BNUMBER:  B-274389; B-274389.2; B-274389.3
DATE:  December 6, 1996
TITLE:  Israel Aircraft Industries, Ltd., MATA Helicopters Division

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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:Israel Aircraft Industries, Ltd., MATA Helicopters Division

File:     B-274389; B-274389.2; B-274389.3

Date:December 6, 1996

Howard J. Stanislawski, Esq., Gary P. Quigley, Esq., and Richard L. 
Larach, Esq., Sidley & Austin, for the protester.
Irvin Becker, Esq., for Lear Astronics Corporation, the intervenor.
Joshua A. Kranzberg, Esq., and Tina Marie Pixler, Esq., Department of 
the Army, for the agency.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

1.  In a negotiated procurement with a stated best value evaluation 
plan, a contracting agency reasonably may assign a technically 
acceptable proposal fewer than the maximum possible evaluation score 
where such rating is reasonable and consistent with the evaluation 
methodology applied to all proposals.

2.  Enhanced safety of a proposed auxiliary fuel monitoring system for 
a helicopter, when considered in a source selection decision, is not 
an unstated evaluation factor where, although not specifically stated 
as a factor, it is intrinsic to various stated evaluation factors.

3.  Agency's identification of advantages in a proposal is not 
improper, even where solicitation does not state that agency will 
identify advantages in addition to numerically rating proposals, since 
source selection officials in best value procurements may always 
consider such information when analyzing numerical ratings.

4.  Agency reasonably may evaluate an offer as posing a higher past 
performance risk than other offers where the offeror's performance 
history as stated in the proposal or otherwise obtained by the agency 
during evaluations is less relevant to the solicited requirement than 
that of the offerors rated as having a low performance risk.

5.  Selection of a higher priced, higher rated offeror under a 
procurement where non-price factors are more important than price is 
reasonable where the source selection decision is consistent with the 
stated evaluation plan and is reasonably supported by the record.

DECISION

Israel Aircraft Industries, Ltd., MATA Helicopters Division, protests 
an award to Lear Astronics Corporation under request for proposals 
(RFP) No. DAAJ09-95-R-0217, issued by the U.S. Army Aviation and Troop 
Command for the modification of External Stores Support System (ESSS) 
and External Range Fuel System (ERFS) Mission Kits with an Auxiliary 
Fuel Monitoring System for the UH/EH-60 (Blackhawk Helicopter) 
aircraft.  Israel Aircraft contends that the evaluations and source 
selection decision were unreasonable and otherwise improper.

We deny the protests.

The Blackhawk Helicopter, by means of the ESSS and ERFS Mission Kits, 
uses outboard and/or inboard auxiliary fuel tanks to extend its flight 
range.  Other than a float sensor to indicate when a tank is empty and 
a flowmeter to indicate the flow of fuel, the aircraft does not have a 
fuel monitoring system to indicate the level of fuel remaining in each 
auxiliary tank.  The lack of such a fuel monitoring system currently 
creates difficulties for the flight crew in the management of 
auxiliary fuel use and of changes in the center-of-gravity of the 
aircraft.  These difficulties create a risk to human safety and 
reportedly contributed to a fatal crash.  This RFP solicited proposals 
to modify the current auxiliary fuel system with an accurate fuel 
monitoring system that would eliminate these difficulties.

The RFP, issued on June 26, 1995, contemplated award of a firm, 
fixed-price contract for base and option quantities.  Initial 
proposals were submitted by September 6.  During the course of 
evaluations, the Army determined that amendment of the RFP was 
necessary to eliminate ambiguities and conflicts.  The agency 
suspended evaluations to permit such amendment and submission of 
revised proposals.  

The amended RFP stated that award would be made on a best value basis 
with all non-price evaluation areas--technical, logistics, and past 
performance--together being more important than price.  The technical 
area and price "are approximately equal in value and the most 
significant evaluation areas[,]" and the logistics area and past 
performance risk "are approximately equal in value and significantly 
less important" than the technical area and price.  The RFP also 
divided the technical and logistics areas into elements and 
sub-elements, and stated their relative importance under the 
respective area.[1]  The RFP reserved the right to award to other than 
the lowest-priced offeror.

Six offerors, including Lear and Israel Aircraft, submitted revised 
proposals by April 10, 1996.  The Army evaluated proposals using a 
combination of numerical and adjectival ratings.  

The source selection plan (SSP) described how proposals would be 
scored.  For the technical and logistics areas, the evaluators rated 
each sub-element on a scale of
0-10, with 0 representing a technically unacceptable sub-element 
(i.e., "the proposed approach indicates a complete lack of 
understanding of the requirements or the technical problems 
involved"), 5 representing an adequate sub-element (i.e., "generally 
meets minimum requirements"), and 10 representing an outstanding 
sub-element (i.e., "comprehensive and complete in all details; exceeds 
all requirements and objectives").  Numerical scores between these 
points on the scale had similar definitions consistent with their 
relative place on the scale.  Each sub-element was also evaluated for 
proposal risk based on a five-place adjectival scale (low, 
low-moderate, moderate, moderate-high, and high).  After evaluations 
for all sub-elements were completed, the lead evaluator for the 
element converted the risk ratings into point scores of up to 2 points 
and either added (for lower risk) or subtracted (for higher risk) 
these risk rating points from the numerical ratings for the 
sub-elements.  The total numerical score for each sub-element was then 
adjusted to reflect its respective weight under the stated evaluation 
plan.

Also under the technical and logistics areas, the evaluators wrote 
narrative descriptions, which included identifying significant 
advantages (i.e., blue flags), strengths (i.e., green flags), and 
weaknesses (i.e., red flags).  The flag narratives were not 
individually rated but were identified and summarized in the 
evaluation reports presented to the Source Selection Authority (SSA).

Past performance risk was evaluated on the same five-place adjectival 
scale as proposal risk; however, these risk ratings were not converted 
to numerical scores.  Price was evaluated for completeness and 
reasonableness, but was not numerically scored.

The Army conducted discussions, and requested and received best and 
final offers (BAFO) by July 3.  A summary of the weighted evaluations 
of the three highest ranked BAFOs follows:

                 Lear         Offeror A    Israel Aircraft

Technical (40)   24.78        23.44        20.88

Logistics (10)    6.626        6.675        5.825

Past Perf. Risk  low          low          low-moderate

Price ($)        27,148,443   27,089,270   23,011,376
Lear had six blue flags and five green flags under the technical area, 
and one blue flag and seven green flags under the logistics area.  
Offeror A had two blue flags and three green flags under the technical 
area, and six green flags under the logistics area.  Israel Aircraft 
had three blue flags and two green flags under the technical area, and 
three green flags under the logistics area.  Israel Aircraft submitted 
the lowest priced proposal of the six offerors.

The agency also ranked proposals using a decision risk analysis, a 
methodology that uses normalized price and evaluation ratings to 
identify the relative value of each proposal under the stated 
evaluation plan.  Under this analysis, the proposals of Lear, Offeror 
A, and Israel Aircraft were ranked first, second, and third, 
respectively.

The evaluation for each proposal and the agency's decision risk 
analysis were presented to the SSA.

The SSA's source selection decision document first summarized the 
evaluation of each proposal, including the specific advantages and 
strengths that were the bases for the blue and green flags.[2]  The 
SSA then stated:

     "b.  [Lear] was ranked highest overall in the Technical Area, and 
     their Total Evaluated Price is ranked third.  Additionally, Lear 
     presented a very strong Logistics proposal, and Past Performance 
     Risk Analysis uncovered few concerns.  The Contracting Officer 
     has determined [Lear] to be responsible. . . .

     "c.  [Lear's] exceptional Technical Proposal offers the 
     Government a number of significant advantages, as [previously 
     described in the decision document].  These advantages will be 
     actualized in enhanced accuracy, maintainability, and durability 
     for the [auxiliary fuel management system] itself, and enhanced 
     safety for the aircraft outfitted with this system.  In addition 
     to the desirable technical advantages, [Lear's] proposal is 
     considered to present a low overall risk.

     "d.  Although [Israel Aircraft] presented a lower evaluated price 
     for the [auxiliary fuel management system], technically, they 
     were ranked third, overall. [Israel Aircraft's] Technical 
     Proposal was acceptable, and did offer some desirable advantages, 
     but was not as strong as [Lear's] and presented a slightly higher 
     risk.  Also, the [performance risk assessment] did show some 
     concerns with [Israel Aircraft's] ability to successfully perform 
     the requirements.  Lack of detail throughout their proposal 
     raised some concerns with [Israel Aircraft], and they are 
     considered overall a higher risk for award than [Lear]."

The SSA then similarly analyzed Offeror A's proposal, conducted a 
tradeoff analysis weighing the advantages offered by Lear compared to 
the slight price advantage offered by Offeror A, and concluded:

     "The advantages offered only by Lear's proposal are considered 
     highly beneficial to the Government, and worth the slight 
     tradeoff in price." [Emphasis in original.]

The SSA then referenced the decision risk analysis and stated:

     "The results of this Analysis substantiated the overall ranking 
     of [Lear's] proposal as offering the Best Value to the 
     Government."

On August 9, the Army awarded the contract to Lear.  These protests 
followed.  

Israel Aircraft first alleges that its technical score of 20.88 out of 
40 points was unreasonably low for a proposal that met or exceeded all 
of the agency's minimum requirements.  

Where, as here, the RFP states a best value evaluation plan--as 
opposed to award to the lowest priced, technically acceptable 
offeror--evaluation of proposals is not limited to determining whether 
a proposal is merely technically acceptable; rather, proposals may be 
further differentiated to distinguish their relative quality by 
considering the degree to which technically acceptable proposals 
exceed the stated minimum requirements or will better satisfy the 
agency's needs.  Meridian Corp., B-246330.3, July 19, 1993, 93-2 CPD  para.  
29; Individual Dev. Assocs., Inc., B-225595, Mar. 16, 1987, 87-1 CPD  para.  
290; Computer Sciences Corp., B-189223, Mar. 27, 1978, 78-1 CPD  para.  234.  

Here, the rating method used by the agency under the technical and 
logistics areas implemented such a differentiation of proposals.  A 
median score of 5 indicated that a proposal met the minimum 
requirements for the sub-element being evaluated.  Scores 
progressively higher than 5 indicated the increasing degree to which 
the proposal exceeded the requirements; for example, a perfect score 
of 10 indicated that a proposal exceeded all of the applicable 
requirements.  

While Israel Aircraft correctly notes that its proposal was fully 
responsive to the RFP, such a proposal under the Army's rating scale 
should properly receive approximately half of the possible points for 
satisfying the minimum requirements.  Israel Aircraft's proposal 
received slightly more than half of the total possible points based on 
the total scores for the sub-elements, which is consistent with the 
Army's evaluation that Israel Aircraft's proposal met, and to some 
degree exceeded, the stated RFP requirements.  While Israel Aircraft 
asserts that evaluation credit should not have been given to proposals 
that offered enhanced features in excess of the RFP requirements, this 
best value procurement, which by its terms was intended "not to 
restrict the ingenuity and resourcefulness of the offerors," clearly 
contemplated that proposals offering enhanced performance 
characteristics would receive appropriately more evaluation credit 
than proposals merely offering to meet the RFP requirements.  Meridian 
Corp., supra; Individual Dev. Assocs., Inc., supra.  

The protester has not alleged that any of its sub-element scores were 
unreasonable or that its total technical score was unreasonable under 
the rating scale employed.  Based on our review of the evaluations, we 
find that the Army reasonably and consistently applied its scoring 
methodology to all proposals.  

The protester next alleges that the SSA's consideration of enhanced 
safety to the aircraft in Lear's proposed approach was an unstated 
evaluation criterion.  It further alleges that the use of blue flags 
for evaluating proposals was not identified in the RFP evaluation 
scheme, and that they thus are unstated evaluation factors essentially 
because they constitute bonus points for "gold plating" or exceeding 
the stated solicitation requirements. 

At a minimum, a solicitation must state all significant evaluation 
factors and subfactors, and their relative importance.  10 U.S.C.  sec.  
2305(a)(2)(A) (1994); Federal Acquisition Regulation  sec.  15.605(d)(1) 
(FAC 90-31); H.J. Group Ventures, Inc., B-246139, Feb. 19, 1992, 92-1 
CPD  para.  203.  However, a solicitation need not identify each element to 
be considered by the agency during the course of the evaluation where 
such element is intrinsic to the stated factors or subfactors.  Marine 
Animal Prods. Int'l, Inc., B-247150.2, July 13, 1992, 92-2 CPD  para.  16.

We agree with the Army that enhanced aircraft safety is intrinsic to 
the stated evaluation factors and is not an unstated evaluation 
factor.  Not only was improving the safe operation of the aircraft the 
underlying basis for the auxiliary fuel monitoring system, but all of 
the technical elements and most of the sub-elements stated in the RFP 
require compliance with the performance specifications, wherein it is 
stated that the monitoring system:

     "shall afford the crew with a quick, unambiguous indication of 
     fuel status and provide the crew with control capability to 
     easily and directly manage the fuel system [and] shall monitor 
     external auxiliary fuel for imbalance conditions that result in 
     aircraft lateral center-of-gravity changes."

Additionally, the stated sub-elements under human factors, a stated 
element under the technical area, include visibility and readability, 
and operation.  Thus, it is obvious that enhanced aircraft safety 
pervades this entire procurement and advantages in this regard could 
properly be considered by the SSA in making her award decision.
 
The blue flags, protested as unstated evaluation factors, were not 
intended or used as evaluation factors.  They were nothing more than a 
method of identifying evaluated advantages in a proposed approach that 
provided valuable benefits to the agency.[3]  Although the evaluation 
stated the number of blue flags evaluated in each proposal, the agency 
never relied on the sheer number of such flags to indicate the quality 
of a proposal as alleged by the protester; instead, the specific 
advantage associated with each flag was always identified.[4]  
Information regarding specific proposal advantages is the type of 
information that agencies should make available to source selection 
officials to enable them to reasonably determine whether and to what 
extent numerical or adjectival evaluation ratings indicate meaningful 
differences in proposals and the resulting value of such differences.  
Grey Advertising, Inc., 55 Comp. Gen. 1111 (1976), 76-1 CPD  para.  325; A & 
W Maintenance Servs., Inc.--Recon., B-255711.2, Jan. 17, 1995, 95-1 
CPD  para.  24.  

Israel Aircraft next alleges that, under the past performance risk 
area, the Army did not reasonably evaluate the information in the 
protester's proposal or conduct a reasonable investigation of 
information outside of the proposal.[5]  We disagree.

The RFP stated that the agency would focus its evaluation of past 
performance risk on the offerors' and proposed subcontractors' 
histories of past performance relevant to the proposed effort, and 
stated detailed instructions regarding the information that offerors 
were to provide.  The RFP also stated that the government may use data 
both provided by the offeror and obtained from other sources, but 
warned offerors:

     "Since the Government may not necessarily interview all of the 
     sources provided by the offerors, it is incumbent upon the 
     Offeror to explain the relevance of the data provided . . . . the 
     burden of providing thorough and complete past performance 
     information rests with the offerors."

Israel Aircraft's proposal stated that it had experience in fuel 
measurement systems, provided a brief general description of its 
experience in developing fuel measurement and management systems for 
aircraft, and stated that its subcontractor had designed and 
manufactured a variety of fuel monitoring and management components 
and systems.  However, Israel Aircraft's proposal (and revised 
proposal) did not provide any contract information related to its own 
claimed fuel monitoring system experience, but listed information for 
Israel Aircraft's contracts for the modification of helicopter 
clutches, the production of helicopter main rotor blade pockets, 
helicopter maintenance and crash damage repair, and a special mission 
crew seat, and for two contracts to repair/overhaul helicopter main 
rotor blades.  The contract information provided for its subcontractor 
identified several small contracts with one aircraft company for fuel 
flow indicators, for which limited information was provided, and 
identified a contract under the control of a foreign country for a 
fuel gauging system for an aircraft, but stated that information about 
this contract could not be released.

The agency's investigation of Israel Aircraft's past performance 
produced little helpful information.  A search of the Army and Air 
Force contract data bases produced no information.  A Dun & Bradstreet 
report provided some mixed data (both positive and negative 
information on organizational management).  A survey sent to the 
Army's industrial specialist who was assigned to monitor Israel 
Aircraft's performance on the two contracts for repair/overhaul of 
rotor blades was returned with many items marked "not observed."  
However, the person did indicate that performance was good, although 
he did identify some problems.

The agency had similar difficulty in gathering information about 
Israel Aircraft's subcontractor.  The survey sent to the reference for 
the contract on fuel flow indicators was not completed, but rather the 
aircraft company sent a one-page letter stating that its company 
policy restricts the amount of information it will release on its 
suppliers.  The letter only stated that the supplier's current 
performance ratings for quality and delivery were below the levels 
established for the corporation's "Supplier Certification Program."  
The letter added that the supplier and the corporation "are working 
diligently to improve" these performance problems.

The past performance risk rating for Israel Aircraft was "low to 
moderate."  Israel Aircraft's proposal did not demonstrate successful 
past performance on directly relevant contracts, although the agency 
considered the offeror's capability to be very diverse.  The agency 
stated that the subcontractor's prime expertise is with fuel systems 
and determined that, although there are some concerns with the 
subcontractor's performance capabilities, the overall risk was "not 
expected to be of major concern."

Lear, on the other hand, provided very detailed information in its 
past performance proposal.  Lear and its subcontracting team has 
extensive successful experience in electronic monitoring and control 
systems, including a Lear contract for the design of an aircraft fuel 
monitoring system with a potential value of more than twice that of 
this procurement.  Also, the Army did not have difficulty obtaining 
information to confirm the information in Lear's proposal.  The 
agency's investigation supported a determination of a "low" past 
performance risk rating for Lear; the protester does not challenge 
this rating.

In cases such as this, it is reasonable to give a better evaluation 
rating to offerors with successful performance on more relevant 
contracts.  Ogden Support Servs., Inc., B-270012.4, Oct. 3, 1996, 96-2 
CPD  para.  137; TESCO, B-271756, June, 24, 1996, 
96-1 CPD  para.  284.  The record shows that Lear reported and documented 
more relevant successful experience than did Israel Aircraft.  
Moreover, since the RFP stated that it was the offeror's 
responsibility to provide the information sufficient for evaluation, 
including relevance of past contracts, and that the agency may rely 
solely on the information provided by the offeror, we do not think the 
agency was required to do a more extensive investigation than it did 
here, notwithstanding the unsupported general statements in Israel 
Aircraft's proposal about claimed experience in fuel measurement 
systems.  Thus, we find from this record that the evaluation of past 
performance was reasonable.

The protester also alleges that the Army did not perform a 
cost/technical tradeoff to determine whether an award based on Lear's 
higher rated proposal offered sufficient benefits to the Army to 
justify paying almost $4 million more than Israel Aircraft's lowest 
priced proposal.

In a negotiated procurement, unless the RFP so specifies, there is no 
requirement that award be based on lowest price.  Lloyd-Lamont Design, 
Inc., B-270090.3, Feb. 13, 1996, 96-1 CPD  para.  71.  A procuring agency 
has the discretion to select a higher rated technical proposal if 
doing so is reasonable and consistent with the evaluation scheme set 
forth in the RFP.  We will uphold an award to a higher rated offeror 
at a higher price where the agency reasonably determined that the cost 
premium was justified considering the technical superiority of the 
selected proposal.  Even where a source selection official does not 
specifically discuss the cost/technical tradeoff in the source 
selection decision, we will not object if the tradeoff is supported by 
the record.  Id.

Here, although the protester correctly points out that the source 
selection decision does not specifically identify the SSA's tradeoff 
rationale in selecting Lear's higher rated proposal over Israel 
Aircraft's lower rated, lowest priced proposal, we think the record 
reasonably supports the tradeoff that was implicit in the decision.  
The decision document does explain the tradeoff that the SSA made 
between Lear's and Offeror A's proposals since Offeror's A's proposal 
was second ranked overall.  The SSA also specifically reviewed the 
evaluations and considered the specific advantages that Lear's 
proposal had over Israel Aircraft's proposal, and noted that Israel 
Aircraft had submitted the lowest price.[6]  The record evidences that 
Israel Aircraft's proposal was evaluated lower than Lear's proposal 
for every non-price evaluation area, and that Lear's significant 
non-price advantages relate directly to the stated evaluation 
criteria;[7] the Army states that these additional advantages of 
Lear's proposal offset the lower price of Israel Aircraft's proposal.  
Since the non-price evaluation areas together are more important than 
price under the stated evaluation scheme, the tradeoff implicit in the 
SSA's selection of Lear over Israel Aircraft is supported by the 
record, and is reasonable and consistent with the evaluation criteria.  
See id.; Pressure Technology, Inc., B-265793, Dec. 29, 1995, 
95-2 CPD  para.  288; Litton Indus., Inc., B-236720, Dec. 26, 1989, 89-2 CPD  para.  
595.  

Finally, Israel Aircraft alleges that the decision risk analysis 
conducted by the agency distorted the ranking of offerors and thus 
cannot be the basis for a reasonable source selection decision.  
However, the decision risk analysis was not the basis for the source 
selection decision here.  As evidenced by the source selection 
decision document, the SSA first made her decision based on the raw 
evaluation data and only then referenced the decision risk analysis to 
find that it supported her decision.  The agency also states that the 
analysis is only a tool to assist the agency in comparing the relative 
value of proposals in numerical terms.  Furthermore, even if we assume 
that all of the protester's allegations about the distortions in the 
decision risk analysis are true and the analysis is adjusted to 
eliminate these distortions, by our calculations, and given our 
conclusions as set out above, Israel Aircraft's proposal would be 
ranked second and Lear's proposal would remain first.  

The protests are denied.

Comptroller General
of the United States

1. The source selection plan, which was not disclosed to offerors, 
identified numerical weights for the evaluation criteria.  Price and 
technical were each worth 40 percent, and logistics and past 
performance risk were each worth 10 percent, which is consistent with 
their importance as stated in the RFP.  Elements and sub-elements 
similarly were assigned weights consistent with the RFP.

2. No red flags were evaluated for any proposal.

3. The protester does not allege that the advantages associated with 
these flags were not reasonably related to the stated evaluation 
sub-elements under which they were identified.

4. Identification of these advantages in addition to the numerical 
scores is not double- counting of the advantages, as the protester 
alleges, because they merely identify, in part, the bases for the 
scores; they do not further increase the given scores.

5. Israel Aircraft's initial proposal contained insufficient 
information for the Army to evaluate the firm's past performance.  The 
Army informed Israel Aircraft of these deficiencies, in response to 
which Israel Aircraft provided additional information.  The record 
shows that the agency considered all information submitted by Israel 
Aircraft in evaluating that firm's past performance. 

6. The record shows that the SSA was advised and was cognizant of the 
specific prices offered by the six offerors.

7. Lear's proposal advantages, excluding the ones that it has in 
common with the protester's, are:

            [DELETED]

These advantages were identified in the evaluation documents under the 
specific stated evaluation sub-elements to which they relate.