BNUMBER: B-257451.2, Dec. 9, 1994, 94-2 CPD ¶ 230 at 3 ; Information Sys. & Networks Corp. , B-237687, Feb. 22, 1990, 90-1 CPD ¶ 203 at 3. The protester's mere disagreement with the agency's judgment does not establish that an evaluation was unreasonable. Medland Controls, Inc. , B-255204, B-255204.3, Feb. 17, 1994, 94-1 CPD ¶ 260 at 3.
DATE: May 28, 1998
TITLE: East/West Industries, Inc., B-257451.2, Dec. 9, 1994, 94-2
CPD ¶ 230 at 3 ; Information Sys. & Networks Corp., B-237687,
Feb. 22, 1990, 90-1 CPD ¶ 203 at 3. The protester's mere
disagreement with the agency's judgment does not establish that an
evaluation was unreasonable. Medland Controls, Inc., B-255204, B-
255204.3, Feb. 17, 1994, 94-1 CPD ¶ 260 at 3., May 28, 1998
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Matter of:East/West Industries, Inc.
File:B-278734.4
Date:May 28, 1998
Pamela J. Mazza, Esq., and Philip M. Dearborn, Esq., Piliero, Mazza &
Pargament, for the protester.
Ellen D. Washington, Esq., Department of the Navy, for the agency.
Christine Davis, Esq., and James Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Where the agency accounted for weaknesses in the awardee's
technical approach in rating its proposal, protester's argument that
the agency should have further downgraded the awardee's proposal based
upon the evaluated weaknesses constitutes mere disagreement with the
agency's judgment, which does not establish that the evaluation was
unreasonable.
2. Agency reasonably used a price analysis and technical reevaluation
to determine that the awardee understood the contract requirements,
notwithstanding its low price.
DECISION
East/West Industries, Inc. protests the award of a contract to Skyline
Industries, Inc. under request for proposals (RFP) No.
N00019-97-R-0013, issued by the Department of the Navy, Naval Air
Systems Command, for the design, development, testing and production
of Common Crash Resistant Troop Seat Systems.
We deny the protest.
The RFP, issued as a small business set-aside, was for the award of a
fixed-price contract for the design, development and testing of 20
seats. RFP sec. B. Assuming that qualification testing was successful,
the RFP also stated two option quantities under which the government
could procure an overall estimated quantity of 5,408 seats. RFP sec. B,
M-3.
The solicited seats are for use in the UH-1N, H-3, and H-46
helicopters to minimize injuries during a crash. The contractor was
to design the seats so that they could be installed, stowed, and
reconfigured to fit in the three types of helicopters. RFP Attachment
(2) sec. 1, 3(h). During the design and development effort, the
contractor was to engage in trade studies of the subject helicopters
to develop a design for the seat, considering which design would
optimize the seat's adaptability ("commonality") to the various
helicopter platforms. Id., RFP Attachment (1) sec. 1.3.
The RFP stated three evaluation factors: technical, management, and
price, including options. RFP sec. M-2(2), (5). The technical factor
was most important, and the management and price factors, while equal
to one another, were of lesser importance than the technical factor.
RFP sec. M-2(2). The RFP stated that the government might not select a
lower-priced proposal if a higher-priced proposal was deemed more
advantageous, considering each proposal's relative strengths,
weaknesses, and performance risks. Id. The source selection plan
provided five adjectival ratings, "outstanding," "highly
satisfactory," "satisfactory," "marginal," and "unsatisfactory," and
three risk assessment ratings, "high," medium," and "low."
The RFP listed five management subfactors and six technical
subfactors. RFP sec. M-2(3), (4).[1] Under the most important technical
subfactor, design and integration, offerors were to describe their
knowledge of the subject helicopters and their approach to conducting
trade studies to determine the best design approach. Under the next
most important technical subfactor, commonality, offerors were to
describe how they intended to address commonality considerations
during the design process. The RFP did not require offerors to
propose a particular design or design approach, but advised that
proposals offering new seat designs would be considered higher risk
than proposals offering existing seat designs. RFP sec. L-9.
The RFP invited the submission of alternate proposals, and, on June
16, 1997, the Navy received eight proposals from four offerors,
including the awardee and the protester. The agency eliminated one
offeror's proposal from the competitive range and conducted
discussions with the remaining firms. On November 25, the agency
received seven best and final offers (BAFO) from three firms,
including East/West and Skyline.[2]
Skyline submitted the lowest-priced BAFO at $8,726,604, or $1,608 per
seat. East/West submitted the next lowest-priced BAFO at $16,341,081,
or $3,011 per seat. The government estimate was $10,926,564, or
$2,013 per seat, which was based upon a 1996 contract for
non-developmental crashworthy helicopter seats.
East/West's BAFO, which was based upon an existing seat design, was
the highest-rated. East/West's management proposal was rated "highly
satisfactory," and its technical proposal was rated "highly
satisfactory/low risk." In comparison, Skyline's management proposal
was rated "satisfactory," and its technical proposal was rated
"satisfactory/medium risk."[3] In assigning the "satisfactory/medium
risk" rating, the technical evaluation team (TET) considered the fact
that Skyline proposed a new seat to be developed by Skyline and its
subcontractor, the manufacturer of the UH-1N helicopter; that the
design was very preliminary; and that the proposal's design and
integration approach focused on the UH-1N helicopter, not the H-3 and
H-46 helicopters, though the TET found that the "preliminary seat
design is common among the helicopters."
On January 5, 1998, the competitive award panel (CAP) performed a
cost/technical tradeoff and recommended that Skyline's lowest-priced
proposal be selected for award. Before making its recommendation, the
CAP considered whether Skyline's significantly lower price and
somewhat lower technical rating evidenced a flawed understanding of
the contract requirements, and concluded that Skyline's
"satisfactory/medium risk" rating was justified and evidenced an
understanding of the requirements. The CAP reasoned that Skyline's
price was probably lower than East/West's because Skyline will perform
the work in an area with a lower cost of living than East/West (Fort
Worth, Texas versus Long Island, New York) and because Skyline could
purchase data rights for the UH-1N helicopter, manufactured by its
subcontractor, on much more favorable terms than East/West could
negotiate. In addition, the CAP considered the fact that Skyline's
price was closer to the government estimate than was East/West's
price. This price analysis, combined with the TET's findings,
persuaded the CAP that Skyline understood the contract requirements.
The CAP presented its findings and award recommendation to the source
selection authority (SSA). Like the CAP, the SSA questioned whether
Skyline's much lower price evidenced a misunderstanding of the
contract requirements. Suspending a selection decision, the SSA
reconvened the TET to reevaluate all BAFOs received; in particular,
the SSA asked the TET to assign adjectival and risk ratings at the
subfactor level for each BAFO. The TET confirmed the overall
"satisfactory" rating of Skyline's proposal based upon the new ratings
assigned at the subfactor level. Skyline's proposal received
"satisfactory/low risk" ratings under three subfactors,
"satisfactory/medium risk" ratings under two subfactors including
commonality, and a "marginal/medium risk" rating under the design and
integration subfactor.
After receiving the TET's report, the SSA determined that Skyline
understood the contract requirements and approved the award
recommendation of the CAP. The CAP acknowledged, and the SSA
concurred, that Skyline's proposal was riskier than East/West's,
though, in the agency's view, Skyline's proposed use of the UH-1N
helicopter manufacturer as its subcontractor mitigated some of the
proposal risks. Even accounting for the greater risks inherent in
Skyline's proposal (and the potentially greater costs of monitoring
the riskier contract, estimated at about $1 million), the agency
determined that the significant price advantage of Skyline's
"satisfactory/medium risk" proposal outweighed the benefits of
East/West's "highly satisfactory/low risk" proposal. This protest
followed.
East/West protests that the agency should have rejected Skyline's
proposal as technically unacceptable. East/West claims that Skyline's
proposal focused on the design and integration issues relative to the
UH-1N helicopter manufactured by its subcontractor, without
establishing a design and integration approach relative to the H-3 and
H-46 helicopter platforms. Accordingly, East/West argues that the
agency should have regarded Skyline's proposal as technically
unacceptable under the design and integration and commonality
subfactors.
It is not the function of our Office to evaluate proposals de novo.
Rather, we will examine an agency's evaluation only to ensure that it
was reasonable and consistent with the stated evaluation criteria and
applicable statutes and regulations, since determining the relative
merit of competing proposals is primarily a matter within the
contracting agency's discretion. Advanced Tech. and Research Corp.,
B-257451.2, Dec. 9, 1994, 94-2 CPD para. 230 at 3; Information Sys. &
Networks Corp., B-237687, Feb. 22, 1990, 90-1 CPD para. 203 at 3. The
protester's mere disagreement with the agency's judgment does not
establish that an evaluation was unreasonable. Medland Controls,
Inc., B-255204, B-255204.3, Feb. 17, 1994, 94-1 CPD para. 260 at 3.
We find no basis to object to the TET's evaluation in this case.
Skyline's ratings under the contested subfactors ("marginal/medium
risk" for design and integration and "satisfactory/medium risk" for
commonality) accounted for the weaknesses in Skyline's design and
integration approach relative to the H-3 and H-46 helicopter
platforms. While the protester believes that these weaknesses should
have caused the TET to find the proposal unacceptable, we find
reasonable the TET's assessment that Skyline's proposal demonstrated
an acceptable, if not strong, approach to the contract requirements.
Specifically, even though the TET questioned how effectively Skyline
would address design and integration issues in adapting its seat to
the H-3 and H-46 helicopters, the TET determined that Skyline's
proposed seat was, in fact, common to all three platforms; that
Skyline intended to perform a trade study early in the process to
support its design before it ruled out other possibilities; and that
Skyline's proposal presented a thorough understanding of the design
and integration issues related to the UH-1N helicopter platform, which
would serve as the cornerstone for further trade studies.
Furthermore, when asked during discussions about its design and
integration approach with respect to the H-3 and H-46 helicopters,
Skyline confirmed that the approach outlined for the UH-1N helicopter
should generally apply to these other aircraft, since Skyline's
proposed seat design was common to all three platforms, and that
further integration issues would be addressed during a trade study--an
approach contemplated by the RFP. RFP Attachment (1) sec. 1.3. The
protester's argument that more was required to establish the
acceptability of Skyline's proposal constitutes mere disagreement with
the TET's ratings, which we find reasonably balanced the competing
strengths, weaknesses, and risks in Skyline's proposal.
In a related argument, East/West also protests that Skyline's proposal
price is unrealistically low and demonstrates that the awardee does
not understand the solicitation requirements, which should have
resulted in the rejection of Skyline's proposal. We disagree.
While an agency may provide for a price realism analysis in the
solicitation of fixed-price proposals for such purposes as measuring
an offeror's understanding of the solicitation requirements, this RFP
did not provide for a price realism analysis, include price as a
consideration in the technical evaluation, or provide for an
evaluation of the offeror's understanding. See Applied Communications
Research, Inc., B-270519, Mar. 11, 1996, 96-1 CPD para. 145 at 3; Akal
Sec., Inc., B-261996, Nov. 16, 1995, 96-1 CPD para. 33 at 5-6.
Nevertheless, the record reflects that the agency performed a price
analysis based upon techniques recommended by the Federal Acquisition
Regulation (FAR) to determine that Skyline's price was reasonable and
to ascertain that Skyline understood the contract requirements,
notwithstanding its low price. Specifically, the agency compared the
awardee's price with the government estimate and with East/West's
price, and determined that Skyline's price was generally in line with
the government estimate and that the wide margin between Skyline's
price and East/West's price reflected discounts available to Skyline
in purchasing UH-1N data rights and in doing business in an area with
a lower cost of living than East/West. Given that the nature and
extent of an agency's price analysis is largely a matter of agency
discretion, dependent upon the facts of a particular procurement, PHP
Healthcare Corp., B-251933, May 13, 1993, 93-1 CPD para. 381 at 5, we
think that the agency performed an adequate price analysis pursuant to
FAR sec. 15.805-2 (June 1997), which validated the realism of Skyline's
price and its understanding of the contract requirements.
Furthermore, the SSA, in an effort to confirm that Skyline understood
the contract requirements despite its low price, reconvened the TET
and directed it to reevaluate BAFOs. Based upon this reevaluation,
the TET determined that Skyline's proposal was free from any
"unsatisfactory" or "high risk" ratings at the subfactor level and
manifested an overall "satisfactory" approach to the RFP technical
requirements. See Crestmont Cleaning Serv. & Supply Co., Inc. et al.,
B-254486 et al., Dec. 22, 1993, 93-2 CPD para. 336 at 6-7. The protester
has provided no basis to disagree with this assessment.
The protest is denied.
Comptroller General
of the United States
1. The management subfactors, in descending order of importance, were
(i) Organization, (ii) Associate Contractor Agreements, (iii)
Configuration Management, (iv) Tracking, and (v) Past Performance.
The six technical subfactors, in descending order of importance, were
(i) Design and Integration,
(ii) Commonality, (iii) Experience, (iv) Production Capability, (v)
System Safety, Reliability, and Quality Assurance, and (vi) Logistics.
RFP sec. M-2(3), (4).
2. Skyline submitted a single BAFO, East/West submitted two BAFOs, and
the other firm submitted four BAFOs.
3. Skyline's proposal was rated "medium risk" from a design and
development standpoint and "low risk" from a production standpoint.