BNUMBER:  B-275180.2
DATE:  January 29, 1997
TITLE:  Engineering and Computation, Inc.

**********************************************************************

Matter of:Engineering and Computation, Inc.

File:     B-275180.2

Date:January 29, 1997

Suresh K. Verma for the protester.
David S. Cohen, Esq., Cohen & White, for IIT Research Institute, an 
intervenor.
Louis R. Durnya, Esq., and Richard N. Wolf, Esq., National Aeronautics 
and Space Administration, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Even if the agency's reevaluation of the protester's proposal was 
flawed and the protester should have been evaluated as the low cost 
offeror, the protester was not prejudiced since under the 
solicitation's evaluation methodology where technical evaluation 
factors were weighted equal to cost, the agency could reasonably make 
a cost/technical tradeoff and award the contract to the incumbent 
contractor which was rated "excellent" for the relevant corporate 
experience and past performance evaluation factor, as opposed to the 
protester, a new corporate entity rated "neutral" for this evaluation 
factor because it had no prior corporate experience and past 
performance and the solicitation did not provide for consideration of 
the experience of the firm's key personnel in evaluating corporate 
experience and past performance.

DECISION

Engineering and Computation, Inc. (ECI) protests the reevaluation of 
its proposal and the selection of IIT Research Institute (IITRI) for 
the award of a contract under request for proposals (RFP) No. 
8-H-5-EH-18305, issued by the National Aeronautics and Space 
Administration for the operation and maintenance of metallurgy 
research facilities at the Marshall Space Flight Center in Huntsville, 
Alabama.  In Engineering and Computation, Inc., B-261658, Oct. 16, 
1995, 95-2 CPD  para.  176, we sustained ECI's protest because we could not 
determine the reasonableness of the agency's selection decision since 
it was based on unsupported evaluation conclusions and the agency 
failed to rebut ECI's protest assertions that its proposal was 
misevaluated.  We recommended that the agency reevaluate all 
proposals, document its reevaluation, and make a new selection 
decision.[1]  ECI maintains that the agency did not properly 
reevaluate its proposal.

We deny the protest.

The RFP contemplated the award of a cost-plus-fixed-fee contract for a 
base period and four option periods to the offeror whose proposal was 
most advantageous to the government.  The RFP contained the following 
essentially equal evaluation factors:  (1) mission suitability; (2) 
cost; (3) relevant experience and past performance; and (4) other 
considerations (e.g., phase-in; corporate policies, procedures, and 
practices; labor relations; corporate resources; and small business 
and small disadvantaged business subcontracting plans).  The mission 
suitability evaluation factor, the only factor that was point-scored, 
consisted of the following subfactors:  (1) understanding the 
requirement (350 points); (2) management approach (325 points); and 
(3) staffing plan (325 points).  Based on points received, adjectival 
ratings were assigned (e.g., "excellent"--91 to 100 percent of points 
received and "very good"--71 to 90 percent of points received).  
Adjectival ratings were also assigned to the other noncost evaluation 
factors.  An offeror's proposed cost was adjusted to reflect the 
"probable cost of doing business" with the firm.

The agency reevaluated the best and final offers of the three 
competitive range offerors, including ECI, a newly formed, small 
disadvantaged business concern, and IITRI, the incumbent contractor.  
The reevaluation results, which were supported by narratives of the 
strengths, weaknesses, and risks in each offeror's proposal, were as 
follows:

                Firm A          ECI             IITRI

Mission Suitability845 points;
                very good       860 points;
                                very good       950 points; excellent

Relevant Experience & Past PerformanceExcellentNeutralExcellent

Other ConsiderationsExcellent   Very Good       Excellent

Proposed Cost; Most Probable Cost$7,782,311; $9,395,378$8,121,978; 
                                $9,173,068      $7,641,083; $9,171,509
The source selection official (SSO)[2] reviewed the reevaluation 
results and noted that the relative order of mission suitability 
scores did not change, although the scores of Firm A and ECI increased 
slightly (i.e., Firm A by 5 points and ECI by 10 points).  While 
IITRI's score remained the same, the SSO determined that IITRI still 
had an advantage in each of the mission suitability subfactors.  The 
SSO concluded that IITRI's proposal was "clearly the best proposal" 
with respect to the mission suitability evaluation factor.  For the 
relevant experience and past performance evaluation factor, Firm A and 
IITRI again received "excellent" ratings based on references and prior 
performance.  ECI, a new corporate entity with no relevant corporate 
experience and past performance, received a "neutral" rating (as 
opposed to the previous "good" rating).  Firm A and IITRI continued to 
receive "excellent" ratings for the other considerations evaluation 
factor, and ECI again received a "very good" rating.  Finally, the SSO 
noted that IITRI's proposed cost was lower than the proposed costs of 
Firm A and ECI, and that ECI had the highest proposed cost.  The SSO 
considered the adjusted, most probable costs for ECI and IITRI to be 
essentially equal.  Because of the relatively small differential in 
the most probable costs for each offeror, particularly ECI and IITRI, 
the SSO determined that cost would not be a significant discriminator 
in making the new source selection decision.  Based on his review of 
the reevaluation results and without regard to the cost differential 
between the offerors' most probable costs, the SSO selected IITRI for 
award based on its substantially higher mission suitability score and 
its "excellent" rating for both the relevant experience and past 
performance and the other considerations evaluation factors.

ECI argues that the agency misevaluated its proposal for the mission 
suitability and cost evaluation factors.  More specifically, for each 
of the mission suitability subfactors, offerors were required to 
discuss risks and their approaches for minimizing the impact of those 
risks on the overall success of the program.  The agency rated ECI 
lower than IITRI because it viewed ECI's discussion of risk under each 
subfactor as incomplete.  For each subfactor, the agency specified 
areas of concern with ECI's risk analysis.  In its protest, ECI 
rebutted each of these reasons, essentially arguing that the agency's 
concerns were not reasonably based.  ECI maintains that it should have 
received an "excellent" rating for the mission suitability evaluation 
factor.  In addition, ECI objects to the manner in which the agency 
calculated its most probable cost.  ECI believes that if properly 
calculated, its most probable cost should have been lower than 
IITRI's.[3]

The agency argues that even if ECI had been rated "excellent" for the 
mission suitability evaluation factor and its most probable cost had 
been evaluated lower than IITRI's, ECI, a new corporate entity with no 
prior corporate experience and past performance, was not prejudiced 
because the agency would have still awarded the contract to IITRI at a 
cost premium in light of its "excellent" corporate experience and past 
performance as the incumbent contractor.

In a procurement where the award will be made to the offeror whose 
proposal is most advantageous to the government based on the 
evaluation factors in the RFP, a determination to award to a 
higher-cost offeror with a good past performance record over a 
lower-cost offeror with a neutral past performance rating is not 
precluded since such a determination is consistent with making a 
cost/technical tradeoff to determine if one proposal's technical 
superiority is worth the higher cost associated with that proposal.  
Cost/past performance tradeoffs are permitted when such tradeoffs are 
consistent with the RFP.  Excalibur Sys., Inc., B-272017, July 12, 
1996, 96-2 CPD  para.  13.

Here, the RFP stated that the technical and cost evaluation factors 
were of equal importance in determining the offeror whose proposal was 
most advantageous to the government.  Assuming that ECI and IITRI were 
each rated "excellent" for the mission suitability evaluation factor 
and that ECI's most probable cost was lower than IITRI's, the agency 
nevertheless could reasonably make a cost/technical tradeoff, 
considering the advantages of awarding the contract to IITRI as the 
incumbent contractor which was rated "excellent" for relevant 
corporate experience and past performance against any cost advantage 
associated with awarding to ECI, a new corporate entity rated 
"neutral" for this evaluation factor because it had no prior corporate 
experience or past performance.  In other words, the agency could 
reasonably determine that it was worth the payment of a cost premium 
to select for award IITRI, a successfully performing incumbent 
contractor, rather than to select ECI, an offeror whose proposal might 
result in cost savings to the government, but which did not have any 
relevant corporate experience or past performance as required by the 
RFP.

We point out that the RFP stated that in evaluating an offeror's 
relevant experience and past performance, "[t]he overall corporate or 
offeror's relevant experience and past performance . . . (as opposed 
to that of proposed key personnel) with comparable or related 
procurement/project efforts [would] be considered."  (Emphasis added.)  
Consistent with the RFP, we think the agency reasonably assigned a 
"neutral" rating to ECI for the relevant experience and past 
performance evaluation factor since ECI was a new corporate entity 
with no prior corporate experience or past performance.  While ECI's 
program manager was formerly the program manager for IITRI under the 
predecessor contract, under the terms of the RFP, the experience of 
proposed key personnel was not to be considered in evaluating an 
offeror's relevant corporate experience and past performance.  Rather, 
in accordance with the RFP, the experience of ECI's program manager 
was evaluated under the mission suitability management approach 
subfactor.  We therefore have no basis to object to the "neutral" 
rating assigned to ECI for the corporate experience and past 
performance evaluation factor, and we note that such rating did not 
penalize ECI, a newly formed corporate entity, for its lack of 
corporate experience and past performance.

Accordingly, even if ECI were correct that the agency's reevaluation 
of its proposal was flawed, we conclude that ECI was not prejudiced.  
Accepting ECI's contentions, we believe the firm reasonably received a 
"neutral" rating for the relevant corporate experience and past 
performance evaluation factor, and that IITRI's "excellent" rating for 
this evaluation factor in light of its favorable performance as the 
incumbent contractor was properly a basis upon which the agency could 
reasonably determine that even at a higher cost, IITRI's proposal was 
most advantageous to the government.

The protest is denied.[4]

Comptroller General
of the United States

1. ECI states that in accordance with our recommendation, it timely 
filed with the agency a claim for the costs of filing and pursuing its 
protest.  The agency has not adjudicated ECI's claim.  Pending such 
adjudication, we view as premature ECI's current request that we 
consider its claim. 

2. In light of our recommendation for corrective action, the agency 
elevated the new source selection decision from the contracting 
officer for the procurement to the Marshall Space Flight Center 
Procurement Officer.

3. ECI basically objects to the agency's normalization of each 
offeror's proposed costs.  For example, ECI complains about the 
application of the same agency headquarter's percentage escalation 
factor to each offeror's direct labor costs, particularly since the 
escalation factor it used to calculate its proposed direct labor costs 
was significantly lower than the factor used by the agency.  However, 
the RFP stated that in adjusting costs to determine the "probable cost 
of doing business" with each offeror, "common or different cost[s] to 
more than one proposal [would] be adjusted to a common baseline."  By 
applying the same escalation factor to each offeror's direct labor 
costs, the agency evaluated such costs "to a common baseline" as 
required by the RFP.  ECI's challenge constitutes a protest of an 
alleged solicitation impropriety which was not timely raised prior to 
the appropriate closing time for receipt of proposals.  Bid Protest 
Regulations, section 21.2(a)(1), 61 Fed. Reg. 39039, 39043 (1996) (to 
be codified at 4 C.F.R.  sec.  21.2(a)(1)).

4. There is no credible evidence in the record to support ECI's 
position that the agency was biased against ECI, a small disadvantaged 
business concern, or biased in favor of IITRI, the incumbent 
contractor.  As discussed, even if the agency's reevaluation was 
flawed, ECI was not prejudiced because the award was otherwise 
consistent with the terms of the RFP.