BNUMBER:  B-270090.3
DATE:  February 13, 1996
TITLE:  Lloyd-Lamont Design, Inc.

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Matter of:Lloyd-Lamont Design, Inc.

File:     B-270090.3

Date:     February 13, 1996

Kenneth S. Kramer, Esq., and Catherine E. Pollack, Esq., Fried, Frank, 
Harris, Shriver & Jacobson, for the protester.
Arthur I. Leaderman, Esq., Smith, Pachter, McWhorter & D'Ambrosio, for 
Remtech Services, Inc., an intervenor.
Samuel D. Kreiter, Esq., Department of the Navy, for the agency.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protester's contention that agency improperly evaluated proposals 
is denied where the record shows that the agency evaluated in 
accordance with the criteria announced in the solicitation, and the 
record reasonably supports the evaluators' conclusions.

2.  Where the solicitation announced that the Department of the Navy 
intended to evaluate proposals and make award on the basis of initial 
proposals without conducting discussions, and the Navy reasonably 
determined, on the basis of it evaluation of the initial proposals, 
that the technically superior, slightly higher-cost offeror 
represented the best value under the solicitation's evaluation scheme, 
the Navy was not required to conduct discussions with the protester.

DECISION

Lloyd-Lamont Design, Inc. (LLD) protests the award of a contract to 
Remtech Services, Inc. under request for proposals (RFP) No. 
N00030-96-R-0200, issued by the Department of the Navy for training 
acquisition and support.  The protester argues that the agency's 
evaluation of proposals was unreasonable; that the Navy improperly 
failed to conduct discussions; and that the agency's cost/technical 
tradeoff was flawed.

We deny the protest.

BACKGROUND

The RFP was issued as a competitive, small disadvantaged business 
set-aside under section 8(a) of the Small Business Act, 15 U.S.C.  sec.  
637(a) (1994).  The RFP contemplated the award of a 
cost-plus-fixed-fee, level-of-effort contract for training acquisition 
and support services related to strategic weapons systems (SWS), for a 
base year with options for performing various requirements through 
fiscal year 2000.  Section M of the RFP listed the following 
evaluation factors in descending order of importance:  (1) personnel; 
(2) technical approach; (3) corporate experience; (4) management 
approach; (5) transition plan; and (6) facilities and equipment.  
Within each factor, the RFP listed subfactors of varying importance.  
Cost was to be evaluated for reasonableness and realism.  Award was to 
be made to the offeror whose proposal represented the best value to 
the government.  The RFP stated that in making the "best value" 
determination, the agency would apply a tradeoff formula announced in 
the solicitation which permitted the agency to pay up to a 30 percent 
premium for a technically superior proposal.

Three firms, including the protester and the awardee, submitted 
proposals in response to the RFP.  Each offeror proposed a different 
major subcontractor, all of which had been incumbents under prior 
contracts for these services.  A source selection evaluation board 
(SSEB) evaluated technical proposals by assigning numerical point 
scores (ranging from 0 to 100 points) under each subfactor; cost was 
not point-scored.  A source selection advisory council (SSAC) reviewed 
the SSEB's results and computed a final weighted point score for each 
proposal.  LLD's proposal earned a total weighted score of 90.596 
points; Remtech's proposal earned a total score of 93.402 points.  
Remtech's proposed cost, $10,417,985, was slightly higher than LLD's, 
$10,257,424--a difference of $160,561 over the life of the contract, 
including options.

Based on the results of the evaluation, the SSAC concluded that 
Remtech's proposal offered the best value to the government, and 
recommended award to that firm.  The source selection authority (SSA) 
agreed with that recommendation, and on September 28, Remtech was 
awarded the contract.  The agency debriefed LLD on October 3, and this 
protest followed.[1]

PROTESTER'S CONTENTIONS

LLD argues that the agency's evaluation of competing proposals was 
flawed in several respects, particularly with respect to the 
evaluation of its proposal under the "personnel" and "management 
approach" factors.  Specifically, the protester argues that its 
proposal deserved a higher rating because of its "superior, qualified 
personnel" and "proven staffing approach," and that the agency treated 
Remtech's proposal differently in the evaluation.  LLD also argues 
that the agency improperly awarded the contract without conducting 
discussions, and that the cost/technical tradeoff was flawed.

ANALYSIS

Evaluation of Proposals

In reviewing a protest challenging an agency's technical evaluation, 
we examine the record to ensure that the agency's evaluation was 
reasonable and consistent with the stated evaluation criteria.  See 
Abt Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD  para.  223.  With 
respect to the protester's contentions regarding the evaluation of 
proposals, we have reviewed the proposals, individual evaluators' 
narrative sheets, the team evaluation narratives, and the award 
recommendation memorandum, and find no basis for questioning the 
SSEB's ratings.

Although LLD's proposal earned a relatively high score overall, the 
evaluators considered several aspects of the proposal weak.  Of 
particular concern was LLD's staffing plan, in which LLD offered what 
the SSEB considered to be a significant percentage of key personnel on 
a part-time basis.  One evaluator specifically noted that some of 
LLD's "most qualified [key personnel] fall into this [part-time] 
category."  Another evaluator expressed concern that LLD's approach 
could create a scheduling conflict, noting that the protester's 
approach could have a detrimental effect on support tasks and 
scheduling.  The evaluators also noted that LLD's proposal did not 
indicate "SWS experience in manning analysis support," and showed 
"very little experience in [information resources management]," one of 
two areas critical for successful contract performance.  One evaluator 
specifically noted that given the number of employees proposed with 
college degrees in mathematics and computer sciences, LLD's personnel 
assignments did not correlate with the employees' field of study; it 
was found that while a majority of proposed personnel had college 
degrees, some of LLD's key personnel held degrees in subjects 
unrelated to their proposed functions.

The record shows that the SSEB considered LLD's proposed staffing plan 
to be the significant weakness in the proposal, affecting the most 
important evaluation factor, "personnel," as well as the "management 
approach" factor.  The agency had recently experienced performance 
problems under the incumbent contract (which had been awarded to LLD's 
proposed major subcontractor in this procurement), primarily as a 
result of that firm's use of part-time personnel during contract 
performance.  The agency explains that part-time personnel would 
likely be assigned to other projects, potentially preventing 
short-term reassignments to the project.  In addition, the agency 
found that under LLD's staffing plan, although fully dedicated 
personnel could be reassigned to address immediate problems, since the 
majority of them were tasked at higher levels, their reassignment 
could interrupt ongoing, critical work.  In short, the agency 
anticipated that under LLD's approach, the Navy could experience 
similar performance problems as it had under the incumbent contract.  
Primarily because of this weakness, the SSEB downgraded LLD's proposal 
under the "personnel" factor, and slightly downgraded LLD's proposal 
under the relevant subfactor[2] within the "management approach" 
factor.

In view of the SSEB's conclusions regarding the adverse impact LLD's 
staffing plan could have on the successful performance of the 
contract, we have no basis to question LLD's score under the personnel 
or management approach evaluation factors.  The SSEB's ratings of 
LLD's proposal under these factors reasonably reflect the evaluators' 
concerns over the impact LLD's staffing plan could have on contract 
performance, particularly in view of the agency's recent experience 
under the incumbent contract which used LLD's approach.  Further, we 
have reviewed the record in light of the protester's allegations 
regarding unequal treatment of LLD's and Remtech's proposals in the 
evaluation and find no evidence supporting the protester's allegation 
that offerors were treated differently.  LLD's mere disagreement with 
the evaluators' judgment does not make the SSEB's ratings 
unreasonable.  Calspan Corp., B-258441, Jan. 19, 1995, 95-1 CPD  para.  
28.[3]

Cost/Technical Tradeoff

The RFP announced that in deciding which proposal offered the best 
value, the Navy would make a cost/technical tradeoff in accordance 
with the following formula:

     "As indicated on the graph, the [g]overnment is willing to pay 
     [30] percent more for an offeror with a proposal that earns the 
     highest possible technical score (i.e. 100 points), than an 
     offeror with the lowest evaluated price who has the lowest 
     possible technically acceptable proposal score (i.e. 75 points).  
     For example, as the technical quality of a proposal increases, 
     the acceptable increase in the price premium also increases.  Any 
     point above the line [on the attached graph] represents an offer 
     above the premium the [g]overnment is willing to pay; therefore, 
     an award on the basis of that offer would not be deemed the best 
     value to the [g]overnment.  Conversely, any point on or below the 
     line represents an offer within the premium and one which the 
     [g]overnment may consider for award.  The [g]overnment will make 
     award to the [o]fferor, on or below the line, which represents 
     the best value to the [g]overnment."

The protester contends that the agency mechanically applied this 
formula, and argues that the position of offerors' total scores on the 
graph, by itself, was an insufficient basis upon which to make award 
to Remtech.  According to the protester, the agency was required to 
make a separate determination justifying paying a 1.6 percent premium 
for the technical benefits of Remtech's proposal.

In a negotiated procurement, unless the RFP so specifies, there is no 
requirement that award be based on lowest cost.  A procuring agency 
has the discretion to select a more highly-rated technical proposal if 
doing so is reasonable and is consistent with the evaluation scheme 
set forth in the RFP.  Management Sys. Designers, Inc., B-244383.3, 
Sept. 30, 1991, 91-2 CPD  para.  310.  We will uphold an award to a higher 
rated offeror with higher proposed costs where the agency reasonably 
determines that the cost premium was justified considering the 
technical superiority of the selected offeror's proposal.  United 
Telecontrol Elecs., Inc., B-235774.2, Nov. 7, 1989, 89-2 CPD  para.  433.  
Even where a source selection official does not specifically discuss 
the technical/cost tradeoff in the selection decision document, we 
will not object if the tradeoff is supported by the record.  Maytag 
Aircraft Corp., B-237068.3, Apr. 26, 1990, 90-1 CPD  para.  430.

Here, although, as LLD correctly points out, the SSA did not 
specifically explain his rationale for paying more for Remtech's 
technically superior proposal, we think that the record reasonably 
supports the tradeoff decision.  The record shows that the protester's 
proposal suffered from a noteworthy weakness with respect to staffing 
that the evaluators reasonably found problematic and was the primary 
reason that Remtech's proposal was found technically superior.  Given 
the evaluators' legitimate concerns over the impact of the weaknesses 
in LLD's proposal on the successful performance of the contract, and 
in light of the relatively minimal difference in total cost between 
LLD's and Remtech's proposal, the SSA's cost/technical tradeoff 
decision was unobjectionable.

Discussions

LLD argues that the agency improperly awarded a contract to Remtech at 
a higher cost without conducting discussions.  The protester argues 
that given the evaluators' concern over its proposed staffing, the 
agency should have afforded it an opportunity to explain its rationale 
for the proposed part-time staffing approach, for example, which would 
have raised its ratings under several factors.

Where, as here, an RFP sets forth the provisions of Federal 
Acquisition Regulation (FAR)  sec.  52.215-16, Alternate III, advising 
offerors of the agency's intent to award without conducting 
discussions, a Department of Defense contracting agency may properly 
do so, provided the contracting officer determines that discussions 
are unnecessary.  FAR  sec.  15.610(a)(4) (FAC 90-29);[4] Infotec Dev., 
Inc., B-258198 et al., Dec. 27, 1994, 95-1 CPD  para.  52.  The discretion 
of the contracting officer to determine whether or not to hold 
discussions is not unfettered; we will review the exercise of that 
discretion to ensure that it was reasonably based on the particular 
circumstances of the procurement, including consideration of the 
proposals received and the basis for the selection decision.  See 
Facilities Management Co., Inc., B-259731.2, May 23, 1995, 95-1 CPD  para.  
274; The Jonathan Corp.; Metro Mach. Corp., B-251698.3; B-251698.4, 
May 17, 1993, 93-2 CPD  para.  174.

Here, the Navy reasonably determined that Remtech's proposal was 
clearly technically superior to LLD's proposal.  The difficulties in 
LLD's proposed staffing plan cited by the evaluators were reasonably 
based and represented a clear discriminator in finding Remtech's 
proposal to be technically superior.  Based on our review of the 
record, we think that given the evaluators' conclusions, the agency 
reasonably had no doubt that Remtech's slightly higher cost proposal 
offered the best value to the government.  Under these circumstances, 
the Navy could properly make award to Remtech on the basis of initial 
proposals.  Compare Information Spectrum, Inc., B-256609.3; 
B-256609.5, Sept. 1, 1994, 94-2 CPD  para.  251 (discussions were not 
necessary where the agency reasonably could determine which offer 
represented the best value to the government) with The Jonathan Corp.; 
Metro Mach. Corp., supra (discussions were necessary where the agency 
could not reasonably determine which proposal represented the best 
value to the government, given the significant discrepancy between the 
agency's cost realism estimate and the cost proposals received and the 
closeness of the competition); see also TRW, Inc., B-254045.2, Jan. 
10, 1994, 94-1 CPD  para.  18. 

The protest is denied.

Comptroller General
of the United States

1. Subsequently, the agency informed us that the head of the 
contracting activity had determined that it was in the government's 
best interest to continue performance of the contract, notwithstanding 
the protest.  See 31 U.S.C.  sec.  3553(d)(3)(C)(i)(I) (1994).

2. Under this subfactor, evaluators were to score proposals based on 
the following question:  "[d]oes the offeror have the ability to adapt 
to emergent problems, including making available resources for short 
term specialized projects?"

3. The protester also takes issue with the evaluation of its proposal 
with respect to SWS experience and educational backgrounds of key 
personnel.  The agency points out, however, that even if LLD's 
proposal had been assigned a perfect score (100 points) in the 
relevant subfactors, the effect on LLD's final weighted score would be 
an immaterial change from 90.596 points to 91.331 points.

4. This authority now extends to civilian agencies as well.  See 41 
U.S.C  sec.  253b(d) (1994); FAR  sec.  15.610(a)(3) (FAC 90-31).