposal.   CDSI contends that  the SEB
   improperly permitted DynCorp to use two subcontractors,       and
        as references under  criterion 2.  CDSI contends  that      
   was not assigned  10% of the DPLH and,  therefore, its experience
   could not properly be considered.  Even though         experience
   was listed  as a weakness,  CDSI argued that DynCorp  should have
   received no experience for these  functions and should have  been
   graded a "significant" weakness,  decreasing its score from      
   to      under criterion 2.
 
        In   reply  DynCorp  states   that  CDSI  has   misread  the
   solicitation provision  which states:   "Subcontractors  proposed
   for whom  the DPLH  equals or  exceeds 10  percent  of the  total
   estimated DPLH for  this solicitation shall provide  one contract
   reference."    DynCorp  contends that  this  provision  "does not
   prohibit  subcontractors with less  than 10%  of DPLH  from being
   used as a  reference; rather it  states that subcontractors  over
   10% must  provide a reference."  Intervenor's Reply Brief  at 11.
   We agree with DynCorp.   The RFP stated an additional requirement
   that subcontractors for whom the  DPLH equals or exceeds 10% were
   required to provide an additional contract reference.19
                       
   ____________________
 
        19   In   Count   IV,   CDSI   alleged   that  DynCorp   was
   impermissibly allowed  to submit contract references  in addition
   to the number permitted in criterion 1  of the RFP to satisfy the
   requirements  in  criterion  2.   Consistent  with  the preceding
 
        Further, the RFP's provision  on reference contracts  speaks
   in  terms of "offerors"  submitting three reference  contracts of
   similar size and scope.   Read in conjunction with DOE's response
   to  vendor question 1, the RFP permits subcontractors' experience
   -- regardless of their percentage of the DPLH -- to  be evaluated
   as  the  experience  of  the  prime.    The  response  to  vendor
   question 1 states, in pertinent part: 
    
        Subcontractor(s)' . . . experience will be evaluated as
        experience of the  prime contractor.  However,  for the
        evaluation under Criterion 1 the prime contractor  (one
        firm)  must submit  not less  than  three contracts  of
        similar scope and size to its own corporate experience.
 
        Thus,  if  the   prime  chose  to  submit   three  reference
   contracts,  an   additional   two  presumably   could   be   from
   subcontractors  regardless  of  the   percentage  of  DPLH  being
   performed by those firms.
 
        We  also  conclude that  the         reference  was properly
   considered.  CDSI contends because the      contract was found to
   be dissimilar  to  the instant  contract  under criterion  1,  it
   should not have  been considered as a strength under criterion 2.
   We disagree.   The  reference contracts were  not required  to be
   graded in the same manner for both criteria 1 and  2.  What was a
   weakness in similarity in size  and scope was reasonably found to
   be a  strength under criterion 2 in that it demonstrated directly
   related experience.
 
   Did the SEB Improperly Evaluate Criterion 3?
 
        CDSI  has   alleged  two  improprieties   in  the  technical
   evaluation regarding criterion 3.
 
        First,  CDSI challenged the increase in DynCorp's score from
   a         to a         for subcriterion 3(b),  quality management
   program, between  DynCorp's  initial and  revised proposals  even
   though  DynCorp  made  no  substantive  changes  in  its  revised
   proposal.   Protester's  Posthearing  Brief at  25-26.   DOE  and
   intervenor contend that DOE properly rescored all proposals under
   subcriterion 3(b) prompted by DOE's initial evaluation of        
                                                  Specifically,   in
   trying to understand what                                     DOE
   made flowcharts for                           the same  thing for
   CDSI  and DynCorp.   DOE could  not create a  flowchart for CDSI.
   DOE  maintains  that  the strength  of  DynCorp's  program became
   apparent  after  the  flowcharts   were  created.    Intervenor's
   Posthearing Brief at 59-60.
 
 
                       
   ____________________
 
   analysis, we deny this count.
 
        We note  that in the  initial evaluation worksheet,  the SEB
   listed  no  strengths  and no  weaknesses  for  DynCorp's quality
   management program and scored the proposal at        While we are
   troubled about the apparent lack  of a thorough evaluation at the
   outset,  we find  the SEB's  explanation  and revised  evaluation
   credible,  and  we  cannot  conclude  that  the  final  score  is
   unjustified.
 
        Second,  CDSI challenges  DOE's  determination to  downgrade
   CDSI under criterion 3 because it did not have a                 
       plan, a                                 program, and a       
                                                when             the
   solicitation  contains no requirement for such              plans
   and programs.  DOE assigned  CDSI a                         under
   subcriterion 3(b), quality management program, for its failure to
   have                                                             
   CDSI contends that by insisting  on these               features,
   DOE applied undisclosed evaluation criteria nowhere stated in the
   RFP.  Protester's Posthearing Brief at 27-28.
 
        Ideally,  if  an  agency requires  offerors  to  possess and
   utilize             plans and programs, the agency should clearly
   disclose that  in the solicitation.  Here, the agency did not use
   the adjective               in describing criterion 3 components.
   However, the agency  did request, in vendor questions  to CDSI, a
   description of the            programs, and CDSI provided such  a
   description.  Therefore,  CDSI was on notice that  the agency was
   assessing           plans in evaluating criterion 3.  See Grumman
   Data Systems Corp. v. Department of the Air Force, GSBCA 11635-P,
   1994  BPD    64, at  42-43  (Mar.  19,  1992).   The  agency  was
   legitimately interested in  an offeror's                programs.
   Contract management, quality management, management approach, and
   oversight are items  which are readily susceptible  to           
   plans and programs and we conclude, on the whole, that it was not
   unreasonable  for  the  agency to  request  such  information and
   utilize it in its evaluation of these subfactors.  Id.
 
   Did DOE Fail to Conduct Meaningful Discussions with CDSI?
 
        CDSI  claimed  that  DOE improperly  failed  to  discuss the
   following deficiencies with  it during discussions:  (1) only    
   of its reference contracts qualified as similar in scope and size
   to  the proposed contract; and (2) CDSI's systems development and
   maintenance   manager  did  not  satisfy  one  of  the  mandatory
   requirements for this position.
 
        We agree that  DOE failed to conduct  meaningful discussions
   with CDSI in these areas.  First, DOE concluded that CDSI had a  
                       under  criterion 1 because  it had  only     
   contract which was similar in  size and scope.  CDSI received    
   out of a possible     points for this criterion.  The contracting
   officer testified that he did  not discuss this with CDSI because
   CDSI had received a score of       which was            under the
   rating plan.  Regardless of  the label applied by the contracting
   officer,  criterion 1 was a  significant part of  the evaluation,
   and the  failure  to advise  CDSI  that        of  its  reference
   contracts were  not similar in size  or scope was error.   System
   Automation Corp., GSBCA 8204-P, 86-1 BCA   18,654, at  93,817-20,
   1985 BPD   15, at 20-24.
 
 
        Similarly,  DOE  should  have  held  discussions  with  CDSI
   concerning the failure of its systems development and maintenance
   manager to meet the minimum requirements.  As we have recognized,
   the  experience  requirements  for  key  personnel  were  minimum
   mandatory requirements.
 
        Finally,  as explained more  fully below, in  the context of
   the  cost  evaluation,   DOE  conferred  an  unfair   competitive
   advantage on DynCorp by disclosing in its post negotiation letter
   of August 27, 1993, that the  Wyatt Data Survey would be utilized
   in evaluating cost realism and  that direct labor rates below the
   50th   percentile   of   that  wage   survey   would   be  deemed
   unrealistically low.
 
   Did DOE Conduct an Arbitrary and Capricious Cost Evaluation?
 
        As  a prelude  to our cost  discussion, we note  that in the
   context of a  cost reimbursement contract, the  evaluation of the
   cost  proposal  should  not  be  a  primary consideration.    FAR
   15.605(d), 48 CFR 15.605(d) (1993).   This is because, regardless
   of  the  cost  proposed,  the  Government is  bound  to  pay  the
   contractor  its  actual  and  allowable  costs.    FAR  15.605(d)
   provides:
 
             (d)   In  awarding a  cost-reimbursement contract,
        the  cost proposal  should  not be  controlling,  since
        advance estimates of  cost may not be  valid indicators
        of  final actual costs.   There is  no requirement that
        cost-reimbursement contracts be awarded on the basis of
        lowest  proposed cost,  lowest  proposed  fee,  or  the
        lowest  total proposed  cost plus  fee.   The award  of
        cost-reimbursement contracts primarily on  the basis of
        estimated  costs   may  encourage  the   submission  of
        unrealistically   low   estimates  and   increase   the
        likelihood of cost overruns.  The primary consideration
        should be which  offeror can perform the  contract in a
        manner   most  advantageous   to  the   Government,  as
        determined by the evaluation of proposals  according to
        the established evaluation criteria.
 
        In  construing this  FAR provision,  the General  Accounting
   Office recognized in AmerInd, Inc., B-248324, 92-2 CPD   85, at 4
   (Aug. 6, 1992):   "Consequently, a cost realism analysis  must be
   performed  by the  agency to  determine  the extent  to which  an
   offeror's proposed cost represents what the contract should cost,
   assuming reasonable  economy and  efficiency."   The solicitation
   here provided that  an unrealistic cost or price  proposal may be
   evidence  of  the   offeror's  lack  of  understanding   or  poor
   understanding of the project.   The solicitation continued:  "The
   cost proposal will be evaluated for determination of the probable
   cost  to the  Government  for those  offerors in  the competitive
   range . . . ."
 
 
        As  both  the  GAO  and  this  Board  have  recognized,  the
   contracting agency is in the best position to make a cost realism
   determination  and, therefore, the review of an agency's judgment
   is  limited  to  determining whether  the  agency's  cost realism
   evaluation was reasonably based.  AmerInd, at 4; SofTech, Inc. v.
   Department of the Air Force, GSBCA 11708-P, 92-3 BCA   25,080, at
   125,017, 1992 BPD   116, at 18  (". . . in general, cost  realism
   determinations are 'by their nature business judgments which call
   for  the exercise of discretion  by Government officials.'  Thus,
   unless we  find that the  exercise of this judgment  was 'clearly
   defective' we will not upset it 'even if the protester's contrary
   opinion  is   not  unreasonable.'     Program   Resources,  Inc.,
   GSBCA 8879-P, 87-2 BCA   19,816, 1987 BPD   65.").
 
        After  considering  the myriad  allegations  which CDSI  has
   raised against DOE's cost evaluation in this protest, we conclude
   that  the  agency  made  two  errors, not  in  its  cost  realism
   determination,  but  in  its  disparate  treatment  of  offerors.
   First, DOE  disclosed to  DynCorp, but not  CDSI, that  the Wyatt
   Wage Data  Survey would be used  as a standard for  assessing the
   cost realism  of direct labor  rates and that any  salaries below
   the 50th  percentile would be considered unrealistically low.  In
   so advising DynCorp,  the SEB gave DynCorp  an unfair competitive
   advantage that it did not bestow on other offerors.
 
        We  recognize  that  DynCorp had  utilized  wage  surveys to
   derive its rates and that  the SEB in disclosing this information
   was  addressing that portion of DynCorp's proposal.  Nonetheless,
   DOE went too  far in its advice  and skewed the playing  field in
   DynCorp's favor.   We further  recognize that the RFP  in general
   terms  in  paragraph  M.13 advised  offerors  that  in discussing
   professional compensation evaluation "supporting information will
   include   data  such   as   recognized   national  and   regional
   compensation surveys  . . .  ."  However, this  general statement
   does  not  come  close  to  advising  offerors  of  the  specific
   "benchmark" DOE disclosed to DynCorp.
 
        While CDSI  was told  nothing in  its discussions  regarding
   wage  surveys, DynCorp  was  told  that DOE  would  use the  50th
   percentile  of the  Wyatt Data  Survey to establish  the probable
   cost in those instances where  rates proposed were below the 50th
   percentile, and  that in the  event DynCorp failed to  submit its
   own surveys or specific employee  salaries, the DOE "will use the
   Wyatt Data Surveys  and other data deemed necessary  to establish
   the  probable  cost."   DynCorp  was  thus  given  more  specific
   guidance  regarding what direct  labor rates would  be considered
   reasonable than was CDSI.
 
        DynCorp  used this  information  regarding  the  Wyatt  Wage
   Survey at BAFO.  For the most part, DynCorp was able to correlate
   its direct  labor rates  to the  Wyatt Survey,  but in  those few
   instances where it could not,  it took great pains to distinguish
   away  the Wyatt  Survey and  explain why  its own  experience and
   other surveys were more relevant checkpoints.
 
        In  its BAFO  CDSI referenced the  Wyatt Survey  as follows:
   "Moreover,  to  ensure  the rates  are  reasonable  for  the work
   described  in the  position descriptions,  we  have compared  the
   proposed rates to applicable categories in the Mercer, Wyatt-ECS,
   Washington Personnel Association,  Washington Compensation Forum,
   and  Washington Technical Personnel  Forum surveys.   These rates
   are,  we believe,  the minimum  reasonable rates  to  attract and
   retain qualified contract personnel,  prevent loss of  continuity
   of the DOE  environment, and fulfill the requirement  of M.013 of
   the Solicitation."   Unlike DynCorp, CDSI  did not correlate  its
   wage rates primarily to the Wyatt Data Survey or distinguish that
   survey from  any of its own wage rates  which were not within the
   appropriate range of that survey.
 
        The  SEB used exclusively the Wyatt Data Survey to ascertain
   the reasonableness  of  rates.   We  believe  this  disparity  in
   treatment gave  DynCorp an unfair  competitive advantage.   As we
   recognized in Communications Network Systems, Inc. v.  Department
   of Commerce, GSBCA 12705-P, 1994 BPD   63, at 24 (Feb. 24,  1994)
   (citations  omitted),  "'[t]he   sine  qua  non   of  competitive
   negotiations, and  indeed of all  public contracting is  that all
   offerors  be  afforded an  equal opportunity  to compete.'   This
   requires   that  offerors   receive   equal  information   during
   negotiations."     Here,  the  disclosure  of  use  of  the  50th
   percentile  methodology as  well as  the identity  of  one survey
   which  would be  used  in evaluating  proposals,  gave DynCorp  a
   competitive edge.
 
        The  second element of disparate treatment in the evaluation
   of  cost proposals concerned  the use of  uncompensated overtime.
   Although                                                         
            and both offerors indicated in their proposals that they
   were not  proposing uncompensated overtime, the  agency suggested
   that  CDSI dilute  its rates  based on  its use  of uncompensated
   overtime, but did not apply the same standard to DynCorp.20
 
        Although  we  deny  the  remainder  of   CDSI's  allegations
   regarding  cost,  some  bear comment.    During  the  hearing and
   subsequent  briefing, CDSI focused  on two contentions:   (1) The
   contracting  officer's  improper  conclusion that  there  was  no
                       
   ____________________
 
        20   We recognize that  in the request  for BAFOs, DOE  left
   the treatment of uncompensated overtime  up to CDSI.  However, we
   view the pre-BAFO instructions to have influenced CDSI's proposal
   of uncompensated overtime at BAFO, and to have reasonably  caused
   CDSI to dilute its rates.
   difference between composite rates and category rates, and his   
 
                                                                    
                restricted  CDSI's  ability  to  provide  its   best
   proposal.21   (2) The  contracting  officer's misconception  that
   individuals  whose rates were used  for the development of direct
   labor rate  estimates were  the actual  individuals who  would be
   performing  work under  the contract.   CDSI  contends that  as a
   result of this  methodology, the contracting officer  forced CDSI
   to  exclude 200  personnel from  the existing ITSO  contract from
   CDSI's estimate, thus preventing CDSI from proposing its own best
   estimate  for  the  cost of  performing  the  work.   Protester's
   Posthearing Brief at 37.
 
        In  considering these allegations, we are cognizant that the
   contracting officer's  cost realism  determination should not  be
   upset unless clearly defective.  The evidence as a whole does not
   support a finding that the contracting officer insisted that CDSI
                                                                    
                                                         Rather, the
   evidence suggests that  the contracting officer took  great pains
   to ensure that those individuals whose salaries                  
                     were  actually  qualified  for  the  RFP  labor
   categories in all respects.  The RFP clearly permitted offerors  
                                                                    
                                                                  
   22  
 
                       
   ____________________
 
        21   DynCorp  argues that  CDSI's contentions  regarding its
   direct labor rate  are untimely.  We disagree.   DynCorp contends
   that  CDSI knew  the  impact of  DOE's  instructions long  before
   contract  award and  should  have  protested  before  that  time.
   Intervenor's  Posthearing Brief at 152.   Although CDSI was aware
   of the contracting officer's instructions and attempted to comply
   with them, CDSI was not aware of the way  the contracting officer
   intended to use these instructions  and how they would impact his
   evaluation.   We view CDSI's challenge regarding its direct labor
   rates as a  challenge to the evaluation and  not the instruction.
                                __________
   Therefore, the allegations are timely.
 
        22   The DCAA Audit  Manual, paragraph 9-505, Evaluation  of
   Estimated  Direct Labor Rates, recognizes that direct labor rates
   used to  estimate direct labor  costs may be at  expected average
   rates which may be either separately estimated  for each proposal
   or  pre-established for pricing  many proposals submitted  over a
   given period of time.
 
                                           Protester's   Posthearing
   Brief at 50-51.                                                  
                                                                    
                                                                    
                 Id.                                                
                     
 
        The contracting officer, on the other hand, 
 
        CDSI  has also  lodged numerous  additional  attacks against
   DOE's  instructions regarding CDSI's  preparation of  its revised
   cost proposal and its  BAFO.  In essence, CDSI contends  that the
   directives  of the contracting officer were misleading and caused
   it improperly to raise its rates  or to offer                    
   labor rates for certain RFP categories.  We do not agree that the
   record  supports  these  contentions  and,  in  the  interest  of
   judicial economy, we do  not discuss these contentions given  our
   conclusion that in two regards the agency did improperly evaluate
   CDSI's  cost proposal, thus  warranting corrective action  in any
   event.  
 
   Did DOE  Perform  an  Improper  Responsibility  Determination  of
   DynCorp?
 
        CDSI claims  that  the contracting  officer  had  inadequate
   information  on  which  to  base  an  affirmative  responsibility
   finding.   In  particular,  CDSI  alleges  that  the  contracting
   officer failed to consider that there were ongoing investigations
   involving allegations that  DynCorp falsely claimed to  have done
   work that was never completed at Ft. Belvoir.  
 
        Finally,  CDSI notes  that the  10-K  report furnished  with
   DynCorp's  proposal indicated that  in November 1991  DynCorp was
   advised that it  might be the target of possible  fraud and false
   claim  prosecution.   CDSI contends  that  because DOE  failed to
   consider information  which was  relevant to  DynCorp's integrity
   and ethical business practices, it  failed to meet its obligation
   prior to determining  that DynCorp was responsible.   Protester's
   Posthearing Brief at 98-99.
 
        DOE   and  intervenor   respond   that  the   responsibility
   determination  was  adequate  because   the  contracting  officer
   ascertained that DynCorp was not under indictment, and was not on
   GSA's list of  debarred and suspended contractors.   In addition,
   the contracting officer checked with DynCorp to see whether a new
   certification needed to be  submitted.  Respondent's  Posthearing
   Brief  at   58;   Intervenor's  Posthearing   Brief  at   164-67.
   Intervenor  persuasively  contends that  open  investigations are
   not, by themselves, reasons to find an offeror nonresponsible.  
 
        As a matter of law,  this Board has traditionally accorded a
   contracting officer's responsibility  determination deference and
   tempered  its de  novo review.    Executone Information  Systems,
   Inc.,  v. Department of Health and Human Services, GSBCA 12402-P,
   94-1 BCA   26,274, at 130,730, 1993  BPD   203, at 17.  Protester
   has  cited no statute,  regulation, or other  authority which has
   been violated by the contracting  officer in declining to rely on
   open investigations  or a  settlement.   The Federal  Acquisition
   Regulation   establishes   the   mandatory   requirements   which
   contracting  officers  must follow  in  performing responsibility
   determinations.    FAR 9.404.   Those  regulations  establish the
   GSA's list of  debarred and suspended offerors  as the checkpoint
   for  ascertaining  an offeror's  responsibility.   So long  as an
   offeror  in a  negotiated  procurement is  not on  the ineligible
   list, it is  free to submit a  proposal.  Cf.  Integrated Systems
   Group v.  Department of  the Navy,  GSBCA 12784-P (May 12,  1994)
   (offeror's  response  to   a  request  for  quotation   could  be
   considered,  even though at  the time the  response was submitted
   offeror  was on  the  debarred  and suspended  list,  so long  as
   offeror was removed from the list prior to award).
 
        Nor  was  there  any substance  to  CDSI's  contentions that
   DynCorp  lacks financial responsibility.  The contracting officer
   reviewed DynCorp's 10-K  and relied upon  a report by  DCAA.   At
   hearing, DynCorp  established that  it had  access to  sufficient
   capital to perform the ITSO  contract.  CDSI has not demonstrated
   that  DynCorp failed to  provide accurate and  complete financial
   information to the contracting officer.
   Did  DOE  Award   to  an  Offeror  Which   Had  an  Impermissible
   Organizational Conflict of Interest (OCI)?
 
 
        CDSI    contends   that    because   DynCorp's    affiliate,
   DynMcDermott, is a DOE management and operations (M&O) contractor
   responsible  for  operating  DOE's  Strategic  Petroleum  Reserve
   (SPRO) in Louisiana, there exists an impermissible organizational
   conflict of interest.  CDSI  reasons that if permitted to perform
   the  ITSO  contract  DynCorp  will  have  access  to  proprietary
   information concerning  M&O contractors,  which "may  include DOE
   evaluations, concerns, future plans, or investigations concerning
   M&O contractors  generally or  DynCorp specifically.   In  either
   case,  this information would be of value to DynCorp's commercial
   interests as  [an] M&O  contractor."   Specifically, CDSI  claims
   that the existence  of DynCorp's roles in both  the ITSO contract
   and the SPRO  contract creates an impermissible  conflicting role
   for     DynCorp     under      DOE     Acquisition     Regulation
   (DEAR) 9.09.570-4(a), which provides:
 
        Two  questions should generally be asked in determining
        whether  organizational  conflicts of  interest  exist:
        (1) Are  there  conflicting  roles which  might  bias a
        contractor's judgment in  relation to its work  for the
        Department?    (2) Is  the contractor  being  given  an
        unfair competitive  advantage based on  the performance
        of the contract?
 
   48 CFR 909.570-4(a) (emphasis added).   Citing the first question
   CDSI  contends  that  DynCorp's dual  role  might  bias DynCorp's
   judgment as the ITSO contractor concerning the confidentiality of
   M&O information.  Protester's Posthearing Brief at 92.
 
        DEAR 909.570-4(a) continues:
 
        The ultimate determination as to whether organizational
        conflicts of interest exist should be made in the light
        of common sense  and good business judgment  based upon
        the relevant facts and the work to be performed. .  . .
        Department personnel  must pay particular  attention to
        proposed  contractual requirements  which call  for the
        rendering  of  advice,  or  consultation or  evaluation
        services  or   similar  activities   that  lay   direct
        groundwork  for the  Department's  decisions on  future
        acquisitions,   research   and   development  programs,
        production and regulatory activities.
 
        Applying a common sense  approach, we believe that  CDSI has
   not met its burden of proving  there was an improper OCI in  this
   case.  DynCorp will not under the ITSO contract be evaluating any
   work performed  under the  SPRO contract.   The SPRO  contract is
   totally  unrelated  to  the  ITSO   statement  of  work,  and  is
   physically  far  removed   from  ITSO  performance.     Even  the
   contention  that   DynCorp  will  have   access  to   information
   concerning the  SPRO contract  is an  assumption.   Further,  the
   contracting  officer was aware  that DynCorp's affiliate  was the
   M&O contractor for the SPRO, but he reasonably concluded that any
   organizational  conflict of  interest  arising  due to  DynCorp's
   affiliate's M&O contract could be mitigated after award.  In sum,
   the  relationship between DynMcDermott as the SPRO M&O contractor
   and DynCorp as the ITSO contractor is too remote, and any OCI too
   speculative, to support a conclusion  of violation of statute  or
   regulation.
 
   Was DOE Biased Against CDSI?
 
 
        CDSI contends  that DOE harbored impermissible  bias against
   CDSI which permeated the conduct of the entire procurement.
 
        In  reviewing  alleged  bias,   the  Board  presumes   "that
   Government officials acting in their  official capacity do so  in
   good faith."  SMS Data Products Group, Inc., GSBCA 10587-P,  90-3
   BCA    23,034, at  115,658, 1990  BPD   141,  at 9.   A protester
   "must  come forward with  evidence to overcome  the presumption."
   Id.
 
        The  evidence  which  a  protester  must  proffer  is  quite
   substantial.    "Well-nigh  irrefragable  proof"  is required  to
   induce us to abandon  a presumption of good  faith dealing.   See
   Schaefer  v. United  States, 633  F.2d 945,  949 (Ct.  Cl. 1980);
   Trans-Atlantic Industries, Inc., GSBCA 10803,  91-1 BCA   23,412,
   at 117,458.
 
        CDSI  cites  the  following  indicia  of DOE's  bias:    the
   manifold procurement violations; the standardless methodology  of
   evaluation;  the fact that  the SEB knew  that DynCorp's proposal
   was                                                throughout the
   entire  evaluation process;  the  SEB's  acceptance of  DynCorp's
   representations regarding       even  though it could not confirm
   them; the waiver of the  minimum of three reference contracts for
   DynCorp; the          of DynCorp's score on criterion 3(b) from  
     to      without any change in its proposal; the  downgrading of
   CDSI's proposal for  not having  features it  liked in  DynCorp's
   proposal like the                                       the SEB's
   discussions with  DynCorp about        23 and lack  of discussion
   with CDSI about the         contracts; the contracting  officer's
   testimony  at  hearing  that  CDSI  was  being  investigated  for
   fraudulent  billing; his testimony regarding bait and switch; and
   the SEB's destruction of all of its notes.
 
        CDSI  goes  on  to  allege  evidence of  bias  in  the  cost
   evaluation,  such as  the  disparate  treatment of  uncompensated
   overtime,  mischaracterization of the DCAA audits, the failure to
   advise   CDSI  about  the  Wyatt  Data  Survey,  the  contracting
                       
   ____________________
 
        23   We did not  reach this contention given  our conclusion
   that DOE was required to conduct discussions with CDSI  regarding
   the                
   officer's characterization  of CDSI  as "argumentative," and  the
   failure of the contracting officer to consider CDSI's response to
   the DCAA audit  letter because it was marked  draft.  Protester's
   Posthearing  Brief   at  103-05.     Although   this  litany   of
   allegations, some of  which we have accepted, is  suggestive of a
   flawed   procurement,   it   does   not   constitute   "well-nigh
   irrefragable proof" of bias, and the Board does not conclude that
   bias tainted the award process.
 
   Was there Impermissible Technical Transfusion/Leveling?
 
 
        CDSI claims that DOE provided DynCorp with and  that DynCorp
   obtained  source  selection  information,  procurement  sensitive
   information, and proprietary information pertaining to CDSI prior
   to  award.   CDSI cites  its organizational  chart and  documents
   indicating its current subcontractors and task assignments.
 
        This argument fails for several reasons.  First, there is no
   proof that DOE provided DynCorp with the organizational chart and
   related documents.  The  record suggests only that  the documents
   mysteriously  appeared in DynCorp's  proposal room.   Second, the
   documents  were  disseminated  to  hundreds  of  CDSI  employees,
   approximately one hundred of whom have left the contract.  Third,
   and most importantly,  the documents were not used  by DynCorp in
   this procurement in any way.  As DynCorp's administration manager
   testified, the organization  depicted by CDSI was  different from
   that called for by the RFP.  Thus, there has been no violation of
   statute or regulation  in the context of this  procurement and no
   prejudice to CDSI in this procurement.
 
                                Decision
 
        The protest is GRANTED IN  PART.  Specifically, Counts 1, 4,
   8, 11, 12,  13, 15, and 16 are  DENIED; Counts 2, 3, 5,  6, and 7
   are GRANTED; Counts 9 and 10 are GRANTED IN PART.
 
        Our suspension  of  the agency's  delegation of  procurement
   authority lapses by its terms.
 
        The  Board  is  unable to  ascertain  whether  the awardee's
   proposal was properly  determined to have the best  value or not.
   Since additional discussions must be held, another round of BAFOs
   must be submitted and evaluated.  Because  this evaluation should
   begin on  a clean slate, unaffected by  this particularly intense
   and  difficult litigation process, we direct the establishment of
   a  new source  evaluation  board.    See  Communications  Network
   System, Inc. v.  Department of Commerce, GSBCA 12705-P,  1994 BPD
     63,  at  27  (Feb. 24,  1994);  Denro,  Inc.  v. Department  of
   Transportation, GSBCA 11736-P-R, 1992  BPD   381 (Aug. 31, 1992).
   The SSO need not be replaced.
 
        The  new   SEB  shall  establish  objective   standards  for
   ascertaining  strengths,   weaknesses,  and  the   import  of   a
   designation  of a "significant" strength or weakness.  Similarly,
   the  SEB shall  establish objective  baseline-type  standards for
   determining  similarity in  size  and  scope  for  the  reference
   contracts.
 
 
        We strongly  recommend,  but  do not  order,  that  the  DOE
   rethink  its  policy  of  permitting  wholescale  destruction  of
   individual  evaluators'  notes  during  the   evaluation.    This
   prevents a reviewer such as the SSO from ascertaining whether the
   consensus   ratings  bear   any   relationship  to   independent,
   individual  evaluations.   Preserving the  individual evaluators'
   worksheets would enhance the accountability of the process.
 
        Next, the  SEB  must begin  anew  to perform  its  reference
   checks for CDSI's     contracts and DynCorp's            and     
   contracts and to  rescore criteria 1 and  2.  The SEB  shall also
   reanalyze  proposals  with  regard to  the  use  of uncompensated
   overtime  and treat  all offerors  equally.   After  reevaluating
   proposals in that fashion, the SEB shall engage in discussions as
   necessary, and disclose to all  offerors the standard it will use
   in the evaluation  of cost BAFOs.   The SEB  shall then call  for
   another round of BAFOs and proceed in accordance with statute and
   regulation.
 
        We recognize that the  empaneling of a new SEB may cause the
   agency inconvenience.   Nonetheless, after careful consideration,
   we conclude that this is the only  manner in which to ensure that
   further competition is on an equitable basis.
 
                                      _____________________________
                                      MARY ELLEN COSTER WILLIAMS
                                      Board Judge
 
   We concur:
 
 
 
   ____________________________       ____________________________
   STEPHEN M. DANIELS                 ALLAN H. GOODMAN
   Board Judge                        Board Judge