BNUMBER:  B-258113.2; B-258113.3
DATE:  November 13, 1995
TITLE:  Olin Corporation

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Matter of:Olin Corporation

File:     B-258113.2; B-258113.3

Date:   November 13, 1995

Bradford C. Vassey for the protester.
Deborah M. Moeschl, Esq., for Alliant Techsystems, Inc., an interested 
party.
Richard C. Dale II, Esq., Department of the Navy, for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Where solicitation evaluation scheme gave greater weight to 
technical merit than price and protester's proposal contained 
technical deficiencies which were not resolved in revised proposal, 
agency reasonably concluded that protester's proposal was marginal and 
awarded contract to offeror which submitted higher-priced, higher 
technically rated proposal.

2.  Allegation of bias is denied where the record contains no credible 
evidence that agency acted with specific intent to injure the 
protester.

DECISION

Olin Corporation protests the award of a contract to Alliant 
Techsystems, Inc. under request for proposals (RFP) No. 
N68936-94-R-0238, issued by the Department of the Navy for 25 
millimeter (mm) tracer ammunition.  Olin contends that the agency's 
evaluation was flawed and reflected the agency's bias against the 
protester.

We deny the protest.

The RFP contemplated award of a firm, fixed-price contract for 
production of one million plus rounds of 25mm PGU-32/U ammunition.  
Proposals were to be evaluated on the basis of price and six equally 
weighted technical/management factors:  understanding the requirement; 
manufacturing approach; total quality management; production schedule; 
organizational structure; and facilities.  The combined 
technical/management factors were slightly more important than price.  
Award was to be made to the offeror whose proposal was most 
advantageous to the government.  

Olin and Alliant were the only offerors who submitted proposals by the 
May 19 closing time.[1]  The agency evaluated both proposals, 
conducted discussions with both offerors, and amended the RFP to 
change certain specifications.  Both offerors submitted best and final 
offers (BAFO). 

The agency evaluated Alliant's proposal as excellent overall based 
upon its rating of excellent under three evaluation factors and 
acceptable under the other three.  Olin's proposal was rated marginal 
overall, based upon marginal scores under four of the technical 
factors and ratings of acceptable under the other two.  Alliant's BAFO 
price was $17,900,415, while Olin's was $17,772,028.

In his source selection determination, the contracting officer noted 
that Alliant had received an overall excellent rating on its technical 
proposal and that the proposal had demonstrated the best understanding 
of the contract requirements.  The contracting officer determined that 
Alliant's approach to achieving a quality product and managing the 
manufacturing process would yield the highest quality ammunition.  In 
view of Olin's overall BAFO rating of marginal, and the relatively 
insignificant price difference ($128,387) between the two proposals, 
the contracting officer awarded Alliant the contract.  Upon learning 
of the award, Olin filed a protest with our Office, supplementing it 
after receiving a debriefing.  Primarily, Olin argues that the 
evaluation was flawed.

Where an evaluation is challenged, we will examine the evaluation to 
ensure that it was reasonable and consistent with the evaluation 
criteria and applicable statutes and regulations, since the relative 
merit of competing proposals is primarily a matter of administrative 
discretion.  Information Sys. & Networks Corp., 69 Comp. Gen. 284 
(1990), 90-1 CPD  203.  Mere disagreement with the agency's 
evaluation does not itself render the evaluation unreasonable.  Litton 
Sys., Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD 115.  

Olin contends that the agency's technical evaluation failed to give 
proper weight to Olin's technical superiority and expertise in the 
production of PGU-32/U ammunition.  Olin had been awarded a low rate 
initial production (LRIP) contract in 1992 to produce the same 25mm 
ammunition.  Olin notes that its experience with that contract 
resulted in the government's changing certain key specification 
parameters.  Thus, it concludes that its expertise cannot be 
duplicated by Alliant and that the agency necessarily failed to give 
Olin's proposal appropriate credit.  

In evaluating Olin's current proposal, the agency found that Olin had 
not demonstrated its technical superiority.  Notwithstanding Olin's 
views on its experience and ability to perform, based on Olin's 
proposal and record of past performance, the agency anticipated that 
Olin's performance difficulties under the LRIP contract would continue 
under a new contract.  In this regard, the government observes that 
while Olin's first lot of ammunition was accepted with a 100-percent 
pass rate, its second lot was unacceptable; only 13 of 20 rounds were 
successful.  After expending virtually all of the LRIP funding, Olin 
had only produced 2,500 rounds for the first article and 25,000 rounds 
of the 300,000 plus rounds called for under the contract.  In 
addition, despite the agency's identification of various deficiencies 
in discussions, Olin's BAFO failed to resolve them.  For example, 
Olin's initial proposal and its BAFO failed to resolve issues 
concerning tracer burn time, projectile hardness, use of statistical 
process control (SPC), production capacity, and nose-to-body pressing 
operations.  Olin's proposal also referred to methods of action Olin 
had employed on the LRIP contract, without detailing or incorporating 
those methods in its proposal.  Accordingly, we find nothing 
objectionable in the agency's evaluation of Olin's proposal.  

Olin also argues that the agency improperly downgraded its proposal in 
the technical evaluation.  Olin argues that its proposal was penalized 
in a number of areas without adequate justification.  Based on our 
review of the record, we disagree.  For example, the RFP required 
offerors to provide a plan for control and validation of product 
quality during the production phase, using SPC techniques as defined 
in specifically identified industry standards or other 
government-approved documents.  Olin asserts that its proposal fully 
addressed this requirement.  However, for certain production machines, 
Olin only proposed to conduct studies to determine whether they were 
capable of supporting SPC and proposed to use 100-percent inspection 
to compensate for quality control.  Based on the quality control 
problems observed in the LRIP contract and the inadequacy of 
inspection alone, the agency pointed out this deficiency during 
discussions.  Olin's BAFO then failed to address the matter. 

Another example, Olin argues that its proposal unfairly was downgraded 
for failing to provide solutions to problems Olin identified in the 
specifications concerning projectile hardness and tracer burn time, 
while Alliant's, was not downgraded, despite Alliant's lack of 
sufficient expertise to even identify the problems.  The record 
provides no evidence of unfair treatment in this regard.  The agency 
advised Olin and Alliant that the specifications for these two areas 
were changed during the evaluation process.  Alliant responded that it 
could make the adjustments without difficulty and satisfactorily 
explained its position during discussions.  In contrast, Olin 
maintained in discussions that both changes would significantly impact 
production, but in its BAFO did not address either.  Instead, it 
merely stated that it would produce the rounds in accordance with the 
TDP and meet the revised specifications.  Under these circumstances, 
we find nothing objectionable or unreasonable in the agency's 
evaluation.  Olin's arguments to the contrary simply reflect its 
disagreement with the agency's assessment, which does not establish 
that the evaluation was unreasonable.  Litton Sys., Inc., supra.     

Olin alleges that the agency was biased against it as a result of its 
earlier specification protest, as evidenced by the results of the 
technical evaluation and a reference to the protest in a pre-award 
survey statement.  

There must be very strong proof that an agency has a specific intent 
to injure a protester before we may find bias.  Hill's Capitol Sec., 
Inc., B-250983, Mar. 2, 1993, 93-1 CPD  190.  The protester must 
produce credible evidence that any bias translated into agency action 
which unfairly affected the protester's competitive position.  Id.  

Here, the record contains no such evidence.  As discussed above, the 
technical evaluation was unobjectionable.  The evaluators identified 
various deficiencies which resulted in a rating of marginal for four 
of the six technical management factors.  The fact that many of these 
deficiencies stemmed from Olin's performance difficulties under the 
LRIP contract and were the subject of Olin's protest does not show 
that the agency was biased.  Rather it is apparent that the evaluators 
simply took into account Olin's problem performance in evaluating its 
ability to perform the instant contract.  

With regard to the pre-award survey, reference to the protest, the 
technical survey stated that "[b]ased on current contractual issues at 
[one of Olin's facilities] and Olin's protest to the current 
solicitation, the technical capability of the offeror to control the 
place of performance, specifically the [facility in question] and 
[its] ability to perform to the technical requirements of this 
solicitation are unsatisfactory."  The survey indicates that Olin 
attributed its performance problems to alleged deficiencies in the 
TDP, which it had raised in the referenced protest.  Since Olin 
maintained that it could not perform until the TDP deficiencies were 
corrected, and the agency did not agree, the mention of the pending 
protest was simply a reference to the source of the disagreement.  In 
any event, the agency explains that the technical evaluators neither 
had access to, nor based their evaluation of Olin's proposal on, the 
survey.  Similarly, the contracting officer did not rely on that 
statement in evaluating Olin's proposal.  In short, the simple 
reference to Olin's prior protest in a pre-award survey does not 
provide any credible evidence of bias. 

Finally, Olin argues that the agency's cost/technical tradeoff was 
flawed because it failed to take into consideration certain "hidden 
costs" associated with the Alliant proposal.  Olin argues that the 
agency should have considered the start-up learning curve costs 
associated with Alliant's inexperience in producing the PGU-32/U 
ammunition.  In Olin's view, the agency also should have considered 
the cost of an agreement between the agency and Raufoss A/S, the 
holder of the patent on this ammunition, to provide technical 
assistance in production of the rounds.  The cost would not be 
applicable under an Olin contract because Olin has its own agreement 
with Raufoss.

We find no merit to these arguments.  First, since this is a 
fixed-price contract, the agency was not required to conduct a 
detailed cost or cost realism analysis.  See PHP Healthcare Corp; 
Sisters of Charity of the Incarnate Word, B-251799 et al.,  May 4, 
1993, 93-1 CPD  366.  While the "best buy" clause in the RFP stated 
that the award decision would be based on "the probable costs to the 
government as compared with the evaluated rating of the proposal," it 
is clear that the agency intended this to refer to a comparison of 
prices, and not to a detailed cost realism analysis under this firm, 
fixed-price requirement.  In this regard, the agency amended the RFP 
to replace language referring to an emphasis on "realism and 
reasonableness" with language referring to an emphasis on the 
"reasonableness of the proposed price."

Second, the costs about which Olin complains are not "hidden" in any 
case.  Alliant's proposal included its start-up and learning curve 
costs and its proposed price was less than $200,000 higher than 
Olin's.  Further, the agency observes that once these one-time costs 
are paid, Alliant's proposed unit price is lower than Olin's.  With 
regard to technical assistance from Raufoss, the agency explains that 
its pending agreement for such assistance played no part in this 
procurement; the Navy has an independent need for the broad technical 
assistance/ technical transfer agreement and would have negotiated it 
with or without this procurement.  In addition, it appears that the 
cost of such assistance is insignificant.  During discussions, the 
agency advised both offerors that it planned to make technical 
assistance from a couple of Raufoss engineers available to them for a 
"few months."  The protester alleges that the agreement would cost 
$350,000 per year.  However, since the agreement in question is not 
limited to this ammunition contract and the assistance appears very 
limited in time and scope, the record provides no basis to conclude 
that the cost would be significant.  Accordingly, the agency 
reasonably did not evaluate these allegedly "hidden costs" in making 
its tradeoff.

The protest is denied.

Comptroller General 
of the United States

1. Subsequently, Olin filed a protest with the agency, challenging 
certain specifications in the technical data package (TDP).  After the 
agency denied the protest, Olin filed a protest with our Office.  
Since Olin's protest was not filed with the agency or our Office 
within 10 working days of when it knew, or should have known, of the 
alleged defects in the TDP, we dismissed its protest as untimely.  
(B-258113) on Sept. 12, 1994.