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).