United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

 

Decision 

Matter of: Serco, Inc. 

File: B-406683; B-406683.2 

Date: August 3, 2012 

Richard J. Webber, Esq., Judith B. Kassel, Esq., and Patrick R. Quigley, Esq., Arent 

Fox LLP, for the protester. 

Anne B. Perry, Esq., Jonathan s. Aronie, Esq., Ryan E. Roberts, Esq., and Cheryl 

A. Palmeri, Esq., Sheppard Mullin Richter & Hampton LLP, for the intervenor. 

Beth Sturgess, Esq., Department of Homeland Security, U.S. Citizenship and 

Immigration Services, for the agency. 

Tania Calhoun, Esq., and Edward Goldstein, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision. 

DIGEST 

1. Agency reasonably attributed past performance and experience of affiliated 

entities to awardee where proposal demonstrated a significant nexus to the 

affiliates, including a statement that the parent company had declared the program 

a top corporate priority and indications that the awardee would rely on the personnel 

and managerial resources of its affiliated entities in performance of the contract. 

2. Protest that agency should have rejected awardee’s proposal for offering 

unbalanced prices is denied where the agency reasonably determined that the 

pricing did not pose unacceptable risk to the government. 

DECISION 

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

Investigations Services, Professional Services Division (USIS, PSD), of Falls 

Church, Virginia, under request for proposals (RFP) No. HSSCCG-11-R-00010, 

issued by the Department of Homeland Security, U.S. Citizenship and Immigration 

Services (USCIS), to obtain Application Support Center operations and facilities 

services at multiple sites. Serco primarily challenges the agency’s evaluation of 

USIS, PSD’s technical and price proposals. 

We deny the protest. 

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. 
Page 2 B-406683, B-406683.2

BACKGROUND 

As part of its responsibility for administering immigration benefits, USCIS obtains 

biometric and biographic data (e.g., digital fingerprints, photographs, driver’s license 

scan, passport scan, and signatures) from applicants. USCIS uses this data to 

conduct criminal background checks before deciding to grant benefits. RFP §§ C.2, 

C.1.2. Application Support Centers (ASC) are contractor-operated facilities that 

collect this data and provide other services. Through this procurement, USCIS 

seeks to obtain ASC operational and facilities support. RFP § C.1.2. 

The solicitation, issued May 12, 2011, contemplated award of one or two 

indefinite-delivery/indefinite-quantity contracts (either two regional contracts or a 

single contract covering both regions) with fixed-unit price and cost-reimbursable 

contract line items. The proposals for the single award are the only ones at issue 

here. The contemplated contract includes a 1-year base period of performance, 

four 1-year option periods, and a maximum ordering limit of $1.946 billion. RFP 

§§ B.1, F.2, and B.2. Current ASC operations include staffing and support at 141 

sites around the United States and its territories. The contractor is to accomplish 

such major tasks as biometric and biographic capture, customer identity verification, 

rescheduling support, extraordinary surge support, and program management 

support. RFP § C.3. 

Award was to be made to the offeror whose proposal represented the best value to 

the government considering four evaluation factors, listed in descending order of 

importance: technical capability, small business participation, past performance, 

and price.1

 RFP § M.1. The non-price factors, when combined, were significantly 

more important than price. Id.

Under the technical capability factor, the agency was to assess the degree to which 

proposals effectively demonstrated that their proposed solutions would meet or 

exceed the RFP’s requirements. RFP § M.2. The solicitation identified three 

technical capability subfactors: program management/management controls (the 

most important subfactor), staffing/retention, and relevant corporate experience 

(both of which were equally important). Id. The overall factor rating was to be 

based on the subfactor ratings--outstanding, good, acceptable, marginal, or 

unacceptable--and their relative order of importance. Id.

Under the past performance factor, the agency was to evaluate each offeror’s 

potential for successful performance. RFP § M.4. The evaluation would consider, 

among other things, whether the offeror’s past performance was similar to this 

acquisition in terms of size, scope, and complexity. Past performance was to be 

evaluated as outstanding, good, acceptable, unacceptable, or neutral. Id.

 

1

 The small business participation factor is not at issue here. 
Page 3 B-406683, B-406683.2

The solicitation included one contract line item (CLIN) for each USCIS district, with 

most including five sub-CLINs. For each district, the first sub-CLIN established a 

fixed price per month for processing a baseline range of number of applicants. The 

remaining sub-CLINs (Ranges AB through AE) represented successively larger 

ranges of applicants above the baseline range, and were to be priced on a fixed 

price per applicant basis. ASC workload has historically fluctuated, but generally 

decreased between 2007 and 2010. RFP §§ C.2, C.1.2. Other direct costs (ODC) 

for facilities, equipment, supplies and travel will be reimbursed on a 

cost-reimbursable basis for not-to-exceed dollar amounts. 

Price was to be evaluated for reasonableness using one or more price analysis 

techniques established under Federal Acquisition Regulation (FAR) § 15.404. RFP 

§ M.5. The RFP stated that the total evaluated price would be calculated by adding 

together the total of the baseline ranges, the maximum range amounts (the AE subCLINs), and ODCs for the base and option years. All ranges were to be evaluated 

for reasonableness. Id. In addition, the RFP cautioned offerors that the agency 

may reject proposals determined to be unreasonable or materially unbalanced as to 

the price for the base and option years. Id. 

USCIS received proposals from three offerors, including Serco and USIS, PSD. 

After an evaluation by the technical evaluation committee (TEC) and business 

evaluation committee (BEC), the contracting officer (CO) included all proposals in 

the competitive range. Discussions were conducted, and final proposal revisions 

(FPR) were requested and evaluated. The TEC and BEC presented the results to 

the source selection advisory council (SSAC) and source selection authority (SSA) 

on November 1. The SSA found that USIS, PSD’s pricing appeared to be 

unbalanced. She asked the BEC to provide additional information regarding 

whether the government would be paying unreasonably high prices due to this 

perceived unbalanced pricing. AR, Exh. 24, Source Selection Decision (SSD), at 

11. The BEC provided further analysis in an addendum to its report. The SSAC 

relied on the findings of the TEC and BEC and recommended award to USIS, PSD. 

The evaluation results with respect to Serco and USIS, PSD were as follows: 

Serco USIS, PSD 

Technical Capability Good Outstanding 

Program Management/Management Controls Good Outstanding 

Staffing/Retention Good Good 

Relevant Corporate Experience Good Good 

Small Business Participation Good Good 

Past Performance Outstanding Good 

Total Evaluated Price $1,185,537,575.32 $979,847,246.72 

 

AR, Exh. 24, SSD, at 6. 
Page 4 B-406683, B-406683.2

The SSA reviewed the TEC report, BEC report and addendum, and SSAC report, 

and conducted her own comparison of the proposals’ strengths and weaknesses. 

Id. at 1. She concluded that USIS, PSD’s proposal represented the best value to 

the government since it was technically superior and, although significantly less 

important, offered the lowest total evaluated price. Id. at 18. 

With respect to the non-price factors, the SSA noted that USIS, PSD’s proposal was 

rated highest under the most important factor, technical capability, for “very 

significantly exceeding” most requirements under the most important subfactor, 

program management, and for meeting and significantly exceeding many of the 

requirements under the remaining subfactors. Id. at 14. She explained that the 

program management subfactor reflected areas that are critical to ASC operations 

and program success, and stated that an offeror very significantly exceeding most 

requirements for the program management subfactor brought substantially less risk 

to performance. Id. As for the least important factor, past performance, the SSA 

noted that Serco’s proposal had the highest rating but found that there was very 

little risk associated with the performance of any of the offerors. Id. at 17. 

The SSA stated that USIS, PSD offered the lowest evaluated price but that, under 

the BEC’s initial analysis, it appeared that its prices in certain ranges were much 

higher than those of other offerors. The BEC’s additional assessment was sufficient 

to allay her concerns. The SSA stated that this assessment revealed “little to no 

concern that the ‘unbalanced prices’” in USIS, PSD’s proposal could result in the 

agency paying unreasonably high prices should it award a contract to the firm. Id. 

Moreover, she stated, even with the potential that the USIS, PSD proposal could 

result in the government paying a higher price at some ranges than it might pay to 

other offerors, she found that USIS, PSD clearly offered strengths in its program 

management approach that she considered to be of substantial value, and for which 

“the risk of paying a higher actual price is justified.” Id. at 18. 

Serco primarily challenges the agency’s evaluation of USIS, PSD’s proposal under 

the past performance factor, the relevant corporate experience subfactor, and the 

price factor. Serco also alleges that the agency treated the offerors unequally with 

regard to their pricing assumptions. 

 

DISCUSSION 

As an initial matter, a common thread underlying Serco’s challenges to the 

evaluation of USIS, PSD’s past performance and relevant corporate experience is 

the notion that the agency was confused about whether USIS, PSD was the offeror, 

or whether the offeror was, in fact, some other affiliated USIS entity. In this regard, 

Serco highlights the fact that the agency’s notice of award identified USIS, LLC as 

the awardee, but that FedBizOpps identified the awardee generally as USIS and 

listed the data universal numbering system (DUNS) number corresponding to USIS, 

PSD. 
Page 5 B-406683, B-406683.2

As a factual matter, the record reflects that USIS, PSD is a wholly-owned subsidiary 

of USIS, LLC. The record also reflects that the awardee’s proposal identifies USIS, 

PSD as the offeror, but generally refers to the firm as USIS.2

 In various places, the 

proposal also specifically references USIS, LLC, and, what the parties refer to as a 

sister company, USIS Labat Anderson Division.3 The CO explains that, after receipt 

of proposals, she immediately started drafting the evaluation documentation. Since 

the proposal’s cover letter and title pages referred to USIS, LLC, she inserted this 

name as the name of the offeror in the draft documents. However, when she 

evaluated the actual proposal, she realized, as noted above, that the offeror was 

expressly identified as USIS, PSD. Notwithstanding this realization, the CO states 

that she failed to correct the draft evaluation documents and carried over her initial 

use of the name USIS, LLC. She states that she should have described the offeror 

as USIS, PSD, in all contract file documentation. CO’s Supp. Statement, at 1. 

We are satisfied that the CO was aware of the identity of the offeror as USIS, PSD. 

We also have no reason to question her account that the identification of the offeror 

as USIS, LLC throughout the evaluation record was an inadvertent error. See

Command Mgmt. Servs., Inc., B-310261, Dec. 14, 2007, 2008 CPD ¶ 29 at 6 

(agency understood which entity was the offeror despite clerical errors in the 

record). However, this inattention to detail, both in the draft evaluation documents, 

and throughout the evaluation process, has given rise to the allegations addressed 

below. 

Past Performance Evaluation 

Serco argues that the agency’s evaluation of USIS, PSD’s past performance was 

flawed because it failed to ascertain which USIS entities performed the contracts 

offered to substantiate the past performance of USIS, PSD. In this regard, Serco 

asserts that the agency had no basis to attribute the past performance of these 

other entities to USIS, PSD since the agency failed to consider the extent to which 

the resources of these other entities would have meaningful involvement in contract 

performance. 

The record reflects that USIS, PSD submitted six past performance references for 

itself as the prime contractor. The agency concluded that only one reference, a 

contract performed by “USIS” for background investigations fieldwork services 

valued at nearly $2 billion, was similar in size, scope, and complexity to the instant 

acquisition. Like the ASC contract at issue here, the referenced contract required 

 

2 The proposal expressly identifies USIS, PSD, as the offeror, AR, Exh. 32, USIS 

FPR, Part III, at III-1, and includes other indicia of the offeror’s identity. 

3

 The record reflects that Labat-Anderson is also a wholly-owned subsidiary of 

USIS, LLC. 
Page 6 B-406683, B-406683.2

customer identify verification, surge support, program management support, 

facilities management, multiple district offices nationwide, leasing, management of a 

large staff, and training. Supp. AR, Exh. 2, TEC’s Past Performance Report, at 19-

20. The relevant past performance questionnaire included primarily “good” ratings. 

Id. Based on this reference, USCIS evaluated USIS, PSD’s past performance as 

“good”, finding very little risk anticipated with the firm’s performance. Id. at 25-26. 

The CO states that, since the reference did not specifically refer to USIS, PSD, she 

believed it was performed by USIS, LLC. CO Supp. Statement, at 1. Moreover, 

because USIS, PSD’s proposal relied on the experience and resources of various 

affiliated companies, including the parent, USIS, LLC, and USIS, PSD’s sister 

company, Labat-Anderson, the agency maintains that it properly considered the 

past performance information at issue. Id. at 2. 

An agency properly may attribute the experience or past performance of a parent or 

affiliated company to an offeror where the firm’s proposal demonstrates that the 

resources of the parent or affiliate will affect the performance of the offeror. 

Ecompex, Inc., B-292865.4 et al., June 18, 2004, 2004 CPD ¶ 149 at 5. The 

relevant consideration is whether the resources of the parent or affiliate--its 

workforce, management, facilities, or other resources--will be provided or relied 

upon for contract performance, such that the parent or affiliate will have meaningful 

involvement in contract performance. IAP-Hill, LLC, B-406289, Apr. 4, 2012, 2012 

CPD ¶ 151 at 3-4. Where a proposal shows a significant nexus between the parent 

or affiliate concern’s resources and the contracting entity, there is nothing 

objectionable in attributing the experience or past performance of the related 

entities to the business entity entering into the contract. Id.; see also Hot Shot 

Express, Inc., B-290482, Aug. 2, 2002, 2002 CPD ¶ 139 at 3. 

The CO states the proposal submitted by USIS, PSD, clearly established that 

“USIS, PSD would be calling upon the same USIS, LLC resources used for the 

OPM field work services contract” to perform the requirements at issue. CO Supp. 

Statement, at 2. In this regard, the CO highlighted the fact that the proposal’s cover 

letter was signed on behalf of USIS, LLC by its chief executive officer (CEO), who is 

also the CEO of USIS, PSD. The letter stated that the firm (USIS, LLC) was 

committed to offering exceptional service to USCIS and its applicants for 

immigration benefits. AR, Exh. 32, FPR Cover Letter, Business Proposal, at 1. The 

letter explained that, as a team member on the incumbent contract, the firm had 

invested in personnel and operating systems that currently supported the ASC 

program, demonstrating its corporate commitment to its continued success, and had 

mapped a path forward to meet the agency’s needs. Id. at 2. USIS, PSD’s 

proposal elsewhere states that, because of its high profile and importance, the 

USIS, LLC Board of Directors had declared the ASC program a “top corporate 

priority” and directed the CEO to personally oversee its development and 
Page 7 B-406683, B-406683.2

execution.4 The ASC corporate program manager is to report directly to the USIS, 

LLC CEO. AR, Exh. 32, Technical Proposal 1.0, at 14. 

The CO also states that the proposal made it clear that USIS, PSD would be calling 

upon the same USIS, LLC resources used for the background fieldwork services 

contract. USIS, PSD proposed to use the background investigators under that 

contract to perform [DELETED] under the ASC contract. CO Supp. Statement, at 2, 

citing AR, Exh. 32, FPR, Part III, at III-6, III-10; see also AR, Exh. 32, Technical 

Proposal 1.0, at 4, 11, 24 (offering access to pool of background investigators used 

on the other contract). The CO further points out that the proposal stated USIS, 

PSD would use the same models as those used by USIS, LLC, on that other 

contract to “[DELETED]” on the ASC contract. CO Supp. Statement, at 2, citing AR, 

Exh. 32, FPR, Part III, at III-34; see also id., Technical Proposal 1.0, at 11, 4. 

Finally, the CO states that USIS, PSD’s proposal included letters of commitment 

from key personnel that were signed by the president of Labat-Anderson. CO 

Supp. Statement, at 2, citing AR, Exh. 32, FPR, Attch. H. The proposal stated that 

this individual was assigned to oversee the first 30 days of the transition on the ASC 

contract. AR, Exh. 32, FPR, Attch. K; Technical Proposal 1.0, at 38. 

Serco’s principal argument is that the agency did not contemporaneously document 

the above analysis. This is not in dispute. In reviewing an agency’s evaluation, we 

do not limit our consideration to contemporaneously-documented evidence, but 

instead consider all the information provided, including the parties’ arguments and 

explanations. ASRC Research & Technology Solutions, LLC, B-406164, 

B-406164.3, Feb. 14, 2012, 2012 CPD ¶ 72 at 4. While we generally give little or no 

weight to reevaluations and judgments prepared in the heat of the adversarial 

process, Boeing Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 

1997, 97-2 CPD ¶ 91 at 15, post-protest explanations that provide a detailed 

rationale for contemporaneous conclusions, and simply fill in previously unrecorded 

details, will generally be considered in our review of the rationality of selection 

decisions so long as those explanations are credible and consistent with the 

contemporaneous record. NWT, Inc.; PharmChem Labs, Inc., B-280988, 

B-280988.2, Dec. 17, 1998, 98-2 CPD ¶ 158 at 16. 

As previously indicated, the CO explained that she understood the background 

investigations contract, the sole basis for the past performance rating, to have been 

performed by USIS, LLC, the parent company. CO Supp. Statement, at 1. 

Moreover, she explained that she found USIS, PSD’s proposal to have established 

that the resources of USIS, LLC, and Labat-Anderson, were to be brought to bear 

 

4

 The record reflects that at the time of proposal submission, the corporate officers 

and directors of USIS, PSD were all officers and directors of USIS, LLC. 

Intervenor’s Supp. Comments, at 11. 
Page 8 B-406683, B-406683.2

on this contract. Id. at 2. Given that the CO’s explanations are consistent with the 

underlying record, we think it reasonable to consider her post-protest explanations. 

Moreover, because USIS, PSD’s proposal set forth the extensive role and 

commitment of resources from its affiliates, as described above, we have no basis 

to object to the agency’s attribution of the past performance of USIS’ affiliated 

entities to USIS, PSD, or to the “good” rating assigned to that past performance.5 

Technical Capability – Relevant Corporate Experience Evaluation 

Serco argues that USIS, PSD’s corporate experience is not relevant because 

several of its contracts were small compared to the instant procurement. Serco 

asserts that where relevance is undefined, the experience had to involve a contract 

of similar size, scope, and complexity.6

 Comments, June 26, 2012, at 22. 

The evaluation of proposals is a matter within the discretion of the contracting 

agency, since the agency is responsible for defining its needs and the best method 

of accommodating them. Encorp--Samcrete Joint Venture, B-284171, B-284171.2, 

Mar. 2, 2000, 2000 CPD ¶ 55 at 4. In reviewing an agency’s evaluation, we will not 

reevaluate proposals, but instead will examine the agency’s evaluation to ensure 

that it was reasonable and consistent with the solicitation’s stated evaluation criteria 

and with procurement statutes and regulations. Id.

Proposals were to be evaluated to the extent to which they addressed and 

demonstrated relevant corporate experience as a prime contractor in various areas, 

including: management of multiple sites/locations in a large geographically 

dispersed environment; management of a workforce of this magnitude; customer 

service; immigration benefits services; collecting and processing biometric data 

electronically and manually; facilities management; management of significant 

workload volume with lulls and significant surge events; and implementing a training 

program of this magnitude. RFP § M.4. The agency evaluated USIS, PSD’s 

 

5

 In support of its protest, Serco highlights the fact that the CO did not fully 

appreciate the corporate relationship between USIS, PSD and USIS, LLC. The 

record reflects that the CO mistakenly believed USIS, PSD to be a division of USIS, 

LLC, as opposed to a wholly-owned subsidiary. This distinction is of no 

consequence in this instance, where it is apparent that the CO considered the role 

of USIS, PSD’s affiliates, as set forth in its proposal, when attributing the past 

performance and experience of these affiliates to USIS, PSD. 

6

 Serco also challenges the evaluation of USIS, PSD’s corporate experience on the 

same basis as it challenged the past performance evaluation--that the agency did 

not identify which USIS entities performed the projects considered. For the same 

reasons discussed above, we find the agency’s consideration of the experience of 

the USIS entities unobjectionable. 
Page 9 B-406683, B-406683.2

proposal as “good” because its experience met all the requirements and 

significantly exceeded many of them. AR, Exh. 18, TEC Final Report, at 144. 

We do not agree with Serco that the agency could only consider as “relevant” 

contracts of similar size, scope, and complexity to the ASC contract. The RFP 

expressly imposed such a requirement for the past performance evaluation factor, 

but did not commit the agency to evaluating relevant corporate experience only in 

this selective manner. See S4, Inc., B-299817, B-299817.2, Aug. 23, 2007, 2007 

CPD ¶ 164 at 8. The record shows that the TEC analyzed USIS, PSD’s experience 

in connection with each required area in deciding to evaluate the proposal as 

“good.” Much of this analysis does, in fact, consider the size, scope, and complexity 

of that experience. USIS, PSD’s proposal might have received a higher rating had 

its experience been with larger contracts because, as Serco notes, experience on 

smaller contracts may be less relevant. However, Serco has given us no reason to 

find that, based on the size of its contracts alone, the agency improperly evaluated 

USIS, PSD’s relevant corporate experience as “good.” 

Serco’s real argument is that USIS, PSD’s corporate experience was not sufficiently 

“good” to support the “outstanding” rating it received for the technical capability 

factor overall. Serco posits that this subfactor should have been worth 25 percent 

of the overall rating and that, when combined with the ratings for the other 

subfactors, USIS should have received only a “good” rating overall. 

The record is clear that the “outstanding” rating for USIS’ proposal under the 

technical capability factor was driven by its “outstanding” rating under the most 

important subfactor, program management. The SSA explained that, in that area, 

USIS, PSD very significantly exceeded the requirements, and described the 

reasons the proposal’s features were of such value to the agency. AR, Exh. 11, 

SSD, at 14. Evaluation ratings for offerors’ proposals, including adjectival ratings, 

are but guides to, and not substitutes for, intelligent decisionmaking. See Jacobs 

COGEMA, LLC, B-290125.2, B-290125.3, Dec. 18, 2002, 2003 CPD ¶ 16 at 31. 

Even if the RFP had assigned a specific weight to the relevant corporate experience 

subfactor, which it did not, Serco has not shown that the qualitative assessment 

underlying the outstanding rating for USIS, PSD’s proposal was unreasonable. 

Price Evaluation 

Serco argues that USIS, PSD’s proposal contains unbalanced pricing.7

 Serco also 

contends that the BEC and the SSA failed to consider the real risks of this alleged 

unbalanced pricing. 

 

7

 Serco questions the RFP’s method for determining the total evaluated price, and 

states that USIS, PSD took advantage of this method, but acknowledges that it did 

not protest the solicitation’s terms. To the extent that Serco is now protesting those 

(continued...) 
Page 10 B-406683, B-406683.2

Unbalanced pricing exists when, despite an acceptable total evaluated price, the 

price of one or more contract line items is significantly overstated, while others are 

understated. FAR § 15.404-1(g)(1); Citywide Managing Servs. of Port Washington, 

Inc., B-281287.12, B-281287.13, Nov. 15, 2000, 2001 CPD ¶ 6 at 7. Unbalanced 

pricing may increase risk to the government, but agencies are not required to reject 

an offer solely because it is unbalanced. Where an unbalanced offer is received, 

the agency is required to consider the risks to the government associated with the 

unbalanced pricing in making the award decision, including the risk that the 

unbalancing will result in unreasonably high prices for contract performance. FAR 

§ 15.404-1(g)(2); Cherokee Painting LLC, B-311020.3, Jan. 14, 2009, 2009 CPD 

¶ 18 at 3. Our Office will review for reasonableness both an agency’s determination 

whether an offeror’s prices are unbalanced, and an agency’s determination as to 

whether an offeror’s unbalanced prices pose an unacceptable risk. Semont Travel, 

Inc., B-291179, Nov. 20, 2002, 2002 CPD ¶ 200 at 3. 

We need not consider Serco’s arguments, or the agency’s counter-arguments, that 

USIS, PSD’s pricing was in fact unbalanced. As discussed below, the agency 

conducted the requisite consideration of risks associated with the unbalanced 

pricing that may have existed in the proposal and reasonably concluded that USIS, 

PSD’s pricing did not pose an unacceptable risk to the government.8

 

As previously indicated, each CLIN, representing a USCIS district, included up to 

five sub-CLINs. The first was to be priced on a fixed price per month basis for a 

baseline range of applicants processed per location. The baseline ranged from one 

applicant to 50 percent of the prior year’s production volume in each district. AR, 

Exh. 19, Final BEC Report, at 25. The remaining sub-CLINs were for successively 

larger ranges of applicants processed above the baseline that were to be priced 

using a fixed price per applicant rate. Sub-CLIN (or Range) AB ranged from one 

applicant above the baseline maximum to 120 percent of the prior year’s production 

 

(...continued) 

terms, such a protest is untimely and will not be considered. Bid Protest 

Regulations, 4 C.F.R. § 21.2(a)(1) (2012) (protests based upon alleged solicitation 

improprieties which are apparent prior to the time set for receipt of initial proposals 

shall be filed prior to that time). 

8 The concept of unbalanced pricing has limited application in the context of a 

negotiated procurement under which the government’s primary objective is the best 

overall value rather than the lowest price. Legacy Mgmt. Solutions, LLC, 

B-299981.2, B-299981.4, Oct. 10, 2007, 2007 CPD ¶ 197 at 5 n.4. The concept of 

unbalancing applies in such cases only where price constitutes the basis for the 

source selection. Id. Here, the non-price evaluation factors, when combined, were 

significantly more important than price, and award was based primarily on USIS, 

PSD’s technical superiority. 
Page 11 B-406683, B-406683.2

volume in each district. The agency expected the majority of production volume to 

fall within this band. Id.9

 

The contractor was to be paid the baseline sub-CLIN amount regardless of actual 

production volume. When actual production exceeded the baseline maximum, the 

contractor was to receive compensation that was equal to the baseline sub-CLIN 

plus the number of additional applicants processed, multiplied by the rate 

associated with the pricing range applicable to the total number of applicants 

processed. Id. at 25-26. 

The BEC conducted an extensive analysis of the offerors’ pricing, including their 

methodologies and approaches, and compared the proposals with the independent 

government cost estimate (IGCE), the current contract, and each other. The BEC 

found that USIS, PSD used a pricing strategy involving a very significantly lower 

baseline price than that reflected in the other points of comparison, but significantly 

higher per applicant rates for the first two ranges (Ranges AB and AC). The BEC 

stated that USIS, PSD would make up its costs from its lower baseline pricing 

because the number of applicants in Range AB would be realized, minimizing risk. 

The BEC found that, because the per applicant rates were so high in Ranges ACAD, the government could pay significantly more on a per applicant basis for these 

ranges. While the BEC ultimately concluded that the price difference for Range AB 

was not significant, it noted that the government would pay a significantly higher 

amount to USIS, PSD for Range AC than it would pay to the other offerors if those 

ranges were maximized. AR, Exh. 19, BEC Final Report, at 36-37. 

The BEC also conducted a per-applicant rate analysis on the total price that would 

be paid if each range were maximized. When the total baseline amount was 

combined with the average per applicant rate for the maximum of Range AB, the 

risk was that the government could pay 9.7 percent more to USIS, PSD than to the 

next highest-priced offeror. The BEC did not consider this amount, which was 

below the IGCE, to be significant. Id. at 39. When this analysis was applied to 

Range AC, the risk was that the government could pay 46.9 percent more to USIS, 

PSD than to the next highest-priced offeror, or 8 percent more than the IGCE. The 

BEC considered this amount to be significant, but stated that the risk was 

dependent upon the actual number of applicants processed. Id. When this analysis 

was applied to Range AD, the risk was that the government would pay 24 percent 

more to USIS than to the next highest-priced offeror, but an amount below the 

 

9

 The AC sub-CLINs were maximized at 100 percent of operational capacity using 

single work shifts; the AD sub-CLINs were maximized at 200 percent of operational 

capacity using double work shifts; and the AE sub-CLINs were maximized at 

comprehensive immigration reform figures, where volume would exceed current 

capacities. Id.
Page 12 B-406683, B-406683.2

IGCE. Finally, when this analysis was applied to Range AE, USIS, PSD offered the 

lowest price. Id. at 40. 

The SSA found that the BEC’s analysis of range prices appeared to be based on 

the scenario where the maximum number of applicants in a particular range would 

be processed at the ASCs over the entire contract period. The SSA concluded that 

this scenario was unlikely. The SSA also found that the BEC’s analysis of the per 

applicant rates in each range did not adequately consider the offerors’ baseline 

prices.10 AR, Exh. 24, SSD, at 11. At her request, the BEC conducted an 

additional analysis of USIS, PSD’s pricing to determine whether the “perceived 

unbalanced pricing” would result in the government paying an unreasonably high 

price for performance, and to determine whether USIS, PSD’s prices were fair and 

reasonable at the ranges the government was most likely to experience. AR, Exh. 

21, BEC Addendum, at 1. 

In its addendum, the BEC stated that the “maximization scenario” it used in its initial 

report anticipated the maximum number of applicants at every location, every 

month, every year, for five years. The BEC agreed, in retrospect, that this was an 

extreme and unlikely scenario. If it occurred, USIS, PSD’s price would be higher 

than either of the other offerors for Range AB and significantly higher for Ranges 

AC and AD. In addition to this unlikely “maximization scenario” analysis, the BEC 

decided to use historical data from the prior two fiscal years to conduct analyses 

that would result in a more realistic comparison of range pricing. The BEC 

concluded that, based on these analyses, USIS, PSD’s range pricing was 

reasonable and, “while ‘unbalanced’ across various ranges[,] poses little risk to the 

government at the expected production level and is consistent with” Serco’s offer. 

Id. at 5. 

Moreover, the BEC found that historical data showed the numbers of applicants for 

nearly every district would be in Range AB (one district reached Range AC). The 

BEC compared the offerors’ proposed per applicant rates for Range AB by applying 

the historical data to the range plus the baseline amount. This analysis showed it 

would cost the government 1.6 percent more over five years using USIS, PSD’s 

rates than using Serco’s rates. Both prices were considered reasonable. Id. at 2. 

As for the other ranges, to which historical data did not apply, the BEC stated that 

the ultimate prices for each offeror could not be definitively compared because it 

would depend on the number of applicants processed and at which particular ASC. 

Id. The BEC had already analyzed all of the ranges using its maximization 

scenario. 

 

10 The baseline range has to be realized before the range pricing is invoked, so the 

reasonableness of range pricing has to be determined in the context of the baseline 

range. AR, Exh. 21, BEC Addendum, at 1. 
Page 13 B-406683, B-406683.2

The BEC also used a blended per applicant rate (the baseline per applicant rate 

plus the range per applicant rate) as a basis for comparison. An analysis over a 

five-year period for Ranges AB, AC, and AD showed that, for Range AB, USIS, 

PSD had the highest blended per applicant rate but that the rates among the 

offerors were comparable. For Range AC, there was a larger gap; all three offerors’ 

blended rates decreased as the numbers of applicants increased, as expected. For 

Range AD, there was a gap similar to that in Range AB--in other words, all offerors’ 

rates decreased again as numbers of applicants increased. The BEC stated that, at 

the expected production levels, Serco’s and USIS, PSD’s blended rates appear to 

be very comparable based on price competition. Id. at 3. 

Finally, the BEC determined that the differences in range pricing were due to 

differences in proposed full-time equivalents (FTE), productivity, and methodology. 

The BEC described USIS, PSD’s pricing methodology, which it considered to be a 

reasonable approach. In addition, the BEC stated that the TEC’s full FTE analysis 

was considered to be reasonable. Id. at 4. 

The SSA’s source selection decision was made on the basis of both the BEC’s 

initial report and its addendum. The SSA described the BEC’s analysis and 

characterized its addendum as using a more reasonable basis for analysis than that 

used in its original report. AR, Exh. 24, SSD, at 12. She stated that the BEC’s 

additional assessment assured her that its determination that USIS, PSD’s range 

prices were reasonable had adequate support. Further, the BEC’s analysis using 

historical data showed little to no concern “that the ‘unbalanced prices’” in USIS, 

PSD’s proposal could result in USCIS paying unreasonably high prices should it 

make award to the firm. Id. at 12-13, 17. Moreover, the SSA stated, even with the 

potential that the government could pay a higher price at some ranges to USIS, 

PSD than to the other offerors, USIS, PSD offered strengths in its program 

management approach that she considered to be of substantial value to USCIS and 

for which the risk of paying a higher actual price was justified. Id. at 18. 

Serco argues that the BEC--and the SSA--failed to acknowledge the risks posed by 

USIS, PSD’s pricing methodology. As Serco asserts, at the high end of Range AB, 

the agency could pay 9.8 percent more to USIS than to Serco for the services, and 

at the high end of Range AC, the agency could pay 47 percent more to USIS than 

to Serco. 

Our review shows that neither the BEC nor the SSA failed to acknowledge these 

risks. The figures cited by Serco are drawn from the BEC’s initial report, which was 

fully considered by the SSA. In addition to considering this initial analysis based on 

the maximization scenario, the SSA asked the BEC to perform additional analysis 

based on a more likely scenario for her consideration. The BEC supplemented its 

maximization scenario analysis with analyses based on historical data. Under these 

analyses, the differences between the offerors’ pricing narrowed. 
Page 14 B-406683, B-406683.2

A price reasonableness determination is a matter of administrative discretion 

involving the exercise of business judgment by the contracting officer that we will 

question only where it is unreasonable. Comprehensive Health Servs., Inc., 

B-310553, Dec. 27, 2007, 2008 CPD ¶ 9 at 8. Serco argues that the analysis using 

historical data was inadequate because the number of applicants can increase in 

the future. This is, of course, possible, but Serco has not shown that the BEC’s use 

of this data as a more realistic gauge of the pricing risk than the maximization 

scenario described above was unreasonable. In any event, the analysis in the 

BEC’s addendum did not supplant the analysis in the initial BEC report--which relied 

on the maximization scenario advocated by Serco--but merely supplemented it for 

the express purpose of providing the SSA a more complete picture of the risk of any 

unbalanced pricing in USIS, PSD’s proposal. 

By reviewing the BEC’s initial and supplemental conclusions, and by performing an 

independent analysis, the SSA met the requirement to determine the risk 

associated with any perceived unbalanced pricing in USIS, PSD’s proposal. 

Semont Travel, Inc., supra. It is clear that she understood the risks, both under the 

maximization scenario and under the historical data scenario, of the firm’s alleged 

unbalanced pricing. While she believed the BEC’s supplemental analysis based on 

historical data was the more likely scenario, and proposed little to no risk to the 

government, she went on to state that even if award to USIS, PSD resulted in 

paying a higher price at some ranges, the firm offered strengths for which the risk of 

paying a higher actual price was justified. AR, Exh. 24, SSD, at 17-18. Serco has 

not provided any meaningful challenge to the SSA’s conclusion that USIS, PSD’s 

technical strengths justified the risk of paying a higher price for its services. 

Unequal Treatment 

Serco argues that USCIS treated offerors unequally by allowing USIS, PSD to 

assume higher applicant processing productivity levels than it allowed Serco to 

assume. The record does not support this allegation. 

The RFP did not include maximum productivity levels. The RFP only required the 

contractor to maintain a “minimum” productivity rate of six applicants processed per 

hour per biometrics technician. RFP § C, Attch. G, at C-63, C-68-69. The RFP also 

included historical data showing that the incumbent achieved productivity levels in 

excess of this minimum productivity rate. RFP Amend. No. 0001, § J, Attch. C. 

During discussions, both firms were advised that there was a maximum of six 

applicants “scheduled” per hour. AR, Exh. 9, Serco Discussion Question T14; Exh. 

13, USIS, PSD Discussion Question T.11. Serco was given an additional 

discussion item that expressed concern about the basis for its productivity 

assumption, but did not say that it exceeded any maximum productivity level. AR, 

Exh. 9, Serco Discussion Question P.3. 
Page 15 B-406683, B-406683.2

Serco contends that, during oral discussions, it “heard an invocation” to change its 

productivity assumptions because it substantially increased its price. Comments, 

June 11, 2012, at 25. Serco has provided an affidavit from a vice president who 

states that, when the TEC chair questioned the firm’s productivity assumptions, he 

asked whether six applicants per hour per workstation was the maximum 

throughput, and the TEC chair said that it was. However, Serco’s vice president 

elsewhere states the TEC chair said the agency would “schedule” no more than six 

applicants per hour per workstation. Id., Exh. I. 

The TEC chair denies instructing Serco that the maximum productivity level would 

be limited to six applicants per hour. He states that the firm was only informed that 

the government schedules a maximum of six applicants per hour per workstation. 

Agency Motion for Dismissal, Attch. 1, Declaration of TEC Chair, at 2. The TEC 

chair’s account is supported by the contemporaneous notes of a TEC member. AR, 

Exh. 11, Notes of TEC Members, at 10. 

While Serco claims to have “heard an invocation” to revise its productivity 

assumptions, we are not persuaded that Serco heard the agency to limit its own 

productivity assumption to six applicants per hour. Serco’s own proposal casts 

serious doubt on its contentions where it proposed an average productivity rate that 

exceeded the alleged “maximum productivity level” of six applicants per hour. AR, 

Exh. 29, Serco Business Proposal FPR, at 40-41. More specifically, Serco’s FPR 

expressly indicated that, in deriving its staffing solution, it used the “minimum 

acceptable productivity,” or “baseline” rate of six applicants per hour at [DELETED] 

sites, and “increased the throughput” at [DELETED] sites. Id.; see also AR, Exh. 

12B, Serco Final Responses to Discussion Questions, at 2. Additionally, the record 

reflects that Serco’s FPR supports the agency’s characterization of the six applicant 

per hour rate as a scheduling maximum where the FPR refers to the six applicants 

per hour rate as the “maximum anticipated applicant scheduling.” AR, Exh. 12A, 

Serco Discussions Questions, at 12, 14. Because the record of discussions and 

Serco’s own FPR, do not support Serco’s claim of unequal treatment, we have no 

basis to conclude that the agency’s discussions and evaluation were unfair, or 

otherwise improper. 

The protest is denied. 

Lynn H. Gibson 

General Counsel