United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

DOCUMENT FOR PUBLIC RELEASE 

The decision issued on the date below was subject to a 

GAO Protective Order. This redacted version has been 

approved for public release. 

 

Decision 

Matter of: Serco Inc. 

File: B-405280 

Date: October 12, 2011 

Marcia G. Madsen, Esq., Andrew A. Nicely, Esq., David F. Dowd, Esq., Polly A. Myers, 

Esq., and Cameron Hamrick, Esq., Mayer Brown LLP, for the protester. 

Ronald S. Perlman, Esq., William M. Pannier, Esq., and Oliya S. Zamaray, Esq., 

Holland & Knight LLP, for Capstone Corporation, the intervenor. 

Capt. Joon K. Hong, and Allen E. Sebastian, Esq. Department of the Army, for the 

agency. 

Jonathan L. Kang, Esq., and James A. Spangenberg, Esq., Office of the General 

Counsel, GAO, participated in the preparation of the decision. 

DIGEST 

1. Protest challenging agency’s evaluation of awardee’s proposed staffing levels is 

denied where the agency’s estimate for the required staffing was reasonable, and the 

awardee’s staffing was consistent with agency’s estimate. 

2. Protest alleging unequal treatment by the agency with regard to the offerors’ 

proposed staffing is denied where the record shows that the protester could not have 

been prejudiced by the alleged unequal evaluations and discussions. 

DECISION 

Serco Inc., of Reston, Virginia, protests the award of a contract to Capstone 

Corporation, of Alexandria, Virginia, by the Department of the Army, under request 

for proposals (RFP) No. W9124D-11-R-0009, for personal effects (PE) processing 

services for the Army Human Resource Command. Serco argues that the Army 

unreasonably evaluated Capstone’s proposed staffing levels, misled the protester 

during discussions, and treated the offerors unequally during discussions and 

proposal evaluations. 

We deny the protest. 
BACKGROUND 

The RFP was issued on March 2, 2011, and was amended once. The solicitation 

sought proposals to provide support for the Joint Personal Effects Depot (JPED) at 

Dover Air Force Base, Delaware. JPED’s mission is to “receive, safeguard, inventory, 

store, process and make final disposition of personal effects . . . of all killed, injured, 

medically-evacuated or missing Department of Defense (DOD) personnel resulting 

from overseas contingency operations.” RFP, Performance Work Statement (PWS), 

¶ 1.1. In addition to processing PE, the contractor will also be required to process 

“forensic” cases, which involve digital media items, and to photograph each 

processed item. 

The RFP anticipated award of a fixed-price contract with a 1-month phase-in period, 

an 11-month base period, and four 1-year options. Offerors were advised that they 

would be evaluated on the basis of price, and the following non-price factors: 

(1) mission capability, (2) past performance, and (3) small business participation. 

The mission capability factor had three equally-weighted subfactors: (1) staffing 

plan, (2) management plan, and (3) experience. For purposes of award, the 

solicitation stated that the mission capability and past performance factors were of 

“approximately equal” weight, were “significantly more important” than the small 

business participation factor, and that the non-price factors, when combined, were 

“significantly more important” than price. RFP at 46. 

The RFP stated that offerors’ proposals were required to identify each Service 

Contract Act (SCA) labor category for the labor positions under which staff would 

perform, and provide information concerning the wage rates, and the burdened and 

unburdened labor rates, that apply to the positions. RFP at 28. The RFP included 

SCA wage rates, that would apply to the contract. Id. at 51-57. The RFP also 

provided historical workload data from January 2008 until January 2011. RFP, 

Technical Exhibit (TE) No. 2. 

Serco has been the incumbent contractor for the PE contract at the JPED since 2004. 

Protest at 7. The protester was awarded the most recent contract, which is a laborhour contract, on July 29, 2008. Under the incumbent contract, Serco was initially 

authorized to provide up to 98 full-time equivalent (FTE) personnel to perform the 

work. Protester’s Comments at 6 n.2; Agency Report (AR), Tab 21, Initial SSEB 

Report, at 6. As discussed in more detail below, the agency issued a “reach-back 

order” in September 2010, which required Serco to provide additional staffing to 

address a backlog in uncompleted work and an anticipated increase in the 

workload.1

 Supp. AR, Tab 5, Reach-Back Order, at 5. 

 

1

 The incumbent contract expired on July 31, 2011; the contract is currently being 

performed by Serco under a sole-source order to provide continued performance 

during this protest. Contracting Officer (CO) Statement at 1. 

Page 2 B-405280 
The Army received five proposals in response to the RFP by the closing date of 

April 7, 2011. As relevant here, Serco proposed performing the work with [deleted] 

FTEs, and Capstone initially proposed performing the work with [deleted] FTEs. 

AR, Tab 5, Capstone Initial Proposal, vol. III, at 9; Tab 7, Serco Initial Proposal, vol. 

III, at 2. The agency source selection evaluation board (SSEB) evaluated each 

offeror’s proposal, and assigned ratings for the proposals. As relevant here, the 

agency evaluated the offerors’ staffing plans in part by comparing the proposed FTE 

levels to the independent government estimate (IGE) prepared for this procurement. 

The ratings for the protester and intervenor were as follows: 

SERCO CAPSTONE 

MISSION CAPABILITY ACCEPTABLE GOOD 

Staffing Plan Good Good 

Management Plan Acceptable Good 

Experience Marginal Excellent 

PAST PERFORMANCE ADEQUATE EXCELLENT 

SMALL BUSINESS 

PARTICIPATION GOOD GOOD 

PRICE $[deleted] $[deleted] 

AR, Tab 8, Prenegotiation Objective Memorandum (POM), at 6. 

Following the initial evaluations, the Army conducted several rounds of discussions 

with the offerors as further detailed below. After receiving offerors’ proposal 

revisions, the agency SSEB revised its evaluation. The final ratings for the protester 

and intervenor were as follows: 

SERCO CAPSTONE 

MISSION CAPABILITY EXCELLENT EXCELLENT 

Staffing Plan Excellent Excellent 

Management Plan Good Good 

Experience Excellent Excellent 

PAST PERFORMANCE EXCELLENT EXCELLENT 

SMALL BUSINESS 

PARTICIPATION GOOD GOOD 

PRICE $[deleted] $27,814,014 

AR, Tab 17, Source Selection Decision (SSD), at 3. 

Page 3 B-405280 
The CO for the procurement also served as the source selection authority. The CO 

concluded that Serco and Capstone were the most highly-rated offerors. In 

comparing the proposals, the CO noted that the SSEB found that “[w]hile [Serco] 

proposes . . . [deleted] FTE’s [more] than [Capstone], the . . . proposed staffing for 

both Offerors was Excellent and demonstrated a strong understanding of the 

requirement and ability to meet the projected workloads in a timely manner.” Id. 

at 3-4. The CO also noted that the SSEB “found that both [Serco and Capstone] 

proposed strong key personnel exhibiting knowledge of PE processes and 

procedures as well as offering knowledgeable and experienced individuals.” Id. at 4. 

The CO concluded that, because the offerors’ proposals received “equivalent 

technical ratings,” Capstone’s lower price was the deciding factor that merited award 

to that offeror. Id. at 4-5. The Army notified Serco of the award on June 27, and this 

protest followed. 

DISCUSSION 

Serco argues that the Army’s evaluation of Capstone’s proposal was flawed under 

the staffing plan subfactor based on the agency’s use of an unreasonable estimate for 

the number of FTEs required to perform the work. The protester also argues that 

the agency misled it during discussions concerning its proposed staffing, and 

evaluated the offerors unequally under the staffing plan subfactor. For the reasons 

discussed below, we find no basis to sustain the protest.2

Evaluation of Capstone’s Proposed Staffing 

First, Serco contends that the IGE prepared by the agency and used in the evaluation 

of offerors’ proposals was unreasonable because it failed to accurately reflect the 

level of effort that will be required to process PE cases under the contract. 

Specifically, the protester argues that the agency’s IGE unreasonably disregarded the 

staffing levels required by the reach-back order under the incumbent contract. 

The evaluation of an offeror’s proposal is a matter within the agency’s discretion. 

IPlus, Inc., B-298020, B-298020.2, June 5, 2006, 2006 CPD ¶ 90 at 7, 13. A protester’s 

mere disagreement with the agency’s judgment in its determination of the relative 

merit of competing proposals does not establish that the evaluation was 

 

2

 Serco raises other collateral issues. For example, the protester contends that the 

agency failed to evaluate the reasonableness of Capstone’s proposed price. 

Capstone, however, proposed a lower price than Serco; thus the protester could not 

have been prejudiced by the agency’s price reasonableness evaluation, as such an 

evaluation examines whether an offeror’s proposed price is too high, as opposed to 

too low. DB Consulting Group, Inc., B-401543.2, B-401543.3, Apr. 28, 2010, 2010 CPD 

¶ 109 at 8. We have reviewed all of the arguments raised by Serco, and conclude that 

none provides a basis to sustain the protest. 

Page 4 B-405280 
unreasonable. VT Griffin Servs., Inc., B-299869.2, Nov. 10, 2008, 2008 CPD ¶ 219 at 4. 

In reviewing a protest against an agency’s evaluation of proposals, our Office will not 

reevaluate proposals, but instead will examine the record to determine whether the 

agency’s judgment was reasonable and consistent with the stated evaluation criteria 

and applicable procurement statutes and regulations. Shumaker Trucking & 

Excavating Contractors, Inc., B-290732, Sept. 25, 2002, 2002 CPD ¶ 169 at 3. 

To resolve this issue, we will first review the staffing-level history under the 

predecessor contract, the IGE, and the proposals submitted. 

As discussed above, Serco was the incumbent contractor for the JPED contract. The 

protester began performing the requirement in July 2008, under a labor-hour contract 

with a maximum authorized FTE level of 98 FTEs. 

In August 2010, an Army contracting officer’s representative (COR) prepared a 

memorandum for the CO concerning a backlog in work at the JPED. The COR noted 

that Serco had not been providing the full level of 98 FTEs authorized for the JPED 

contract. The COR further stated that “[t]he shortage of personnel is causing a 

backlog of work at the JPED . . . [and] is leading SERCO to unjustified overtime so 

they can compensate their personnel who have worked extended hours to attempt to 

cover the backlog.” Supp. AR, Tab 4, at 1. The COR recommended that the agency 

exercise the “reach-back” provisions of the contract, which requires the contractor 

to provide additional staffing on short notice, in order to address the backlog. Id. 

On September 30, the Army issued a 10-month reach-back order directing Serco to 

provide up to 47 additional FTEs to address the backlog of work; this order raised 

the authorized staffing limit from 98 to 145 FTEs. Supp. AR, Tab 5, Reach-Back Task 

Order. 

On November 10, the Army prepared its initial IGE for this RFP, which addressed the 

estimated costs and staffing levels required to perform the contract. The initial IGE 

assumed that the work would require 99 FTEs, as well as 47 additional FTEs to 

perform reach-back work. Supp. AR, attach. 1, Initial IGE, Nov. 10, 2010. On 

January 25, 2011, the agency prepared a revised IGE, which deleted the reach-back 

order staffing levels, and reduced the non-reach-back staffing levels to 98 FTEs. 

Supp. AR, attach. 3, Revised IGE, Jan. 25, 2011. This IGE was finalized on 

February 3, with the same 98 FTE assumption. Id. 

The Army states that the reach-back staffing was deleted from the IGE because the 

enhanced levels of performance were not anticipated to be required under the new 

contract. In this regard, the CO states that part of the increased workload was the 

result of the backlog created during Serco’s performance, the agency assumed that 

the reach-back order represented a temporary staffing level that would not be 

required for the new contract. In this regard, the CO states as follows: 

The Agency included workload data for 2008, 2009, and 2010 in the 

current Solicitation to enable offerors reviewing the workload data to 

Page 5 B-405280 
determine potential risk of surges along with information related to a 

potential drawdown of U.S. troops. Therefore inclusion of temporary 

reach-back costs in the current government estimate was not 

appropriate, especially in light of the fact that the surge was temporary. 

These types of contingency costs would be factored in by the offerors 

when pricing their fixed-price proposals. 

CO Supp. Statement, Aug. 30, 2011, at 1-2. 

The RFP, issued on March 2, 2011, provided data concerning the PE cases received 

from January 2008 through January 2011. The chart below provides the data 

available in the RFP, as well as data provided by the agency, which was not available 

in the RFP and was provided during the development of this protest: 

Date3

PE 

Cases4Backlog5FTEs6Date 

PE 

Cases Backlog FTEs 

Jan-08 272 Oct-09 264 97 

Feb-08 289 Nov-09 272 96 

Mar-08 189 Dec-09 209 96 

Apr-08 320 Jan-10 211 97 

May-08 221 Feb-10 157 96 

Jun-08 245 Mar-10 219 96 

Jul-08 291 Apr-10 218 95 

Aug-08 204 May-10 148 94 

Sep-08 216 Jun-10 244 91 

Oct-08 171 94 Jul-10 284 68 87 

Nov-08 127 95 Aug-10 348 83 86 

Dec-08 124 92 Sep-10 324 142 92 

Jan-09 175 89 Oct-10 341 157 107 

Feb-09 196 85 Nov-10 322 242 132 

 

3

 The RFP provided data through January 2011; the later data were provided by the 

agency in its report on the protest. 

4

 “PE Cases” represents cases received. 

5

 The backlog data was not provided in the RFP; this data was provided by the 

agency during the course of the protest. As noted above, the backlog order data 

commenced in July 2010. 

6

 “FTEs” represents the average number of FTEs present during the month. The FTE 

data were not provided in the RFP; these data were provided by the agency during 

the protest. The agency did not provide data for the months prior to October 2008; 

however, Serco was authorized to use no more than 98 FTEs during this time. 

Page 6 B-405280 
Mar-09 173 83 Dec-10 365 209 139 

Apr-09 160 83 Jan-11 414 149 142 

May-09 125 81 Feb-11 304 80 145 

Jun-09 177 80 Mar-11 291 41 141 

Jul-09 171 79 Apr-11 281 24 127 

Aug-09 172 91 May-11 268 129 

Sep-09 307 95 Jun-11 285 127 

RFP at TE 2; Supp. AR, Tab 2, Staffing Headcounts, at 1-9; Agency Response to GAO 

Question, Sept. 23, 2011, at 1-2.7

Serco’s proposal assumed that the JPED contractor would be required to process an 

average of 234 PE cases per month.8

 Serco’s proposal stated that it would provide 

[deleted] FTEs to perform the work.9

 AR, Tab 7, Serco Initial Proposal, vol. III, at 3. 

Capstone’s proposal assumed that the JPED contractor would be required to process 

an average of 282 PE cases per month. AR, Tab 5, Capstone Initial Proposal, vol. III, 

at 7. Capstone based its assumption by averaging the PE case data for the most 

recent 12 months identified by the RFP, i.e., February 2010 through January 2011. Id.

Capstone’s initial proposal stated that it would provide [deleted] FTEs to perform 

the work. Id. Following discussions with the agency, during which the agency 

expressed the concern that Capstone had not proposed a sufficient number of 

processing lines (i.e., groups to perform PE review), the awardee stated that it would 

increase the number of lines from [deleted] to [deleted], thereby adding [deleted] 

FTEs and increasing its overall staffing level to 105 FTEs. AR, Tab 10, Capstone 

Discussions Response, at 3. The agency concluded that the awardee’s response 

addressed the concern. AR, Tab 16, PNM, 

at 6. 

 

7

 Although the solicitation did not explicitly state that offerors were required to base 

their proposals on the workload data provided in the RFP, the agency states that it 

expected offerors to do so, and the offerors’ proposals each based its assumption on 

part or all of the workload data. CO Supp. Statement, Aug. 30, 2011, at 1-2. 

8

 Based upon review of the record, it appears that the protester based its 

assumptions by averaging the PE case data for all of the months identified in the 

RFP, i.e., January 2008 through January 2011, given that this average is 234 FTEs. 

9

 As addressed in more detail below, Serco also reclassified certain of its personnel 

positions during discussions to address the Army’s concern that the protester had 

placed SCA-covered staff in inappropriately-low SCA wage categories. AR, Tab 14, 

Serco Discussions Response, June 6, 2011, at 1-2. 

Page 7 B-405280 
Serco protests that Capstone’s proposed staffing of 105 FTEs was unacceptable and 

that an IGE reflecting a staffing level of 98 FTEs was not a reasonable measure to 

judge the adequacy of Capstone’s proposed staffing. Serco contends that the 

agency’s issuance of the reach-back order should be viewed as an acknowledgement 

that the PE workload had increased to levels that required a higher level of FTEs 

than the 98 FTEs reflected in the IGE and initially authorized under the incumbent 

contract. In effect, the protester argues that the reach-back order represented a 

change to the anticipated level of performance for the JPED contract that should 

have been reflected in the IGE. Specifically, the protester argues that the workload 

reflected in the RFP requires offerors to address how they will process “400 or more 

PE cases” per month and that the IGE of 98 FTEs and Capstone’s proposal of 

105 FTE’s were both unacceptably low.10 Protester’s Comments at 7-8; Protester’s 

Supp. Comments at 8-9. 

These contentions are not consistent with the assumptions stated in Serco’s 

proposal, however. Rather, as discussed above, Serco assumed that it would be 

required to perform 234 PE cases per month--apparently based on the staffing 

assumptions on the full 37-month period reflected in the RFP workload data, 

including the 10-month reach-back period from October 2010 through July 2011. 

This assumption is considerably lower than the workload data in the RFP for 

reach-back order period (October 2010 to January 2011), which indicate that an 

average of 360 PE cases was received each month. See RFP at TE 2. 

Moreover, as discussed above, the Army assumed that the backlog experienced 

during Serco’s performance of the incumbent contract would be resolved. See CO 

Supp. Statement, Aug. 30, 2011, at 1-2. In fact, the backlog was eliminated by Serco 

by the completion date for the contract. Response to GAO Question, Sept. 23, 2011, 

at 1-2. The Army also assumed that the higher levels of PE cases received during the 

reach-back period would not continue. See CO Supp. Statement, Aug. 30, 2011, 

at 1-2. In fact, the record shows that the number of PE cases declined over the final 

3 months of the contract to 281, 268, and 285 cases per month. These numbers are 

closer to the range of the performance levels assumed by Serco (234) and Capstone 

(282) for the JPED contract, than to the average of 360 cases experienced under the 

reach-back order from October 2010 through January 2001, or the “400 or more PE 

cases” per month alleged in the protest. Protester’s Comments at 7-8; RFP at TE 2; 

Agency Response to GAO Question, Sept. 23, 2011, at 1-2. 

Serco’s proposal assumption that the JPED contract will be required to process only 

234 PE cases per month also undercuts its challenge to the reasonableness of the 

 

10 Our decision addresses the protester’s argument concerning the overall number of 

FTEs in the context of the PE case workload. The protester does not argue that the 

forensic workload has changed as a result of the reach-back order, or has otherwise 

changed in a way that renders the IGE unreasonable. 

Page 8 B-405280 
IGE, particularly in light of the protester’s performance on the incumbent contract. 

The data show that for 9 of the 30 months before Serco began to experience a 

backlog and was authorized to increase its FTE levels (January 2008 – June 2010), 

the company was able to address more PE cases than what its proposal assumes 

would be required under the current award.11 Specifically, during the period that 

Serco was limited to no more than 98 FTEs, the protester met the following levels of 

performance for processing of PE cases: 272 cases (Jan-08), 289 cases (Feb-08), 

320 cases (Apr-08), 245 cases (Jun-08), 291 cases (Jul-08), 307 cases (Sep-09), 

264 cases (Oct-09), and 272 cases (Nov-09). See RFP at TE 2; Supp. AR, Tab 2, 

Staffing Headcounts, at 1-9. 

In sum, we do not think the record supports the protester’s argument that the 

requirements for the JPED contract, as identified by the workload data set forth in 

the RFP, could not be performed with the 98 FTEs identified in the IGE or the 

105 FTEs proposed by Capstone. 

Serco also argues that the Army’s evaluation of Capstone’s proposed staffing was 

unreasonable with regard to the awardee’s approach to meet surges in requirements 

for supporting the JPED, as required by the PWS. See RFP, PWS, ¶¶ 1. Capstone’s 

proposal discussed its understanding of the possibility of “surges” and “spikes” in the 

workload, and stated that its proposed approach of cross-training staff would 

provide the ability to address such increased requirements. AR, Tab 5, Capstone 

Initial Proposal, vol. III, at 7. During discussions, the agency asked Capstone to 

address the following weakness: “[Y]ou state [deleted] processing lines would be 

sufficient to handle the workload. Concern is made as to whether this is a sufficient 

number to support a fluctuation.” AR, Tab 9, Capstone Discussions, May 26, 2011, at 

1. In response to discussions, Capstone stated that it would [deleted], increasing the 

number of processing lines from [deleted] to [deleted], and thereby increasing 

Capstone’s overall FTE level from [deleted] to 105. AR, Tab 10, Capstone’s 

Discussions Response, June 2, 2011, at 2. The awardee stated that this change would 

enable it to handle “fluctuations” in the increased requirements of up to 440 PE cases 

per month. Id. at 3. 

The Army’s rating for Capstone under the staffing plan subfactor did not rely on the 

awardee’s overall FTE level alone. Instead, the agency concluded that Capstone’s 

proposal merited significant strengths under the staffing plan subfactor based on the 

number of PE inspection lines proposed, and the number of staff trained to use the 

agency’s Defense Casualty Information Processing System (DCIPS), which is used to 

 

11 We also note that Serco began to experience a backlog in cases at a time when it 

was staffing the effort with 10 fewer FTEs than authorized under its contract. Supp. 

AR, attach. 2, Staffing Headcounts, at 1-9. 

Page 9 B-405280 
log data for the JPED. AR, Tab 16, PNM, at 5-6. These strengths gave the agency 

confidence that Capstone could successfully perform the contract at its proposed 

staffing level. Id.

Although the protester argues that the agency should have pressed for more details 

from Capstone concerning its technical approach, or should not have relied on the 

level of details provided in the awardee’s proposal and response to discussions, this 

disagreement with the agency’s judgment does not provide a basis to sustain the 

protest. 

Discussions and Unequal Treatment 

Serco argues that the Army’s evaluation of its proposal under the staffing plan factor 

was unreasonable because the agency conducted misleading discussions, and also 

treated the protester and intervenor unequally during evaluations. For the reasons 

discussed below, we conclude that these arguments provide no basis to sustain the 

protest. 

Misleading discussions

Serco argues that the Army misled it during discussions concerning its staffing by 

requesting that the protester adjust its labor mix, which resulted in the protester 

increasing its proposed price. This argument is based on the agency’s initial 

evaluation conclusion that Serco’s proposal had the following weakness: 

Weakness: Seems to have a limited labor mix. [Deleted] people and 

[deleted] are listed as [deleted], but [deleted] pay is more than 

[deleted] pay. [Deleted] makes less than a [deleted] as well. Some 

supervisory position[s] appear to be cross-trained for the [deleted] 

position. 

AR, Tab 8, POM, at 10. During discussions, the Army advised Serco that its 

proposal’s response to the staffing plan subfactor had the following weakness: “The 

proposed labor mix appears very limited; the most notable are [deleted] and 

[deleted], who are categorized as [deleted].” AR, Tab 13, Serco Discussions, May 26, 

2011, at 1. 

In response to the discussions question, the protester stated that “Serco Inc. has 

elected to alter its staffing plan in order to strengthen the labor mixture.” AR, 

Tab 14, Serco Discussions Response, June 6, 2011, at 1. Specifically, the protester 

explained that it reduced [deleted] FTEs for [deleted] to [deleted] FTEs, reducing a 

[deleted] position from [deleted] to [deleted] FTEs, and increased the [deleted] 

position [deleted]. The protester further explained that because “the pay rates of the 

[deleted] positions are higher than that of the [deleted] position in the Wage 

Determination, employees performing this mission will also be able to [deleted].” Id. 

Page 10 B-405280 
Finally, Serco stated that “[a]s a result, the price will increase by approximately 

$[deleted].” Id. 

The agency’s evaluation of Serco’s response to the discussion question concluded 

that the weakness had been addressed. The agency noted that “[t]he Offeror 

appeared to have a limited labor mix [because] [deleted] were all classified as 

[deleted].” AR, Tab 16, PNM, at 8. The agency found that Serco’s response to the 

discussions question “addressed the limited labor mix used in their staffing plan and 

adjusted for appropriate pay” by “[deleted]” and stating that “[deleted] will be crosstrained as [deleted].” Id. Based on these changes, the agency concluded that the 

protester has addressed “discrepancy in pay,” and further concluded that “[t]hese 

changes and significant strengths identified in the initial evaluation justify a change 

to ‘Excellent’” under the staffing plan subfactor. Id. 

The protester contends that the agency’s discussions were misleading because they 

caused it to raise its price, despite the fact that its price was already higher than 

Capstone’s proposed price. 

The Federal Acquisition Regulation (FAR) requires agencies to conduct discussions 

with offerors in the competitive range concerning, “at a minimum . . . deficiencies, 

significant weaknesses, and adverse past performance information to which the 

offeror has not yet had an opportunity to respond.” FAR § 15.306(d)(3). 

Discussions, when conducted, must be meaningful; that is, they may not mislead 

offerors and must identify proposal deficiencies and significant weaknesses that 

could reasonably be addressed in a manner to materially enhance the offeror’s 

potential for receiving award. Lockheed Martin Corp., B-293679 et al., May 27, 2004, 

2004 CPD ¶ 115 at 7. 

We think that the agency’s discussions were not misleading, as they meaningfully 

advised the protester of the agency’s concern regarding its proposed staffing, and 

permitted the protester to revise its proposal in a way that improved its prospect for 

award. In this regard, the protester’s response to the discussions question resulted 

in the agency’s elimination of the weakness for the protester’s proposal, and an 

increase in Serco’s score for staffing plan subfactor from good to excellent. 

In any event, even if the agency had improperly led the protester into increasing its 

price, there is no possibility that Serco could have been prejudiced by the agency’s 

actions. In this regard, the protester stated in its discussions response that the 

changes to its staffing increased its costs by only $[deleted]. AR, Tab 14, Serco 

Discussions Response, June 6, 2011, at 1. Where, as here, an agency’s discussions 

are alleged to be misleading as to price or cost, our Office will not sustain the protest 

where the protester’s and awardee’s proposal were rated equal and the protester’s 

price or cost would have still remained lower than the awardee’s in the absence of 

Page 11 B-405280 
the disputed discussions.12

 See L-3 Sys. Co., B-404671.2, B-404671.4, Apr. 8, 2011, 

2011 CPD ¶ 93 at 16. Here, any adjustment to this relatively minor element of cost 

could not effect the result of the competition, in light of the more than $[deleted] 

difference between the offerors’ proposed prices. 

Unequal evaluations

Next, Serco argues that the Army treated offerors unequally by finding that its labor 

mix was limited, but not finding that Capstone’s labor mix was also limited. Serco 

notes that its proposal designated [deleted] discrete labor positions, and contends 

that its proposal provided detailed descriptions of each position and how it related 

to the relevant SCA labor category. In contrast, the protester notes that Capstone 

proposed only [deleted] discrete labor positions, and contends that the awardee 

provided fewer details concerning those positions than Serco. For this reason, the 

protester contends that, to the extent that the agency viewed Serco’s labor mix as 

“very limited,” the awardee’s labor mix should have been considered even more 

limited and Capstone should have been assessed a significant weakness. 

The Army responds that the concern raised in discussions with Serco did not relate 

to the number of labor categories or the details regarding those categories, as alleged 

by the protester. Instead, the agency states that the concern related to the 

designation of personnel, most notably [deleted] and [deleted], as [deleted], which 

were lower-paid categories under the SCA wage determination. CO Statement 

at 15-16; see also AR, Tab 21, Initial SSEB Report, Apr. 21, 2011, at 6 (“Weakness: 

Some positions seem to be mislabeled.”) 

The protester argues that the agency’s argument is not supported by the record, 

because the discussion question related to a “limited labor mix,” rather than the 

designation of personnel under the SCA wage determination. As discussed above, 

however, the protester clearly understood that agency’s question related to the 

classification of [deleted] and [deleted] under different SCA categories; indeed, 

Serco’s response directly addressed the reclassification of personnel performing 

these positions. AR, Tab 14, Serco Discussions Response, June 6, 2011, at 1. The 

Army accepted the protester’s response as addressing the concern, removed the 

weakness from the evaluation, and increased Serco’s rating for the staffing approach 

subfactor to the highest rating of excellent. AR, Tab 16, PNM, at 8. 

 

12 Our Office will not sustain a protest unless the protester demonstrates a 

reasonable possibility that it was prejudiced by the agency’s actions, that is, unless 

the protester demonstrates that, but for the agency’s actions, it would have had a 

substantial chance of receiving the award. McDonald-Bradley, B-270126, Feb. 8, 

1996, 96-1 CPD ¶ 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. 

Cir. 1996). 

Page 12 B-405280 
On this record, we find no basis to conclude that the agency assessed a weakness 

based on the number or diversity of labor categories proposed by Serco or that the 

agency treated the offerors unequally by not assessing a weakness for Capstone 

based on its proposal of fewer labor categories than Serco. 

Serco further argues that the agency unreasonably identified a strength for 

Capstone’s approach of using [deleted] percent of its proposed FTEs for PE 

inspection. AR, Tab 8, POM, at 6. The protester argues that it was unreasonable to 

give credit to the awardee for placing a high number of personnel into a limited 

number of labor categories, in light of the agency’s concern that Serco’s use of a 

higher number of labor categories represented a “very limited labor mix.” Again, we 

think that the record shows that the agency did not assess a weakness for Serco 

based on the number of labor categories proposed--as evidenced by the protester’s 

discussions response and the agency’s revised evaluation--and there is, accordingly, 

no evidence of unequal treatment by the agency concerning this matter. 

Finally, the protester argues that since Serco was required to address the 

classification of [deleted] and [deleted] during discussions, the agency should have 

had the same concerns regarding Capstone’s classification of these positions. In this 

regard, the protester contends that because the awardee did not separately designate 

these positions in its proposal, they would have to be performed under one of the 

broader “personal effects specialist” categories, which correspond to the “general 

clerk I, II, and III” SCA wage rate categories, and which have lower SCA wage rates 

than [deleted] or [deleted].13 See AR, Tab 5, Capstone Initial Proposal, vol. III, at 8-9. 

While it appears that the agency’s evaluation did not consider that the awardee had 

proposed broad labor categories that did not have the same rate of pay as [deleted] 

and [deleted], here too Serco was not prejudiced by the Army’s evaluation. As 

indicated above, Serco’s correction of the weakness identified by the agency 

concerning its designation of [deleted] and [deleted] required the protester to 

increase its proposed price by $[deleted]. The protester has provided 

 

13 Serco’s initial protest and comments on the agency report focused on [deleted] and 

[deleted]. In its comments on the supplemental agency report, Serco argued that a 

broader range of positions should have been questioned. See Protester’s Supp. 

Comments at 33-37. Because these additional arguments were not raised within 10 

days of when Serco knew or should have known of the basis for the arguments, we 

dismiss them as untimely. Bid Protest Regulations, 4 C.F.R. § 21.2(a)(2). In any 

event, the protester does not demonstrate that revising the rates associated with the 

other positions could have possibly affected the $[deleted] difference between the 

offerors’ proposed prices. 

Page 13 B-405280 
Page 14 B-405280 

no basis to conclude that a similar correction in the awardee’s proposal would result 

in a price increase that could offset Capstone’s $[deleted] price advantage. 

The protest is denied. 

Lynn H. Gibson 

General Counsel