BNUMBER:  B-265708
DATE:  December 19, 1995
TITLE:  Hagler Bailly Consulting, Inc.

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Matter of:Hagler Bailly Consulting, Inc.

File:     B-265708

Date:     December 19, 1995

Judd L. Kessler, Esq., and Ronald S. Perlman, Esq., Porter, Wright, 
Morris & Arthur, for the protester.
Joel R. Feidelman, Esq., Anne B. Perry, Esq., and C. Anthony Trambley, 
Esq., Fried, Frank, Harris, Shriver & Jacobson, for Resource 
Management International, Inc., an interested party.
Rosemary T. Rakas, Esq., United States Agency for International 
Development, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting officer reasonably selected higher technically rated, 
higher-cost proposal for award where he reasonably determined that 
proposal's technical advantages were worth the additional cost, and 
evaluation scheme provided that technical evaluation factors were more 
important than cost in determining the best value to the government.

DECISION

Hagler Bailly Consulting, Inc. (HBC) protests the award of a contract 
to Resource Management International, Inc. (RMI) under request for 
proposals (RFP)  
No. 492-95-07, issued by the United States Agency for International 
Development to provide technical assistance on an Energy Demand Side 
Management (DSM) project to the Government of the Philippines.  HBC 
basically alleges that the evaluation was biased against the firm, and 
also challenges the cost/technical tradeoff.[1]

We deny the protest.

In response to severe power shortages during the 1990s, the government 
of the Philippines is undertaking a program to improve the overall 
operation of the country's energy sector, particularly focusing on 
supply-side, or end-use, aspects for providing electricity.  DSM 
principles and measures allow electric utilities and their customers 
to modify their electricity consumption patterns with respect to both 
the timing and level of electricity demand.  According to the RFP, the 
objective of DSM activities is "to reduce utility capacity 
requirements with a corresponding decrease in total generation so that 
electricity services can be offered efficiently, effectively and at 
least cost."  This DSM project will be funded using a portion of the 
agency's funding commitment to support the World Bank's Global 
Environment Facility.

The RFP contemplated the award of a cost-plus-award-fee, 
completion-type contract for a 3-year period.  Under the RFP, the 
contractor will (1) validate DSM activity by assessing the potential 
of DSM activities in the Philippines; (2) provide technical assistance 
to establish DSM regulatory frameworks; and (3) establish a pilot 
program in the industrial sector to test findings, demonstrate 
tangible benefits, and establish proven and replicable models.  The 
RFP described seven tasks, including the National DSM Assessment, 
requiring the contractor to describe electricity use by primary 
end-users (commercial, residential, and industrial) in order to 
provide load forecasting data based on customer consumption, and the 
Industrial DSM Assessment, requiring the contractor to develop a 
comprehensive database from which the design of an industrial sector 
program will be developed.  The RFP explained that portions of some of 
the specific tasks have already been initiated or even partially 
completed, but emphasized that "[t]he intent of this contract is that 
there will not be a duplication of effort."  Accordingly, the RFP 
stated that it would be the contractor's responsibility to review, 
incorporate, and/or utilize all ongoing or completed DSM task-related 
activities.

The RFP stated that the award would be made to the offeror whose 
proposal was deemed to represent the best value to the government, 
technical evaluation factors and cost considered.  The RFP included 
the following four technical evaluation factors (and weights, on a 
100-point scale):  (1) technical approach (35 points); (2) team 
personnel qualifications (25 points); (3) corporate experience (25 
points); and (4) management structure and approach (15 points).  Cost 
was worth 20 points.[2]  The RFP provided that the agency would not 
necessarily award a contract to the offeror proposing the lowest cost 
or to the offeror with the highest total combined evaluation score.

Four firms, including HBC and RMI, submitted initial technical and 
cost proposals.  Technical proposals were evaluated by the agency's 
technical evaluation committee (TEC), while cost proposals were 
reviewed by the contracting officer.  The contracting officer included 
the proposals of HBC, RMI, and one other firm in the competitive range 
and subsequently conducted written discussions with each competitive 
range offeror.  Following discussions, each competitive range offeror 
submitted a best and final offer (BAFO).  The final scores for HBC and 
RMI were as follows:

             Technical  Cost  Total
     HBC       83      20     103
     RMI       94     15.2    109.2 

The scores for the technical evaluation factors were supported by 
narratives of the strengths and weaknesses in each offeror's technical 
proposal.

In addition to RMI having the highest total combined evaluation score, 
the contracting officer concluded that RMI's proposal was clearly 
technically superior and worth its higher cost.  Accordingly, the 
contracting officer awarded a contract to RMI.

HBC complains that because an initial technical evaluator had a prior, 
limited business relationship with RMI, the evaluation was biased 
against HBC.

Where a protester alleges bias on the part of a contracting official, 
the record must establish that the official intended to harm the 
protester, since contracting officials are presumed to act in good 
faith.  Docusort, Inc., B-254852.2, Feb. 22, 1995, 95-1 CPD  107.  
Moreover, even where there is evidence of bias, this does not provide 
a basis for sustaining a protest unless the protester also 
demonstrates that the bias translated into action which harmed the 
protester's competitive position.  Id.

There is no evidence of bias here.  The record shows that one member 
of the initial three-member TEC simultaneously headed the Energy 
Efficiency Division of the Philippine Department of Energy.  Pursuant 
to Philippine law, this office performs routine energy audit services 
(approximately 60 audits per year) for any industrial or commercial 
entity at standard, predetermined rates when private sources for such 
audits are not available or otherwise qualified.  Several months prior 
to submission of its initial proposal under this RFP, RMI used this 
office's routine audit services in performing another contract.  
However, the head of the office receives no extra compensation when 
his office performs such routine services, and there is no evidence 
that the individual otherwise benefitted personally from the office's 
business relationship with RMI.

Further, the record shows that, while the individual in question 
evaluated initial proposals, he was not a member of the final TEC, due 
to a leave of absence because of a family medical emergency.  The 
individual did not evaluate BAFOs and there is no evidence in the 
record which suggests that, after leaving the initial TEC, he played 
any further role in evaluating proposals or in making an award 
recommendation to the contracting officer.  Moreover, the record shows 
that, in evaluating HBC's initial proposal, of the three members of 
the initial TEC, the individual in question assigned the highest 
technical score to HBC's proposal.  It thus appears that HBC actually 
benefitted from this individual's participation on the initial TEC.  
We conclude that there is no basis for a finding of bias on the 
agency's part.  See, e.g., Suncoast Scientific Inc., B-240689, Dec. 
10, 1990, 90-2 CPD  468.[3]

HBC also challenges the contracting officer's cost/technical tradeoff 
decision which resulted in the award to RMI.  HBC contends that the 
contracting officer had no reasonable basis for concluding that RMI's 
proposal was superior to HBC's proposal and therefore worth the cost 
premium. 

In a negotiated procurement, an agency has the discretion to select a 
highly-rated, higher-cost proposal if doing so is reasonable and 
consistent with the evaluation scheme set forth in the RFP.  Pacific 
Architects & Eng'rs, Inc., B-257431.7, Dec. 8, 1994, 95-1 CPD  202.  
We have upheld awards to higher-rated offerors with significantly 
higher proposed costs where it was determined that the cost premium 
was justified considering the significant technical superiority of the 
selected offeror's proposal.  Id.

The record shows that in determining the proposal representing the 
best value to the government, the contracting officer not only 
considered RMI's highest total combined technical and cost score, but 
also explained why he believed the technical superiority of RMI's 
proposal justified the payment of a cost premium to RMI.  In this 
respect, the contracting officer referenced in the negotiation 
memorandum the conclusion of the technical evaluators that RMI's 
proposal was

     "clear, concise, and demonstrated a thorough understanding of the 
     requirements of the project and of the DSM technical/financing 
     problems/solutions in the Philippine context.  RMI's technical 
     proposal was found to be of higher quality than the other 
     proposals, and is both innovative and practical.  The proposal 
     quality reflects RMI's clear perception of implementing an 
     industrial sector DSM program in the Philippines."[4]

The contracting officer concluded that RMI's proposal was "the clearly 
technically significantly innovative and superior proposal [and] [was] 
worth the higher [cost] by delivering a higher quality end product."  

In the agency report, the contracting officer furnished a declaration 
in which he elaborated upon the statement in the negotiation 
memorandum.[5]  Specifically, the contracting officer believed that 
RMI's demonstration program was designed for expeditious 
implementation, including accelerated development of energy end-use 
data through a customized model and complete and immediate use of 
existing Philippine models and databases.  The contracting officer 
also believed that RMI's demonstration program could be used as the 
basis for implementing a successful industrial pilot program.  In 
addition, the contracting officer was impressed with RMI's plan to 
establish a fund to finance future DSM projects and a public/private 
sector group to research and track consumer end-use and load issues.  
In contrast, while recognizing HBC's DSM experience, the contracting 
officer concluded that HBC's proposal was "generic," that is, did not 
address a DSM approach tailored to the Philippines but, rather, an 
approach which generally could be used in any developing country.  The 
contracting officer further believed that although all proposals, 
including HBC's and RMI's, had shown an understanding that duplication 
of effort was not expected, RMI proposed a more effective and 
innovative approach than HBC for eliminating duplication of work and 
for incorporating previously completed assessments.  Finally, the 
contracting officer determined that RMI's proposed subcontractor had 
strong DSM experience in the Philippines and would play a significant 
role in satisfying the project's objectives.  On the other hand, the 
contracting officer had some concerns with HBC's team's understanding 
of DSM in the Philippine context.  We point out that the contracting 
officer's discussion reflects many of the narrative evaluation 
findings of the TEC which unanimously recommended RMI for award.

Although RMI's proposed cost was higher than HBC's (by approximately 
24 percent),[6] given the RFP's evaluation scheme, under which 
technical considerations were more important than cost, the 
contracting officer's specific determination that RMI's proposal was 
sufficiently technically superior to HBC's to warrant its higher cost 
provided a reasonable basis for the award to RMI. 

The protest is denied.

Comptroller General
of the United States

1. We previously dismissed HBC's initial "information and belief" 
allegations challenging the evaluation, including the agency's alleged 
use of unstated evaluation factors, and HBC's supplemental allegations 
in this regard, since these allegations were not raised in a timely 
manner; they were raised in the firm's comments filed more than 10 
working days after receipt of the agency's administrative report.  See 
4 C.F.R.  21.2(a)(2) (1995). 

2. The proposal of the lowest cost offeror would receive 20 points and 
the proposals of the other higher cost offerors would receive a 
proportionate share of 20 points.

3. In any case, since there has been no showing that HBC's proposal 
was negatively affected by any alleged bias--HBC has not shown that 
the evaluation conclusions were unreasonable--there would be no basis 
for sustaining the protest even if bias were evident.  Docusort, Inc., 
supra.

4. The RFP clearly contemplated consideration of an offeror's proposed 
approach to DSM in the context of the Philippines.  In this regard, 
each of the seven tasks specifically described in the RFP expressly 
referenced the Philippines.  Moreover, the most important evaluation 
factor--technical approach--required an offeror to demonstrate its 
"[g]eneral understanding of the services to be performed as indicated 
by proposal content, task discussions, and proposed approach to 
contract requirements [i.e., specific tasks]," and its "understanding 
of DSM technical and financial problems/solutions in the Philippine 
context."

5. Contrary to HBC's assertion, while we generally give more weight to 
contemporaneous records than to those prepared after the fact, here, 
we conclude that the contracting officer's declaration is consistent 
with the contemporaneous evaluation and selection records; thus, there 
is no basis for according this declaration less weight than other 
documents in the agency report.  Engineered Air Sys., Inc., 
B-254032.2, Nov. 23, 1993, 93-2 CPD  298.

6. Offerors were required to use two "plug" numbers (for training and 
commodities) in calculating their proposed costs.  Even if the "plug" 
numbers are subcontracted from each offeror's proposed cost and cost 
scores are adjusted, RMI's total combined score remains higher than 
HBC's total combined score.

In the negotiation memorandum, the contracting officer also explains 
that RMI's proposed cost was determined reasonable vis-a-vis the 
government estimate, the proposed cost of the other competitive range 
offeror, and costs for the same or similar goods or services.  In 
addition, the contracting officer noted several reasons (i.e., HBC's 
proposal was not tailored to the Philippines and most of its line 
items, such as proposed travel and per diem and other direct costs 
were "too conservative") why HBC's proposed cost was considered 
unrealistically low in comparison to RMI's proposed cost.