BNUMBER:  B-275819 
DATE:  April 1, 1997
TITLE: Matter of:Environmental Chemical 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:Environmental Chemical Corporation

File:     B-275819

Date:April 1, 1997

John A. Burkholder, Esq., McKenna & Cuneo, L.L.P., for the protester.
Kenneth M. Bruntel, Esq., Lloyd M. Weinerman, Esq., and Jonathan A. 
Epstein, Esq., Crowell & Moring, L.L.P., for UXB International, Inc.; 
and Paul F. Khoury, Esq., and Mark H. Neblett, Esq., Wiley, Rein & 
Fielding, for Environmental Hazards Specialists International, Inc., 
intervenors.
Steven W. Feldman, Esq., Department of the Army, for the agency.
Andrew T. Pogany, Esq., Office of the General Counsel, GAO, 
participated in the preparation of the decision.

DIGEST

1.  Selection officials are not bound by recommendations made or 
price/cost evaluation methodologies used by an agency evaluation panel 
or other subordinate officials in evaluating price proposals.

2.  Source selection officials in negotiated procurements have broad 
discretion in determining the manner and extent to which they will 
make use of the technical and cost evaluation results.  In exercising 
that discretion, they are subject only to the tests of rationality and 
consistency with the established evaluation factors.

DECISION

Environmental Chemical Corporation (ECC) protests the multiple awards 
of indefinite delivery/indefinite quantity contracts to UXB 
International, Inc., Environmental Hazards Specialists International, 
Inc. (EHSI), and EOD Technology, Inc. under request for proposals 
(RFP) No. DACA87-96-R-0008, issued as a small business set-aside by 
the Department of the Army, Corps of Engineers, Huntsville, Alabama, 
to safely locate, identify, and dispose of ordnance and explosives at 
various Department of Defense (DOD) sites.

We deny the protest.

The RFP, issued on January 10, 1996, contemplated multiple awards and 
stated that the government would award the contracts to the 
responsible offerors whose offers conforming to the solicitation were 
most advantageous to the government, cost or price and other factors, 
specified elsewhere in the solicitation, considered.  The RFP 
contemplated a 3-year contract ordering period, with task orders to be 
issued under the contract in an anticipated combination of firm, 
fixed-price, time-and- materials (T&M), and cost-plus-fixed-fee (CPFF) 
bases.  The RFP stated that each offeror was required to submit for 
evaluation a past performance proposal   (Volume 1) and stated that a 
technical oral presentation/interview would also be required.  The RFP 
contained the following subfactors for past performance:       (1) 
questionnaire results; (2) team overview; and (3) terminated 
contracts.  The RFP contained the following subfactors for the oral 
presentation/interview:  (1) technical; (2) management; and (3) 
safety.  Concerning price/cost, the RFP also required offerors to 
submit a price proposal (Volume 2).  The RFP provided that Volume 1 
and the oral presentation/interviews would be numerically scored; 
Volume 2, price, would not be scored but would be evaluated for 
reasonableness, realism and affordability based upon the labor rates 
proposed in Schedule B of the RFP and the offerors' estimates proposed 
in response to the RFP's sample task order.[1]

The agency received proposals on March 27, 1996, and held individual 
oral presentation/interview sessions with offerors during the 
following months.  Initial evaluation by the agency's five technical 
evaluators was completed pursuant to the source selection plan, with 
the evaluators recording, in narrative form, strengths and weaknesses 
for each offeror in support of every subfactor score.  After 
conducting discussions, the agency received best and final offers 
(BAFO) on October 29, 1996.  Evaluation of BAFOs resulted in the 
following technical and cost rankings:[2]

    Offeror   Technical      Evaluated Price/Cost[3]
                            (as adjusted for realism)

                              CPFF            T&M

EHSI        [Deleted]   [Deleted]       [Deleted]

UXB         [Deleted]   [Deleted]       [Deleted]

EOD         [Deleted]   [Deleted]       [Deleted]

ECC         [Deleted]   [Deleted]       [Deleted]
The chairman of the technical evaluation panel issued a memorandum to 
the source selection authority (SSA) ranking EHSI, UXB, and EOD as 
first, second, and third, respectively.  The agency evaluators did not 
recommend ECC for consideration to the SSA since they found various 
irregularities and weaknesses in its proposal that are not relevant 
here.  The SSA followed this recommendation, and awards were made to 
these firms.  This protest followed.  In response to the protest, the 
SSA reevaluated BAFOs, including ECC's BAFO, and determined that even 
if ECC had been considered, its proposal would not have been selected 
for award.[4]  The SSA found as follows:

     "The closest call is between [EOD] and ECC.  [EOD] is superior to 
     ECC on both past performance and oral presentation.  While ECC 
     has an advantage over [EOD] on [individual labor rates, EOD] has 
     a significant price advantage (greater than [deleted]) over ECC 
     on the most probable cost evaluation of the sample task order.  
     Due to the magnitude of the most probable cost advantage of 
     [EOD], I consider their overall cost proposal more advantageous 
     than ECC.  [EOD] has a slight edge over ECC in all [respects, 
     including] past performance, oral presentation and cost [as 
     compared with] the offer of ECC.  [UXB and EHSI represented 
     similar substantial cost savings] because of the magnitude of the 
     most probable cost advantages [of UXB and EHSI]."

The protester does not challenge the technical scores or ratings it 
received from the agency.  The protester notes that had its proposal 
been initially considered it would have "ranked fourth [technically] 
overall, only [a few] points out of a possible 6,000 behind one of the 
three awardees," EOD.  Since the record shows this assertion to be 
correct, we turn to the protester's arguments concerning the 
price/cost evaluation.

The protester's sole argument that it should have received an award as 
one of the best value offerors is that the SSA was bound to follow the 
price/cost evaluation methodology initially used by the evaluators and 
also used by a subordinate contract specialist in reevaluating ECC's 
price/cost ranking after its protest was filed.  The record shows that 
this initial agency methodology was as follows:

     "All comparable labor categories were reviewed to determine which 
     offeror proposed the lowest wage rate, the second lowest wage 
     rate and so on for all six offerors.  For this analysis, 
     comparable labor category is defined as any labor category for 
     which two or more offerors proposed.  The lowest offer in each 
     comparable labor category was denoted with a '1' and the second 
     lowest a '2' and so on up to number '6.'  For all labor 
     categories, a '1' denotes the lowest wage rate offered and a '6' 
     the highest wage rate offered for that category."

According to the protester, these numerical labor hour cost ranking 
numbers were then added to the sample task order ranking numbers to 
arrive at the overall price/cost ranking of the offerors, with the 
lowest total number equaling the highest ranking.  The protester 
states that had the agency followed this methodology in evaluating 
ECC's price/cost proposal, ECC would have been ranked second in 
overall cost and thus entitled to award.  The protester states that 
the SSA improperly "overruled" the contract specialist's analysis and 
instead determined as follows:

     "I disagree with [the contract specialist's] analysis and 
     conclusion primarily because the methodology she employed does 
     not give proper consideration to the magnitude of the difference 
     of the most probable cost analysis of the [offerors]."

Thus, the protester essentially argues that the SSA was not permitted 
to consider the actual magnitude of the difference among offerors' 
evaluated price/cost proposals but was only permitted to consider 
rudimentary arithmetic price/cost rankings.  We reject the protester's 
argument.  The protester has not cited or referred us to any provision 
in the RFP which would have precluded the SSA from considering the 
actual dollar amount difference among offerors.  Moreover, selection 
officials are not bound by recommendations made or price/cost 
evaluation methodologies used by an agency evaluation panel or other 
subordinate officials.  See Bell Aerospace Co., 55 Comp. Gen. 244 
(1975), 75-2 CPD  para.  168.  Rather, source selection officials in 
negotiated procurements have broad discretion in determining the 
manner and extent to which they will make use of the technical and 
cost evaluation results.  Grey Advertising, Inc., 55 Comp. Gen. 1111 
(1976), 76-1 CPD  para.  325.  In exercising that discretion, they are 
subject only to the tests of rationality and consistency with the 
established evaluation factors.  Id.  We think that the agency's 
consideration of the actual dollar difference among offerors in its 
best value selection decision, instead of merely relying on simple 
arithmetic rankings, was entirely rational and reasonable.[5]

The protest is denied.

Comptroller General
of the United States 

1. The sample task order was a "critical element" of the evaluation 
process.  Offerors were required to provide "their technical, 
management and safety approach to performing the sample task [and to 
cost] the sample task using both a time and materials and a 
cost-plus-fixed-fee approach" in the price volume.

2. The maximum technical score was 6,000 points.

3. The offerors' price proposals were separately evaluated ("costed") 
                        on both a CPFF basis and a T&M basis for 
                        evaluation purposes.

4. In making this determination, the SSA made no changes to ECC's past 
performance or oral presentation/interview scores or its cost ratings 
because the Army had not lowered ECC's scores or rankings when it 
decided not to consider the firm.  None of the "deficiencies" that the 
agency previously identified in its review of ECC's cost proposal, 
such as weaknesses in ECC's cost estimating system, led to any point 
score reductions in the technical evaluation; nor were any technical 
points otherwise reduced for any issue raised by the protester here.  
Thus, since the SSA tradeoff decision that included ECC's proposal 
assumed the validity of the protester's assertions and arguments, 
except as discussed below, we need only resolve the reasonableness of 
this tradeoff decision by the SSA to decide this protest.

5. The protester also argues that EHSI's price proposal was 
unreasonably low and should have been rejected.  However, the agency 
found that EHSI had "provided an extensive discussion on the 
integrated technical approach to the [sample task order] which tied 
all technical portions together.  It was a very detailed discussion.  
The offeror's presentation shows that they have all the tools to do 
the work properly.  The relationship between all phases of the sample 
task order is exceptionally orchestrated and exceedingly logical."  
The agency further explains that EHSI's price proposal was only low 
because the firm employed a "best case scenario" in its sample task 
order which the agency reasonably adjusted upwards for evaluation 
purposes.  The protester has not disputed this explanation, and we 
therefore need not further consider this matter.  Other issues raised 
by the protester in its initial protest were either withdrawn or have 
been rendered academic by our finding that the agency properly 
considered the actual price/cost difference among offerors in making 
its selection decision.