BNUMBER:  B-261044.4
DATE:  December 14, 1995
TITLE:  Caltech Service Corporation

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

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:Caltech Service Corporation

File:     B-261044.4

Date:     December 14, 1995

Alan Dickson, Esq., Jeffrey H. Schneider, Esq., and Josï¿½ Otero, Esq., 
Epstein Becker & Green, for the protester.
Gregory H. Petkoff, Esq., and Peter M. Ditalia, Esq., Department of 
the Air Force, 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

Agency reasonably evaluated and considered the relative strengths of 
the proposals under a best value evaluation scheme in concluding that 
no proposal was significantly superior to the awardee's low-priced 
proposal, and thus reasonably found that proposal to represent the 
best value to the government.

DECISION

Caltech Service Corporation protests the award of a contract to 
Cabaco, Inc., by the Department of the Air Force under request for 
proposals (RFP) No. F33657-93-R-0028, for the operation and 
maintenance of the common area at Air Force Plant 42, Palmdale, 
California.[1]  

We deny the protest.

The RFP, issued on a small disadvantaged business set-aside basis, 
sought operation and maintenance services, including security, 
airfield maintenance, fire protection/crash rescue, and industrial 
facilities maintenance and engineering services to be performed in 
accordance with the standards in the RFP's performance work statement 
(PWS) for a base year with 4 option years.  Firm, fixed prices were 
solicited for the bulk of the work, and not-to-exceed cost ceilings 
were specified for the several cost reimbursement line items.   

The RFP stated that award would be made to the responsible offeror 
whose conforming offer was determined, based on an integrated 
assessment of the evaluation criteria and other considerations, to be 
most advantageous to the government.  The following factors were 
listed in descending order of importance, with the subfactors within 
each area being of equal importance:

    (1) Technical

        (a) fire protection and crash rescue
        (b) security
        (c) maintenance/supply
        (d) engineering

    (2) Management

        (a) organization and management
        (b) government furnished property
        (c) safety

    (3) Cost

The RFP also set forth various elements corresponding to the 
requirements in the PWS that would be evaluated under each subfactor.  
For example, with regard to the fire protection and crash rescue 
subfactor, the only element was

    "The position descriptions for the Fire Chief, Assistant Chief for 
    Training, Assistant Chief for Operations and Emergency Medical 
    Technicians will be evaluated for compliance with the PWS."

Each subfactor was to be evaluated under a color/adjectival rating 
scheme considering the designated elements of the subfactor.[2]  Each 
subfactor was also to be evaluated for proposal risk--to assess the 
risk associated with an offeror's proposed approach--and for 
performance risk--to assess the probability of successful performance 
based on the "offeror's relevant past and present performance."[3]  
The color/adjectival rating, proposal risk, and performance risk were 
to be weighted equally for each evaluation factor except cost.  For 
cost, the Air Force determined each offeror's most probable cost 
(MPC),[4] which was to be evaluated for reasonableness, realism, and 
completeness.  The RFP specifically stated that the MPC would be a 
significant factor in the source selection decision and would be 
evaluated equally with the performance risk rating for each offeror's 
cost.  The RFP also noted that the subjective judgment of the 
government evaluators is implicit in the evaluation process.

A source selection evaluation team (SSET) evaluated each subfactor 
element for soundness of approach and understanding/compliance with 
the minimum requirements of the RFP utilizing a plus (exceeds 
standard)/check (meets standard)/ minus (does not meet standard) 
rating system.  Evaluators assessed each proposal's technical 
strengths, weaknesses, deficiencies, and risks (i.e., proposal risk), 
and then assigned a color/adjectival and risk rating for each 
subfactor.  

In addition, a performance risk analysis group (PRAG) conducted a 
performance risk assessment of the relevant present and past 
performance of each offeror and their major subcontractor(s) for each 
subfactor.  The PRAG evaluated information submitted by offerors, 
responses to questionnaires sent to references, and pre-award surveys, 
and assigned performance risk ratings for all the subfactors (the PRAG 
inadvertently overlooked evaluating the government-furnished property 
subfactor for performance risk).

The SSET presented the source selection authority (SSA) with its 
findings at an initial evaluation briefing and, based on this 
evaluation, the SSA established a competitive range of eight 
proposals, including Caltech's and Cabaco's.   Discussions were 
conducted, and best and final offers (BAFO) submitted and evaluated.  
Both Caltech's and Cabaco's BAFOs were rated green/acceptable with  
low performance risk and low proposal risk for each subfactor (except 
security, for which both offerors received N/A for performance risk).  
Caltech's MPC was $56,306,018 while Cabaco's was $51,808,250.

Based on its evaluation of the BAFOs, the SSET and PRAG presented the 
SSA with a final evaluation briefing and a proposal analysis report 
summarizing the strengths, weaknesses, and risks of each proposal for 
the technical evaluation subfactors as well as the performance risks 
and costs.  Based on an integrated assessment of the findings of the 
SSET, the SSA determined that Cabaco's proposal contained a variety of 
strengths, which he detailed in a source selection statement, and a 
significantly low MPC, such that Cabaco's proposal represented the 
best overall value.  The Air Force thus made award to Cabaco.

Caltech argues that its proposal was technically superior to Cabaco's 
under the technical and management factors, and that the fact that it 
received the same green/acceptable rating for each subfactor as 
Cabaco's proposal indicates that award was actually made solely on the 
basis of low price, without regard to relative technical merit.  In 
support of its protest, Caltech has attacked the reasonableness of 
virtually every aspect of the technical, proposal risk, performance 
risk, and cost evaluations.

While procuring agencies have broad discretion in determining the 
evaluation plan they use, they do not have the discretion to announce 
in the solicitation that one plan will be used, and then follow 
another in the actual evaluation.  Trijicon, Inc., 71 Comp. Gen. 41 
(1991), 91-2 CPD  375.  Specifically, agencies may not specify that 
technical superiority will be more important than cost, and then make 
award as though the RFP provided for award to the lowest-cost, 
technically acceptable offeror.  Id.  In our review of an agency's 
evaluation of proposals, we confine our analysis to a determination of 
whether the evaluation was reasonable and consistent with the 
solicitation evaluation criteria.  SDA Inc., B-248528.2, Apr. 14, 
1993, 93-1 CPD  320. 
 
The protester's and awardee's proposals were reasonably rated as 
green/acceptable with low proposal risk and low performance risk for 
each subfactor, with both found to contain various strengths and 
weaknesses.[5]  While it may be that Caltech's proposal contained more 
strengths than Cabaco's, Caltech has not shown that it deserved a 
higher rating, or that Cabaco deserved a lower rating, for any 
subfactor, or that the identified strengths in Caltech's proposal 
would offset Cabaco's $4.6 million cost advantage.  Moreover, the 
record does not evidence that the Air Force abandoned the best value 
evaluation scheme to simply make award to the low-cost technically 
acceptable offeror.  Instead, as indicated in the source selection 
statement, the SSA found that no proposal was significantly superior 
to Cabaco's proposal--which had a variety of documented strengths--so 
as to justify the payment of the associated substantial cost premium.

The major area where Caltech asserts that the superiority of its 
proposal was not recognized is the fire protection/crash rescue 
subfactor, where both Caltech's and Cabaco's proposal received 
green/acceptable ratings.  Caltech asserts that since the evaluators' 
worksheets show that Caltech's proposal received more "plus" ratings 
than Cabaco's for this subfactor, the SSET erred in not awarding 
Caltech a higher score.  Caltech specifically notes that one 
evaluator's worksheets reveal that Caltech's rating for fire 
protection/crash rescue was provisionally upgraded from an initial 
rating of green/acceptable[6] to blue/exceptional, but was finally 
rated green/acceptable, a rating which Caltech asserts was 
unjustifiably low.

The Air Force explains that in order to be rated blue for any element, 
a proposal had to exceed the specified performance or capability 
standard in a beneficial way to the Air Force and have no significant 
weaknesses, and that the source selection plan for this procurement 
charged evaluation team leaders with ensuring that ratings were 
consistently applied.  For the subfactor in issue here,  the team 
leader did not concur with the evaluator's provisional blue rating, 
even though Caltech's position descriptions for the fire 
protection/crash rescue personnel exceeded the PWS standards.  This 
was because Caltech did not respond to the agency's request during 
discussions to incorporate into the draft contract all of the enhanced 
education, experience, and certification standards indicated in its 
position descriptions.  Given Caltech's failure to completely respond 
to the discussion request, we see nothing unreasonable in the team 
leader's and SSET's ultimate finding that Caltech's proposal was not 
sufficiently exceptional for this subfactor to warrant a blue rating; 
while the protester disagrees with the rating, it has not shown it was 
unreasonable.  Moreover, although Cabaco's proposal initially was 
given a provisional yellow/marginal rating for fire protection/crash 
rescue, Cabaco remedied the weaknesses/deficiencies in its proposal 
during discussions and improved its initial minus ratings to checks; 
nothing in the record suggests that Cabaco's green/acceptable rating 
for this subfactor was unwarranted.  Thus, while it is true that 
Caltech's proposal contained more strengths for this subfactor than 
Cabaco's, even though they received the same rating, the record does 
not indicate that Caltech's proposal was underrated or Cabaco's 
proposal was overrated.[7] 
 
Caltech contends that the Air Force's evaluation was affected by 
Cabaco's alleged misrepresentations concerning the current employment 
status of several of its proposed personnel, specifically, Cabaco's 
proposal's misrepresentation that these individuals were currently, or 
were recently, employed by the incumbent contractor, Pacifica.  
However, the Air Force did not consider the qualifications and 
experience of specific individuals in the evaluation, even though 
Caltech tendered these individuals' resumes in its proposal.  Rather, 
consistent with the RFP, the agency only evaluated the offerors' 
position descriptions, as stated in the proposals, for the designated 
key management and supervisory personnel, including those for fire 
protection/crash rescue, which it found at least compliant with the 
standards set forth in the PWS.  

Caltech also contends that Cabaco's BAFO should have been downgraded 
because it replaced employees of its subcontractor, Day & Zimmerman, 
which is experienced in structural fire protection, with Cabaco 
employees, to operate the Plant 42 alarm room.[8]  Caltech alleges 
that, even though Cabaco itself had no experience in this area, the 
Air Force did not downgrade Cabaco's BAFO based on this change.  The 
Air Force responds that since the alarm room operation only needs one 
operator per shift, and this individual's duties are not particularly 
complicated, the change in personnel was not important enough to 
adjust the risk factor or lower the technical rating.  We note that 
the alarm room requirement was but one of many listed in the PWS under 
fire protection/crash rescue and was never separately evaluated.  
Given that Cabaco's proposal evidences that alarm room operators would 
be qualified to monitor the plant's fire protection systems and to 
dispatch appropriate equipment, and detailed the requirements 
associated with alarm room operation, the Air Force had no reason to 
lower Cabaco's technical rating or to increase the proposal risk 
factor because of Cabaco's substitution of personnel in its BAFO.

Caltech argues that because the incumbent contractor, Pacifica, will 
be Caltech's  subcontractor for fire protection/crash rescue, the 
performance risk of its proposal should have been rated superior to 
Cabaco's for the security subfactor and the airfield maintenance 
element of the maintenance/supply subfactor.  Caltech concludes that 
the Air Force therefore should not have found that Caltech's proposal 
did not demonstrate past performance in the security area, and 
improperly rated it N/A for that subfactor.  We disagree. 

Consistent with the RFP, the Air Force evaluated the experience of the 
offeror itself for performance risk.  The Air Force could not assign 
performance risk to Caltech for the security subfactor because Caltech 
itself had no previous experience in this regard and did not propose 
Pacifica as a subcontractor for security, but merely proposed to hire 
Pacifica employees and integrate them into Caltech's security 
operation.  According to the Air Force, all offerors proposed hiring 
portions of incumbent Pacifica's work force, and none was given past 
performance credit for this aspect of their proposal.  Since Pacifica 
is Caltech's subcontractor only for fire protection/crash rescue, the 
agency reasonably determined that Caltech's proposal should not 
receive an enhanced or low performance risk rating for other areas.[9]  

Caltech also contends that the questionnaires received by the PRAG for 
Cabaco show that Cabaco should have received a significantly less 
favorable past performance risk rating than Caltech.  However, while 
Caltech received more outstanding ratings for past performance, this 
is not a basis for concluding that Cabaco, which had satisfactory 
ratings, should have received anything other than a low performance 
risk assessment.  It is true that [DELETED] respondents to the past 
performance questionnaire rated Cabaco [DELETED] for custodial 
services, but this respondent also noted that Cabaco's services had 
improved in this area--which was the only performance element out of 
nine evaluated by that respondent that [DELETED]--and that Cabaco's 
overall performance was satisfactory.  Further, the other [DELETED] 
respondents gave Cabaco [DELETED] and [DELETED] ratings for all the 
performance elements of their contracts with Cabaco.  We conclude that 
the performance risk ratings were reasonable.[10]

Finally, Caltech complains that the Air Force could not find Cabaco's 
proposed cost realistic because it had to add $4 million to Cabaco's 
BAFO costs to calculate its MPC.  However, this adjustment to MPC in 
no way reflected agency concern with the realism of the elements 
included in Cabaco's proposed cost.  Rather, the adjustment was made 
only because Cabaco was found to have omitted from its cost proposal 
the not-to-exceed estimates for the cost reimbursement line items that 
were designated by the agency in the RFP for all offerors.  Since 
offerors did not separately propose these pre-designated costs, the 
agency appropriately considered Cabaco's proposal's omission of these 
costs when it calculated Cabaco's MPC. While Caltech also complains 
that Cabaco's offer was unrealistically low, the agency specifically 
found that Cabaco's wage rates were consistent with the applicable 
wage determinations, that its manning levels were acceptable, and that 
Cabaco had the financial capability to successfully perform the 
contract at its proposed prices.  Caltech has not shown that the 
agency's judgment in this regard was unreasonable.[11]

In sum, the Air Force reasonably determined that Cabaco's proposal's 
technical strengths and low MPC represented the best value to the 
government.

The protest is denied.

Comptroller General
of the United States

1. Plant 42 is a government-owned, contractor-operated facility for 
government agencies and contractors performing research, development 
and production work on various aircraft and other programs.  The 
common areas of Plant 42 include an airfield, access gates, and other 
areas not exclusively or solely occupied by a contractor or agency.

2. The color/adjectival ratings were blue/exceptional, 
green/acceptable, yellow/marginal, and red/unacceptable.

3. The evaluation ratings for proposal risk and performance risk were 
high, moderate, and low.  If no past performance had been 
demonstrated, a rating of "Not Applicable" (N/A) was given for 
performance risk.

4. The MPC was the sum of the estimated cost for operations and 
maintenance support (which was offered on a firm, fixed-price basis, 
including wages), other government costs (not-to-exceed estimates 
established by the Air Force for the cost reimbursement line items), 
and any necessary adjustments to wage rates made by the agency in the 
cost evaluation to ensure compliance with the Service Contract Act and 
collective bargaining agreements.  

5. For example, Cabaco's proposal had a designated strength with 
regard to the demonstrating understanding of as-built drawings element 
under the engineering subfactor, which was not found in Caltech's 
proposal; on the other hand, Caltech's proposal contained identified 
strengths in the fire protection/crash rescue subfactor not found in 
Cabaco's proposal.  

6. Caltech's initial proposal received a number of "minus" ratings for 
the fire protection/crash rescue subfactor.  Thus, Caltech's assertion 
that it was and should have been rated blue from the offset has no 
merit.

7. Further, the record shows that the SSA was fully aware of the 
strengths of Caltech's proposal when he made the source selection.  He 
was informed in the SSET briefing of Caltech's relative strengths in 
the fire protection/crash rescue area, i.e., that the educational 
attainment and experience requirements for firefighter position 
descriptions included in Caltech's proposal exceeded the PWS 
standards, and was also advised that Cabaco had no significant 
strengths in this area.  In addition, for performance risk, the SSA 
was briefed that Caltech's subcontractor for fire protection/crash 
rescue, Pacifica, had performed well as the incumbent contractor, 
whereas the experience of Cabaco's subcontractor, Day & Zimmerman, was 
limited to structural fires, with no crash rescue experience.

8. The PWS required that the contractor man the alarm room with one 
person continuously 24 hours per day, 7 days a week.  Unlike other 
firefighter positions which required specified training and 
experience, the PWS was silent on the qualifications and training for 
alarm room operators.

9. Caltech asserts that, had the Air Force conducted adequate 
discussions, Caltech could have avoided receiving the N/A rating for 
past performance for security, presumably by proposing Pacifica as a 
subcontractor for security.  However, although the N/A rating meant 
that Caltech had not itself demonstrated relevant past performance in 
the security area, the N/A rating was intended as a neutral rating 
rather than as a sign of a deficiency or weakness.  The Air Force 
notes that nearly every other offeror had at least one area without 
demonstrated performance and the PRAG did not request from any of them 
any additional data in this regard since the RFP had requested 
offerors to include all relevant data concerning past performance in 
their proposals.  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.  John Brown U.S. Servs., Inc., B-258158 et 
al., Dec. 21, 1994, 95-1 CPD  35.

10. Also, the Air Force's inadvertent failure to assign performance 
risk for the government-furnished property subfactor during the 
original evaluation did not prejudice Caltech because both offerors 
were ultimately evaluated as having low performance risk for 
government-furnished property.  While Caltech asserts that its rating 
should be superior because its subcontractor had responsibility for 
government-furnished property as the incumbent, Cabaco had also 
handled government-furnished property satisfactorily on previous 
government contracts; there thus is no basis to find that either 
offeror's low risk rating was unwarranted.

11. Caltech asserts that performance risk improperly was not evaluated 
with regard to Cabaco's cost as contemplated by the RFP; however, the 
record confirms that Cabaco's proposal reasonably received a low 
performance risk rating for this factor based on the responses to the 
past performance questionnaires.