BNUMBER:  B-276620 
DATE:  July 3, 1997
TITLE: Science and Engineering Services, Inc., B-276620, July 3,
1997
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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:Science and Engineering Services, Inc.

File:     B-276620

Date:July 3, 1997

Howell Roger Riggs, Esq., for the protester.
Anita B. Williams, Logistics, Engineering & Environmental Support 
Services, Incorporated, an intervenor.
Joshua A. Kranzberg, Esq., and Francis J. Faraci, Esq., Department of 
the Army, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency reasonably selected higher-cost, technically superior proposal 
under evaluation scheme that favored technical merit over cost where 
it determined that the awardee's technical advantages offset the 
protester's advantages in cost and past performance.  

DECISION

Science and Engineering Services, Inc. (SES) protests the award of a 
contract to Logistics, Engineering & Environmental Support Services, 
Incorporated (LESCO) under request for proposals (RFP) No. 
DAAH01-97-R-0010, a total small business set-aside, issued by the 
Department of the Army, United States Army Missile Command (USAMC), 
Redstone Arsenal, Alabama, for support services for the USAMC 
Logistics Support Activity (LOGSA).  

We deny the protest.

The RFP, issued on October 15, 1996, contemplated the award of an 
indefinite quantity time-and-materials contract to provide functional, 
direct, on-site support services to LOGSA and LOGSA-supported 
customers for a 36-month period.  LOGSA is a logistics products and 
services organization that is the Army's focal point for collection, 
integration, analysis, and distribution of logistics data.  LOGSA 
supports a diverse array of customers worldwide, including the 
Department of Defense (DOD), Defense Nuclear Agency, forestry service, 
and allied nations.  The RFP work includes development of information, 
maintenance, configuration management, training, evaluation and test 
support, integrated logistics support, and special projects.  

The RFP provided for award to be made without discussions under a best 
value evaluation scheme, considering four evaluation areas:  
Technical, Management, Past Performance, and Most Probable Cost 
(MPC).[1]  The technical area was said to be the most important; it 
was worth more than each other area individually, but not in 
combination, and was said to be significantly more important than the 
management area, substantially more important than the past 
performance area, and slightly more important than the MPC area.  The 
MPC area was slightly more important than the past performance area 
and substantially more important than the management area. The past 
performance was slightly more important than the management area.
  
Under the technical area, the RFP listed four equally weighted 
evaluation elements, of which the first two each were comprised of 
four equally weighted factors, as follows:

     (A) Element 1.  The offer demonstrates an understanding of the 
     Army functions of:

        Factor 1. Integrated Logistics Support
        Factor 2.  Readiness Analysis
        Factor 3.  Maintenance, Supply, and Transportation
        Factor 4.  Conventional [Arms] Control Treaties and Agreements

     (B) Element 2.  Offeror demonstrates an understanding of Army and 
     DOD current and emerging automated information systems in the 
     following areas:

        Factor 1.  Logistics and Financial Data Base
        Factor 2.  DOD Plan to Integrate Information Systems Including 
     The                                                           
     Army Approach To A Seamless System
        Factor 3.  Expert Systems
        Factor 4.  Re-engineering Initiatives

     (C) Element 3.  Qualifications of personnel to include education, 
     training, and experience and the relevance and significance of 
     the experience to the required effort.

     (D) Element 4.  Offeror demonstrates an understanding of the 
     requirements of the [statement of work] by his approach to the 
     sample delivery orders, logistics integrated data base and arms 
     control support.

The RFP advised that the MPC would be the government's estimate of the 
cost of completing the contract using the offeror's technical and 
management approaches adjusted by any additional cost to the 
government.  The evaluation, among other things, included evaluating 
the offeror's indirect expense rate, projected rates, and projected 
expense pools.

Three offerors, including SES and LESCO, submitted proposals by the 
December 5 closing date.  The Army evaluated the technical and 
management proposals under an adjectival rating scale of outstanding, 
very good, satisfactory, poor and unacceptable.  The past performance 
area was rated with adjectival ratings of superior, good, adequate, 
and inadequate, and proposal risk was assessed with ratings of low, 
moderate, or high.  The MPC evaluation was conducted with the 
assistance of the Defense Contract Audit Agency (DCAA).  

SES' proposal received an overall rating of outstanding in the 
technical and management areas with virtually no risk and a superior, 
low risk past performance rating.  In the technical area, under 
element 1, SES received very good ratings for factors 1 and 3 and 
outstanding ratings for factors 2 and 4, and under element 2 it 
received a very good rating for factor 1 and outstanding ratings for 
the other factors; the remaining elements were rated outstanding.  
SES' proposed cost of [DELETED] was upwardly adjusted by [DELETED] to 
a $8,757,487 MPC because DCAA and the Army considered SES' proposed 
overhead rate to be understated in that DCAA reported that it failed 
to include an SES prospective contract in the indirect cost pool and 
was not calculated on the basis of SES' actual labor-hour base.

LESCO's proposal also received an overall rating of outstanding with 
virtually no risk under the technical and management areas, with 
outstanding ratings under every element and factor in the technical 
area, and received a good/low risk past performance rating.  The Army 
upwardly adjusted LESCO's proposed cost of [DELETED] by [DELETED] to a 
$8,564,349.32 MPC.[2]   

Based on this evaluation, the Source Selection Authority (SSA) 
determined that LESCO's proposal represented the best value to the 
government, and that award should be based on initial proposals 
without discussions.  After a detailed discussion of the relative 
strengths and weaknesses of the proposals, the SSA concluded:

     In the highest weighted technical area LESCO was rated 
     outstanding as compared to very good for SES in three of the 
     factors.  Considering the equal standing between LESCO and SES in 
     the lowest weighted management area, and only slightly better 
     rating for SES over LESCO in lower weighted past performance, the 
     decision comes to the cost and technical areas.  The MPC for 
     LESCO is lower than the MPC for SES.  Although the proposed cost 
     for LESCO is slightly higher than that proposed by SES, LESCO has 
     demonstrated by their technical ratings their outstanding 
     understanding of the requirement.  During the contract this 
     understanding would provide efficient performance resulting in 
     less time and lower cost for learning/preparation resulting in 
     lower cost overall.  In this instance the higher rated technical 
     proposal of LESCO is worth the additional cost as proposed and 
     would provide the best value to the Government.

Award was made to LESCO on March 20, 1997.  This protest of the award 
selection followed.

Where as here, a solicitation provides that technical considerations 
are more important than cost, source selection officials have broad 
discretion in determining the manner in which they will make use of 
the technical and cost evaluation results in arriving at a source 
selection decision; such cost/technical tradeoffs are governed only by 
the test of rationality and consistency with the RFP's stated 
evaluation criteria.  JB Indus., B-251118.2, Apr. 6, 1993, 93-1 CPD  para.  
297 at 7. 

SES protests that it should have received the award.  Specifically, 
SES contends that the agency's upward adjustment in determining SES' 
MPC was not reasonably based, and that SES' MPC should have been lower 
than LESCO's, while its proposal was at least technically equal to 
LESCO's, as evidenced by the identical outstanding ratings for the 
technical area received by the two proposals, as well as SES' superior 
past performance rating. 

Contrary to SES' contentions, the record shows that the SSA found 
that, notwithstanding their identical outstanding technical ratings, 
LESCO's proposal was actually technically superior to SES', and that, 
regardless of the MPC evaluation, this advantage offset any advantage 
SES may have had in proposed cost and past performance.  Adjectival 
ratings, like numerical point scores, when used for proposal 
evaluation, are useful only as guides to intelligent decision-making 
and are generally not controlling for award because they often reflect 
the disparate, subjective judgments of the evaluators.  STD Research 
Corp., 72 Comp. Gen. 211, 215, 93-1 CPD  para.  406 at 5.  Here, the SSA 
reasonably found LESCO's proposal had a technical advantage over SES', 
as evidenced by the documented higher ratings for three technical 
factors.  

For example, the Army found LESCO's proposal demonstrated a thorough 
understanding of each technical element and factor.  Specifically, the 
Army concluded that LESCO's understanding of the factors related to 
integrated logistics support; readiness analysis; maintenance, supply, 
and transportation; and conventional arms control treaties and 
agreements was exact and to the point.

In contrast, the record shows that the Army found, among other things, 
that in discussing maintenance planning, SES' technical proposal did 
not mention the primary data sources that would be used to perform the 
work; that with respect to maintaining maintenance and readiness 
policy procedures SES described only a cursory approach; that SES 
incorrectly assumed that LOGSA manages major subordinate commands; 
that SES did not discuss utilization of the readiness analysis data to 
identify "Status of Resources and Training System" weapons systems 
deficiencies to the major command or unit level; that SES incorrectly 
referred to the Standard Army Management Information System; that SES' 
proposal failed to elaborate on the specific actions to be taken on 
data base management if awarded the contract; that SES' proposal did 
not address how readiness and maintenance policies would be prepared; 
and that SES' technical proposal contained some spillover among the 
elements that indicated a lack of understanding of the separate 
requirements.  While these weaknesses only resulted in SES' receiving 
very good ratings for three of the technical factors and did not 
prevent its receiving an overall outstanding technical rating, they 
evidence a lower degree of understanding than that exhibited by 
LESCO's proposal.

The Army reports that this contract involves the issuance of separate 
task orders covering a variety of LOGSA functions.  Each task will 
contain a separate number of hours needed to accomplish the specific 
task for each labor category bound by a ceiling dollar amount that the 
contractor has no obligation to exceed.  Therefore, the Army reports 
that the agency has a critical need to obtain the best technical 
approach to complete the task within the ceiling amount.  The Army 
advises that time spent in familiarization, startup, and learning 
means expenditure of hours and dollars without any return as the 
available amount of funds shrinks and, thus, it is in the government's 
best interest to keep this time to a minimum. 

Based on our review of the record, we find that the agency reasonably 
found LESCO's proposal was technically superior to SES' and that this 
advantage under the most heavily weighted technical area offset SES' 
advantages in proposed cost and past performance.  Since the award 
selection reasonably found that LESCO's technical superiority 
overweighed SES' advantage in proposed cost, we need not consider SES' 
protest of the MPC adjustments.

The protest is denied.

Comptroller General
of the United States

1. The RFP further explained that an inherent consideration in the 
evaluation under these areas would be the risk associated with the 
offeror's proposed technical approach.

2. The third proposal received overall [DELETED] technical and 
management ratings and a [DELETED] risk past performance rating, and 
its proposed cost of [DELETED] was adjusted to a [DELETED] MPC.