BNUMBER:  B-260778.2; B-260778.3
DATE:  February 12, 1996
TITLE:  Deployable Hospital Systems, Inc.

**********************************************************************

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:Deployable Hospital Systems, Inc.

File:     B-260778.2; B-260778.3

Date:     February 12, 1996

Michael A. Gordon, Esq., and Fran Baskin, Esq., Holmes, Schwartz & 
Gordon, for the protester.
Barbara S. Kinosky, Esq., Bean, Kinney & Korman, for TVI Corporation, 
an interested party.
Robert B. Tauchen, Esq., and Gregory H. Petkoff, Esq., Department of 
the Air Force, 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 improperly determined that awardee 
satisfied a definitive responsibility criterion requiring it to 
provide evidence of recent sales of the item being procured or similar 
items is denied where the agency's determination that the awardee's 
recent sales constituted sales of "similar items" is fully and 
reasonably supported. 

2.  Protest that contracting agency improperly evaluated awardee's 
financial capability as part of the technical evaluation by ignoring 
evidence questioning the findings of a pre-award survey is denied 
where the contracting officer considered this evidence and reasonably 
determined, notwithstanding that information, that the firm remained 
financially capable of performing the contract.

3.  Protest asserting disparate treatment and improper evaluation of 
technical proposals is denied where the record shows that the 
evaluation of proposals was reasonable and consistent with the 
solicitation's evaluation criteria save for one aspect, and correction 
of this aspect of the evaluation in the manner most favorable to the 
protester would not affect the reasonableness of the award 
determination since, at most, the two offerors would be approximately 
technically equal; the protester's price is significantly higher than 
that of the awardee; and the agency reasonably states that such a 
result would not have affected its best value determination. 

DECISION

Deployable Hospital Systems, Inc. (DHS) protests the Department of the 
Air Force's decision to affirm its award of a contract, under request 
for proposals (RFP) No. FA0021-95-R-0009, to TVI Corporation after 
having implemented our recommendation in Deployable Hosp. Sys., Inc., 
B-260778, July 21, 1995, 95-2 CPD  para.  65.  In that decision, we 
sustained DHS' protest of the original award to TVI because the Air 
Force's failure to document its technical evaluation and its 
determination that TVI satisfied a definitive responsibility criterion 
compelled a conclusion that they lacked a reasonable basis.  DHS now 
challenges various aspects of the Air Force's reevaluation and the 
subsequent award decision.

We deny the protest.

BACKGROUND

The solicitation sought offers for a fixed-price contract for 
deployable integrated mobile hospital tent systems.  A total system 
satisfying the requirement consisted of shelters--or tents--and their 
associated equipment, packed within trailers providing transport, 
storage, electrical power, and heating, ventilation and air 
conditioning (HVAC) support.

Award was to be made to the offeror providing the best overall value 
to the government.  Proposals would be evaluated based on an 
integrated assessment of quality and price, with quality somewhat more 
important than price.  Quality encompassed two equally important 
evaluation factors, technical quality and quality control.  The 
technical quality factor contained four subfactors, in descending 
order of importance:  technical specification compliance, 
interoperability, total system, and expeditious setup.  The importance 
of price was to increase as the quality differences between proposals 
decreased.

The RFP also listed, as less important, several general considerations 
that would be considered in the technical evaluation, including 
pre-award survey results, financial capability, and level of 
experience in similar acquisitions.  Section LH-173 of the RFP 
discussed the contracting officer's need to make a responsibility 
determination and required offerors to provide, as a minimum, a list 
of the three most recent sales of "this or similar items/services" to 
commercial concerns or government activities.

TVI and DHS were the only offerors submitting proposals.  Each offeror 
submitted a technical proposal, a price proposal, and a training 
videotape.  The evaluators rated both offers acceptable under each 
technical factor and subfactor, and the Defense Contract Management 
Area Operations (DCMAO) office's pre-award survey of TVI and its 
proposed subcontractor for trailer manufacture resulted in 
satisfactory findings.[1]  The contracting officer concluded that both 
proposals were essentially technically equal, noting, however, that 
TVI's proposal was superior with respect to the expeditious setup 
subfactor, and turned to a consideration of price--TVI's offered price 
was $1,367,104 and DHS' was $1,815,755.  She stated that DHS's higher 
price could not be justified for a substantially equal technical 
solution, and, on March 6, 1995, awarded TVI the contract.  In 
sustaining DHS' protest of the award for the reasons cited above, we 
recommended that the Air Force reevaluate the proposals, adequately 
document the evaluation, and make a best value determination based 
upon the reevaluation results.

In its reevaluation, the Air Force determined that TVI satisfied the 
definitive responsibility criterion and all of the unrated general 
considerations, including financial capability.  In addition, TVI's 
proposal was now rated superior[2] under both the technical quality 
factor and the quality control factor.  DHS' proposal was rated 
acceptable under both factors.  Based upon these findings and a 
consideration of the large difference between the offerors' prices, 
the Air Force affirmed its award to TVI.  

DHS' protest challenges the agency's determinations as to TVI's 
satisfaction of the definitive responsibility criterion and the 
financial capability consideration, as well as the agency's evaluation 
of the offerors' technical proposals.

DEFINITIVE RESPONSIBILITY DETERMINATION

DHS argues that the Air Force improperly determined that TVI satisfied 
the solicitation's requirement to provide evidence of recent sales of 
"this or similar items."  

The solicitation required offerors to provide, as a minimum, "a list 
of the three most recent sales of this or similar items/services . . . 
."  The parties do not dispute that this requirement, which calls for 
the prospective contractor to have a designated number of projects in 
a specific area completed, is a definitive responsibility criterion, 
see D.H. Kim Enters., Inc., B-255124, Feb. 8, 1994, 94-1 CPD  para.  86, 
which is a specific and objective standard established by an agency 
for use in a particular procurement for the measurement of an 
offeror's ability to perform the contract.  Federal Acquisition 
Regulation (FAR)  sec.  9.104-2; BBC Brown Boveri, Inc., B-227903, Sept. 
28, 1987, 87-2 CPD  para.  309.

A contracting agency has broad discretion in determining whether 
offerors meet definitive responsibility criteria, since the agency 
must bear the brunt of any difficulties experienced in obtaining the 
required performance.  BMY, Div. of Harsco Corp., B-233081; 
B-233081.2, Jan. 24, 1989, 89-1 CPD  para.  67.  Where an allegation is made 
that definitive responsibility criteria have not been satisfied, we 
review the record to ascertain whether evidence of compliance has been 
submitted from which the contracting officer reasonably could conclude 
that the criteria have been met.  BBC Brown Boveri, Inc., supra.  In 
making a determination regarding an offeror's compliance with a 
definitive responsibility criterion, a general statement by the agency 
of its rationale is all that is required.  Deployable Hosp. Sys., 
Inc., supra. 

The criterion in question here could be satisfied by an offeror's 
providing evidence of three recent sales of "this or similar items."  
This solicitation seeks offers for soft shelters packed within a 
utilities trailer--a soft shelter system.  TVI's proposal lists only 
one such contract, which was terminated for convenience prior to 
performance, and its trailer subcontractor lists no such contracts and 
claims no such sales.  Since TVI has no recent sales of a soft shelter 
system--shelters with a trailer--the question is whether the 
contracting officer reasonably determined that TVI's sales of soft 
shelters alone, under six recent contracts, and/or its sales of 
targets and decoys, under four recent contracts, are sales of 
"similar" items, so as to satisfy this criterion.

During the reevaluation, the contracting officer prepared detailed 
findings in which she concluded that TVI's recent sales of soft 
shelters alone, and its recent sales of targets and decoys, were sales 
of "similar" items sufficient to show TVI's compliance with this 
criterion.  In addition to the fact that the soft shelters previously 
sold were the same shelters proposed for this contract, she concluded 
that TVI had extensive manufacturing experience with targets and 
decoys whose manufacturing process was sufficiently similar to that 
required for the soft shelters that the criterion was satisfied.  In 
this regard, the multi-dimensional targets and decoys manufactured by 
TVI are quick-erect, expandable units, constructed of an articulating 
strut frame covered with a canvas-type material--which is the same 
technology used for the soft shelters.   

The essence of DHS' challenge is that an offeror must have recent 
sales of both the shelters and the utilities trailers to meet this 
criterion and that, since TVI has not previously sold or manufactured 
the trailers, it cannot reasonably meet the criterion.  However, 
previous sales of both the shelters and trailers would clearly 
constitute evidence of sales of "this item"--the system required here.  
The protester's proffered reading of the criterion thus is 
unreasonable, since it would eliminate the "similar" item provision 
from the criterion.

In concluding that TVI had recent sales of "similar" items sufficient 
to satisfy the definitive responsibility criterion, the contracting 
officer documented her findings that TVI's manufacturing experience 
related to its recent sales of shelters alone, and targets and decoys, 
is similar to the process required here, noting various construction 
similarities.  Since her determination that TVI's recent sales 
involved "similar items" is supported by the record, we have no basis 
to find it unreasonable.  See Restec Contractors, Inc., B-245862, Feb. 
6, 1992, 92-1 CPD  para.  154.   

FINANCIAL CAPABILITY 

DHS contends that the Air Force's reliance upon TVI's pre-award survey 
results in determining the firm's financial capability improperly 
ignored evidence produced prior to the reevaluation, which calls those 
survey results into question.

In reevaluating TVI's proposal with respect to financial 
capability,[3] the contracting officer acknowledged that her initial 
evaluation relied upon DCMAO's pre-award survey findings.  In that 
survey, DCMAO reviewed copies of TVI's financial information, provided 
over the signature of TVI's then-president, Mr. Brent Molovinsky.  
DCMAO concluded that the firm had made a strong recovery from its 1991 
bankruptcy; had a strong ability to meet cashflow needs; and had 
sufficient working capital available to perform the contract.  

During the initial protest, DHS submitted documents which questioned 
DCMAO's positive assessment of TVI's financial capability.  In a March 
1995 bankruptcy court filing, TVI's shareholders' committee objected 
to a report filed by Mr. Molovinsky, asserting that it contained false 
or misleading information.  The committee stated that there was 
evidence that the firm had been extremely unprofitable for the last 2 
years; that Mr. Molinovsky had not filed required financial reports; 
and that there was a pattern of concealment and evidence of improper 
use of company assets.  The firm's June 2 report to its shareholders, 
issued after Mr. Molovinsky was asked to resign, suggested that, based 
upon preliminary review, TVI had long been operating at a very low 
level of sales and with a significant monthly loss, resulting in 
cashflow problems; that the firm had not filed required bankruptcy 
reports and had deviated from its bankruptcy reorganization plan; and 
that the firm had violated several Securities and Exchange Commission 
regulations related to the sale of stock.  With respect to the status 
of the firm's records, the report stated that initial investigations 
suggested significant malfeasance by Mr. Molovinsky.

In reevaluating TVI's proposal, the contracting officer stated that 
she had reviewed these documents and concluded that there was nothing 
to indicate that TVI did not presently have the backing of its 
financial institution to execute the contract, or the ability to 
obtain it.  The June 2 report specifically addresses each element of 
TVI's financial status and sets forth the management action proposed 
to resolve the problems.  With respect to the status of its working 
capital, the report states that TVI believes its "long standing ally," 
Capital Bank, will finance requirements for government contracts.  
After the issuance of our initial decision, Capital Bank provided the 
contracting officer with a letter in which it confirmed that it had 
agreed to provide TVI with short-term credit to complete the contract, 
which would ensure that the company had adequate financial resources 
to perform.[4] 

For a procuring agency to ignore extrinsic evidence indicating that an 
offeror may not be able to perform would be unfair to the agency and 
to the other competitors, and thus is inconsistent with the 
competitive procurement system.  See Continental Maritime of San 
Diego, Inc., B-249858.2; B-249858.3, Feb. 11, 1993, 93-1 CPD 
 para.  230.  Here, however, the contracting officer did not ignore the 
extrinsic evidence provided by DHS, but reviewed it and concluded 
that, notwithstanding this information, TVI had the financial 
capability to perform the contract.  In light of the contracting 
officer's consideration of this evidence, including the fact that 
TVI's management had clearly set forth the steps it planned to take to 
recover its businessworthiness, and the fact that a bank was willing 
to provide working capital to TVI, we cannot conclude that her 
evaluation of TVI as financially capable was unreasonable.  See 
Transco Contracting Co., B-228347.2, July 12, 1988, 88-2 CPD  para.  34.

DHS contends that Mr. Molovinsky provided DCMAO with fraudulent 
information which tainted TVI's entire proposal requiring its 
rejection.  However, as we stated in our initial decision, the record 
before us concerning this issue is so speculative as to preclude any 
conclusion of fraudulent activity.  TVI's own report to its 
shareholders clearly states that it is based on "incomplete records 
and preliminary examination," and that "little if any has been 
verified and is simply based upon the best documents or information 
available."  Moreover, the basis for the charge of malfeasance against 
Mr. Molovinsky primarily concerns his failure to keep adequate records 
and file timely financial reports, which suggests, at most, 
negligence.  Such preliminary and speculative information affords us 
no basis to find any fraud here, much less a basis to reject TVI's 
proposal.  See Deployable Hosp. Sys., Inc., supra. 

EVALUATION OF TECHNICAL PROPOSALS 

DHS argues that the Air Force's reevaluation of the offerors' 
technical proposals lacks a rational basis and evidences a disparate 
treatment of the two offerors.

We will review an evaluation to ensure that it was reasonable and 
consistent with the stated evaluation criteria.  Newport News 
Shipbuilding and Dry Dock Co. et al.,  B-261244.2 et al., Sept. 11, 
1995, 95-2 CPD  para.  192.  The determination of the merits of proposals is 
primarily a matter of administrative discretion which we will not 
disturb unless the evaluation was arbitrary or unreasonable.  See 
Realty Executives, B-237537, Feb. 16, 1990, 90-1 CPD  para.  288.  The fact 
that a protester does not agree with the evaluation does not render 
the evaluation unreasonable.  Logistics Servs. Int'l, Inc., B-218570, 
Aug. 15, 1985, 85-2 CPD  para.  173.  In a best value procurement, as here, 
where there is a substantial price difference between the protester's 
proposal and the awardee's proposal, the protester, in order to 
prevail, must show that its proposal should have been evaluated by the 
agency not just as essentially technically equal or close in technical 
merit, but as overall technically superior to the awardee's proposal.  
See Newport News Shipbuilding and Dry Dock Co. et al., supra; 
Scheduled Airlines Traffic Offices, Inc., B-253856.7, Nov. 23, 1994, 
95-1 CPD 
 para.  33.
 
Technical Quality

As indicated above, for the technical quality factor, which contained 
four subfactors (technical specification compliance, interoperability, 
total system, and expeditious setup), TVI's proposal was rated 
superior and DHS' acceptable.  The first subfactor, technical 
specification compliance, involved a review of the extent to which the 
offerors complied with the RFP's technical specifications.  DHS' 
proposal was rated acceptable under all of the specifications, except 
training, where it was rated superior.  TVI 's proposal was rated 
acceptable under all of the specifications, except the operation and 
the frame specifications, where it was rated superior.  Since TVI 
scored higher in these two areas, the Air Force rated its proposal 
superior overall for technical specification compliance.  DHS' 
proposal was rated acceptable.  

DHS challenges the evaluation with regard to numerous specifications.  
As the following examples illustrate, our review of the record in this 
matter shows that DHS' challenge consists of its disagreement with the 
agency's judgment, premised largely upon its misreading or selective 
reading of the record, and affords us no basis to find this aspect of 
the evaluation unreasonable.

For example, the life cycle specification required an indefinite life 
cycle for the shelter frame and an exterior fabric liner with 
specified characteristics.  Both proposals were rated acceptable 
because both firms proposed to comply with the requirements.  While 
DHS complains that the agency ignored its experience in producing 
these shelters, we see no basis to conclude that that experience, in 
itself, evidences that its shelters will have a longer life cycle.  
DHS also asserts that the agency ignored favorable user input about 
its product, but the contracting officer's memorandum of her 
discussions with users about both offerors' products contains the 
information to which DHS refers, as well as favorable and unfavorable 
information about both offerors' products.  Finally, DHS' insistence 
that a test report shows the "fragility" of the TVI shelter is 
rebutted by information showing that the damage suffered was due not 
to any inherent life-cycle deficiency, but to user misuse.  

DHS next objects that, in reevaluating the proposals under the wind 
and snow loading specification, for which both proposals were rated 
acceptable, the agency ignored test data DHS submitted in support of 
its claim to meet the wind loading requirements and ignored TVI's lack 
of objective evidence to support its similar claim.  The Air Force did 
not ignore this information, but specifically referenced the 
respective proposal sections in which it was contained.  In addition, 
DHS' statement concerning its test data is matched by TVI's additional 
support for its claim.  TVI explains that its shelters have survived 
the winds of helicopter overflight, and states that the stress of the 
calculated wind loads is significantly less than that of the snow 
loads, for which it was tested.  In view of the agency's full 
consideration of this matter, including TVI's additional supportive 
information, we have no reason to believe that the evaluation was 
unreasonable.  

Finally, the frame specification required that structural 
tubing/framing be of sufficient size and strength to be durable and 
lightweight, "such as 0.625" aluminum tube, 2024 T-3 series" aluminum 
alloy or lightweight high strength steel.  TVI proposed to have struts 
that were .635" thick and made of the stated alloy.  DHS proposed to 
have struts that were [DELETED] thick and made of a different alloy.  
The agency rated DHS' proposal acceptable because it met the thickness 
requirement, albeit with an unspecified alloy.  TVI's proposal was 
rated superior because the Air Force believed its frame was more 
robust based upon its thicker struts, made of the specified alloy;[5] 
a user report asserting that TVI's frame is stronger than that of DHS; 
and DHS' training video, which states that if erection and striking is 
not done evenly and with continual eye contract, its struts can be 
broken.  DHS argues that the user report elsewhere states that, 
according to a user, the negative information concerns an older, less 
strong version of the DHS frame; however, that user's statement was 
made a year after proposals were submitted, and DHS has not made it 
clear whether the newer frame to which the user refers is the one it 
offered under this proposal.  DHS' failure to address this issue, as 
well as its failure to address the offerors' differing strut 
thicknesses and its own admission concerning the fragility of its 
shelter, leaves us with no basis to find the evaluation unreasonable.  
See Mevatec Corp., B-260419, May 26, 1995, 95-2 CPD  para.  33.  

The first of the remaining subfactors, interoperability, involves 
consideration of compatibility with the DHS shelters and trailers that 
already exist in the Air Force's inventory.  In brief, all shelters 
must be able to interconnect, such as by way of a "boot" or other 
interconnecting component, and be erectable and repairable with the 
shelters of different manufacturers at the system level.  Both 
proposals were rated acceptable because, respectively, DHS stated that 
its shelters were interoperable, and TVI stated that its shelters 
could be modified, with minor design adjustments, to be interoperable 
with other shelters.  DHS argues that these identical ratings evidence 
disparate treatment because DHS has accomplished the requirements, 
without design adjustments, and TVI merely states that it believes its 
proposed design will be interoperable with only minor modifications.  
However, nothing in the RFP dictates that actual accomplishment of the 
requirements, in and of itself, warrants a superior rating, and there 
is no reason to question TVI's representations.   

Similarly, the total system subfactor required firms to supply tents 
that could be packed within the trailer, and a trailer unit meeting 
the requirements, for a total system.  Both offerors received 
acceptable ratings because both proposals contained evidence that the 
firms could meet these requirements.  We again reject DHS' argument 
that TVI should have been found unacceptable because it has no 
experience in manufacturing or integrating a total system, as the 
subfactor does not require such experience for an acceptable rating, 
and TVI's proposal supports the evaluation result. 

Finally, the expeditious setup subfactor required firms to provide a 
system with quick erecting capability--each shelter must be erectable 
in less than 4 minutes, and fully equipped with standard equipment in 
less than 10 minutes by six trained personnel for a large shelter or 
four trained personnel for a medium or small shelter.  TVI's proposal, 
rated superior, stated that its shelters were erectable by two to four 
personnel in under 4 minutes, and could be fully equipped in under 10 
minutes using no special tools or push poles.  DHS' proposal, rated 
acceptable, stated that its large shelter was erectable in less than 4 
minutes[6] and could be fully outfitted in less than 10 minutes using 
six trained personnel, and its medium and small shelters could be 
fully set up and outfitted using four trained people in less than 10 
minutes.  DHS also utilizes a push pole to erect the shelters.  The 
Air Force rated TVI's proposal superior for two reasons.  First, TVI 
required a minimum of two people and DHS required a minimum of four 
people for erection and setup, and the agency reasonably found that 
the use of fewer personnel was more efficient.  Second, the Air Force 
believed that the streamlined method of TVI's shelter erection, absent 
push poles, was beneficial.  

DHS argues that the agency improperly failed to investigate how many 
people were needed to erect TVI's large shelter; whether TVI's setup 
time was based on a small shelter; or whether TVI's time for having 
the shelter fully equipped included various items.  However, TVI's 
proposal clearly states that "its shelters were erectable by 2-4 
personnel in under 4 [minutes], fully equipped in under 10 minutes. . 
. ."  There is no reason to believe that this statement does not refer 
to all of its shelters, nor is there any reason to believe that the 
expression "fully equipped" does not mean what it says.  As to DHS' 
belief that the Air Force is "silly" to find beneficial value in TVI's 
streamlined erection method, and that other aspects of TVI's erection 
are detrimental, this disagreement with the agency's judgment is 
insufficient to render that judgment unreasonable.  Fermont Div., 
Dynamics Corp. of Am., B-257373.3
et. al., Dec. 22, 1995, 95-2 CPD  para.     .  

In sum, the protester has not shown that TVI's superior rating or DHS' 
acceptable rating for the technical quality factor were unsupported or 
unreasonable.

Quality Control
 
Although, as noted in our prior decision, the language of the quality 
control factor and subfactor is unclear,[7] it appears to allow an 
offeror to demonstrate its quality control expertise by virtue of its 
experience in manufacturing similar systems or through explanations of 
such issues as specific inspection techniques and corrective actions.  
In its reevaluation, the Air Force broke the factor down into two 
areas:  quality control processes, wherein it evaluated the offerors' 
quality assurance processes, and experience level, wherein it 
evaluated the offerors' experience in manufacturing similar 
systems.[8] 

The Air Force rated TVI's proposal superior and DHS' proposal 
acceptable under the quality control processes aspect, based on the 
contents of the proposals; DHS' favorable past performance; TVI's 
pre-award survey results; and the offerors' differing warranty terms.  
The Air Force stated that it made the distinction because TVI provided 
insight into its subcontractor's quality control processes by citing 
compliance with a military quality control standard, and DHS did not, 
and because TVI offered a longer warranty term than did DHS.  Our 
review of the record shows that the agency's evaluation here is 
unreasonable.

The contents of the two proposals contain marked differences.  DHS' 
proposal included a thorough total quality management policy 
delineating the quality responsibilities of each department head.  DHS 
addressed the steps it takes with respect to the quality assurance of 
its subcontractors, and its trailer subcontractor specifically states 
its experience with the military quality control standard--the agency 
was wrong to state otherwise and failed to acknowledge this error when 
it was raised.  Finally, DHS provided an exhaustive set of total 
quality management procedures for each step in the manufacturing 
process, as well as its quality control check lists for the frame, 
fabric, and trailer, and a sample certificate of inspection and 
quality control.  In contrast, TVI's proposal simply states that it 
and its subcontractors meet the quality assurance requirements of the 
military standard and provides a sketchy outline of its overall 
quality control.  This general nod to the solicitation's requirements 
is not augmented by TVI's pre-award survey results,[9] which show 
nothing more than is contained in the proposal.  While we do not 
dispute the use of warranty terms as a measure of quality assurance 
processes and cannot conclude that the record, as a whole, does not 
support an acceptable rating for TVI, the agency could not reasonably 
conclude that TVI's proposal is superior under this factor.  

Nevertheless, we see no basis to conclude that the agency's error in 
the evaluation under the quality control factor would have changed the 
award decision.  Assuming an adjustment in scores most favorable to 
DHS, the ratings of the proposals under the quality control factor 
would be reversed--TVI's would change from superior to acceptable, 
while DHS' would change from acceptable to superior.  Their ratings 
under the other, equally important technical factor (technical 
quality) would remain unchanged (DHS' proposal, acceptable; TVI's 
proposal, superior).  Accordingly, adjusting the quality control 
scores in the manner most favorable to the protester would, at most, 
make the proposals approximately technically equal.  Where proposals 
are essentially technically equal, price may become the determinative 
factor in making an award, notwithstanding that the evaluation 
criteria assigned price less importance than technical considerations.  
Ogilvy, Adams & Rinehart, B-246172.2, Apr. 1, 1992, 92-1 CPD  para.  332.  
Considering the RFP's specific instruction that the importance of 
price would increase as the quality differences between proposals 
decreased, we have no basis to question the agency's best value 
determination in light of DHS' substantially higher price.  See 
Newport News Shipbuilding and Dry Dock Co. et al., supra.   Indeed, 
the agency confirms that even if DHS' technical ratings had improved, 
given the substantial differences between the two offerors' prices, 
its award decision would have been the same.

The protest is denied. 

Comptroller General
of the United States

1. Since DHS had previously provided shelters to this activity, the 
Air Force determined that a pre-award survey of the firm was 
unnecessary.

2. The possible adjectival ratings were "insufficient data," 
"unacceptable," "acceptable," or "superior."

3. While an offeror's financial capability to perform a contract is a 
traditional responsibility factor, see FAR  sec.  9.104-1, in appropriate 
circumstances, and where the solicitation so apprises offerors, 
financial capability may be used to assess the relative merits of 
individual proposals.  E.H. White & Co., B-227122.3; B-227122.4, July 
13, 1988, 88-2 CPD  para.  41.  This solicitation clearly apprised offerors 
of the Air Force's intention to consider financial capability in the 
technical evaluation as one of the less important general 
considerations.  

4. We do not agree with DHS that the agency's review of this letter 
constituted improper discussions solely with TVI.  Discussions occur 
when an offeror is given an opportunity to revise or modify its 
proposal, or when information provided by an offeror is essential for 
determining the acceptability of its proposal.  FAR  sec.  15.601; 
Motorola, Inc., 66 Comp. Gen. 519 (1987), 87-1 CPD  para.  604.  This letter 
merely clarified the statement in the shareholder's report concerning 
the firm's working capital, and there is nothing to suggest that it 
had any bearing on the agency's determination that TVI's proposal was 
acceptable.  See Jack Faucett Assocs., 
B-254421.2, Feb. 18, 1994, 94-1 CPD  para.  204.

5. In discussing the qualities of the different alloys, the Air Force 
quoted a passage from a data sheet submitted by TVI's counsel during 
the course of the initial protest.  For the same reasons discussed 
above, we do not agree with DHS that the agency's consideration of 
this document constituted improper discussions.  This communication 
did not revise TVI's proposal, but merely confirmed information 
already in the agency's possession and, thus, constituted a 
permissible clarification.  See FAR  sec.  15.601; Jack Faucett Assocs., 
supra.

6. Another section of DHS' proposal gives this setup time as 5 
minutes, which does not meet the specification.

7."(4)      Quality control is the implementation of a controlling 
            process that can identify and correct any structural or 
            design problem before, during, and after production of the 
            product.

        "(a) Firms with an experience level in the manufacturing of 
        similar systems with the capability to build in sufficient 
        quantity/quality to meet delivery.  Firms should demonstrate 
        the expertise to predict product quality concerns, i.e., 
        specific inspection techniques and corrective actions might be 
        one area addressed."

8. For the same reasons that we find that the contracting officer 
reasonably determined that TVI complied with the definitive 
responsibility criterion, we reject DHS' argument that TVI should have 
been rated unacceptable, instead of acceptable, under the experience 
level aspect of this factor.  DHS was rated superior here.

9. DHS argues that the agency improperly utilized the pre-award survey 
results to evaluate this factor, but the solicitation specifically 
states that the pre-award survey results would be considered.  
Moreover, in evaluating proposals, contracting agencies may consider 
any evidence, even if that evidence is entirely outside the proposal, 
so long as the use of the extrinsic evidence is consistent with 
established procurement practice.  Intermagnetics Gen. Corp.--Recon., 
B-255741.4, Sept. 27, 1994, 94-2 CPD  para.  119.