BNUMBER: B-274246.3; B-274246.4; B-274246.5
DATE: August 20, 1997
TITLE: Symetrics Industries, Inc., B-274246.3; B-274246.4; B-
274246.5, August 20, 1997
**********************************************************************
DOCUMENT 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:Symetrics Industries, Inc.
File: B-274246.3; B-274246.4; B-274246.5
Date:August 20, 1997
Edward J. Kinberg, Esq., for the protester.
Sophia L. Rafatjah, Esq., Tracor, Inc., the intervenor.
Marian E. Sullivan, Esq., and John E. Lariccia, Esq., Department of
the Air Force, for the agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Argument that agency was required to amend the solicitation upon
receiving information that funds were unavailable for the purchase of
a significant portion of an estimated quantity included in the request
for proposals for an indefinite quantity/indefinite delivery order
contract is sustained where the record shows that the change in
quantity was material and there was a reasonable possibility that the
protester was prejudiced by the agency's failure to amend the
solicitation.
DECISION
Symetrics Industries, Inc. protests the award of a contract to Tracor,
Inc. by the Department of the Air Force, pursuant to request for
proposals (RFP) No. F33657-96-R-0001, issued for the purchase of Lots
IV through VII of the AN/ALE-47 Countermeasures Dispenser System
(CMDS). Symetrics argues that the evaluation of proposals was
unreasonable because it was based on a flawed quantity estimate, which
resulted in an improper award decision.
We sustain the protest.
BACKGROUND
The AN/ALE-47 CMDS is an electronic warfare system used by the Army,
Navy and Air Force to protect aircraft from hostile missile attacks.
The system discharges chaff cartridges and decoy flares to distract
ground-launched missiles aimed at aircraft.[1] Five distinct line
replaceable units (LRU) comprise the system in varying numbers and
configurations depending on the aircraft involved. These LRUs are a
control-display unit, a programmer, a switch assembly, a digital
sequencer, and a dispenser assembly.
The RFP was issued in October 1996, and contemplated the award of a
4-year fixed-price indefinite delivery/indefinite quantity (ID/IQ)
contract to the offeror whose proposal provided the best value to the
government.[2] The RFP explained that the proposal with the best
value would be "the most advantageous offer, price and other factors
considered . . . providing the best mix of utility, technical quality,
business aspects, risks, and price for a given application." RFP sec.
M.1.0.
The RFP advised that each proposal would be evaluated in four areas,
in descending order of importance: technical, schedule,
cost/price--most probable life cycle cost, and management. Under
these four factors, the technical factor included four subfactors of
equal weight: manufacturing/quality assurance, integrated logistics
support, systems engineering, and testing. In addition to the four
factors, the RFP also listed four general considerations of equal
weight, all of which were less important than the four evaluation
factors. The general considerations were pre-award survey, executive
in-plant review, plant visits, and RFP terms and conditions. RFP sec.
M.2.0.
Offerors were also advised that two of the evaluation
factors--technical (including the four subfactors) and
management--would be assigned a color/adjectival rating, a proposal
risk assessment, and a performance risk assessment.[3] They were also
advised that the color/adjectival rating and the two risk ratings
would receive equal consideration. RFP sec. M.6.0 The remaining two
evaluation factors--schedule and cost/price--were not rated but were
assigned a performance risk assessment.
Since the RFP here envisioned the award of an ID/IQ contract, each LRU
had an accompanying minimum and maximum order quantity, as well as a
best estimated quantity (BEQ) for each of the four lots to be
procured. These BEQs were used to evaluate each offeror's
capabilities and price, and are set forth below:
LRU LOT IV LOT V LOT VI LOT VII
Control- Display Unit 95 123 101 98
Programmer 107 147 137 134
Switch Ass'y 279 267 126 270
Sequencer 3,755 491 315 503
Dispenser 1,024 810 408 838
TOTAL SHIPSETS 107 147 137 134
As shown above, the purchase estimate for one of the LRU's, the
sequencer, was much higher than any other item in Lot IV, and was much
higher than the purchase estimate for this item in Lots V through VII.
The RFP explained that in Lot IV, an estimated 3,219 additional
digital sequencers would be procured to support the upgrade of the
AN/ALE-40 system under the Consolidated Clean-Up modification program.
RFP para. M.4.1.2.
By the December 4, 1996, initial closing date, the Air Force received
[deleted] proposals, [deleted] were included in the competitive range.
Written and oral discussions were held with the competitive range
offerors and best and final offers (BAFO) were received by April 7.
At the conclusion of the evaluation, Tracor's proposal received
[deleted] ratings [deleted] under the four equally-weighted technical
subfactors, [deleted] rating under the management factor, and
[deleted]. Symetrics's proposal received [deleted] ratings under the
technical and management factors, and [deleted] ratings in every
assessment of proposal and performance risk but one [deleted].[4]
Symetrics's proposal offered [deleted]. A summary of these results is
shown in the table below:
TRACOR SYMETRICS
Color
RatingProp
Risk Perf
Risk ColorRatingProp
Risk Perf
Risk
Technical
--Mfg./QA[deleted][deleted][deleted][deleted][deleted][deleted]
--Int. Logistics Support[deleted][deleted][deleted][deleted][
deleted][deleted]
--Systems Eng'g[deleted][deleted][deleted][deleted][deleted][dele
ted]
--Testing[deleted][deleted][deleted][deleted][deleted][deleted]
Schedule ----- -----[deleted] ----- -----[deleted]
Cost-Price/ MPLCC[deleted] -----[deleted][deleted] -----[deleted]
Management [deleted][deleted][deleted][deleted][deleted][deleted]
In making the award decision, the source selection authority (SSA)
noted that Tracor [deleted] the manufacturing/quality assurance
technical subfactor, and [deleted] under the integrated logistics
technical subfactor. In addition, since Tracor proposed to accelerate
delivery of production units--the RFP required production within 18
months, Tracor offered to begin deliveries [deleted]--the SSA decided
that the expedited production schedule offered "a significant risk
mitigation opportunity" for the government. Source Selection
Decision, April 29, 1997, at third unnumbered page. As a result, the
SSA concluded that Tracor's technical superiority [deleted] awarded to
Tracor. This protest followed.
DISCUSSION
Symetrics disputes nearly every element of the evaluations, raising at
least 42 challenges in its initial and four supplemental protests.
While many of these challenges fail to state a valid basis for a bid
protest and some suggest a lack of understanding of the federal
procurement process,[5] certain of these challenges raise issues
appropriate for our review. The three major areas in which Symetrics
raises potentially valid challenges are whether the evaluation was
based on an erroneous BEQ for sequencers and was flawed as a result,
and whether the evaluations of Symetrics's and Tracor's proposals were
reasonable.
With respect to the need for sequencers, Symetrics argues that the
requirement for sequencers in Lot IV of the purchase (which was only
available for orders until September 30, 1997) was so unusually high
that any offeror other than Tracor was required to take extraordinary
steps to meet the agency's need. Symetrics does not argue that the
RFP was flawed when initially issued, but contends that the Air Force
was required to amend the RFP when it received notice--1 week prior to
the request for BAFOs--that the underlying purchase order for the
great majority of the needed sequencers had been canceled for lack of
funding. In Symetrics's view, since several of the evaluation
weaknesses assessed against its proposal--and against proposals
submitted by any offeror other than Tracor--were related to the high
number for sequencers in Lot IV which no longer reflected an accurate
quantity estimate, the final evaluation and cost/technical tradeoff
lacked a reasonable basis.
The Air Force responds that the BEQ for sequencers included in the RFP
had a sound basis and that the agency was not required to amend the
RFP 1 week before the request for BAFOs on the basis of a funding
change that did not diminish the underlying need for the parts. The
Air Force argues that the need for sequencers remains valid, and that
the agency may yet receive funding before the end of the Lot IV
ordering period on September 30, 1997. In addition, the Air Force
points out that other requirements for sequencers have arisen and the
agency currently has concrete orders for 1,574 sequencers as part of
Lot IV. Alternatively, the Air Force argues that Symetrics was not
prejudiced by the agency's decision not to amend the sequencer
estimate in the RFP since all offerors competed equally.
Generally, where an agency's requirements change after a solicitation
has been issued, it must issue an amendment to notify offerors of the
changed requirements and afford them an opportunity to respond.
Federal Acquisition Regulation (FAR) sec. 15.606(a); United Tel. Co. of
the Northwest, B-246977, Apr. 20, 1992, 92-1 CPD para. 374 at 7, aff'd,
Department of Energy et al., B-246977.2 et al., July 14, 1992, 92-2
CPD para. 20. The object of the requirement is to avoid award decisions
not based on the agency's most current view of its minimum needs. See
N.V. Philips Gloellampenfabriken, B207485.3, May 3, 1983, 83-1 CPD para.
467 at 12. Agencies must amend solicitations to reflect a significant
change in the government's requirements even after the submission of
BAFOs, up until the time of award. See United Tel. Co. of the
Northwest, supra, at 8 (change in requirements occurred after the
selection decision but during the 2-1/2 year delay in award caused by
various protests); Universal Techs., Inc., B-241157, Jan. 18, 1991,
91-1 CPD para. 63 at 4-5, recon. denied, B-241157.2, May 24, 1991, 91-1
CPD para. 505. One circumstance requiring the issuance of an amendment is
a significant change in the government's estimate of the quantity it
expects to order. See Management Sys. Designers, Inc. et al.,
B-244383.4 et al., Dec. 6, 1991, 91-2 CPD para. 518 at 5, recon. denied,
Institute for Sys. Analysis--Recon., B-244383.7, Apr. 1, 1992, 92-1
CPD para. 328, req. for mod. of remedy denied, Management Sys. Designers,
Inc.--Request for Modification of Remedy, B-244383.8, June 8, 1992,
92-1 CPD para. 496; Universal Techs., Inc., supra.
As explained above, the RFP's estimate for sequencers in Lot IV was
largely driven by a single requirement--the upgrade of the AN/ALE-40
system under the Consolidated Clean-Up (CCUP) modification program.
RFP sec. M.4.1.2. Specifically, 3,219 of the sequencers out of the
estimated 3,755 were related to this program. Id. A funded purchase
request for Lot IV in the amount of $7 million in support of this
program had been filed with the contracting office.
Based on our review of the record, we have little doubt that the BEQ
for sequencers in Lot IV was valid at the time the solicitation was
issued, as the Air Force urges. Notwithstanding the validity of the
estimate when first made, the agency was required to amend the
solicitation when it learned that its estimate of the amount to be
purchased was no longer valid. Universal Techs., Inc., supra. Here,
the record shows that on March 25, the CCUP program manager withdrew
the $7 million order for 3,219 sequencers pending completion of an
ongoing review of the precise number of sequencers that would be
needed. Concurrently, the Office of the Secretary of the Air Force
redirected the funds for the sequencer upgrade away from the CCUP
program to support the Air Force's efforts in Bosnia. At that
point--which, as noted above, was 1 week before BAFOs were
requested--the 3,755 figure no longer represented a reasonable
estimate of the quantity of sequencers to be purchased as part of Lot
IV.
In addition, our Office has previously considered whether the removal
of available funding changes the validity of an agency's estimated
requirement. In Management Sys. Designers, Inc. et al., supra, an
agency issued an ID/IQ RFP for the purchase of support services in
seven discrete task areas--task areas A through G--but learned after
the initial evaluation of proposals, and before convening discussions,
that funding would be available only for task area A. Id. at 3. We
concluded that while the agency might still have an ongoing "need" for
the other six task areas, it could actually expect to procure only
task area A since funding was only available for task A. Under these
circumstances, we held that the agency was required to amend the RFP
to reflect the agency's best estimate of the purchase amount. Id. at
5. In our view, the Air Force here--when it learned in March that the
3,755 figure was no longer realistic--was likewise required to amend
its RFP to reflect its best estimate of the quantity of sequencers to
be purchased during Lot IV.[6]
Nonetheless, even where we have held that an agency has acted
improperly, a protester must demonstrate a reasonable possibility that
it was prejudiced by the agency's actions, that is, the protester must
show that, but for the agency's actions, it would have had a
substantial chance of receiving the award. McDonald-Bradley,
B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see Statistica, Inc. v.
Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996); Universal Techs.,
Inc., supra, at 5. As stated above, the Air Force argues that
Symetrics was not prejudiced by the agency's failure to amend the RFP
because all offerors were treated equally, and because the weaknesses
in Symetrics's evaluation--resulting in the decision to select
Tracor's higher-priced, higher-rated proposal over Symetrics's
lower-priced, slightly lower-rated proposal--would not change as a
result of a correction of the solicitation's estimated quantity.
We disagree. Our review of the record shows that the requirement for
sequencers in Lot IV, 3,755, is between 7 and 12 times higher than the
BEQ for sequencers in Lots V through VII (491, 315, and 503,
respectively). This anomaly in the RFP's requirement for sequencers
was triggered by the one-time purchase of sequencers in support of the
upgrade program discussed above. The effects of this one-time
purchase are reflected in the evaluation results.
Specifically, during the evaluation, only Tracor, the original
equipment manufacturer and the incumbent producing these items since
1988, was found to clearly possess the capacity to produce the items
required by Lot IV without schedule risk. Symetrics's proposal (and
those of the other small business offerors) showed a requirement to
hire additional workers to meet the RFP's requirements for Lot IV. It
was because of the need for the new hires that the agency evaluators
gave the proposal a [deleted] rating and concluded that there was a
[deleted] of schedule slippage under the [deleted] technical
subfactor.
The Air Force argues that its assessment of [deleted] under the
[deleted] technical subfactor was related to all of the requirements
in Lot IV, and not just the sequencers. In addition, the Air Force
argues that, even if its need for sequencers had been reduced to the
amount of its current orders, it still would have assessed a
performance risk against Symetrics. In our view, the evidence in the
record does not support these contentions.
With respect to the link between new hires--the cited reason for the
risk assessed under this subfactor--and the large estimate for
sequencers, the Air Force's request for clarification number CTQD003
asked how many additional people would be needed to support the
program, and how many were new hires as opposed to transfers within
the company. Symetrics responded that due to the "surge" requirements
in Lot IV it would need [deleted]. In addition, in its comments on
the first agency report, Symetrics explained that it needed "to hire
[deleted] to meet the high quantity manufacturing requirements of
having to build 3,755 Sequencers in one year." Symetrics's First
Comments Filing, June 30, 1997, Part I at 11. Thus, our comparison of
all the BEQs in Lot IV with those in Lots V, VI, and VII (see table on
page 3 of this decision) and our review of other materials in the
record, lead us to conclude that the requirement for sequencers was
clearly driving the need for additional hires to meet the requirements
of Lot IV.
With respect to the Air Force's claim that even with a lower sequencer
estimate it still would have assessed a risk against Symetrics, we
note that Symetrics claims its hiring needs would drop substantially
[deleted] if the requirement for sequencers dropped to 600. Id. at
20. While there is no way to know how the evaluators would have
assessed the risk associated with Symetrics needing to hire [deleted]
the record provides no basis to infer that the risk assessment would
be the same as when Symetrics needed to hire [deleted] as it did under
the superseded estimate of 3,755 sequencers. Thus, on this record, we
conclude that there is a reasonable possibility that Symetrics was
prejudiced by the agency's failure to amend its quantity estimate.
For the reasons above, we conclude that the large requirement for
sequencers in Lot IV significantly affected the evaluation, and that
the agency's decision not to amend the solicitation and permit
offerors to revise their proposals accordingly resulted in an
unreasonable evaluation and a flawed selection decision. Since we are
sustaining Symetrics's protest and recommending that all offerors in
the competitive range be permitted to submit revised proposals, we
need not address the other issues raised in Symetrics's protest.[7]
RECOMMENDATION
For the reasons above, we recommend that the agency reopen the
competition, issue an amendment to reflect its current best estimate
of the quantity to be ordered as part of Lot IV, request a second
round of BAFOs, and reevaluate proposals. If, at the conclusion of
the agency's reevaluation, another offer represents the best value to
the government, the Air Force should terminate the contract awarded to
Tracor--performance of which has been suspended pending the outcome of
this protest--and make a new award. We also recommend that the
protester be reimbursed the reasonable costs of filing and pursuing
its protest, including attorneys' fees, limited to its contention that
the agency failed to amend the RFP's estimate for sequencers. 4
C.F.R. sec. 21.8(d)(1) (1997); see Komatsu Dresser Co., 71 Comp. Gen.
260, 267 (1992), 92-1 CPD para. 202 at 9. In accordance with 4 C.F.R. sec.
21.8(f)(1), Symetrics's certified claim for such costs, detailing the
time expended and the costs incurred, must be submitted directly to
the agency within 60 days after receipt of this decision.
The protest is sustained.
Comptroller General
of the United States
1. The AN/ALE-47 has been developed for integration and installation
on Air Force F-16, C-130, C-141, C-17 and C-5 aircraft; Navy F-18,
VH-60, VH-3, P-3, V-22 and HH-60 aircraft; and Army MH-47D and MH-60
aircraft. Foreign military sales to Korea, Taiwan, Switzerland,
Finland and Malaysia are also underway.
2. The appropriate method for procuring these items--after procuring
them since 1988 on a sole-source basis from Tracor, the original
equipment manufacturer--has been in dispute for several years. The
Air Force first decided to "break out" the remaining need for these
parts for full and open competition, but later elected to reserve the
requirement for exclusive small business participation in accordance
with a decision by the head of the agency. In response, Congress
first directed that the viability of a small business set-aside be
reviewed, and ultimately directed the use of full and open competition
including, but not limited to, small businesses. A more complete
recitation of these events is found in our decision in Datacom,
Inc.--Protests and Request for Costs, B-274175 et al., Nov. 25, 1996,
96-2 CPD para. 199 at 2-4.
3. The color/adjectival ratings used in the evaluation were
blue/exceptional, green/acceptable, yellow/marginal, and
red/unacceptable. Proposal risk was rated high, moderate or low, and
was defined as the risks identified in an offeror's proposed approach.
Performance risk was rated high, moderate, low, or not applicable, and
was defined as an assessment of the offeror's present and past work
record to gauge confidence in the offeror's ability to successfully
perform as proposed.
4.[deleted]
5. For example, Symetrics argues that the evaluation was flawed
because the source selection briefing contained a slide showing the
number of CRs (clarification requests) and DRs (deficiency requests)
issued to the competitive range offerors during negotiations.
Conducting negotiations using CRs and DRs is a routine procedure and a
summary of this effort routinely appears as part of the briefing given
to selection officials. Symetrics cannot reasonably claim to be
prejudiced by the mere mention of the number of CRs and DRs to the
selection official. In another instance, Symetrics complains that the
assessment of performance risk by the Performance Risk Assessment
Group (PRAG) constituted an improper double evaluation. Again, the
use of a PRAG to evaluate performance risk is a routine technique for
making reasoned judgments about risk, and violates no federal
procurement principle.
6. While the Air Force contends that it could yet purchase more
sequencers if it locates more funding between now and September 30, we
note that the ordering period for Lot IV expires in just over 1 month.
At this juncture, a general claim that these funds might materialize,
without more, is speculative and insufficient to support the estimate
in the RFP.
7. While we do not address Symetrics's specific challenges to the
evaluation of its and Tracor's proposals, we have reviewed each of
these contentions and conclude that none would merit a decision by our
Office to sustain the protest.