BNUMBER:  B-270094; B-270094.2
DATE:  February 8, 1996
TITLE:  Proteus Corporation; United International Engineering, Inc.

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DECISION FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:Proteus Corporation; United International Engineering, Inc.

File:     B-270094; B-270094.2

Date:February 8, 1996

Eric J. Marcotte, Esq., and Carl J. Peckinpaugh, Esq., Winston & 
Strawn, for Proteus Corporation; and Don A. Howard, Esq., Howard & 
Aldridge, for United International Engineering, Inc., the protesters.
Richard B. Oliver, Esq., and Dana L. Fitzgibbons, Esq., McKenna & 
Cuneo, for Arcata Associates, Inc., an intervenor.
Gregory H. Petkoff, Esq., and Douglas M. Whitehead, Esq., Department 
of the Air Force, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency reasonably assigned moderate risk and green/acceptable 
ratings in evaluating the protester's proposal where the firm's 
proposed manning--which was significantly lower than other 
offerors'--represented a higher risk to successful contract 
performance; difference in offerors' staffing was a proper basis for 
distinguishing between protester's low cost and awardee's high cost 
proposal, which was evaluated as low risk and exceptional for 
technical merit. 

2.  Protest that agency improperly assigned an exceptional rating to 
the awardee's proposal for a technical subelement and only an 
acceptable rating to the protester's proposal, notwithstanding the 
protester's allegedly superior experience and approach to one of 
several systems being evaluated under the subelement, is denied where 
the agency's evaluation considered the offerors' overall approach to 
supporting all of the systems and found, in contrast to the 
protester's proposal, that the awardee's proposal contained a number 
of features exceeding the solicitation requirements.

DECISION

Proteus Corporation and United International Engineering, Inc. (UIE) 
protest the award of a contract to Arcata Associates, Inc. under 
request for proposals (RFP) No. F26600-94-R0176, issued by the 
Department of the Air Force for comprehensive technical support 
services for the agency's weapons and tactics center range complex 
(WTCRC).  Both protesters contend that the agency misevaluated 
proposals and made an irrational award decision.

We deny the protests.

The RFP contemplated the award of a cost reimbursement contract for a 
base year with 4 option years to perform a wide array of services in 
support of the WTCRC, the Air Force's largest combat training range.  
The WTCRC is comprised of a number of facilities that contain various 
advanced systems for training pilots in all aspects of combat flight 
activities.  The RFP provided that the agency would perform an 
integrated assessment to determine the proposal offering the best 
overall value to the government based on the following factors listed 
in descending order of importance:  technical merit, current and past 
performance, and cost.  

The subelements of the technical merit factor listed in descending 
order of importance were:  engineering and integration, operations and 
maintenance, and management and control functions.  These subelements 
were to be evaluated using three "assessment criteria":  understanding 
the requirement, soundness of approach and compliance with 
requirements, all equal in importance.  Based on this assessment, an 
overall technical merit rating was to be assigned using a 
color/adjectival rating system (blue/exceptional, green/acceptable, 
yellow/marginal or red/unacceptable).  In addition to this rating, the 
RFP provided with regard to technical merit that proposals would 
receive a proposal risk rating of either high, moderate, or low based 
upon an assessment of the risks associated with each proposal.  

In the current and past performance area, the RFP provided that the 
agency would assign color/adjectival ratings based on information 
submitted by the offerors with their proposals, as well as information 
obtained from outside sources.  In addition to the color/adjectival 
rating, the RFP provided that the agency would also assign a 
performance risk rating of high, medium, or low based on the offerors' 
performance record.  Finally, cost was to be evaluated for realism, 
reasonableness, and completeness.

The Air Force received five proposals, four of which it found to be 
within the competitive range.  The Air Force engaged in discussions 
with these four offerors and solicited best and final offers (BAFO).  
After evaluating BAFOs, the agency engaged in another round of 
discussions to provide offerors receiving moderate or high proposal or 
performance risk ratings an opportunity to further explain their 
proposed approaches, or their current or past performance.  After 
concluding these discussions, the agency solicited and received a 
second round of BAFOs.  The evaluators rated the second BAFOs as 
follows:
    
Offeror         Technical Merit/
                Proposal Risk   Past & Present Performance/
                                Performance RiskEvaluated Cost[1]

Proteus         Green/Moderate  Blue/Low        $15,807,774

UIE             Green/Low       Green/Low       $23,631,916

Arcata          Blue/Low        Blue/Low        $23,937,873

JB Industries   Green/Moderate  Green/Low       $18,841,272
On the basis of these evaluation results, the agency made award to 
Arcata.  The Air Force source selection authority (SSA) specifically 
found that, although Arcata had the highest overall evaluated cost, 
its proposal offered a combination of outstanding technical features 
and low risk that was worth the extra cost.

PROTEUS'S PROTEST

Risk Rating

The evaluators assigned Proteus's proposal a moderate proposal risk 
rating primarily because they were concerned with the low number of 
personnel Proteus had proposed, and because Proteus's technical 
approach involved extensive cross utilization of its personnel to 
accomplish all of the RFP tasks.  Proteus contends that the moderate 
rating was improper because it was based on the erroneous finding that 
its proposed staffing was inadequate.  Proteus maintains it was 
irrational to assign its proposal a moderate risk rating, since it was 
not rated technically unacceptable and its proposed costs were not 
increased in the realism analysis.[2]  Proteus also argues that 
Arcata's larger proposed staff in fact was excessive, and that the 
agency failed to have an objective standard against which to measure 
the offerors' proposed staffing.

In reviewing allegations concerning the propriety of a technical 
evaluation, our Office does not independently evaluate proposals or 
substitute its judgment for that of the agency; we review the 
evaluation only to ensure that it was reasonable and consistent with 
the terms of the solicitation and applicable statutes and regulations.  
JB Indus., B-251118.2, Apr. 6, 1993, 93-1 CPD  para.  297.

The record shows that Arcata offered to perform using [deleted] 
employees whereas Proteus proposed only [deleted] employees.  This 
comparatively low staffing level reflected Proteus's proposed 
extensive cross utilization of personnel, and the use of part-time 
employees.  Essentially, Proteus proposed to have its engineers work 
on more than one of the systems, and to use part-time employees to 
fulfill additional responsibilities that could not be met by the 
full-time employees when peak demand circumstances arose.  Proteus's 
approach was predicated on the assumption that not all of the systems 
will need to be maintained or operated simultaneously.

The evaluators found Proteus's approach technically acceptable and its 
proposed costs realistic, concluding that the firm could in fact 
perform with its proposed staffing under its technical approach.  The 
evaluators were concerned, however, that Proteus's staffing approach 
had the potential to cause schedule delays and degradation of 
operations, and that it could lead to an overall loss of training 
missions or increased costs.  The evaluators thus concluded that, 
while Proteus's proposed approach was acceptable, the risk was higher 
than if the proposal had been based on more staffing.  Arcata's 
proposal was assigned a low proposal risk rating for this very 
reason--its approach placed less reliance on cross utilization, 
included more dedicated personnel overall and did not rely on 
part-time employees to meet peak demand situations.

There is nothing unreasonable in these conclusions.  Using fewer 
employees to perform a contract is a legitimate strategy that will 
reduce the cost of performance.  However, such an approach also 
reasonably can be expected to result in more situations where an 
employee may not be available immediately when a task arises.  While 
Proteus would argue that careful, skilled management can minimize (and 
maybe even eliminate altogether) these situations, the agency was not 
compelled to assume this best case scenario, and to ignore the worst 
case scenario.  We think the moderate risk rating reasonably reflects 
the evaluators' legitimate concerns regarding the worst case 
scenario.[3]   JB Indus., supra.

There is no support for Proteus's assertion that Arcata's proposed 
staffing was excessive.  Proteus's staffing level was below the 
government estimate, and was specifically determined to be sufficient 
for Arcata's proposed approach.  Proteus has not attempted to show--by 
means, for example, of specific references to Arcata's proposal--that 
the agency's determination was flawed.  Further, the Air Force was not 
required to use an objective standard--a specific staffing level--for 
determining proper staffing.  Indeed, the mechanical application of a 
government staffing estimate to determine the acceptability of 
proposed manning is improper, since such an approach fails to take 
into consideration such things as unique or innovative technical 
approaches.  KCA Corp., B-255115, Feb. 9, 1994, 94-1 CPD  para.  94.  Here, 
the Air Force did precisely what it should have done--it assessed the 
adequacy of each offeror's proposed staffing in light of its technical 
approach, finding as to both Proteus and Arcata that their staffing 
was acceptable for their approaches.  

Technical Merit Rating

Proteus contends that the evaluation of its proposal under the 
technical merit factor was erroneous; it believes its proposal should 
have received the same blue/exceptional rating as Arcata's.  In 
support of its position, Proteus points to the fact that the agency 
initially identified numerous strengths in its offer that were the 
same as the strengths found in the Arcata offer; it complains that 
these strengths improperly were not conveyed to the SSA.

Proteus is correct that the evaluators initially identified strengths 
in its proposal that they were not conveyed to the SSA.  However, this 
was because it was determined that the strengths initially identified 
for Proteus's proposal reflected only individual evaluator comments, 
and not the evaluators' consensus view.  The evaluators thus 
subsequently prepared a revised evaluation report which did not state 
the strengths that did not represent the consensus view of Proteus's 
proposal.  There is nothing improper in revising evaluation 
conclusions in this manner.  While Proteus complains that Arcata's 
strengths were not eliminated in this revised repo/rt, there is no 
basis for finding that these strengths did not reflect the consensus.  
In fact, the agency's technical evaluation team chief  specifically 
states that the revised report "correctly reflects the consensus of 
the [technical evaluation team]." 

Further, there is no reason to conclude that the Proteus and Arcata 
proposals should have been treated the same in the revised report.  As 
discussed above, the evaluators' (and the SSA's) overriding concern 
with Proteus' proposal was with the inadequacy of its proposed 
staffing; there was no similar concern with Arcata's staffing.  While 
there was no separate evaluation category for staffing, the problem 
inherent in Proteus's staffing approach pervaded its entire technical 
approach.  In the "Overall Proposal Risk Assessment and Evaluation 
Summary," the evaluators detailed the reasons for assigning both the 
color/adjectival ratings and the risk ratings.  Not only were the 
risks inherent in Proteus's staffing approach repeatedly noted in the 
risk assessment portion of this document, but it was the basis of 
notable weaknesses under two assessment criteria (soundness of 
approach and understanding/compliance with requirement) under the 
operations and maintenance subelement.  Given the legitimate concerns 
with Proteus's staffing, and its effect on the technical merits of 
Proteus's proposal, there simply is no basis to conclude that 
Proteus's technical merit rating should have been higher than 
green/acceptable.

Improper Weighting Of Proposal Risk

Proteus contends that the Air Force assigned disproportionate weight 
to proposal risk, which was only supposed to be a general 
consideration, improperly elevating it above Proteus's significant 
cost advantage in the cost/technical tradeoff decision. 

This argument is without merit.  Risk was an evaluation criterion and 
the record shows that the SSA specifically considered the differences 
between Proteus's and Arcata's proposals, and found that Proteus's low 
staffing, extensive cross utilization, and use of management personnel 
to perform work level tasks posed a risk to contract scheduling and 
could potentially have a negative effect on performance in terms of 
lost missions, degraded pilot training and budget adjustments.  This 
problem with Proteus's proposal was properly considered and reasonably 
affected both Proteus's proposal risk rating and its color/adjectival 
technical merit rating.  See JB Industries, supra (protester's 
proposal properly assigned both a yellow/marginal adjectival rating 
and a high risk rating based on inadequate staffing); see also 
Greenbrier Indus., Inc., B-252943, Aug. 11, 1993, 93-2 CPD  para.  91 
(agencies may properly consider a deficiency in more than one area of 
technical evaluation where the deficiency affects the acceptability of 
a firm's proposal in more than one way).  The SSA weighed this risk, 
together with the overall negative impact of the inadequate staffing 
on the technical proposal, against Proteus's lower cost and determined 
that lower risk and increased staffing were in the government's best 
interest.   See JWK Int'l, B-256609.4, Sept. 1, 1994, 95-1 CPD  para.  166.  
While cross utilization and other staffing reduction strategies are 
approaches to reducing the cost of performance, the agency was not 
required to sacrifice what it deemed was the staffing necessary for 
satisfactory, low risk performance; the agency's conclusion was 
consistent with the evaluation scheme, under which technical 
considerations were most important.  

UIE'S PROTEST

UIE contends that the Air Force misevaluated proposals under the 
engineering and integration technical subelement.  UIE's argument 
centers around one of the numerous operating systems, the route 
integration instrumentation system (RIIS).  This is an electronic 
combat training system used to monitor electronic combat ranges and 
provide bomber crews with detailed post-training mission debriefings.  
The system is comprised of both on the ground hardware and extensive 
software, and the focus of UIE's protest allegation relates to 
maintenance of the software.  

Essentially, UIE contends that the agency improperly assigned a 
blue/exceptional rating to Arcata's proposal under the engineering and 
integration subelement while assigning UIE only a green/acceptable 
rating.  UIE contends that it was irrational to assign these ratings 
because Arcata does not have any direct RIIS experience (although it 
represented to the Air Force that it did), and engaged in "bait and 
switch" tactics by misrepresenting that it had incumbent RIIS employee 
commitments.  UIE points out that, in comparison, its proposed 
subcontractor, GTE Government Systems Corporation, was the incumbent 
contractor performing software development and modification for the 
RIIS system.  

The RIIS system was not the sole consideration under the engineering 
and integration subelement; the contract's software and firmware 
support requirements included three other electronic systems.  The 
record shows that the evaluators were predominately concerned with 
each firm's proposed approach, as opposed to the particular employees 
offered to perform, under this subelement.  Arcata's proposal was 
assigned a blue/exceptional rating because the evaluators concluded 
that it included a number of innovations that exceeded the 
requirements of the RFP in a way that was beneficial to the Air Force.  
For example, the evaluators noted that Arcata offered [deleted].

In comparison, while the evaluators found UIE's proposal acceptable 
under this subelement, they noted no particular strengths that 
exceeded the requirements of the RFP to the agency's benefit.  Other 
than suggesting that its proposal merited a blue/exceptional rating 
largely because of its RIIS experience, UIE does not challenge the 
agency's evaluation conclusions in this area.  UIE does not allege, 
for example, that the agency improperly failed to give its proposal 
evaluation credit for specified proposal features that exceeded the 
RFP's requirements; in fact, UIE does not even address the propriety 
of its rating in connection with the other systems besides the RIIS 
system that were reviewed under this subelement.  In our view, UIE's 
position amounts to no more than disagreement with the evaluators' 
conclusions regarding the relative merit of its proposal in this area, 
which is insufficient to show that the evaluation was unreasonable or 
otherwise improper.  See Cleveland Telecommunications Corp., B-257294, 
Sept. 19, 1994, 94-2 CPD  para.  105.

We also find no merit to UIE's bait and switch allegation.  Where a 
protester alleges that a bait and switch has occurred, it must show 
that the firm in question made a misrepresentation regarding 
particular individuals it does not expect to employ during contract 
performance, that the misrepresentation was material (that is, was 
relied upon by the agency), and that it had a significant impact on 
the evaluation results.  Intermetrics, Inc., B-259254.2, Apr. 3, 1995, 
95-1 CPD  para.  215.

The RFP did not require the submission of resumes for all proposed 
employees, but only key management employees.  For the remainder of a 
firm's staffing, the RFP required only that the firm describe its 
methods and procedures used in identifying and retaining personnel 
qualified to perform the effort.  Arcata's proposal included only one 
resume in connection with the RIIS function--the resume of its 
proposed RIIS site manager, who was currently employed by the Navy in 
a civilian capacity and executed a letter of commitment to work for 
the firm if it were awarded the contract.  As for the remainder of its 
staff requirements for the RIIS function, Arcata represented only that 
it would retain the core personnel currently working on the system, 
that it had letters of commitment from some of the incumbent RIIS 
personnel, and that it had spoken with all RIIS personnel who in turn 
had expressed a desire to be considered for employment if Arcata were 
the successful offeror.  Arcata also represented that it had "direct" 
RIIS experience because of the commitments of incumbent employees.  
The record shows that Arcata in fact did have letters of commitment 
from a number of the incumbent RIIS personnel.[4]  Arcata's proposal 
thus contained no misrepresentation concerning either the extent to 
which it had obtained commitments from incumbent personnel and how it 
would staff the RIIS function, or as to its direct experience based on 
the commitments, so it cannot be said there was an improper bait and 
switch.  Id.

UIE raised numerous other allegations in its initial protest which the 
Air Force responded to in detail in its agency report.  In its 
comments, UIE did not rebut the agency's position on these issues, 
stating instead that it preferred to have our Office decide these 
matters based on the existing record.  We have reviewed all of UIE's 
allegations and find that they are either based on a misunderstanding 
of the facts surrounding the acquisition, or simply without merit.  
For example, UIE alleged that the agency had engaged in technical 
leveling during discussions with Arcata.  UIE's contention centered 
around the fact that the Air Force conducted an additional round of 
discussions after receiving the first BAFOs.  UIE alleged that this 
second round of discussions was conducted for the sole purpose of 
providing Arcata an additional opportunity to improve its technical 
rating.  As discussed above, the agency's second round of discussions 
was conducted for the limited purpose of providing offerors which had 
received a moderate or high proposal or performance risk rating an 
opportunity to further explain their proposed approaches.  Because 
Arcata had received low proposal and performance risk ratings, it was 
not given any additional discussion questions after the first round of 
BAFOs.  (UIE on the other hand was given a discussion question because 
its proposal had received a moderate performance risk rating.)  The 
record thus does not support the allegation.

The protests are denied.

Comptroller General
of the United States

1. The agency made no significant cost adjustments to any of the 
                                                proposals under its 
                                                cost realism 
                                                evaluation.  

2. Proteus argues in the alternative that the Air Force's failure to 
increase its evaluated costs during the cost realism evaluation in 
light of its proposal risk rating shows that the agency failed to 
conduct an adequate cost realism evaluation.  It is not apparent to 
us, however, how such an alleged failure could have prejudiced 
Proteus, since any increase in the firm's evaluated cost necessarily 
would have adversely affected its competitive standing.  In any case, 
as discussed below, the record shows that the agency considered 
Proteus's manning acceptable and its proposed costs realistic, and 
found only that there was an enhanced potential risk associated with 
award to Proteus in light of its approach.

3. Proteus argues in the alternative that the Air Force did not 
conduct meaningful discussions with it because the agency did not 
directly discuss Proteus's proposed staffing.  This allegation is 
without merit.  The agency reopened discussions after the first BAFOs 
in order to provide firms receiving moderate or high proposal or 
performance risk ratings an additional opportunity to address the 
agency's concerns.  Proteus was provided an additional five discussion 
questions, all of which dealt specifically with the adequacy of its 
proposed staffing.  For example, in connection with the firm's 
proposed staffing plan for hardware engineering support, the agency 
asked :

            "Request further explanation of hardware engineering 
            support methods for all Nellis Range Complex systems.  
            Considering Range operations and your proposed staffing 
            plan, please provide more detail on how your approach will 
            avoid significant serious disruption of schedule or 
            degradation of performance."  (Emphasis in original.)

The agency's other discussion questions were similarly detailed.  The 
Air Force clearly provided Proteus meaningful discussions in the area 
of its staffing approach.  Fidelity Technologies Corp., B-258944, Feb. 
22, 1995, 95-1 CPD  para.  112.

4. Arcata advised our Office during the pendency of the protest that 
it had received employment applications from a significant number of 
the remaining incumbent RIIS personnel after being awarded the 
contract.