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, -25ï¿½ Fahrenheit (F), 
and 120ï¿½ F.  GBI's APU significantly exceeded the minimum requirements 
under both ambient temperature and -25ï¿½ F, and was given a strength 
for this achievement.  However, the evaluators noted that the test 
could not be performed at 120ï¿½ 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 120ï¿½ 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 -25ï¿½ F, they were 
not tested at 120ï¿½ 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 120ï¿½ 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.