BNUMBER:  B-261959.3
DATE:  January 23, 1996
TITLE:  Raytheon Company

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

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:Raytheon Company

File:     B-261959.3

Date:     January 23, 1996

Kenneth S. Kramer, Esq., James S. Kennell, Esq., Anne B. Perry, Esq., 
and Catherine E. Pollack, Esq., Fried, Frank, Harris, Shriver, & 
Jacobson, for the protester.
Mark D. Colley, Esq., David P. Metzger, Esq., Steven D. Gordon, Esq., 
Bruce E. Kasold, Esq., Craig A. Holman, Esq., and Dorn C. McGrath, 
Esq., Holland & Knight, for Hughes Missile Systems Company, an 
interested party.
Shauna D. Russell, Esq., and Timothy Hickey, Esq., Department of the 
Navy, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest that, given agency's establishment of an evaluation 
Steering Committee composed of representatives from NATO member 
nations, agency was required to secure waiver of statutory requirement 
that contracts be awarded only by the head of the agency or his 
delegate--not foreign citizens--is denied where there is no basis in 
the record to conclude that participation by foreign members of the 
Steering Committee in the evaluation process resulted in an abdication 
of source selection authority to the Steering Committee.

2.  Where, in response to an agency question attempting to clarify a 
proposal's offer of technical data rights, offeror proposes a material 
revision to its proposal, and agency accepts and proceeds to evaluate 
the proposal on the basis of the response, agency has engaged in 
discussions such that it must hold discussions with the other 
competitive range offeror and allow both offerors to submit best and 
final offers.

DECISION

Raytheon Electronic Systems Division, through its parent, Raytheon 
Company, protests the award of a contract to Hughes Missile Systems 
Company under request for proposals (RFP) No. N00024-95-R-5400, issued 
by the Naval Sea Systems Command, Department of the Navy.  The RFP was 
issued to procure engineering and manufacturing development of the 
Evolved Seasparrow Missile.  Raytheon argues that the Navy's selection 
of Hughes for award of this contract was unreasonable and results from 
an improper deviation from applicable procurement laws and 
regulations. 

We sustain the protest.

BACKGROUND

This procurement--seeking design, development, fabrication (of test 
articles) and testing of a modified warhead, new rocket motor, and new 
tail control section for the existing Seasparrow missile system--was 
conducted pursuant to a Memorandum of Understanding (MOU) among 
members of the North Atlantic Treaty Organization (NATO).  The MOU, 
for the Cooperative Support of the Seasparrow Surface Missile System, 
provides for the establishment of a steering committee comprised of a 
representative of each of the 13 nations participating in the MOU.  An 
addendum to the MOU assigns the contracting responsibility for the 
missile upgrade to the Department of the Navy within the U.S. 
Department of Defense (DOD) (and provides that the procurement be 
conducted in accordance with U.S. contracting laws, regulations and 
procedures), but requires unanimous approval by the Steering Committee 
of any source selection advisory council (SSAC) recommendation for 
award prior to a final selection decision by the source selection 
authority (SSA).

Pursuant to the authority in 10 U.S.C.  sec.  2304(c)(1) (1994), the Navy 
limited the competition here to Raytheon and Hughes, the only two 
qualified Seasparrow missile producers, and issued the RFP on December 
16, 1994.  As mentioned above, the procurement seeks a modified 
guidance section and fuze,[1] along with a new rocket motor and new 
tail control system, resulting in a faster and more maneuverable 
missile.  These increases in speed, maneuverability, and warhead/fuze 
effectiveness are required to meet both U.S. and international threat 
scenarios.  Despite the international cooperative nature of this 
endeavor, however, the U.S. threat scenario included in the RFP is 
more challenging--i.e., more difficult to counter--is classified and 
is not releasable to the non-U.S. participants in the program.  As a 
result, these requirements were included in a classified attachment to 
the RFP marked "NOFORN," barring dissemination of the information to 
foreign nationals.  Section L of the RFP advised offerors that any 
information covered by the NOFORN restriction should be clearly 
labeled and segregated in a separate proposal annex.[2]

Section M of the RFP advised the two offerors that proposals would be 
evaluated under each of seven technical/management evaluation factors, 
listed below in descending order of importance:  (1) 
performance/design; (2) schedule, planning and control; (3) work 
share; (4) organization/resources; (5) test and evaluation; (6) 
support engineering; and (7) production readiness.  Section M also 
advised that offers must be evaluated as technically acceptable under 
each of the above factors  to be eligible for award.  In addition, 
section M explained that the agency was seeking the greatest value for 
the government and reserved the right to pay a premium of up to 25 
percent to obtain the services of an offeror whose proposal received a 
higher technical score than the lowest cost technically acceptable 
proposal.  The RFP also warned that the agency intended to award a 
contract without discussions.  

After receipt of initial proposals from both Raytheon and Hughes on 
March 7, 1995, the source selection evaluation board (SSEB) and the 
cost evaluation panel (CEP) evaluated the proposals and prepared 
reports to the SSAC.  The SSEB's report provided the following 
adjectival ratings under each of the evaluation factors:

                     Hughes               Raytheon

Performance/Design   [DELETED]            [DELETED]

Schedule, Planning and Control[DELETED]   [DELETED]

Work Share           [DELETED]            [DELETED]

Organization/Resources[DELETED]           [DELETED]

Test and Evaluation  [DELETED]            [DELETED]

Support Engineering  [DELETED]            [DELETED]

Production Readiness [DELETED]            [DELETED]
With respect to costs, the CEP's report to the SSAC made the following 
adjustments to each offeror's proposed costs:

                     Proposed Costs       Evaluated Costs

Hughes               [DELETED]            $175,219,629

Raytheon             [DELETED]            [DELETED]
The CEP's report also identifies additional risk associated with 
Raytheon's proposed costs.  Specifically, since [DELETED].

Upon receipt of these reports, the SSAC began a review of the SSEB and 
CEP findings, including assigning numerical scores to the 
predetermined weighting factors in order to calculate a weighted 
technical/management score for each offeror.  As part of this review, 
the SSAC upgraded the adjectival ratings assigned to Hughes by the 
SSEB in four of the seven evaluation factors.  In each case where the 
SSAC upgraded the adjectival rating assigned to the Hughes proposal by 
the SSEB, the SSAC made written findings explaining the basis for its 
decisions.  The SSAC made no changes to the ratings assigned the 
Raytheon proposal by the SSEB.  At the conclusion of the review, the 
evaluation results were as follows (with the changed ratings shown in 
bold):

                     Hughes               Raytheon

Performance/Design   Acceptable           Good

Schedule, Planning and ControlGood        Acceptable

Work Share           Outstanding          Acceptable

Organization/ResourcesAcceptable          Acceptable

Test and Evaluation  Good                 Acceptable

Support Engineering  Good                 Acceptable

 Production ReadinessAcceptable           Acceptable
Using these adjectival ratings and the weights assigned each of the 
evaluation factors, the SSAC calculated a weighted score of [DELETED] 
for Hughes's proposal and [DELETED] for Raytheon's proposal.  After 
comparing the strengths and weaknesses associated with the two 
technical proposals, and considering the relative difference in 
evaluated costs and cost risk, the SSAC recommended award to Hughes 
despite the higher evaluated costs in its proposal.[3]   

The SSA for this procurement states that he attended several days of 
the deliberations of the SSAC and concluded that award should be made 
to Hughes.  The SSA explains that he advised civilian leadership of 
the Navy of his decision in late May 1995.  On a date after June 16 
but before June 19, the SSA--who also served as chairman of the 
Steering Committee formed pursuant to the MOU--received the unanimous 
vote of the Steering Committee to accept the SSAC recommendation, 
which included his vote as chairman.  The SSA explains that on June 
19, he formally determined that award should be made to Hughes, based 
on the recommendation of the SSAC and the Steering Committee vote.  On 
that date, the contracting officer awarded the contract to Hughes and 
this protest followed.

PROTESTER'S CONTENTIONS

Raytheon's protest raises two broad challenges to this procurement:  
(1) that the structure of the source selection process foreclosed any 
independent selection decision by the SSA; and (2) that the evaluation 
was unreasonable.  In the first broad area, Raytheon contends that by 
permitting representatives of foreign governments to serve on the 
SSAC, the Navy improperly relinquished control over the selection 
decision for reasons discussed more fully below.  In the second broad 
area, Raytheon claims that the Navy improperly held discussions only 
with Hughes and not with Raytheon; that the technical evaluation of 
both proposals was unreasonable; that the Navy improperly awarded on 
the basis of initial proposals when discussions were required; and 
that the Navy's evaluation of Hughes's proposed costs was 
unreasonable. 
 
STRUCTURE OF THE SOURCE SELECTION PROCESS

In its challenge to the structure of the source selection 
process--portions of which were the subject of a partial dismissal 
decision issued early in these proceedings[4]--Raytheon essentially 
argues that the Navy wrongly abdicated the authority to make the 
selection decision to the foreign members of the Steering Committee 
(many of whom also served on the SSAC) without obtaining a statutory 
waiver that Raytheon claims was required.  Based on our review of the 
applicable statutory provisions, we conclude that, under these 
circumstances, the Navy's selection process was proper.  

This procurement was conducted under the authority set forth at 22 
U.S.C.  sec.  2767 (1994), which permits the President to enter into 
cooperative projects with NATO, or with NATO member countries.  A 
companion provision within the Department of Defense procurement 
statutes, 10 U.S.C.  sec.  2350b (1994), authorizes the Secretary of 
Defense to support such cooperative projects through the use of 
contracting or other activities.  Under this authority, the Secretary 
may waive the application of most laws and regulations related to the 
formation of contracts, see 10 U.S.C.  sec.  2350b(c)(1)(A),[5] but such a 
waiver must be signed by either the Secretary of Defense, the Deputy 
Secretary of Defense, or the Acquisition Executive designated for the 
Office of the Secretary of Defense.  See 10 U.S.C.  sec.  2350b(c)(3). 

Against this backdrop of near unlimited authority to waive applicable 
procurement statutes (coupled with greatly curtailed delegation 
authority), Raytheon contends that the inclusion of the NATO Steering 
Committee members on the SSAC violates the requirements applicable to 
the evaluation of contracts set forth in 10 U.S.C.  sec.  2305(b)(4)(B), 
which provides, in relevant part, that:

     "the head of the agency shall award a contract with reasonable 
     promptness to the responsible source whose proposal is most 
     advantageous to the United States, considering only cost or price 
     and the other factors included in the solicitation."

While Raytheon recognizes that the above-quoted authority to evaluate 
contracts may be delegated to any agency official pursuant to 10 
U.S.C.  sec.  2311,[6] Raytheon argues that this authority could not be 
delegated to the foreign representatives of the Steering Committee who 
were empaneled on the SSAC without use of the waiver authority in 10 
U.S.C.  sec.  2350b(c)(3).  Similarly, Raytheon argues that the Steering 
Committee members' presence on the SSAC, together with the requirement 
that the Steering Committee unanimously approve the selection 
decision, was a de facto divestiture of the SSA's selection authority 
in favor of the Steering Committee.  According to Raytheon, our Office 
should conclude that the structure of the selection process here was 
improper without a decision by the Secretary of Defense (or one of his 
two delegees) to waive the application of section 2305, and that the 
contract awarded to Hughes is void ab initio.

Our Office will not usually consider a protester's challenge to the 
composition of an evaluation panel because we regard this as a matter 
within the discretion of the agency which we will not review without a 
showing of possible abuse of that discretion in light of a conflict of 
interest or actual bias on the part of evaluators.  Univ. Research 
Corp., B-253725.4, Oct. 26, 1993, 93-2 CPD  para.  259; Herndon Science and 
Software, Inc., B-245505, Jan. 9, 1992, 92-1 CPD  para.  46; National 
Council of Teachers of English, B-230669, July 5, 1988, 88-2 CPD  para.  6.  
We consider the protester's contentions in this case, however, to the 
extent Raytheon claims that by placing the foreign members of the 
Steering Committee on the SSAC the Navy violated statutory 
requirements. 

We conclude that there is no requirement for the statutory waiver 
contemplated by 10 U.S.C.  sec.  2350b.  First, as noted above, 10 U.S.C.  sec.  
2305(b)(4)(B) refers to contract award being made by the "head of the 
agency"; 10 U.S.C.  sec.  2311 permits the agency head--here, the Secretary 
of Defense--to delegate procurement responsibilities and functions to 
any agency official.  We see no basis to interpret these provisions to 
preclude an agency's use of outside assistance to formulate a 
selection decision.

To the extent that Raytheon contends that the Navy's reliance on the 
SSAC resulted in an abdication of source selection authority, we find 
this argument without merit.  The Navy structured this shared-expense, 
NATO cooperative procurement so that the NATO members, who after all 
will be acquiring the missile system, agreed with the selection.  
While, in this sense, the Steering Committee could effectively veto a 
selection, it had no authority to impose selection of a contractor on 
the SSA.  Under the framework of this cooperative endeavor, if the 
Steering Committee disagreed with the SSA, there would have been a 
stalemate, and presumably, the project would not have gone forward.  
While this framework clearly invests the Steering Committee with a 
significant role, we do not agree that it transfers from the SSA to 
the Steering Committee authority to select a contractor.  Thus, we do 
not agree that this framework triggered the requirement for a waiver 
from the applicable statutes.[7]

Since we conclude that no waiver was required to structure the 
selection process as the Navy did here and deny this ground of 
Raytheon's protest, we need not consider Raytheon's contention that 
the award decision without a waiver was void ab initio.  Similarly, we 
deny Raytheon's related claim that the mere presence of foreign 
representatives on the SSAC--and their corresponding inability to 
review portions of the technical proposals marked NOFORN--rendered the 
evaluation here unreasonable.  The SSEB performed a detailed review of 
the proposals, including those portions of the proposal which could 
not be revealed to representatives of foreign governments.  The SSAC 
accepted the SSEB's assessments in this regard, and, as discussed 
above, the SSAC had significant participation by U.S. citizens who 
were eligible to review the NOFORN portions of the proposals if 
needed.  Thus, we see nothing unreasonable about the evaluation here 
based on the presence of non-U.S. citizens on the SSAC.

DISCUSSIONS

Raytheon contends that the Navy improperly held discussions only with 
Hughes, and wrongly permitted Hughes to revise its proposal, while not 
giving Raytheon a similar opportunity.  Raytheon argues that once the 
Navy held discussions with Hughes, it was required to do so with 
Raytheon, and it was required to permit both offerors to submit best 
and final offers (BAFO).  The Navy does not deny that if discussions 
are held, they must be held with all offerors or that upon the 
conclusion of discussions, all offerors must be permitted to submit 
BAFOs; rather, the Navy argues that no discussions occurred here, and 
that what transpired between the Navy and Hughes was merely 
clarification of Hughes's proposal.

At issue here is Hughes's proposed conveyance of data rights to the 
government for certain elements of the Seasparrow missile.  
Specifically, Hughes's proposal [DELETED].[8]

GPLR permit the government to use technical data to conduct follow-on 
competitive procurements, but limit use of the data for other 
commercial purposes.  Defense Federal Acquisition Regulation 
Supplement (DFARS)  sec.  227.401(14).[9]  GPLR may only be claimed by an 
offeror for a limited time; offerors are required to identify the time 
period for which they claim GPLR, and after expiration of the claimed 
time the government is entitled to unlimited rights to the data.  
DFARS  sec.  227.402-72(a)(2); 252.227-7013(b)(2).

In reviewing Hughes's proposal, the Navy explains that its evaluators 
wanted confirmation that the above-quoted Hughes statement was 
intended to mean that, [DELETED].  This led to the following written 
question to Hughes:

     [DELETED]

Hughes responded:

     [DELETED]

The Navy concluded that Hughes's response meant that the proposal was 
offering [DELETED].  In its recommendation to the SSA that award be 
made to Hughes, the SSAC included Hughes's offer [DELETED] proposal 
over Raytheon's.  According to Raytheon, regardless of whether the 
Navy intended to seek clarification or to conduct discussions, Hughes 
took the opportunity to revise its proposal, and this exchange 
constituted discussions.  Thus, Raytheon claims that it, too, should 
be given an opportunity to revise its proposal.

Federal Acquisition Regulation (FAR)  sec.  15.610(a) permits contracting 
agencies to make award on the basis of initial proposals without 
discussions, where the solicitation, as here, announces this 
possibility.  Where discussions are held with one offeror, however, 
the agency is required to conduct discussions with all other offerors 
whose proposals are in the competitive range, which is composed of 
those proposals that, as submitted, either are acceptable or are 
susceptible of being made acceptable through negotiations.  FAR  sec.  
15.610(b); HFS, Inc., B-248204.2, Sept. 18, 1992, 92-2 CPD  para.  188; 
Microlog Corp., B-237486, Feb. 26, 1990, 90-1 CPD  para.  227; Kinetic 
Concepts, Inc., B-232118, Oct. 26, 1988, 88-2 CPD  para.  428.  Discussions 
are material communications related to an offeror's proposal and 
distinguishable from clarifications, which are merely inquiries for 
the purpose of eliminating minor uncertainties or irregularities in a 
proposal.  Microlog Corp., supra.   

The difference between clarifications and discussions is described in 
FAR  sec.  15.601:

     "'Clarification' . . . means communication with an offeror for 
     the sole purpose of eliminating minor irregularities, 
     informalities, or apparent clerical mistakes in the proposal . . 
     . .  Unlike discussion . . ., clarification does not give the 
     offeror an opportunity to revise or modify its proposal, except 
     to the extent that correction of apparent clerical mistakes 
     results in a revision."

     "'Discussion' . . . means any oral or written communication 
     between the Government and an offeror (other than communications 
     conducted for the purpose of minor clarification) whether or not 
     initiated by the Government, that (a) involves information 
     essential for determining the acceptability of a proposal, or (b) 
     provides the offeror an opportunity to revise or modify its 
     proposal."

See also New Hampshire-Vermont Health Serv., 57 Comp. Gen. 347 (1978), 
78-1 CPD  para.  202 (if the communications provide an offeror with an 
opportunity to make a substantive change in its proposal, the 
communications are discussions, not clarifications); The Human 
Resources Co., B-187153, Nov. 30, 1976, 76-2 CPD  para.  459 (same).  If 
discussions are conducted, the agency must request BAFOs from those 
offerors whose proposals are still in the competitive range, even 
where the discussions do not directly affect the offerors' relative 
standing.  FAR  sec.  15.611(a); HFS, Inc., supra; Microlog Corp., supra; 
Kinetic Concepts, Inc., supra. 

It is the actions of the parties that determine whether discussions 
have been held, and not merely the characterization of the 
communications by the agency.  ABT Assocs., B-196365, May 27, 1980, 
80-1 CPD  para.  362; The Human Resources Co., supra.  The acid test of 
whether discussions have been held is whether it can be said that an 
offeror was provided the opportunity to revise or modify its proposal.  
51 Comp. Gen. 479 (1972); New Hampshire-Vermont Health Serv., supra; 
The Human Resources Co., supra.

The key issue here is whether Hughes's response changed its proposal 
in a meaningful way.  We conclude that it did, and thus that the 
exchange constituted discussions, not clarifications.

The Navy explains that the Seasparrow missile program has existed 
since 1968, and that during that time improvements to the missile have 
been modest.  With this procurement, the Navy (and NATO) seek 
engineering and manufacturing design changes to significantly enhance 
the capabilities of this missile system.  After the design changes 
procured here are incorporated into the Seasparrow missile, the Navy 
(and NATO) seek to competitively purchase production quantities of 
these missiles for years to come.  In this environment, the 
willingness of the offerors to provide relatively unfettered access to 
as much of the technical data as possible will have a significant 
impact on the government's ability to conduct future competitions for 
the enhanced missile.  [DELETED].

[DELETED]

[DELETED] other conclusion about the meaning of Hughes's response is 
not supported by the language of the response.[10]

Since Hughes's response to the Navy's question about [DELETED] effect 
of revising the company's proposal, this exchange met the requirements 
of the test set forth at FAR  sec.  15.601 for determining whether 
discussions were held.  4th Dimension Software, Inc.; Computer Assocs. 
Int'l, Inc., B-251936; B-251936.2, May 13, 1993, 93-1 CPD  para.  420.  
Accordingly, we sustain the protest.[11]

RECOMMENDATION

We recommend that the Navy conduct discussions with both offerors, 
request best and final offers, and proceed with the source selection 
process.  In view of our recommendation, we need not consider 
Raytheon's numerous challenges to the evaluation, since most of these 
matters can be resolved, if necessary, during discussions. 

If, after the selection process has concluded, Raytheon's offer is 
determined to be more advantageous than the offer submitted by Hughes, 
the Navy should terminate Hughes's contract and award to Raytheon.  We 
also find that the protester is entitled to recover the reasonable 
cost of filing and pursuing this protest, including attorney's fees.  
4 C.F.R.  sec.  21.6(d)(1)  (1995).  The protester should submit its 
certified claim for protest costs directly to the agency within 60 
days of receipt of this decision.  4 C.F.R.  sec.  21.6(f)(1).

The protest is sustained.

Comptroller General
of the United States

1. The onboard fuze detects the missile's proximity to the target and 
computes the optimum point to detonate the warhead.  The Seasparrow 
generally destroys targets by guiding to within warhead lethal radius 
of the target and detonating.

2. To assure that offerors understood that there would be foreign 
participation in the source selection process, the agency drafted a 
question on this subject which was included as part of 69 offeror 
questions answered prior to the submission of proposals.   

3. The SSAC also concluded that award without discussions was 
appropriate, and elected not to use the discussion questions drafted 
by the SSEB for each of the technical/management weaknesses 
identified.

4. Raytheon has asked that we reconsider our earlier decision 
dismissing the first ground of its initial protest, B-261959, Aug. 16, 
1995, unpub., while the Navy has argued that Raytheon has failed to 
provide any basis for reconsidering our earlier decision.  Since 
Raytheon's supplemental protest filings have changed the formulation 
of this challenge significantly since its initial protest, and since 
in our view its current challenge is timely and raises an issue that 
may appropriately be considered by our forum, we will consider the 
issue on its merits.

5. Section 2350b(c)(1)(A) permits the Secretary to waive: 

            "the application of any provision of law, other than a 
            provision of the Arms Export Control Act or section 2304 
            of this title, that specifically--(A) prescribe procedures 
            to be followed in the formation of contracts. . . ."

6. 10 U.S.C.  sec.  2311, entitled "Assignment and delegation of 
procurement functions and responsibilities," provides in pertinent 
part as follows: "(a) In general.--Except to the extent expressly 
prohibited by another provision of law, the head of an agency may 
delegate, subject to his direction, to any other officer or official 
of that agency, any power under this chapter."

7. We note that Raytheon's assertions that the SSA would have been 
hamstrung had he selected an offeror different from that recommended 
by the Steering Committee in this case raises a theoretical concern 
only.  The SSA here explains that he participated in several days of 
the SSAC review, and that as the SSAC developed its consensus on each 
of the evaluation factors, he reached his own conclusions about the 
relative strengths and weaknesses of the competing proposals.  The SSA 
explains that he agreed with the ultimate decision that the Hughes 
proposal offered the greatest value to the government.  

Additionally, we note that Raytheon's assertions imply that the 
foreign representatives on the Steering Committee comprised the 
totality of the SSAC, other than its U.S. chairman.  However, the 
record shows that the SSAC included significant participation by U.S. 
government personnel.  For example, while several of the NATO country 
representatives on the Steering Committee opted not to participate on 
the SSAC, the SSAC included both a U.S. Chairman, two U.S. 
representatives, and two U.S. technical advisors.  (The two technical 
advisors were not named members of the SSAC but were serving as 
advisors to the SSAC members.)  In addition, the SSAC met throughout 
its deliberations with the Chairman of the SSEB, and the SSA--both 
officials with the U.S. Navy.  Thus, of the 12 signatories on the SSAC 
report, 3 were U.S. representatives, and 4 other U.S. representatives 
participated in the deliberations. 

8. This quotation was taken from the narrative text of Hughes's 
proposal.  The Navy's question to Hughes quotes from a tabular display 
of the proposed data rights set forth on the same page.  We see no 
substantive difference between the two statements.

9. The DFARS provisions applicable to technical data rights have been 
revised.  The new provisions are effective as of their date of 
publication for inclusion in solicitations issued after September 29, 
1995.  See 60 Fed. Reg. 33,464-33,507 (June 28, 1995) (to be codified 
at 48 C.F.R Parts 211, 227, and 252).  The citations in this decision 
are those applicable to this procurement--i.e., the ones in place 
prior to June 28, 1995.  

10. In fact, we find unreasonable the Navy's conclusion that Hughes's 
response means [DELETED].  Under these circumstances, the Navy's 
conclusion that Hughes's proposal [DELETED].

11. Prejudice is a prerequisite to sustaining a protest, and 
generally, we have presumed prejudice when an agency holds discussions 
with fewer than all of the competitive range offerors.  National 
Medical Staffing, Inc., B-259402; B-259402.2, Mar. 24, 1995, 95-1 CPD 
 para. 163.  Here, in fact, Raytheon has asserted that, if given the 
opportunity to address evaluator concerns during discussions, it would 
have submitted a revised proposal.  There is no basis to assume that 
this would not have occurred, with the result that the outcome of the 
competition could have been affected.  See id.; Telos Field Eng'g, 
B-253492.2, Nov. 16, 1993, 93-2 CPD  para.  275.