BNUMBER:  B-276487.2 
DATE:  June 30, 1997
TITLE: GTE Hawaiian Telephone Company, Inc., B-276487.2, June 30,
1997
**********************************************************************

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:GTE Hawaiian Telephone Company, Inc.

File:     B-276487.2

Date:June 30, 1997

Rand L. Allen, Esq., Paul F. Khoury, Esq., David A. Vogel, Esq., and 
R. Paul Margie, Jr., Esq., Wiley, Rein & Fielding, and Michael W. 
Clancy, Esq., for the protester.
C. Stanley Dees, Esq., Thomas C. Papson, Esq., Patrick K. O'Keefe, 
Esq., and Stephen E. Ruscus, Esq., McKenna & Cuneo, and Steven W. 
DeGeorge, Esq., for AT&T Corporation, an intervenor.
H. Jack Shearer, Esq., Defense Information Systems Agency, for the 
agency.
Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  In a negotiated procurement for telecommunications services where 
the solicitation established detailed functional performance 
specifications and a page limitation for technical proposals, the 
procuring agency reasonably determined the compliance of the awardee's 
(and protester's) proposals based in part upon the firms' promises of 
compliance with more than 1,300 performance requirements and evidence 
of technical capability or feasibility.

2.  Lower-level evaluators' assessment of significant risk of delay in 
meeting schedule requirements did not demonstrate that the awardee 
would not satisfy these requirements, where the source selection 
official reasonably found that the awardee had committed to, and was 
capable of, satisfying the schedule requirements.

3.  Where price is stated to be more important than the technical and 
management evaluation factors, the agency's judgment that the 
awardee's substantial price advantage outweighed the protester's 
acknowledged technical superiority, primarily in the area of evaluated 
schedule risk, was reasonable and in accord with the award evaluation 
criteria.

DECISION

GTE Hawaiian Telephone Company, Inc. protests the award of a contract 
to AT&T Corporation under request for proposals (RFP) No. 
DCA300-96-R-0001, issued by the Defense Information Technology 
Contracting Organization, Defense Information Systems Agency (DISA) 
for the Hawaii Information Transfer System (HITS).  GTE contends that 
AT&T's proposal is not compliant with mandatory solicitation 
requirements and that DISA performed an unreasonable best value 
analysis in selecting AT&T's lower-rated, lower-priced proposal for 
award.

We deny the protest.

The RFP provided for the award of a fixed-price, indefinite delivery 
services contract to provide end-to-end switched voice, switched data, 
integrated services digital network (ISDN) and dedicated transmission 
services to Department of Defense users throughout the State of Hawaii 
for a 10-year contract period.  The HITS contract will replace the 
existing Oahu Telephone System, the Hawaii Area Wideband Systems, and 
other dedicated transmission service systems,[1] allowing the 
government to consolidate its telecommunication services under one 
contract.  HITS will interface and interoperate with other 
communication networks, including the Defense Information System 
Network, the Government Emergency Telecommunication Service, the 
Defense Satellite Communication System, FTS2000, and public telephone 
networks.

A Functional Requirements Specification (FRS) was provided in the RFP, 
which specified the information transfer requirements for HITS, 
identified the services and features that HITS must provide, and 
stated performance specifications and network management system 
requirements.  The contractor is required to provide whatever 
equipment, facilities, and network management are necessary to deliver 
services in compliance with the FRS requirements.  The RFP stated with 
regard to the configuration of the HITS:

     "The Contractor shall make maximum use of commercially available 
     off-the-shelf technology and services.  The Contractor's system 
     engineering shall maximize configuring HITS from existing 
     off-the-shelf equipment, services, and subsystems and minimize 
     designing new equipment, subsystems, and services.  The HITS 
     configuration shall represent the most cost effective and 
     technically efficient solution to meet Government requirements."

The RFP also identified the locations for which service was required 
and the types of service that would be provided at each location 
(e.g., switched voice service, dedicated transmission service, or all 
required services).  

The contractor is required to provide Initial Operational Capability 
(IOC) within 8 months of contract award.  IOC is defined as the point 
at which the first HITS location and services are operational and 
accepted by the government.  The contractor is also required to 
provide Full Operational Capability (FOC) within 18 months of contract 
award.  FOC is defined as the point at which all service requirements 
items and features for all locations have been "cutover" and accepted 
by the government.  Offerors were to provide transition plans to 
describe their strategy for consolidating existing services into a 
single communication infrastructure and to satisfy the IOC and FOC 
schedule requirements.  Detailed acceptance testing procedures were 
also set forth in the RFP; among other things, the contractor was 
required to plan for pre-cutover and post-cutover testing to 
demonstrate that all HITS requirements will be satisfied.

The RFP provided a best value basis for award and identified the 
following evaluation criteria:  technical quality, management quality, 
and price.[2]  Price was stated to be approximately equal in weight to 
the combination of the technical and management quality criteria; 
technical quality was stated to be of greater weight than management 
quality.  The RFP cautioned that the government would "not pay a 
significantly higher price for slightly superior technical and 
management quality."

Offerors were informed that DISA would first evaluate proposals on a 
pass/fail basis to determine compliance with every requirement 
identified in the statement of work and FRS.  Compliant proposals 
would then be qualitatively assessed under the technical and 
management quality criteria for understanding, compliance with 
requirements, and risk.  In this regard, offerors were instructed to 
discuss their design and technical approach to satisfy each RFP 
requirement and to fully demonstrate their understanding of the 
requirements.

DISA received proposals from only GTE and AT&T.[3]  Four rounds of 
discussions were conducted with the two offerors.  During discussions 
and based upon the offerors' responses, DISA decided that the RFP 
requirements were overly restrictive in a number of regards and 
amended the RFP to relax 17 solicitation requirements.  At the 
conclusion of technical discussions, DISA's source selection 
evaluation board (SSEB) found that both GTE's and AT&T's proposals 
were fully compliant with the RFP requirements, as amended; in so 
concluding, the SSEB compared the offerors' proposals against a 
"compliance matrix" that ensured that each proposal satisfied the 
1,350 RFP performance requirements.  Hearing Transcript (Tr.) at 52, 
149, 211.[4]  The final technical quality and management quality 
criteria scores were as follows:

     Factor    Score[5]       Risk[6]        Weight    Result
GTE  Technical 6.13      Low to Moderate     60%       3.68
     Management5.73      Low                 40%       2.29
                                             TOTAL     5.97 

AT&T Technical 4.20      Moderate to High    60%       2.52
     Management6.13      Low                 40%       2.45
                                             TOTAL     4.97

As indicated by the scores, the SSEB found GTE's technical proposal to 
be superior to AT&T's, while AT&T's management proposal was found to 
be superior to GTE's.

Regarding AT&T's technical proposal, the SSEB assessed as a strength 
AT&T's proposal to build its system around the 5ESS-2000 switch,[7] a 
telecommuncations switch considered established, reliable and 
flexible, which AT&T proposed to interconnect with multiple SONET 
rings.[8]  The SSEB also noted a number of disadvantages and risks in 
AT&T's proposal arising primarily from AT&T's need to provide 
extensive software development to satisfy a number of critical HITS 
requirements, and AT&T's failure to adequately describe its approaches 
to accomplishing "grade of service" and timing and synchronization 
requirements.  

Regarding GTE's technical proposal, the SSEB noted, as a strength, 
GTE's offer to provide the existing, "state-of-the-art" DMS-100 switch 
interconnected with a SONET transmission network.  Disadvantages and 
risks were also noted for GTE's proposal based upon GTE's failure to 
completely document some elements of its proposed system, and GTE's 
need for considerable software customization and integration to 
support the network management system.  

"Cost only" best and final offers (BAFO) were requested and evaluated 
as follows:

             Actual Life Cycle CostDiscounted Life Cycle Cost[9]
AT&T             $291.29M[10]             $197.19M
GTE              $365.33M                 $243.57M
IGCE[11]         $284.39M                 $187.55M

The SSEB prepared a report, detailing the advantages, disadvantages, 
and risks posed by each offeror's proposal, and briefed the source 
selection advisory council (SSAC) and SSA regarding the SSEB's 
evaluation findings.  The SSEB's technical and management evaluation 
conclusions, including its determination that both proposals were 
compliant with all RFP requirements, were accepted by the SSAC, which 
then focused its assessment on the impact on the government of the 
SSEB's findings.  Tr. at 292-294, 330-331.

A BVWG, consisting of some members of the SSAC, was convened to 
identify, analyze, and quantify significant differences between GTE's 
and AT&T's technical and management proposals.[12]  In general, the 
BVWG concluded that the evaluated point difference between the two 
firms' proposals reflected a lack of detail in AT&T's proposal as well 
as greater risks of delay in the AT&T approach, primarily arising from 
AT&T's need to perform greater software development and customization 
than GTE.

Significant discriminators between the two firms' proposals were 
identified.  These discriminators were grouped into the following 
categories--switched services, network management, network topology 
and survivability, and key personnel/experience.  For the areas in 
which schedule or compliance risk was identified, the BVWG quantified 
the estimated costs to the government of those risks posed in 
additional government resources or to acquire the required services 
due to any possible delay in performance.  The net calculation of this 
quantification was that AT&T's proposal posed an additional $1.1M of 
risk to the government.  In addition, the BVWG found that AT&T offered 
slightly better, experienced key personnel than GTE, but that GTE 
offered slightly better critically assured service[13] than AT&T 
these discriminators were not quantified.  The SSAC prepared a report 
detailing the BVWG's findings and unanimously concluded that AT&T's 
substantially lower-priced proposal was a better value to the 
government than GTE's slightly superior, but much higher-priced, 
proposal.

On the basis of the SSEB's and SSAC's reports, as well as his 
attendance at the SSEB's briefing to the SSAC, the SSA selected AT&T's 
proposal for award.  The SSA stated in his written source selection 
decision:

     "In this instance, both offerors have proposed acceptable network 
     architecture and network management plans.  Both offerors propose 
     proven, state of the art equipment.  Both offerors have provided 
     good management plans, with highly qualified personnel, and 
     generally have good to exceptional records of past performance.  
     Therefore, the award decision does not involve a serious question 
     of whether an offeror would provide the required services--both 
     offerors plainly would do so.  The decision instead involves a 
     determination of which proposal is most advantageous to the 
     Government, consistent with the award criteria in the RFP.

     "There are some significant differences in the technical and 
     management proposals of the two offerors.  The above point scores 
     provide useful guidelines in distinguishing the differences 
     between the two proposals.  However, the point differentials do 
     not necessarily accurately reflect the relative differences 
     between the two proposals.  In particular, while I agree that GTE 
     generally has provided a better technical proposal than AT&T, I 
     do not think the difference between those two proposals is as 
     great as might be suggested by the difference in point score, 
     i.e., a 6.13 compared to 4.20.  I base this conclusion in large 
     part on my reading of the SSAC report, as well as the BVWG/SSAC 
     discussions which I attended."

The SSA then discussed in detail each of the technical discriminators 
and attendant potential costs, as identified by the BVWG.  The SSA 
found that the $1.1M probable additional expense to the government 
associated with AT&T's proposal was "relatively trivial" in comparison 
to enormous price disparity between the proposals, i.e., $46M in 
discounted life cycle costs and $74M in actual life cycle costs.  The 
SSA also found that the risk attributed to AT&T's proposal may be 
overstated because much of the risk was attributable to lack of detail 
in AT&T's proposal and not equipment or network deficiencies, and 
given AT&T's record of past performance, extensive past experience, 
and substantial financial and personnel resources.  Accordingly, the 
SSA concluded:

     "that the AT&T proposal is most advantageous to the Government.  
     The AT&T proposal provides a enormous cost savings to the 
     Government relative to the GTE proposal.  Although the GTE 
     proposal does offer some technical advantages, and a lower risk 
     of delays in implementation, I do not believe that these 
     technical advantages outweigh the substantial cost premium.  When 
     quantified, the technical advantages of the GTE proposal are 
     relatively insignificant compared to the disparity in price, 
     i.e., a net advantage to GTE of approximately $1.1 million versus 
     a $46 million advantage in AT&T's [discounted life cycle cost].  
     Even if the quantification were vastly understated, such as by a 
     factor of ten, the AT&T proposal nonetheless would be most 
     advantageous to the Government by a wide margin."

Award was made to AT&T.  This protest followed.

GTE complains that AT&T's proposal is not compliant with a number of 
mandatory solicitation requirements, such that AT&T's offer should not 
have been found eligible for award.  Specifically, GTE asserts that 
AT&T's proposal is noncompliant with the ISDN, grade of service, and 
the timing and synchronization requirements specified in the FRS.[14]  
GTE also argues that AT&T's proposal is noncompliant because, contrary 
to the RFP requirement that offerors describe their design and 
technical approaches, AT&T did not sufficiently describe how it would 
satisfy the RFP requirements regarding specified MUFs,[15] the 
internal Stratum 3 clock, the Defense Switched Network Integrated 
Management Support System (DIMSS) interface, critical assured service, 
and the network management system.  Finally, GTE argues that AT&T will 
not meet the mandatory FOC schedule date, given the likely delay that 
DISA evaluated in AT&T's proposal due to that firm's need to perform 
substantial software development and customization to satisfy RFP 
requirements to provide the MUFs, [DELETED], and the network 
management system.

DISA and AT&T dispute each of these allegations and contend that 
AT&T's proposal is fully compliant with all of the RFP's requirements.  
They state that AT&T's proposal, like GTE's, was found compliant based 
upon a commitment of the offeror to perform each RFP requirement and 
the SSEB's finding that the proposed solution to accomplishing the 
requirement was technically feasible.  The agency and intervenor also 
argue that the implementation and schedule risks, which GTE points to 
in the evaluation record, do not demonstrate that AT&T's proposal is 
noncompliant, but rather represent the agency's best value analysis of 
AT&T's acceptable approach.

In considering protests of an agency's evaluation of proposals, we 
examine the record to determine whether the agency's judgment was 
rational and consistent with stated evaluation criteria and applicable 
statutes and regulations.  Abt Assocs., Inc., B-237060.2, Feb. 26, 
1990, 90-1 CPD  para.  223 at 4.  Such judgments are by their nature often 
subjective; nevertheless, the exercise of these judgments in the 
evaluation of proposals must be reasonable and bear a rational 
relationship to their announced criteria upon which competing offers 
are to be selected.  Southwest Marine, Inc.; American Sys. Eng'g 
Corp., B-265865.3; B-265865.4, Jan. 23, 1996, 96-1 CPD  para.  56 at 10.  
From our review of the record, including the hearing testimony and the 
parties' protest arguments, we conclude that the agency's evaluation 
of proposals was reasonable.

First, the record does not support GTE's arguments that AT&T's 
proposal was not compliant with the ISDN, grade of service, and timing 
and synchronization requirements specified in the RFP.  

ISDN is an international telecommunications standard for transmitting 
voice, video, and data over digital lines, allowing the transmission 
of digitized voice data and network management information 
simultaneously.  See Tr. at 196-197.  The RFP ISDN requirement 
specifies that the contractor provide basic rate and primary rate ISDN 
services in accordance with Bellcore National ISDN standards (NI-1 and 
NI-2), "except as otherwise specified by the HITS FRS."  The RFP then 
identified the 28 features of the National ISDN standards which 
contractors must provide and required an additional feature, 
MLPP[16]--a MUF--which is not included in the National ISDN standards.  
Although software to comply with the National ISDN standards is 
readily available, DISA recognized that offerors would be required to 
offer customized software in order to provide the required MLPP 
feature.

AT&T offered [DELETED].[17]  The SSEB found that AT&T's [DELETED] ISDN 
[DELETED] satisfied the RFP requirements.  Tr. at 198-199.  Offerors 
were not required to provide all the National ISDN features, as GTE 
suggests; rather the RFP only required offerors to provide the 28 
National ISDN features identified in the RFP.  Although GTE complains 
that AT&T provided HITS users with [DELETED], GTE does not explain why 
this renders AT&T's proposal noncompliant, given that AT&T's [DELETED] 
satisfies the RFP requirements.  Based on our review, we find 
reasonable the agency's determination that AT&T's proposal satisfied 
the ISDN requirement.

With regard to the next protested requirement, "grade of service" 
refers to the RFP requirements for a switched traffic surge capacity 
sufficient to handle up to 125 percent of the normal peak load 
network-wide[18] and a switching processor capacity sufficient to 
handle up to 200 percent of the switching system normal processor 
load.  GTE contends that the SSEB found that AT&T's proposed [DELETED] 
switch and AT&T's switching system configuration cannot accommodate 
the required surge capacity.  

The record shows that the SSEB determined that AT&T's [DELETED] 
switches and switching system configuration do both have sufficient 
capacity to satisfy the RFP surge requirements.  Tr. at 189-196.  
While the SSEB was concerned that AT&T had not provided complete 
details as to how it would configure its system to meet these 
requirements, AT&T committed itself to providing services satisfying 
the surge requirements, and the SSEB found that sufficient information 
was provided by AT&T regarding its switches and architecture to allow 
the evaluators to determine that the grade of service requirements 
would be met.  Tr. at 189.  We find no basis in this record to 
question this determination.[19]  

With regard to the timing and synchronization requirements--which are 
necessary to permit network switches to work as a synchronized 
team--the RFP required that all gateway switches be externally timed 
by reference to a Stratum 1 reference signal.  AT&T proposed to 
[DELETED].  Although the SSEB determined that this approach was 
technically feasible by referring to technical literature for the 
[DELETED] that would support this requirement, AT&T had not cited this 
technical reference in its proposal to explain the feasibility of its 
approach, even though AT&T had provided the technical literature with 
its proposal.  Tr. at 181.  GTE, on the other hand, proposed a HITS 
synchronization plan based upon provisioning a Building Integrated 
Timing supply using the global positioning satellite system as its 
primary reference source at all HITS locations; this, the SSEB found, 
is a method commonly used by military communication sites in the 
Pacific region.  The SSEB concluded, reasonably we find, that both 
AT&T's and GTE's proposals satisfied this requirement, but that GTE's 
proposed approach was superior to AT&T's.[20]  

GTE also contends that AT&T provided insufficient information in its 
proposal to reasonably demonstrate compliance with the RFP 
requirements for the specified MUFs, the DIMSS interface, the critical 
assured service, the internal Stratum 3 clock, and the network 
management system.[21]  Specifically, GTE contends that both the 
solicitation proposal preparation instructions and evaluation criteria 
required offerors to describe and document their approaches to 
satisfying the RFP requirements.  GTE argues, citing the disadvantages 
and risks sections of the SSEB report, that AT&T did not 
satisfactorily demonstrate compliance with the above requirements.

Because the contracting agency is responsible for evaluating the data 
submitted by an offeror and ascertaining whether it is sufficient to 
determine the acceptability of the proposal, we will not disturb an 
agency's determination in this regard unless it is shown to be 
unreasonable.  SAIC Computer Sys., B-258431.2, Mar. 13, 1995, 95-1 CPD  para.  
156 at 8; Inframetrics, Inc., B-257400, Sept. 30, 1994, 94-2 CPD  para.  138 
at 3.

Here, we find that DISA had a reasonable basis for its determination 
that AT&T had provided sufficient proposal information to demonstrate 
compliance with the RFP requirements.  We do not agree with GTE that 
the RFP required that proposals be found noncompliant for any 
requirement where they failed to provide what the evaluators believed 
to be a complete discussion.  In this regard, although there were more 
than 1300 technical requirements for which offerors had to show 
compliance, the RFP limited technical proposals to 800 pages.  Given 
the complexity of HITS, the length and detail of the FRS, and this 
proposal page limitation, we do not find it unreasonable to expect 
that offerors would not fully discuss and describe their compliance 
with each and every requirement, and that the agency would accept 
statements of compliance with each offeror concerning some of the RFP 
requirements.[22]  See SAIC Computer Sys., supra at 8-10.  In this 
case, to determine compliance with the RFP's technical requirements, 
the SSEB sought a commitment to comply with the specified requirement 
and evidence of technical feasibility.  Tr. at 53, 170, 215.   

For example, in reviewing AT&T's proposal to determine whether AT&T 
had satisfied the requirement to provide the MUFs--e.g., MLPP, 
DSN7,[23] and PAT[24]--the SSEB found that AT&T had committed to 
providing these features in a future switch software revision.  
Specifically, the SSEB found AT&T was relying on the future release of 
Lucent Technologies software release [DELETED][25] to provide a number 
of required HITS features, including DSN7 and MLPP, for its [DELETED] 
switches, and PAT for its [DELETED] switches.[26]  Although the SSEB 
reported that AT&T had not documented the [DELETED] software in its 
proposal, the technical evaluation team chair explained in his hearing 
testimony that this meant that the unreleased software had yet to be 
tested and certified as to its ability to provide these features.  Tr. 
at 47-48.  The SSEB determined compliance in accordance with the above 
standard when it found that AT&T had committed to providing these 
features, which its proposal said would be provided through the future 
software release; that Lucent Technologies had committed, in a letter 
included in AT&T's management proposal, to providing these features in 
the [DELETED] software release; and that AT&T had successfully 
provided other 5ESS switches in other military networks with MLPP, 
PAT, and CCS7 (the commercial channel signaling protocol), which 
indicated to the evaluators that AT&T was capable of providing the 
MUFs here.  See Tr. at 47-48, 55, 70, 234.

We note that GTE's proposal was found to be compliant, although it 
also was  relying upon "undocumented," future switch software releases 
to provide HITS features.  While, like AT&T's proposed future software 
releases, these future software releases were not documented or 
completely described to the evaluators' satisfaction, the SSEB 
similarly found GTE's proposal compliant (albeit representing a lower 
risk than AT&T's proposal), based upon GTE's commitment to provide the 
features and the evaluators' determination that GTE's solution was 
feasible.  See Tr. at 56, 239-47.

GTE and AT&T were also treated similarly with regard to the agency's 
determination that both offerors proposed sufficient information to 
demonstrate compliance with the network management system 
requirements.[27]  Both offerors proposed a commercial off-the-shelf 
(COTS) software solution to providing the HITS network management 
system features, and the SSEB found that both offerors would require 
extensive customization and integration of their software before 
implementation.  In this regard, both offerors' network management 
system solutions were assessed to be high risk.  Thus, the SSEB found, 
regarding AT&T's proposal, that:

     "[AT&T's] proposed HITS network management solution is based on 
     proved network management concepts and provides the comprehensive 
     functionality needed to manage and operate the HITS network and 
     services.

     "The proposed [network management system] will employ high 
     quality, highly capable, state-of-the-art, standards-based, COTS 
     hardware and software.

     "Based on the disparities, inconsistencies, and uncertainties in 
     [AT&T's] proposal, proof that integration of the proposed 
     [network management] tools and COTS application software to 
     substantiate [AT&T's] statement of compliance has not been 
     demonstrated or provided."

Regarding GTE's proposed network management system solution, the SSEB 
found:

     "While the proposed [network management system] design appears to 
     be technically sound and shows a good understanding of specified 
     HITS network management requirements, the risk associated with 
     implementing a fully compliant HITS [network management system] 
     in time to meet specified milestones is high due to the apparent 
     need to extensively customize and integrate the proposed COTS 
     network management application software.  Although stating 
     compliance that network management of both switching and 
     transmission network elements will be provided, this risk 
     assessment is also based on the lack of detailed information in 
     the proposal regarding the design, development, implementation 
     and operation of network management functions for transmission 
     network elements."

In sum, the SSEB had concerns with both offerors' proposed network 
management system solutions, see Tr. at 93-94, 254-257, but 
nonetheless found the offerors' proposals compliant with regard to 
these requirements.  The SSEB found that AT&T's specific proposal 
commitment, coupled with the COTS hardware and software proposed and 
the evaluators' knowledge that the proposed hardware and software 
could meet the agency's needs, was sufficient to demonstrate AT&T's 
compliance with this requirement.

The SSEB also found that AT&T provided sufficient information in its 
proposal to demonstrate compliance with the RFP requirement that 
"[a]ll switches have an internal reference or system clock with a 
frequency and stability equal to a least a Stratum 3. . . ."  Although 
AT&T committed itself to provide the required Stratum 3 internal clock 
for all switches, [DELETED].  Because AT&T did not specifically state 
that it was replacing the [DELETED] with a Stratum 3 clock, the SSEB 
assessed this aspect of AT&T's proposal as a risk.  Nevertheless, the 
agency found that the switch could be equipped with a Stratum 3 clock 
as specifically promised by AT&T.  In this regard, GTE does not assert 
that these switches cannot be provided with a Stratum 3 clock; 
[DELETED].

AT&T's proposal was also found to be compliant with the critical 
assured service requirement of the RFP, despite the SSEB's concerns 
with the lack of detail provided in the proposal, because AT&T 
described an approach that the SSEB found would meet this requirement.  
The agency also found that critical assured service is a routine 
feature of military communications networks and would not be difficult 
for experienced vendors, such as GTE and AT&T.  We find no basis to 
question this aspect of DISA's evaluation of AT&T's proposal.

In sum, as noted by GTE, the SSEB found considerable risk with various 
aspects of AT&T's proposal because of AT&T's limited description of 
how it would accomplish the foregoing (and other) requirements and 
because AT&T required software development or customization to meet 
them.[28]  However, this does not mean that AT&T was not compliant 
with these requirements; to the contrary, this evidences the 
reasonableness of the agency evaluation--that is, DISA recognized that 
AT&T had offered a compliant solution but one that entailed risk to 
the government.  See TEAC Am. Corp., Inc., B-259831 et al., May 3, 
1995, 95-1 CPD  para.  273 at 11.  

GTE also complains that AT&T will not comply with the mandatory 
schedule requirements.  Specifically, GTE argues that DISA's 
evaluation record establishes that it is probable, if not likely, that 
AT&T will not be able to satisfy the RFP's FOC date, inasmuch as the 
BVWG determined that AT&T would likely miss the IOC date.  DISA and 
AT&T respond that AT&T took no exception to the schedule requirements 
in its proposal and therefore is compliant with the IOC and FOC 
requirements, and that GTE has misconstrued the purpose and 
conclusions of the BVWG's risk quantification analysis.  

The record shows that the BVWG accepted the SSEB's assessment that 
AT&T's proposal complied with the RFP requirements as well as the 
SSEB's determination that AT&T's approach entailed a moderate to high 
risk to the government that the IOC and FOC dates would not be met; 
the BVWG quantified the potential for delay that arose from each of 
the areas of AT&T's proposal for which the SSEB assessed moderate or 
high risk.  Tr. at 292-294, 330-331.  The BVWG found that a 
significant potential for delay existed for AT&T meeting the IOC date 
because AT&T needed switch software revisions to satisfy various HITS 
requirements, such as providing MUFs on all switches and [DELETED]; 
customizing and integrating the COTS network management system 
software; and configuring AT&T's switches to satisfy grade of service 
requirements.  The BVWG found that it was probable that AT&T's 
software revisions could result in a delay of [DELETED] after the IOC 
date and that AT&T's customization of the network management software 
could result in up to a [DELETED] delay in satisfying the IOC 
requirement.  The BVWG did not find that AT&T would not meet the FOC 
date or calculate any risks of AT&T's proposal not meeting the FOC 
date, see Tr. at 343-344, although the BVWG found it was likely that 
there may be grade of service problems during contract performance 
with AT&T's solution, and that, given the minimal impact on the user, 
it may take between [DELETED] after the FOC date to detect and correct 
any grade of service problem.  Tr. at 359, 445-446.  The BVWG chair 
testified, and the record otherwise evidences, that the BVWG's 
calculations of probable delay were prepared as a means of quantifying 
the risk assessed in AT&T's proposal and were not intended to 
represent "a forecast of [a] future event actually occurring or not."  
Tr. at 301-302; see Tr. at 324-325, 405-406, 409.

The BVWG's risk analysis, including estimates of probable delay, was 
fully presented to the SSA, who determined that AT&T would, in fact, 
comply with the RFP's required schedule and that, in this regard, the 
BVWG's estimates of risk and delay were too pessimistic.  The SSA 
testified that, based upon his more than 20 years of software 
development experience, he believed that AT&T would satisfy the RFP's 
schedule requirements, notwithstanding the significant software 
development and customization that had to be performed by that firm.  
Tr. at 548.  Specifically, the SSA testified that in his opinion the 
software development required would not be so difficult as to cause 
AT&T to miss the FOC date.  Regarding the customization of the network 
management system software, he stated that "[t]his network stuff is 
done every day.  We run millions of lines of this code around the 
country."  Tr. at 548-49.  Regarding the switch software, the SSA was 
aware that the features to be provided, although not under the DSN7 
protocol, were already available and should not be difficult to 
develop for this contract.  Tr. at 570, 573.  The SSA also concluded 
that he had two "very good companies"--AT&T and Lucent 
Technologies--doing the software revisions and software customization, 
and that this would mitigate any potential for delay, particularly 
given AT&T's financial incentive to satisfy the schedule requirements; 
that is, AT&T would not be paid until it provided service in 
accordance with the HITS contract.  Tr. at 570; see Tr. at 548-549.

The record also shows that the BVWG's determination of the length of 
AT&T's likely delay was based upon that group's subjective judgment 
and not upon any calculation of the level of effort actually required 
to perform this software revision and customization.  Tr. at 340, 361, 
384-85.  In addition, the BVWG's assessment of potential delay 
associated with AT&T's need to provide the [DELETED] software revision 
was based in part upon the SSEB's and BVWG's misunderstanding of when 
the relevant software release would occur.  During the protest 
process, AT&T provided the affidavit of Lucent Technologies [DELETED] 
for the 5ESS-2000 switch, who states the MUFs required under DSN7 
would be supplied by software release [DELETED].  In its proposal, 
AT&T had incorrectly identified the software to provide the MUF 
features as software release [DELETED], rather than [DELETED].  
[DELETED], DISA incorrectly believed that this represented a delay in 
the anticipated release of the [DELETED] software, which was planned 
for late 1996.  Tr. at 231-234, 330.  In fact, software release 
[DELETED] (which does not include MUFs for this contract) was released 
on schedule in December 1996.  The SSEB chair testified that this 
misunderstanding affected the evaluators' assessment of the risk 
associated with AT&T's need for switch software revisions.  Tr. at 
232.  Moreover, [DELETED].[29]  Tr. at 351.   

We find no basis to object to the SSA's judgment that AT&T would 
satisfy the RFP schedule requirements.  Contrary to GTE's argument, 
DISA's lower-level evaluators did not determine that AT&T would not 
satisfy the contract schedule requirements, but found that AT&T's 
approach entailed risks that it would not meet the schedule.  Indeed, 
the record establishes that the BVWG's estimates of delay were not 
intended to forecast AT&T's noncompliance with the schedule 
requirements, but to quantify possible risk to the government, should 
delays occur.  In any event, source selection officials are not bound 
by recommendations or evaluation judgments of lower-level evaluators 
but may make their own judgments, which are subject to the tests of 
rationality and consistency with the stated evaluation criteria.  See 
PRC, Inc., B-274698.2; B-274698.3, Jan. 23, 1997, 97-1 CPD  para.  115 at 7.  
Here, GTE has not shown that the SSA's judgment that AT&T would meet 
the RFP schedule requirements was unreasonable.[30]

GTE also complains that the agency's best value analysis was 
unreasonable because DISA did not assign any value to GTE's technical 
superiority and because DISA underestimated the cost to the government 
of the risk in AT&T's proposal.  In this regard, GTE asserts that DISA 
effectively converted this procurement from a best value basis for 
award to one in which award was simply made to the offeror with the 
lowest-priced, technically acceptable proposal.

Source selection officials have broad discretion to determine the 
manner and extent to which they will make use of the technical and 
cost evaluation results in a negotiated procurement.  Grey 
Advertising, Inc., 55 Comp. Gen. 1111, 1118-21  (1976), 76-1 CPD  para.  325 
at 9-12.  In deciding between competing proposals, cost/technical 
tradeoffs may be made, the propriety of which turns not on the 
difference in technical scores or ratings per se, but on whether the 
source selection officials judgment concerning the significance of the 
difference was reasonable and adequately justified in light of the RFP 
evaluation scheme.  Southwest Marine, Inc.; American Sys. Eng'g Corp., 
supra at 17; DynCorp, B-245289.3, July 30, 1992, 93-1 CPD  para.  69 at 8.

The record contains detailed documentation that establishes that the 
BVWG and SSA performed a thorough and complete best value analysis of 
the two firms' proposals and gave GTE's proposal appropriate credit 
for its assessed technical superiority.  As indicated above, the BVWG 
identified the significant discriminators between the two firms' 
proposals, where GTE was found to offer a superior solution or where 
AT&T's proposal was found to pose greater risk than GTE's.  Each of 
the discriminators identified by DISA's evaluators was reviewed by the 
BVWG and SSA to assess the impact on the user.[31]  Tr. at 296.  

In making this assessment, the BVWG and SSA recognized that, given the 
nature of this contract as a fixed-price service contract with tight 
performance specifications, the level and quality of service received 
from a compliant vendor would not significantly vary; as stated by the 
agency, the services were basically "transparent to the user."  Tr. at 
260-262, 336-338, 488-489.  In this regard, the SSA noted in his 
source selection decision [DELETED]--dedicated transmission and 
transmission-dependent switched voice services--that "[t]ransmission 
essentially is a commodity, which reputable vendors provide with 
little or no difference in quality."  The RFP's extensive 
pre-acceptance testing procedure also provided confidence to the BVWG 
and SSA that any potential problems in AT&T's performance that would 
affect the level of service provided would be identified and corrected 
before implementation of the system.  Tr. at 296-297, 520.  We cannot 
say from our review of the record that the BVWG's and SSA's judgment 
in this regard was unreasonable.  

Accordingly, DISA evaluated the value of what it considered to be the 
real benefits of GTE's higher-rated proposal to ascertain whether they 
justified the payment of the associated price premium.  In performing 
this evaluation, the BVWG and SSA assessed the impact of the evaluated 
discriminators by focusing upon the cost to the government of 
acquiring services from other sources during any period of delay or of 
providing additional government oversight and monitoring, Tr. at 414, 
and the cost to the government of directing AT&T to replace a 
compliant solution with a more expensive solution.  Tr. at 391.  

For example, the BVWG and SSA, in reviewing the discriminator based 
upon AT&T's reliance upon the future [DELETED] software release, 
concluded that the risk of additional cost to the government for 
oversight/monitoring and acquisition of services elsewhere could be 
approximately $[DELETED].  Regarding the network management system 
software, AT&T was found to pose greater risk than GTE to perform 
necessary customization and integration of COTS software, because AT&T 
had failed to completely describe how its various software 
applications would interface; the BVWG and SSA assessed the potential 
cost of this to the government to be approximately $[DELETED] for 
additional oversight/monitoring.  Regarding timing and 
synchronization, the BVWG and SSA found that GTE had proposed a more 
reliable and robust method of ensuring timing and synchronization than 
had AT&T, although AT&T's solution was compliant; to assess the impact 
of this discriminator, the BVWG and SSA determined that approximately 
$[DELETED] would be the additional cost to the government of directing 
AT&T to replace its compliant solution with GTE's superior 
solution.[32]  

GTE's objection to DISA's quantification of the risk in AT&T's 
proposal is based upon its view that there will be a diminution in the 
level of service received by the government from AT&T.  The protester 
calculates the value of this diminution of service by reference to the 
system of "outage credits" provided by the RFP where a contractor 
fails to meet specified grade of service requirements.[33]  This 
argument, however, fails to account for the agency's assessment--which 
we have found reasonable--that there will be no diminution in the 
level of service received from AT&T, and for this reason provides us 
with no basis to object to DISA's quantification of the discriminators 
between the two firms' proposals.

The record simply does not support GTE's contention that award was 
based on the lowest-priced, technically acceptable proposal, but 
evidences that a best value award decision was reasonably made in 
accord with the RFP evaluation scheme.  In this regard, the record 
shows that SSA accepted the findings of the lower level evaluators 
that GTE's technical proposal was superior to AT&T's; he also accepted 
that AT&T's management proposal was superior to GTE's.  The record 
establishes that the SSA went beyond the evaluation ratings to assess 
the impact of the difference between the two firms' proposals.  The 
SSA recognized that the essential technical difference between AT&T's 
and GTE's proposal was that AT&T's proposal posed a greater risk of 
delay and of a need for additional government oversight than did 
GTE's, Tr. at 563, but that the service the customer would ultimately 
receive from either vendor would be essentially the same.  Tr. at 487.  
Thus, it was AT&T's greater risk, as quantified by the BVWG, that the 
SSA weighed against GTE's substantial price premium (even though the 
SSA believed that this risk had been exaggerated by the lower-level 
evaluators).  The SSA also gave appropriate weight to AT&T's superior 
management proposal rating and good past performance record, which the 
SSA found mitigated the risks in AT&T's proposal.  Tr. at 557.  
Furthermore, the SSA was aware that telecommunications services were 
available under the FITS contract, at lower rates than offered by AT&T 
or GTE, for eleven months after the FOC date; this "safety net" also 
mitigated the risk of delay in AT&T's proposal.  Tr. at 482, 499-501.  

In sum, the SSA found that the evaluated risks in AT&T's fixed-price 
proposal were worth the substantial price advantage.  Contrary to 
GTE's arguments, we find this is an appropriate best value analysis, 
which is both reasonable and consistent with the stated evaluation 
criteria.

The protest is denied.

Comptroller General
of the United States

1. Although these contracts have expired, DISA has been acquiring 
telecommunication services under the Follow-on Interim Telephone 
System (FITS) contract, which was awarded to GTE on a sole source 
basis and can be extended through July 1999.

2. Subcriteria were also identified for the technical quality and 
management quality criteria.

3. GTE also submitted an alternate proposal that offered to continue 
use of the older switches that had supported service under the Oahu 
Telephone System contract.  This proposal was rejected because it did 
not comply with several critical HITS requirements, posed significant 
scheduling risk, and would provide inferior service relative to that 
offered by the other proposals.  

4. A hearing was conducted to elicit the testimony of the chair of the 
SSEB's technical team, the chair and other members of the best value 
working group (BVWG), and the source selection authority (SSA).

5. Under DISA's scoring methodology, a score of 4 reflected an 
acceptable proposal--"[t]he offeror's proposal meets requirements in 
an acceptable manner"; a 5 to 8 score reflected a good 
proposal--"[t]he offeror's proposal exceeds minimal requirements in 
some meaningful aspects and should result in successful completion of 
the requirement."

6. Low risk was defined as having little potential to cause disruption 
of schedule, increase in cost, or degradation of performance.  
Moderate risk was defined as having some potential to cause disruption 
of schedule, increase in cost, or degradation of performance, but 
where special contractor emphasis and close government monitoring 
could probably overcome difficulties.  High risk was defined as likely 
to cause significant serious disruption of schedule, increase in cost, 
or degradation of performance, even with special contractor emphasis 
and close government monitoring.

7. AT&T proposed 12 5ESS-2000 switches in the following 
configurations:  [DELETED].

8. SONET is an optical transmission network.  Tr. at 90.

9. The discounted price was calculated by using a discount rate of 7.9 
percent and mid-year discounting factors derived from Office of 
Management and Budget Circular A-94.

10."M" equals a million.

11."IGCE" refers to the independent government cost estimate.

12. The SSAC and BVWG were not aware of GTE's and AT&T's proposed 
prices until after the completion of the best value analysis.  Tr. at 
293.

13."Critical assured service" is a sub-element of the topology and 
survivability discriminator category.  It refers to the requirement 
that offerors provide certain designated critical switched voice users 
assured service "to guarantee these subscribers will be able to 
initiate and receive calls even when the subtending central office or 
access line is unable to process calls."

14. GTE originally argued that AT&T was not compliant with a number of 
other RFP requirements, such as the provision of specified military 
unique features (MUF) and an internal Stratum 3 clock.  After review 
of the agency's report, GTE contended only that AT&T had provided 
insufficient information in its proposal to demonstrate compliance 
with these requirements.

15. The MUFs required by the RFP include multilevel precedence and 
preemption (MLPP), Defense Switched Network (DSN) 7 Common Channel 
Signaling (CCS), and Precedence Access Threshold (PAT).

16. MLPP provides specified users with the capability to get assured 
service.  Tr. at 43.

17. Both AT&T and GTE proposed to satisfy some of the 28 required 
National ISDN features with functional equivalents.  DISA treated GTE 
and AT&T similarly in finding that their proposals satisfied the ISDN 
requirement.  GTE does not challenge this aspect of DISA's evaluation.

18."Normal peak load" was defined as five call attempts per line per 
hour.

19. We note that AT&T's proposal's lack of detail concerning how its 
network design would satisfy this requirement was accounted for by the 
SSEB in its assessment of this aspect of AT&T's proposal as a moderate 
risk.  GTE's proposal was treated similarly in this regard; although 
GTE's proposal was found compliant with this requirement, the SSEB was 
similarly concerned that GTE had not provided complete enough detail 
concerning its network to allow the evaluators to verify that GTE's 
network would satisfy surge requirements.  Tr. at 251-253.

20. The difference in GTE's and AT&T's approaches was accounted for by 
DISA in its evaluation by assessing this to be a significant 
discriminator; in fact, AT&T's proposal was rated high risk for this 
requirement because of AT&T's vague explanation of its timing and 
synchronization plan, while GTE's proposal was assessed as low risk.

21. GTE does not contend that AT&T will be incapable of providing 
these features under the HITS contract.

22. In fact, during discussions DISA informed the offerors that their 
"failure to fully substantiate compliance may result in a lower 
evaluation score and/or higher risk assessment," which indicated to 
the offerors that any lack of detail could be addressed in the 
agency's comparative evaluation of proposals.

23. DSN7 is the military version of the commercial common channel 
signaling requirement.  Tr. at 42-43.

24. PAT is the tool used by the switching element to allow 
implementation of MLPP.  Tr. at 42-43.

25. The record shows that operating system and core 
applications--designated as 5E software--are the same for all the 
5ESS-2000 switches regardless of configuration. Each software release 
is denominated as 5E with a revision number; thus, for example, 
[DELETED].  Although not explained in AT&T's proposal nor recognized 
by the evaluators, the actual software release that will provide the 
MUFs for the HITS is [DELETED].

26. AT&T is also relying upon future software releases--specifically, 
[DELETED]--to satisfy the [DELETED] requirements.

27. The HITS network management system will provide the government 
with access and control capability of all the HITS resources.  Tr. at 
89.

28. The risk to the government was fully identified and described in 
the SSEB and SSAC reports that were provided to and reviewed by the 
SSA.

29.[DELETED].

30. GTE also argues that DISA treated offerors unequally when it 
rejected GTE's alternate proposal allegedly because of the risk that 
GTE could not satisfy the schedule requirements, while accepting 
AT&T's proposal evidencing similar schedule risk.  The record 
establishes, however, that DISA rejected GTE's alternate proposal 
because it was based upon outdated technology, would not meet numerous 
requirements even after GTE upgraded its proposed system, and was 
markedly inferior to AT&T's proposal as well as to GTE's other 
proposal.

31. We note that in objecting to the BVWG's analysis, GTE does not 
assert that the discriminators that were identified are not 
appropriate or that there were additional technical discriminators 
that should have been considered; rather, GTE's complaint is that it 
did not receive credit for its higher technical score and that the 
cost of AT&T's potential for failure was underestimated.

32. The agency also recognized that GTE had proposed a [DELETED] 
transmission backbone than did AT&T.  Specifically, GTE proposed to 
provide an [DELETED] ("OC" refers to an optical carrier--i.e., a fiber 
optic transmission channel) to most HITS locations, while AT&T offered 
to provide [DELETED], if later required.  DISA determined that the 
benefit of [DELETED] was minimal, however, because the agency 
[DELETED].  The BVWG quantified this difference between the proposals 
to be approximately $[DELETED], representing [DELETED].  GTE has not 
shown this determination to be unreasonable.

33. The RFP provides for payments by the contractor to the government 
during periods of severe service interruption.