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.