BNUMBER: B-278254
DATE: January 12, 1998
TITLE: Research Triangle Institute, B-278254, January 12, 1998
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DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Matter of:Research Triangle Institute
File: B-278254
Date:January 12, 1998
Philip J. Davis, Esq., and Mark H. Neblett, Esq., Wiley, Rein &
Fielding, for the protester.
Robert A. Mangrum, Esq., Carl J. Peckinpaugh, Esq., and Jason I.
Hewitt, Esq., Winston & Strawn, for Chemonics International, Inc., an
intervenor.
Rumu Sarkar, Esq., United States Agency for International Development,
for the agency.
John Van Schaik, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
The selection of a lower-rated, lower-cost offer for award rather than
a higher-rated, higher-cost offer in a best value procurement in which
technical merit was stated to be more important than cost was not
improper where the agency reasonably concluded that the higher-rated
offer, although technically superior to the lower-rated offer, was not
worth the additional cost.
DECISION
Research Triangle Institute (RTI) protests the award of a contract to
Chemonics International, Inc. under request for proposals (RFP) No.
97-001, issued by the United States Agency for International
Development (USAID). RTI contends that, in deciding to award the
contract to Chemonics, the contracting officer disregarded the
proposal evaluation record and ignored the RFP's stated evaluation
criteria which emphasized technical superiority over cost.
We deny the protest.
BACKGROUND
The RFP solicited proposals to provide technical assistance for the
USAID Local Government Partnership (LGP) Program in Poland. The
contractor is to support the efforts of Polish local governments to be
more effective, responsive, and accountable on a sustainable basis.
This is a follow-on contract to USAID's technical assistance pilot LGP
program in Poland; RTI is a member of the incumbent consortium of
firms currently performing the pilot program. The RFP contemplated
award of a 40-month, level-of-effort contract, and stated that the
contractor would be paid on a cost-plus-award-fee basis.
The RFP stated that technical proposals would be scored by a technical
evaluation committee (TEC) using the following technical evaluation
criteria and maximum evaluation points:
1. Relevance of offeror's past performance in implementing similar
projects and quality of performance under those contracts (20 points);
2. Degree to which the offeror's proposal reflects a clear
understanding of the project's concepts and overall strategic
objective, including the role and importance of performance monitoring
(20 points);
3. Offeror's demonstration of full understanding of the technical
issues involved in this procurement (15 points);
4. Viability of offeror's proposal for institutionalizing the LGP
program within Polish institutions and professions for sustainability
of results (20 points);
5. Qualifications of proposed personnel (15 points);
6. Offeror's proposal for a timely and effective management approach
for implementing this program within the 3.5 year period of the
project and the budget range (10 points).
The RFP also provided that cost proposals would be scored using the
following cost factors and points: (1) Total cost (10 points), (2)
Reasonableness of cost (5 points), and (3) Proposal award fee (5
points).
The RFP stated that the contract would be awarded to the offeror whose
proposal, conforming to the solicitation, was most advantageous to the
government, considering the above technical and cost factors. It also
stated that "[t]he formula set forth above will be used by the
Contracting Officer as a guide in determining which proposals will be
most advantageous to the Government."
Five proposals were submitted. The TEC evaluated and scored the
technical proposals. The contracting officer determined that the
proposals of RTI, Chemonics, and a third offeror were in the
competitive range. Discussions were conducted and the technical
proposals were rescored. The technical scores and proposed costs of
the three competitive range proposals were as follows:
Offeror Technical scoreProposed cost
RTI 82.75 $27,999,936
Chemonics 69 $27,842,929
Third offeror 68.5 $27,996,808
The agency requested three rounds of best and final offers (BAFO).
The second and third rounds were necessitated by errors in RTI's cost
proposal. After the first BAFOs--and after the TEC had recommended
award to RTI--the contracting officer discovered RTI had not complied
with a requirement for a 40-month budget; RTI had proposed only 39
months.
In the second BAFOs, RTI's proposed cost remained the same; Chemonics
reduced its cost by $330,211. Although RTI's second BAFO included the
required 40-month budget, the firm made another error in its cost
proposal. The contract includes a $3 million grant program and the
RFP required the cost of administering that program to be budgeted
separately. RTI failed to comply with this provision, budgeting
$360,000 out of the $3 million in grant resources for the cost of
administering the grant program. The contracting officer requested
another round of BAFOs, again advising RTI to revise its cost proposal
to comply with the RFP.
In its third and final BAFO, RTI complied with the requirements of the
grant program. RTI made other budget changes, including
reapportioning training costs between RTI and its subcontractors, and
reducing materials and communications costs. RTI also increased the
overall cost of its proposal slightly to $28,000,000, the highest of
the three competitive range proposals. Chemonics, in its third BAFO,
reduced its overall cost by $1,648,789, by reducing its own and its
subcontractors' fees and establishing ceilings on its overhead costs
below the current rates. Thus, after the third round of BAFOs, the
total cost difference between the RTI and Chemonics proposals was $2.3
million.
After the third round of BAFOs, the contracting officer requested that
the chair of the TEC provide an analysis of whether an award to RTI at
a cost premium could be justified. In a memorandum to the contracting
officer, the TEC chair explained that she discussed the $2.3 million
cost difference with two members of the TEC and stated that the
difference in technical ratings between the RTI and Chemonics
proposals did not justify the additional cost of an award to RTI. The
memorandum recommended award to Chemonics.
The contracting officer then performed a cost analysis according to
the formula in the RFP. Under the total cost factor, USAID awarded 5
of the 10 available points to each of the proposals because they were
within the government's estimate, and awarded an additional 5 points
to the Chemonics proposal since it achieved a lower total cost. Under
the cost reasonableness factor, the contracting officer awarded 3 of
the 5 available points to the RTI proposal due to concerns that the
firm's total cost did not change in spite of the adjustments in its
cost proposal during discussions and due to the lack of specific
measures in the proposal to provide cost savings. The contracting
officer awarded Chemonics 4 points under the cost reasonableness
factor based on a concern that Chemonics's proposed training and
communications costs may be low. Under the award fee factor, the
contracting officer noted that RTI's proposal included the highest
award fee of the three proposals, while the Chemonics award fee was
the lowest, and awarded 5 points to the Chemonics proposal and 3
points to the RTI proposal.[1] The cost points assigned to the three
competitive range proposals, along with the technical scores and total
scores assigned to each, were as follows:
Total costCost
reason.Award feeCost scoreTech. scoreTotal score
RTI 5 3 3 11 82.75 93.75
Chem. 10 4 5 19 69 88
Third offeror53 4 12 68 80
In an award decision memorandum, the contracting officer noted that,
while RTI had the highest-ranked technical proposal, its cost was
approximately $2.3 million greater than the cost of the Chemonics
proposal. The contracting officer also stated that the Chemonics
proposal provided an additional level of effort of approximately 195
person months of local professional staff and a fourth regional
office, although the contracting officer stated that "these may or may
not be technically significant but [they do] indicate further cost
value." The contracting officer also stated that the cost difference
was valid, noting that "[a]pproximately $1.6 million of the difference
is strictly due to [Chemonics's] reduced fee and indirect cost rate
ceilings and thus represents a clear cost difference." The memorandum
stated that, based on the significant cost difference, a
cost/technical trade-off review was performed to determine if RTI's
higher technical score provided an advantage that justified RTI's
higher cost. The memorandum notes that the $2.3 million difference
was used in the trade-off decision, "although we believe that the
determination is equally valid for $1.6 million."
The contracting officer noted that RTI's technical proposal was
stronger primarily in the areas of understanding the project's
concepts and overall strategic objectives and understanding the
technical issues involved, although the contracting officer noted that
these strengths "might be expected since [RTI is] one of the
organizations participating in the implementation of the pilot [LGP
program]." In comparison, the contracting officer noted that
"Chemonics demonstrated the institutional capacity to implement the
program and can adequately perform the services called for in the
RFP." According to the contracting officer:
While RTI had more depth of understanding, neither RTI not
Chemonics presented perfect technical proposals and while RTI's
is clearly stronger, Chemonics' proposal in these areas has been
determined by the TEC to be more than technically adequate to
meet the Government's requirements.
The contracting officer also noted there were several factors which
lessened the impact of the lower technical ranking of the Chemonics
proposal. The contracting officer noted that Chemonics has a clearly
superior core management team. For example, the contracting officer
noted that the background, management, and leadership skills of
Chemonics's chief of party exceed those of RTI's chief of party. The
contracting officer also noted that Chemonics's proposal was strong on
rapid mobilization and start-up, which will assist the firm in
commencing implementation in a timely manner and getting up to speed
more quickly on technical issues and understanding of the project's
concept and overall strategic objective.
In addition, the contracting officer noted that Chemonics will have
the opportunity to gain additional first-hand information and
understanding of the technical issues, concepts, and strategic
objectives of the program early in the contract. According to the
award decision memorandum, USAID will turn over to the new contract
team all relevant materials and contact information from the pilot
program, and the statement of work calls for a several month period of
overlap with the implementor of the pilot program during the
transition period. In the award decision memorandum, the contracting
officer concluded that the additional $2.3 million of cost of the RTI
proposal was neither necessary nor warranted and that "the Contracting
Officer can not, in good conscience, justify the cost premium involved
in gaining the technical advantages of the RTI proposal. The
Chemonics proposal is most advantageous to the Government."
PROTEST ALLEGATIONS
RTI argues that USAID was so enamored with Chemonics's unexpected
reduction in cost in its third BAFO that it decided to award to
Chemonics based on its low cost, low technical offer. According to
RTI, in order to reach this desired result, the agency essentially
dismissed 4 months of proposal evaluation and study by the TEC, during
which RTI outscored Chemonics 83 to 69 and scored higher on five of
the six technical factors, including the four most highly valued
factors. RTI argues that the agency's "single-minded objective" of
awarding to Chemonics based on its low cost can be seen in the
contracting officer's "pro forma" cost/technical trade-off which,
according to RTI, ignored or dismissed evidence in the record that
conflicted with its analysis. RTI also argues that at no point did
USAID conduct any analysis of the value of the benefits the agency
could enjoy from RTI's technically superior proposal. RTI argues the
award was unreasonable and inconsistent with the stated evaluation
scheme, which provided that technical considerations were more
important than cost by a ratio of 5 to 1. According to RTI, it
appears from the record that USAID deemed the various criteria within
the technical factor to have equal weight and the technical and cost
factors to also be equivalent.
RTI also argues that the trade-off decision sought to diminish RTI's
technical superiority and elevate Chemonics's technical proposal, in
spite of its deficiencies, as well as to expand the cost difference
between the proposals. According to RTI, USAID's trade-off could do
this only by ignoring and contradicting the evaluation of the
proposals, by diminishing the weights of the more important technical
subfactors on which RTI excelled, and by according determinative
weight to technical subfactors with relatively low value on which
Chemonics scored well. Finally, RTI argues that USAID's cost
evaluation was deficient for questioning RTI's proposed cost and
wrongfully deducting points from RTI's cost score.
ANALYSIS
Notwithstanding a solicitation's emphasis on technical merit, an
agency may properly award a contract to a lower-cost, lower
technically scored offeror if it decides that the cost premium
involved in awarding to a higher-rated, higher-cost offeror is not
justified, given the acceptable level of technical competence
available at the lower cost. Dayton T. Brown, Inc., B-229664, Mar.
30, 1988, 88-1 CPD para. 321 at 4. The determining factor is not the
difference in technical merit, per se, but the contracting agency's
judgment concerning the significance of that difference. Id. at 4-5.
In this regard, evaluation scores are merely guides for the source
selection authority, who must use his or her judgment to determine
what the technical difference between competing proposals might mean
to contract performance, and who must consider what it would cost to
take advantage of it. Grey Advertising, Inc, 55 Comp. Gen. 1111,
1118-19 (1976), 76-1 CPD para. 325 at 9-10. In making such
determinations, the source selection authority has broad discretion,
and the extent to which technical merit may be sacrificed for cost, or
vice versa, is limited only by the requirement that the trade-off
decision be reasonable in light of the established evaluation and
source selection criteria. Blue Cross Blue Shield of Texas, Inc.,
B-261316.4, Nov. 9, 1995, 95-2 CPD para. 248 at 13-14. Where, as here,
cost is secondary to technical considerations, selection of a
lower-priced, lower-rated proposal over a higher-rated proposal
requires an adequate justification, i.e., one showing that the agency
reasonably concluded that the higher technical score did not reflect
actual technical superiority, see Dayton T. Brown, Inc., supra, at
5-6, or that the higher-rated proposal's technical superiority was not
worth the cost premium. See Wyle Labs., Inc.; Latecoere Int'l, Inc.,
69 Comp. Gen. 648, 658-59 (1990), 90-2 CPD para. 107 at 16.
In this case, while the contracting officer acknowledged that RTI's
proposal was technically superior, he determined that the technical
superiority was not worth the cost premium. We conclude that the
award decision was reasonable and in accordance with the RFP
evaluation criteria.
First, we reject RTI's contention that, as a result of Chemonics's
substantially reduced cost in its final BAFO, the agency disregarded
or dismissed the earlier evaluation record, which had demonstrated the
superiority of RTI's proposal. As RTI notes, based on the TEC
evaluation, its proposal outscored the Chemonics proposal 83 to 69
points and scored higher on five of the six technical factors,
including the four most highly valued factors. Nonetheless, RTI's
proposal was far from perfect--having achieved a score of only 83 out
of a possible 100 technical points. The evaluation record prior to
the final Chemonics cost reduction shows the evaluators' concerns with
a number of weaknesses in RTI's proposal. For example, in a
memorandum prepared before the second BAFOs, the TEC chair stated
that, while RTI's proposal was clearly superior to the other
proposals, "the [TEC] found fault with certain aspects of [RTI's]
technical approach, flexibility, and personnel choices . . . ."
In addition, the record shows that prior to the final Chemonics cost
reduction the contracting officer questioned whether there was as
significant a difference between the RTI and Chemonics technical
proposals as was reflected in the TEC scoring. In another
memorandum--prepared before the second BAFOs--the contracting officer
stated he "was not fully convinced that the scoring reflected the
technical difference - feeling that Chemonics, in such areas as past
performance, personnel and management should have been given somewhat
higher scores." Thus, contrary to RTI's suggestion, the agency's view
of the offerors' proposals did not take a "drastic turn" after
Chemonics reduced its price.
Second, we find no merit to RTI's argument that nothing in the record
suggests that USAID attempted to determine the value of the specific
benefits offered by RTI's technically superior proposal or to explain
why its superiority on the most heavily weighted evaluation factors
was not worth the additional cost. Specifically, RTI argues that
neither a TEC memorandum recommending award to Chemonics nor the award
decision addressed the value of RTI's technical superiority or
discussed its worth to the program. According to RTI, rather than
addressing the value of RTI's technical strengths, the award decision
merely focused on the "adequacy" of the Chemonics proposal and
mentioned that firm's higher score on its core management team--an
issue that was encompassed within the personnel qualifications
technical subfactor, the fifth criterion in importance, worth only 15
out of 100 points.
In our view, the record establishes that the contracting officer and
other agency officials made the effort to determine the value of the
benefits of RTI's proposal in relation to the cost of that proposal
and to explain why, in their view, the superiority of RTI's proposal
was not worth the additional cost associated with that proposal. In
order to address these questions, after the three rounds of BAFOs, the
contracting officer asked another agency official to review the RTI
and Chemonics proposals for realism and reasonableness and asked the
chair of the TEC to provide a memorandum on whether she felt the
higher technically rated proposal justified the higher cost. After
receiving the input of those officials, the contracting officer noted
that RTI's proposal was the highest ranked technically and was
stronger primarily in the areas of understanding the project's
concepts and overall strategic objectives and understanding the
technical issues involved. The contracting officer discounted these
strengths, however, stating that they "might be expected since [RTI
is] one of the organizations participating in the implementation of
the pilot [LGP program]."
Although the contracting officer never assigned a specific dollar
value to RTI's superiority or otherwise attempted to quantify the
advantages of RTI's proposal, there is no requirement that an agency
do so. Southwest Marine, Inc.; American Sys. Eng'g Corp., B-265865.3,
B-265865.4, Jan. 23, 1996, 96-1 CPD para. 56 at 19. Rather, the
contracting officer need only determine, as he did here, that the
additional technical benefit of RTI's proposal was not worth the
additional cost of that proposal. In this respect, the contracting
officer concluded that the additional $2.3 million of cost of the RTI
proposal was neither necessary nor warranted and that "the Contracting
Officer can not, in good conscience, justify the cost premium involved
in gaining the technical advantages of the RTI proposal. The
Chemonics proposal is most advantageous to the Government." Contrary
to RTI's contention that USAID never attempted to determine the value
of the specific benefits offered by RTI's technically superior
proposal, we conclude that the record shows exactly that effort by the
contracting officer.
Third, the record does not support RTI's contention that the award
decision was inconsistent with the weights assigned to the various
technical evaluation factors or with the greater weight assigned by
the RFP to technical merit over cost. The record shows that the
contracting officer simply conducted his own examination into whether
the technical difference between the RTI and Chemonics proposals were
differences that would have an impact on performance of the contract
and would justify the additional cost. The contracting officer's
disagreement with the TEC concerning the overall strength of the two
proposals or the merits of the proposals under certain of the
evaluation factors does not indicate that he disregarded the RFP
evaluation scheme.
RTI nonetheless argues that USAID's trade-off ignored and contradicted
the TEC's evaluation of the proposals, by diminishing the weights of
the more important technical subfactors on which RTI excelled, and by
according determinative weight to technical subfactors with relatively
low value on which Chemonics scored well. According to RTI, the
contracting officer's trade-off decision sought to diminish RTI's
technical superiority and to elevate the Chemonics technical proposal,
in spite of its deficiencies, as well as to expand the cost difference
between the proposals. RTI challenges numerous aspects of the
selection decision. We have considered all of these challenges and
conclude that the contracting officer did not ignore the evaluation
record and, to the extent that the contracting officer took exception
to that record, the record provides support for his decision to do so.
In this respect, source selection officials are not bound by the
recommendations or evaluation judgments of lower-level evaluators,
even though the working-level evaluators may normally be expected to
have the technical expertise required for such evaluations. Loral
Aeronutronic, B-259857.2, B-259858.2, July 5, 1995, 95-2 CPD para. 213 at
8. We address below a number of illustrative examples of RTI's
arguments.
For example, RTI challenges the contracting officer's suggestion that
RTI's technical superiority was due to its work on the pilot project.
As explained above, in his award decision, the contracting officer
noted that RTI's technical proposal was stronger than the Chemonics
proposal primarily in the areas of understanding of the project's
concepts and overall strategic objectives and understanding of the
technical issues involved. The contracting officer noted, however,
that these strengths "might be expected since [RTI is] one of the
organizations participating in the implementation of the pilot [LGP
program]."
RTI disputes the significance of its experience on the pilot project.
First, RTI notes that it has not been a prime contractor on the
project; it is only a subcontractor. In fact, notes RTI, one of the
subcontractors proposed by Chemonics under this solicitation also is a
subcontractor on the pilot project. Thus, according to the protester,
any advantage enjoyed by RTI as a result of its "incumbency," is
shared by the Chemonics team. In addition, RTI argues that USAID
should not be permitted to dismiss RTI's technical advantage as simply
a benefit of incumbency. According to RTI, citing our decision
PharmChem Labs., Inc., B-244385, Oct. 8, 1991, 91-2 CPD para. 317 at 5,
the record here lacks a showing in the contemporaneous evaluation
record "that [the protester's] superiority was illusory or so
insignificant that it could be offset" by the lower-cost offer.
We disagree. As USAID explains, Chemonics itself was not involved in
the pilot project and, as RTI noted in its protest, RTI is a member of
the incumbent consortium of firms currently performing the pilot
program in Poland.[2] The contracting officer's view, as stated in
the award decision document, was that RTI's understanding of the
project, as reflected in its proposal, was enhanced by its work on the
pilot. We have no basis to disagree with that view. Source selection
officials in appropriate circumstances properly may conclude that a
numerical scoring advantage based primarily on incumbency does not
indicate an actual technical superiority that would warrant a higher
cost. See Computer Tech. Servs., Inc., B-271435, June 20, 1996, 96-1
CPD para. 283 at 6. In addition, although the contracting officer never
determined that the technical superiority of RTI's proposal was
"illusory," he did decide, as explained above, that it was not worth
the additional cost.
RTI also argues that USAID unreasonably attempted to lessen the impact
of Chemonics's lower technical rating and that those attempts have
failed. For example, RTI notes that the selection decision cites
Chemonics's strength on the "core management team" as a factor that
lessens the disparity in the technical scores. RTI argues, however,
that Chemonics's core management team was fully considered and
evaluated in the proposal scoring and, according to the protester,
Chemonics's strength in this area should not result in it receiving
additional credit in the trade-off. RTI argues, moreover, that
Chemonics's purported strength is illusory. According to RTI, the
record shows that Chemonics's past performance is characterized by
regular failure to deliver the team it proposes. RTI notes that the
TEC recognized this failure and alerted the contracting officer as
follows:
References on past and current projects reported that Chemonics
has underbid on several proposals, requiring post-contract award
changes. In the majority of cases checked by the committee,
there were problems with staffing--either the original team that
was bid was not delivered and/or key staff had to be replaced.
In some instances there was 100% turnover of expatriate staff
from proposed staff to the final implementation team. Given that
the committee felt that one of Chemonics' strongest points was
the core management team, their poor track record of uncertain
staffing was particularly troublesome.
RTI notes that the contracting officer's award decision memorandum
does not acknowledge this documented failure on Chemonics's part to
live up to its proposal representations. According to RTI,
Chemonics's "particularly troublesome" track record of "uncertain
staffing" played no role in the agency's trade-off analysis.
In our view, the contracting officer simply determined that
Chemonics's lower technical score was not an accurate reflection of
the quality of performance that could be expected from that firm. We
conclude that the contracting officer could reasonably make that
determination based on the record. First, notwithstanding RTI's
contention that Chemonics was given additional credit in the trade-off
for its core management team, the record shows that this was not the
case. Rather, the contracting officer simply stated his view that
Chemonics's superior management team would likely overcome weaknesses
in other aspects of its proposal.
Second, although RTI argues that the contracting officer's award
decision memorandum did not acknowledge Chemonics's documented failure
to regularly deliver the team it proposes, as USAID points out, this
matter was raised with Chemonics in discussions and the firm provided
an explanation which the agency accepted. Specifically, Chemonics was
asked about reports that the firm underbid on several proposals and
that post-award contract changes were required to replace staff
members that were not delivered or otherwise had to be replaced. In
its response to this discussion question, Chemonics acknowledged the
agency's concerns and explained the circumstances that had led to the
replacement of personnel on a number of projects. Chemonics also
explained that, in order to allay the agency's concerns, it had
maintained contact with and reconfirmed the availability of all key
personnel on this project. This response satisfied the agency's
evaluators. After the discussions related to this issue, the chair of
the TEC prepared a memo which stated that "[t]he Chemonics proposal is
clearly superior in its core management team." In addition, in the
award decision, the contracting officer considered Chemonics's core
management team to be a strength and superior to RTI's core management
team. Thus, although RTI disagrees with the agency's view of the
Chemonics management team, the record shows that the agency's concerns
in this area were addressed and satisfied by Chemonics.
RTI also argues that the contracting officer is wrong to suggest in
the award decision that Chemonics will be able to compensate for its
low technical scores when it gains additional first-hand information
and understanding of the technical issues, concepts, and strategic
objectives of the program early in the contract. As explained above,
the award decision memorandum noted that USAID will turn over to the
new contract team all relevant materials and contact information from
the pilot program. RTI argues that the evaluation and the selection
decision should have been based on the content of the proposals, "not
on expectations for the future." In addition, according to RTI,
giving Chemonics credit in the trade-off analysis for such factors as
understanding of the technical issues, concepts, and strategic
objectives effectively wrote those criteria out of the RFP evaluation
scheme--at allegedly severe prejudice to RTI, which outscored
Chemonics on those factors by 31.6 to 20.8 points. RTI also argues
that the contracting officer is simply wrong that information will be
made available to the awardee that was not available earlier. RTI
states that the materials in question were made available under the
RFP during the proposal process.
We conclude that the contracting officer could reasonably conclude
that RTI's technical superiority is mitigated to some degree by
Chemonics's ability to get up to speed quickly because it will have
the opportunity to gain first-hand information and understanding of
the technical issues, concepts, and strategic objectives of the LGP
program early in the contract. Although RTI disparages the
contracting officer's conclusion in this regard and argues that the
evaluation and the selection decision should be based on the
proposals, "not on expectations for the future," we see nothing
unreasonable in agency officials reviewing proposals with a goal of
deciding what sort of performance to expect from a particular firm if
it is awarded a contract; this is precisely what the evaluators are
expected to consider.
We also do not agree with RTI that the effect of giving Chemonics
credit in the trade-off analysis for understanding of the technical
issues, concepts, and strategic objectives was to write those criteria
out of the RFP evaluation scheme. The contracting officer was simply
expressing his view that the Chemonics proposal may have been entitled
to greater credit under these factors than it had been assigned in the
evaluation. Since, as explained above, source selection officials are
not bound by the recommendations or evaluation judgments of
lower-level evaluators, Loral Aeronutronic, supra, at 8, there was no
impropriety in the contracting officer reaching a different (equally
reasonable) view of Chemonics's proposal than the evaluators did.
Concerning RTI's contention that the contracting officer wrongly
concluded that Chemonics will benefit under the contract from the
availability of information on the pilot program since the materials
in question were made available during the proposal process, the
agency acknowledges that some documents were in fact made available to
offerors under the RFP. Nonetheless, the agency reports that
additional materials will be made available to the awardee under the
contract. USAID notes that the RFP states that all relevant materials
and contact information from the pilot program will be turned over to
the contractor during a transition period and explains that some of
these materials were still being generated under the pilot program
while the procurement was taking place. Based on this explanation, we
think the contracting officer could reasonably conclude that Chemonics
will have access to information that will allow it to gain additional
first hand information and understanding of the technical issues,
concepts, and strategic objectives of the LGP program early in the
contract.
Moreover, we think the contracting officer could reasonably conclude
that Chemonics's access to documents from the pilot program during
this procurement was not the same as having participated--as did
RTI--under the pilot program. As explained, we think the contracting
officer reasonably observed that some of RTI's evaluated strengths
were to be expected as a result of RTI's involvement in the pilot
program. We think it was also reasonable for the contracting officer
to conclude that, once Chemonics has a similar exposure, it will have
a similar depth of knowledge and, therefore, this difference between
the two firms did not represent additional value to the extent that
the technical scores reflected.[3]
RTI also challenges the suggestion in the award decision that the $2.3
million cost difference between RTI and Chemonics may be greater
because the Chemonics proposal provided an additional level of effort
of approximately 195 person months of local professional staff and a
fourth regional office. RTI notes that the contracting officer in the
award memorandum noted that "these may or may not be technically
significant . . . ." Moreover, RTI argues that there is evidence in
the record that the additional personnel and regional office would not
add value, since several members of the TEC identified Chemonics's
extra staffing and regional office as weaknesses because they were
expensive and not cost effective.
These contentions are essentially irrelevant to the source selection
decision. As explained above, the contracting officer noted in the
award decision that the difference in cost between the RTI and
Chemonics proposals was approximately $2.3 million. The contracting
officer's point in referring to the additional level of effort in the
Chemonics proposal was that Chemonics's actual cost advantage may be
greater than $2.3 million. The contracting officer stated, however,
that the cost/technical trade-off was based on the difference of $2.3
million. Under the circumstances, the additional level of effort
referred to by the contracting officer in the award decision had no
significant impact on the trade-off decision.
RTI also challenges the cost evaluation, arguing that the contracting
officer's concerns that resulted in a downgrading of RTI's cost
proposal and the loss of points in the cost evaluation were
unreasonable. In awarding RTI's proposal only 5 points, the
contracting officer noted that RTI's cost was at the top of the
government estimate, as it had been throughout the competition. The
cost evaluation memorandum prepared by the contracting officer also
stated that RTI's budget was "somewhat difficult to follow" and, "left
the Contracting Officer with the feeling that there was some lack of
realism here and the total cost may be more than $28 million."
According to the cost evaluation memorandum, the reason for these
concerns was that, although RTI had ultimately correctly increased the
number of months covered by the budget from 39 to 40 and had increased
the funds in the grant program, neither of these actions resulted in a
significant increase in the estimated cost.
RTI argues that, in deducting points from RTI's cost score, the agency
overlooked the adjustments RTI made in its cost proposal to offset
whatever cost increase may have been required by these changes.
According to RTI, the factual record before the contracting officer
was more than sufficient to rebut the contracting officer's "feeling"
that there was a lack of realism in RTI's proposal. As RTI notes, its
final BAFO response indicated that the firm had revised a number of
line items of its cost proposal in order to accommodate the change in
grant administration costs.
RTI also argues that the deduction of points under the total cost
factor was inconsistent with the agency's finding that RTI's costs
were considered reasonable. In addition, RTI argues that the total
cost factor scores were not based on any consideration of the
magnitude of the difference in offeror prices. According to RTI, it
was unreasonable for the agency to award Chemonics 100 percent of the
available points under the total cost factor for having the lowest
cost and then to award RTI only 50 percent of the available points
even though RTI's proposed cost was only 9 percent higher than that of
Chemonics. RTI argues that, if it had "received the additional four
or five points commensurate with its price," the disparity in total
points between the RTI and Chemonics proposals would have been greater
and may have resulted in a different trade-off result.
These contentions do not call into question the propriety of the
source selection decision. The record reflects that most of the
difference in the cost scores assigned to the two proposals was due to
the difference in their scores on the total cost factor. Essentially,
that difference was due to the fact that RTI's proposal was the
highest cost proposal in the competitive range, while the Chemonics
proposal was the lowest. RTI argues that it was unreasonable for the
agency to award Chemonics 100 percent of the available points (10
points) under the total cost factor for having the lowest cost and
award RTI only 50 percent of the available points, even though RTI's
proposed cost was only 9 percent higher than that of Chemonics. RTI's
arguments here amount to little more than a disagreement with the
score assigned to its cost proposal and provide no basis for us to
challenge those scores.[4] See Medical Serv. Corp. Int'l, B-255205.2,
Apr. 4, 1994, 94-1 CPD para. 305 at 10-11.
The protest is denied.
Comptroller General
of the United States
1. RTI's proposed award fee was approximately 5 percent, while
Chemonics's award fee was approximately 2.5 percent.
2. RTI also stated in its protest that it "has been the prime
contractor or major subcontractor on two other large USAID contracts
providing technical assistance and training directly to local
governments in Poland since 1992."
3. RTI also states that the contracting officer is simply wrong that
there would be a several month period of overlap with the implementor
of the pilot program. RTI notes that the overlap with the implementor
of the pilot program was deleted by an amendment to the RFP.
Apparently, the contracting officer was mistaken in this respect.
Nonetheless, we do not see how that mistake could make any difference
in the award decision. As we explained above, we think the
contracting officer could reasonably conclude that Chemonics will be
able to compensate for its lower technical scores due to its strong
core management team and access to materials from the pilot.
4. In any event, it is clear that the contracting officer did not make
the source selection decision based on a difference in points assigned
to the cost proposals. Rather, as explained above, the award decision
reflects the contracting officer's consideration of the expected $2.3
million cost difference between the two proposals in relation to the
technical differences between the proposals. The 4 or 5 additional
points claimed for RTI's cost proposal would clearly have been
irrelevant in the selection decision, which was based, properly, on an
analysis of whether RTI's higher technical rating justified its higher
cost.