BNUMBER:  B-275356
DATE:  February 11, 1997
TITLE:  Computer Systems Development Corporation

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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:Computer Systems Development Corporation

File:     B-275356

Date:February 11, 1997

John R. Tolle, Esq., Barton, Mountain & Tolle, LLP, for the protester.
Barbara S. Kinosky, Esq., Bean, Kinney & Korman; and James S. 
Phillips, P.C., Esq., for Cost Management Systems, Inc., an 
intervenor.
Keith Simmons, Esq., and James T. Tate, Jr., Esq., Department of 
Defense, for the agency.
Marie Penny Ahearn, Esq., and John M. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest challenging award to higher-priced, higher technically rated 
offeror is denied where solicitation's evaluation scheme gave greater 
weight to technical merit than to price; agency reasonably determined 
that awardee's proposal was technically superior to protester's; and 
by identifying and costing specific technical discriminators as a tool 
in its best value assessment, agency reasonably concluded that 
protester's lower price did not outweigh technical advantages of 
awardee's proposal. 

DECISION

Computer Systems Development Corporation (CSDC) protests the award of 
a contract to Cost Management Systems, Inc. (CMS) under request for 
proposals (RFP) No. HQ0006-96-R-0004, issued by the Ballistic Missile 
Defense Organization (BMDO), Department of Defense (DOD), to provide 
support services for automated information systems (AIS).  The 
protester argues that BMDO improperly evaluated proposals and 
unreasonably selected CMS for award despite CMS' higher price.  

We deny the protest.

BACKGROUND

The RFP contemplated award of a cost-plus-fixed-fee contract for a 
2-year base period with two 1-year options, on a best value basis.  
The technical evaluation factors, in descending order of importance, 
were:  (1) past performance,             (2) personnel, (3) 
understanding and approach, (4) corporate experience, and      (5) 
management; each factor was to be evaluated with a color rating and 
risk assessment.  Proposed cost was to be evaluated for realism, 
completeness and reasonableness; the results of the cost realism 
analysis would be used to adjust proposals to the most probable cost 
(MPC) to the government, which in turn would be used to assist in the 
best value determination.  The RFP provided in this regard that 
"[w]hile the evaluated probable cost to the government is a 
substantial area to be taken into account in the overall integrated 
assessment of offers, the non-cost factors collectively are of greater 
importance," and that "[t]herefore, the government may select other 
than the lowest cost/priced, acceptable offer if it is determined that 
the additional capability offered is worth the additional cost in 
relation to other acceptable offers."  

Ten proposals were received, five of which, including those from CSDC 
and CMS, were evaluated at an acceptable level and included in the 
competitive range.  Discussions were held and best and final offers 
(BAFO) requested.  CMS' BAFO was rated blue under three of the five 
technical factors--past performance, understanding and approach, and 
corporate experience--and green for the remaining factors and also 
received a low risk assessment.[1]  CSDC's BAFO was rated green under 
all factors and received a low risk assessment.  (Two other proposals 
received technical ratings higher than CSDC's, but are not relevant 
here.)  CSDC's BAFO cost was low at $5,819,303--but was adjusted 
upward to a $5,894,937 MPC--while CMS' was second high at $7,013,870.

The source selection evaluation team (SSET) determined that the value 
impact of the quantifiable discriminators of CMS' highest rated 
proposal was $1,224,426, which was greater than the $1,118,933 cost 
advantage offered by CSDC's low MPC, and thus would result in a cost 
savings or benefit to the government of $105,495.[2]  The source 
selection authority (SSA) reviewed the SSET's evaluation and 
determination, concluded that the benefits of CMS' technical proposal 
indeed outweighed CSDC's proposal's lower cost, and thus selected CMS 
for award.

TECHNICAL EVALUATION

CSDC challenges various aspects of the technical evaluation and 
essentially concludes that its proposal should have been evaluated as 
technically equal to the awardee's, and that it therefore should have 
received the award based on its low MPC.  

Our Office will not question an agency's evaluation of proposals 
unless it was inconsistent with the RFP or unreasonable.  Information 
Sys. & Networks Corp.,   69 Comp. Gen. 284 (1990), 90-1 CPD  para.  203; 
Dylantic, Inc., B-261886, Oct. 30, 1995, 95-2 CPD  para.  197.  We find 
nothing objectionable with the evaluation here.

Past Performance

CSDC challenges the evaluation of past performance on the basis that 
the agency improperly failed to consider the dollar value similarity 
of the offerors' prior contracts to the procurement here.  As a 
result, CSDC notes, CMS' proposal received a blue rating based on past 
contracts of a generally smaller dollar value than the procurement 
here, while CSDC's proposal received a green rating despite the fact 
that its prior contracts generally were of a greater dollar value than 
the procurement here.  CSDC concludes that there was no basis for 
rating CMS' proposal higher than its own under this factor.

This argument is without merit.  The RFP specified that the evaluation 
of past performance would encompass the "[c]ontractor's performance in 
previous contracts including quality, timeliness/responsiveness, cost 
control, and customer satisfaction."  As the RFP did not state that 
similarity of dollar value would be considered in this assessment, the 
agency properly did not focus on dollar value similarity. 

BMDO rated CMS' past performance blue based on the offeror's 
overwhelmingly excellent past performance questionnaire responses and 
positive self-assessments (the two informational bases for evaluating 
past performance).  Specifically,       100 percent of the past 
performance questionnaires indicated that CMS' performance had at 
least met expectations, and 75 percent indicated that the firm 
exceeded expectations.  Additionally, CMS' self-assessments were 
evaluated as "excellent" based on described problem prevention/lessons 
learned which resulted in improved contract performance.  In contrast, 
only 80 percent of CSDC's questionnaires rated the firm's performance 
as having met expectations, less than   75 percent rated its 
performance as having exceeded expectations, and several responses 
cited instances of unsatisfactory performance based on not submitting 
invoices to the government on time and not paying a subcontractor.  We 
conclude that the evaluation of proposals in this area encompassed the 
elements stated in the RFP, and that CMS' past performance reasonably 
was rated superior to CSDC's.[3]

Corporate Experience

CSDC challenges the evaluation of corporate experience on the same 
basis as its challenge to the past performance evaluation--the size of 
contracts was ignored or given little weight in the agency's 
assessment.  Specifically, the protester complains that the agency 
based CMS' higher rating on two DOD contracts--which the agency 
determined were greater in scope than the procurement here--even 
though the record indicates that only one of those contracts was of a 
greater dollar amount.  The protester further complains that CMS' 
higher rating in this area was based on its having provided services 
to other DOD agencies, although there was no specific requirement in 
the RFP for such experience.

Under the corporate experience factor, the RFP provided that 
consideration would be given to the "[b]readth (i.e., variety or 
number of contracts) and significance (i.e., size, complexity, 
participation) of corporate experience (including subcontractors and 
consultants of this proposal) in accomplishing efforts relevant to 
those described in the [statement of work] SOW."  The RFP also 
provided that "[w]hen cited contracts cover a variety of size and 
complexity, greater weight goes to relevant contracts of a size and 
complexity equal to or greater than this solicitation," and that 
"[p]articular emphasis shall be placed on contracts that provide [AIS] 
services in a dynamic environment . . . [such as] . . . [o]pen 
architecture or systems migration experience."  

CMS' experience was rated blue, and superior to CSDC's, because it was 
found to exceed the minimum requirements, based on CMS' experience in 
performing the exact same work as that required under the RFP for the 
Offices of the Under Secretary of Defense for Acquisition and 
Technology and the Assistant Secretary of Defense for Command, 
Control, Communications, and Intelligence, both of which offices were 
considered by the evaluators to have technical and political 
environments comparable to BMDO.  We find nothing unreasonable in this 
evaluation.  While contract size was identified as one of the 
considerations under this factor, the entire corporate experience 
evaluation was to be based on experience "in accomplishing efforts 
relevant to those described in the [statement of work]," that is, 
similarity of the work performed to the work under the RFP.  Contract 
size was not assigned greater significance than similarity of the work 
performed or any other consideration.  Indeed, as noted, "particular 
emphasis" was to be given AIS services contracts performed in a 
dynamic environment.  CMS' superior rating was consistent with this 
emphasis--it was based on the firm's extensive experience in the AIS 
area and, particularly, on the fact that the firm had performed the 
exact same work as required under the RFP for other DOD agencies 
(presumably also in a similar dynamic environment).  Given that the 
RFP did not preclude consideration of work performed for other DOD 
agencies, the fact that the RFP did not specifically require 
experience with other DOD entities is irrelevant to the propriety of 
the agency's consideration of CMS' experience.  We conclude that, to 
the extent CSDC may have performed larger dollar value contracts than 
CMS, there was nothing improper or unreasonable in the agency's 
essentially determining that this consideration was outweighed by, and 
thus did not warrant as high a rating as, the similarity of the work 
under CMS' prior contracts.  Counter Technology Inc., B-260853, July 
20, 1995, 95-2 CPD  para.  39; see Noslot Cleaning Servs., Inc., B-251264, 
Mar. 18, 1993, 93-1 CPD  para.  243.[4] 

COST EVALUATION

CSDC argues that the agency improperly adjusted the firm's proposed 
government site labor overhead rate upward from 28 percent to 31.1 
percent, resulting in a $75,634 increase in CSDC's proposed cost.  The 
record shows that the agency adjusted CSDC's overhead rate because it 
was below the range of rates in the other proposals, CSDC did not 
provide the detailed information necessary to support the rate, and 
the agency was unable to verify the rate through the Defense Contract 
Audit Agency (DCAA).  CSDC generally disagrees with the agency's 
position, but has provided no specific information or argument showing 
that the adjustment was unreasonable.  Energy and Envtl. Servs. Corp., 
B-258139.4, May 15, 1995, 95-2 CPD  para.  32.  In any case, the adjustment 
had no apparent effect on the award, and thus resulted in no prejudice 
to CSDC, since the evaluated cost benefit on which the award to CMS 
was based was greater than the amount of the adjustment.  See Prospect 
Assocs., Inc., B-260696, July 7, 1995, 95-2 CPD  para.  53. 

COST/TECHNICAL TRADEOFF

CSDC challenges the cost-technical tradeoff on the grounds that 
neither the agency's methodology in assigning a cost impact to 
technical proposal discriminators, nor the discriminators themselves, 
were disclosed in the RFP.  The protester asserts that had it known 
that the tradeoff would focus on technical features/capabilities that 
exceeded the RFP requirements, it would have offered these extras.   

In order to assist in making a best value determination, the SSET 
identified various discriminating factors in CMS' higher-cost, 
highest-rated technical proposal, and the value impact of those 
differences compared to CSDC's low cost, technically acceptable 
proposal.  Specifically, the SSET identified nine discriminators 
(covering all of the evaluation factors except management) and 
determined that their total value impact in terms of cost savings or 
benefit to the government was $1,224,426,[5] which was greater than 
the advantage offered by CSDC's low cost proposal.  Based on CMS' cost 
savings discriminators and its low best value total cost, as 
calculated above, the SSET recommended award to the firm.  The source 
selection authority (SSA) concurred with the SSET's recommendation, 
determined that the "additional benefits derived from CMS' technical 
proposal outweigh the lower cost of the . . . CSDC proposal," and 
directed award to the firm.

In negotiated procurements, where an agency chooses between a 
higher-cost, higher-rated proposal and a lower-cost, lower-rated 
proposal, our review is limited to determining whether the 
cost/technical tradeoff is consistent with the stated evaluation 
criteria and otherwise reasonable.  Purvis Sys. Inc., 71 Comp. Gen. 
203 (1992), 92-1 CPD  para.  132; Central Texas College, 71 Comp. Gen. 164 
(1992), 92-1 CPD  para.  121.  

BMDO's cost/technical tradeoff was consistent with the RFP and 
reasonable.  While the agency's specific methodology--assigning 
specific dollar value to discriminators and subtracting those values 
from the proposed cost--was not disclosed in the RFP, it clearly was 
consistent with the evaluation as described in the RFP.  In this 
regard, the RFP notified offerors that, if necessary, the best value 
determination would include a cost/technical tradeoff analysis, and 
that "[t]his comparative evaluation w[ould] focus on significant 
differences or discriminating factors between the proposals and the 
value impact of those differences."  The RFP further specifically 
provided that "the government may select other than the lowest 
cost/priced, acceptable offer if it is determined that the additional 
capability offered is worth the additional cost in relation to other 
acceptable offers."  Offerors, including the protester, were on notice 
from this RFP language that the agency would assign values to 
discriminators between proposals, and that is precisely what the 
agency did during its tradeoff deliberations.  See Engineering and 
Professional Servs., Inc.,    B-262179, Dec. 6, 1995, 95-2 CPD  para.  266 
(where we found unobjectionable the use of a similar methodology which 
was executed in reverse by adding the dollar value of the 
discriminators to proposals that did not possess the particular 
features).

Further, the discriminators identified by the agency clearly were 
encompassed by the stated evaluation factors.  For example, under the 
understanding and approach factor, defined in the RFP as 
"understanding of requirements and approach to automated systems 
support services as described in the statement of work," the SSET 
determined that CMS' offer presented two discriminators or significant 
differences between it and other proposals--a reduced start-up time of 
2 weeks (which exceeded the requirement for a transition period not to 
exceed 90 days), and 24-hour staff coverage for support of the AIS 
facilities using pager technology (which exceeded the requirement for 
operation from 6 a.m. to 10 p.m. Monday through Friday and 8 a.m. to 4 
p.m. weekends and holidays).  The SSET determined that the shortened 
transition period would result in a saving to the government of 
$330,000 due to 2-1/2 months of incumbent services that would not be 
needed, and that the 24-hour coverage would result in a cost benefit 
of $357,994.  Both discriminators involve CMS' approach to providing 
AIS services, and thus were encompassed by the understanding and 
approach factor.  

We conclude that the RFP provided sufficient notice to offerors as to 
the manner in which the tradeoff would be conducted.  Moreover, where, 
as here, detailed technical proposals are sought and technical 
evaluation criteria are used to enable the agency to make comparative 
judgments about the relative merits of competing proposals, offerors 
are on notice that qualitative distinctions among the technical 
proposals will be made under the various evaluation factors.  Main 
Bldg. Maintenance, Inc., B-260945.4, Sept. 29, 1995, 95-2 CPD  para.  214.  
Since offerors here were on notice of a comparative evaluation, any 
additional credit which CMS received in the tradeoff for offering to 
exceed a minimum requirement was entirely proper.

CSDC further contends that the tradeoff was unfair because its 
proposal was not credited with certain significant benefits of 
equivalent value to those offered by CMS.  Specifically, the protester 
notes that its proposed use of additional personnel in the first 30 
days of contract start-up (under the personnel factor) and its 
proposed senior advisory board and agency access to the firm's 
intranet (under management) were noted as "strengths" in the technical 
evaluation, but were not assigned a dollar value in the tradeoff.  
This argument is without merit.  The agency states that, although the 
evaluators viewed the areas cited by the protester as "good ideas" 
they were insufficient to be regarded as significant discriminators 
(or to raise the protester's ratings under the factors from green to 
blue).  This is because, the agency explains, CSDC's proposal "did not 
provide a detailed discussion of how [the additional] personnel would 
be utilized and the benefit to the government" or "demonstrate how 
[the management initiatives] provided any additional value that would 
benefit [BMDO]."  While CSDC disagrees with the agency's judgment in 
not assigning value to these areas of its proposal, it has not 
specifically rebutted the agency's explanation that these strengths 
did not provide any quantifiable additional value or benefit to the 
government and has not otherwise shown the agency's judgment to be 
unreasonable.

The protest is denied.

Comptroller General 
of the United States

1. Blue was defined as "exceeds specified performance or capability in 
a beneficial way to BMDO, and has no significant weakness," and green 
was defined as "meets evaluation standards and any weaknesses are 
readily correctable."

2. The agency determined that several other nonquantifiable 
qualitative discriminators added value to CMS' proposal. 

3. In any case, the record does not support the protester's suggestion 
that CMS' prior contracts were of a smaller dollar value than the 
current requirement.  CMS had one past contract in the amount of $19.2 
million and was the subcontractor on a contract in the amount of $46.5 
million.  In addition, the record indicates that one of CMS' proposed 
subcontractors had past performance with contracts in the amount of 
$1.5 billion and $300 million.  

4. In any event, as already discussed, the record indicates that CMS' 
experience included experience as the prime on a $19.2 million DOD 
contract, and as a subcontractor on a $46.5 million Air Force 
contract.  

5. Value impacts were assessed using equivalent government rates and 
historical costs incurred from the current contract.