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.