TITLE:  Marquette Medical Systems, Inc., B-277827.5; B-277827.7, April 29, 1999
BNUMBER:  B-277827.5; B-277827.7
DATE:  April 29, 1999
**********************************************************************
Marquette Medical Systems, Inc., B-277827.5; B-277827.7, April 29, 1999

Decision

Matter of: Marquette Medical Systems, Inc.

File: B-277827.5; B-277827.7

Date: April 29, 1999

Mitchell W. Quick, Esq., Michael, Best & Friedrich, for the protester.

William M. Weisberg, Esq., and Monica C. Parchment, Esq., Tucker Flyer, for
Hewlett-Packard Company, an intervenor.

Col. Nicholas P. Retson, and Maj. Jonathan C. Guden, Department of the Army,
for the agency.

Peter A. Iannicelli, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Where solicitation for a fixed-price contract stated that offerors could
propose either to provide new items or to upgrade the existing ones and that
proposed prices would be calculated by adding the total proposed price for
the basic requirement to the prices proposed for all option periods, agency
improperly deviated from solicitation's evaluation criteria when it adjusted
proposed prices to take into account the agency's expectations of savings
associated with the offer of new items and additional costs associated with
upgraded ones.

2. Agency's "normalization" of offerors' prices was not reasonable where it
double counted the cost difference associated with the use of new rather
than upgraded existing items by both deducting the price of new items from
the total price of the offeror proposing them and adding the price of
replacement items to the price of the offeror proposing to upgrade existing
ones.

3. Protest ground alleging that technical evaluation of awardee's proposal
was improper is denied where there is ample support in the record for the
evaluators'

determination that the awardee had extensive prior experience and for the
evaluators' high rating of the awardee's proposal on quality of technical
approach.

DECISION

Marquette Medical Systems, Inc. protests the award of a contract to
Hewlett-Packard Company by the Department of the Army pursuant to request
for proposals (RFP) No. DAMD17-94-R-0052, for a Cardiology Medical
Information System (CMIS system) to replace the Department of Defense's
(DoD) existing computerized medical information system. The protester
contends that the agency's evaluation of proposals and award decision were
unreasonable and inconsistent with the RFP's evaluation scheme. Protest
at 6-10; Supplemental Protest at 2-4.

We sustain the protest.

BACKGROUND

Issued on April 5, 1996, the RFP requested proposals for providing hardware,
software, documentation, training, support and maintenance services relating
to storage, retrieval and interpretation of electrocardiograms (ECG). RFP sect.
B. The CMIS system would be deployed at 15 major medical centers and
approximately 200 hospitals and medical clinics throughout the United
States. RFP sect. J, apps. E, G; Contracting Officer's Statement at 1. The RFP
stated that there were 950 ECG carts in the existing system and specifically
invited offers based upon either replacing or upgrading the existing ECG
cart inventory. RFP sect.sect. C.2.4; J, app. G, at J-15. The RFP anticipated award
of a fixed-price contract for a base period of 1 year with options for 7
additional years. RFP sect. F-2(a). Essentially, the Army was buying all
hardware and software required to operate the CMIS system, as well as
documentation, training, and support services, during the base period of the
contract, and extended maintenance and support services in the option years.
Contracting Officer's Statement at 1. Marquette has been the incumbent
contractor since the present medical information system was put into
operation in 1980. Id.

The RFP stated that the contract would be awarded to the responsible offeror
whose offer, conforming to the solicitation, was determined to be the best
overall value, after consideration of price and other factors. RFP sect. M.2.
The technical evaluation criteria, in descending order of importance
(factors (3) and (4) were comparatively equal), were (1) quality of
technical approach; (2) contract management; (3) understanding of overall
contract requirements; (4) past performance and relevant experience; and (5)
key personnel qualifications. RFP sect. M.1.b. The RFP defined the best overall
response as the response that was evaluated as most superior technically
with a realistic estimated cost. RFP sect. L.d, at L-9. The RFP stated that
price was considered less important than technical considerations and that
the agency would evaluate price by adding the total price for all option
periods to the total price for the basic requirement. RFP sect.sect. M.3, M.4.

The agency received initial proposals from and conducted negotiations with
three offerors.[1] Agency Report, Tab 20, Post Business Clearance Memorandum
at 1. After first BAFOs were received and evaluated, Marquette's proposal
received a technical score of [deleted] (out of 100 possible points) while
Hewlett-Packard's received a technical score of [deleted] points. Id. at 7.
Marquette's total price was $[deleted] and Hewlett-Packard's total price was
$[deleted]--a price differential $[deleted] in Marquette's favor.Prices have
been rounded to the nearest dollar. Id. The agency determined that
Marquette's and Hewlett-Packard's proposals were [deleted] and that the
technical differences between them did not justify paying Hewlett-Packard's
higher price. Id. at 8. Accordingly, on August 4, 1997, the Army initially
awarded the contract to Marquette. Agency Report, Tab 31, Addendum to Post
Business Clearance Memorandum, May 8, 1998, at 1. Hewlett-Packard filed a
protest in our Office alleging that the award was improper because the Army
had relaxed certain RFP requirements for Marquette, whose proposed equipment
did not meet the RFP's minimum mandatory requirements.Hewlett-Packard's
protest (reference No. B-277827) was filed on August 19, 1997. After the
Army announced that it was going to issue an amendment changing the
pertinent RFP equipment requirements, Hewlett-Packard withdrew its protest
and we closed our file without action.

Two additional rounds of discussions were held, and second and third BAFOs
were received and evaluated. Agency Report, Tab 31, Addendum to Post
Business Clearance Memorandum, May 8, 1998, at 1. Marquette's third BAFO
received a technical score of [deleted] points, while Hewlett-Packard's
again received a score of [deleted] points; Marquette's total price was
$[deleted] while Hewlett-Packard's was $[deleted]--a price differential of
just $[deleted] in Hewlett-Packard's favor.[4] Id. at 2, 5. The agency again
determined that Marquette's and Hewlett-Packard's proposals were [deleted],
but that Hewlett-Packard's offer was the best overall value because it was
rated [deleted]. Id. at 5, 6. On this basis, on June 24, 1998, the Army
reversed its initial selection decision and awarded the contract to
Hewlett-Packard. Marquette filed a protest in our Office alleging that the
award was improper because, among other things, the price and technical
evaluations were unreasonable, and because Hewlett-Packard's proposal was
noncompliant with several of the RFP's requirements.Marquette's protest
(reference No. B-277827.2) was filed on July 9, 1998. The Army again decided
to take corrective action, including reopening discussions and, since
Hewlett-Packard's prices had been revealed, revealing all offerors' prices
before soliciting new BAFOs. Contracting Officer's Statement at 4. Based on
this corrective action, we dismissed the protest as academic.

Hewlett-Packard then filed suit in the United States Court of Federal Claims
protesting the Army's proposed corrective action. Contracting Officer's
Statement at 4. The Court allowed the Army to proceed with a fourth round of
discussions, BAFOs, and evaluations. Id. This time, Marquette's proposal
received a technical score of [deleted] points, while Hewlett-Packard's
proposal again received a score of [deleted] points; Marquette's total price
was $[deleted], while Hewlett-Packard's total price was $[deleted] a price
differential of $[deleted] in Marquette's favor. Agency Report, Tab 50,
Addendum to Post Business Clearance Memorandum, Dec. 4, 1998, at 3, 4. In
spite of Hewlett-Packard's higher price, and based on the "best value"
analysis set out in detail below, the contracting officer determined that
Hewlett-Packard's proposal represented the best overall value. Id. at 6.
Consequently, on December 22, 1998, the contract was awarded to
Hewlett-Packard. After a debriefing, Marquette filed this protest on January
19, 1999. After receiving protest-related documents, including evaluation
materials, from the Army, Marquette filed a supplemental protest on February
16. Performance under the contract has been stayed pending our resolution of
the protest. [6] Contracting Officer's Statement at 1.

THE AGENCY'S "BEST VALUE" ANALYSIS

The protester contends that the present award decision was inconsistent with
the two previous award decisions. Protest at 7. Marquette points out that
Hewlett-Packard's first BAFO received a total of [deleted] technical points
while Marquette's received [deleted] technical points (a difference of
[deleted] points) and Hewlett-Packard's third BAFO received a total of
[deleted] technical points while Marquette's received [deleted] technical
points (a difference of [deleted] points). Yet, in both instances, the
agency determined that Marquette's and Hewlett-Packard's BAFOs were
[deleted] and selected the lower-priced offer for award. Id. at 3, 4. Now,
in making the third award, Marquette contends, the agency has done "an
inexplicable about face" and selected Hewlett-Packard's fourth BAFO over
Marquette's, even though Hewlett-Packard's margin of technical superiority
has narrowed to just over [deleted], while Marquette's price is
approximately $[deleted] lower than Hewlett-Packard's. Id. at 7.

While providing no explanation for any apparent inconsistencies between the
first two and the present award decisions, the agency argues that the two
previous award decisions are irrelevant to the validity of the present award
decision, so long as the present award decision is rational and consistent
with the RFP's stated evaluation criteria. Agency Report at 3. We need not
examine the alleged inconsistencies because, as discussed below, we find
that the contracting officer's best value analysis, upon which the award
decision was based, was neither reasonable nor consistent with the stated
evaluation scheme.

In December 1998, as part of the evaluation of the fourth round of BAFOs,
the agency performed what is labeled in the record a "best value
determination." In that analysis, the contracting officer considered the
cost of purchasing new ECG carts over the potential 8-year life of the
contract. Agency Report at 6-8; Contracting Officer's Statement at 10-11.
The contracting officer reports that, since Hewlett-Packard offered to
replace, while Marquette offered to upgrade, the ECG carts in the government
inventory, he "normalized" the two offers' prices for comparison purposes.
Contracting Officer's Statement at 11; Agency Report, Tab 49, Best Value
Determination, Dec. 3, 1998, para.para. 3, 7.

The contracting officer explains that his "normalizing" process consisted of
deducting from Hewlett-Packard's price, for evaluation purposes, the price
of the [deleted] new ECG carts that the firm proposed to supply, thus
reducing its total price of $[deleted] by $[deleted], to $[deleted].
Contracting Officer's Statement at 11; Agency Report, Tab 49, Best Value
Determination, Dec. 3, 1998, para. 3. The contracting officer found that,
because Hewlett-Packard would be supplying new carts, it "can be predicted
that there will be minimal need to acquire new carts" during the contract
cycle. Best Value Determination, Dec. 3, 1998, para. 6. With respect to
Marquette's proposal to upgrade the existing carts, the contracting
officer's analysis stated that 665 carts would have to be replaced, which
the contracting officer concluded would represent an additional cost of
approximately $[deleted] over the contract period, if Marquette's proposal
were accepted. Id. para. 7. The contracting officer also found that
Hewlett-Packard's approach of replacing [deleted] carts [deleted] Id. para. 8.
Based on this analysis, the contracting officer determined that
Hewlett-Packard's BAFO represented the best value and selected
Hewlett-Packard for award. Agency Report, Tab 50, Addendum to Post Business
Clearance Memorandum, Dec. 4, 1998, at 5-6.

Marquette also asserts that the contracting officer improperly evaluated
offers using a life-cycle cost analysis even though the RFP did not inform
offerors that such an analysis would be conducted. Supplemental Protest
at 2-4. Marquette also disputes the specific elements of the agency's best
value analysis and asserts that there is no reasonable justification for the
selection of Hewlett-Packard's proposal as the best value when, in fact,
having Hewlett-Packard perform this fixed-price contract will cost the Army
approximately [deleted] percent more than having Marquette perform. Protest
at 9-10.

Procuring agencies have broad discretion to determine the evaluation scheme
they will use, but they do not have the discretion to announce in the
solicitation that one scheme will be used, and then follow another in the
actual evaluation. 10 U.S.C. sect. 2305(b)(1) (1994); Technical Support Servs.,
Inc., B-279665, B-279665.2, July 8, 1998, 98-2 CPD para. 26 at 3; Trijicon,
Inc., B-244546, Oct. 25, 1991, 91-2 CPD para. 375 at 5. Once offerors are
informed of the criteria against which their proposals will be evaluated,
the agency must adhere to those criteria or inform all offerors of any
significant changes made in the evaluation scheme. Trijicon, Inc., supra, at
5.

Here, the RFP specifically invited offers based upon either of two very
different technical approaches to fulfilling DoD's requirement for a CMIS
system. Offers could properly be based upon upgrading the existing ECG carts
or upon supplying new ECG carts. RFP sect. C.2.4. Regardless of the approach
offered, the RFP anticipated award of a fixed-price contract and stated that
offers would be evaluated for award purposes by adding the total price for
all options to the total price for the basic requirement. RFP sect. M.4. In
fact, upon award and exercise of the options, the government will be
obligated to pay the contractor the fixed prices scheduled in its proposal
for the basic and option periods of the contract. While the RFP indicated
that the contracting officer would conduct a price analysis, the RFP gave no
indication that the price analysis would involve deducting the price for
performing any part of the work (and especially not the price for a major
component like the ECG carts) from an offeror's total price in an attempt to
"normalize" the competition.[7] RFP sect.sect. L.e, M.3. In fact, where the contract
is fixed price, an agency is not permitted to make adjustments for cost
elements, since the fixed price is the price the awardee is obligated to
perform at and the price the government is bound to pay. See PHP Healthcare
Corp.; Sisters of Charity of the Incarnate Word, B-251799 et al., May 4,
1993, 93-1 CPD para. 366 at 6. Further, while a source selection official may in
its price/technical tradeoff quantify the effects of a concern on the
technical side, such as the risk of schedule slippage, see, e.g.,
Allied-Signal Aerospace Co., B-250822, B-250822.2, Feb. 19, 1993, 93-1 CPD
para. 201 at 14-15, the quantification must be rationally based and consistent
with the RFP. Here, the price evaluation and best value analysis technique
was not in accord with the scheme announced in the RFP and was not
reasonably based in any event.

The agency asserts that the contracting officer did not conduct a life-cycle
cost analysis but, other than suggesting that the contracting officer's
analysis does not fall squarely within the FAR's definition of the term
"life-cycle cost," the agency provides no support for its position. The FAR
defines "life-cycle cost" as "the total cost to the Government of acquiring,
operating, supporting, and (if applicable) disposing of the items being
acquired." FAR sect. 7.101.

From our review of the record, it is clear that, even though the contracting
officer may not have considered or quantified all of the costs of operating
the CMIS system over the 8-year life contract, he certainly considered some
costs that rightfully may be considered as part of a life-cycle cost
analysis. Most notably, the contracting officer considered and attempted to
quantify the cost of acquiring new replacement ECG carts under both
Hewlett-Packard's and Marquette's approaches. Contracting Officer's
Statement at 11, 12; Agency Report, Tab 49, Best Value Determination,
Dec. 3, 1998, para.para. 3, 7. He also considered, but did not attempt to quantify,
certain support costs (i.e., technician training after the initial
deployment phase, maintenance, administration, cart surveys, and software
upgrades) that might be associated with each approach. Agency Report,
Tab 49, Best Value Determination, Dec. 3, 1998, para. 8.

Regardless of the label given the contracting officer's evaluation, and
regardless of whether the contracting officer's analysis of costs that might
be associated with each approach over the life of the contract was complete
and thorough, the above cost elements were not listed in proposals but were
considered in the best value determination. These cost elements are
pertinent life-cycle costs that should have been identified in the RFP if
they were to be evaluated. See Eastman Kodak Co., B-194584, Aug. 9, 1979,
79-2 CPD para. 105 at 7 (if life-cycle costs are to be evaluated, the
solicitation must indicate that fact); see also Lanier Bus. Prods., Inc.,
B-200695, B-200696, Mar. 10, 1981, 81-1 CPD para. 188 at 2-3 (the particular
elements of the life-cycle cost evaluation should be disclosed to offerors
in the RFP).

The solicitation gave no indication that the agency would adjust proposed
prices for evaluation purposes, based on the cost savings believed to be
available from acquiring new carts and the additional costs believed to be
associated with upgrading the existing carts. Adjustments of the order made
here clearly could have affected offerors' judgment about whether to propose
new carts rather than upgrades to the existing inventory. Effectively, the
agency added a significant evaluation factor to those announced in the
solicitation, by disfavoring proposals based on the upgrading of the
existing carts. Since the RFP failed to advise offerors of this unannounced
criterion and this failure prejudiced the protester, who proposed the
"disfavored" option, we sustain the protest on this ground.

Moreover, our review of the source selection record shows that the
calculations used in the contracting officer's best value analysis were
themselves unreasonable. That analysis improperly double-counted the costs
associated with the way the carts were proposed: for evaluation purposes, it
both deducted the entire price of the new carts from Hewlett-Packard's price
and added the cost of purchasing new carts during the contract period to
Marquette's price.

Both aspects of the double counting were problematic. The analysis deducted
the entire price of Hewlett-Packard's new carts, even though, because this
is a fixed-price contract, the agency is certain to pay those costs. As to
Marquette's costs, however, the contracting officer's assumption that the
majority of its upgraded carts will need to be replaced is disputed by the
protester and unsupported in the record, which includes no evidence to
suggest that Marquette's upgraded carts would need to be replaced sooner
than Hewlett-Packard's. The contracting officer concedes that he has no idea
how many of the carts have recently been replaced nor how many will actually
require replacement over the term of the contract; in calculating the
$[deleted] figure effectively added to Marquette's price, the contracting
officer concedes that he did not have a price from Marquette for replacing
the full inventory of ECG carts, so his figure was merely based on his
calculation of what it would cost to have Marquette replace ECG carts using
a Federal Supply Schedule price. Agency Report, Tab 49, Best Value
Determination, Dec. 3, 1998, para.para. 2, 3; Contracting Officer's Supplemental
Statement at 2. Again, at a minimum, we think that the contracting officer
should have obtained accurate information concerning how many carts would
likely need to be replaced over the life of the contract and Marquette's
actual price for replacing all 950 carts to treat the offers equally in
making his best value determination.[8] In addition, while Marquette
proposed to [deleted], the contracting officer's analysis apparently did not
take that into account.

There is another reason suggesting the impropriety of deducting
Hewlett-Packard's [deleted] price for replacing [deleted] ECG carts from the
firm's price for evaluation purposes. To the extent that Hewlett-Packard's
technical approach, which was premised on [deleted], was responsible for its
receiving the highest technical score, it was inappropriate to ignore the
price associated with that approach.

In sum, it was improper for the agency, without advising offerors, to give a
substantial preference during the evaluation to proposals to provide new,
rather than upgraded, carts; and, in any event, the way that the preference
was calculated here was unreasonable. We therefore sustain the protest on
this ground.

BUY AMERICAN PREFERENCE

The protester contends that, since the procurement is subject to the Buy
American Act, 41 U.S.C. sect.sect. 10a-d (1994), and Hewlett-Packard has proposed to
supply end products (i.e., ECG carts) that are manufactured in the Peoples
Republic of China, the Army should have added a price differential to
Hewlett-Packard's offer, but improperly did not do so. Protest at 10-11.

The RFP included Defense Federal Acquisition Regulation Supplement (DFARS)
clause 252.225-7006 which, among other things, stated that offers would be
evaluated by giving preference to end products made in the United States and
certain other designated countries and required offerors to identify and
certify all end products that were not domestic end products. RFP sect. K.26. To
qualify as domestic, an end product must meet a two-pronged test: (1) it
must be manufactured in the United States; and (2) the cost of its
components which are mined, produced, or manufactured in the United States
must exceed 50 percent of the cost of all its components. FAR sect. 52.225-3(a);
RFP sect. I.34; Computer Hut Int'l, Inc., B-249421 et al., Nov. 23, 1992, 92-2
CPD para. 364 at 4. While domestic certifications may sometimes be accepted at
face value, a contracting agency should go beyond a firm's
self-certification for Buy American Act purposes, rather than relying on the
validity of that certification, when it has reason to question whether a
domestic product will in fact be furnished. Hewlett-Packard Co., B-228271,
Dec. 3, 1987, 87-2 CPD para. 545 at 4; Computer Hut Int'l, Inc., supra, at 5.

Hewlett-Packard's proposal's Buy American Act certificate did not identify
any end products as not domestic, but included a note referring the reader
to its Certifications Introduction, which listed four manufacturing plants
that would be used to perform the contract, as well as their locations,
including a location in the People's Republic of China, and the percent of
the total effort that would be performed at each. Agency Report, Tab 6,
Hewlett-Packard's Proposal, sect. K.26, at K-25, and vol. II, sect. 3, at 3 (Place
of Performance Certification). In that certification, Hewlett-Packard
represented that its ECG carts (designated as the M1700A PageWriter Xli),
which were to be manufactured in China, would amount to 30.6 percent of its
total effort.

The contracting officer states that, after reviewing Hewlett-Packard's
certifications, he was satisfied that no Buy American Act preference needed
to be applied and did not seek additional information from Hewlett-Packard.
Contracting Officer's Statement at 5. The agency contends that the
contracting officer reasonably relied on Hewlett-Packard's certifications
and properly did not apply a Buy American Act preference. Agency Report
at 8-9.

Because we are recommending, in light of our sustaining the protest on the
grounds discussed above, a re-evaluation of proposals, we need not determine
whether, prior to the award decision, the contracting officer had a duty to
inquire further regarding the applicability of the Buy American Act
preference to Hewlett-Packard's proposal. As a result of the protest
pleadings, even if not earlier, enough information has been brought to the
contracting officer's attention to warrant further inquiries concerning
Hewlett-Packard's proposal, so that, at this point, reliance on the
offeror's self-certification in a re-evaluation would not be reasonable.
Hewlett-Packard's certification that the ECG carts would amount to only 30.6
percent of its total effort could not eliminate the need for further
inquiry, since it was provided without explanation, and no adequate support
for it was provided during the protest. In this regard, we note that review
of Hewlett-Packard's fourth BAFO could have alerted the contracting officer
to possible Buy American Act concerns. See Agency Report, Tab 47,
Hewlett-Packard's Fourth BAFO, amended Nov. 24, 1998, at 2nd- 6th unnumbered
pages. Of the total price for the CMIS system's hardware and software
components, the price of the ECG carts alone is $[deleted], while the total
price for all other hardware and software is just $[deleted].[9] Thus,
Hewlett-Packard's Chinese-made ECG carts represent approximately [deleted]
percent of the total price for the CMIS system.

TECHNICAL/PAST PERFORMANCE EVALUATION OF HEWLETT-PACKARD

Marquette contends that the technical and past performance evaluations of
Hewlett-Packard's proposal were unreasonable and inconsistent with the RFP's
evaluation scheme. Marquette asserts that the past performance evaluation
was flawed because Hewlett-Packard does not have experience in converting
legacy data from the existing medical information system to the new CMIS
system as required by section L.d.1 of the RFP.[10] Protest at 12. Marquette
also asserts that the past performance evaluation was flawed because
Hewlett-Packard has no experience in designing, installing and maintaining
CMIS systems of similar magnitude and complexity. Id. In addition, the
protester contends that the overall technical evaluation was unreasonable
because the evaluation panel rated Hewlett-Packard's proposal slightly
higher than Marquette's even though Hewlett-Packard proposed inadequate
training time. Supplemental Protest at 6-7.

Our Office will question an agency's evaluation of proposals only if it
lacks a reasonable basis or is inconsistent with the RFP's stated evaluation
criteria. DAE Corp., Ltd., B-257185, Sept. 6, 1994, 94-2 CPD para. 95 at 4. A
protester's mere disagreement with the agency over its evaluation does not
establish that the evaluation was unreasonable. Id.; Cubic Applications,
Inc., B-274768 et al., Jan. 2, 1997, 97-1 CPD para. 98 at 3. After reviewing the
record in light of the protester's arguments, we have no basis to question
the agency's evaluation.

Contrary to Marquette's assertion, the RFP contained no requirement that an
offeror demonstrate prior experience in converting legacy data. The RFP
provision cited by the protester as requiring previous experience in
converting legacy data to the new system merely states: "The solution shall
include conversion, migration, or incorporation of existing ECG data records
to the new system." RFP sect. C.2.5. Thus, the RFP required that proposals
provide for converting, migrating, or otherwise incorporating the
legacy-type data stored in the existing medical information system for use
in the offeror's proposed CMIS system, but did not require that an offeror
demonstrate prior experience converting the legacy-type data presently being
used by the DoD. Hewlett-Packard's proposal fulfilled the requirement,
stating that [deleted] and describing how it would proceed to do that work.
Agency Report, Tab 6, Hewlett-Packard's Proposal, vol. 1, sect. 3, at 62-65. The
record shows that the evaluation panel was aware of the fact that
Hewlett-Packard's proposal had no demonstrated experience in converting
legacy-type data, but believed that this represented minimal risk, which was
mitigated by the firm's strength in software solutions, and the evaluators
noted that the proposal was technically outstanding. Agency Report, Tab 10,
SSEB Report, July 25, 1996, at 4th unnumbered page. Accordingly, we find no
impropriety in this case.

Regarding past performance and relevant experience, the RFP stated that the
adequacy of the offeror's response would be determined by the strength of
the firm's background, including past performance and relevant experience in
similar contracts/projects, and the level of customer satisfaction, as
demonstrated in existing information systems supported and maintained by the
firm. RFP sect. L.d.1, Factor 4, at L-10. Offers were to demonstrate prior
experience with the configuration design, installation and maintenance of a
system of similar magnitude of complexity, and were to include three
references. Id. Based upon our review of Hewlett-Packard's proposal and the
evaluation record, we find that there is ample support, discussed below, for
the evaluators' determination that Hewlett-Packard's proposal demonstrated
the firm's extensive experience and for the evaluators' high rating of
Hewlett-Packard on past performance and relevant experience.[11] Agency
Report, Tab 10, SSEB Report, July 25, 1966, at 4th unnumbered page. See
Cobra Techs., Inc., B-280475 et al., Oct. 6, 1998, 98-2 CPD para. 98 at 4-5, and
cases cited.

Hewlett-Packard's proposal stated that the firm had extensive experience in
the medical products field and that Hewlett-Packard was one of the world's
largest manufacturers of electromedical devices and systems, with more than
$1.3 billion in sales of medical products, systems, and services in 1995
(the last full year before initial proposals were submitted). Agency Report,
Tab 6, Hewlett-Packard's Proposal, vol. 1, sect. 1, at 23-25. As required,
Hewlett-Packard's proposal included brief descriptions of three previous
projects that the firm had performed and gave the names of references for
each. Id. The type and size of the listed contracts varied greatly: (1) the
dollar value of the prior projects ranged from $1.5 million to $71.0
million; (2) the work was performed for government agencies and commercial
firms; and (3) the work included providing hardware, software, and technical
support, as well as installation of a patient monitoring and clinical
information system and an ECG management system located at 16 different
hospitals. Id. The references that responded to the Army's inquiries gave
very positive appraisals. Army Report, Tab 8, Past Performance
Questionnaires, at 5th-13th unnumbered pages. The references stated, among
other things, that the quality of Hewlett-Packard's work ranged from very
good to excellent; that Hewlett-Packard was cooperative; that
Hewlett-Packard was committed to customer satisfaction; that Hewlett-Packard
resolved problems quickly; and that they would do business with
Hewlett-Packard again.

In addition, the record shows that the evaluators considered the exceptional
qualifications and experience of the key personnel proposed by
Hewlett-Packard in making their determination that Hewlett-Packard had the
requisite experience with prior projects of a similar magnitude. See, e.g.,
Agency Report, Tab 10, SSEB Report, July 25, 1966, at 21st and 25th
unnumbered pages. While Marquette tried in its comments on the agency report
to distinguish the projects previously performed by Hewlett-Packard from the
work that will be required under the present contract, in view of the fact
that the RFP merely required previous experience on similar but not
identical projects, and in view of the above-described past performance
information that was included in Hewlett-Packard's proposal, we have no
basis to find unreasonable the evaluation panel's determination that
Hewlett-Packard had extensive relevant experience. Protester's Comments
at 13-15; Contracting Officer's Statement at 5-6; Agency Report, Tab 10,
SSEB Report, July 25, 1966, at 4th unnumbered page. See Cobra Techs., Inc.,
supra, at 4-5.

Regarding the contention that Hewlett-Packard's proposal should not have
received a slightly higher rating than Marquette's because Hewlett-Packard
proposed inadequate training time, the evaluation record shows that at
virtually every stage of the evaluation, the evaluators noted their concern
with Hewlett-Packard's proposal for only 1 day of training and even stated
that they considered it inadequate. Nevertheless, in spite of the perceived
training weakness, after every evaluation, the evaluation panel consistently
gave Hewlett-Packard's proposal a high rating (roughly [deleted] out of a
possible [deleted] points) on the quality of technical approach evaluation
factor based upon their finding that the proposal was otherwise superior.
Agency Report, Tab 10, SSEB Report, July 25, 1996, at 4th unnumbered page;
Agency Report, Tab 14, SSEB Group Worksheet, Mar. 11, 1997, at 3rd
unnumbered page; Agency Report, Tab 18, SSEB Group Summary Score, June 5,
1997, at 3rd unnumbered page; Agency Report, Tab 24, SSEB Group Worksheet,
Dec. 18, 1997, at E-6; Agency Report, Tab 42, SSEB Report, Nov. 5, 1998, at
3rd unnumbered page, E-6. The contracting officer explains that he was aware
of the training weakness identified by the evaluators, but that he did not
consider it significant, and that it was already reflected in the scores
accorded the proposal by the evaluators. Contracting Officer's Statement
at 6-7. In this regard, the Chairman of the SSEB confirms that
Hewlett-Packard's short training schedule was taken into account by the
evaluation panel along with the other superior aspects of the proposal when
they gave the proposal high ratings in the quality of technical approach
factor. Agency Report, Tab 2, att. 3, Declaration of the Chairman of the
SSEB, para. 6. Since the evaluators were obviously aware of this one weakness in
Hewlett-Packard's proposal, yet nonetheless determined that the proposal
merited a very high rating based upon other attributes, we see no reason for
finding the evaluation unreasonable. We therefore deny the protest on this
ground.

RECOMMENDATION

In light of the discussion above, we believe that the agency should
reconsider whether the RFP's current evaluation scheme, with no preference
for the supply of new, rather than upgraded, carts, represents its needs. If
it does, we recommend that the agency reevaluate offers in accordance with
that evaluation scheme. If the agency determines that the evaluation factors
need to be amended to meet its needs, we recommend that the agency amend the
RFP accordingly (for example, by advising offerors of a preference for new
carts or disclosing life-cycle cost elements that will be evaluated), make
other necessary revisions to the RFP (such as including an estimate of the
number of ECG carts that will need to be replaced during the life of the
contract if the upgrade approach is offered), hold an additional round of
discussions, allow offerors to submit revised BAFOs, and then evaluate those
BAFOs in accord with the RFP's revised scheme and the discussion above. We
also recommend that, if Hewlett-Packard continues to propose carts that are
manufactured in China, the agency obtain the cost information necessary to
make an informed determination whether Hewlett-Packard's proposed system can
be considered a domestic end item or whether a Buy American Act differential
must be applied to Hewlett-Packard's price for evaluation purposes.

If Hewlett-Packard is not the successful offeror following corrective
action, we recommend that the agency terminate Hewlett-Packard's contract
for the convenience of the government and make award as appropriate. We also
recommend that Marquette be reimbursed the reasonable costs of filing and
pursuing the protest, including attorneys' fees. 4 C.F.R. sect. 21.8(d)(1)
(1998). The protester should submit its certified claim for costs, detailing
the time expended and the costs incurred, directly to the contracting agency
within 60 days after receipt of this decision.

The protest is sustained.

Comptroller General

of the United States

Notes

1. Only the evaluations of the protester and the awardee are relevant to the
protest grounds.

4. In its third BAFO, Marquette submitted two proposals; the second proposal
was [deleted] with a total price of $[deleted]. Protest at 4.

6. The parties have raised a number of arguments, both procedural and on the
merits, in support of their respective positions. While we have carefully
considered every argument and examined the entire record in light of them,
we will address only the most significant issues here.

7. The contracting officer's use of the term "normalization" is inapposite.
Normalization is a technique sometimes used within the cost adjustment
process in an attempt to arrive at a greater degree of cost realism. It
involves the measurement of offers against the same cost standard or
baseline where there is no logical basis for the differences in approach or
where there is insufficient information provided with the proposals, leading
to the establishment of common "should have bid" estimates by the agency.
See The Research Found. of the State of New York, B-274269, Dec. 2, 1996,
96-2 CPD para. 207 at 5. Normalization is not proper where, as here, varying
costs between competing proposals result from different technical approaches
that are permitted by the RFP. See Dynalectron Corp.; Lockheed Elecs. Co.,
Inc., B-181738, Jan. 15, 1975, 75-1 CPD para. 17, at 18-21, aff'd, June 5, 1975,
75-1 CPD para. 341.

8. Because the evaluation panel reported as a weakness of the
Hewlett-Packard proposal the inadequacy of the proposed training, we also
find questionable the contracting officer's citing as an advantage of
Hewlett-Packard's proposal the fact that Hewlett-Packard's "[deleted]."
Agency Report, Tab 42, SSEB Evaluation Report, Nov. 5, 1998, at 3rd
unnumbered page; Agency Report, Tab 49, Best Value Determination, Dec. 3,
1998, para. 8.

9. Hewlett-Packard's total price in that fourth BAFO was $[deleted] of which
$[deleted].

10. Initially, Marquette alleged that the Army unreasonably did not consider
the fact that the replacement ECG carts proposed by Hewlett-Packard would
have fewer features and less capabilities than the carts presently in use,
resulting in degraded performance. Protest at 14. Marquette also protested
that the composition of the evaluation panel that evaluated the fourth BAFOs
was improper because it differed from that described in the agency source
selection plan and because not all of the evaluators that had evaluated
earlier proposals were available to evaluate the fourth BAFOs. Supplemental
Protest at 4-5. The Army's protest report responded to these allegations,
but Marquette did not reply to the agency's response. Agency Report
at 10-12. We therefore consider the allegations abandoned. Trijicon, Inc.,
supra, at 4 n.3.

11. Ultimately, the evaluation panel gave Hewlett-Packard's proposal a
rating of [deleted] points (out of 10 possible points) on this factor, while
Marquette's proposal received [deleted] points. Agency Report, Tab 42, SSEB
Report, Nov. 5, 1998, at E-4, E-6.