BNUMBER: B-261244.2; B-261244.3; B-261244.4; B-261244.5
DATE: September 11, 1995
TITLE: Newport News Shipbuilding and Dry Dock Company;
Combustion Engineering, Inc.; Sierra Nuclear 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:Newport News Shipbuilding and Dry Dock Company;
Combustion Engineering, Inc.; Sierra Nuclear Corporation
File: B-261244.2; B-261244.3; B-261244.4; B-261244.5
Date: September 11, 1995
Donald C. Holmes, Esq., and Michael A. Gordon, Esq., Holmes, Schwartz
& Gordon, for Newport News Shipbuilding and Dry Dock Company, a
protester.
Gerald D. Morgan, Jr., Esq., William H. Espinosa, Esq., and Jeffrey A.
Lovitky, Esq., Winthrop, Stimson, Putnam & Roberts, for Combustion
Engineering, Inc., a protester.
John Burkholder, Esq., Morgan, Lewis & Bockius, for Sierra Nuclear
Corporation, a protester.
L. Graeme Bell III, Esq., Monica Parham, Esq., and Christopher Wood,
Esq., Crowell & Moring, for Westinghouse Electric Corporation, an
interested party.
Louis D. Victorino, Esq., John W. Chierichella, Esq., Catherine E.
Pollack, Esq., and Lawrence E. Ruggiero, Esq., Fried, Frank, Harris,
Shriver & Jacobson, for TRW Environmental Safety Systems Inc., the
management and operating prime contractor for the Department of
Energy.
Mary H. Egger, Esq., Gena E. Cadieux, Esq., and Janet Zoe Barsy, Esq.,
Department of Energy, for the agency.
Susan K. McAuliffe, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Award of single contract was permitted under solicitation which
expressly stated that one or more contracts could be awarded; protests
that offerors were misled to believe more than one award would be made
are denied where contention is not reasonably supported.
2. Agency's management and operating (M&O) contractor performed
appropriate price analysis under solicitation which contemplated award
of fixed-price contract where M&O contractor determined that awardee's
price was reasonable and realistic on the basis of its review of
awardee's detailed pricing data related to its proposed approach and a
comparison to the other proposals.
3. Protests challenging disparate treatment and improper evaluation
of technical proposals are denied where evaluation record shows that
evaluation of proposals was reasonable and consistent with the
solicitation's evaluation criteria and alleged irregularity in the
evaluation had an insignificant effect, if any, on the offerors'
technical evaluation scores and would not affect the reasonableness of
the award determination in light of the protesters' substantially
higher prices (or substantially lower technical evaluation scores).
DECISION
Newport News Shipbuilding and Dry Dock Company, Combustion
Engineering, Inc., and Sierra Nuclear Corporation protest the award of
a subcontract to Westinghouse Electric Corporation under request for
proposals (RFP) No. VA.CS.WLS.6/94.015. The RFP was issued by TRW
Environmental Safety Systems, Inc. (TESS), as the management and
operating (M&O) prime contractor to the Department of Energy (DOE),
for the design of multi-purpose canister (MPC) systems for managing
the storage, transportation, and disposal of spent nuclear fuel.
Newport News and Combustion Engineering principally contend that the
RFP required multiple awards and that TESS improperly evaluated
offerors' price and technical proposals. Sierra Nuclear Corporation
protests the evaluation of its proposal.
We deny the protests.
The RFP was issued on June 3, 1994, by TESS, as the M&O prime
contractor for DOE, and set forth a 3-phase procurement scheme--Phase
1 involves the design and preparation of safety analyses for two MPC
systems (large and small) and the preparation of alternative design
studies and special technical reports (the subcontract awarded to
Westinghouse for Phase 1 is the subject of the current protests);
Phase 2 involves an option for Nuclear Regulatory Commission (NRC)
certification of the Phase 1 designs, fabrication of scale model and
prototype system components, and testing of the components; and Phase
3 involves an option for fabrication and delivery of the MPC systems
and welding equipment.[1]
The RFP provided for TESS' "award of one or more fixed-price
subcontracts" for Phase 1, TESS' subsequent evaluation of design
documentation and revised "proposal(s) [to] select one or more
offerors to proceed" with Phase 2, and, concurrent with the
performance of Phase 2, for TESS to evaluate designs and offers for
production, fabrication, and delivery and "select not more than one of
the offerors to proceed to Phase 3 fabrication and delivery. The RFP
advised that "[o]fferors not awarded initial subcontracts for Phase 1
are not eligible for participation in subsequent phases." The RFP
provided that "TESS intends to award a subcontract(s)" to the
"[o]fferor(s) whose proposal meets all of the MPC systems'
requirements and is judged to represent the best value to the
Government" using the following stated evaluation criteria: technical
factors (including design, certifiability, system operability, and
fabricability); business and management factors (including corporate
experience, personnel, management plans, and facilities); and price
(including analysis of cost and price proposals for reasonableness and
realism). For Phase 1, the business and management factor was more
important than the technical factor and price was least important.[2]
The RFP, as amended, required offerors to submit firm, fixed prices
for Phase 1, and fully supported estimated prices for Phases 2 and
3.[3] Offerors were to calculate their proposed prices based on
estimated quantities and types of spent nuclear fuel set forth in the
RFP. Firm, fixed prices for Phases 2 and 3 were required from any
successful Phase 1 offeror 9 and 24 months, respectively, after award
of Phase 1. Proposed estimated prices for Phases 2 and 3 were to be
evaluated under the Phase 1 evaluation to determine proposed total
prices, however, award of Phase 1 was to be made in the amount of the
firm, fixed prices for Phase 1 only without any obligation on the part
of TESS to exercise the Phase 2 and 3 options.
Five offerors submitted proposals by October 24. TESS Resource Teams,
each assigned an evaluation factor, evaluated the proposals. The
Source Election Board (SEB) developed consensus ratings for each
offeror's proposal based upon the Resource Team reports and assigned
ratings to the proposals after applying the weights assigned to each
factor. Price proposals were separately evaluated. All five
proposals were included in the competitive range and discussions were
held with the offerors. Best and final offers (BAFO) were received by
February 21, 1995. After evaluation of the BAFOs, the SEB assigned
"best value" rankings to the proposals, listed below in descending
order, where "points" refers to the total evaluation points received
under the technical and business and management factors out of a
possible 100 points:
1. Westinghouse (with [DELETED] points, a Phase 1 proposed price of
$14,049,233, a Phase 2 and 3 proposed estimated price of [DELETED],
and a total price of [DELETED];
2. Holtec International (with [DELETED] points, a Phase 1 proposed
price of [DELETED], a Phase 2 and 3 proposed estimated price of
[DELETED], and a total price of [DELETED];
3. Newport News (with [DELETED] points, a Phase 1 proposed price of
[DELETED], a Phase 2 and 3 proposed estimated price of [DELETED], and
a total price of [DELETED];
4. Combustion (with [DELETED] points, a Phase 1 proposed price of
[DELETED], a Phase 2 and 3 proposed estimated price of [DELETED], and
a total price of [DELETED];
5. Sierra (with [DELETED] points, a Phase 1 proposed price of
[DELETED], a Phase 2 and 3 proposed estimated price of [DELETED], and
a total price of [DELETED].)
The SEB briefed the Source Selection Authority (SSA) on its findings
and the SSA forwarded a recommendation to DOE for award of Phase 1
subcontracts to Westinghouse and Holtec. DOE authorized award only to
Westinghouse, finding that all other proposals "raise[d] certain
technical, business management or cost concerns." TESS awarded a
single subcontract for Phase 1 to Westinghouse on April 20, 1995.
These protests followed.[4]
Newport News and Combustion initially challenge TESS' award of a
single contract to Westinghouse on the basis that the RFP required
multiple awards for Phase 1. Alternatively, the protesters contend
that offerors were misled to believe that more than one award would be
made. We disagree.
Initially, our review of the record shows that the terms of the RFP
clearly notified all offerors that one or more awards could be made
for Phase 1. The RFP also explained that an offeror only would be
eligible for participation in the Phase 2 and 3 options if awarded a
Phase 1 subcontract. The protesters thus should have known from the
RFP that a single Phase 1 award could be made which, under the RFP's
terms, would have limited eligibility for further participation in the
procurement to one firm, as here. The protesters' challenges to the
RFP's terms and the contentions that the single award to Westinghouse
has created an improper sole source "situation" for Phases 2 and 3 are
untimely.[5] Protests of solicitation improprieties must be filed
with our Office prior to the time set for receipt of initial proposals
to be timely. 4 C.F.R. 21.2(a)(1) (1995); see Continental Technical
Servs. of Georgia, Inc., B-259681; B-259681.2, Apr. 19, 1995, 95-1 CPD
204.
Further, nothing in the record demonstrates, as the protesters
contend, that communications from the M&O contractor or DOE before the
issuance of the RFP and after the submission of proposals could have
reasonably misled offerors. The challenged communications essentially
involve the use of the word "awards" rather than "award(s)," but are
not inconsistent with the RFP's stated terms providing for either one
or multiple awards. The timing of the communications themselves shows
that if the protesters in fact interpreted them to mean that multiple
awards would be made, those offerors' reliance on that interpretation
in preparing their proposals was unreasonable. See Essex Electro
Eng'rs, Inc., B-238207; B-238207.2, May 1, 1990, 90-1 CPD 438. The
subsequently issued RFP and its terms are controlling over any pre-RFP
statements and any challenged statement made after the submission of
proposals is irrelevant to the preparation of the proposals. In fact,
[DELETED].[6]
Newport News and Combustion next challenge the adequacy of TESS'
evaluation of price proposals. The protesters contend that
Westinghouse submitted a "low-ball" price proposal which should have
been rejected or adjusted upward under a "most probable cost"
analysis; the protesters contend that TESS improperly failed to
perform an in-depth cost realism analysis of the proposals.
The RFP provided that proposals must include sufficient information,
including a Standard Form 1411, and bases of estimates, with a cost
breakdown of proposed prices and the method and basis of calculating
the proposed prices, for TESS to verify "the basis for and
reasonableness of the prices offered." The RFP provided that "[t]he
cost and price proposal will not be point scored, assigned a numerical
weight, or adjectivally rated" and that price proposals would be
evaluated in accordance with the following:
"A. Cost/Price Analysis. Analysis of cost and price proposals will
be performed in accordance with the [Federal Acquisition Regulation
(FAR)] and [Department of Energy Acquisition Regulation (DEAR)].
"B. Cost/Price Realism. An unrealistic price proposal may be
evidence of the [o]fferor's lack of understanding or poor
understanding of the scope of
work . . . ."
TESS found all of the offerors' proposed prices reasonable and
realistic based upon the information contained in the proposals and
did not adjust the proposed prices (except for correction of a
mathematical error in Newport News's proposal which the protester does
not challenge). Firms that submitted more detailed pricing data, as
required by the RFP, however, were found by TESS to provide a higher
degree of confidence in the reasonableness and realism of the proposed
prices. Westinghouse's prices were found to be supported by a
comprehensive breakdown of pricing components. The Westinghouse price
proposal, which was [DELETED] included detailed line item bases of
estimates, including applicable labor categories, hours and rates.
Westinghouse also provided a detailed breakdown of tasks and
descriptions of the work to be performed within each line item to
support the firm's proposed prices.
Although Newport News, which offered the highest prices for all three
phases of performance ([DELETED] percent higher than the awardee's),
was requested several times during the procurement to provide detailed
bases of estimates to support its and its team members' proposed
prices, Newport News failed to submit additional pricing information.
Instead, Newport News contends that its proposed pricing was accurate
and adequately supported because it was "based primarily on actual,
verifiable cost experience" with similar contracts. TESS found,
however, that Newport News's costs remained, in part, unsubstantiated
since without further explanation of the direct relationship of past
costs on different contracts involving many different components and
approaches, TESS could not fully assess the reliability of the firm's
proposed pricing under the current RFP.
Where, as here, the award of a fixed-price contract is contemplated, a
proposal's "cost realism" is not ordinarily considered since a
fixed-price contract places the risk and responsibility for contract
costs and resulting profit or loss on the contractor, even if the
solicitation states generally that prices will be evaluated for
realism. Crestmont Cleaning Serv. & Supply Co., Inc.; Scott & Sons
Maintenance, Inc.; Son's Quality Food Co., B-254486 et al., Dec. 22,
1993, 93-2 CPD 336; Culver Health Corp., B-242902, June 10, 1991,
91-1 CPD 556. Under the FAR, the procuring agency in its discretion
may provide for performance of a price analysis to determine that the
proposed prices are fair and reasonable. FAR 15.805-1 and
15.805-2; Family Realty, B-247772, July 6, 1992, 92-2 CPD 6. Here,
the RFP did not provide for any specific type of cost or price
evaluation, but rather generally referenced the price and cost
analysis methods available under the FAR and DEAR. The M&O
contractor, in its discretion, conducted a price analysis for this
fixed-price contract. The FAR provides a number of price analysis
techniques that may be used to determine whether prices are fair and
reasonable, including a comparison of the prices received with each
other. FAR 15-805.2; Ogden Gov't Servs., B-253794.2, Dec. 27, 1993,
93-2 CPD 339. The depth of an agency's price analysis is a matter
within the sound exercise of the agency's discretion. Research
Management Corp., 69 Comp. Gen. 368 (1990), 90-1 CPD 352; Family
Realty, supra.
We have no basis to conclude that TESS' price analysis and
determination that Westinghouse's prices were reasonable and realistic
were not in accordance with the RFP's terms and the federal norm.[7]
As discussed above, an in-depth cost realism (or as Newport News
contends, a most probable cost) analysis was not required by the FAR,
the solicitation, or the federal norm. FAR 15.805; Ogden Gov't
Servs., supra; Serv-Air, Inc.--Recon., 58 Comp. Gen. 362 (1979), 79-1
CPD 212.[8] Since there were five offerors in the competitive
range, TESS decided that adequate price competition existed and
compared the price proposals internally and to each other--[DELETED].
The record supports the agency's view that each offeror's proposed
price reasonably related to the differences in proposed approach.
Finally, Westinghouse's price proposal was found to be comprehensive
in supporting its costs.
The protesters next challenge the technical evaluation of the
proposals. We will review an evaluation to ensure that it was
reasonable and consistent with the stated evaluation criteria. See
Space Applications Corp., B-233143.3, Sept. 21, 1989, 89-2 CPD 255.
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 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 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 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 Scheduled
Airlines Traffic Offices, Inc., B-253856.7, Nov. 23, 1994, 95-1 CPD
33.[9]
The protesters assert numerous challenges to the M&O contractor's
determination that Westinghouse's proposal offered the best value to
the government. Many of the contentions simply are unsubstantiated;
most of the contentions reflect the protesters' disagreement with the
agency's evaluation but do not persuasively demonstrate that the
evaluation was unreasonable. Each protester generally contends that
it should have received additional points for the evaluation factors
under which they failed to receive the maximum points available or,
alternatively, that Westinghouse's proposal should have received fewer
points under each evaluation factor. Our review of the procurement
and protest records, including the RFP, the evaluation documents, the
protesters' proposals, and the protest submissions of the parties,
shows that TESS and DOE made a reasonably supported best value
determination in awarding the subcontract to Westinghouse.
Specifically, we think the minimal evaluation point differences among
the offerors that would result if the allegations of inconsistent
evaluations in fact had merit, would have had an inconsequential
effect on the award determination given the substantial price
differences between the awardee's and protesters' proposals (or in the
case of Sierra's protest, the substantial difference in technical
scores).
First, Sierra protests the evaluation of its own proposal on
principally two bases: that the evaluators improperly downgraded
Sierra for lack of large, complex contract experience and for
providing insufficient pricing data to support its proposed
prices.[10] Our review of the record supports the reasonableness of
TESS' evaluation under the challenged technical evaluation area.
Sierra states that had it known that large, complex contract
experience was to be favored, [DELETED]. TESS defends its evaluation
by pointing out that the RFP was clear, and thus the protester was on
notice, that one of the most important evaluation factors for the
business and management proposal was "corporate experience and success
in performance on contracts of size and complexity similar to that
being proposed." We agree that the RFP reasonably advised Sierra of
the need for experience comparable to the work under the RFP. The
protester does not rebut TESS' determination that Sierra's proposal
[DELETED]. Our review of the proposal confirms the reasonableness of
that determination; in fact, [DELETED], despite the matter having been
raised with the protester during discussions.
Next, Newport News and Combustion challenge the evaluation of their
own and Westinghouse's proposals under every evaluation factor stated
in the RFP. Westinghouse received consistently high scores under each
evaluation factor and its proposal was determined low risk based upon
a conservative approach to meeting the RFP requirements substantiated
by a very detailed, comprehensive proposal. Westinghouse received the
highest total technical and business and management score and offered
a price approximately [DELETED] percent lower than Newport News and
Combustion, and only approximately [DELETED] percent higher than
Sierra's proposal which received significantly lower evaluation
scores. Although each proposal was evaluated by the Resource Teams on
an individual basis, as called for in the source selection plan, the
best value determination required a comparative evaluation of the
proposals' relative technical merit which supported the award to
Westinghouse. Our review of the evaluation record confirms the
reasonableness of TESS' award to Westinghouse.
DESIGN
The most important technical evaluation factor was design. Although
the offerors were all rated as satisfactory for design, the noted
strengths and weaknesses of each proposal differed due to the
different approaches proposed. Combustion's proposal, for instance,
was downgraded for failing to provide as detailed a design proposal as
requested by the RFP. Combustion protests that its design should have
been rated higher because it surpassed the [DELETED] requirements of
the RFP. The record shows that its proposal received credit for
exceeding [DELETED]--as did the other offerors' proposals that
exceeded the [DELETED] requirements. However, its proposal was
reasonably downgraded for including many general statements of
compliance with other RFP design requirements rather than
demonstrating compliance and thus, additional credit was not
warranted.
Under the design factor, Newport News's and Westinghouse's proposals
had similar significant strengths, but Newport News's proposal also
was evaluated as having a significant weakness regarding the
[DELETED]. The protester states that it responded adequately to these
concerns, but the record does not show that TESS' remaining concerns
in the area did not justify the lower rating for design.
Newport News also contends that Westinghouse's proposal's design score
should have been lowered for introducing a [DELETED] design that had
not [DELETED]. The record, however, shows that the proposed [DELETED]
was fully substantiated in Westinghouse's proposal and was reasonably
rated as satisfactory. TESS correctly noted that although NRC
certification is an important aspect of the overall evaluation of
proposals, the RFP design subfactors did not specifically include NRC
certification requirements. We also think TESS reasonably considered
Westinghouse's presentation of supporting information showing that its
[DELETED] was based upon an existing, effective design, and thus,
TESS' technical rating of Westinghouse's proposal under design was
reasonable.
CERTIFIABILITY
Regarding the evaluation of certifiability, this RFP evaluation factor
contemplated review of the degree of confidence presented by the
proposals for timely design certification by NRC (the proposal of NRC
approved quality assurance programs and the offer of products or
components previously certified by the NRC would warrant higher scores
under the evaluation factor). Westinghouse's proposal was rated
slightly higher than Newport News's and Combustion's proposals under
this factor and, we think, the record adequately supports the ratings.
Newport News and Combustion both [DELETED]. Although Westinghouse was
cited for a significant weakness concerning [DELETED] the substantial
detail in the certifiability section in its proposal, which
demonstrated considerable knowledge of the NRC certification process
and offered a proactive, attentive approach to meeting NRC
requirements, reasonably led TESS to consider Westinghouse's approach
to be an acceptable risk under the certifiability criterion.
Newport News's proposal was assigned a significant weakness under the
certifiability factor for failing to propose the use of
[DELETED]--which are used in previously NRC certified containers.
Newport News also failed to adequately respond to TESS' questions
regarding NRC's ongoing concerns regarding the firm's current NRC
application for certification of its product. We find unpersuasive
Newport News's argument that its proposal should have been rated
higher than Westinghouse's for certifiability on the basis that its
NRC application has already been filed--being the first to file at NRC
is not necessarily demonstrative of timely success in the NRC
certification process.
Further, neither the record nor Combustion's disagreement with the
evaluation determinations warrants a change in Combustion's
certifiability score. Combustion failed to provide the detailed
information required by the RFP to support its proposal.
Specifically, although Combustion states that its product has been
[DELETED], the firm failed to show that it fully understood the NRC
certification process and failed to discuss in sufficient detail in
its proposal its anticipated NRC rulemaking time frames. We believe
it was incumbent upon Combustion to provide supporting information in
this regard to include, for instance, additional information [DELETED]
to support its assertion of its ability to timely obtain NRC
certification of its product and to further substantiate the firm's
familiarity with NRC requirements. TESS' conclusions are adequately
supported on the record.
SYSTEM OPERABILITY
System operability was the third important technical factor and, the
record shows, represents an important distinguishing factor among the
proposals. Westinghouse's proposal under this factor was found by
TESS to provide an "excellent presentation of reliability and
supportability that indicated a thorough understanding of their
applicability in the design of equipment and components." The
proposal was well-received for showing a good understanding of system
safety and efficiency, and for providing good interchangeability of
parts. Although some concern was raised as to the [DELETED], the
offeror did provide details for an alternative method of [DELETED]
that minimized the earlier concern.
Newport News's proposal, on the other hand, which received no
significant strengths for system operability, was downgraded under
this factor for its significant weakness in failing to meet the RFP
requirement for the proposed [DELETED]. Newport News's proposal was
also downgraded slightly for a lack of detail in its proposal for
system operability and the firm provides no basis to question that
finding. The firm's contention that TESS should have realized that,
since the firm's proposal stated that the firm had built other
canisters, the required processes and equipment were in place, is
unreasonable. It is the offeror's responsibility to submit an
adequately written proposal. See INFOCUS Communications, B-256244,
May 31, 1994, 94-1 CPD 330.
Our review of the record also shows that Combustion's proposal was
reasonably downgraded for system operability since, despite being told
during discussions that TESS had concerns about [DELETED], the firm
failed to provide adequate explanation to alleviate the concerns.[11]
BUSINESS AND MANAGEMENT
Newport News's proposal received the highest total score under the
business and management evaluation factors; Westinghouse's proposal
was rated [DELETED] (by a minimal difference in score) and
Combustion's proposal was rated [DELETED] (by a more substantial
margin). Again, Combustion's proposal's main weakness, which is
confirmed by our review of the record, was a lack of detail; for
example, Combustion offered insufficient information to show
[DELETED]. Combustion's contention that the SSA wrongfully failed to
accept the Resource Team's higher ratings for its corporate experience
and management plan is not persuasive--the SSA was entitled to, and
reasonably did, under each respective factor, take into account the
proposal's lack of information regarding [DELETED] and justifiable
concerns about the [DELETED].[12] See Sarasota Measurements &
Controls, Inc., B-252406.3, July 15, 1994, 94-2 CPD 32.
Newport News essentially attempts to reevaluate its own business and
management proposal compared to Westinghouse's proposal in its protest
submissions and argues that if it received the full 10 points
available under each evaluation factor (instead of the 9 points it
received), and Westinghouse's score was lowered under any or all of
the business and management evaluation factors, Newport News's
proposal would be found technically superior. Newport News contends
that the evaluators improperly credited the Westinghouse proposal
under the corporate experience factor for the experience of certain
key personnel whose experience was separately evaluated under the
personnel evaluation factor. The corporate experience factor required
offerors to show "experience and success in performance on contracts
of size and complexity similar to that being proposed" and the "degree
to which the [o]fferor has demonstrated success in designing and
fabricating systems . . . certified by the [NRC] . . . ." The record
indicates that TESS evaluated Westinghouse's corporate experience to
include some NRC certification experience of its subcontractor's key
personnel. Even if the protester is correct in this aspect of its
protest, however, the record shows that Westinghouse provided strong
support for its own experience in projects of similar size and
complexity and some relevant independent NRC certification experience
to still warrant close to the corporate experience score received--at
best, only a minimal difference in the point scores under this factor
might have been warranted which, contrary to Newport News's
contention, simply could not have made its proposal so technically
superior to Westinghouse's proposal to reasonably question the
agency's best value determination in light of Newport News's
substantially higher price.[13]
The protests are denied.
Robert P. Murphy
General Counsel
1. The RFP defined the MPC as a "sealed, metallic container
maintaining multiple [spent nuclear fuel] assemblies in a dry, inert
environment and overpacked [i.e., in casks] separately and uniquely
for various system elements of storage, transportation, and geologic
disposal."
2. For the Phase 2 option, the technical factor was to be most
important, followed by business and management, and both factors were
more important than price. For Phase 3, the total fixed price was to
be determinative.
3. The RFP, as originally issued, required firm, fixed prices for
Phase 1 and guaranteed maximum prices for Phases 2 and 3; the
guaranteed maximum prices requirement was deleted by amendment No.
0004 to the RFP, issued June 3, 1994, which added the requirement for
estimated Phase 2 and 3 prices.
4. Since this procurement is for a subcontract awarded by a DOE M&O
prime contractor acting "by or for" the government, our review is
limited to whether the procurement conformed to the federal norm
reflected in the policy objectives of the federal procurement statutes
and regulations. See Elma Eng'g, 70 Comp. Gen. 81 (1990), 90-2 CPD
390; Merrick Eng'g, Inc., B-238706.3, Aug. 16, 1990, 90-2 CPD
130.
5. TESS, however, reports that it will acquire unlimited rights to the
MPC systems designs under its subcontract with Westinghouse and that
the protesters will have the opportunity to participate in any future
competitive procurements for the MPC systems.
6. In response to the protests of a single award, TESS reports that
insufficient funding was available to support an additional award to
either Newport News or Combustion. The record shows that most of the
offerors' proposed prices exceeded TESS/DOE estimates. Although the
protesters believe that TESS could have or should have sought
additional funding in order to make multiple awards to their firms, we
see no requirement for the M&O contractor to have done so. The award,
as discussed below, was based upon a reasonable determination that
Westinghouse's proposal offered the best value to the government and
the single award was permitted under the terms of the RFP.
7. We think the price evaluation terms in the RFP reasonably notified
the offerors of the agency's discretion in determining the scope of
the price evaluation to be performed--the RFP did not require a most
probable cost analysis of the estimated prices for Phases 2 and 3
(these phases were not awarded under the Phase 1 fixed-price
subcontract). Separate fixed-price awards may be made, under the
option terms of the subcontract and the RFP, for Phases 2 and 3 at a
future time and will then be subject to TESS' price/cost evaluations.
8. Newport News specifically challenges as unreasonable TESS'
conclusion that Westinghouse's [DELETED]. As TESS points out,
however, the Westinghouse proposal expressly included [DELETED].
Also, lower [DELETED] costs, we believe, could also be reasonably
related to Westinghouse's [DELETED]. The protester has not shown that
the price evaluation was unreasonable.
9. Although we have reviewed all of the protesters' numerous
contentions regarding the technical evaluation of the awardee's and
protesters' proposals, we discuss only a representative sample of
those contentions in this decision.
10. Sierra does not rebut TESS' report that, despite the RFP's
requirement for detailed supporting pricing data to verify the
reasonableness of prices, Sierra failed to [DELETED]. Based on this
record, we find reasonable the agency's conclusions that [DELETED].
Accordingly, this aspect of Sierra's protest is denied.
11. The protesters also challenge the evaluation of proposals under
the fabricability factor, the least important technical evaluation
factor. Westinghouse again submitted a more detailed technical
proposal than the other offerors which reasonably rated highly for
[DELETED]. Newport News's proposal, on the other hand, proposed
[DELETED] requiring special tooling, but failed to address the process
in detail, and thus reasonably was assessed as presenting some risk.
Combustion, despite being told of the specific concerns of the M&O
contractor regarding a perceived lack of detail in its proposal,
failed to adequately explain what Combustion concedes was a [DELETED].
We see no impropriety in the evaluation here.
12. Combustion also contends that TESS improperly permitted
Westinghouse to take exception to material RFP requirements, however,
the RFP permitted certain exceptions where adequately supported by the
offeror--Combustion has not persuasively shown that any such exception
rendered Westinghouse's proposal unacceptable in any way. Combustion
also contends that TESS engaged in improper post-BAFO discussions with
Westinghouse regarding the terms of the RFP's indemnification clause
(to which Westinghouse had taken exception in its BAFO, but which was
subsequently agreed to by the awardee). We see no basis to conclude,
however, that, even if these acts constituted improper post-BAFO
discussions, Combustion has suffered competitive prejudice as a
result. Given the reasonableness of the technical and price
evaluations, and the fact that Combustion does not contend--nor is it
likely (since the firm only minimally lowered its price in its
BAFO)--that it would have lowered its price the more than [DELETED]
percent necessary to be in line for award if another round of
discussions was conducted, the record does not show the requisite
element of prejudice to sustain the protest on this ground. See
Maritime Management, Inc., B-260311.2; B-260311.3, July 11, 1995, 95-2
CPD 11; IT Corp., B-258636 et al., Feb. 10, 1995, 95-1 CPD 78.
To the extent Combustion protests, for the first time in its July 17
comments in response to the agency's report on the protest, that TESS
failed to meaningfully discuss with the firm its concerns regarding
Combustion's proposed management plan, the challenge is untimely since
it was not filed within 10 working days of Combustion's receipt of the
agency report which contained TESS' evaluation record. 4 C.F.R.
21.2(a)(2).
13. The protests raise numerous other issues either not proper for our
review or for which the protesters fail to provide sufficient support
to warrant further discussion, e.g., the alleged use by the awardee in
its proposal of another offeror's proprietary information, allegations
of organizational conflict of interest on the part of TESS and that
TESS intends to use funding and the offerors' proprietary information
for its own financial gain, and allegations that the single award
determination was based upon NRC direction that multiple awardees'
applications for certification would be too burdensome for that
agency.