BNUMBER:  B-276435.2 
DATE:  July 15, 1997
TITLE: Rotair Industries, Inc., B-276435.2, July 15, 1997
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Matter of:Rotair Industries, Inc.

File:     B-276435.2

Date:July 15, 1997

Jacob B. Pompan, Esq., and Gerald H. Werfel, Esq., Pompan, Ruffner & 
Werfel, for the protester.
Benjamin G. Perkins, Esq., and Niketa L. Wharton, Esq., Defense 
Logistics Agency, for the agency.
Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency selection of higher-priced vendor with a shorter delivery 
schedule and better past performance record was reasonable and 
consistent with the solicitation's evaluation scheme, which provided 
that where, as here, the vendor with the best past performance history 
did not offer the lowest price, the agency would make a tradeoff of 
price and past performance and other considerations, including 
delivery schedule.

DECISION

Rotair Industries, Inc. protests the issuance of a purchase order by 
the Defense Supply Center Richmond (DSCR), Defense Logistics Agency to 
Aero Components Company (Aero) under request for quotations (RFQ) No. 
SPO460-97-Q-D651 for a quantity of hoist fittings.  Rotair challenges 
the adequacy of the best value determination which resulted in an 
award to Aero.

We deny the protest.

The RFQ was issued on December 16, 1996, to qualified sources for a 
quantity of   58 hoist fittings identified as National Stock Number 
1560-00-932-5539, Federal Supply Class (FSC) 1560.  The RFQ provided a 
delivery schedule calling for delivery "within 90 days ARO [after 
receipt of order].  If unacceptable provide best possible delivery                    
."  The RFQ advised that the best value award decision would be based 
on a tradeoff between price and past performance, with price and past 
performance being equally weighted.  The RFQ further stated that if 
the vendor with the best past performance history did not offer the 
lowest price, the agency would make the appropriate tradeoff of price 
for past performance, and listed several other considerations such as 
weapons system application/item criticality, delivery 
schedule/inventory status, and historical delivery/quality problems, 
that would be considered by the agency in its tradeoff determination.  

Past performance would be evaluated in accordance with an automated 
best value model (ABVM).[1]  The ABVM score, assigned by DSCR on a 
monthly basis to each vendor for a particular FSC, measures delivery 
performance during the preceding 12 months, excluding the most recent 
2-month period, and quality performance during the past 12 months, 
excluding the most recent month.  Negative delivery and quality 
performance data to be included in the ABVM score is made available to 
each vendor by the 15th day of the month on the DSCR electronic 
bulletin board and the RFQ advised vendors that they could review the 
performance data and challenge its accuracy if they disagreed with it.  
In this regard, the RFQ stated that "the challenge period for the 
performance data used to calculate the ABVM score for a particular 
month ends the day before the new score becomes effective."  Moreover, 
since the posted ABVM scores would be used in making best value award 
decisions, vendors were urged to file challenges to performance data 
in a timely manner and the RFQ provided instructions on where and to 
whom challenges should be submitted. 

Five quotations were submitted by the January 6, 1997, closing date.  
Rotair submitted the lowest-priced quotation of $256.55 each with 
delivery 330 days ARO, but received an ABVM score of 76.4 based on 39 
contract line items.  Aero submitted the next lowest-priced quotation 
of $306.00 each, offered delivery 150 days ARO and had the highest 
ABVM score of 87.4 based on 391 contract line items.  In comparing the 
relative merits of the two quotations, DSCR determined that Aero's 
higher-priced quotation represented the best value because its past 
performance as measured by its ABVM score indicated that it was more 
likely that the government would receive timely delivery, as compared 
to Rotair's past performance as measured by its lower ABVM score.[2]  
In making this decision, the agency considered the fact that the item 
was out of stock and there were numerous backorders waiting to be 
filled, and concluded that Aero's faster proposed delivery (150 days 
ARO versus Rotair's 330 days ARO), along with its lower performance 
risk as represented by its ABVM score offset Aero's slightly higher 
price when compared to the lower price offered by Rotair.[3]  A 
purchase order was subsequently issued to Aero on January 27, 1997, 
for 58 units at a total cost of $17,748.  

Rotair protests that the agency's best value determination was flawed 
and that the agency improperly selected a significantly higher-priced 
quotation for award.  In a best value procurement, price is not 
necessarily controlling in determining the offer that represents the 
best value to the government.  Rather, that determination is made on 
the basis of whatever evaluation factors are set forth in the 
solicitation, with the source selection official often required to 
make a price/technical tradeoff to determine if one proposal's 
technical superiority is worth the higher cost that may be associated 
with that proposal.  In this regard, price/past performance tradeoffs 
are permitted when such tradeoffs are consistent with the 
solicitation's evaluation scheme.  See USA Elecs., B-275389, Feb. 14, 
1997, 97-1 CPD  para.  75 at 3.  Consequently, where, as here, the 
solicitation identifies price and past performance and other 
considerations as the evaluation criteria and indicates that, if the 
vendor with the best past performance history has not offered the 
lowest price, the selection official must make a tradeoff 
determination and decide which offer  represents the best value to the 
government.  See Excalibur Sys., Inc., B-272017, July 12, 1996, 96-2 
CPD  para.  13 at 3.   

Rotair contests the price/past performance tradeoff because it was 
based on an evaluation factor--required delivery schedule--not listed 
in the RFQ.  As noted by the protester, the RFQ provided for delivery 
90 days ARO or "best possible delivery."  Thus, Rotair argues it would 
have "taken steps to reduce [its] delivery time" had it known that a 
faster delivery date would be a factor in the award decision.

We think the solicitation provided ample notice that the agency would 
consider in its best value determination a vendor's delivery schedule.  
The solicitation asked for 90 days ARO or the "best possible 
delivery."  Further, the RFQ explicitly provided for consideration of 
the offerors' delivery schedule/inventory status as part of any 
price/past performance tradeoff decision.  We think the agency clearly 
stated its intent to assess the "best possible delivery" proposed by 
vendors within the context of the supply position for this item.  
While the "award justification" memorandum  indicated that a "required 
delivery schedule" rather than the "best possible delivery" dates was 
an additional consideration in the agency's best value determination, 
we think the lack of precision in that wording is immaterial, since 
Rotair competed on the basis that the agency would compare the "best 
possible delivery" dates offered by the vendors in conjunction with 
the inventory status for this item.  Given the RFQ language, Rotair 
was on notice that it should submit its best possible delivery 
schedule, and its failure to do so is not grounds to disturb the 
award. 

Rotair also protests that the agency failed to demonstrate why Aero's 
offered delivery schedule was more advantageous to the government and 
failed to adequately justify the payment of a price premium.  The 
record establishes otherwise.  In making the best value determination, 
the agency recognized the importance of Aero's low performance risk 
based on its higher ABVM score and faster proposed delivery schedule 
as compared to Rotair's lower price, lower ABVM score, and longer 
proposed delivery schedule.  The agency also considered the supply 
position for the item and concluded that award to a higher-priced 
vendor with a low performance risk and faster delivery was warranted 
in these circumstances, because Rotair's longer delivery schedule 
would have a detrimental impact on the continuing backorder status of 
this critical application item.  While Rotair disagrees, we find 
nothing unreasonable in this determination, which was consistent with 
the RFQ's tradeoff determination scheme.  To the extent Rotair 
disagrees with the significance placed on delivery schedule/inventory 
status, its protest of this solicitation provision after award is 
untimely.  Bid Protest Regulations, 4 C.F.R.  sec.  21.2(a)(1) (1997). 

 The protest is denied.[4]

Comptroller General
of the United States

1. The ABVM is an automated system which collects a vendor's existing 
past performance data and translates it into a numeric score which is 
used for comparison of past performance among vendors.  The ABVM score 
is a combination of the vendor's quality and delivery scores and 
ranges from 0 to a perfect score of 100.   

2. The protester correctly points out that the agency buyer mistakenly 
wrote, in the purchase pricing memorandum, that Aero's quote was 16 
percent higher than Rotair's when, in fact, it is slightly more than 
19 percent higher.  The protester concedes, however, that the 16 
percent figure is correct as a description of how much lower Rotair's 
quote was than Aero's.  Nothing in the record suggests that the 
buyer's misstatement in this regard prejudiced Rotair.  Competitive 
prejudice is an essential element of a viable protest.  Lithos 
Restoration, Ltd., 71 Comp. Gen. 367, 371 (1992), 92-1 CPD  para.  379 at 5.  
It is undisputed that Aero quoted the items for $306.00 each, while 
Rotair quoted them at $256.55 each, a difference of $49.45 per unit, 
and that both the buyer and the contracting officer (the source 
selection official) were aware of the actual quotes submitted by the 
two firms.  Thus, the misstatement in the purchase pricing memorandum 
is immaterial and provides no basis to object to the price/past 
performance tradeoff analysis which resulted in a best value award to 
Aero. 

3. Here, the award determination describes, without contradiction, the 
stock position for this item as follows: no stock on hand; 119 units 
due in; 105 backorders; and a quarterly demand forecast of 22 units.

4. Rotair also argues that DSCR failed to justify the ABVM score 
assigned to Aero, and that the score therefore could not be relied 
upon to justify the award.  Noting that past performance was to be an 
evaluation factor weighted equally with price in the best value 
decision, Rotair contends that the agency's initial failure to 
disclose how the ABVM scores were computed or to provide the 
underlying performance data that was used to calculate the ABVM scores 
provides a basis for sustaining the protest.  In response, the agency 
did provide the formulas used to calculate a vendor's quality and 
delivery scores and furnished the underlying historical performance 
data for Aero as well as Rotair.  The protester was given an 
opportunity to review this information and submit any rebuttal.  
Rather than doing so, Rotair requested that we consider its protest on 
the existing record.  After reviewing all of the supporting historical 
performance data for the ABVM score assigned to Aero, we conclude that 
the score is reasonably supported.  For example, the performance data 
identifies contracts with delinquent line items as well as contract 
line items with quality deficiencies.