BNUMBER:  B-266299
DATE:  February 9, 1996
TITLE:  Creative Management Technology, Inc.

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Matter of:Creative Management Technology, Inc.

File:     B-266299

Date:   February 9, 1996      

Jacob Dixon, Jr. for the protester.
Col. Thomas F. Brown, Capt. Christopher M. Petras, and Martin F. 
McAlwee, Esq., Department of the Air Force, for the agency.
Behn Miller, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest alleging that agency failed to conduct meaningful 
discussions with protester is denied where discussion questions 
reasonably led protester into area of its technical proposal that was 
deficient.

2.  Agency's determination that the protester's lower-priced proposal 
did not represent the best value to the government in a procurement 
for technical engineering and spacelift services is unobjectionable 
where the agency reasonably evaluated the protester's proposal as 
posing a moderate performance risk due to the protester's reliance on 
subcontractor personnel and corporate resources, and reasonably 
concluded that compared to the awardee's proposal, which was 
reasonably evaluated as posing a low performance risk due to the 
awardee's capability to rely on in-house personnel and internal 
corporate resources, was worth the price premium.  

3.  Protest that awardee gained an unfair competitive advantage 
because it proposed the services of government employee as a project 
leader is denied where:  (1) government employee advised the agency of 
his employment discussions and subsequent offer from the awardee; (2) 
the government employee did not participate in the procurement; (3) 
there is no evidence that the government employee influenced the 
technical evaluators or that the employee had access to source 
selection information, or otherwise conferred an unfair competitive 
advantage on the awardee; and (4) there is no evidence that the 
government employee participated in the preparation of the awardee's 
proposal.

DECISION

Creative Management Technology, Inc. (CMT) protests the award of a 
contract to AJT and Associates under request for proposals (RFP) No. 
F08650-95-R-A078, issued by the Department of the Air Force for 
technical engineering and spacelift services (TESS) to support the 
agency's 45th Space Wing Eastern Launch Range Space Program.  CMT 
contends that the Air Force failed to apprise the firm of 
informational deficiencies in its proposal, thereby depriving the 
protester of the opportunity to improve its moderate risk proposal 
rating.  CMT contends that it should have received the award since the 
agency's risk concerns were unreasonable, and it offered a lower price 
than the awardee.  CMT also argues that the technical evaluation and 
subsequent award to AJT were tainted by a conflict of interest.

We deny the protest.

The TESS services are critical engineering support necessary to ensure 
scheduled space program launches and missions including Titan IV, 
Atlas II, Delta II and III, Trident D-5, and various commercial 
satellite programs.  The procured services include phase-in tasks; 
project management; engineering design; emergency on-call engineering 
support; inspection services; and data compilation/recordkeeping.  The 
RFP was issued on May 15, 1995 and contemplated the award of a 1-year 
contract with 4 option years based on an integrated assessment of 
technical and price factors, with price less important than technical 
merit.  The RFP required each offeror to submit a technical/management 
proposal, which was to be evaluated under seven criteria of equal 
importance.  The RFP further provided that risk analysis of each 
proposal would be performed and considered as part of the overall 
evaluation.

By the June 21 closing date, four offers were received, including 
offers from CMT and AJT.  During the next 2 months, numerous 
"Clarification Requests/Deficiency Reports" (CR/DR) were issued to 
each of the four offerors.  Of significance to this protest, 4 of the 
36 CRs/DRs provided by the Air Force to CMT stated,

     "[CMT's proposal] states CMT will use their fixed-price 
     engineering personnel for on-call engineering services.  Mixing 
     work requirements may create project scheduling problems during 
     actual execution of the contract.  Example, fixed-price design 
     might have longer completion date or completion date might be 
     delayed.  Please revalidate your approach."

     "Various references in multiple sections refer to corporate 
     resources as a means of accomplishing work.  What are these 
     resources?  Past performance does not indicate any other 
     technically oriented personnel (design-types) employed."

     "Proposal states that CMT has the ability to 'bring in 
     subcontracted consulting or temporary personnel.'  Please provide 
     how these personnel will be drawn and how this will be done 
     'quickly'?"

     "[Reference the proposed list of on-call engineering associate 
     contractors.]  Does CMT have existing agreements with Associate 
     Contractor[s]?"

On August 11, the Air Force requested best and final offers (BAFO), 
which were submitted by each offeror on August 15.  At the conclusion 
of the BAFO evaluation, in a Proposal Analysis Report dated August 11, 
the source selection evaluation team (SSET) recommended AJT for award.  
Although AJT and CMT were closely ranked, the SSET determined that 
AJT's proposal was technically superior to CMT's since AJT proposed to 
satisfy all required on-call engineering services exclusively through 
the use of in-house personnel and in-house corporate resources, which 
posed significantly less risk than CMT's proposed on-call engineering 
approach--which relied heavily on subcontractor personnel and 
resources--and was therefore rated a moderate performance risk by the 
SSET.

On September 7, after reviewing and concurring in the SSET's finding, 
the source selection authority (SSA) awarded the contract to AJT.  
Although CMT's price was lower than AJT's, the SSA determined that 
AJT's lower performance risk warranted paying an approximately 
12-percent price premium.  Specifically, the SSA noted that any 
interruption in the required TESS services--including delays in 
providing emergency on-call engineering services--could potentially 
cause launch delays that would cost the agency approximately $1 
million per day.  On September 26, after attending the agency's 
debriefing, CMT filed this protest.

DISCUSSION

Adequacy of Discussions

At the debriefing, the Air Force advised CMT that one of the chief 
reasons for the protester's moderate performance risk rating was the 
protester's failure to provide letters of commitment or similar 
agreements from its proposed on-call engineering subcontractors.  As a 
result, the agency concluded that in the event CMT's proposed 
subcontractors were unavailable, the protester would be forced to 
relocate full-time personnel to perform any emergency on-call 
engineering tasks--incurring delays in ongoing critical TESS services 
that could potentially disrupt intended launch schedules and related 
space program projects.  In addition, because of CMT's lack of 
subcontractor agreements, the agency questioned whether CMT could rely 
on its subcontractor's corporate resources in the event they were 
required.

In its protest, CMT contends that the Air Force never requested 
subcontractor letters of commitments or similar agreements during its 
discussions with the protester, and had the agency done so, CMT could 
have provided these documents. 

In response, the Air Force maintains that it was unable to 
specifically request such evidence as part of its discussions with CMT 
because of technical transfusion and technical leveling concerns.  The 
Air Force states that because AJT had already furnished letters of 
commitment in its initial proposal and evidence of an approved 
corporate credit line, and because the solicitation did not require 
this type of evidence, the agency believed that if it requested these 
specific documents from the protester it would be engaging in 
technical transfusion or technical leveling by revealing one of the 
strengths in AJT's approach.  The Air Force further asserts that based 
on the questions the agency issued to CMT regarding its proposed 
subcontractors, on-call engineering approach and corporate resources, 
CMT reasonably should have been able to ascertain that stronger 
evidence of the protester's ability to rely on its subcontractors and 
their resources, as well as evidence of providing prompt on-call 
engineering services without interruption to the other required TESS 
tasks, was needed to support its proposal.

In negotiated procurements, agencies are required to conduct 
meaningful discussions with all competitive range offerors.  Acumen 
Eng'g/Analysis, Inc., B-260102, May 11, 1995, 95-1 CPD  para.  240.  While 
this generally requires agencies to advise offerors of proposal 
deficiencies and to afford them an opportunity to submit a revised 
proposal, it does not mean that agencies must conduct all-encompassing 
discussions; rather, agencies are only required to lead offerors into 
those areas of their proposals needing amplification, given the 
context of the procurement.  Id.  In this regard, the content and 
extent of discussions are within the discretion of the contracting 
officer, since the number and type of proposal deficiencies, if any, 
will vary among the proposals.  Federal Acquisition Regulation (FAR)  sec.  
15.610(d); Pan Am. World Servs., Inc. et al., B-231840 et al., Nov. 7, 
1988, 88-2 CPD  para.  446.

In any discussions with competing offerors, agencies must avoid 
unfairness and unequal treatment.  CBIS Fed. Inc., 71 Comp. Gen. 319 
(1992), 92-1 CPD  para.  308.  Disclosure of one offeror's approach to 
another is unfair and is prohibited as "technical transfusion."  See 
FAR  sec.  15.610(d)(2); CBIS Fed. Inc., supra.  Similarly, technical 
leveling is also to be avoided; this situation occurs when an agency, 
through successive rounds of discussions, helps to bring a proposal up 
to the level of another proposal by pointing out weaknesses that 
remain in the proposal due to an offeror's lack of diligence, 
competence, or inventiveness after having been given an opportunity to 
correct them.  FAR  sec.  15.610(d); SAIC Computer Sys., B-258431.2, Mar. 
13, 1995, 95-1 CPD  para.  156.

Because the protester had already provided the agency with a list of 
its proposed subcontractors in its initial proposal, we think the Air 
Force could have requested copies of subcontractor agreements and 
letters of subcontractor commitment without concerns about improperly 
disclosing aspects of AJT's technical approach (technical transfusion) 
or improperly coaching CMT (technical leveling).  See CBIS Fed. Inc., 
supra.  However, as noted above, agencies enjoy a great deal of 
discretion in how they discuss proposal deficiencies with various 
offerors, and in this case we think the questions posed to CMT 
reasonably placed the protester on notice that providing firm evidence 
of the reliability of its subcontractors, such as letters of 
commitment or subcontractor agreements, would be a desirable response.

As noted above, the Air Force explicitly asked CMT during discussions 
to examine  its approach towards staffing on-call engineering requests 
given the agency's  concerns about disruptions in the non-emergency 
schedule work that would arise if designated full-time staff were 
taken off their routine tasks.  Additionally, the record shows that 
the Air Force asked CMT to amplify how it would bring in subcontracted 
personnel "quickly," and whether the protester had "existing 
agreements" with its proposed on-call engineer "associate 
contractors."  In the context of this procurement, these three 
discussion questions plainly indicated that the agency was concerned 
about CMT's ability to rely on and promptly retain its proposed 
subcontractors for any required on-call engineering tasks, and that 
CMT's proposed approach might entail scheduling disadvantages and 
performance risks not addressed in the protester's proposal.  The Air 
Force was under no legal obligation to spell out exactly what 
technical response would completely allay the agency's concerns about 
CMT's ability to provide low-risk performance.  Medland Controls, 
Inc., B-255204; B-255204.3, Feb. 17, 1994, 94-1 CPD  para.  260.  Under the 
circumstances, the Air Force's discussions were adequate to lead the 
protester into the area of the agency's concern, and were therefore 
legally unobjectionable.

Risk Evaluation and Selection Decision

CMT maintains that its proposed approach should not have been 
determined to pose a moderate risk because despite its failure to 
provide letters of commitment regarding proposed subcontractor 
personnel and their corporate resources, the protester's proposal 
nonetheless conveyed that the firm had immediate access to these 
proposed firms and their assets.  In this regard, CMT admits that it 
"does not have a highly qualified technical staff sitting around 
waiting to solve problems such as those associated with on-call 
engineering" and further concedes that "[u]nless you use resources 
already on the contract, there will be a lag period before any outside 
sources can be placed on the project."  Nevertheless, CMT contends 
that the reputation of its subcontractors--which are generally 
recognized as having strong personnel and resources, and which have 
performed several similar requirements at CCAS and other space program 
locations--as well as CMT's established history of working with these 
firms, renders the SSET's risk concerns unreasonable.  We disagree.

Source selection officials in negotiated procurements have broad 
discretion in determining the manner and extent to which they will 
make use of the technical and price evaluation results.  Grey 
Advertising, Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD  para.  325.  In 
reviewing an agency's evaluation of competing proposals, we only 
examine the agency's evaluation to ensure that it was reasonable and 
in accord with the evaluation criteria.  See Orion Research, Inc., 
B-253786, Oct. 21, 1993, 93-2 CPD  para.  242.  A protester's mere 
disagreement with the agency's evaluation determination does not 
demonstrate that the evaluation was unreasonable.  Global Assocs., 
Ltd., B-256277, June 6, 1994, 94-1 CPD  para.  347.

Contrary to the protester's arguments, we find that the agency 
reasonably evaluated the protester's proposal as posing a higher risk 
than the awardee's.  Because CMT provided no concrete evidence of its 
ability to swiftly dispatch its proposed subcontractors to perform any 
required on-call engineering tasks, we think the agency reasonably 
concluded that CMT's proposal presented a higher risk of interruption 
to the TESS services--and therefore disruption to the related space 
programs and missions--than did AJT's proposal.  In contrast to CMT, 
AJT proposed only in-house personnel for all TESS 
requirements--including the on-call engineering; further, AJT provided 
a letter of commitment from its bank demonstrating that in addition to 
its substantial internal corporate resources, the bank had established 
for it a significant line of credit so that the firm had access to 
additional, immediately available funding for any unforeseen contract 
contingency, including any emergency on-call engineering support.  
Finally, unlike CMT, for the few consultants and subcontractors that 
AJT proposed on a contingency, emergency basis, AJT provided letters 
of commitment demonstrating an unquestionable ability to immediately 
deploy any and all proposed subcontractors, in the event they were 
required, to support any task under this contract.

Technical/price tradeoffs may be made in deciding between competing 
proposals; the propriety of such a tradeoff turns not on the 
difference in technical scores or ratings, per se, but on whether the 
agency's judgment concerning the significance of that difference was 
reasonable and adequately justified in light of the RFP evaluation 
scheme.  Global Assocs., Ltd., supra.  Here, given AJT's lower-risk 
approach--which provided a better guarantee that the Air Force would 
not suffer any costly interruptions in the performance of critical 
TESS services--we think the SSA could reasonably conclude that AJT's 
lower-risk proposal was worth the 12-percent price premium, 
particularly since under the evaluation scheme in the RFP, price was 
less important than technical merit.  See Brunswick Defense, B-255764, 
Mar. 30, 1994, 94-1 CPD  para.  225.

Alleged Conflict of Interest

The record shows that AJT's proposed project manager was a contracting 
officer's technical representative (COTR) who served on the 
predecessor contract until he retired, 1 day after the current 
contract was awarded to AJT.  CMT contends that AJT's proposed 
employment of the project manager constituted a personal conflict of 
interest prohibited by the procurement integrity provisions of FAR 
subpart 3.104.  Alternatively, CMT contends that AJT's proposed 
project manager must have used inside source selection information to 
assist the awardee in drafting the winning proposal; CMT also 
maintains that the project manager similarly must have assisted the 
agency in drafting the current RFP to favor AJT's capabilities, 
resulting in an improper organizational conflict prohibited by FAR 
subpart 9.5. 

The Air Force acknowledges that AJT's proposed project manager served 
as the COTR for the predecessor contract; however, the agency asserts 
that contrary to the protester's contentions, no procurement integrity 
or organizational conflict of interest regulations were violated by 
AJT's proposed use of the COTR.

The Air Force reports that AJT approached the COTR on April 18, 1995 
and offered him an employment position as project manager for the 
upcoming procurement.   The COTR accepted the employment offer with an 
effective start date of October 1, but conditioned his acceptance of 
AJT's employment offer on the Air Force's determination that such 
employment would not constitute an improper conflict of interest.  The 
COTR then reported the employment contact to the agency and, by 
memorandum dated May 8, formally requested an ethics advisory opinion 
regarding his potential post-government employment by AJT.  The Air 
Force determined that employment with AJT was permissible since the 
COTR was not involved in any aspect of the current TESS procurement.

The interpretation and enforcement of post-employment conflict of 
interest restrictions are primarily matters for the procuring agency 
and the Department of Justice.  Our general interest, within the 
confines of a bid protest, is to determine whether any action of the 
former government employee may have resulted in prejudice for, or on 
behalf of, the awardee during the award selection process.  Cleveland 
Telecommunications Corp., B-257294, Sep. 19, 1994, 94-2 CPD  para.  105; 
Technology Concepts and Design, Inc., B-241727, Feb. 6, 1991, 91-1 CPD  para.  
132.

Here, we find nothing improper in either the COTR's conditional 
acceptance of employment while still an Air Force employee, or in 
AJT's proposed use of the COTR in its proposal.  Although procurement 
officials are prohibited from engaging in employment negotiations 
during the conduct of a procurement, FAR  sec.  3.104-3(b), the COTR was 
not a procurement official as defined within these regulations:  the 
COTR had no involvement with drafting, reviewing or approving the RFP 
specifications; evaluating proposals; selecting sources; conducting 
negotiations; or approving the award to AJT.  FAR  sec.  3.104-4(h).  
Further, while any government employee is prohibited from 
"participating personally and substantially" in any matter that would 
"affect the financial interests of any person with whom the employee 
is negotiating employment," FAR  sec.  3.104-1(b)(2), there is no evidence 
that the COTR participated in any way in the procurement on behalf of 
the Air Force or AJT.  See Cleveland Telecommunications Corp., supra.  
Nor did the COTR participate in the drafting or negotiation process 
for the predecessor solicitation, known as the Ground Systems 
Associate Contract (GSAC).  In this regard, the Air Force reports that 
the GSAC requirements underwent substantial changes, rewriting, and 
restructuring before being issued as the instant TESS procurement.

Since the COTR was not involved in any aspect of the TESS procurement, 
and since the COTR was not employed by AJT, and did not otherwise 
assist AJT in the drafting of its proposal for this procurement, the 
organizational conflict of interest restrictions set forth at FAR 9.5 
are inapplicable.  See Abt Assocs., Inc., B-253220.2,  Oct. 6, 1993, 
93-2 CPD  para.  269.

Although the protester contends that AJT's proposed employment of a 
current Air Force employee must have influenced the SSET to favor the 
AJT proposal, the record simply does not support this contention.  CMT 
has not furnished any evidence to support this allegation, and we will 
not attribute bias in the evaluation of proposals on the basis of 
inference or supposition.  See TLC Sys., B-243220, July 9, 1991, 91-2 
CPD  para.  37.  The protester's speculation notwithstanding, the record 
contains no evidence of bias in the evaluation of either CMT's or 
AJT's proposal; instead, the record contains a well-documented, 
detailed evaluation and source selection analysis, showing that the 
Air Force conducted its evaluation reasonably and in accordance with 
the evaluation criteria.  Under these circumstances, CMT's allegations 
of possible impropriety, unaccompanied by supporting evidence, amount 
to nothing more than speculation, and as such, do not provide a basis 
for protest.  ITT Fed.  Servs. Corp., B-253740.2, May 27, 1994, 94-2 
CPD  para.  30.  

The protest is denied.

Comptroller General
of the United States