BNUMBER: B-275419; B-275419.2; B-275419.3
DATE: February 20, 1997
TITLE: Doss Aviation, Inc.; Dominion Aviation, Inc.
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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:Doss Aviation, Inc.; Dominion Aviation, Inc.
File: B-275419; B-275419.2; B-275419.3
Date:February 20, 1997
Thomas G. Jeter, Esq., and Mark J. Meagher, Esq., McKenna & Cuneo, for
Doss Aviation, Inc.; John R. Thompson, for Dominion Aviation, Inc.,
the protesters.
Col. Nicholas P. Retson, and Maj. Michael J. O'Farrell, Department of
the Army, for the agency.
Harvey G. Sherzer, Esq., William A. Roberts, Esq., Lee P. Curtis,
Esq., and Terry M. Petrie, Esq., Howrey & Simon, for UNC Aviation
Services, an intervenor.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that agency mechanically applied an undisclosed staffing
estimate in evaluating proposals is denied where the solicitation put
offerors on notice that staffing was a critical area of the
evaluation, offerors were required to describe the number of personnel
that would perform the work and show how the agency's stated flight
training requirements would be met, offerors were advised during
discussions as to whether their proposals included fewer instructor
pilots than were considered necessary under the agency estimate, and
there is no indication in the record that the agency unreasonably
overlooked or rejected specific elements of offerors' proposed
staffing approaches which were likely to result in the need for fewer
instructor pilots than the agency estimate.
2. Protest that in best value procurement agency improperly awarded
additional evaluation credit based on aspects of awardee's proposal
that exceeded the solicitation's minimum requirements is denied; where
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, and there is no
basis to object to the award of extra credit for advantageous elements
of a proposal when the additional credit is related to the stated
evaluation factors.
DECISION
Doss Aviation, Inc. and Dominion Aviation, Inc. protest the Department
of the Army's award of a contract to UNC Aviation Services, under
request for proposals (RFP) No. DABT01-96-R-0001, for rotary wing
(helicopter) flight training services at Fort Rucker. Doss and
Dominion primarily challenge the agency's evaluation of technical
proposals.
We deny the protests.
BACKGROUND
The solicitation contemplated award of a fixed-price contract, for a
base year with 4 option years, to furnish academic training classes,
flight simulator training, and aircraft flight training for rotary
wing aircraft at Fort Rucker. Although the statement of work (SOW)
established minimum manning totals for specified key personnel,
including flight commanders, offerors were required to calculate and
propose the average number of flight instructors required for each
fiscal year based on (1) projected student inputs into the training
program and class schedules set forth in the solicitation and (2) a
requirement to maintain a minimum flight instructor-to-student ratio
of one instructor to two students in all flight training courses.
Award was to be made based on the proposal offering the "best overall
value to the Government" under the following four criteria (listed in
descending order of importance): (1) "technical," comprised of three
subfactors, the most important of which was number and qualifications
of personnel; (2) performance history; (3) cost/price realism; and (4)
price. The solicitation stated that price, although listed as the
least important evaluation factor, would "become the determinative
factor with respect to offerors that are essentially equal in
technical acceptability, performance history, and cost/price realism."
Nine proposals were received by the closing time on July 8, 1996.
Seven proposals--including UNC's, Doss's, and Dominion's--were
included in the competitive range. Following discussions with
offerors, the Army requested best and final offers (BAFO). Based upon
the evaluation of BAFOs, the source selection evaluation board (SSEB)
reported to the source selection authority (SSA) that UNC had
submitted the technically superior proposal and that "[t]he technical
advantages presented by UNC are worth the price difference in this
mission essential, labor intensive, and fixed price contract." The
results of the evaluation were as follows:
UNC Doss Dominion
Technical 248,999 points/
no performance risk226,670 points/
moderate performance risk228,945
points/
moderate performance
risk
Performance Historylow risk low risk moderate risk
Cost/Price Realismrealistic realistic realistic
Price $101,633,570 $95,167,182 $96,696,210
The SSEB found that the proposed staffing levels of both Dominion and
Doss posed a performance risk. The SSEB noted with respect to
Dominion that it had proposed five fewer instructor pilots ([DELETED])
than the [DELETED] considered necessary in the independent government
estimate (IGE). Although the SSEB found this proposed staffing level
to be acceptable, it noted that it was essential for student pilot
production and quality of training that the required two student/one
instructor pilot ratio be maintained, and determined that Dominion
would need to increase its proposed labor force at the expense of its
profit and general and administrative expenses (G&A) in order to
maintain the required ratio. [DELETED]; the SSEB believed this
created the potential that Dominion would be required to absorb
additional costs (because of rising insurance premiums). Given that
Dominion's low profit ([DELETED] percent) and G&A ([DELETED] percent)
rates left it with only a "very small margin for error," the SSEB
concluded that in the event that the contractor encountered additional
costs beyond those on which it based its fixed price, the contractor
would be at financial risk in performing the contract, and that this
in turn could pose a risk to accomplishment of the training mission.
According to the SSEB, "[t[he potential exists for Dominion to reduce
quality in training and/or timeliness of service or to not clearly
meet the technical requirements of the RFP to absorb the increased
costs." In addition, the SSEB reported that on the only prior
contract on which the agency had received reports with respect to the
performance of Dominion itself (rather than its employees), Dominion
had encountered significant performance problems. Although Dominion's
performance on this contract had improved such that it was now
marginal, but satisfactory, the SSEB concluded that this level of past
performance itself created a moderate risk.
The SSEB's conclusions for Doss were similar to those for Dominion.
It noted that Doss had proposed four fewer instructor pilots
([DELETED]) than the [DELETED] considered necessary in the IGE;
although the SSEB found the proposed staffing level to be acceptable,
it determined that Doss, like Dominion, would need to increase its
proposed labor force at the expense of low proposed profit ([DELETED]
percent) and G&A ([DELETED] percent). Given the fact that Doss's low
profit and G&A rates left it with only a "very small margin for
error," and the additional fact that, as reported by the Defense
Contract Audit Agency, Doss had experienced an actual [DELETED]
percent G&A rate in the first quarter of 1996, the SSEB concluded that
encountering additional costs would put Doss at financial risk, which
in turn could pose a risk to accomplishment of the training mission.
According to the SSEB, "[t[he potential exists that Doss would reduce
quality in training and/or timeliness of service or . . . not clearly
meet the technical requirements of the RFP to absorb increased costs."
In contrast, the SSEB found UNC's proposal to be technically superior,
offering minimum performance and financial risk. The SSEB noted that
UNC had proposed [DELETED] instructor pilots, two more than considered
necessary in the IGE. Further, UNC's proposal was evaluated as
offering other significant advantages, including experienced
personnel, [DELETED], a comprehensive and innovative safety program
that provided excellent lines of communication, a detailed
mobilization plan, and detailed management and organization charts
that indicated excellent planning and [DELETED]. In addition, the
SSEB noted that UNC had an excellent performance record as the
incumbent flight training contractor at Fort Rucker and that its price
proposal was based on the actual costs it was experiencing in
performing that contract; according to the SSEB, UNC had demonstrated
the ability to perform successfully at its stated fixed price. The
SSEB concluded that UNC's proposed price was "reasonable for the
superior technical services offered."
The SSA concurred in the SSEB's determination that UNC's proposal was
most advantageous to the government. Although recognizing that Doss
and Dominion had offered lower prices, the SSA determined that their
proposals presented a risk to accomplishing the training mission as a
result of their inadequate staffing, limited ability within the
contract price--because of low profit and G&A rates--to cover cost
increases that were likely as a result of the need to hire more
instructor pilots or increases in [DELETED] insurance rates, and
marginal performance history (Dominion). The SSA noted that, in
contrast, UNC's performance history was evaluated as low risk, and
that UNC was
"clearly superior technically to other offerors . . . with no
potential performance risk. Recognizing that the performance
of this contract impacts significantly on various flight
training programs and contracts that support those programs
and the possibility of loss of human life during this flight
training, it is imperative that the offeror presenting the
best technical proposal with the least amount of risk receive
contract award."
The SSA concluded that the technical advantages of UNC's proposal were
worth the higher price of the proposal (as stated in the post business
clearance memorandum) and that UNC's proposal therefore represented
"the best value to the Government in accordance with the RFP
evaluation criteria."
Upon learning of the resulting award to UNC, Doss and Dominion filed
these protests with our Office. We discuss below the most significant
of their arguments.
APPLICATION OF IGE
Doss
Both Doss and Dominion challenge the Army's application of the IGE to
their proposals. In its protest, Doss primarily argues that the Army
improperly mechanically applied the IGE to its proposal, without
regard to the specifics of Doss's proposed approach.
An agency properly may evaluate technical or price proposals for
adequacy against an undisclosed reasonable estimate of appropriate
manning where the RFP notifies offerors that staffing is an area of
evaluation. DynCorp et al., B-257037.2 et al., Dec. 15, 1994, 95-1
CPD para. 34. Here, the RFP specifically put offerors on notice that
staffing was a critical area of the evaluation, indicating that
staffing was the most important subfactor of the most important
evaluation factor. Offerors were required to describe the number of
personnel that would perform the work and show how the production
schedule and quantities set forth in the solicitation--that is, the
projected student inputs into the training program and class
schedules--would be met. Moreover, during discussions, offerors were
specifically advised as to whether their proposals included fewer
instructor pilots than were considered necessary under the IGE.[1]
On the other hand, since absolute reliance on estimates can have the
effect of arbitrarily and unfairly penalizing an innovative or
unusually efficient offeror, KCA Corp., B-255115, Feb. 9, 1994, 94-1
CPD para. 94, it is inappropriate to determine the acceptability of
proposals by the mechanical application of an undisclosed estimate.
Allied Cleaning Servs., Inc., 69 Comp. Gen. 248 (1990), 90-1 CPD para. 275
(mechanical application of a staff-hour estimate found unreasonable).
Rather, the evaluation must also take into consideration whether an
offeror's proposed work force is particularly skilled and efficient,
or whether, because of a unique approach, a firm could satisfactorily
perform the work with staffing different from that estimated by the
agency. Kinton, Inc., 67 Comp. Gen. 226 (1988), 88-1 CPD para. 112.
We find no improper mechanical application of the IGE. The Army
reports that it did use the IGE as a starting point or "guide" in
evaluating proposed staffing. However, according to the Army, it did
not mechanically apply the IGE. Rather, explains the agency, "[i]f
the method proposed by the offeror did not furnish the required number
of personnel according to the IGE, and did not have a reliable and
workable method to assure continuation of the training, the proposal
was adjudged to offer some risk to the Government." The agency found
nothing in Doss's staffing approach that indicated that Doss was
likely to be able to perform satisfactorily with fewer instructor
pilots than the IGE.
Although Doss questions the Army's account of the evaluation process,
maintaining that the contemporaneous evaluation documentation does not
show that anything more than a mechanical application of the IGE
occurred, Doss has not shown what specific elements of its proposed
staffing approach were acceptable approaches that were likely to
result in the need for fewer instructor pilots.[2] Furthermore, Doss
specifically acknowledges that it "has not challenged in this protest
the reasonableness of the agency's IGE." We thus find no basis to
question the agency's evaluation in this area.
Dominion
Dominion argues that had the agency accepted its lower estimated
setback rates--that is, the percentage of student pilots held back for
additional training--the evaluated 5-instructor pilot deficit relative
to the IGE would have been reduced to a 1-instructor deficit.
Specifically, Dominion proposed a reduction in the setback rates
relative to the historical setback rates for the past 12 months, which
were set forth in the RFP. However, Dominion offered no detailed
explanation in its proposal as to how it would accomplish a reduction
in the historical setback rates, and we find no basis to question the
agency's position that Dominion's essentially unsupported claim that
it would be able to reduce the historical rates would not justify
evaluating its staffing based on this hope.[3]
UNC'S STRENGTHS
Dominion
Both Dominion and Doss challenge the agency's assignment of strengths
to UNC's proposal. In its protest, Dominion asserts that "[t]he
Solicitation and the Prebid Conference [were] a clear instruction to
provide the Agency with the lowest cost technically acceptable"
approach.
Dominion's interpretation is without merit. In a negotiated
procurement, unless the RFP so specifies, there is no requirement that
award be based on lowest cost. Lloyd-Lamont Design, Inc., B-270090.3,
Feb. 13, 1996, 96-1 CPD para. 71. As noted by Dominion, the solicitation
did state that "[p]rice will become the determinative factor with
respect to offerors that are essentially equal in technical
acceptability, performance history, and cost/price realism."
(Emphasis added.)[4] However, the use of the term "acceptability" in
this context clearly did not indicate that award would be made on the
basis of the low, technically acceptable offer; indeed, the import of
the language is that the agency would be performing a comparative
evaluation of technical proposals, and that price would become
determinative only if proposals were otherwise equal. The
solicitation also made clear elsewhere that award would be made to the
offeror whose proposal offered the "best overall value to the
Government" based on consideration of the four listed evaluation
criteria of varying weight, only one of which was price and the most
important of which was "technical" (not "technical acceptability").
Doss
Doss asserts that the Army improperly awarded UNC's proposal
additional evaluation credit "based on aspects of UNC's proposal that
exceeded or were outside the RFP requirements and evaluation
criteria," such as offering quality assurance instructor training at
no cost to the government and crediting UNC under the technical factor
for its prior safety record while the incumbent contractor at Fort
Rucker.
Doss's position is without merit. 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. Evaluation credit properly may be
given, under these circumstances, where a proposal includes
enhancements or features not required by the solicitation. Id.
Further, the credit given UNC's proposal fell within the stated
evaluation criteria. The SOW required the contractor to "establish a
complete Quality Control Program to assure the requirements of the
contract are provided as specified" and provided for government
quality assurance evaluators (QAE) to monitor the contractor's
performance, while the statement of evaluation criteria specifically
provided for evaluation of the offeror's approach to quality control.
In our view, the Army could reasonably consider UNC's proposal for UNC
quality control instructors to furnish training to "Government
QAE/Instructor Pilot" personnel at no cost to the government to be an
advantageous part of UNC's overall quality control program and as such
to merit credit under the quality control evaluation subfactor. As
for the recognition in the SSEB report of UNC's prior safety record as
the incumbent contractor at Fort Rucker, this consideration appears
related to both (1) the evaluation element for safety, one of the
seven elements under the policies and procedures subfactor, which was
one of the two subfactors under the technical factor, and (2) the
performance history evaluation factor. We see no basis to object to
consideration of UNC's prior safety record under the safety element
rather than the performance history factor. Since offerors here were
on notice of a comparative evaluation, and the additional credit which
UNC received in the tradeoff for offering to exceed a minimum
requirement was related to the stated evaluation factors, such credit
was entirely proper.
COST/TECHNICAL TRADEOFF
Both Dominion and Doss challenge the Army's cost/technical tradeoff.
Dominion generally questions whether the additional staff offered by
UNC was worth the higher price of its proposal. Doss argues that the
Army failed to meaningfully consider whether the technical advantages
offered by UNC's proposal were worth the higher price of the proposal,
and instead focused only on the technical superiority of its proposal
and on whether prices were realistic and reasonable.
In a negotiated procurement, unless the RFP so specifies, there is no
requirement that award be based on lowest cost. A procuring agency
has the discretion to select a more highly-rated technical proposal if
doing so is reasonable and is consistent with the evaluation scheme
set forth in the RFP. Lloyd-Lamont Design, Inc., supra; Management
Sys. Designers, Inc., B-244383.3, Sept. 30, 1991, 91-2 CPD para. 310. We
will uphold an award to a higher-rated offeror with higher proposed
costs where the agency reasonably determines that the cost premium was
justified considering the technical superiority of the selected
offeror's proposal. United Telecontrol Elecs., Inc., B-235774.2, Nov.
7, 1989, 89-2 CPD para. 433. Even where a source selection official does
not specifically discuss the technical/cost tradeoff in the selection
decision document, we will not object if the tradeoff is supported by
the record. Lloyd-Lamont Design, Inc., supra; Maytag Aircraft Corp.,
B-237068.3, Apr. 26, 1990, 90-1 CPD para. 430.
Here, the Army maintains that the agency in fact performed a
cost/technical tradeoff and concluded that the technical
superiority/lower risk of UNC's proposal justified its higher price.
Although the record includes some indication that the Army focused on
selecting the technically superior/low risk proposal so long as its
cost/price was realistic and reasonable, the contemporaneous
evaluation record also includes documentation of the advantages
offered by UNC's proposal and determinations by the SSEB and the SSA
that the resulting technical superiority/low risk of UNC's proposal
was worth its higher price.
The Army has determined that the protesters' proposals offered
significant performance risk as a result of inadequate staffing, a
limited ability to absorb within their proposed contract prices the
likely cost increases they would encounter in performing the contract
and, with respect to Dominion, a marginal past performance record.
The agency has further determined that UNC submitted a technically
superior proposal which was based on adequate staffing with
experienced personnel and offered advantages in a number of areas,
including quality control and management, and that UNC had an
excellent performance record as the incumbent contractor,
demonstrating its ability to successfully perform the required work at
its stated fixed price, such that UNC's proposal overall offered the
agency a significantly higher likelihood of the successful performance
of vital, safety-related services. Again, the Army has concluded that
the resulting technical superiority/low risk of UNC's proposal was
worth its higher price. Given the superiority of UNC's proposal under
the most important evaluation factor (technical), its excellent
performance record as the incumbent contractor, the greater realism of
its proposed cost/price, the fact that price was the least important
of four evaluation factors, and the fact that UNC's price was only 5.1
and 6.8 percent higher than Dominion's and Doss's prices,
respectively, we find no basis to question the agency's position that
UNC's proposal offered the best value under the stated evaluation
criteria.
The protests are denied.
Comptroller General
of the United States
1. Thus, Doss, which initially proposed 17 instructor pilots fewer
than the original IGE--subsequently revised downward as a result of
amendments to the RFP--was advised during discussions that it had
proposed "significantly fewer" instructor pilots than the number
considered necessary in the IGE.
2. It is not apparent from the record what specific elements of Doss's
BAFO proposed staffing approach were reasonable approaches that were
likely to result in the need for fewer instructor pilots than the IGE.
For example, although Doss proposed to transfer instructor pilots from
one type of training to a second type in order to accommodate the
expected reduction in the agency's requirement for the first type, and
also proposed [DELETED], Doss does not explain, nor is it otherwise
apparent, how these elements of its approach would reduce the required
number of instructor pilots on staff at any one time. Further,
although Doss initially also proposed to use flight commanders and
supervisors as instructor pilots, the agency questioned that approach
during discussions, and Doss informed the agency in its BAFO that
"[s]ince using a supervisor or [quality control personnel] is limited
to 'unusual and temporary workload' [--according to the SOW--] we have
not included them in our Instructor staffing calculations."
3. Although Dominion also questions the Army's failure to accept its
alternate proposal to combine flight classes and thereby reduce the
number of flight commanders, who supervise instructor pilots, we note
that this would not have reduced the required number of flight
instructors. Moreover, Dominion's approach was inconsistent with the
provisions of the RFP, which specified the required number of flight
commanders. Furthermore, the agency maintains that Dominion's
proposal would result in the diversion of instructor pilots to
duties--required to be performed under Army regulations--otherwise
performed by flight commanders, thereby exacerbating the instructor
pilot shortage in Dominion's proposed organization, causing some
student pilots to forgo flight instruction each day, and forcing the
combination of flight classes at different levels of flight training.
According to the agency, Dominion's plan would compromise student
production, quality of training, and potentially endanger safety.
Dominion has not shown that the agency's concerns in this regard were
unreasonable.
4. Dominion's argument is also based to some extent on statements made
during the preproposal conference. However, the minutes of the
preproposal conference indicate that the contracting officer advised
potential offerors that "the WRITTEN answers to questions raised would
be the official answers." In any case, under the solicitation and the
applicable provisions of the Federal Acquisition Regulation (FAR) sec.
15.410 (FAC 90-32) and 52.215-14, solicitation amendments were to be
in writing. Occu-Health, Inc.; Analytical Sciences, Inc., B-258598.2
et al., Feb. 9, 1995, 95-1 CPD para. 59.