BNUMBER:  B-270309
DATE:  February 12, 1996
TITLE:  Cardinal Scientific, Inc.

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Matter of:Cardinal Scientific, Inc.

File:     B-270309

Date:     February 12, 1996

Richard Martinez for the protester.
Michael Trovarelli, Esq., and J. Albert Calluso, Esq., Defense 
Logistics Agency, for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency's use of adjectival rather than numerical rating system in 
evaluation of proposals is appropriate and provides a rational basis 
for source selection.

2.  In award of a firm, fixed-price contract, agency's price realism 
evaluation is unobjectionable where it is based on cost and price 
information submitted by the offerors which reasonably supports 
conclusion that offerors' proposed prices are realistic.  

3.  Where corporate experience/past performance evaluation criterion 
did not restrict offerors' submission of information concerning 
production of item identical to that solicited, agency properly 
evaluated as acceptable, similar experience of offeror which had not 
previously produced the identical item.

DECISION

Cardinal Scientific, Inc. (CSI) protests the award of a contract to 
Defiance Electronics Inc. under request for proposals (RFP) No. 
SPO200-95-R-8084, issued by the Defense Logistics Agency (DLA), for 
portable x-ray darkrooms.  CSI contends that the RFP contained 
defective instructions and evaluation factors and challenges the 
agency's evaluation of proposals.

We deny the protest.

The RFP was issued on June 2, 1995, for a basic quantity of 202 
portable x-ray darkrooms with an option for an additional 202 units.  
The units are designed as portable, light weight, rapidly 
assembled/disassembled darkrooms that provide a light-free environment 
for the processing of medical x-ray film within a modular, portable 
tent.  The complete ensemble fits into a carrying case and includes a 
tubular aluminum frame with covers, door flaps, safety light, and fan.  
The RFP called for the award of a firm, fixed-price contract to the 
offeror whose proposal represented the best value to the government.  

The RFP identified the darkroom by its national stock number (NSN 
6525-01-369-7178) and listed 22 salient characteristics which units 
were required to meet.  The RFP instructed offerors to describe the 
item offered and how it failed to meet, met, or exceeded the specified 
salient characteristics.  Offerors also were instructed to complete a 
checklist corresponding to the salient characteristics, identifying 
for each characteristic whether the item was compliant, non-compliant, 
or represented an alternate proposal.  Pricing information was to be 
provided in a separate business proposal.  

Proposals were to be evaluated on the basis of price and three factors 
(listed in descending order of importance):  technical approach, 
management approach, and corporate experience/past performance.  
Technical factors were more important than price, but the RFP advised 
that as proposals became more equal in technical merit, price became 
more important.  

While 30 potential offerors were solicited, only CSI and Defiance 
submitted proposals.  A technical evaluation panel (TEP) reviewed the 
proposals, conducted discussions with the offerors, and obtained 
limited cost and pricing information from both.  At the close of 
negotiations, the agency requested best and final offers (BAFO) from 
both offerors.  The TEP evaluated the revised proposals and found both 
proposals to be acceptable overall.  CSI had three strong points under 
management approach and past performance while Defiance had one strong 
point under management approach.  Defiance's BAFO was $894,658, 
approximately half as much as CSI's BAFO. 

The contracting officer reviewed the technical and price evaluations 
and concluded that Defiance's proposal represented the best value to 
the government.  She recognized that CSI's proposal contained more 
strong points than did Defiance's proposal and that technical 
considerations were more important than price.  She concluded that 
CSI's technical advantages did not greatly exceed the technical 
advantages in Defiance's proposal and did not warrant the payment of 
the significant price premium associated with CSI's proposal; 
accordingly, she recommended that the source selection authority (SSA) 
select Defiance for award.  The SSA approved the contracting officer's 
recommendation and, on October 11, DLA awarded Defiance the contract.  
This protest followed.     

CSI argues that a number of solicitation instructions and evaluation 
factors are defective, ambiguous, or otherwise indefinite.[1]  For 
example, CSI contends that the instructions concerning the technical 
proposal checklist were defective because they did not clearly set 
forth how offerors were to complete the checklist.  The RFP listed 22 
salient characteristics as well as provided a corresponding checklist 
on which offerors were required to identify the technical status 
(compliant, non-compliant, or an alternate proposal) of the proposed 
unit.  The checklist only contained 18 places to describe a unit's 
technical status.  Prior to submission of its proposal, CSI sought 
clarification and was advised by the agency to "determine the salient 
characteristics and assign the appropriate [technical] status".  In 
CSI's view, requiring it to decide which characteristics were salient 
did not provide a clear foundation by which to compare and evaluate 
multiple offers.  This contention is untimely filed as it concerns an 
alleged solicitation impropriety which CSI was required to raise prior 
to the closing time for receipt of proposals.  Bid Protest 
Regulations, section 21.2(a)(1), 60 Fed. Reg. 40,737, 40,740 (Aug. 10, 
1995) (to be codified at 4 C.F.R.  sec.  21.2(a)(1)).[2]

CSI next contends that the agency improperly used adjectives to rate 
the proposals.[3]  The protester believes that only numerical scoring 
can properly distinguish among competing proposals.  This is not the 
case. Whatever evaluation method is used must give the selection 
authority a clear understanding of the relative merits of proposals; 
the use of adjectival rating schemes, supported as here by narrative 
assessments of the individual proposals, can reasonably convey a 
proper appreciation of the strengths and weaknesses of individual 
proposals.  See Ferguson-Williams, Inc., 68 Comp. Gen. 25 (1988), 88-2 
CPD  para.  344.  We have no basis to conclude that the evaluation scheme 
used here created any artificial equality of proposals; the record 
demonstrates that the adjectival scheme, in conjunction with the 
narrative assessments of individual proposals, provided a reasonable 
method for discerning the relative strengths and weaknesses perceived 
by the evaluators and a reasonable method for recognizing the 
advantages and disadvantages of award to one offeror as opposed to 
another.  See Tennier Indus., Inc., B-252338, June 18, 1993, 93-1 CPD  para.  
471.

CSI also challenges the agency's price evaluation.  The RFP provided 
that the agency would evaluate cost or pricing data or limited pricing 
information with the initial proposals or during discussions.  The RFP 
also provided that the agency would evaluate proposals for realism, 
that is, as it relates to an offeror's demonstration that the proposed 
price provides an adequate reflection of the offeror's understanding 
of the requirements of the solicitation.  Based on its experience with 
production and material costs for manufacture of portable darkrooms, 
CSI contends that the agency could not have properly evaluated the 
realism of Defiance's costs as reflected in the awardee's 
significantly lower proposed price.[4]  

Generally, cost realism (a measurement of the likely cost of 
performance in a cost reimbursement contract) is not a factor in the 
evaluation of proposals when a fixed-price contract is to be awarded, 
since the government's liability is fixed, and the risk of cost 
escalation is borne by the contractor.  PHP Healthcare Corp.; Sisters 
of Charity of the Incarnate Word, B-251799 et al., May 4, 1993, 93-1 
CPD  para.  366.  However, since the risk of poor performance when a 
contractor is forced to provide services at little or no profit is a 
legitimate concern in evaluating proposals, an agency in its 
discretion may, as it did here, provide for a price realism analysis 
in the solicitation of fixed-priced proposals.  Id.  The depth of an 
agency's price realism analysis is a matter within the sound exercise 
of the agency's discretion.  See Family Realty, B-247772, July 6, 
1992, 92-2 CPD  para.  6.

Here, the agency was initially concerned with the significant price 
difference in the proposals.  Accordingly, it requested and obtained 
limited cost and pricing information from both offerors.  The 
information from Defiance detailed its labor, materials, burden, and 
profit for each unit to be produced.  Based on her review of this 
material, the contracting officer concluded that Defiance had 
demonstrated that its expected costs and overhead would allow it to 
successfully perform the contract and achieve a reasonable profit.  
Our own review of this cost information discloses nothing 
objectionable or unreasonable.  While the protester disagrees with the 
agency's conclusion, there is nothing in the record to indicate that 
the contracting officer's analysis or conclusions about Defiance's 
ability were erroneous.  In this regard, we note that the technical 
evaluators were convinced from Defiance's proposal that it could 
successfully produce portable darkrooms meeting the agency's 
requirements.  Our conclusion is not changed by the fact that the 
technical evaluators were unaware of the prices proposed by the 
offerors.  The integrated evaluation of price and technical factors 
was performed by the contracting officer.[5]

CSI also contends that the agency's evaluation of Defiance's proposal 
under the corporate experience/past performance criterion was flawed.  
CSI argues that the section L instructions for this criterion required 
offerors to submit data on contracts "for the same item" performed in 
the last 3-year period.  Since Defiance has not previously produced a 
portable darkroom, CSI argues that the awardee should have been rated 
"unacceptable" under this criterion.  

Where an evaluation is challenged, we will examine the evaluation to 
ensure that it was reasonable and consistent with the evaluation 
criteria and applicable statutes and regulations, since the relative 
merit of competing proposals is primarily a matter of administrative 
discretion.  Information Sys. & Networks Corp., 69 Comp. Gen. 284 
(1990), 90-1 CPD  para.  203.  Our review of the record provides no basis 
for objecting to the agency's evaluation.

The agency takes the position that the corporate experience/past 
performance evaluation criterion did not require that offerors provide 
evidence of experience in manufacturing the exact item solicited in 
order to receive an "acceptable" rating.  We agree.  When the 
instructions in section L and the evaluation criteria in section M are 
considered together, it is plain that the agency intended to consider 
all experience, not just that concerning portable darkroom production.   
Notwithstanding section L's language regarding prior "same item" 
contracts, the evaluation criterion encompasses all corporate 
experience/past performance and its first subfactor is entitled 
"similar work."  In section M, the RFP provides detailed information 
on the extent of the evaluation and nowhere indicates that only 
experience in producing the same item will be considered.  In this 
regard, it defines past experience as the offeror's record of 
conforming to specification/commercial product descriptions and to 
standards of good workmanship; adherence to contract schedules; and 
reputation for reasonable and cooperative behavior.  It also provides 
that the evaluation will include consideration of past performance 
information obtained apart from that submitted by the offerors.  Thus, 
offerors could submit, as did Defiance, and the agency could properly 
credit, information concerning "similar" contract performance.  

Here, Defiance submitted information showing that it had successfully 
produced hundreds of units of portable medical equipment for use in a 
field environment.  From this information, the evaluators could find 
that Defiance's past experience was relevant and indicated that the 
offeror could successfully produce portable field x-ray darkrooms.  
Thus, the evaluators reasonably rated Defiance's experience as 
"acceptable" under the similar work subfactor and "acceptable" overall 
for the experience evaluation criterion.  CSI, with its directly 
relevant experience producing the darkrooms, was rated "highly 
acceptable" under the similar work subfactor and "acceptable" overall 
under the experience criterion.  Since the RFP allowed for 
consideration of "similar" experience and Defiance's experience 
appears relevant, the agency's evaluation is unobjectionable.  CSI's 
contentions to the contrary merely reflect disagreement with the 
agency's evaluation, which does not render the evaluation 
unreasonable.  Litton Sys., Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD  para.  
115. 
The protest is denied.

Comptroller General 
of the United States

1. CSI's submissions raised numerous protest grounds.  We have 
considered all of the protester's arguments concerning the 
solicitation, the agency's evaluation of the proposals, and its award 
determination and find that none has merit.  Our decision addresses a 
representative selection of these grounds.

2. Also untimely is CSI's contention that its unit should represent 
the minimum standard for technical acceptability.  While the NSN 
identified by the agency is the same as that assigned to the 
protester's darkroom, the agency did not issue this solicitation on a 
brand name or equal basis.  Rather, the salient characteristics of the 
unit were listed and offerors were invited to propose items meeting 
these characteristics or to propose alternate items.  Any protest of 
this methodology had to be made prior to the closing time for receipt 
of proposals.  

3. In a related argument, CSI contends that it was improper to use 
"highly acceptable" as one of the scoring adjectives because offerors 
were instructed to identify how their units were compliant, 
non-compliant, or represented an alternate proposal.  We find nothing 
improper in the agency's use of "highly acceptable" as a rating to 
denote proposal aspects which exceed the specifications.  In this 
regard, section L of the RFP advised offerors to describe how each 
one's unit fails to meet, meets, or exceeds the specification salient 
characteristics.  Since offerors were plainly invited to propose units 
exceeding the stated specifications, CSI's protest of this alleged 
solicitation impropriety is now untimely.  

4. Although CSI appears concerned that Defiance's offer is 
unreasonably low priced, the submission of a below-cost offer is not 
itself legally objectionable.  See H. Angelo & Co., Inc., B-244682.2, 
Oct. 30, 1991, 91-2 CPD  para.  407.  Whether a contract can be performed at 
the offered price is a matter of the offeror's responsibility, the 
determination of which we will not review absent circumstances not 
alleged here. Virginia Mfg. Co., Inc., B-241404, Feb. 4, 1991, 91-1 
CPD  para.  113. 

5. CSI also alleges that it was informed by agency personnel that the 
price evaluation was "incomplete."  Whether one evaluator may have 
believed that additional price analysis was warranted is not material 
here.  The record indicates that the contracting officer, who is 
responsible for determining whether the proposed price is fair and 
reasonable (Federal Acquisition Regulation  sec.  15.805-2), was satisfied 
with the analysis.