BNUMBER:  B-271435
DATE:  June 20, 1996
TITLE:  Computer Technology Services, Inc.

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Matter of:Computer Technology Services, Inc.

File:     B-271435

Date:June 20, 1996

Pamela J. Mazza, Esq., Andrew P. Hallowell, Esq., and Antonio R. 
Franco, Esq., Piliero, Mazza & Pargament, for the protester.
George W. Griffith, Esq., Department of the Army, for the agency.
Ronald K. Henry, Esq., and Mark A. Riordan, Esq., Kaye, Scholer, 
Fierman, Hays & Handler, for North American Telecommunications, Inc., 
an intervenor.
Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Award to technically slightly lower-rated, lower-priced offeror is 
unobjectionable where (1) although solicitation stated that technical 
superiority was more important than price, the solicitation did not 
provide for award solely on the basis of the highest technical point 
score, and clearly stated that price would be considered a substantial 
factor in the evaluation; and (2) the source selection evaluation 
panel (SSEP) considered the relative strengths and weaknesses in the 
protester's and the awardee's proposal and, despite a specific request 
from the source selection authority to do so, the SSEP could not 
identify any strengths in the protester's proposal sufficient to 
justify paying its higher price.

DECISION

Computer Technology Services, Inc. (CTSI) protests the award of a 
contract to North American Telecommunications, Inc. (NATI) under 
request for proposals (RFP) No. DASW01-95-R-0267, issued by the 
Department of the Army, Defense Supply Service--Washington (DSSW), for 
material handling, moving, and storage services, and warehouse 
operations support.  CTSI contends that the agency improperly awarded 
the contract to an offeror with a technical proposal that was lower 
rated than CTSI's.

We deny the protest.

BACKGROUND

The RFP, issued on June 30, 1995, contemplated the award of a 
fixed-price requirements contract for a base period with up to four 
1-year options.[1]  Section M of the RFP explained that the government 
would evaluate proposals by assigning numerical ratings to each 
proposal in accordance with the following five factors worth a total 
of 1,000 points (total number of points available for each factor is 
shown in parenthesis):  (1) technical approach (350 points); (2) 
understanding the project (225 points); (3) personnel experience and 
qualifications (125 points); (4) innovation (100 points); and (5) 
corporate past performance record on projects of similar size and 
scope (200 points).  Within each factor, the RFP listed subfactors and 
the maximum point value for each.  The RFP stated that technical 
superiority would be most important in the evaluation.  Although price 
would not be point-scored, the RFP stated that price would be 
considered a substantial factor in the evaluation.  Award was to be 
made to the responsible offeror whose proposal was most advantageous 
to the government considering price and technical factors.

Four offerors submitted proposals by the time set on August 21 for 
receipt of initial proposals.  A source selection evaluation panel 
(SSEP) rated the initial technical proposals by assigning numerical 
scores under each evaluation factor and subfactor in accordance with 
section M of the RFP.  The contracting officer, who served as the 
source selection authority (SSA) for this procurement, reviewed the 
results of the SSEP's initial evaluation and concluded that the 
evaluators had provided insufficient information concerning the 
strengths and weaknesses of the competing proposals to permit an 
intelligent selection decision.  The SSA requested that the SSEP 
reconvene, clarify the evaluation results, and provide explanatory 
details in support of the numerical ratings assigned the proposals.

In response to that request, the SSEP reconvened and reevaluated all 
four proposals, and on September 22, submitted more detailed 
evaluations to the SSA, with the following point-score results:

                   Offeror      Tech. Score

                    CTSI            963 

                    NATI            894

                      C             544

                      D             456
For each factor and subfactor rated, the SSEP identified strengths, 
weaknesses, and deficiencies in the proposals, and provided a 
narrative explanation in support of the numerical ratings assigned 
each proposal.  The SSEP also identified any areas requiring 
discussions with the offerors.  Subsequently, on September 29, the 
SSEP submitted a "consolidated technical evaluation report summary" to 
the SSA.  In that document, the SSEP provided a brief narrative 
reflecting a summary of the consensus findings of the SSEP addressing 
each of the four proposals.

As relevant to this protest, the SSEP noted in its summary report that 
CTSI had submitted an excellent proposal which had earned nearly a 
perfect score in the evaluation.  The SSEP pointed out that the 
evaluators had identified more than 40 strengths in CTSI's proposal, 
and had found only 4 weaknesses and no deficiencies.  The SSEP found 
that CTSI's proposal "far exceed[ed] the other offerors in the depth 
of understanding, demonstrated experience, and overall responsiveness 
. . . ," and recommended CTSI for award.

The SSEP's summary report noted that the evaluators had identified 27 
strengths and 9 weaknesses in NATI's proposal.  The report explained 
that NATI had not submitted all of the information requested in the 
RFP, and that these gaps in NATI's proposal had been specifically 
identified in the evaluation documents submitted to the SSA as 
"weaknesses" or "areas requiring discussions."  The summary report 
concluded that NATI was "an acceptable contractor," and was the SSEP's 
second choice for award of the contract.  The SSEP concluded that 
offerors C and D had submitted poor proposals and recommended that 
those two firms be eliminated from further consideration.

Based on these results, the agency excluded offeror C's and D's 
proposals from further consideration.  The agency then conducted 
discussions with CTSI and NATI, and requested best and final offers 
(BAFO) from those two firms.  The SSEP reevaluated proposals based on 
the BAFOs and the responses to the discussion questions, and 
unanimously concluded that both CTSI and NATI had adequately addressed 
all of the SSEP's concerns.

After reviewing the results of the SSEP's final evaluation, by letter 
dated February 26, 1996, the SSA requested that the SSEP make an award 
recommendation.  In his letter, the SSA pointed out that NATI's 
lower-rated proposal was $3.5 million lower in total price than the 
protester's proposal.  The SSA reminded the SSEP that under the terms 
of the RFP, award was to be made to the offeror whose proposal was 
considered most advantageous to the government, considering price and 
technical factors.  The SSA then requested that the SSEP specifically 
identify advantages and disadvantages in the competing proposals that 
would justify paying a premium for CTSI's higher-rated proposal.

In response to the SSA's request, the SSEP was unable to identify any 
specific advantages in CTSI's proposal that would justify paying the 
higher price.  The SSEP stated that the slight point difference 
between the protester's and the awardee's proposals--a difference of 
only 69 out of 1,000 points--was insignificant given the technical 
merit of both proposals.  The SSEP specifically stated that both CTSI 
and NATI had "made excellent presentations and that either firm could 
adequately meet the needs of DSSW."  The SSEP concluded that the 
69-point difference in technical scores was not sufficient to justify 
paying $3.5 million more for CTSI's proposal.  Having failed to 
identify any strengths or advantages in the protester's proposal worth 
paying the premium, the SSEP unanimously recommended award to NATI.  
In a memorandum dated February 29, the SSA documented his reasons for 
concurring with the SSEP's recommendation.  By letter dated March 6, 
the agency informed CTSI that award had been made to NATI.  This 
protest followed.

PROTESTER'S CONTENTIONS

CTSI challenges the selection decision on several grounds.  Central to 
the protester's contentions is the argument that the SSEP improperly 
reversed its position with respect to the technical superiority of 
CTSI's proposal.  The protester relies on the SSEP's September 29 
"consolidated technical evaluation report summary," which described 
the strengths and benefits of CTSI's proposal over NATI's and 
recommended award to the protester.  According to the protester, the 
SSEP's change in position, in response to the SSA's request that the 
SSEP make an award recommendation in light of the price difference 
between CTSI and NATI, was unreasonable.  The protester maintains that 
given the solicitation's emphasis on technical considerations over 
price, and in light of the SSEP's initial recommendation to award the 
contract to CTSI, the selection of NATI's lower-rated proposal was 
improper.[2]

DISCUSSION

As a preliminary matter, CTSI's allegation that selection of NATI's 
lower-rated proposal was improper because the solicitation emphasized 
technical considerations over price is without merit.  Even where 
price is the least important evaluation criterion, an agency may 
properly award to a lower-rated, lower-priced offeror if the agency 
reasonably determines that the premium involved in awarding to a 
higher-rated, higher-priced offeror is not justified.  Tracor Applied 
Sciences, Inc., B-253732, Oct. 19, 1993, 93-2 CPD  para.  238.  As explained 
below, the record shows that the SSA reasonably concluded that paying 
a premium for CTSI's higher-rated technical proposal was not warranted 
in light of NATI's meritorious proposal and lower price.

To the extent that CTSI argues that the SSEP "reversed" its 
conclusions regarding the technical superiority of CTSI's proposal 
over NATI's, the record does not support its position.  Rather, in 
response to the SSA's specific request, the SSEP concluded that based 
on its review of the proposals and the responses to the discussion 
items, there was no basis to justify award to CTSI at its higher 
price, particularly in light of the technical merits of NATI's 
lower-price proposal.  The SSEP then unanimously recommended award to 
NATI.
 
Specifically, the record shows that the SSEP initially identified nine 
"weaknesses" in the awardee's proposal, which NATI fully addressed 
following discussions, thus narrowing the gap that may have existed 
between the proposals.[3]  For instance, some of the concerns noted, 
which the agency characterizes as relatively minor, included that NATI 
had not referred to the use of pagers or cellular telephones in its 
proposal; that an employee NATI proposed had limited records 
management experience; and that although NATI made references to 
clerical support, it had not listed any support staff.  The record 
shows that these weaknesses, along with the other six the SSEP 
identified in NATI's proposal, were fully addressed in response to the 
agency's discussion items.  With respect to the use of communications 
equipment, for example, NATI directed the agency to the relevant page 
of its proposal where it stated that its "leader" personnel would be 
immediately available to the contracting officer's representative by 
telephone or pager.  NATI also provided a list of its support staff 
and replaced the records management employee with someone with more 
experience in performing that function.  Since NATI's responses to the 
discussion items fully addressed all of the SSEP's concerns, the 
differences due to the weaknesses that the SSEP had noted between 
CTSI's and NATI's initial proposals either no longer existed or were 
significantly reduced as a result of discussions.

In addition, the record shows that the SSA concluded that CTSI's 
numerical scoring advantage over NATI was based primarily on the 
firm's experience as the incumbent and the evaluators' familiarity 
with CTSI, as evidenced by the narrative comments in the SSEP's 
worksheets.  The record supports this conclusion.  For instance, one 
evaluator noted as a strength in CTSI's proposal the fact that firm 
"is currently working a DSS-W contract performing tasks 2, 3, 4, and 
5," and awarded the firm the maximum number of points (200) under the 
corporate past performance record factor.  The evaluators also noted 
as a strength in CTSI's proposal the fact that the firm is the 
incumbent with "direct experience" and "knowledge" in the DSS-W 
environment, and gave CTSI's proposal the maximum number of points 
available under the applicable evaluation factor.

In a  statement provided to our Office, the SSA explains that based on 
his review of the SSEP's comments, it was clear to him that CTSI's 
incumbency served to provide the SSEP with a level of assurance that 
raised the evaluators' "comfort level," resulting in higher numerical 
ratings assigned CTSI's proposal under several evaluation factors; the 
SSA concluded, however, that the mere fact that CTSI was a "known 
entity" to the evaluators should not serve as a discriminating factor 
between the two firms.  Source selection officials in appropriate 
circumstances properly may conclude that a numerical scoring advantage 
based primarily on incumbency does not indicate an actual technical 
superiority that would warrant paying a higher price, Sparta, Inc., 
B-228216, Jan. 15, 1988, 88-1 CPD  para.  37; see also Northern Virginia 
Serv. Corp., B-258036.2; B-258036.3, Jan. 23, 1995, 95-1 CPD  para.  36, n. 
5 (citing NUS Corp.; The Austin Co.,B-221863; B-221863.2, June 20, 
1986, 86-1 CPD  para.  574), and we see nothing unreasonable about the SSA's 
conclusion here.  Accordingly, we think that the SSA's conclusion that 
CTSI's numerical rating advantage did not reflect an actual technical 
superiority that would warrant paying its higher price also was a 
reasonable exercise of the SSA's discretion.

The protester further argues, however, that the SSA's price/technical 
tradeoff decision was flawed because the SSA, rather than conducting 
an analysis to determine whether NATI's lower-rated proposal 
represented the best value to the government, simply improperly 
concluded that CTSI's and NATI's proposals were essentially 
technically equal, and selected NATI for award solely on the basis of 
its lower price. 

The protester's contention is without merit.  Selection officials must 
decide whether the point scores show technical superiority and what 
that difference may mean in terms of contract performance.  See Grey 
Advertising, Inc., 55 Comp. Gen. 1111 (1976) 76-1 CPD  para.  325.  As 
already explained, the SSEP was unable to attribute any meaningful 
significance in terms of contract performance to the slight point 
difference between CTSI's and NATI's proposals, and the SSA reasonably 
concluded that CTSI's numerical point advantage was based primarily on 
the firm's incumbency and the SSEP's familiarity with a "known 
entity."  Further, the SSA's request to the SSEP to identify specific 
strengths in CTSI's proposal that would justify paying the higher 
price was a reasonable attempt to ensure that proposals were evaluated 
in accordance with the evaluation factors announced in the 
solicitation, and that any cost/technical tradeoff decision was 
reasonably based.  See, e.g., Wyle Labs., Inc.; Latecoere Int'l, Inc., 
69 Comp. Gen. 648 (1990), 90-2 CPD  para.  107; Latecoere Int'l., 
Inc.--Advisory Opinion, B-239113.3, Jan. 15, 1992, 92-1 CPD  para.  70.  
Thus, regardless of whether the SSA viewed the proposals as 
essentially technically equal, making price the basis for selection, 
or concluded that the point difference between the proposals did not 
warrant paying the price premium associated with CTSI's proposal, we 
find nothing improper in the SSA's selection decision.  See Calspan 
Corp., B-255268, Feb. 22, 1994, 94-1 CPD  para.  136, recon. denied, 
B-255268.2, July 5, 1994, 94-2 CPD  para.  6.
 
The protest is denied.

Comptroller General
of the United States

1. The agency competed the requirement under section 8(a) of the Small 
Business Act, 15 U.S.C.  sec.  637(a) (1994), which authorizes the Small 
Business Administration to contract with agencies and arrange 
performance of such contracts by awarding subcontracts to socially and 
economically disadvantaged small businesses.

2. The protester also contends that the SSA improperly revealed 
pricing information to the SSEP during the evaluation and that the 
SSEP failed to properly evaluate CTSI's responses to the discussion 
items.  Except for the protester's bare assertions in this regard, 
there is no support in the record for these allegations.

3. As noted above, the SSEP identified four "weaknesses" in CTSI's 
proposal, all of which were satisfactorily addressed during 
discussions.  Thus, after discussions, both offerors had resolved all 
the weaknesses initially identified in their proposals.