BNUMBER: B-257822.5
DATE: August 18, 1995
TITLE: Matter of: Engineering Incorporated
**********************************************************************
REDACTED VERSION[*]
Matter of: Engineering Incorporated
File: B-257822.5
Date: August 18, 1995
Michael A. Hordell, Esq., Robert S. Brams, Esq., and Laura L. Hoffman,
Esq., Gadsby & Hannah, for the protester.
David B. Dempsey, Esq., and Sheila C. Stark, Esq., Akin, Gump,
Strauss, Hauer & Feld, L.L.P., for Dynatest Consulting, Inc., an
interested party.
Lester Edelman, Esq., and Danielle Conway-Jones, Esq., Office of the
Chief Counsel, U.S. Army Corps of Engineers, for the agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. In evaluating technical proposals under a solicitation for a
pavement testing machine, an agency reasonably gave credit to
statements in the offerors' proposals concerning how existing machines
would be updated and customized so as to comply with the specification
requirements.
2. In evaluating the awardee's experience, the agency properly
imputed subcontractors' experience to the awardee, where the
solicitation did not prohibit the use of subcontractors to perform the
contract; the agency reasonably downgraded awardee's proposal for its
reliance on subcontractors under another relevant evaluation factor.
DECISION
Engineering Incorporated protests the reinstatement of the award of
contract No. DACA39-94-C-0097 to Dynatest Engineering, Inc. by the
U.S. Army Corps of Engineers for a pavement testing machine to be used
by the U.S. Army Cold Regions Research and Engineering Laboratory
(CRREL), Frost Effects Research Facility (FERF), Hanover, New
Hampshire.
We deny the protest.
The RFP contemplated the award of a firm, fixed-price contract to
furnish and deliver an automatic loading machine (ALM) for testing
pavement. An ALM applies simulated traffic loads on truck and
aircraft tires to various types of pavement test sections under
different conditions. By simulating the passage of many vehicles or
aircraft over pavement in a short period of time, an ALM enables the
accelerated testing of road and airfield surfaces, so that researchers
can more accurately forecast the durability of particular types of
pavement surfaces under actual weather and traffic conditions.
Section C of the RFP, specifications/work statement, as amended,
listed numerous features required by the Corps in the solicited ALM.
The RFP stated that award would be made to the offeror whose proposal
is determined to be most advantageous to the government, cost and
other criteria considered, and that:
"[t]he combined technical factors are significantly more
important than cost. Cost is not expected to be the controlling
factor in the selection of a contractor for this solicitation.
The degree of importance of cost as a factor could become greater
depending upon the equality of the proposals for other factors
evaluated; where competing proposals are determined to be
substantially equal, total cost and other cost factors could
become the controlling factor."
The technical factors were
"a. Demonstrated experience and expertise by the offeror in
developing, constructing, and operating an [ALM] as described in
the specifications in Section C of this solicitation or test
equipment of similar or comparable complexity.
"b. Demonstrated understanding of the requirement as specified
in the scope of work.
"c. Adequacy of the offeror's own resources (personnel and
equipment) to construct the type of machine described herein as
opposed to dependence on subcontracting.
"Factor (a) is significantly more important than factors (b) and
(c). Factor (b) is slightly more important than factor (c).
Factor (c) is slightly less important than factor (b)."
Offerors were required to submit sufficient information with their
proposals to permit evaluation in accordance with the stated factors;
there was no specific requirement that offerors demonstrate compliance
with all specification requirements.
The Corps received nine proposals by the closing date for receipt of
proposals, including Engineering Incorporated's and Dynatest's.
Engineering Incorporated offered its Mk IV Accelerated Loading
Facility (ALF) for $[DELETED]. The ALF is basically a 90-foot long
steel structural frame containing a moving test wheel carriage that
travels longitudinally at specified speeds back and forth on rails
attached to the frame. Loads of weights are applied to the test wheel
carriage, whose test wheels are fitted with either truck or aircraft
tires, to achieve the desired load on the pavement test section.
Dynatest offered its Mark IV Heavy Vehicle Simulator (HVS) for
$[DELETED]. Dynatest's model is based on a South African product and
will be manufactured at the facilities of Dynatest's South African
subcontractor. The HVS resembles a large truck and is comprised of an
approximately 74-foot long steel frame with a cab mounted on tires at
either end. Suspended beneath the chassis frame is a test beam which
moves laterally and vertically by means of hydraulic cylinders. A
test wheel carriage, between the side frames of the test beam and
supported on rollers which run on rails, moves back and forth in a
longitudinal direction. During testing, the HVS is lifted off the
pavement by built-in hydraulic jacks, the test wheels lowered to the
pavement, the desired load applied by hydraulic cylinders, and the
test wheels then traverse the pavement test section.
The Corps's technical evaluation board (TEB) rated Engineering
Incorporated's proposal the highest with a technical score of 94 out
of a possible 100 points, and Dynatest's proposal second highest with
a technical score of 93 points. The Corps conducted written
discussions and requested best and final offers (BAFO) from the four
offerors with the highest technical scores, including Engineering
Incorporated and Dynatest. Based on the BAFOs, the TEB rated the
Engineering Incorporated and Dynatest proposals as technically equal,
with both receiving the highest technical score of 93 points.[1]
Dynatest's BAFO price was $[DELETED] and Engineering Incorporated's
BAFO price remained $[DELETED]. In evaluating Dynatest's price, the
Corps applied the 50-percent Buy American Act surcharge to the foreign
portion of Dynatest's offer. Dynatest's evaluated price of $[DELETED]
was $[DELETED] less than Engineering Incorporated's $[DELETED]
price.[2] The Corps determined that Dynatest's technically equal and
lower evaluated priced offer was most advantageous to the government,
and made award to Dynatest in the amount of $1,525,000.[3]
On July 7, 1994, after receiving notice of the award to Dynatest,
Engineering Incorporated protested to our Office that the Corps failed
to adequately evaluate the proposals. Because of the protest, the
Corps issued a stop-work order to Dynatest. After receiving the
agency's report on the protest defending the award, Engineering
Incorporated raised additional grounds for protest, including the
Corps's alleged failure to conduct meaningful discussions and the
Corps's alleged misapplication of the Buy American Act surcharge to
Dynatest's offer.
In considering Engineering Incorporated's supplemental protest, the
Corps agreed that it had misapplied the Buy American Act surcharge to
Dynatest's offer and that the surcharge should have been applied to
Dynatest's total offered price. Under this calculation Dynatest's
evaluated price exceeded Engineering Incorporated's price, such that
Dynatest's proposal could no longer be considered most advantageous to
the government. As award could not be made to Engineering
Incorporated because that firm's price exceeded the funds available
for the project, the contracting officer canceled the RFP with the
intention of resoliciting the agency's needs at a later date. Based
on the Corps's proposed corrective action, our Office dismissed
Engineering Incorporated's protest as academic on October 11.
Dynatest then protested to our Office the termination of its contract,
contending that the Buy American Act surcharge was properly applicable
only to the South African manufactured equipment portion of its price,
not its total price, and that Dynatest's award was improperly
terminated.
On March 1, 1995, we sustained Dynatest's protest, finding that the
Corps, in its corrective action in response to Engineering
Incorporated's protest, incorrectly applied the Buy American Act
surcharge to Dynatest's total price, instead of that portion
representing Dynatest's nondomestic manufacturing costs. Dynatest
Consulting, Inc., B-257822.4, Mar. 1, 1995, 95-1 CPD 167. Because
Dynatest had not provided sufficient information in its BAFO to enable
the Corps to determine which elements of its costs were subject to the
Buy American Act surcharge, we recommended that the Corps obtain
clarification from Dynatest as to the costs associated with the South
African portion of its HVS, and reevaluate Dynatest's price by
applying the Buy American Act surcharge only to the South African
portion to determine Dynatest's evaluated price. We noted that if
Dynatest's evaluated price exceeded Engineering Incorporated's price,
the contract was properly terminated, but, if Dynatest's evaluated
price remained lower than Engineering Incorporated's, the Corps should
reinstate the award to Dynatest and Engineering Incorporated could
then reinstate its other protest grounds. Id.
Subsequently, the Corps obtained the additional cost information from
Dynatest and determined that the portion of Dynatest's original price
to which it had initially applied the Buy American Act surcharge was
correct and that Dynatest's offer remained most advantageous to the
government. Thus, the Corps reinstated the award to Dynatest on April
7. Engineering Incorporated then timely reinstated its other protest
grounds, which are the subject of this decision.
Engineering Incorporated primarily protests the evaluation of its and
Dynatest's proposals as technically equal, asserting that its proposal
should have been considered superior. In reviewing protests against
the propriety of an agency's evaluation of proposals, it is not the
function of our Office to independently weigh the merits of the
offers. Microeconomic Applications, Inc., B-258633.2, Feb. 14, 1995,
95-1 CPD 82. Rather, the evaluation of proposals is a matter within
the discretion of the procuring agency since the agency is responsible
for defining its needs and the best method of accommodating them and
must bear the burden of any difficulties resulting from a defective
evaluation. Data Sys. Analysts, Inc., B-255684; B-255684.2, Mar. 22,
1994, 94-1 CPD 209. Consequently, we will question an agency's
evaluation only where the record clearly shows that the evaluation
does not have a reasonable basis or is inconsistent with the
evaluation criteria listed in the RFP. S.T. Research Corp., B-233115,
Feb. 15, 1989, 89-1 CPD 159. A protester's mere disagreement with
the agency does not render the evaluation unreasonable. South Capitol
Landing, Inc., B-256046.2, June 20, 1994, 94-2 CPD 3.
Engineering Incorporated first argues that Dynatest's proposed HVS
fails to comply with numerous material specification requirements.[4]
We have reviewed Engineering Incorporated's contentions in this regard
and find them without merit.
For example, Engineering Incorporated complains that Dynatest's
machine does not offer uni-directional capability as required by
specification C.3. Specification C.3 requires that, for the lighter
traffic loads to be tested (less than 25,000 pounds), the ALM's test
wheel be able to travel over the pavement test surface
uni-directionally (i.e., the load is applied in only one direction and
the test wheel is lifted off the pavement on its return in the other
direction).[5] Specifically, Engineering Incorporated contends that
the test wheel on Dynatest's machine, after applying the test load in
one direction, maintains a static weight of 4,500 pounds on the
pavement surface during its return in the other direction, which does
not comply with the uni-directional testing requirement that loads be
applied in only one direction. Engineering Incorporated's contention
that Dynatest's machine will maintain a static load of 4,500 pounds is
based on what it believes to be the characteristics of Dynatest's
earlier Mark III model--which is not the machine offered here. In any
case, in Dynatest's proposal, the offered Mark IV version is expressly
represented as having the required uni-directional capability, and
there is no indication in Dynatest's proposal that this machine is not
capable of applying a load in one direction only.[6]
As another example, Engineering Incorporated argues that Dynatest's
test wheel does not achieve the required minimum speeds, does not
travel at a constant speed, and does not carry a load over the minimum
20 feet of test section, as required by specifications C.3 and C.5.[7]
Here, again, Engineering Incorporated's contentions are based on the
perceived characteristics of Dynatest's Mark III model, which is not
being offered here. In its proposal, Dynatest states that it is
upgrading the hydraulic components of the Mark III HVS to achieve the
required test wheel speed for the Mark IV and promises that its
machine will be able to test the specified loads at the specified
speeds. Likewise, the proposal indicates that the updated hydraulic
system will enable the HVS test wheel to maintain a constant speed
over the required distance of 20 feet, rather than the 16 feet
achievable by the Mark III, since the upgraded hydraulic system will
allow the test wheel to be accelerated and decelerated over shorter
distances.[8]
Based on our review and as illustrated by the foregoing examples,
there is no merit to Engineering Incorporated's numerous contentions
of Dynatest's machine's noncompliance with the specification
requirements, which were primarily based on its analysis of the Mark
III's capabilities or unreasonable interpretations of Dynatest's
proposal. Further, we find that the TEB reasonably accepted
Dynatest's assurances that the upgraded features of its Mark IV
machine will meet each of the specification requirements. While
Engineering Incorporated objects to these assurances by Dynatest as
being merely blanket statements of compliance, we note that the RFP
did not expressly require offerors to demonstrate in their proposals
how they would comply with each specification requirement and that
Engineering Incorporated's proposal also merely states that it will
comply with several of the specification features, which Engineering
Incorporated's previous ALMs did not have, e.g., high load and
bi-directional capability.[9] Indeed, the record indicates that
neither Dynatest's Mark IV HVS nor Engineering Incorporated's Mk IV
ALF have yet been fabricated. In this regard, we understand that the
market for ALMs is very limited and that only a handful of Dynatest's
and Engineering Incorporated's earlier models have been produced,
which, beyond their basic designs, appear to be fabricated according
to the performance features requested by each customer.
Engineering Incorporated also objects to the 1-point reduction in its
technical score under the "demonstrated understanding of the
requirements as specified in the scope of work" factor after
submission of its BAFO because of the agency's concerns that
Engineering Incorporated had not identified an adequate longitudinal
moving technique for its ALM. In this regard, specification C.6
requires that the ALM be capable of longitudinal movement from one
pavement test section to another at least 25 feet away within 2 hours.
During discussions, the Corps told Engineering Incorporated that it
was "concerned with [Engineering Incorporated's] proposed method to
meet [specification C.6] because [DELETED] is not available at [FERF]
for moving the machine longitudinally" and "[w]e would prefer an
alternative system." Engineering Incorporated responded in its BAFO
with further explanations and assurances as to how longitudinal
movement would be achieved without [DELETED]. In evaluating
Engineering Incorporated's BAFO response, the TEB members were
unanimously concerned about the acceptability of Engineering
Incorporated's proposed method of moving its machine longitudinally,
in light of the conditions at FERF, where the machine would be in
operation. The Chairman of the TEB also points out that the FERF does
not have the "strong, smooth floor conditions" found in the
Engineering Incorporated shop (which members of the TEB had visited),
and thus the method used by Engineering Incorporated to move its ALM
might not be successfully implemented at the FERF. Under the
circumstances, we think the agency reasonably found Engineering
Incorporated's proposed method for moving its ALM longitudinally to be
problematic, and appropriately downgraded that firm's proposal.
Engineering Incorporated also contends that the Corps improperly gave
Dynatest too much credit and Engineering Incorporated too little
credit for experience and expertise in developing and constructing
ALMs. The TEB awarded Engineering Incorporated a score of 51 and
Dynatest a score of 53 out of a possible 55 points under the
experience/expertise factor.
Although Dynatest itself was only recently incorporated, the other
members of Dynatest's team, Ermetek Pty., Ltd., and the South African
Council for Scientific and Industrial Research (CSIR), have
substantial experience in the fabrication, design, and operation of
ALMs. [DELETED].
We note that the experience and expertise of the members of Dynatest's
team are not dissimilar to Engineering Incorporated's own experience
in developing and constructing ALMs. [DELETED].
Engineering Incorporated's proposal did not receive full credit under
the experience/expertise factor primarily because the proposal did not
demonstrate that the critical bi-directional and high load
capabilities had been reduced by that firm to an ALM design or that
Engineering Incorporated had manufactured a machine with such
capabilities. While, as indicated above, Engineering Incorporated had
substantiated its capabilities (as opposed to its
experience/expertise) to add these features through shop tests and
engineering analyses, it does not appear that these features had been
included in an ALM. Instead, Engineering Incorporated refers to some
1981 design experience with "full-scale" aircraft landing loads and to
its experience with bi-directional capabilities with regard to control
systems, as demonstrating its experience/expertise.[10] Under the
circumstances, we cannot find the agency acted unreasonably in
downgrading Engineering Incorporated's proposal because that firm has
not incorporated these capabilities into an ALM.[11]
Given the extensive experience/expertise of Dynatest's team and
Engineering Incorporated's limited experience/expertise regarding
incorporation of the bi-directional and high load capabilities into an
ALM, we cannot find that the TEB acted unreasonably in rating Dynatest
slightly higher than Engineering Incorporated for the
experience/expertise factors. While Engineering Incorporated asserts
that Dynatest is a new company with limited experience/expertise of
its own, an agency may consider an offeror's subcontractors'
experience under relevant evaluation factors where, as here, the RFP
allows for the use of subcontractors to perform the contract and does
not prohibit the consideration of subcontractors' experience in the
evaluation of proposals. Decision Sys. Technologies, Inc.; NCI Info.
Sys., Inc., B-257186 et al., Sept. 7, 1994, 94-2 CPD 167.
Engineering Incorporated also contends that the Corps scored Dynatest
too highly in the evaluation category "adequacy of resources
(personnel and equipment) to construct the ALM as opposed to
dependence on subcontracting." As described above, Dynatest's HVS
will be built in South Africa by Dynatest's subcontractors, namely,
Ermetek, which will fabricate the machine at its plant, and CSIR,
which will provide technical support. Production of the Mark IV HVS
will be under the direct, full-time supervision of Dynatest personnel
to ensure that the modifications to the existing design comply with
the Corps's requirements. Dynatest is also responsible for support
services for its machine, such as ensuring parts availability,
training Corps's personnel, and [DELETED]. Because of Dynatest's
dependence on subcontracting, the TEB downgraded its proposal by 4
points (i.e., 16 out of 20 points). In contrast, Engineering
Incorporated received a perfect 20 point score. Given Dynatest's
critical responsibilities and team relationship with the fabricator of
the offered machine, we cannot say that its score for this factor is
too high.
Engineering Incorporated also contends that the Corps failed to
consider the lower operating costs associated with Engineering
Incorporated's machine in evaluating proposals.[12] This contention
has no merit. Even though the RFP did not provide for the
consideration of such costs in the price evaluation, the TEB
considered the operating cost savings claimed by Engineering
Incorporated in its proposal, and gave Engineering Incorporated
appropriate credit in its technical score.[13]
Finally, we find no merit to Engineering Incorporated claims that the
award resulted from a pattern of unequal treatment to favor Dynatest
throughout the procurement process, inasmuch as each of the examples
cited by Engineering Incorporated is either an untimely protest
contention and/or does not substantiate Engineering Incorporated's
claims.[14]
The protest is denied.
Robert P. Murphy
General Counsel
* The decision issued on August 18, 1995, contained proprietary
information and was subject to a General Accounting Office protective
order. This version of the decision has been redacted. Deletions are
indicated by "[deleted]."
1. The other two offerors' proposals were significantly lower rated.
2.[DELETED].
3. The amount of the award was less than the price of Dynatest's BAFO
because the Corps waived applicable customs duties that had been
included in Dynatest's price.
4. The specifications which Engineering Incorporated alleges
Dynatest's HVS does not satisfy concern the machine's uni-directional
testing capability, test wheel speed and ability to maintain a
constant speed, pavement test section length, automatic operation,
lateral movement, replication of traffic wander, noise level,
operational temperature range, uniform wheel load, monitoring of
load/tire pressure/temperature, and compliance with industry
standards. The TEB evaluated the offerors' proposed machines'
compliance with the specifications under the "demonstrated
understanding of the requirement as specified in the scope of work"
evaluation factor.
5. The specification further requires that the test wheel be able to
apply all loads, including high loads of between 25,001 pounds and
45,000 pounds, bi-directionally (i.e., the wheel applies the load to
the pavement in both directions). Uni-directional testing replicates
vehicular traffic on a road since traffic normally goes in the same
direction in each lane. Bi-directional testing allows accelerated
testing of pavement, and, at the higher loads, replicates the wear and
tear on airport pavement surfaces.
6. We note that Dynatest's proposal indicates that its Mark III model
also has the required uni-directional capability. Moreover,
subsequent to award, Dynatest confirmed that its test wheel can be
lifted off the pavement in one direction, so that no load would be
applied as required for uni-directional testing.
7. In this regard, specification C.5 requires that:
"The machine will be capable of . . . constant speed and constant
load for a minimum of a 20 linear [foot] test section. Up to 5
[feet] for acceleration and deceleration will be allowed at
either end of the 20 [foot] test section on the same surface."
8. Dynatest also clarified for the Corps during discussions that its
machine will comply with the minimum 20-foot test section.
9. In its proposal, Engineering Incorporated stated that the ALF's
operational software "will be upgraded for two-direction operation";
this evidences that bi-directional capability had not previously been
incorporated in Engineering Incorporated's ALM. The record indicates
that Engineering Incorporated had merely conducted a shop test to
demonstrate that its machine could be operated in two directions and
completed engineering analyses to indicate that its machine could
accommodate high loads.
10. Engineering Incorporated's proposal indicates that the control
technology derived from its SAFARI system--an automated robotic
maintenance system of comparable complexity to an ALM which is used to
wash and paint aircraft--permits the addition of operator selection of
bi-directional capability. Engineering Incorporated's proposal merely
refers to the incorporation of this type of control system (without
specific discussion of the bi-directional capability) in an ALM built
for the [DELETED], which was delivered to that customer after
submission of Engineering Incorporated's proposal.
11. Engineering Incorporated contends that the Corps failed to conduct
meaningful discussions by not seeking clarification of these points.
Where, as here, a proposal is considered to be acceptable and in the
competitive range, the agency is not obligated to discuss every aspect
of the proposal that receives less than the maximum possible rating.
Northern Virginia Serv. Corp., B-258036.2; B-258036.3, Jan. 23, 1995,
95-1 CPD 36; Specialized Technical Servs., Inc., B-247489.2, June
11, 1992, 92-1 CPD 510. In any case, Engineering Incorporated has
not shown that its experience in this regard was not as evaluated,
such that its rating would have improved with discussions on these
points. See John Brown U.S. Servs., Inc., B-258158 et al., Dec. 21,
1994, 95-1 CPD 35.
12. Engineering Incorporated is not contending that Dynatest's offered
price is unrealistic.
13. The Corps also determined that the actual cost savings were
considerably less than the amount claimed by Engineering Incorporated
because the Corps will operate its machine less than the amount of
time upon which Engineering Incorporated based its cost estimate, and
concluded that Engineering Incorporated's operational cost savings did
not in any case justify the significant additional cost of Engineering
Incorporated's machine.
14. For example, Engineering Incorporated notes that complaints by
Dynatest caused this procurement to be issued on an unrestricted basis
rather than as a small business set-aside. While this may be true,
this does not evidence unequal treatment and, in any event,
constitutes an untimely protest of an alleged solicitation defect not
for consideration by our Office. 4 C.F.R. 21.2(a)(1) (1995).