NASA chose to consolidate test operations at two facilities into one contract with the intention to improve efficiency and safety and lower costs and increase staffing flexibility.  In its RFP it asked offerors to “propose innovative techniques and methods that would benefit the government.”  However, when NASA developed its independent staffing estimate it merely added up the existing staffing levels at the two facilities.  When Honeywell proposed a staffing level 45 FTEs below the government’s estimate, NASA  increased Honeywell’s proposed FTEs by 45, thereby increasing its proposed price and awarded the contract to a lower priced offeror.  In Honeywell’s protest, the GAO noted that the government’s independent staffing level determination may have limited applicability to a particular proposal since, for example, skill levels and innovative work methods may result in lower FTEs.  GAO concluded that NASA’s automatic adjustment of Honeywell’s staffing proposal suggests that NASA’s staffing estimate was used in a “mechanical way in the cost realism evaluation” in spite of the RFP’s encouragement to propose innovative approaches.  Instead, the agency should have independently analyzed the realism of Honeywell’s proposed costs based upon its particular approach (Honeywell Technology Solutions Inc. GAO No. B292354).

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