BNUMBER:  B-265875.2
DATE:  January 11, 1996
TITLE:  Dayron

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Matter of:Dayron

File:     B-265875.2

Date:     January 11, 1996

V. Keith Young, Esq., for the protester.
John B. Denniston, Esq., Covington & Burling, for Intellitec, Division 
of Technical Products Group, Inc., an interested party.
David P. Harney, Esq., and Barry R. Dean, Esq., Department of the 
Army, for the agency.
Linda S. Lebowitz, Esq., and John Van Schaik, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting officer reasonably selected proposal with a higher 
technical rating and higher evaluated price for award where he 
reasonably determined that proposal's technical advantages justified 
the evaluated price premium and the evaluation scheme provided that 
technical evaluation factors were considered significantly more 
important than price in selecting the proposal representing the best 
overall value to the government.

DECISION

Dayron protests the award of a contract to Intellitec, Division of 
Technical Products Group, Inc., under request for proposals (RFP) No. 
DAAE30-95-R-0008, issued by the United States Army Materiel Command, 
Department of the Army, for the production of quantities of M139 
Volcano Mine Dispensers, mounting kits, maintenance self-testers, and 
ancillary equipment.  Dayron protests the evaluation of its proposal 
and the contracting officer's price/technical tradeoff.

We deny the protest.

The RFP contemplated the award of a firm, fixed-price contract for 
basic and option line item quantities to the responsible offeror whose 
proposal was deemed to represent the best overall value to the 
government, technical evaluation factors, performance risk assessment, 
and price considered.  The technical evaluation factors were comprised 
of four minimum standards criteria, which were to be evaluated using 
adjectival ratings of "unacceptable" or "acceptable," and three merit 
rated criteria, which were to be evaluated using adjectival ratings of 
"unacceptable," "acceptable," or "outstanding."  Adjectival ratings 
were to be supported by narratives.  The performance risk assessment, 
based upon an offeror's and its proposed subcontractor's past 
performance of related contract efforts as an indicator of the 
probability of successful contract performance, was to be evaluated 
using a narrative.  Prices were to be evaluated by adding prices for 
the maximum quantity of basic and option line items.  In addition, the 
RFP provided for a 10-percent evaluation preference for small 
disadvantaged businesses (SDB), whereby 10 percent would be added to 
the total price (for evaluation purposes only) of all non-SDBs prior 
to the source selection decision.

Under the RFP, the technical evaluation factors were considered 
significantly more important than the performance risk assessment 
which was considered slightly more important than price.  In addition, 
the merit rated criteria were considered significantly more important 
than the minimum standards criteria.  Of the three merit rated 
criteria, the shipping and storage containers criterion was considered 
significantly more important than the other two equally weighted 
criteria.  In determining the best overall value to the government, 
the RFP stated that the agency reserved the right to award to other 
than the low-priced offeror or to the highest-rated offeror for the 
technical evaluation factors and the performance risk assessment.

Six firms, including Dayron, an SDB, and Intellitec, a non-SDB, 
submitted initial proposals.  The contracting officer included the 
proposals of Dayron, Intellitec, and three other firms in the 
competitive range and subsequently conducted discussions with each 
competitive range offeror.  Following discussions, each competitive 
range offeror submitted a best and final offer (BAFO).  For the 
technical evaluation factors, both Dayron and Intellitec were rated 
"acceptable" for the minimum standards criteria and for the two 
equally weighted merit rated criteria; however, for the significantly 
more important shipping and storage containers merit rated criterion, 
Intellitec was rated "outstanding," while Dayron was rated 
"acceptable."  Both firms were considered to be low risk in terms of 
performance.  Dayron's price was $36,316,192, and Intellitec's price 
was $33,532,720.  After application of the 10-percent SDB evaluation 
preference to Intellitec's price, Intellitec's price was evaluated at 
$36,885,992, $569,800 higher than Dayron's price.[1]  The contracting 
officer awarded a contract to Intellitec as the offeror whose proposal 
was deemed to represent the best overall value to the government.

Dayron protests the evaluation of that portion of its technical 
proposal which addressed the shipping and storage containers merit 
rated criterion.  Dayron contends that in evaluating it as 
"acceptable," as opposed to "outstanding," the technical evaluators 
"ignor[ed] the clearly superior capabilities of [its] subcontractor."  
In this regard, Dayron states that its subcontractor's "facilities, 
technical personnel, and the depth and breadth of [its] manufacturing 
experience dwarf that of any competitor, including Intellitec."

In reviewing protests against the propriety of an agency's evaluation 
of proposals, we will examine an agency's evaluation to ensure that it 
was fair and reasonable and consistent with the evaluation criteria 
stated in the RFP.  Research Analysis and Maintenance, Inc., B-239223, 
Aug. 10, 1990, 90-2 CPD  129; Institute of Modern Procedures, Inc., 
B-236964, Jan. 23, 1990, 90-1 CPD  93.

Under the RFP, the shipping and storage containers criterion was 
comprised of four sub-criteria, requiring each offeror to provide a 
narrative description of the firm's or its proposed subcontractor's 
"expertise," defined as work experience, training of personnel, and 
manufacturing methods and processes, in efforts of comparable 
complexity to the requirements of the RFP; in resin transfer molding 
process control areas; in preparation of glass kit schedules; and in 
the management of shipping and storage container fabrication stages on 
the production floor.  This criterion was considered significantly 
more important than the other two merit rated criteria.

Dayron proposed to subcontract the production of shipping and storage 
containers to a joint venture which was formed in 1989 between a 
company with advanced materials expertise and a company with composite 
parts development and manufacturing experience.  Dayron characterized 
its subcontractor as the "industry leader" in resin transfer molding 
technology, one aspect of the shipping and storage containers 
criterion.  Dayron also characterized its subcontractor's aerospace 
and commercial automotive component fabrication experience as 
"similar" to the RFP requirements for production of shipping and 
storage containers.  Dayron further provided information on its 
subcontractor's investments in research and development efforts which 
it stated "may be selectively applied" to the requirements of the RFP.

In evaluating Dayron's proposal for the shipping and storage 
containers criterion as "acceptable," the evaluators determined that 
Dayron "complie[d] with the requirements of this [criterion]."  More 
specifically, the evaluators concluded that Dayron's proposed 
subcontractor had adequate prior expertise and experience in 
fabricating large, complex aerospace and automotive components, but 
noted that its subcontractor did not have experience in producing 
shipping and storage containers.  The evaluators determined that 
Dayron provided an excellent, detailed narrative addressing training 
and certification of resin transfer molding operators; experience and 
capability with resin transfer molding processes; and handling, 
property, and storage control, shrinkage control, gel coat processes, 
and stability control.  The evaluators believed that Dayron understood 
the requirements for glass kit schedules and that it addressed glass 
fiber handling, control, and storage.  Finally, the evaluators 
determined that Dayron provided adequate responses to molding 
processes and general fabrication plans, but noted that Dayron's 
narrative was not detailed in the area of secondary operations for 
installation of internal cushions and internal and external hardware.

We think Dayron's proposal was reasonably evaluated as "acceptable" 
for the shipping and storage containers criterion.  Dayron made a 
decision to subcontract this requirement, which we believe indicates, 
and the firm does not argue otherwise, that Dayron itself had no 
previous experience in producing shipping and storage containers.  
Dayron further admits that its subcontractor had no previous 
experience in producing such containers.  Under these circumstances, 
we have no basis to conclude that the "acceptable" rating assigned to 
Dayron's proposal--which was based on Dayron's subcontractor's 
demonstrated expertise and experience in producing large, complex 
aerospace and automotive components and on Dayron's proposed approach 
for performing requirements involving resin transfer molding, glass 
kit schedules, and shipping and storage container fabrication 
stages--was other than reasonable.

Dayron also contends that Intellitec's rating of "outstanding" for the 
shipping and storage containers criterion reflects an unfair 
competitive advantage resulting from the technical evaluators' 
consideration of the firm's experience as the incumbent contractor.  
For example, Dayron states that as the incumbent, Intellitec had 
knowledge of problems encountered during performance of prior 
contracts, which gave Intellitec a "unique ability to elaborate on 
issues unknown to other [offerors] and which never would have been a 
problem [for Dayron's subcontractor]."  Dayron believes that 
Intellitec's performance as the incumbent should have been considered 
only in the context of assessing performance risk, not as part of the 
evaluation of Intellitec's technical approach for satisfying the 
requirements of the RFP. 

The RFP required each offeror to provide a narrative description of 
its own or its subcontractor's experience in producing shipping and 
storage containers. As previously discussed, neither Dayron nor its 
proposed subcontractor had experience in producing these containers.  
On the other hand, Intellitec did have such experience as the 
incumbent.

The RFP clearly contemplated the evaluation of an offeror's experience 
in producing shipping and storage containers.  Obviously, the 
evaluation of Intellitec's relevant incumbent experience in this 
regard was reasonably encompassed by the terms of the RFP and for this 
reason, did not represent an unfair competitive advantage to the firm.  
A competitive advantage of an offeror, like Intellitec, which is 
gained through incumbency, is generally not an unfair advantage which 
must be eliminated.  Versar, Inc., B-254464.3, Feb. 16, 1994, 94-1 CPD  
230.  Incumbent contractors with good performance records can offer 
real advantages to the government, and proposal strengths flowing from 
a firm's prior experience may properly be considered by an agency in 
proposal evaluation.  Id.  There is no question that Intellitec had 
relevant incumbent experience; in fact, Dayron does not challenge the 
underlying conclusions of the technical evaluators that there were 
significant technical advantages inherent in Intellitec's proposal 
stemming from that experience as the incumbent.  We conclude that in 
evaluating Intellitec's technical approach for satisfying the 
requirements of the RFP, the technical evaluators reasonably 
considered Intellitec's relevant incumbent experience.[2]

Dayron next argues that the contracting officer failed to conduct 
meaningful discussions as required by Federal Acquisition Regulation  
15.610, see Stone & Webster Eng'g Corp., B-255286.2, Apr. 12, 1994, 
94-1 CPD  306, concerning the shipping and storage containers 
criterion, and more specifically, the contracting officer's belief 
that Dayron had not demonstrated the superiority of its technical 
proposal for this criterion for purposes of receiving an "outstanding" 
rating.  Dayron's argument is not supported by the record.

During discussions, the contracting officer advised Dayron of the 
adjectival ratings assigned to each area of its technical proposal, 
including those areas which were considered deficient, as evidenced by 
"unacceptable" ratings.  As relevant here, the contracting officer 
advised Dayron that its proposal was rated overall "acceptable" for 
the shipping and storage containers criterion and "acceptable" for 
each of the four sub-criteria.  The contracting officer noted no 
deficiencies in Dayron's proposal for this criterion and advised 
Dayron that in order to obtain a rating higher than "acceptable," 
i.e., "outstanding," for any of the merit rated criteria, the firm, in 
accordance with the terms of the RFP, would have to demonstrate 
superiority and explain how that superiority provided value to the 
government.  In its BAFO, Dayron revised those areas of its initial 
proposal which had been considered deficient or "unacceptable," but 
did not address any areas, including the shipping and storage 
containers criterion, which had been rated "acceptable."  Dayron's 
final rating for this criterion remained "acceptable."

Based on this record of discussions, we believe the contracting 
officer reasonably placed Dayron on notice that unless it demonstrated 
in its BAFO superiority with respect to the RFP's merit rated criteria 
and explained how that superiority translated into value to the 
government, its ratings for these criteria would not be higher than 
"acceptable."  Dayron did not attempt to improve upon those areas of 
its proposal initially rated "acceptable."  Under these circumstances, 
we fail to see how Dayron can characterize its final "acceptable" 
rating for the shipping and storage containers criterion as resulting 
from a lack of meaningful discussions.

Finally, Dayron challenges the contracting officer's price/technical 
tradeoff which resulted in the award to Intellitec, a higher 
technically rated, higher evaluated price offeror.  Specifically, 
Dayron argues that a price/technical tradeoff to determine the offeror 
whose proposal represented the best overall value to the government is 
inconsistent in the context of applying an SDB evaluation preference.  
Dayron maintains that award under an RFP which includes an SDB 
evaluation preference should be made to the low-priced, technically 
acceptable SDB, as opposed to a non-SDB with a higher evaluated price 
and higher technical rating.

The contracting officer's tradeoff, however, was consistent with the 
RFP, which provided for both the application of the SDB evaluation 
preference and a best value (price/technical tradeoff) determination.  
Thus, the challenge effectively is that the RFP was defective on its 
face.  Under our Bid Protest Regulations, protests based upon alleged 
improprieties in a solicitation which are apparent prior to the 
closing time for receipt of initial proposals must be filed prior to 
that closing time.  4 C.F.R.  21.2(a)(1) (1995); Engelhard Corp., 
B-237824, Mar. 23, 1990, 90-1 CPD  324.  In this case, Dayron's 
argument, raised after award, is untimely.

The protest is denied.

Comptroller General
of the United States

1. Upon being notified of award, Dayron questioned the contracting 
officer concerning the application of the 10-percent SDB evaluation 
preference.  The contracting officer admitted that the SDB preference 
had not been added to Intellitec's price for evaluation purposes.  At 
that point, the contracting officer effectively took corrective action 
by reevaluating Intellitec's price with the SDB preference and 
revising his source selection decision in light of the evaluated price 
differential after application of the SDB preference.  See Information 
Sys. Networks, Inc., B-254384.3, Jan. 21, 1994, 94-1 CPD  27 (where 
initial protest that the agency failed to apply the 10-percent SDB 
evaluation preference was dismissed based on the agency's taking 
corrective action; subsequent protest focused on the agency's revised 
determination of which proposal represented the best overall value to 
the government, accounting for the evaluated price differential after 
application of the SDB preference).

2. We note that Dayron and Intellitec were both considered to be low 
risk in terms of performance based upon the review by the agency's 
performance risk assessment group of the offerors' past performance on 
related contract efforts.

In addition, contrary to Dayron's assertion, the record shows that an 
offeror's technical proposal and past performance proposal were 
independently evaluated by the technical evaluators and the 
performance risk assessment group, respectively.  There is no evidence 
in the record which suggests that the evaluation of an offeror's past 
performance crossed over to the evaluation of an offeror's technical 
approach for satisfying the requirements of the RFP.