BNUMBER:  B-274698.4 
DATE:  July 10, 1997
TITLE: PRC, Inc.--Reconsideration, B-274698.4, July 10, 1997
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Matter of:PRC, Inc.--Reconsideration

File:     B-274698.4

Date:July 10, 1997

L. James D'Agostino, Esq., Timothy B. Harris, Esq., and William B. 
Fisher, Esq., Wickwire Gavin, for the protester.
Stuart Young, Esq., for DynCorp (a partner in TESCO, a joint venture), 
the intervenor.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

A request for reconsideration which alleges that a prior decision 
denying a protest against a source selection decision was based on 
errors of fact and law, and that the General Accounting Office did not 
consider relevant information, is denied where the allegations are not 
supported by the protest record, and any issues not addressed in the 
prior decision would not provide a basis for reversing or modifying 
that decision.

DECISION

PRC, Inc. requests reconsideration of our decision, PRC, Inc., 
B-274698.2; B-274698.3, Jan. 23, 1997, 97-1 CPD  para.  115, denying its 
protests of an award to TESCO, a joint venture, under request for 
proposals (RFP) No. DATM01-95-R-0019, issued by the U.S. Army Materiel 
Command, Operational Test and Evaluation Command (OPTEC) Contracting 
Activity, for test support services required by the Test and 
Evaluation Command, Fort Hood, Texas.

We deny the request for reconsideration.

In order to obtain reconsideration under our Bid Protest Regulations, 
the requesting party must show that our prior decision may contain 
errors of fact or law, or present information not previously 
considered that warrants reversal or modification of our decision.  4 
C.F.R  sec.  21.14(a) (1997); Defense Logistics Agency; Moheat Envtl. 
Servs..--Recon., B-270538.5; B-270538.6, Nov. 20, 1996, 96-2 CPD  para.  194 
at 1.  Repetition of arguments made during consideration of the 
original protest or mere disagreement with our decision does not 
provide a basis for reconsideration.  R.E. Scherrer, Inc.--Recon., 
B-231101.3, Sept. 21, 1988, 88-2 CPD  para.  274 at 2.  As discussed below, 
PRC has shown no errors of law or fact that warrant reconsideration of 
our prior decision.

PRC first contends that our decision incorrectly found that TESCO's 
initiation of the development under its incumbent contract of an 
automated information management system for the control of government 
furnished property (GFP), which TESCO then proposed in response to 
this RFP, did not constitute an unfair competitive advantage.  PRC 
alleges that our finding was based on erroneous determinations that 
the development of the information management system was a 
"requirement" of the incumbent contract, and that a showing of bad 
faith or an intent to harm the incumbent's competitors was required to 
establish an unfair competitive advantage.  PRC asserts that we 
"should reconsider the evidence in light of whether TESCO was 
unintentionally given a competitive advantage."

PRC's request regarding an unintentional competitive advantage misses 
the point, since, as discussed in our prior decision, the record 
showed that the competitive advantage which TESCO may have received 
from performing as the incumbent contractor was not an unfair 
competitive advantage.  A competitive advantage of an incumbent 
contractor, which was gained by virtue of that contractor's performing 
the incumbent contract, is not an unfair or improper competitive 
advantage, and an agency is not required to attempt to equalize 
competition to compensate for that advantage unless there is evidence 
of preferential treatment or other improper action.  Versar, Inc., 
B-254464.3, Feb. 16, 1994, 94-1 CPD  para.  230 at 12; Information Ventures, 
Inc., B-240925.2, Jan. 15, 1991, 91-1 CPD  para.  39 at 3; Wismer and Becker 
Contracting Engineers and Synthetic Fuel Corp. of Am., A Joint 
Venture, B-191756, Mar. 6, 1979, 79-1 CPD  para.  148 at 14.

We stated in our decision that there was no evidence in the record to 
show that the  development of an information management system "was 
outside the scope of the incumbent contract."[1]  The work 
authorization orders (WAO), issued annually at the start of each 
fiscal year of the contract, included requirements for record keeping 
and report preparation, as well as requirements for seeking and 
incorporating efficiencies to improve the quality and production of 
services.  The protester does not argue that these WAOs were outside 
the scope of the contract.  Although not stated in our decision, the 
terms of the WAO issued at the start of the final year (fiscal year 
1996) of TESCO's incumbent contract specifically required the 
contractor to "[d]evelop and implement an information management 
system" for the control of GFP.  Since automated information 
management systems are intended to improve the efficiency of record 
keeping and report preparation, the development of an information 
management system was within the scope of the incumbent contract.[2]  

Where contract requirements are repetitive or otherwise prepare the 
incumbent contractor to compete for future solicitations, the 
performance of the incumbent contract will obviously give the 
incumbent contractor a competitive advantage over other competitors 
for the succeeding contract; however, this competitive advantage is 
not in itself preferential treatment or otherwise an unfair 
competitive advantage.  See B.B Saxon Co., Inc., 57 Comp. Gen. 501, 
512-513 (1978), 78-1 CPD  para.  410 at 19-20 (incumbent contractor's 
possession of required equipment by virtue of performing the incumbent 
contract was not evidence of unfair competitive advantage); Crux 
Computer Corp., B-234143, May 3, 1989, 89-1 CPD  para.  422 at 5 
(development of a system under prior agency contract is not evidence 
of preferential treatment in subsequent competition for the system); 
H. J. Hansen Co., B-181543, Mar. 28, 1975, 75-1 CPD  para.  187 at 7-8 
(contract for preliminary study which in effect financed the 
contractor's competitive advantage was not evidence of unfair 
advantage for succeeding sole source contract).  Here, there is no 
evidence that TESCO obtained an unfair competitive advantage by its 
funded initiation of an information management system for the control 
of GFP under the incumbent contract or that the last WAO under that 
contract was issued due to improper motives.

PRC next contends that our decision incorrectly found that the 
higher-level source selection officials had a reasonable basis for 
reducing the evaluated risk of certain aspects of TESCO's proposal 
from those determined by the lower-level evaluators.  PRC alleges that 
nothing in the record rebuts these judgments of the lower-level 
evaluators, that the record does not establish which official actually 
made the reductions and his rationale for doing so, and the record 
does not establish that the SSA was aware of the initially evaluated 
risks and their reduction.  We disagree.

The agency's explanation for the reduction of risk stated in response 
to the protest was that source selection officials in the source 
selection evaluation board (SSEB) and the source selection advisory 
council (SSAC) had judged from their own qualified knowledge that the 
risks associated with the development of TESCO's proposed information 
management system and the proposed staffing plan were not as 
significant as the lower-level evaluators had determined.  The hearing 
testimony from several of these officials explained their knowledge 
and indicated that, in their judgment, the risks were "minor" or 
"minimal."  Hearing Transcript (Tr.) at 268-272, 278-281 (risk 
associated with development of the information management system); 
355-364 (risk associated with staffing plan).[3]  Although the source 
selection report did not explain the basis for the risk reductions, 
the protest record, including hearing testimony and TESCO's proposal, 
supported the reasonableness of those reductions.[4]  Since source 
selection officials are not bound by the judgment of evaluators and 
may impose their own evaluation judgment where, as here, that judgment 
is rational and consistent with the evaluation criteria, we determined 
that the reduction of evaluated risk in TESCO's proposal was 
proper.[5]  See Loral Aeronutronic, B-259857.2; B-259858.2, July 5, 
1995, 95-2  para.  213 at 7-9.

PRC has not shown that our determination in this regard was based on 
factual or legal error.  PRC's allegations that the record does not 
clearly establish the specific individual who actually changed the 
risk ratings in the source selection report, or whether the SSA was 
aware of these reductions in risk ratings, do not alter the prevailing 
facts here:  the report to the SSA stated reasonable risk ratings and 
the SSA relied upon this report in making his source selection 
decision.  In any event, PRC did not establish that the SSA (who was a 
witness at the hearing) was unaware of the evaluated risk reductions, 
or that he disagreed with the judgments of his subordinate source 
selection officials.  Since, as indicated, source selection officials 
may properly revise evaluation judgments and PRC did not show the 
revised risk ratings upon which the SSA relied to be unreasonable, 
PRC's allegations that we erred in upholding the SSA's resulting 
selection decision are unfounded.  Id.

PRC also contends that we made an error of law by not applying the 
standard of review for source selection decisions stated in Dewberry & 
Davis, B-247116, May 5, 1992, 92-1 CPD  para.  421.  We disagree.  As 
indicated in Dewberry & Davis, we review a source selection decision 
for reasonableness and consistency with the stated evaluation scheme.  
Id. at 5.

We did not cite Dewberry & Davis in our prior decision because the 
facts surrounding the source selection there were not similar to the 
facts surrounding the protested selection of TESCO.  Although cost was 
the least important factor under a best value evaluation scheme in 
both Dewberry & Davis and the present case, the similarities between 
the two cases end there.  In this case, the evaluated difference 
between PRC's and TESCO's technical proposals was small, although the 
cost difference was not, and the SSA's determination that there did 
not exist additional value in PRC's proposal to account for its $1.5 
million dollar additional cost was reasonably supported by the record.  
In Dewberry & Davis, the technical difference between the protester's 
nearly perfect technical rating and the awardee's barely acceptable 
rating was extreme, but was not considered in the source selection 
decision; thus, the record showed that the agency essentially 
conducted its source selection on a low cost, technically acceptable 
basis, which was contrary to the stated evaluation scheme.  Id. at 
5-7.

A more analogous decision, cited in our prior decision, is Calspan 
Corp., B-255268, Feb. 22, 1994, 94-1 CPD  para.  136, which involved facts 
quite similar to the selection of TESCO's proposal over PRC's.  
Specifically, cost was the least important factor in the stated 
evaluation scheme; the evaluated technical and cost differences were 
similar to those present here; and the record evidenced that the 
lower-level evaluators may have unduly emphasized an aspect of one 
proposal resulting in a noticeable evaluated difference, but there was 
little or no significant difference between the proposals that would 
provide additional value for the acceptance of the higher cost 
proposal.  Id. at 8-10.

PRC nevertheless argues that we erred in finding that it had not 
identified any significant technical or management differences not 
considered in the source selection or evaluation that would justify 
the cost premium associated in making award to PRC.  Despite having 
access under a protective order to TESCO's complete proposal, PRC did 
not show the existence of any significant difference between what each 
proposal offered.  Instead, PRC essentially alleged that TESCO's 
ratings should have been lower than evaluated based on statements made 
by agency personnel.  Our decision explained that the ratings given to 
TESCO were reasonably based on the rating scale stated in the source 
selection plan; they need not have been lower under that rating scale, 
despite isolated remarks from some agency personnel to the contrary.

To the extent PRC alleges that we failed to consider its allegations 
that certain aspects of TESCO's or PRC's proposals were not evaluated, 
PRC does not identify any real and significant differences in the two 
proposals.  For example, PRC alleges that TESCO's proposed Mobile Army 
Instrumentation Suite (MAIS) staffing was deficient; however, as 
stated in our decision, since TESCO's proposed MAIS staffing was at 
least equal to PRC's, there is no basis to find that PRC's proposal 
offered any advantage over TESCO's.  Also, while our prior decision 
did not mention PRC's allegation that it was not given credit for 
offering a fully developed GFP tracking application, the record does 
not show that this aspect of the proposals was a basis upon which to 
differentiate between them, given that the record suggested that PRC's 
system was similar to TESCO's system.  

In sum, PRC did not show that its proposal offered any additional 
value over TESCO's proposal to warrant paying the additional $1.5 
million.  Thus, we correctly found that the SSA's selection of TESCO's 
proposal at a lower price under the stated evaluation scheme was 
reasonable.  See id. at 10.

Lastly, PRC contends that we erred in not finding that an appearance 
of impropriety arose from TESCO's employment of the former OPTEC 
commanding officer.  PRC alleges that a protester should not be 
required to show that such a former government employee had access to 
competitively useful information in order to prove that an appearance 
of impropriety existed, as this would be inconsistent with the 
decision in NKF Eng'g, Inc. v. United States, 805 F.2d 372 (Fed. Cir. 
1986).  We disagree.

Our decision was based on the principle of law that a contracting 
agency may disqualify an offeror from a competition where an 
appearance of a conflict of interest exists, even if no actual 
impropriety can be shown, so long as the determination is based on 
facts and not mere innuendo or suspicion.  This is entirely consistent 
with NKF Eng'g, Inc. v. United States, which requires that the facts 
of the case support a finding of an appearance of impropriety.  Id. at 
376-377.  The record contained no hard evidence that the former OPTEC 
commanding officer had access to information from which the offeror 
employing him could have gained an unfair competitive advantage.  We 
therefore determined that the record did not establish the existence 
of an appearance of impropriety.  Our decision acknowledged that the 
employment of this person so soon after his retirement might raise 
some suspicion of impropriety, but PRC did not establish anything 
beyond suspicion or innuendo.

PRC alleges that our analysis of the record failed to consider 
misrepresentations in the former commanding officer's affidavits, and 
reports on the status of OPTEC procurements which he received.  We did 
not fail to consider these portions of the record.  The former 
commanding officer was a witness at the hearing on the protests 
because his representations in successive affidavits were amended to 
explain conflicting documents as they were entered into the record.  
He testified that the contracting function was not within his command; 
that his exposure to procurement-related documents was rare; and that 
he still could not recall reviewing certain documents in the record, 
but acknowledged that his signature or initials on these documents 
indicated that he had indeed reviewed them.  Our decision found his 
testimony credible on these points, and then analyzed the documents to 
which he had access, and found that the information contained in them 
was not competitively useful and thus was not evidence of an 
appearance of impropriety.  PRC has not identified any errors in our 
analysis of these documents. 

To the extent PRC alleges that we did not consider in our analysis the 
periodic procurement status reports to which the commanding officer 
had access, we note that our decision did not specifically discuss 
these status reports because PRC's comments on the hearing merely 
mentioned their existence without attempting to show that they 
established an appearance of impropriety.  PRC's examination of the 
witness showed that these status reports were supposed to show whether 
procurements were staying on schedule.  Tr. at 517-520.  Of course, as 
incumbent contractor, TESCO properly would be aware of the status of 
its contract, and thus the information in the status reports would not 
be competitively useful.  The commanding officer's access to these 
status reports is not evidence of an appearance of impropriety.

The request for reconsideration is denied.

Comptroller General
of the United States

1. We did not, as alleged by the protester, conclude that this work 
was a "requirement" of the prior contract.

2. Contrary to the protester's allegations, the last WAO issued under 
the prior contract requiring the information management system or 
"common data base" was issued before the issuance of this RFP, which 
contains a proposed WAO substantially similar to that last WAO.

3. As stated in our prior decision, our Office will consider, in 
addition to the contemporaneous record, all information provided to us 
for consideration during the protest, including the parties' arguments 
and explanations, and testimony elicited at a hearing.  The agency's 
contemporaneous record of the evaluation process was inadequate, and 
we convened a hearing to supplement that record.

4. As PRC alleges, the source selection officials did not review 
TESCO's proposal.  However, their judgment was based on their personal 
knowledge of the aspects of the proposal as described by the 
evaluators.  The evaluators' bases for their risk evaluations, except 
for the initial risk ratings, as well as other aspects of the 
proposals were accurately stated in the source selection report.  
Thus, relevant aspects of TESCO's proposal were readily available to 
the source selection officials without referring directly to the 
proposal.

5. Contrary to PRC's contention, we did not substitute our judgment 
for that of the evaluators, but reviewed the reasonableness of the 
higher-level source selection officials' determinations.