BNUMBER:  B-277538.2 
DATE:  April 28, 1998
TITLE: Command Technology, Inc., B-277538.2, April 28, 1998
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Matter of:Command Technology, Inc.

File:     B-277538.2

Date:April 28, 1998

Igor Boris for the protester.
Kathy B. Cowley, Esq., and Maria Bellizzi, Esq., Department of the 
Navy, for the agency.
Christine F. Davis, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

In making multiple awards on the basis of a price/technical tradeoff, 
agency reasonably determined that one awardee's significant price 
advantage overcame the minor technical advantages afforded by the 
protester's proposal, while another awardee's significant technical 
advantage overcame the slight price advantage of the protester's 
proposal.

DECISION

Command Technology, Inc. (CTI) protests its failure to receive an 
award under request for proposals (RFP) No. N00600-96-R-3241, issued 
by the Department of the Navy, Naval Supply Systems Command, for 
scanning and conversion services in support of the Defense Automated 
Printing Service.

We deny the protest.

The RFP contemplated the award of one or more contracts for the 
conversion of documents in a paper or microform format to an 
electronic data base.  RFP  sec.  M.1.  The RFP provided for the award(s) 
to be made on a fixed-price, indefinite-quantity, indefinite-delivery 
basis for a base year plus 4 option years.  RFP  sec.  B, L.17.

The RFP advised that the government may elect to pay a price premium 
to select a technically superior proposal for award.  RFP  sec.  M.3(e).  
The RFP evaluation factors were (1) past performance, (2) technical 
understanding and approach/oral presentation, and (3) price, including 
options.  RFP  sec.  M.2(a), M.6, M.7.  Past performance was the most 
important factor, and the combined weight of the past performance 
factor and the technical understanding and approach/oral presentation 
factor was significantly more important than price.  RFP  sec.  M.3(d), 
M.7(a).

The technical understanding and approach/oral presentation factor 
provided for an evaluation of the offeror's ability to perform the 
contract and its understanding of the eight work categories 
encompassed by the RFP.  RFP  sec.  M.2(a).  The past performance factor 
provided for an evaluation of the quality, depth, and relevance of the 
offeror's past performance, considering information obtained from the 
offeror and its past performance references.  RFP  sec.  L.11(c), M.7(b), 
(c).  The RFP stated adjectival ratings for the evaluation of 
technical and past performance proposals.  The possible technical 
proposal ratings were "outstanding," "better," "acceptable," 
"marginal," or "unacceptable," while the possible past performance 
ratings were "neutral,"[1] "outstanding," "better," "satisfactory," 
and "marginal."  RFP  sec.  M.2(b), M.3(c), M.7(d).  The RFP stated that a 
"marginal" past performance rating would not render a proposal 
ineligible for award, but warned that "an acceptable technical 
proposal and marginal past performance [proposal] . . . with the 
lowest price may not be selected if award to a higher-priced proposal 
affords the Government a greater overall benefit."[2]  RFP  sec.  M.3(e), 
M.7(d).

The agency received 13 proposals in response to the RFP.  Nine 
proposals, including CTI's, were put in the competitive range.  One 
firm withdrew from the competition, and the agency, after conducting 
two rounds of discussions, received best and final offers from the 
remaining eight offerors on September 22, 1997.  

On November 20, the Navy completed a price/technical tradeoff between 
the four lowest-priced proposals, which were rated as follows:

                Docucon    CTI        ActiveSystemsDoc-U-Care 

Price           $77,763,250$76,922,500$67,333,175 $58,463,471

Past PerformanceOutstandingOutstandingBetter      Outstanding

Technical       OutstandingAcceptable Acceptable  Acceptable
Those proposals that were lower-rated and higher-priced than Docucon's 
were not considered in the price/technical tradeoff.

Based upon the evaluation results, the agency made awards to Docucon, 
Doc-U-Care, and ActiveSystems, but not to CTI.  The agency concluded 
that CTI's technical advantage over ActiveSystems was not worth the 
associated $9,589,325 price premium, while Docucon's technical 
advantage over CTI was worth the associated $840,750 price premium.  
Doc-U-Care's lowest-priced proposal, which was rated technically equal 
to CTI's, was also selected--CTI does not challenge Doc-U-Care's 
award.

In performing the tradeoff between CTI's and ActiveSystems' proposals, 
the agency determined that the technical superiority of CTI's proposal 
was not significant enough to overcome ActiveSystems' $9,589,325 price 
advantage.  In considering the technical superiority of CTI's 
proposal, the Navy noted that CTI's past performance rating, while 
better than ActiveSystems', was based upon far fewer past performance 
references; the Navy characterized CTI's past performance rating as 
"(a weak) outstanding," as compared to "(a strong) better" rating 
earned by ActiveSystems.  In addition, even though CTI's and 
ActiveSystems' technical proposals both earned overall "acceptable" 
ratings, ActiveSystems' proposal received a stronger acceptable rating 
because it demonstrated a better understanding of certain work 
categories than did CTI's proposal.  Accordingly, the agency did not 
deem CTI's somewhat superior proposal to be worth the significant 
price premium.

In performing the tradeoff between CTI's and Docucon's proposals, the 
agency observed that Docucon's proposal price was only $840,750, or 1 
percent, more than CTI's proposal price.  The agency considered this 
price premium negligible to obtain the technical advantages afforded 
by Docucon's highest-rated proposal.  In terms of technical merit, 
only Docucon's proposal earned "outstanding" ratings under both the 
past performance and the technical understanding and approach/oral 
presentation factors.  In comparison, CTI's proposal only earned an 
"acceptable" rating under the technical understanding and 
approach/oral presentation factor.  Furthermore, while both proposals 
earned "outstanding" past performance ratings, the Navy believed 
Docucon's past performance was of greater value because Docucon, the 
incumbent contractor, had successfully performed the solicited 
services for the past 10 years.  The agency found that it would 
"directly benefit" from Docucon's successful experience and 
outstanding performance as the incumbent contractor "by not having to 
provide any guidance or oversight throughout the life of this contract 
to ensure successful completion of the tasks."  Accordingly, the 
agency concluded that the advantages associated with Docucon's past 
performance and its technical understanding and approach merited the 
payment of the small price premium.

CTI protests that the agency should have made multiple awards based 
upon the three lowest-priced proposals, Doc-U-Care's, ActiveSystems', 
and CTI's.  The protester argues that the agency, after declining to 
pay a price premium in making awards to Doc-U-Care and ActiveSystems, 
could not then pay such a premium in making award to Docucon.  
According to CTI, the agency selected Doc-U-Care's and ActiveSystems' 
proposals because they were technically acceptable at a lower price 
than CTI's.  The protester asserts that the Navy abandoned this 
rationale in selecting Docucon's proposal, which amounted to unequal 
treatment of CTI.

In a best-value acquisition, agencies are not required to make award 
on the basis of low cost or price; agencies may make price/technical 
tradeoffs, and the extent to which one is sacrificed for the other is 
governed only by the test of rationality and consistency with the 
stated evaluation criteria.  KPMG Peat Marwick, L.L.P., B-271673, July 
15, 1996, 96-2 CPD  para.  53 at 5.  In reviewing protests against allegedly 
improper evaluations and source selection decisions, our Office 
examines the record to determine whether the agency's judgment was 
reasonable and in accord with the RFP's stated evaluation factors.  
Jack Faucett Assocs., B-277555, Sept. 12, 1997, 97-2 CPD  para.  71 at 3.  A 
protester's mere disagreement with an agency's evaluation and source 
selection decision does not render the results unreasonable.  Id.

Contrary to the protester's suggestion, the RFP did not require that 
the agency make award based upon the low-priced, technically 
acceptable proposal(s), nor does the record support that the agency 
employed such a rationale in its selection decisions.  To the 
contrary, the RFP in this case provided that the government may elect 
to pay a price premium to select a technically superior proposal for 
award, RFP  sec.  M.3(e), and the record shows that the agency performed a 
price/technical tradeoff in choosing between proposals superior to 
CTI's from either a price standpoint (ActiveSystems' proposal) or a 
technical standpoint (Docucon's proposal).  The fact that the agency 
decided that CTI's proposal did not represent the best value in the 
face of either ActiveSystems' price advantage or Docucon's technical 
advantage does not establish that the agency violated the evaluation 
scheme or treated offerors unequally; rather, it reflects the relative 
position of the competing proposals based upon the results of the 
price and technical evaluations.

The record supports the agency's judgment that there was no 
significant technical difference between CTI's and ActiveSystems' 
proposals to justify the payment of the significant price premium.  
Both proposals earned "acceptable" ratings under the technical 
understanding and approach/oral presentation factor, and the awardee's 
"better" past performance rating inspired almost as much confidence as 
the protester's "outstanding" past performance rating in view of the 
far greater number of references attesting to the awardee's strong 
performance.

Likewise, the record supports that there was a significant technical 
difference between CTI's and Docucon's proposals to justify the 
payment of the nominal price premium.  The awardee's proposal was 
unique in earning "outstanding" ratings under both non-price factors.  
Not only was the awardee's "outstanding" technical proposal more 
attractive than the protester's "acceptable" technical proposal, the 
awardee's "outstanding" past performance proposal boasted an advantage 
not shared by the protester's "outstanding" past performance proposal, 
namely, the awardee's directly relevant, successful experience as the 
incumbent contractor.

Based upon our review, the agency's justification for preferring both 
ActiveSystems' lower-priced proposal and Docucon's higher-rated 
proposal over CTI's proposal was reasonable and consistent with the 
evaluation scheme.  We therefore find no basis to object to the 
agency's failure to make award to CTI.

The protest is denied.

Comptroller General
of the United States

1. The agency was to assign a "neutral" past performance rating where 
the offeror lacked relevant past performance experience.  RFP  sec.  
M.7(c), (d).

2. Contrary to the protester's interpretation, the above provision 
does not mandate award to the lowest-priced proposal earning better 
than a "marginal" past performance rating.