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.