BNUMBER:  B-275592; B-275592.2 
DATE:  March 6, 1997
TITLE: USATREX International, Inc., B-275592; B-275592.2, March 6,
1997
**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective 
Order.  This redacted version has been approved for public release.
Matter of:USATREX International, Inc.

File:     B-275592; B-275592.2

Date:March 6, 1997

Richard J. Webber, Esq., and Alison J. Micheli, Esq., Arent, Fox, 
Kintner, Plotkin & Kahn, for the protester.
Terrence O'Donnell, Esq., Ari S. Zymelman, Esq., and Jonathan L. 
Marcus, Esq., Williams & Connolly, for Century Technologies, Inc., an 
intervenor.
Dennis J. Gallagher, Esq., Department of State, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Agency's failure to consider proposed subcontractors' experience 
under a past performance/relevant experience criterion is denied where 
circumstances warranted limiting such consideration to the past 
performance/experience of the offeror only.

2.  Protest against conduct of improper post-best and final offer 
discussions is denied where, although such discussions occurred, the 
record conclusively shows that they were not prejudicial to the 
protester.

3.  Allegation that awardee engaged in prohibited "bait and switch" 
tactic is denied where there is no showing that the offeror did not 
intend to provide those employees offered in its proposal, and 
personnel substitutions are adequately explained by the record and 
permissible under the contract.

DECISION

USATREX International, Inc. protests the award of a contract to 
Century Technologies, Inc. (Centech) under request for proposals (RFP) 
No. S-DTSPO-96-R-3007, issued by the Department of State (DOS) for 
technical support services in connection with the agency's 
telecommunications program to link offices and embassies worldwide.  
USATREX maintains that the agency misevaluated proposals and 
improperly engaged in discussions with Centech after the submission of 
best and final offers (BAFO), and that Centech engaged in an improper 
"bait and switch" of personnel.

We deny the protest.

BACKGROUND

The solicitation contemplated the award of a fixed-price, indefinite 
delivery, indefinite quantity contract against which delivery orders 
could be placed; the acquisition was conducted as a competitive set 
aside under section 8(a) of the Small Business Act, 15 U.S.C.  sec.  637(a) 
(1994).[1]  Offerors were required to submit prices based on fixed, 
fully burdened hourly rates for 69 discrete classes of employees.  
Offerors also were to submit detailed technical proposals that 
included information relating to the firm's management approach and 
its performance on ongoing or prior contracts, a package of 86 resumes 
for employees proposed to perform the contract, along with letters of 
commitment, and a detailed response to a sample task outlined in the 
RFP.

The RFP advised offerors that the agency intended to make award to the 
firm whose proposal represented the best overall value to the 
government considering various technical evaluation criteria and 
price; offerors were specifically advised that the agency would assign 
numeric point scores to both the technical and price proposals, and 
that award would be made to the firm whose proposal received the 
highest overall numeric score based on a 100-point scale.  The 
technical evaluation criteria were worth up to 70 points and price 30 
points.  There were three technical evaluation criteria:  
qualifications and experience of proposed staff (35 possible points); 
past performance/relevant experience on similar projects (25 points); 
and management approach (including the sample task) (10 points).  
Price points were to be assigned based on the relationship among the 
competing offerors' prices, with the lowest-priced proposal receiving 
the maximum of 30 points, and the remaining proposals receiving 
proportionally fewer points.

The agency received three timely initial proposals, all of which were 
evaluated as technically acceptable.  The agency concluded that it was 
unnecessary to engage in technical discussions with the offerors and, 
accordingly, simply provided the firms an opportunity to submit 
revised pricing in their BAFOs.  After receiving and evaluating the 
BAFOs, the agency scored the proposals as follows:

                         CENTECH    USATREX    OFFEROR "C"

Qualif./Exp. of Proposed Staff      32.35      33.58         32.19

Past Perf./ Relevant Exp.      21.67      15            21.67

Management Approach             5          5            10

Cost/Price                      30        25.72         21.05

Total Points                  89.02       79.30         84.91
On the basis of these evaluation results, DOS made award to Centech as 
the firm whose proposal offered the greatest overall value to the 
government. 

TECHNICAL EVALUATION

Past Performance/Relevant Experience

USATREX contends that the agency's evaluation of past 
performance/relevant experience was improper and inconsistent with the 
requirements of the RFP.  The record shows that all of the offerors 
submitted information in the form of "extracts" relating to numerous 
prior contracts performed either by the offeror or one of its 
subcontractors.  (For example, USATREX submitted information relating 
to 11 contracts; it was the prime contractor on 4, and its proposed 
subcontractors had been the prime contractors on the others.)  USATREX 
maintains that the agency improperly failed to score all of the 
extracts, instead selecting only a limited number to evaluate, 
notwithstanding that the RFP provided that "each extract will be 
assigned a rating."  USATREX maintains that, had the agency done this, 
it would have received a better past performance rating because it 
would have received evaluation credit for prior contracts performed by 
its subcontractors. 

Where a solicitation requires an evaluation of offerors' past 
performance, the agency has discretion to determine the scope of the 
offerors' performance history to be considered, provided all proposals 
are evaluated on the same basis and the evaluation is consistent with 
the terms of the RFP.  Wind Gap Knitwear, Inc.,        B-261045, June 
20, 1995, 95-2 CPD  para.  124; see also Federal Envtl. Servs., Inc.,
B-250135.4, May 24, 1993, 93-1 CPD  para.  398.  Moreover, where the record 
shows that the agency in fact considered all information included in 
the proposals, the mere fact that the evaluators did not assign a 
discrete score to each proposal element does not provide a basis for 
sustaining a protest, provided all proposals were evaluated in the 
same manner and agency's actions were not prejudicial.  See Wilcox 
Elec., Inc., B-270097, Jan. 11, 1996, 96-1 CPD  para.  82.  

The past performance evaluation was reasonable.  First, while the RFP 
stated that each extract would be rated, it did not state that this 
rating would be in the form of a formal numeric score.  The agency 
explains that each evaluator separately reviewed all of the prior 
contract extracts submitted by the offerors and then selected those 
contracts which, in the evaluator's judgment, were most relevant for 
purposes of arriving at the numeric scores.  (These same prior 
contracts were also used by the evaluators for purposes of 
independently inquiring--through contacting the appropriate 
contracting officials--about the offeror's performance during the 
prior or ongoing contract.)  Thus, the agency's ratings here simply 
were in the form of subjective relevance determinations; contract 
extracts were rated either "relevant" or "not relevant" for purposes 
of the past performance/relevant experience evaluation.  This 
satisfied the requirement of the solicitation that each extract be 
assigned a rating.

Further, the agency's determination of relevance among the extracts 
was  unobjectionable.  The extracts were selected based primarily on 
two considerations:  (1) whether the offeror had performed as a prime 
contractor; and (2) whether the prior contract was of a scope and 
magnitude similar to the requirements of this solicitation.  This was 
reasonable in light of the terms of the RFP, which limited competition 
to firms qualifying under section 8(a) of the Small Business Act and 
included the limitation on subcontracting clause at FAR  sec.  52.219-14.  
While agencies may, in the absence of a solicitation provision to the 
contrary, consider the prior relevant experience and performance of 
subcontractors,  FMC Corp., B-252941, July 29, 1993, 93-2 CPD  para.  71, in 
appropriate circumstances they need not do so.  Jim Welch Co., Inc., 
B-233925.2, July 12, 1989, 89-2 CPD  para.  34.  In this regard, where the 
solicitation contemplates award of a service contract to a firm 
qualifying under section 8(a) of the Small Business Act, and includes 
the provision at FAR  sec.  52.219-14, the agency may properly limit its 
consideration to the offeror's prime contractor experience.  
Innovative Technology Sys., Inc., supra.  Accordingly, we see no basis 
to object to the agency's evaluation approach.

We also have no basis to object to the substance of the evaluation.  
The agency's evaluators assigned USATREX an acceptable (albeit 
relatively lower) score under this criterion as compared to the other 
two firms because USATREX did not have as much prior experience acting 
as a prime contractor on requirements that were similar in scope and 
complexity.  USATREX does not challenge this conclusion, but insists 
only that it would have received a more favorable rating if all of the 
experience of both it and its subcontractors had been reviewed.  
Again, however, we find that the agency's focus on information 
relating to similar contracts where the offeror was the prime 
contractor was reasonable.  Innovative Technology Sys., Inc., supra.

Management Approach

USATREX contends that the agency improperly evaluated Centech's 
management proposal.  According to the protester, the agency 
improperly assigned Centech's management proposal a score of 5 points, 
despite the fact that its response to the sample task requirement was 
viewed as unacceptable by the evaluators.  USATREX maintains that the 
RFP required the agency to assign Centech's management proposal a 
score of 1 point, which was the score mandated for management 
proposals deemed technically unacceptable.

We find no merit to this allegation.  Initially, we point out that the 
evaluators identified deficiencies in both firms' responses to the 
sample task.  Centech's response was deemed "incomplete," while 
USATREX's response to a portion of the sample task was found not to 
meet the delivery schedule requirements outlined in the solicitation 
(offerors were required to detail how they would accomplish staffing a 
24-hour per-day "network management center" within 30 days after the 
issuance of a delivery order, and USATREX's response showed that it 
would accomplish the task within 90 days).  By USATREX's logic, its 
proposal also should have received a management approach score of only 
1 point because its response varied from the requirements of the RFP 
sample task.[2]

More fundamentally, the record shows that the agency viewed both the 
USATREX and Centech management proposals technically acceptable 
overall, albeit with some minor deficiencies.  USATREX's proposed 
management approach was viewed by the agency as generally "weak" 
because it failed to address all of the areas requested by the RFP.  
Centech, on the other hand, was found to have proposed a strong 
substantive management plan, but to have submitted an incomplete 
response to the sample task.  The agency therefore assigned both 
proposals a score of only 5 points, which reflected the unanimous 
judgment of all three evaluators that, despite the minor weaknesses 
identified, both proposals were technically acceptable.  Of 
significance, in our view, is a series of memoranda exchanged between 
the contracting officer and the chairman of the evaluation team after 
the evaluators prepared their final report.  During this exchange, the 
contracting officer asked the evaluators whether any of the weaknesses 
identified in any proposal rendered the proposal technically 
unacceptable; the memorandum cites numerous examples on which the 
contracting officer sought clarification, including the evaluators' 
comment that the Centech sample task response was incomplete.  In 
response, the chairman of the evaluation team noted that the examples 
identified in the contracting officer's memorandum (such as Centech's 
response to the sample task) were deemed by the evaluation team to be 
acceptable and would not impact the ability of the offerors to perform 
under the contract.  He continues by stating:

     "Factor . . . C [the management approach evaluation criterion] 
     had minor deficiencies, but none were deemed significant enough 
     to warrant clarification or discussion with the offerors.  The 
     team panels met and held discussions [in response to the 
     contracting officer's memorandum requesting clarification of the 
     technical evaluation results] . . . to validate the scores of 
     each team member to ensure all areas of the evaluation were 
     properly addressed." 

We conclude that the evaluation of Centech's proposal in the 
management area was reasonable.

PRICE EVALUATION

USATREX challenges the agency's evaluation of Centech's price proposal 
on several grounds.  These arguments are without merit.

Unbalanced Offer

USATREX alleges that Centech's prices are improperly unbalanced, and 
that the proposal therefore could not be accepted for award, because 
Centech proposed [DELETED]; according to USATREX, the rates offered by 
Centech for its entry-level employees [DELETED].  

The concept of unbalancing has only limited application in the context 
of a negotiated procurement where the government's primary objective 
is not with obtaining a contract at the lowest overall cost.  Human 
Resource Sys., Inc.; Health Staffers, Inc., B-262254.3 et al., Dec. 
21, 1995, 96-1 CPD  para.  35.  While award here ultimately was made to the 
low offeror, the RFP provided that technical factors were more than 
twice as important as price, and thus allowed for award to other than 
the low offeror.  In addition, there is no indication that cost was 
the determinative consideration in DOS' award decision.  Since 
technical considerations were more important than cost or price, and 
since ultimately price was not the determinative consideration for 
award purposes, the concept of unbalancing is not applicable.  Id.  In 
any case, an offer can be rejected as materially unbalanced only where 
it is found to be mathematically unbalanced; this requires a showing 
that certain line items are priced significantly lower than the cost 
of those items, and that other line item prices are significantly 
overstated.  Federal Acquisition Regulation (FAR)  sec.  15.814 (FAC 
90-37).  As USATREX has alleged only that the prices for certain line 
items are [DELETED], and there is no evidence of overstated prices, 
the offer is not mathematically unbalanced and therefore could not be 
rejected as materially unbalanced.  Ogden Gov't Servs., B-253350, 
Sept. 14, 1993, 93-2 CPD  para.  161.[3]

Price Reasonableness

Regarding price reasonableness, the purpose of a price reasonableness 
review is to determine whether the prices offered are higher--as 
opposed to lower--than warranted.  McDonnell Douglas Corp., 
B-259694.2; B-259694.3, June 16, 1995, 95-2 CPD  para.  51.  Since USATREX 
asserts that Centech's prices are too low, not too high, (and since 
Centech's price in fact is lower than USATREX's), there is no reason 
to question Centech's prices on the basis of price reasonableness.  To 
the extent that agencies may wish to review the offerors' pricing to 
ensure that it is not too low within the context of a fixed-price 
contract setting, they do so through the application of cost realism 
evaluation methods, but only for limited purposes, such as assessing 
an offeror's understanding of the RFP's technical requirements.  PHP 
Healthcare Corp.; Sisters of Charity of the Incarnate Word, B-251799 
et al., May 4, 1993, 93-1 CPD  para.  366.  However, the RFP here did not 
provide for a realism analysis.[4]

Professional Employee Compensation

USATREX argues that Centech's [DELETED] entry-level position prices 
render its professional employee compensation inadequate.  However, 
the record shows that the agency sought and obtained information from 
Centech relating to its compensation and employee 
advancement/promotion plan; Centech's response, as well as other 
proposal information, led the agency to conclude that its professional 
employee compensation plan was adequate.  The agency ultimately 
concluded that, to the extent Centech's compensation for certain 
categories was [DELETED], this was due in large part to the firm's 
superior experience in controlling costs in contracts of this 
magnitude and complexity.  USATREX has submitted no evidence--for 
example, information relating to its understanding of the prevailing 
wages for entry-level employees in the field--that brings into 
question the reasonableness of the agency's conclusion regarding the 
adequacy of Centech's professional employee compensation levels.  We 
therefore have no reason to question the agency's conclusions in this 
area.  See RGI, Inc., B-243387, July 23, 1991, 91-2 CPD  para.  86.

DISCUSSIONS

USATREX argues that the agency engaged in improper post-BAFO 
discussions with Centech.  The protester's allegation centers around 
an exchange of correspondence between the agency and Centech after the 
submission of BAFOs, during which the subject of Centech's cost 
proposal was addressed.  In essence, the agency was concerned that 
Centech had proposed [DELETED], and also that the firm might have 
trouble [DELETED]; the agency requested that Centech provide 
verification of [DELETED].  In response to the agency's inquiry, 
Centech submitted a three-page letter explaining--apparently to the 
satisfaction of the agency--its [DELETED].  USATREX argues that this 
exchange constituted improper post-BAFO discussions and contends that 
it should also have been afforded an opportunity to engage in 
substantive discussions with the agency.  In this latter regard, 
USATREX specifically maintains that it should have been afforded 
discussions with respect to its management proposal which received a 
score of only 5 points out of a possible 10 and was considered "weak" 
by the agency's evaluators.

The record clearly shows that the information furnished by Centech in 
response to the agency's inquiry was central to the agency's award 
decision.  The agency report includes a document entitled 
"deliberations" in which the contracting officer discusses the 
relative merits of the proposals; this document clearly relies on the 
information furnished by Centech to explain and ameliorate the 
concerns previously advanced by the agency evaluators regarding the 
terms of Centech's cost proposal.  Since the information provided by 
Centech clearly affected the agency's evaluation conclusions regarding 
the acceptability of the Centech cost proposal, the exchange 
constituted discussions.  Federal Acquisition Regulation (FAR)  sec.  
15.601 (discussions occur where communications between the government 
and the offeror involve information essential for determining the 
acceptability of a proposal, or where the offeror is provided an 
opportunity to revise or modify its proposal).

Despite the above conclusion, we nonetheless have no basis to sustain 
USATREX's protest on this ground.  Even where, as here, an agency 
engages in improper post-BAFO discussions with an offeror, we will not 
object to its actions where the record shows that they were not 
prejudicial.  EastCo Bldg. Servs., Inc., B-275334; B-275334.2, Feb. 
10, 1997, 97-1 CPD  para.  83.  For the reasons discussed below, we conclude 
that USATREX was not prejudiced by the agency's actions.

The RFP provided for award to the firm whose proposal received the 
highest combined cost and technical score, and the agency not only 
made award on this basis, but has argued strenuously in its 
submissions to our Office that this was the required basis for award.  
USATREX's pleadings in this case state unequivocally that the agency's 
failure to engage in discussions caused it competitive harm solely 
because it was not afforded an opportunity to improve its management 
proposal, which had received only 5 out of a possible 10 points.  
Thus, even assuming that the protester could have improved its 
management score in response to discussions in this area, this would 
only add an additional 5 points to USATREX's cumulative score which, 
under the terms of the RFP, would not place the firm in line for 
award.  We therefore conclude that the agency's improper post-BAFO 
discussions with Centech did not competitively prejudice USATREX.[5]

BAIT AND SWITCH

USATREX maintains that Centech engaged in an impermissible "bait and 
switch" tactic, whereby the firm offered numerous personnel in its 
proposal that it never intended to provide in performing the contract.  
(As noted earlier, offerors were required to submit resumes for 86 
required employees.)  Centech has substituted a large number of 
employees for those it originally proposed, and USATREX argues that 
this level of substitution evidences Centech's intent at the time it 
submitted its proposal to furnish employees other than those 
proposed.[6]

To establish an improper "bait and switch," a protester must show that 
the firm in question either knowingly or negligently made a 
misrepresentation regarding employees that it does not expect to 
furnish during contract performance, that the misrepresentation was 
relied upon by the agency in the evaluation, and that this had a 
material impact on the evaluation results.  Intermetrics, Inc., 
B-259254.2,
Apr. 3, 1995, 95-1 CPD  para.  215; CBIS Fed., Inc., B-245844.2, Mar. 27, 
1992, 92-1
CPD  para.  308.  

There is no evidence of a prohibited bait and switch here.  While 
there has been a substitution of employees, there is no basis for 
concluding that Centech knowingly or negligently misrepresented its 
intent to furnish the employees specified in its proposal.  USATREX 
would have our Office infer simply from the number of substitutions 
that the awardee never intended to furnish the proposed employees. 
However, we think the record adequately shows that the substitutions 
were not related to a misrepresentation.  In this regard, Centech 
explains that it identified the proposed employees through a [DELETED] 
selection process and confirmed prior to BAFOs that the selected 
employees remained available.  Centech also explains the reasons for 
the substitutions.  First, Centech's proposal indicated its intent to 
recruit as many of the incumbent staff as possible, and a large 
portion of the substitutions were incumbent personnel; there is 
nothing improper in such substitutions where the awardee's proposal 
advised the agency of its intent.  Ebon Research Sys., B-261403.2, 
Sept. 28, 1995, 95-2 CPD  para.  152.  As for the vast majority of the 
remaining substitutions, Centech explains--on an employee-by-employee 
basis--that the substituted personnel were better or equally 
qualified, and more conveniently located for contract performance, 
than those proposed, and that these individuals only became available 
for performance after award.[7]  Given that the solicitation permitted 
personnel substitutions with the agency's permission, we see nothing 
improper in Centech's furnishing substitute personnel under these 
circumstances; the agency advises that the substituted personnel are 
at least as qualified as those originally proposed, and USATREX has 
not argued otherwise.  We therefore have no basis to object to these 
substitutions.  See CHP Int' l Inc., B-266053.2, Apr. 29, 1996, 96-2 
CPD  para.  142.

The protest is denied.

Comptroller General
of the United States

1. Section 8(a) of the Small Business Act authorizes the Small 
Business Administration to enter into contracts with government 
agencies and to arrange for performance through subcontracts with 
socially and economically disadvantaged business concerns.  Federal 
Acquisition Regulation  sec.  19.805 and 13 C.F.R.  sec.  124.311 (1996) provide 
for and govern competitively awarded contracts set aside for firms 
qualified under section 8(a).  Innovative Technology Sys., Inc., 
B-260074, May 24, 1995, 95-1 CPD  para.  258.

2. The scoring also appears reasonable in light of the relative weight 
of the two subfactors--management approach and sample task 
response--under the management approach criterion.  Since the RFP did 
not specify the relative weight of these two subfactors, each 
subfactor was worth approximately 5 points.  The score assigned to the 
Centech proposal reflects the evaluators' judgment regarding the 
relative inadequacy of the firm's response to the sample task.

3. USATREX also maintains that Centech's pricing violates the RFP's 
"Integrity of Unit Prices" clause, FAR  sec.  52.215-26.  However, that 
provision, by its terms, applies only to supply contracts; the RFP 
here contemplated award of a contract for technical support services, 
not supplies. 

4. In any case, the record shows that the agency was well aware that 
Centech had offered prices for its entry-level personnel that were 
[DELETED] which, as discussed, led the agency to seek further 
information from Centech concerning this area.  Centech's explanation 
was satisfactory to the agency.

5. USATREX also suggests that Centech's [DELETED] improperly inflated 
its price score.  As discussed above, we find nothing improper with 
Centech's pricing.  In any case, any scoring advantage related to 
Centech's pricing was not prejudicial to USATREX.  In an effort to 
assess the potential impact that Centech's [DELETED] might have had on 
the outcome of the competition, the agency calculated the offerors' 
prices exclusive of the [DELETED] and assigned revised numeric price 
scores to the proposals.  The record shows that, even exclusive of the 
[DELETED], USATREX's proposal was still higher priced than Centech's 
and that, although USATREX would have received a slightly better price 
score if the [DELETED] were eliminated (27.94 price points rather than 
the 25.72 points actually assigned), this score was insufficient to 
place the firm in line for award--even with the addition of 5 points 
under the management plan evaluation criterion discussed above.  
(USATREX maintains that its price score should have been 29.25 points; 
even with this score, however, USATREX's total score would have been 
lower than Centech's.)

6. USATREX also takes issue with the terms of the letters of 
commitment provided by Centech, maintaining that because the letters 
stated that they did not amount to  binding employment contracts, 
Centech failed to provide the "unequivocal" letters of commitment 
required by the RFP.  There is no merit to this contention.  The 
solicitation did not require binding bilateral employment agreements, 
but rather, only letters that clearly showed the intent on the part of 
the signator to work for the offeror; the letters submitted by Centech 
met this requirement.  Laser Power Technologies, Inc., B-233369; 
B-233369.2, Mar. 13, 1989, 89-1 CPD  para.  267. 

7. By way of example, Centech reports, as to one of its "new" hires, 
that the individual became available after proposal submission and 
that "this person had outstanding qualifications meeting/exceeding 
those of the individuals whose resumes were submitted with the 
proposal. . . ."