BNUMBER: B-260788.2
DATE: August 2, 1995
TITLE: TRW, Inc.
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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:TRW, Inc.
File: B-260788.2
Date: August 2, 1995
Kenneth B. Weckstein, Esq., and Michael K. Love, Esq., Epstein Becker
& Green, P.C., for the protester.
Kathleen C. Little, Esq., Michael R. Charness, Esq., and David R.
Johnson, Esq., McDermott, Will & Emery, and Nancy L. Boughton, Esq.,
for Science Applications International Corporation, and Richard J.
Conway, Esq., William M. Rosen, Esq., and Robert J. Moss, Esq.,
Dickstein, Shapiro & Morin, L.L.P., for BDM Federal, Inc., interested
parties.
Gregory Petkoff, Esq., and Jerri G. Brewer, Esq., Department of the
Air Force, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Cost/technical tradeoff decision resulting in awards to higher
technically rated, higher-cost offerors was unreasonable where
protester's and awardees' proposals were similarly technically rated
except in one evaluation area; it is not clear from the evaluation
record why the identified strengths of protester's proposal in this
one area were rated below awardees'; and source selection official
does not explain (either contemporaneously or in protest record) why
the advantages of the awardees' proposals were superior to those of
the protester's proposal, or why they warranted foregoing protester's
$4 million (approximately 15 percent) lower cost.
DECISION
TRW Inc. protests the decision of the Department of the Air Force to
award contracts for support services for the Air Force Operational
Test and Evaluation Center (AFOTEC)[1] to Science Applications
International Corporation (SAIC) and BDM Federal, Inc., under request
for proposals (RFP) No. F29601-93-R-0036. TRW asserts that the agency
improperly evaluated its proposal and failed to perform a proper best
value analysis.
We sustain the protest.
BACKGROUND
The solicitation, issued on December 30, 1993, contemplated the award
of a cost-plus-award-fee contract for a base year with four 1-year
option periods. The solicitation provided that proposals would be
evaluated under four areas (factors): technical, management,
organizational conflict of interest (OCI), and cost. The areas were
listed in descending order of importance except the technical and
management areas were equal in importance. The solicitation also
listed items (subfactors) that would be evaluated under each area,
each of which would be assigned an adjectival rating,[2] a proposal
risk rating, and a performance risk rating; the item ratings would
then be used to arrive at overall ratings for the areas. Awards were
to be made to the two offerors whose proposals were most advantageous
to the government, based on an integrated assessment of all evaluation
areas.
Six offerors responded to the solicitation. Following evaluation by
the source selection evaluation team (SSET), all proposals were
included in the competitive range. Subsequently, oral discussions
were held and two best and final offers (BAFO) were requested,
submitted and evaluated. The BAFOs of the awardees and the protester
were rated as follows:
TECHNICAL TRW BDM SAIC
Statement of Work Acceptable Acceptable Acceptable
Sample JCOMSS Subtask Acceptable Exceptional Exceptional
Personal Qualifications Acceptable Acceptable Acceptable
Performance Risk Acceptable Acceptable Acceptable
Proposal Risk Low Low Low
MANAGEMENT Acceptable Acceptable Acceptable
Program Management ExceptionalExceptional Exceptional
Sample Program ManagementAcceptable Acceptable Acceptable
SubtaskTransition Plan Acceptable Acceptable Acceptable
Performance Risk Low Low Low
Proposal Risk Low Low Low
ORGANIZATIONAL CONFLICT OF INTERESTAcceptableAcceptableAcceptable
Availability
Avoidance/Mitigation Plan
Performance Risk Low Low Low
Proposal Risk Low Low/ModerateLow
PROPOSED COST $22,972,452$26,999,421 $26,972,201
The SSET presented the evaluation results to the source selection
authority (SSA), who determined that the proposals submitted by BDM
and SAIC represented the best value to the government.[3] Awards were
made to those firms and this protest followed.
TRW argues that the award was not based on a proper integrated
assessment of all evaluation areas. Specifically, TRW asserts that in
reaching the award decision, the SSA improperly failed to consider
that BDM received a worse proposal risk rating than TRW in the OCI
area[4] and did not consider that TRW's proposed cost was $4 million
lower than SAIC's or BDM's. TRW also disputes the SSET's evaluation
of its proposal under the Joint Communication Satellite System
(JCOMSS) subtask (one of the items evaluated under the technical
evaluation area) as less desirable than the awardees' proposals
(acceptable instead of exceptional); this is the only item where TRW's
proposal was rated lower than the awardees'.
In a negotiated procurement, where an agency chooses between a
higher-cost, higher-rated proposal and a lower-cost, lower-rated
proposal, our review is limited to determining whether the
cost/technical tradeoff is reasonable and consistent with the
solicitation's evaluation criteria. SDA Inc., B-248528.2, Apr. 14,
1993, 93-1 CPD para. 320. Where the higher-cost, higher technically rated
proposal is selected for award, the award decision must be supported
by a rational explanation of why the technical superiority of the
higher-cost proposal warrants the additional cost involved, even
though, as in this case, cost may be weighted less heavily than
technical and management factors. Redstone Technical Servs.; Dynamic
Science, Inc., B-259222 et al., Mar. 17, 1995, 95-1 CPD para. 181. This
explanation can be given by the SSA in his award decision, see
Browning Constr. Co., B-250788, Feb. 11, 1993, 93-1 CPD para. 126, or it
can be evident from the evaluation documents on which the source
selection decision is based. See Sabreliner Corp., B-242023;
B-242023.2, Mar. 25, 1991, 91-1 CPD para. 326. The record does not
establish the rationale for the tradeoff decision here.
The source selection decision document prepared by the SSA does not
compare the advantages of the awardees' proposals to those of TRW's
proposal or explain why any advantages of the awardees' proposals were
worth their $4 million higher cost. Rather, the document largely
merely acknowledges the adjectival ratings assigned the proposals by
the SSET. Specifically, with respect to the protester and the two
awardees, the document states that:
"a. SAIC's proposal was evaluated in the Technical Area as
acceptable in the SOW Item, exceptional in the JCOMSS Item and
acceptable under Personnel Qualifications. Their proposal was
rated in the Management Area as exceptional in the Program
Management Item and acceptable in the Program Management Subtask
and Transition Plan Items. SAIC's approach to performing the
JCOMSS subtask demonstrated an excellent understanding of the
application of the requirements of this subtask to the real world
application of the general SOW requirements to actual OT&E. SAIC
assembled an excellent team to support all technical areas of
this requirement and this Team has very little OCI. Their
avoidance/mitigation plan was considered acceptable to mitigate
or avoid any OCI situations. SAIC's proposed costs were
evaluated as realistic, complete, reasonable and were determined
to be the best value to the Government based on an integrated
assessment of all the Areas.
"b. BDM Federal, Inc. was rated in the Technical Area as
acceptable in the SOW Item, exceptional in the JCOMSS Item and
acceptable under Personnel Qualifications. Their proposal was
evaluated in the Management Area as exceptional in the Program
Management Item, and acceptable in the Program Management Subtask
and Transition Plan Items. BDM Federal, Inc.'s approach to
performing the JCOMSS subtask demonstrated an excellent
understanding of the application of the requirements of this
subtask to real world application of general SOW requirements to
actual OT&E. BDM Federal, Inc., assembled an excellent Team to
support the requirements of the SOW. While BDM Federal, Inc.,
and their Team Members had several OCI's, BDM demonstrated that
they have an acceptable avoidance/mitigation plan and procedures
to avoid or mitigate these OCI's. BDM's proposed costs were
evaluated as realistic, complete, reasonable and were determined
to be the second best value to the Government based on an
integrated assessment of all the Areas.
. . . . .
"d. TRW's proposal was evaluated as acceptable in the Technical
Area for SOW, JCOMSS and Personnel Qualifications Items. Their
proposal was rated in the Management Area as exceptional in the
Program Management Item and acceptable in the Program Management
Subtask and Transition Plan Items. TRW's proposal presented an
acceptable understanding of technical requirements and an
acceptable approach to the SOW tasks but occasionally failed to
provide details to demonstrate a thorough understanding of how
and why evaluations are performed. TRW assembled an excellent
Team to provide support for this requirement and was evaluated as
acceptable in the Program Management Subtask and Transition Plan
Items. TRW has several OCI's in the functional area for space
but demonstrated an acceptable Avoidance/Mitigation Plan to avoid
these conflicts by flowing the work down to their Team Members.
TRW's proposed costs were not evaluated as the best value for the
Government based on the overall integrated assessment."
The SSA's discussion of TRW's lower cost is limited to the following:
"TRW's proposal was the lowest proposed price at $22,972,452 but
the integrated assessment of all factors did not deem their
proposal as the best value for the Government. SAIC's proposed
costs at $26,972,201 and BDM's proposed costs at $26,999,421 were
considered the two best values to the Government based on the
integrated assessment of all factors."
There is no other explanation in the record of the reasons for the
SSA's conclusion that TRW's proposal, with its lower cost, was not the
best value to the government. While the quoted narratives contain
some differences, it is not apparent that those differences are
material, or why the SSA believed them to be so. Specifically, the
SSA states that TRW's proposal ". . . occasionally failed to provide
details to demonstrate a thorough understanding of how and why
evaluations are performed. . . ." This assessment apparently is based
on a statement from the SSET's briefing. However, nothing in the
source selection decision document, or elsewhere in the record,
indicates what type of detail was missing from the proposal; that the
"occasionally" omitted details--whatever they were--were considered
significant (by either the SSET or the SSA) in assessing TRW's
relative capabilities; or, if considered significant, why they were
significant. Neither is it clear why the SSA noted this less
desirable aspect of TRW's proposal, while ignoring the fact that BDM's
proposal risk rating was somewhat higher than TRW's (low/moderate
versus low). In sum, the source selection decision document does not
establish that the substance of the technical differences in the
proposals was ever considered by the SSA before he determined that
TRW's low-cost proposal was not the best value to the government.
The reasons for the award decision also are not obvious from the
evaluation record. As indicated, the sample JCOMSS subtask was the
only item under which TRW's proposal received a lower rating than the
awardees'; TRW was rated acceptable while the awardees were rated
exceptional. The Air Force states that SAIC's and BDM's proposals
were better than TRW's under this item because the SSET found only one
strength of outstanding merit and four strengths of significant merit
in TRW's proposal, as opposed to four strengths of outstanding merit
and one strength of significant merit for SAIC, and five strengths of
outstanding merit and one strength of merit above minimum standards
for BDM.[5] The agency does not explain, however, and the record does
not show, the basis for designating certain strengths outstanding and
others significant; it is clear only that both ratings indicate that
all three proposals exceeded minimum standards set by the
solicitation.
For example, the agency listed as a strength of outstanding merit
SAIC's understanding of the JCOMSS subtask requirements, and as a
significant strength TRW's understanding of the subtask requirements.
The evaluation narrative for SAIC in this regard states that:
"The breadth and depth of SAIC's understanding was demonstrated
by their breakdown of effectiveness and suitability issues, their
ability to partition the effectiveness/suitability issues by
JCOMSS' system segment, and their linkage of these segments to
specific proposed tests to illustrate the high OT&E (Operational
Test & Evaluation) utility of the test."
The narrative for TRW's proposal states that:
"Based on their corporate experience of developing and testing
communications satellite systems, TRW translated the OT&E
concepts and goals into very specific executable tasks and
precise deliverables. TRW's understanding of space systems OT&E
will benefit AFOTEC in the test planning process for real
acquisition programs."
The SSET also considered TRW's use of automated tools in their
approach to the JCOMSS methodology a significant strength, stating
that:
"The use of automated tools to populate and maintain the database
and produce summary descriptions helps AFOTEC insure the database
is complete, and adds flexibility to the process of updating the
data base or reorganizing the data as new information is
required."
For BDM, the SSET considered BDM's approach for developing a
methodology to establish a utility for the developmental test events
to be an advantage of outstanding merit, stating that:
"[t]his technique will benefit AFOTEC by clearly prioritizing the
test events for the Test Support Group."
On their face, these perceived strengths appear sufficiently similar
that it is not possible to determine why they received different
ratings, i.e., why one strength was deemed of greater value to the
agency than another. To the extent that certain strengths may in fact
have warranted higher ratings than others, neither the evaluation
record nor the protest record shows why.
We conclude that the award decision is supported by neither the source
selection decision document nor the evaluation documents. In the only
area where TRW was rated lower than SAIC and BDM, all three offerors'
proposals were found to have strengths with no significant weaknesses.
Nothing in the record explains why the perceived technical advantages
in SAIC's and BDM's proposals were deemed superior to the technical
advantages in TRW's proposal. Absent such an explanation, it simply
is not possible to conclude that the SSA reasonably decided that
SAIC's and BDM's proposals were worth a cost premium of $4 million.
We sustain the protest on this basis.
By letter of today to the Secretary of the Air Force, we are
recommending that the agency perform and document a proper
cost/technical tradeoff. If, based on this analysis, BDM's and/or
SAIC's proposal is found no longer to represent the best value to the
government, the agency should terminate the contract(s) for the
convenience of the government and award new contracts as appropriate.
We also find that TRW is entitled to the costs of filing and pursuing
this protest, including reasonable attorneys' fees. 4 C.F.R. sec.
21.6(d)(1) (1995). TRW should submit its certified claim for such
costs, detailing the time expended and costs incurred, directly to the
agency within 60 days after receipt of this decision. 4 C.F.R. sec.
21.6(f)(1).
The protest is sustained.
Comptroller General
of the United States
1. AFOTEC is responsible for conducting independent and objective
evaluations of the operational effectiveness and suitability of
various systems used by the Air Force.
2. The adjectival ratings were blue/exceptional, green/acceptable,
yellow/marginal, and red/unacceptable.
3. PRC, another offeror, was rated the highest for the non-cost areas
but also submitted the highest proposed costs. The SSA first
determined that PRC's proposal was not worth the additional cost.
4. Although the protester and the agency refer to BDM's higher
performance risk rating, the evaluation documents show that BDM in
fact received a low/moderate proposal risk rating for the OCI area.
5. The SSET did note one weakness in TRW's proposal under this
item--TRW did not clearly link the screening criteria in its
assessment methodology to the critical operational issues and measures
of effectiveness/performance that should be used to develop the
criteria. However, the SSET itself stated that this weakness was
minor and did not require clarification.