BNUMBER:  B-265930
DATE:  January 3, 1996
TITLE:  Hellenic Technodomiki S.A.

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

Matter of:Hellenic Technodomiki S.A.

File:     B-265930

Date:     January 3, 1996

D. Kallitsantsis for the protester.
Christopher M. Bellomy, Esq., Cynthia S. Guill, Esq., and Rita M. 
Liotta, Esq., Department of the Navy, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Award to a higher-rated, slightly higher-priced offeror is reasonable 
in a best value procurement where quality, including timely 
performance, is more important than price and the awardee's proposal 
posed a low performance risk with regard to timely performance, 
whereas the protester's proposal posed a moderate to high performance 
risk.

DECISION

Hellenic Technodomiki S. A. protests an award to Contracting, Ltd. 
under request for proposals (RFP) No. N33191-95-R-4361, issued by the 
Department of the Navy, Engineering Field Activity Mediterranean, for 
the construction of shower and locker rooms, a weight room, and a 
racquetball court, and the renovation of a gymnasium at the U.S. Naval 
Support Activity, Souda Bay, Crete, Greece.  

We deny the protest.

The Navy issued the RFP on May 9, 1995, as a reprocurement of a 
previously defaulted contract.  The RFP contemplated the award of a 
fixed-price contract on a best value basis.  The quality evaluation 
factors were slightly more important than price.  The two quality 
evaluation factors, and their respective subfactors, were[1]

     A.  Technical Excellence

       (1) Design/Construction Plan
       (2) Timely Completion

     B.  Management Capabilities

       (1) Prime Contractor Project Management Team
       (2) Subcontracting Plan
       (3) Corporate Past Performance & Financial Resources
       (4) Safety Plan for Prime and Subcontracted Work.

The RFP provided a detailed description of the criteria that would be 
evaluated under each evaluation factor and subfactor.  Under the 
corporate past performance subfactor, the RFP instructed offerors to 
demonstrate that they manage their projects so they are completed on 
time and requested a full explanation of reasons for the late 
completion of any project.

The Navy sent the RFP only to Hellenic and Contracting, Ltd., who were 
performing contracts on-site and were believed to have the capability 
to successfully perform this work.  Both firms submitted proposals.  
The Navy conducted discussions with both firms, including requests for 
explanations on how the offerors planned "to deal with 
'long-lead-time' materials that may potentially delay" project 
completion, with an example of such material.  

The Navy rated both proposals "acceptable" on all but the following 
criteria:[2]

Offeror             Timely Completion   Past Performance

Contracting, Ltd.   Acceptable          Superior

Hellenic            Marginal            Marginal
The Navy rated Contracting, Ltd. superior under past performance 
because it had completed two other projects for the agency at Souda 
Bay in a timely fashion and its work on these projects was rated as 
"outstanding."  Its plan to timely complete the work was "acceptable," 
and the Navy rated Contracting, Ltd.'s proposal "acceptable" overall.

The Navy rated Hellenic "marginal" for timely completion because its 
proposal did not explain how it would complete the project in a timely 
manner and did not demonstrate that its proposed construction plan was 
well thought out and realistic so as to ensure completion of the 
project within the time specified.  The Navy also rated Hellenic's 
proposal "marginal" on past performance because it was behind schedule 
on all nine projects which it was currently performing for the agency 
at Souda Bay.  The Navy's overall rating for Hellenic's proposal was 
"lower-level acceptable."

The BAFO prices for Hellenic and Contracting, Ltd. were 120,800,000 
Greek drachmas (Dra.) and 124,169,178 Dra., respectively.[3]  The Navy 
determined that Hellenic's "lower-level acceptable" BAFO posed a 
moderate to high risk of exceeding the proposed construction time, 
whereas Contracting, Ltd.'s acceptable BAFO posed a low risk.  The 
agency determined that the lower risk associated with Contracting, 
Ltd.'s BAFO outweighed the small price difference between the two 
BAFOs and therefore to represent the best value.  Award was therefore 
made to Contracting, Ltd. and this protest followed.

Hellenic alleges that the agency's evaluation of its proposal was 
unreasonable and does not support the award to the higher-priced 
offeror.  Hellenic alleges that its proposed construction schedule was 
detailed and should not have been downgraded, and that the late 
performance on other projects for the agency were not Hellenic's 
fault.  

In a negotiated procurement, there is no requirement that award be 
made on the basis of lowest price/cost; a cost/technical tradeoff may 
be made, and the extent to which one may be sacrificed for the other 
is governed by the tests of rationality and consistency with the 
established evaluation factors.  Central Texas College, 71 Comp. Gen. 
164 (1992), 92-1 CPD  121.  We will uphold award to offerors with 
higher technical ratings and higher costs, so long as the results are 
consistent with the evaluation criteria and the contracting agency 
reasonably determines that the cost premium involved is justified 
considering the technical superiority of the selected offeror's 
proposal.  Id.; Hawk Servs., Inc.; A-Bear's Janitorial Serv., Inc., 
B-257299.4; B-257299.5, Aug. 31, 1995, 95-2 CPD  91; A & W 
Maintenance Servs., Inc., B-255711, Mar. 25, 1994, 94-1 CPD  214.

Here, the evaluated difference between the two proposals was that 
Hellenic's proposal presented a risk that it would not complete 
construction on schedule, a risk not found in Contracting, Ltd.'s 
proposal.  Timely performance was important to the Navy because the 
default of the prior contractor had already placed this project behind 
schedule.  Although Hellenic's proposal included a detailed proposed 
construction schedule that met the time constraints of the RFP, its 
proposal did not fully demonstrate that it could comply with this 
schedule.  For example, even though the Navy, during discussions, 
asked Hellenic for information on the lead times of significant 
materials, Hellenic's response addressed only the example cited in the 
agency's request and did not show that its proposed schedule accounted 
for lead times in the acquisition of any other materials.  In 
contrast, Contracting, Ltd. in its proposal and discussion response 
specifically accounted for the lead times of all significant 
materials.

In regard to past performance on Navy projects, the protester 
submitted copies of letters which it had sent to the agency alleging 
that the delays in performance were due to circumstances beyond 
Hellenic's control.  However, these conclusory letters provide no 
proof as to whether the referenced delays either were or were not 
attributable to Hellenic, but only confirm that these projects were 
indeed behind schedule.  Therefore, the record affords us no basis to 
find the agency's evaluation of Hellenic's past performance on these 
projects unreasonable.

Since Contracting, Ltd. supported its proposed construction schedule 
by discussing lead times of significant materials and had previously 
performed in a timely manner on projects for the agency, and since 
Hellenic had not similarly supported its proposed construction 
schedule and had a record of late performance on previous projects for 
the agency, the Navy's determination that Contracting, Ltd. had a 
lower performance risk associated with its proposal than did Hellenic 
was reasonable. Given that the quality factor was more important than 
price, we also consider the agency's decision to award to Contracting, 
Ltd. despite its slightly higher price to be consistent with the 
evaluation criteria.[4]   

The protest is denied.

Comptroller General
of the United States

1. The RFP did not state the relative weights of the quality 
evaluation factors.  In the absence of a statement of the relative 
weights of the evaluation factors, they are considered to be of equal 
importance to each other.  See Lingtec, Inc., B-208777, Aug. 30, 1983, 
83-2 CPD  279.

2. The RFP stated that proposals would be evaluated on an adjectival 
rating scale of superior, acceptable, marginal, and unacceptable.

3. The Navy calculated the BAFO prices in U.S. dollars as $989,587 for 
Hellenic and $1,045,631 for Contracting, Ltd.

4. While Hellenic asserts that it should not have even been solicited 
if the agency had such a negative view of its performance, the record 
shows that Hellenic was not selected because its modest price 
advantage was offset by Contracting, Ltd.'s technical superiority with 
regard to the timely completion of the project.