BNUMBER: B-257373.3; B-257373.4; B-257373.5
DATE: December 22, 1995
TITLE: Fermont Division, Dynamics Corporation of America
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REDACTED DECISION
A protected decision was issued on the date below and was subject to a
GAO Protective Order. This version has been redacted or approved by
the parties involved for public release.
Matter of:Fermont Division, Dynamics Corporation of America
File: B-257373.3; B-257373.4; B-257373.5
Date: December 22, 1995
Alan M. Lestz, Esq., Witte, Lestz & Hogan, for the protester.
Ron S. Talain for Goodman Ball, Inc., an interested party.
Tony K. Vollers, Esq., and Vera Meza, Esq., Department of the Army,
for the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that contracting agency unreasonably evaluated offerors'
technical proposals is denied where the record shows that the
evaluation was reasonable and in accordance with the stated evaluation
criteria; protester's disagreement with the agency's judgment as to
the merits of various aspects of these proposals does not render that
judgment unreasonable.
2. Protest that contracting agency's source selection decision
improperly emphasized the benefits of the awardee's proposal under one
evaluation criterion is denied where the decision was consistent with
the stated evaluation criteria, and where the source selection
authority's view that these benefits were sufficiently significant to
warrant the design's slightly increased cost was reasonable.
DECISION
Fermont Division, Dynamics Corporation of America protests the
Department of the Army's selection of Goodman Ball, Inc. (GBI) to
proceed with the Army's continuing engineering, development, and
production of auxiliary power units (APU). Fermont argues that the
Army's selection of GBI--by exercising two options in its existing
contract, and by not exercising the options in Fermont's corresponding
contract--is unreasonable.[1]
We deny the protests.
BACKGROUND
On August 12, 1993, the Army issued request for proposals (RFP) No.
DAAK01-93-R-0024 for the development and production of a 5 kilowatt,
28 volt direct current APU. The APU, which supplies power for
on-board equipment in an XM1068 tracked vehicle, will be mounted on
the vehicle's sloping front "hood," directly in front of the
commander's hatch. After reviewing and evaluating the best and final
offers (BAFO), the Army awarded a contract for phase I of the effort
to each of the three highest-rated offerors: GBI, Fermont, and a firm
not at issue here.
All three contracts required the contractor to design; select and
purchase components, parts, and subassemblies; fabricate; and assemble
six mock-up APUs for inspection and test in accordance with the
purchase description. The evaluation scheme next anticipated
evaluating the contractors' proposals to determine which should
receive the "down-select" award for the phase IIA option, continued
engineering and development, and the phase IIb option, limited
production.
Section H of the three contracts, as amended, listed the down-select
criteria.
The Army would consider two areas, design and cost, with design
roughly twice as important as cost. The design area[2] would consider
the results of the operational mock-up inspection and testing done in
phase I and yield an adjectival rating of exceptional, acceptable, or
unacceptable for each of three evaluation categories and their
factors. An exceptional rating meant that the design exceeded some
requirements in a beneficial way to the Army and had a high
probability of success with no significant weaknesses. An acceptable
rating meant that the design met most requirements and had a good
probability of success with weaknesses that could be readily
corrected. An unacceptable rating meant that the design failed to
meet several requirements and needed major revisions to correct
deficiencies, or failed to meet one or more requirements with an
adverse impact on the effective operation of the units.
The Category I factors, which were considerably more important than
the Category II factors, were sound survey, size and weight, and
reliability maturation. The Category II factors, slightly more
important than the Category III factors, were operation, safety
examination, test method, overload demonstration, and scheduled
maintenance. The Category III factors were vibration survey,
electromagnetic testing, Table I examination, test method, review of
sample wire, XM1068 interfaces, rated speed calculation, proposed
design changes, and demonstration local-remote.[3]
Award would be made to the contractor providing the overall best value
to the government. While cost was an important factor, the Army
reserved the right to award the contract to the firm whose competitive
strengths in the design area significantly outweighed those of the
low-cost offeror. However, cost would become increasingly more
important as the relative merits of the design were determined to be
substantially equal; cost would then be determinative.
The final test reports and proposals were submitted to the contracting
officer on May 30, 1995. After these were evaluated, discussions were
conducted with the offerors, and BAFOs were received and evaluated.
Both GBI and Fermont were rated [DELETED] under the design area and
each of its categories. Within those categories, Fermont received an
[DELETED] rating under the reliability maturation factor, GBI received
an [DELETED] rating under the size and weight factor, and both
offerors received [DELETED] ratings under all of the remaining
factors. Both proposals were also attributed with various strengths
and weaknesses, discussed further below. GBI's evaluated cost was
$3,068,070, and Fermont's was $[DELETED].
On August 7, the source selection authority (SSA) reviewed the
evaluation results, including each offer's strengths and weaknesses,
and determined that GBI's proposal represented the best overall value
to the government. The SSA concluded that the fact that GBI's
installed APU did not extend beyond the top of the XM1068 vehicle--one
reason it received its [DELETED] rating under the size and weight
factor--was an exceedingly important design feature that afforded
significant safety, operational, and transportability advantages that
did not exist in Fermont's design. The SSA believed that these
advantages justified the associated higher cost. Award was made that
same day in the form of an option exercise on GBI's contract, and
these protests followed.
Fermont raises numerous challenges to the Army's technical evaluation
of both its and GBI's proposals. In related arguments, Fermont
contends that the source selection decision was unreasonable and
contrary to the evaluation criteria.
DISCUSSION
Evaluation of Proposals
In reviewing a protest against the propriety of an evaluation, it is
not our function to independently evaluate proposals and substitute
our judgment for that of the agency. Polar Power, Inc., B-257373,
Sept. 2, 1994, 94-2 CPD 92. Rather, we will review an evaluation
only to ensure that it was reasonable and consistent with the RFP
evaluation criteria. Id. The fact that a protester disagrees with
the agency's judgment does not itself establish that that judgment is
unreasonable. ESCO, Inc., 66 Comp. Gen. 404 (1987), 87-1 CPD 450.
Here, we conclude that Fermont's challenge essentially expresses the
firm's disagreement with the agency's judgment, and that, as the
following examples demonstrate, the record reasonably supports the
Army's evaluation of proposals.
The sound survey factor considered two sets of sound levels measured
on two APUs from each contractor. Levels were measured from 12
positions, each 7 meters from the APU, and the highest level for each
APU was compared with the not-to-exceed requirement of 75 dBA and the
desired level of 70 dBA. A level was also measured from the APU
operator's station and compared with the not-to-exceed requirement of
85 dBA. Fermont's highest reading from 7 meters was [DELETED] dBA,[4]
and its readings from the operator's position were [DELETED] dBA.
Fermont objects to the Army's use of the highest reading as its
benchmark, and contends that it should have been rated exceptional
because several of its readings were below 70 dBA. However, we
believe that the Army's rationale for such a benchmark--that the
direction of enemy attack cannot always be controled or
anticipated--is reasonable, as is its reservation of an exceptional
rating for an APU with a maximum reading nearer 70 dBA. While Fermont
also contends that it should have been credited for having operator's
station readings below the required level, the Army states that this
requirement was only necessary to avoid the need for hearing
protection, and that there was little advantage to be gained from a
further decrease in sound levels once the threshold was met. That
Fermont disagrees with the Army's view, arguing that lower sound
levels increase operator comfort, does not make that view
unreasonable.[5]
One consideration under the operations factor was preventive
maintenance. Offerors' APUs were to require such maintenance at no
less than 8-hour intervals, and the maintenance was to last no longer
than 20 minutes. Fermont's maintenance interval was [DELETED] and the
work lasted [DELETED]. The firm's proposal was rated acceptable and
given a strength for the short duration of its maintenance time.
GBI's maintenance interval was [DELETED] and the work lasted
[DELETED]. The firm's proposal was rated acceptable.
Fermont asserts that its proposal should have been rated exceptional
and that GBI's proposal should have been downgraded on the basis of
their respective maintenance times. The record shows that the Army
favorably considered the short duration of Fermont's preventive
maintenance time, giving it a strength, but rated the proposal
acceptable because its interval required APU shutdown [DELETED] times
daily. Likewise, the Army considered the fact that GBI's preventive
maintenance time was excessive, but rated the proposal acceptable
because its interval required APU shutdown only [DELETED] daily and
its excessive time could be easily corrected. While Fermont disagrees
with the Army's judgment as to the value of the offerors' respective
maintenance times, agency evaluators' judgments about the slight
qualitative differences which can render a proposal exceptional or
acceptable are not subject to rational legal objection unless a clear
showing of unreasonableness is made; we find no such showing here.[6]
Mevatec Corp., B-260419, May 26, 1995, 95-2 CPD 33.
The Category II test method factor required the APUs to be subjected
to a frequency and voltage regulation, stability and transient
response test at three temperatures: ambient, -25� Fahrenheit (F),
and 120� F. GBI's APU significantly exceeded the minimum requirements
under both ambient temperature and -25� F, and was given a strength
for this achievement. However, the evaluators noted that the test
could not be performed at 120� F because the oil temperature exceeded
the requirement when the test was attempted. The evaluators stated
that there was no data to indicate that the APU would not have
completed the test with results similar to those under the other
temperatures if it had been able to operate at 120� F, and referred to
the evaluation under the Category III test method factor for a further
discussion of the problem.
The Category III test method factor required the APUs to be subjected
to the maximum power test under these same three temperatures. While
GBI's APUs were tested under ambient temperature and -25� F, they were
not tested at 120� F for the reasons described above. The evaluators
noted this failure, but concluded that it should be readily
correctable with the [DELETED] proposed by GBI under the proposed
design changes factor. Under that factor, the evaluators described
the design changes that GBI had proposed to correct this problem, and
stated that GBI had performed these changes on a unit identical to the
mock-up units, and that the unit had performed as required. While
GBI's proposal was rated acceptable, it was given a weakness for its
failure to perform the maximum power test at 120� F.
Fermont challenges this evaluation, arguing that the Army has
inadequate assurance that GBI's APU will successfully perform at high
temperature. However, the Army duly considered the risks presented
here and downgraded GBI accordingly. Contrary to Fermont's
implication, the evaluation criteria did not require offerors to
demonstrate compliance with every requirement, and allowed evaluators
to rate proposals meeting "most requirements" under a given factor as
acceptable. Further, Fermont's descriptions of numerous other steps
that the Army might have taken to ascertain the likelihood that GBI's
APU would successfully perform do not amount to a showing that the
steps that were taken were inadequate or that the firm's acceptable
rating was unreasonable, particularly in light of the firm's
significant showings under the other temperatures for both tests.
Offerors were to provide a demonstration of generator overload--the
generator overload device automatically limits the output current when
it exceeds a certain level. At the time of the inspection and test,
GBI's alternator manufacturer had not incorporated the overload device
into its design and the firm was unable to demonstrate it. GBI
subsequently conducted tests on the alternator with a current limiter,
and included this test data with its test report. The evaluation
documents clearly acknowledge GBI's failure to demonstrate the device
during testing, but state that the firm proposed a device and included
test data indicating that that device would work. GBI's proposal was
rated acceptable here, but given a weakness for its failure, which was
considered to be readily correctable with a minimal risk. While
Fermont argues that GBI should not have been rated acceptable because
it did not conduct the demonstration, we have no basis to so conclude,
given the RFP's allowance of such a rating for APUs not meeting all of
the requirements. The record shows that the Army considered the risk
pointed out by the protester, giving GBI a weakness as a result;
Fermont's disagreement with the Army's judgment as to the impact of
this failure does not render the evaluation unreasonable. Id.
Finally, Fermont's contention that GBI improperly made a design change
to its unit after testing is not supported by the record. During
GBI's reliability maturation test there were two failures involving
loss of engine oil pressure within the first 50 hours of test. These
failures were diagnosed as a defect concerning the [DELETED], which
was the subject of a manufacturer's recall notice. The recall notice
advises the installation of a different oil pump on the recalled
engines, but Fermont argues that GBI's change of the oil pump
baseplate constituted an improper design change. However, GBI states
that the only difference between the defective oil pump and the
replacement oil pump is the baseplate kit, which incorporates the
[DELETED], and that replacing the baseplate results in the entire
changeover called for by the recall notice. Thus, as the Army
asserts, GBI did not change the design of its APU but merely replaced
a defective component with a nondefective one so that the proper APU
configuration could be tested.
Source Selection Decision
Fermont argues that the source selection decision was made in
contravention of the evaluation criteria. The protester contends that
the selection decision should have been made on the basis of cost, and
that the Army overemphasized the benefits of GBI's shorter APU.
Source selection officials in negotiated procurements have broad
discretion in determining the manner and extent to which they will
make use of the technical and cost evaluation results. Grey
Advertising, Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD 325. In
exercising that discretion, they are subject only to the tests of
rationality and consistency with the established evaluation criteria.
Id.
The evaluation criteria stated that award would be made to the
contractor providing the best overall value to the government. While
cost was an important factor, the Army "reserved the right to award
the contract to the firm whose competitive strengths in the design
area significantly outweighed those of the low-cost offeror." Cost
would only be determinative if the relative merits of the design were
substantially equal. The source selection decision makes it quite
clear that the SSA did not consider the relative merits of the two
proposals to be substantially equal, but believed that GBI's lower APU
height was a competitive strength which significantly outweighed those
of Fermont. Thus, the SSA's decision to rely on this strength was
fully consistent with the stated evaluation criteria and, as discussed
below, reasonable.
The APU's height was one of two considerations under the size and
weight factor, one of the three most important factors set forth in
the evaluation scheme. The purchase description listed a maximum
acceptable APU height of 26 inches and a desired height of "lowest
possible." GBI's APU was 17.1 inches tall, 8.9 inches below the
maximum, and its proposal was rated exceptional and given a strength
for significantly exceeding the requirement.[7] One of Fermont's APUs
was [DELETED] inches tall, with the other [DELETED] inches
tall, and its proposal was rated acceptable.
As reflected in the source selection decision, the Army believed that
the lower height of GBI's APU would increase personnel safety and
survivability. The APU is mounted directly in front of the
commander's hatch, and the lower height of GBI's APU allows the
commander increased vision to the front of the vehicle, enabling him
to assist the driver whose vision is partially obstructed by the APU.
Thus, any reduction in height would decrease the obstruction--the
commander's forward blind area is reduced by more than half with the
GBI APU versus the higher Fermont APU. While Fermont argues that the
driver only requires visual assistance from the right, not the front,
the Army clearly states that, according to the using representative,
the commander looks out the hatch whenever the vehicle is moving, and
the only time he would not be looking out the hatch would be when the
vehicle
was under direct fire. As to Fermont's assertion that its APU would
act to shield the commander from frontal exposure, thereby making its
APU safer, the protester does not address the possibility that enemy
fire would come from other directions.
The Army also believed that the lower height of GBI's APU was a
significant benefit in the area of transportability. According to the
Army, these systems will be transported on C-130 and C-141 aircraft.
The vehicle can be loaded onto these aircraft with the GBI APU
installed, but, due to its height, the Fermont APU would have to be
removed with cargo handling equipment and space would have to be
provided in the aircraft for stowage. Handling equipment and
additional manpower would also have to be available at the aircraft
landing point to remount the Fermont APU. Contrary to Fermont's
belief, the Army states that handling equipment, aircraft space,
rigging materials, and manpower are at a premium during large-scale
deployments, and avoiding a requirement for such things is of
significant value. While Fermont largely relies on a 1992 directive
in arguing that there is no requirement to transport these vehicles by
air, the Army states that the use of past deployment data is no longer
applicable and reasserts the necessity of such transport.
Since the evaluation criteria contemplated award to a firm whose
competitive strengths in the design area significantly outweighed
those of the lower-cost offeror, and since Fermont has not persuaded
us that the Army unreasonably determined that the benefits inherent in
the lower height of GBI's APU significantly outweighed those of
Fermont, we cannot conclude that the source selection decision was
improper.
The protests are denied.
Comptroller General
of the United States
1. Even though the selection was made through the exercise of an
option on the original contract award, our Office has jurisdiction to
consider the protest because the option exercise was based on the
results of a limited competition and evaluation of proposals; the
option exercise thus was not mere contract administration. Mine
Safety Appliances Co., 69 Comp. Gen. 562 (1990), 90-2 CPD 11.
2. The cost area is not at issue here.
3. The Category I factors were of equal weight; the first Category II
factor was twice as important as the rest, which were equal to each
other; and the first two Category III factors were equal and slightly
more important than the remaining factors, which were equal to each
other.
4. Fermont's contention that its highest reading was [DELETED] dBA is
not clearly supported by the test report. In any event, the record
does not support the inference that Fermont's rating would have
differed had the agency considered [DELETED] dBA to have been its
highest reading.
5. Fermont also argues that the Army failed to recognize that one of
GBI's readings from 7 meters, on one APU, exceeded the requirement by
[DELETED] dBA. However, the record shows that the Army recognized
this failure but considered it to be readily correctable because GBI's
second APU met the requirements. Moreover, since this reading was
from the direction of the engine exhaust, the Army believes it is
highly likely that a redirection of the exhaust exit angle will lower
the reading. Fermont's speculation that GBI's proposed design changes
will increase the sound level is insufficient to render the evaluation
unreasonable.
6. Similarly, the scheduled maintenance factor specified a minimum
interval of 100 hours. Fermont contends that it should have been
rated exceptional because its maintenance interval was [DELETED]
hours, which it asserts would be a substantial benefit in terms of
reduced labor costs and increased availability of the APU. The Army
acknowledged this benefit in giving Fermont's proposal a strength for
this attribute, but did not consider it sufficiently beneficial to
merit a rating of exceptional. Fermont's insistence that the value of
its maintenance interval merited an exceptional rating again is a mere
disagreement with the agency's judgment.
7. GBI's proposal was also given a strength for significantly
exceeding the purchase description's weight requirement.