BNUMBER:  B-275213
DATE:  January 30, 1997
TITLE:  United Ammunition Container, Inc.

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Matter of:United Ammunition Container, Inc.

File:     B-275213

Date:January 30, 1997

Robert G. Fryling, Esq., Blank, Rome, Comisky & McCauley, for the 
protester.
Douglas Patin, Esq., and Robert Symon, Esq., Spriggs & Hollingsworth, 
for Omega Container, Inc., an intervenor.
Jeffrey I. Kessler, Esq., and Barry R. Dean, Esq., Army Materiel 
Command, for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  In solicitation which identifies technical approach, management, 
and past performance as separate and independent evaluation factors, 
protest that agency should have considered offeror's allegedly poor 
past performance record under other evaluation factors as well is 
denied since such consideration would have been inconsistent with 
solicitation evaluation scheme and led to improper exaggeration of the 
importance of the past performance factor. 

2.  Agency's evaluation of proposed option pricing based on a 
combination of separate prices for each range under each option, up to 
the maximum quantities, rather than on a single price representing the 
maximum quantities, is unobjectionable where it is consistent with the 
evaluation methodology set forth in the solicitation.

DECISION

United Ammunition Container, Inc. (UAC) protests the award of a 
contract to Omega Container, Inc. under request for proposals (RFP) 
No. DAAE30-96-R-0020, issued by the Department of the Army for the 
supply of inner containers for the 
120 millimeter mortar.  UAC challenges the agency's evaluation of 
Omega's past performance and its method of evaluating option prices. 

We deny the protest.

The RFP contemplated award of a firm, fixed-price contract for a base 
quantity of 58,782 inner containers with two options for quantities of 
11,000 to 80,000 and 16,000 to 115,000 units.  Proposals were to be 
evaluated on the basis of price and three factors, listed in 
descending order of importance:  technical, management, and past 
performance.  The technical factor was "overwhelmingly more important" 
than management and past performance combined and all three factors 
were considered more important than price.  The evaluated price was to 
be determined by adding the price of the basic quantity, first article 
testing (FAT), and option quantities.  Award was to be made to the 
offeror whose proposal was determined to be the most advantageous to 
the government.

UAC and Omega were the only two offerors submitting proposals by the 
August 30, 1996, closing date.  Both proposals were considered 
unacceptable as submitted, but both were placed in the competitive 
range because each offeror had produced the same or similar items and 
the agency expected their proposal scores to increase after 
discussions.  After the conduct of discussions and the submission of 
best and final offers (BAFO), the final technical evaluation was as 
follows: 

Offeror Technical (82)Management (10)Past Perf. (8)Total (100) 

Omega   81         9           3        93

UAC     79.2       10          8        97.2
The slight difference in scores was directly attributable to Omega's 
low rating under past performance.  Taking into consideration the fact 
that the technical factor was significantly more important, the 
contracting officer determined that the proposals were essentially 
technically equal.

Omega's evaluated price was found to be lower than UAC's.  In the 
price evaluation, the agency calculated option prices by multiplying 
the unit price for each range by the maximum quantity in each range 
and added the results to the FAT and basic quantity prices for each 
offeror.  UAC also submitted an alternate price schedule, which was 
based on the agency's early exercise of both options and delivery of 
all option quantities immediately following delivery of the production 
quantities.  The agency did not consider this offer since it took 
exception to the RFP's stated delivery schedule and because the agency 
was unable, for funding and other reasons, to exercise the options so 
soon. 

Based on its finding of technical equivalency and that Omega's 
evaluated price was lower than UAC's, the agency awarded the contract 
to Omega.  After receiving notice of the award and a debriefing, UAC 
filed this protest challenging the technical and price evaluations. 

In its original price evaluation, Omega's evaluated price was lower 
than UAC's proposed price by more than $500,000 and lower than UAC's 
alternate price by approximately $75,000.  After reviewing the 
protest, the agency realized it had improperly calculated prices for 
more option units than could be ordered under the terms of the 
contract.  The agency recalculated the prices based upon the maximum 
number of units and found that Omega's evaluated prices remained lower 
than UAC's proposed price by approximately $235,000 and lower than its 
alternate price by approximately $11,000.

EVALUATION OF PAST PERFORMANCE

Where an evaluation is challenged, we will examine the evaluation to 
ensure that it was reasonable and consistent with the evaluation 
criteria and applicable statutes and regulations, since the relative 
merit of competing proposals is primarily a matter of administrative 
discretion.  Information Sys. & Networks Corp., 69 Comp. Gen. 284 
(1990), 90-1 CPD  para.  203.  Mere disagreement with the agency's 
evaluation does not itself render the evaluation unreasonable.  Litton 
Sys., Inc., B-237596.3, Aug. 8, 1990, 90-2 CPD  para.  115.

UAC contends that the evaluation of Omega's proposal was flawed 
because the agency only considered Omega's past performance record 
under the "past performance" factor.  UAC observes that under the 
technical factor, the most important of six subfactors was 
"manufacturing approach."  Among other matters, an offeror's 
manufacturing approach was evaluated on the basis of the offeror's 
ability to identify all of the general/critical manufacturing 
processes associated with fabrication of its design; the procedures in 
place for each process; its availability of plant, equipment, and 
qualified personnel; and a showing that production flow from these 
processes would meet the delivery schedules.  Under the management 
factor the agency evaluated the performance of the offeror's 
organization.  In UAC's view, an offeror's ability to meet delivery 
schedules had an impact on these subfactors, hence Omega's past 
performance should have been considered under them, and its technical 
score should have been lower.  We disagree.

UAC's contentions ignore the RFP's explicit evaluation scheme which 
provided for the evaluation of past performance under the "past 
performance" factor.  To this end, offerors were required to submit a 
record of previous and current experience and performance on 
similar/related efforts over the last 3 years, specifically 
identifying those efforts of equal or greater complexity performed 
using the offeror's existing plant capability.  Under this factor, the 
agency intended to assess performance risks based on an offeror's past 
performance by examining the offeror's record of performance in 
connection with cost, schedule, quality of product, timeliness of 
performance, business practices, and customer significant achievement.  
In other words, the agency was to evaluate how an offeror might 
perform, based on how it performed in the past.  This is distinct from 
what the agency sought to evaluate under the manufacturing approach 
subfactor, that is,  an offeror's current ability to meet the RFP's 
requirements based on how it proposed to do so and whether it 
currently possessed an adequate facility and qualified personnel to 
ensure timely performance.  Thus, had the agency considered past 
performance under this subfactor, it would have deviated from the RFP 
evaluation scheme and improperly double counted or otherwise 
exaggerated the importance of the past performance factor.[1]   See 
J.A. Jones Management Servs., Inc., B-254941.2, Mar. 16, 1994, 94-1 
CPD  para.  244.

UAC also contends that the agency failed to consider Omega's past 
performance in its assessment of which proposal represented the best 
value.  The record establishes otherwise.  In making her award 
determination, the contracting officer  recognized the overwhelming 
importance of the technical factor and the substantially lesser 
significance of the past performance factor.  She also noted that 
Omega's past performance score of 3 out of 8 points was attributable 
to a lack of sufficient detailed information regarding cost and 
schedules in Omega's proposal.  She also considered that, during the 
evaluation, the agency contacted other sources familiar with Omega's 
past performance who indicated that Omega's performance was 
satisfactory and that any delays previously experienced were either 
insignificant or excusable.[2]  In light of this information and 
Omega's higher score in the technical area, the contracting officer 
found that the 4.2-point difference between the proposals' merit 
ratings was insignificant and that the two proposals were essentially 
technically equal, which led her to award the contract to Omega, the 
offeror with the lowest-evaluated price.  We see nothing unreasonable 
with the contracting officer's determination.  To the extent UAC 
disagrees with the lesser significance placed on past performance, its 
protest of this solicitation provision after award is untimely.  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)).

EVALUATION OF OPTION PRICES

According to the RFP, options were to be evaluated for award purposes 
by adding the total price for the highest quantity of each option 
range to the total price for the basic requirement.  Section B.1 of 
the RFP provided space for option unit prices as follows: "Option I . 
. . Ranges" (11,000 to 35,000; 35,001 to 60,000; 60,001 to 80,000); 
and "Option II . . . Ranges" (16,000 to 50,000; 50,001 to 84,000; 
84,001 to 115,000).  As originally conducted, the evaluation of 
options complied literally with the provisions of the RFP and the 
agency arrived at option prices representing 175,000 units under 
Option I and 249,000 units under Option II.  However, the maximum 
quantities which could be ordered under the options were 80,000 and 
115,000 units, respectively.  

After UAC challenged this methodology in its protest, the agency 
recognized that it was improper for it to have calculated the total 
option prices based upon quantities exceeding those which could be 
ordered under the RFP's option clauses, and reevaluated the option 
prices for each range by multiplying the unit price for the first 
range under each option by the maximum quantity for that range and by 
multiplying the remaining two ranges by the representative difference 
in the ranges.  For example, under Option I, it multiplied the first 
range's unit price by 35,000, the second range's unit price by 24,999 
(the difference between 35,001 and 60,000), and the third range's unit 
price by 19,999 (the difference between 60,001 and 80,000).[3]  
Because Omega's prices remained lower than either UAC's proposed or 
alternate prices, the agency determined that  the award was proper.

UAC now challenges the agency's reevaluation of option prices.  In 
UAC's view, the agency was required to evaluate option prices by 
calculating the price only of the highest quantity for each option.  
That is, instead of calculating three separate prices for each range, 
the agency should have used the unit price for the highest range to 
multiply the maximum number of units in each of the two options.  
Using UAC's method, its alternate proposal would be lower in price 
than Omega's.  

UAC's suggested method gives no effect to the plain language of the 
RFP that options would be calculated by "adding the total price for 
the highest quantity of each option range."  (Emphasis added.)  Since 
the RFP identified three separate ranges and called for prices for 
each range of the two options, the RFP clearly contemplated adding 
three separate quantity prices to calculate the prices of each option.  
While UAC's suggested method might be reasonable under a different RFP 
provision, it is not a reasonable interpretation of the option 
evaluation clause here.   We find nothing objectionable or 
unreasonable in the agency's reevaluation methodology.

In any event, the agency explains that UAC's alternate proposal 
represented an unacceptable, material change to the terms of the 
solicitation.  The RFP provided a detailed delivery schedule calling 
for the FAT to be completed 8 months after contract award; production 
quantity in two parts at 9 and 10 months after award; Option I 
quantities (assuming the maximum ordered) in three parts at 2, 3, and 
4 months after option award; and Option II quantities (assuming a 
maximum order) at 2, 3, 4, and 5 months after Option II award.  The 
options could be exercised/ awarded within 12 months (Option I) and 20 
months (Option II) of contract award.

UAC's alternate pricing was contingent on the agency's early exercise 
of the options and agreement to accept delivery of option quantities 
immediately following delivery of the basic quantity.  As the agency 
correctly observes, in order to consider UAC's alternate offer it 
would have had to amend the RFP to allow Omega to submit an offer on 
the same terms.  The agency chose not to issue an amendment and not to 
consider the alternate pricing because funding contingencies and the 
additional risk to the agency from exercising options prior to the 
completion of the FAT made the proposed contingencies unacceptable.[4]

The protest is denied.

Comptroller General 
of the United States

1. In a related argument, UAC contends that the agency improperly 
considered contracts of smaller size than that contemplated by the 
RFP.  However, the RFP did not make performance of similarly sized 
contracts a matter for specific consideration in the past performance 
evaluation.  Rather, the agency sought information about similar 
efforts of greater or equal complexity.   While contract size may be 
relevant to contract complexity, the fact that the contract to be 
awarded is larger in size (e.g., more units must be delivered) does 
not necessarily mean that the larger contract is more complex.  See 
PMT Servs., Inc., B-270538.2, Apr. 1, 1996, 96-1 CPD  para.  98.  Here, the 
agency explains, without contradiction, that the containers to be 
supplied are not complex items and both offerors elected to use the 
government's technical data package rather than develop their own 
design.  

2. While the agency made no adjustment to Omega's past performance 
score at that time, it now states that the additional information it 
received warranted a three- point increase under Omega's past 
performance assessment.

3. The protester points out that the combined figure does not 
represent the maximum number of option quantities under each option.  
While this is true, the resulting difference in each offeror's price 
is less than $40, an insignificant figure which has no impact on this 
procurement.

4. UAC also argues that by failing to advise it that these terms were 
unacceptable, the agency failed to conduct meaningful discussions.  
While the agency did not expressly state that it considered the 
alternate proposal unacceptable and why, the agency did advise UAC 
that all terms and conditions of the solicitation remained as stated 
in the initial solicitation and would not be changed.  Under the 
circumstances of this case, we believe this was sufficient to lead UAC 
into this area of its proposal which clearly sought to change terms 
and conditions of the solicitation.  Caldwell Consulting Assocs., 
B-242767; B-242767.2, June 5, 1991, 91-1 CPD  para.  530.  UAC further 
claims that had it been more plainly told that its alternate terms 
were unacceptable, it would have deleted those terms and left its 
alternate pricing unchanged.  Since UAC's primary BAFO, proposing a 
significantly higher price, was already based on the RFP's terms, we 
find this argument implausible as it is contradicted by UAC's extant 
pricing methodology.