BNUMBER:  B-277163 
DATE:  September 8, 1997
TITLE: Chek F. Tan & Company, B-277163, September 8, 1997
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Matter of:Chek F. Tan & Company

File:     B-277163

Date:September 8, 1997

Laurence P. Lubka, Esq., Hunt, Ortmann, Blasco, Palffy & Rossell, 
Inc., for the protester.
John J. Finnerty for International Management, Development, and 
Training, Inc., an intervenor.
Bernard Roan, Esq., and Thomas W. Berndt, Esq., National Aeronautics & 
Space Administration, for the agency.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting officer reasonably selected for award the proposal with a 
higher technical rating and higher evaluated cost where she determined 
that the proposal's technical advantages justified the payment of an 
evaluated cost premium, and the solicitation's evaluation scheme 
provided that the mission suitability evaluation factor and an 
offeror's evaluated cost were most important and that an offeror's 
relevant experience and past performance was somewhat less important 
in selecting the most advantageous proposal to the government.

DECISION

Chek F. Tan & Company protests the award of a contract to 
International Management, Development, and Training, Inc. (IMDT) under 
request for proposals (RFP) No. 2-35974(TLS), issued by the Ames 
Research Center, National Aeronautics & Space Administration, for 
financial and accounting services.  The protester challenges the 
evaluation of its proposal and the award to a higher technically 
rated, higher evaluated cost offeror.

We deny the protest.

The RFP was issued on November 26, 1996, and contemplated the award of 
a cost-plus-fixed-fee contract for the base period and four 1-year 
option periods to the offeror whose proposal was determined most 
advantageous to the government, mission suitability, cost, and 
relevant experience and past performance considered.

The mission suitability evaluation factor was comprised of the 
following three subfactors and related elements:  (1) understanding 
the requirement (technical understanding; staffing and training plan, 
replacement, and backup; and total compensation plan for professional 
employees), (2) management plan (organizational structure/management 
approach and phase-in/phase-out plan), and (3) corporate/company 
business.  These subfactors and related elements were weighted and 
scored in accordance with the numerical scheme described in the RFP 
under which an offeror could receive up to a total of 1,000 points for 
the mission suitability evaluation factor.  The mission suitability 
portion of an offeror's proposal also received an overall adjectival 
rating (excellent, very good, good, fair, and poor).  An offeror's 
proposed cost, including the offeror's total compensation plan for 
professional employees, was evaluated in terms of the probable or 
expected cost to the government of the offeror performing the 
contract.  Finally, an offeror's overall corporate experience and past 
performance was evaluated to determine how well the offeror could be 
expected to perform the current requirements.  Relevant experience and 
past performance was evaluated by assigning adjectival ratings (same 
as those set out above).  In determining the offeror whose proposal 
was most advantageous to the government, the RFP stated that the 
mission suitability evaluation factor and an offeror's evaluated cost 
(which were approximately equal in importance to each other) were most 
important, and that an offeror's relevant experience and past 
performance was somewhat less important than either mission 
suitability or cost.

Five firms, including the protester, the incumbent contractor for more 
than 8 years, and IMDT, submitted initial proposals.  The agency 
included the proposals of the protester and IMDT in the competitive 
range and subsequently conducted written and oral discussions with 
these two competitive range offerors.  During discussions, the agency 
identified weaknesses in each offeror's proposal, linking these 
weaknesses to specific RFP provisions.  Following discussions, the 
protester and IMDT submitted best and final offers.

For the mission suitability evaluation factor, out of a possible 1,000 
points, the protester's proposal received 501 points and an overall 
"fair" rating, and IMDT's proposal received 741 points and an overall 
"very good" rating.  These scores were supported by narratives of the 
major and minor strengths and weaknesses in each offeror's proposal.  
The protester's evaluated cost was approximately 6 percent less than 
IMDT's evaluated cost.  The protester received a "very good" rating 
for relevant experience and past performance based on its performance 
as the incumbent contractor.  IMDT, which had experience which was not 
directly relevant to providing financial support services (e.g., 
training, security technology, and technical support services, 
including database management, maintenance, and administration), 
received a "good" rating for relevant experience and past performance 
because its proposed subcontractor had experience preparing training 
courses that specifically related to financial systems and procedures 
at the Ames Research Center.

The contracting officer, who served as the source selection authority, 
determined that IMDT's higher evaluated cost proposal was technically 
superior to the proposal submitted by the protester based on the 
firm's higher score for the mission suitability evaluation factor and 
its "good" rating for relevant experience and past performance.  
Accordingly, the contracting officer determined that IMDT's 
technically superior proposal was most advantageous to the government 
and that this technical superiority justified the payment of an 
evaluated cost premium to IMDT.

The protester contends that in downgrading its proposal for the 
mission suitability evaluation factor, the agency improperly 
considered unstated criteria, for example, health and welfare 
benefits, overtime, and bonus plans.  The protester maintains that 
these benefits were cost-related and only should have been considered 
in evaluating its proposed cost.  We disagree, since the protester's 
position is not supported by the record.

The RFP provided that an offeror's total compensation plan for 
professional employees would be considered not only in evaluating an 
offeror's proposed cost, but also as a related element under the 
understanding the requirement subfactor of the mission suitability 
evaluation factor.  More specifically, the RFP required an offeror to 
provide a compensation plan for professional employees setting forth 
"salaries and fringe benefits" proposed for these employees.  The RFP 
required the offeror to "describe the impact that the proposed 
compensation will have on recruiting and retaining professional 
employees."  The RFP stated that an offeror's compensation plan would 
be evaluated to determine the offeror's understanding of the 
requirements of the work to be accomplished and the suitability of the 
proposed compensation structure to obtain and retain qualified 
personnel to meet mission objectives.  Consistent with the terms of 
the RFP, the protester's narrative description of its compensation 
plan, included as part of its technical proposal, was properly 
evaluated under the mission suitability evaluation factor for the 
purpose of determining the protester's understanding of the 
requirements of the RFP and the effect its proposed compensation plan 
would have in terms of recruiting and retaining professional 
employees.

The evaluation record further shows that the agency downgraded the 
protester's proposed compensation plan because it was not satisfied 
with the protester's explanation for basing the health and welfare 
benefit on a percentage of an employee's gross pay, for paying 
overtime to arguably exempt professional employees, and for having two 
bonus pools.  The agency considered the unsatisfactory explanations of 
these proposed benefits to be the single major weakness of the 
protester's technical proposal under the mission suitability 
evaluation factor.  In its protest, the protester does not challenge 
the substantive evaluation conclusions but rather maintains that it 
proposed its historic compensation plan, which is "not always 
susceptible to a detailed and attractive explanation of its basis," 
but has "resulted in high retention and reasonable costs" as reflected 
by its performance of the predecessor contract.

In reviewing protests against the propriety of an agency's evaluation 
of proposals, we will examine an agency's evaluation to ensure that it 
was fair and reasonable and consistent with the evaluation criteria 
stated in the RFP.  Dayron, B-265875.2, Jan. 11, 1996, 96-1 CPD  para.  10 
at 3.

The RFP specifically notified offerors that they "should not assume 
that the evaluation team is aware of [their] abilities, capabilities, 
plans, facilities, organization or any other pertinent fact that is 
important to accomplishment of work."  The RFP also warned that 
offerors "should assume that the evaluation will be based primarily on 
the information presented (or referenced) in the written proposal.  
Each listed evaluation subfactor/element should be specifically 
addressed."  In determining whether an offeror proposed to fairly and 
properly compensate its professional employees, which was expressly 
recognized in the RFP as being in the government's best interests, the 
RFP stated that the agency would evaluate an offeror's compensation 
plan to ensure that it "reflects a sound management approach and 
understanding of the contract requirements."

In light of these RFP provisions, the protester was required to 
address the agency's concerns with its proposed compensation plan, as 
pointed out by the agency during written and oral discussions by 
noting the weaknesses in its proposal with reference to specific 
provisions of the RFP, or run the risk of being downgraded for failing 
to provide information necessary to fully evaluate its plan under the 
mission suitability evaluation factor as described above.  The 
protester does not dispute that it did not provide a full explanation 
of its proposed health and welfare benefit, overtime, and bonus pools, 
and essentially admits that it did not provide a "detailed and 
attractive explanation" of these benefits.  Accordingly, consistent 
with the terms of the RFP, we think the agency reasonably downgraded 
the protester's compensation plan for failing to provide supporting 
details which demonstrated that the firm's plan reflected a sound 
management approach and that the firm understood the contract 
requirements.[1]

To the extent the protester argues that the agency should have 
discounted its failure to provide a full explanation in its technical 
proposal of its compensation plan because as the incumbent contractor 
it was rated "very good" for relevant experience and past performance, 
and therefore, the agency was aware that it had no prior performance 
problems in terms of recruiting and retaining professional employees 
based on the compensation it historically paid to these employees, its 
argument is simply without merit.

The protester fails to recognize that the agency did not downgrade its 
proposed compensation plan because it was based on amounts 
historically paid by the protester under the predecessor contract.  
Rather, the agency objected that the protester failed to adequately 
explain the rationale for various aspects of its plan in its proposal 
and therefore failed to demonstrate a complete understanding of the 
RFP requirements.  Even though the protester performed successfully as 
the incumbent contractor, as evidenced by its "very good" rating for 
relevant experience and past performance, the RFP expressly advised 
that an offeror should not assume that the evaluation team was aware 
of its overall abilities to perform the contract and that the 
evaluation would be based primarily on the information in the 
offeror's written proposal.  In other words, the agency was not 
required to give an offeror like the protester credit for information 
not included in its proposal.  Since under the terms of the RFP the 
protester was responsible for providing a full discussion of its 
technical approach and methodology within the four corners of its 
proposal, the protester must suffer the consequences of its failure to 
do so, that being the agency's downgrading of its proposal for failing 
to demonstrate in this document its understanding of the RFP 
requirements.  See Wyle Labs., Inc., B-260815.2, Sept. 11, 1995, 95-2 
CPD  para.  187 at 5.

Finally, the protester challenges the agency's decision to award to 
IMDT at a higher evaluated cost because the firm does not have 
relevant experience in performing financial and accounting services.

In a negotiated procurement, there is no requirement that award be 
made on the basis of lowest cost.  Agency officials have broad 
discretion in determining the manner and extent to which they will 
make use of the technical and cost results.  Cost/technical tradeoffs 
may be made, and the extent to which one is sacrificed for the other 
is governed only by the test of rationality and consistency with the 
established evaluation factors.  See Gardiner, Kamya & Assocs., P.C., 
B-253805, Oct. 13, 1993, 93-2 CPD  para.  223 at 5.  Awards to offerors with 
higher technical scores and higher costs are proper so long as the 
results are consistent with the evaluation criteria and the 
contracting agency reasonably determines that the cost premium 
involved was justified considering the significant technical 
superiority of the selected offeror's proposal.  Id.

Regarding the protester's challenge of the agency's evaluation of 
IMDT's experience and past performance, we point out that, while the 
agency recognized that IMDT itself did not have direct relevant 
financial and accounting experience (although it had nine other 
government contracts), the record shows that the firm's proposed 
subcontractor specialized in financial resources training, financial 
systems analyses, and training and cost center development and 
operation in support of the Ames Research Center.  The agency believed 
that IMDT, based on its other contracts and as teamed with its 
proposed subcontractor, demonstrated relevant experience and past 
performance for which it received a "good" rating.  We also point out 
that the RFP did not contain restrictions on subcontracting and in 
fact, in the answers to pre-proposal questions contained in amendment 
No. 1 to the RFP, the agency stated that subcontracting was permitted.

In this case, the RFP stated that the mission suitability evaluation 
factor and an offeror's evaluated cost were most important and that an 
offeror's relevant experience and past performance was somewhat less 
important in determining the most advantageous proposal to the 
government.  Although IMDT's evaluated cost was 6 percent higher than 
the protester's evaluated cost, the contracting officer determined 
that IMDT's proposal was technically superior to the protester's 
proposal for the mission suitability evaluation factor.  The protester 
does not challenge the underlying evaluation of IMDT's proposal, and 
we have confirmed through our review of the record the reasonableness 
of the contracting officer's conclusion that IMDT's proposal was 
technically superior to the protester's proposal.

For example, the source selection record shows that IMDT demonstrated 
an excellent understanding of, and approach for accomplishing, the 
financial and accounting requirements of the RFP.  IMDT furnished an 
extensive and thorough description of its management procedures for 
planning, directing, prioritizing, controlling, and reporting work 
functions and of its training plan.  IMDT described in a detailed and 
organized manner the budget and funding processes.  IMDT presented a 
complete and concise plan for replacement and back-up of non-key 
personnel.  IMDT furnished a complete and thorough recruiting and 
hiring plan and fringe benefits package.  IMDT explained in a 
comprehensive, organized format its quality assurance procedures, 
including total quality management elements from initially 
understanding the requirements to following-up with the client.

In contrast, the source selection record supports the agency's 
conclusion that the protester failed to provide a complete description 
of its total compensation plan, particularly its fringe benefits 
package.  As discussed above, the agency concluded that this failure 
constituted the single major weakness in the firm's technical proposal 
under the mission suitability evaluation factor.  In addition, the 
record supports the agency's conclusion that the protester did not 
furnish a detailed and thorough staffing and training plan for 
cross-utilization of personnel, back-up of non-key personnel, and 
career development, and it did not provide a sufficient rationale for 
selecting key personnel positions.  Further, the record shows that the 
protester did not include in its training plans specific courses 
addressing the technical requirements of the RFP and provided only a 
cursory description of management procedures for planning, directing, 
prioritizing, controlling, and reporting work functions.

In short, the record supports the contracting officer's conclusion 
that IMDT's proposal was technically superior to the protester's 
proposal under the mission suitability evaluation factor.

In addition, the contracting officer noted the protester's successful 
performance as the incumbent contractor for more than 8 years for 
which it received a "very good" rating for relevant experience and 
past performance.  The contracting officer also recognized the "good" 
rating assigned to IMDT for relevant experience and past performance 
based on its other government contracts and its teaming with an 
experienced subcontractor.

The contracting officer concluded that despite IMDT's higher evaluated 
cost vis-a-vis the protester's evaluated cost, IMDT's proposal 
represented the best value to the government based on its technically 
superior mission suitability proposal and its relevant experience and 
past performance gained through the experience of its proposed 
subcontractor.  Consistent with the evaluation and source selection 
scheme described in the RFP, we have no basis to object to the 
contracting officer's conclusion that IMDT's technically superior 
proposal was most advantageous to the government and that this 
technical superiority justified the payment of an evaluated cost 
premium to IMDT.[2]

The protest is denied.

Comptroller General
of the United States
   
1. The protester asserts that by requiring a detailed rationale for 
its compensation plan, as opposed to recognizing that the protester 
proposed its historic benefits package, the agency actually was 
requesting that the protester reduce the amounts to be paid to 
professional employees.  The protester's assertion is not supported by 
the record.  In this regard, such a request from the agency would have 
been inconsistent with the express terms of the RFP cautioning 
offerors that "instances of lowered compensation for essentially the 
same professional work may be considered a lack of sound management 
judgment in addition to indicating a lack of understanding of the 
requirement."

2. Other than the fact that it successfully performed as the incumbent 
contractor, the protester does not explain why it should have received 
an "excellent" rating for relevant experience and past performance.  
In any event, there is nothing in the record which indicates that an 
"excellent" rating for a less important evaluation factor would have 
changed the contracting officer's cost/technical tradeoff.