BNUMBER: B-278673
DATE: February 27, 1998
TITLE: Battelle Memorial Institute, B-278673, February 27, 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:Battelle Memorial Institute
File: B-278673
Date:February 27, 1998
Alexander J. Brittin, Esq., Patrick K. O'Keefe, Esq., Francis E.
Purcell, Jr., Esq., and Arleigh V. Closser, Esq., McKenna & Cuneo, and
Kathy A. Olson, Esq., Battelle Memorial Institute., for the protester.
James J. Regan, Esq., Frederick W. Claybrook, Jr., Esq., Paul
Shnitzer, Esq., and John E. McCarthy, Jr., Esq., Crowell & Moring, and
Stuart I. Young, Esq., for DynPort LLC, an intervenor.
Col. Nicholas P. Retson, JA, Maj. Michael J. O'Farrell, JA, Jay B.
Winchester, Esq., Ltc. James M. Miller, JA, Maj. Jonathan C. Guden,
JA, Cpt. John C. Lavorato, JA, Elizabeth A. Arwine, Esq., and Kenneth
J. Allen, Esq., Department of the Army, for the agency.
Glenn G. Wolcott, Esq., Paul E. Jordan, Esq., and Paul Lieberman,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
1. Where a potential contractor proposes to meet a solicitation's
requirements by offering performance by a government facility, and
personnel employed by that facility are involved in evaluating the
competing offerors' proposals, it is incumbent on the contracting
officer to consider whether similar situations involving contractor
organizations would require avoidance, neutralization or mitigation.
2. Contracting officer reasonably determined that government entity's
minimal, potential involvement in contract performance did not create
a significant conflict of interest requiring avoidance, neutralization
or mitigation.
3. Where protester's offer proposed a more established technical
approach than awardee's offer, agency's technical evaluation resulting
in same technical risk for both proposals is unobjectionable where
evaluation was reasonable and in accordance with stated evaluation
criteria. Under stated evaluation scheme, technical approach was less
important than management of total contract effort, and agency had
unilateral authority to select technical approach during contract
performance.
4. Since the prime contractor is ultimately responsible for
successful performance of contract effort, past performance evaluation
reasonably credited offeror who performed as prime contractor with
relevant experience even though subcontractor on past contract was
responsible for majority of technical work.
5. Where source selection authority reasonably determines that
competing proposals are essentially equal in technical merit with
little difference in risk, award to offeror presenting more
advantageous management proposal and lower evaluated most probable
cost is unobjectionable.
DECISION
Battelle Memorial Institute protests the award of a contract to
DynPort LLC for development, licensure, and production of biological
defense vaccines under request for proposals (RFP) No.
DAMD17-95-R-5020, issued by the Department of the Army, Joint Program
Office for Biological Defense. Battelle challenges the propriety of
the technical and cost evaluations, based in part on an allegation of
an organizational conflict of interest. Battelle asserts that the
conflict arises from DynPort's proposal to use testing facilities
located at the U.S. Army Medical Research Institute of Infectious
Diseases (USAMRIID), an Army installation which employs two members of
the source selection evaluation board (SSEB).
We deny the protest.
BACKGROUND
The Department of Defense (DOD) has an active medical biological
defense (BD) research program focused on the development of vaccines
and other medical products to protect U.S. forces from biological
warfare agents. This program is overseen by the Joint Vaccine
Acquisition Program (JVAP) Project Management Office,[1] and USAMRIID
is the entity directly responsible for developing candidate vaccines
and other medical products. Most of the products developed by
USAMRIID are maintained as investigational new drugs (IND), and have
not been licensed for use by the Food and Drug Administration (FDA).
Absent FDA approval, there are limitations on the manner in which the
products may be used. Based on industry input and an economic study,
DOD developed an acquisition strategy for a prime systems contractor
approach, and issued an RFP on August 9, 1996.[2] The stated purpose
of the RFP was "to establish a prime systems contractor who will use
information and materials from the existing DOD program to create and
execute an integrated approach leading to FDA licensure and long term
production/stockpiling of each vaccine." RFP, sec. C.1. The RFP
contemplated award of a cost-plus-award-fee contract, with two cost
reimbursable contract line item numbers (CLINs), with a maximum
performance period of 10 years.
The RFP provided for a base effort to obtain FDA licensure for 3 BD
vaccine products (tularemia, vaccinia, and Q-fever), options for 15
additional vaccines, and production options for all vaccines including
storage, testing, and disposition.[3] Licensure options were to be
exercised following affirmative DOD "Milestone I" decisions for each
product,[4] and production options were to be exercised after
successful FDA product and establishment licensing to initiate
production.
Rather than setting forth a statement of work (SOW), the RFP provided
a statement of objectives (SOO) and required that offerors propose
their own SOWs and tailor CLIN structures which would allow them to
best execute their proposed programs. The SOO identified five overall
objectives: (1) complete development and testing of vaccines for FDA
licensure for the DOD-required product indication; (2) manufacture
licensed vaccines in sufficient quantities to establish an initial
stockpile; (3) maintain, test, and store vaccines in compliance with
FDA and DOD requirements; (4) distribute or dispose of vaccines as
required; and (5) conduct special studies in support of JVAP
requirements. The SOO also identified a number of specific objectives
including: establishment of a joint government/contractor integrated
product team (IPT) for cost-effective risk reduction; reduction of
program costs and risks through reliance on industry standards,
pursuit of innovative manufacturing methods and process improvements,
cost-effective use, maintenance, and sustainment of industrial
facilities and capabilities, and application of performance-based
incentives; provision of full life-cycle management and JVAP
integration; maintain current DOD stockpile of BD vaccines; establish
and maintain a program/product specific information management
capability; and performance of special studies.
Proposals were to be evaluated on the basis of five factors, listed in
descending order of importance: (1) quality of program integration
and program management; (2) development, licensure, production,
storage, and testing of BD vaccines; (3) past performance with program
integration and in developing and manufacturing vaccines for human
use; (4) availability of laboratory, animal use, production, and
storage facilities meeting FDA and other government regulatory
requirements and industry standards; and (5) cost.[5] Non-cost
factors were scored using a color/adjectival rating system;[6] cost
was evaluated for realism, reasonableness, completeness, and most
probable cost (MPC). Section M also provided for evaluation of
proposal risk addressing the offerors' proposed approach to
accomplishing the SOO, and performance risk addressing the offerors'
ability to successfully complete relevant technical and management
efforts on time and within cost.[7]
Award was to be made to the offeror whose proposal demonstrated
technical, management, and financial capabilities for risk reduction
activities necessary to meet the objectives defined in the SOO and
which represented the best value to the government.
Four proposals, including Battelle's and DynPort's, were received by
the December 9, 1996, closing date. The agency conducted an initial
evaluation of the proposals using separate teams for each of the
evaluation factors which, together, comprised the SSEB. The SSEB
determined that all four proposals were in the competitive range and
sent a series of deficiency reports and items for clarification to
each offeror. After reviewing the offerors' written responses, the
SSEB conducted oral discussions, and obtained best and final offers
(BAFO) from each offeror.
The SSEB's evaluation of BAFOs resulted in Battelle's and DynPort's
proposals [deleted] being rated [deleted] under the management, past
performance, and technical evaluation factors. Battelle's proposal
was evaluated as [deleted] in overall performance risk, while
DynPort's was rated [deleted]. Battelle's proposal risk was rated as
[deleted] and DynPort's was rated as [deleted]. Battelle's total
evaluated MPC was [deleted]; DynPort's was [deleted], approximately
[deleted]. Upon completing its evaluation of cost and non-cost
factors, the SSEB recommended award to Dynport based on the SSEB's
balancing of Battelle's [deleted] and [deleted] against DynPort's
[deleted] and [deleted]. The SSEB presented its findings and
recommendations to the source selection advisory council (SSAC). The
SSAC disagreed with the SSEB's award recommendation, and recommended
to the source selection authority (SSA) that the contract be awarded
to Battelle. The SSA requested a legal review of the evaluation prior
to making his award determination.
In its legal review of the evaluation, the agency determined that the
technical evaluators had [deleted] the proposals of Battelle, DynPort,
and another offeror for the same [deleted] under different evaluation
criteria, that is, the evaluators had "double counted" [deleted].
Specifically, the evaluators had assigned [deleted] to Battelle's and
DynPort's proposals based on [deleted] under the first management
subfactor (plans for interfacing with the government and integrating
subcontractors for optimizing performance of contract requirements)
and to both proposals under the "facilities" technical subfactor. The
evaluators also assigned [deleted] to DynPort's proposal under another
management subfactor (structure of the program management office).
Concluding that such double counting was improper, the SSEB corrected
the evaluation by eliminating the [deleted] from the management
subfactor(s). Since the facilities issue was the only DynPort
[deleted] under the first management subfactor, its elimination
resulted in a change from a [deleted] performance risk rating to a
[deleted] rating. Its elimination from the other subfactor resulted
in a change from [deleted] risk to [deleted]. These changes in the
management risk rating resulted in an improvement in DynPort's overall
performance risk rating from [deleted] to [deleted]. Since Battelle's
proposal was assigned other [deleted] under the first management
subfactor, its management performance risk rating remained [deleted]
and there was no change to Battelle's overall performance risk rating
of [deleted].
Following the agency's correction of the evaluation, both proposals
were rated as [deleted] with [deleted] performance risk. Based on
this corrected evaluation, the SSAC recommended award to DynPort.
After being briefed on the changes, the SSA weighed the significant
attributes of Battelle's and DynPort's proposals, their performance
ratings, risk ratings, and relative MPCs, and determined to make award
to DynPort. Following notice of the award and receipt of a
debriefing, Battelle filed this protest.
CONFLICT OF INTEREST
Battelle first contends that the agency's award to DynPort violates
the conflict of interest provisions contained in Federal Acquisition
Regulation (FAR) subpart 9.5. Battelle maintains that, under
DynPort's proposal, any aerosol challenge studies required under the
contract will be performed by USAMRIID, and points out that two of the
SSEB members were USAMRIID employees.[8] Battelle contends that due
to USAMRIID's proposed involvement in DynPort's contract performance,
the USAMRIID employees were unable or potentially unable to render
objective, impartial advice in the source selection process.
The agency first responds that the conflict of interest provisions in
FAR subpart 9.5 are inapplicable to government organizations,
including USAMRIID. The agency maintains that, because FAR subpart
9.5 generally refers to "companies" or "contractors" rather than
"agencies," the regulations may not, as a matter of law, be applied to
government agencies, institutions, or their employees.
We agree that FAR subpart 9.5, by its terms, does not apply to
government agencies or employees. However, in setting out the
standards of conduct that apply to government business, FAR sec. 3.101-1
states:
Transactions relating to the expenditure of public funds require
the highest degree of public trust and an impeccable standard of
conduct. The general rule is to avoid strictly any conflict of
interest or even the appearance of a conflict of interest in
Government-contractor relationships.
The standards contained in FAR subpart 3.1 are explicitly applicable
to the actions of government personnel. Id.[9]
FAR subpart 3.1 does not provide specific guidance regarding
situations in which government employees may, because of relationships
with particular government organizations, be unable or potentially
unable to render impartial advice to the government.[10] In contrast,
FAR subpart 9.5 addresses analogous situations involving contractor
organizations.[11] Accordingly, we believe that in determining
whether an agency has reasonably met its obligations to avoid
conflicts under FAR sec. 3.101-1, FAR subpart 9.5 is instructive in that
it establishes whether similar situations involving contractor
organizations would require avoidance, neutralization or
mitigation.[12]
FAR sec. 9.505-3 generally prohibits a contractor from evaluating its own
products or services, or those of a competitor, without proper
safeguards to ensure objectivity to protect the government's
interests.
FAR sec. 9.504 provides direction to contracting officers, stating:
(a) Using the general rules, procedures, and examples in this
subpart, contracting officers shall analyze planned acquisitions
in order to--
(1) Identify and evaluate potential organizational conflicts
of interest as early in the acquisition process as possible;
and
(2) Avoid, neutralize, or mitigate significant potential
conflicts before contract award.[13]
Accordingly, where a potential contractor proposes to meet a
solicitation's requirements by offering performance by a government
facility, and personnel employed by that facility are involved in
evaluating the competing offerors' proposals, it is incumbent on the
contracting officer, in complying with the requirements of FAR sec.
3.101, to consider whether similar situations involving contractor
organizations would require avoidance, neutralization or mitigation
and, if so, to take appropriate remedial action.
The agency next maintains that, in any case, it reasonably determined
that the particular facts here did not create a significant conflict
which required avoidance, neutralization or mitigation. Based on the
record, including hearing testimony,[14] we find the agency's
conclusion to be reasonable.
Prior to submission of initial proposals, the agency issued various
solicitation amendments containing responses to offerors' questions.
RFP amendment No. 2 contained the following:
Question: Will the contractor have access to existing government
facilities? If so, which ones.
Answer: There is nothing to preclude the contractor from
approaching Government agencies for use of existing facilities.
However, no Government facilities are being provided as part of
this procurement. Your proposals should clearly state the
coordination approval if Government facilities are being
proposed.
Thereafter, a representative of Frederick Research Corporation (FRC),
one of DynPort's proposed subcontractors, contacted the Commander of
USAMRIID and asked whether that facility could be used to perform
aerosol challenge studies if DynPort were awarded the JVAP
contract.[15] Hearing Transcript (Tr.) at 174. The USAMRIID
Commander told FRC that USAMRIID would be willing to assist DynPort,
on a reimbursable basis,[16] but that there would likely be space
limitations on USAMRIID's ability to hold animals before or after the
actual exposure. Tr. at 180, 243, 246. By letter to FRC dated
November 21, 1996, the USAMRIID Commander confirmed this conversation,
stating:
In principle, our response to [FRC's] request is that USAMRIID
could provide [animal testing] on a reimbursable basis. . .
Attached is a cost estimate prepared by my staff that should
give you a general idea of our costs.
The cost estimate attached to the letter indicated a cost of $24,600
per test.[17]
FRC also contacted Dugway Proving Grounds, another government facility
with aerosol testing capabilities, and received similar assurances
that Dugway would be willing to participate in DynPort's performance
of the JVAP contract. At the hearing, the FRC representative
testified to his understanding that Dugway had just completed
construction of a new animal testing facility which was "essentially
empty," and that they "were looking to bring other work[] into the
facilities."
Tr. at 358-59.
Thereafter, initial proposals were submitted. DynPort's and
Battelle's proposals differed markedly regarding the amount of
[deleted] testing that would be required. DynPort's proposal
indicated that it would perform two tests based on [deleted] for each
vaccine, and that other tests could be performed using alternative
methods of exposure. In contrast, Battelle's proposal was based on
the assumption that virtually all testing would involve aerosol
exposure, anticipating over 1,700 aerosol exposures over the contract
period.[18]
In its initial proposal, DynPort indicated that tests requiring
aerosol exposure would be performed at USAMRIID or Dugway Proving
Ground, stating:
For preclinical and clinical testing, DynPort will provide the
expertise of Porton International, which has extensive knowledge
of such work on botulinum neurotoxins and toxoids. The study
work will be performed by FRC and PAREXEL; the essential animal
studies on efficacy that will permit immune correlates and
surrogate markers to be identified for human studies will include
aerosol challenge that will be performed at DPG-LSD [Dugway
Proving Ground-Life Science Division] or USAMRIID.
During oral discussions with the agency, FRC's representative provided
clarifying information regarding its intentions, stating:
FRC: Let me tell you a little bit about the background and
history as to why we included Dugway and USAMRIID in our
proposal. At FRC we have a BSL 3 facility and have experience
with a number of agents at our BSL 3 levels over the past six
years. We are confident that anything that we can perceive today
that we would need to do in terms of challenge studies, can be
done in our facility. But we are also aware that there[] may be
the possibility that for some reason our facility is not
available, or that new requirements may come up in the future.
And in order to reduce the risk, and diversify our capabilities,
I asked the question would it not be possible and a safe approach
to see if the Army facilities could be used in the eventuality
that some factor, parameter is introduced in the future that
would make our facility unavailable whether its time, whether
it's engineering constraints or whatever. So it was with
that thought that I approached Dugway and USAMRIID . . . .
. . . . .
Agency: It would be useful to know what agents you could use out
there [at FRC's facility] for aerosol testing, in particular, I
don't believe I saw that in the advice of what we have on the
JVAP.
FRC: We don't have current equipment for aerosol capabilities. .
. . We certainly can bring in equipment to isolate it and so on,
to be able to do nose only type of experiments, so that can be
brought into the facility. We have not done that. That is one
of the considerations that led us to approach USAMRIID and Dugway
for their capabilities to support us. We do not know at this
stage, what the FDA would require in terms of surrogate models
for challenge studies that it would require aerosol exposure.
Following discussions, DynPort submitted its BAFO which contained an
appendix to its integrated management plan (IMP). The appendix to the
IMP contained technical summaries for each of the required vaccines;
these summaries were described as "provid[ing] an enhanced discussion
of our rationale and technical justification for the manufacture,
product testing, clinical testing, licensed vaccine production, and
post-production maintenance of the vaccines." Within the technical
summaries, DynPort's BAFO repeatedly states: "testing will be
performed at FRC," with no reference to either USAMRIID or Dugway.
Nonetheless, the 4-page "Overview" to the appendix stated:
DynPort will use the test and exposure facilities at either
USAMRIID or DPG [Dugway Proving Ground] to perform efficacy
studies on vaccine products whenever the FDA requires efficacy
data from a surrogate animal model. . . . Animals exposed to
biological agents for challenge studies performed at USAMRIID can
be housed either at USAMRIID or in the FRC BSL-3 facility.
DynPort ensures that the use of the exposure facility at USAMRIID
will never be limited by lack of animal holding space.
Nothing in the "Overview" to the appendix indicated that Dugway or
USAMRIID were being proposed as backup facilities.[19]
Consistent with the explanation given by FRC's representative during
discussions, the agency interpreted DynPort's BAFO as proposing that
FRC would be primarily responsible for meeting any testing
requirements at its own facility, with USAMRIID or Dugway to be used
on an as-needed basis. Further, in the event USAMRIID were used, the
agency understood that the scope of its performance would likely be
limited to the actual exposure portion of the testing procedure due to
the limited availability of animal holding space at USAMRIID.
At the hearing, the contracting officer testified that, during the
procurement, she considered whether DynPort's proposed use of USAMRIID
created a conflict of interest because two of the SSEB evaluators were
employed by USAMRIID. The contracting officer testified that, after
considering the magnitude of USAMRIID's involvement, the contingent
nature of that involvement, and the relationship between USAMRIID and
Dynport, she determined that the situation did not create a conflict
of interest which required further action. Tr. at 503-535.
A contracting officer is required to identify and evaluate potential
conflicts as early in the procurement process as possible, and to
avoid, neutralize or mitigate significant conflicts. FAR sec. 9.504(a);
Aetna Gov't Health Plans, Inc.; Foundation Health Fed. Servs., Inc.,
B-254397 et al., July 27, 1995, 95-2 CPD para. 129 at 12; D.K. Shifflet &
Assocs., Ltd., B-234251, May 2, 1989, 89-1 CPD para. 419 at 4-5.
Contracting officers must examine each situation individually on the
basis of its particular facts and the nature of the proposed contract.
FAR sec. 9-505; SC&A, Inc., B-270160.2,
Apr. 10, 1996, 96-1 CPD para. 197 at 9.[20] The responsibility for
determining whether a conflict exists rests with the contracting
agency, and we will not overturn the agency's judgment in this regard
unless it is shown to be unreasonable. See Aetna Gov't Health Plans,
Inc., et al., supra.
Based on the limited scope and the contingent nature of USAMRIID's
proposed involvement, the contracting officer's determination that the
circumstances here did not create a significant conflict requiring
further action was reasonable.
First, USAMRIID's proposed involvement is clearly limited to the
contract's requirements related to aerosol challenge studies.
DynPort's proposal contemplates [deleted] studies for each of the 18
vaccines required under the solicitation. Multiplying these [deleted]
tests by USAMRIID's cost estimate of $24,600 per test leads to the
conclusion that USAMRIID may have anticipated receiving a total of
$885,600 in reimbursement over the 10-year period of contract
performance. That is, even if USAMRIID anticipated performing all of
the aerosol challenge studies proposed by DynPort for the entire
contract period, USAMRIID's total reimbursement would represent less
than [deleted] percent of the DynPort's total evaluated cost, and less
than 2.5 percent of USAMRIID's annual funding.[21]
Battelle argues that significantly more aerosol challenge studies will
be required than that reflected in DynPort's proposal, pointing out
that Battelle's proposal contemplates over [deleted]. However,
Battelle's higher level of aerosol exposures is based on the
assumption that the FDA will require virtually all challenge studies
to be performed on the basis of aerosol exposures. As noted above,
DynPort disagrees with Battelle's assumption in this regard,
representing that the FDA has recently permitted licensing of vaccines
for agents normally contracted through the air without requiring
aerosol challenge studies. Tr. at 265-267. Battelle acknowledges
that the FDA requirements regarding aerosol challenge studies is
"unknown." On this record, we cannot conclude that the level of
aerosol exposures set forth in DynPort's proposal is unreasonable, nor
do we view as unreasonable the contracting officer's consideration of
the scope of aerosol testing in DynPort's proposal, (rather than the
scope in Battelle's) as the basis for projecting USAMRIID's potential
involvement in DynPort's contract performance.
Further, we do not find unreasonable the contracting officer's
conclusion that DynPort was unlikely to rely on USAMRIID to perform
aerosol exposures throughout the contract period. During discussions,
FRC's representative stated that FRC could install the equipment
necessary to perform aerosol testing at its own facility if the FDA
required significant aerosol exposures to occur. The record also
indicates that Battelle, itself, contemplated limited testing
requirements during the first several months of contract performance,
providing further support for the agency's conclusion that any
potential USAMRIID involvement in contract performance would be
limited.[22] In addition, throughout its proposal, DynPort's
references to assistance from USAMRIID are virtually always coupled
with similar references to assistance from Dugway Proving Grounds.
The record suggests that, if FRC's facility were unavailable for
aerosol exposures, DynPort may have been more inclined to use Dugway
rather than USAMRIID due to Dugway's greater availability of
facilities. Tr. at 352, 356, 358-359, 568, 631.
Finally, the record does not establish that performance of aerosol
testing at USAMRIID was seen by USAMRIID as providing a significant
benefit for USAMRIID. The record is clear that, when first approached
by FRC, the USAMRIID Commander advised FRC that USAMRIID's ability to
participate in performance of the JVAP contract would be limited.
Specifically, the limited availability of animal holding space at
USAMRIID led the USAMRIID Commander to suggest that, even if
USAMRIID's participation were sought, FRC should contemplate using
USAMRIID's facility only for the actual aerosol exposure portion of
the testing. This contradicts Battelle's thesis that USAMRIID desired
significant involvement in performing the JVAP contract, and that such
involvement was viewed as a benefit to USAMRIID that potentially
influenced the USAMRIID employees' evaluation of proposals.[23]
As noted above, the contracting officer testified that she considered
whether DynPort's proposed use of USAMRIID facilities created a
significant conflict of interest, concluding that it did not, based
on, among other things, the limited amount and contingent nature of
USAMRIID's involvement. The record supports the reasonableness of
that conclusion. Accordingly, this portion of Battelle's protest is
denied.[24]
EVALUATION OF PROPOSALS
Battelle next argues that the agency failed to follow the evaluation
criteria in its evaluation of the proposals.[25] In this regard, it
is not the function of our Office to evaluate proposals de novo.
Rather, we will examine an agency's evaluation only to ensure that it
was reasonable and consistent with the stated evaluation criteria and
applicable statutes and regulations, since determining the relative
merit of competing proposals is primarily a matter within the
contracting agency's discretion. Information Sys. & Networks Corp.,
69 Comp. Gen. 284, 285 (1990), 90-1 CPD para. 203 at 3; Advanced Tech. and
Research Corp., B-257451.2, Dec. 9, 1994, 94-2 CPD para. 230 at 3. The
protester's mere disagreement with the agency's judgment does not
establish that an evaluation was unreasonable. Medland Controls,
Inc., B-255204, B-255204.3, Feb. 17, 1994, 94-1 CPD para. 260 at 3.
EVALUATION OF DYNPORT'S RISK
Battelle first challenges the agency's evaluation of the risk
associated with DynPort's proposed technical approach to development
and production of the fifteen option vaccines. As a preliminary
matter, we note that there are two types of risk involved in the
evaluation: "proposal risk" addressing the offerors' proposed
approach to accomplishing the SOO, and "performance risk" addressing
the offerors' ability to successfully complete relevant technical and
management efforts on time and within cost. While the agency
evaluated [deleted] proposals as [deleted] in overall performance
risk, the agency evaluated DynPort's proposal risk as [deleted] and
Battelle's proposal risk as [deleted]. Battelle's specific challenges
to the risk assessment all concern the evaluation of performance
risk.[26]
Battelle's challenge to the performance risk assessments is based
primarily upon the technical approach proposed by each offeror. In
this regard, DynPort proposed to use a [deleted] approach for
production of the toxin type vaccines, while Battelle proposed using
[deleted].[27] In Battelle's view, since its [deleted] its proposal
should have been evaluated as [deleted] performance risk, while
DynPort's approach should have been evaluated as [deleted] risk,
instead of the [deleted] risk which [deleted] proposals received.
Based on our review of the record, we see no basis to conclude that
the agency's performance risk evaluation was unreasonable.
For example, Battelle observes that its proposal was rated a [deleted]
risk under the first management subfactor regarding plans for
optimizing performance of the contract requirements, while DynPort's
was rated a [deleted] risk, despite the agency's recognition that the
[deleted] method was a [deleted] technical approach. As the agency
points out, this management subfactor is not concerned with the
technical approach. Rather, it is concerned with the life-cycle
management of the program. Thus, the assessment was of an offeror's
ability to programmatically integrate and manage vaccine products,
including program management performance, program schedules,
integration of FDA requirements, managing subcontractors, and managing
cost. Evaluation of this management subfactor was independent of the
technology proposed for production of a specific vaccine.
Under this subfactor, the evaluators found DynPort had demonstrated an
understanding of DOD requirements and had effectively integrated FDA
requirements with the DOD Milestone process. DynPort also had
proposed to shorten the vaccine development, licensure, and production
cycle by up to 3 years through an emphasis on interaction with FDA
immediately after contract award to obtain advice on the processes and
protocols for each vaccine product. [28] The evaluators identified no
disadvantages with DynPort's proposal and rated the proposal [deleted]
risk for this subfactor. With regard to Battelle's proposal, the
evaluators found [deleted] in its clear understanding of interfaces
among the subcontractors, JVAP program office, and the FDA, and in the
experience of Battelle's various subcontractors. [deleted] the
evaluators found [deleted] in Battelle's [deleted] and in Battelle's
[deleted] with the DOD Milestone process. For example, the evaluators
noted that Battelle had proposed to [deleted] while such lots normally
are produced [deleted]. It was for these reasons that the evaluators
assigned a [deleted] risk rating to Battelle's proposal for this
subfactor. Since this is a cost-plus-award-fee contract, the agency
reasonably concluded that [deleted] represented a [deleted] to
successful performance. Likewise, Battelle's decision to propose a
schedule which calls for [deleted] was reasonably perceived as
presenting [deleted].
The agency correctly observes that performance risk associated with
the proposed technology is properly evaluated under the technical
factor, specifically, the "soundness of approach to include
optimization of production" subfactor where [deleted] proposals were
evaluated as [deleted] risk. Battelle also challenges this rating,
arguing that it was unreasonable to evaluate its proven [deleted]
approach as [deleted] as DynPort's [deleted] approach. While the risk
rating is [deleted] for both proposals, the record makes plain that
the ratings were assigned based on reasoned evaluations of both
proposals.
In this regard, the evaluators observed that Battelle, while taking
the [deleted] for vaccine production, also had taken some [deleted].
Production of vaccines using the [deleted] approach [deleted] which
are, according to the agency, "more lethal than nerve agent." Since
production was proposed [deleted], there was an [deleted], all
combining to represent [deleted]. With regard to DynPort, the
evaluators observed that by taking innovative and low cost approaches,
DynPort had incurred risk which would impact on cost and schedule.
Among other issues, the evaluators noted that using [deleted] for
producing the botulinum and SEB vaccines (9 of the 15 option vaccines)
represented a [deleted] risk, despite some advantages in safety and
yields. Contrary to Battelle's contentions of inconsistency, the
evaluators assigned risk based on legitimate, though different,
considerations for each approach. Battelle's disagreement does not
make the evaluation unreasonable. Medland Controls, Inc., supra.[29]
Notwithstanding Battelle's contentions, the proposed technical
approach does not represent the sole evaluation factor and
consequently may not be perceived as driving the entire risk
assessment. In this regard, the technical approach is evaluated under
one of five subfactors under one of the two technical factors. The
relevant technical factor was valued at only 25 percent of the
non-cost factor evaluation, while management, a factor under which the
approach is not germane, makes up 40 percent of the evaluation. Thus,
technical approach, while important to performance of the contract,
constitutes a relatively small percentage of the total evaluation.
In addition, DynPort has not proposed to develop and produce all of
the vaccines using a [deleted] approach. DynPort proposed to develop
and produce the 3 base effort vaccines and 3 of the 15 option vaccines
using [deleted] approaches. DynPort's proposal also details its
team's ability to produce the toxin vaccines by the [deleted] approach
in a segment which is the same length as that devoted to its
discussion of the [deleted] approach. Battelle also proposed to use
[deleted] technology to develop and produce the ricin and improved
plague vaccines. Moreover, during negotiations, Battelle inquired
about whether the agency would require the use of [deleted] technology
in the production of botulinum vaccines. In advising Battelle that
the [deleted] approach would not be required, the contracting officer
specifically advised Battelle that the government had not yet
evaluated which method would be used to produce these vaccines; that
the selection of the method would come through an evaluation of
technical and program elements; and that after the Milestone I
decision, the government reserved the right to renegotiate the cost of
the option based on the production method chosen.[30] Thus, it is not
clear that the agency will even allow DynPort to use the [deleted]
approach. If it does select that approach, it will be because the
agency's own developmental organization has determined that the
approach will produce a viable vaccine. In any event, since the
agency chooses the developmental approach, anticipated risk is
relevant to, but not dispositive of, future success.
EVALUATION OF BATTELLE'S TECHNICAL PROPOSAL
Battelle also contends that the agency erred in evaluating its
proposal with regard to an alleged schedule delay and Battelle's
[deleted]. Based on our review of the record, we believe the
evaluations are reasonable.
The evaluated schedule delay is attributable to Battelle's proposal to
[deleted] at the facility of one of its subcontractors. Battelle's
original model contract did not mention the need to [deleted]. While
a plan to replace [deleted] has an impact on good lab practices (GLP)
and current good manufacturing practices (cGMP), when the agency sent
Battelle a clarification request (CR) on the subject of GLP and cGMP
compliance, Battelle indicated that its subcontractor was fully
compliant. At the same time, Battelle's initial cost proposal
mentioned the plan to [deleted]. A separate CR was issued by the cost
team regarding the costs for the replacement and Battelle replied that
it intended to replace one handler per year for 7 years. Amendment
No. 0006, requesting BAFOs, also requested offerors to provide a
detailed description of all facilities and equipment that are
available, must be built, or procured to meet the contract
requirements and to indicate possible impacts on cost, schedule, and
performance. In its BAFO model contract, Battelle advised that its
subcontractor would upgrade the [deleted] in order to comply with
cGMP.
When the SSEB technical and cost teams met during the final
evaluation, they compared Battelle's responses and the technical team
added a [deleted] regarding the intended replacement. However, the
technical team believed it would be more efficient and advantageous
for the government to complete the entire replacement prior to
beginning contract performance. Since Battelle intended to use this
subcontractor for development of the three base effort vaccines, the
evaluators determined that contract performance would be delayed for
the 6 months they estimated for the complete replacement.
Battelle argues that since it proposed replacement of the [deleted] in
a manner which would not impact the schedule, it was improper for the
agency to evaluate its proposal on a different basis. However,
Battelle assumed the risk that changes in its final offer might raise
questions about its ability to meet the requirements of the
solicitation and, thus, result in downgrading of its proposal. Cubic
Field Servs., Inc., B-252526, June 2, 1993, 93-1 CPD para. 419 at 7;
Comarco, Inc., B-225504, B-225504.2, Mar. 18, 1987, 87-1 CPD para. 305 at
5. The agency's evaluation, based on its own view of the best
approach, was not unreasonable under the circumstances of this
procurement.
Battelle had proposed this subcontractor to perform development and
production of the base effort vaccines and the [deleted] in question
were in the production facilities. Thus, any major replacement, even
on a staggered basis, could have a significant impact on contract
performance. Since the [deleted] are an important aspect of the GLP
and cGMP required by FDA for licensure of the vaccines, the agency had
a valid interest in ensuring that nothing interfered with that
licensure. Further, since the agency was to pay for the replacement
of the air handlers, it was reasonable for the agency to consider
whether a one-time replacement would be more advantageous than a
staggered replacement. In any event, this represented one of several
evaluated disadvantages under one subfactor of the least important
technical factor. While it was considered in the evaluation, when
briefed to the SSAC and SSA, the SSEB advised them that it was less of
a facilities problem than one associated with DynPort's proposal
because the schedule impacts were quantifiable.
With regard to the [deleted] matter, Battelle's original model
contract suggested use of a memorandum of understanding (MOU) to set
forth the roles, responsibilities, interactions, and commitments
between the contractor and the government. Among other things, the
MOU would address who is responsible for "unsuccessful outcomes" when
the government directs a particular decision which overrides the
contractor's decision. The agency sent Battelle a CR seeking
clarification as to the value of such an MOU and discussed it during
oral negotiations. During these negotiations, Battelle explained its
concern regarding how [deleted] would be applied if a government
decision, overriding a contractor decision, was unsuccessful. The
agency observed that it had an [deleted] "which is subjective to a
great degree, which says . . . we agree or disagree with how well you
did that, but it's the government who makes the final decision on what
you do, it's you who make the final decision on how you do it." For
these reasons the agency was "not sure how a MOU fits in."
Subsequently, the agency issued amendment No. 0005 which contained a
revised [deleted] and requested offerors to incorporate any effects of
the revised plan. In its proposal revision, Battelle expressed its
belief that achieving an "excellent rating" in one schedule area and
four performance areas was unrealistic and/or unattainable. As
support for its position, Battelle objected to the criterion
specifying no issuance of FDA Forms 482 and 483 since "FDA always
issues Form 482s and frequently issues a Form 483" in a given
situation. In amendment No. 0006, which closed discussions and
requested BAFOs, the agency modified the [deleted] to eliminate "no
Form 482s" from the criteria. In its BAFO model contract, Battelle
for the first time advised the agency that attempting to achieve the
[deleted]. The SSEB interpreted this language as an indication that
to comply with the [deleted], additional [deleted] and [deleted] would
have to be added to that already proposed. In assessing a [deleted]
to Battelle's proposal under the first management subfactor, the SSEB
noted that Battelle had used the [deleted], but concluded that the
BAFO indicated a [deleted] to accept the [deleted].
Battelle argues that it never [deleted] or [deleted] to [deleted].
Rather, its earlier suggestion of an MOU and its criticism of the plan
were simply aspects of its understanding of the "partnering" between
contractor and agency which was envisioned by this contract. In our
view, the evaluators reasonably concluded that the BAFO language
regarding increased activities with attendant schedule extensions in
order to provide "excellent" contract performance, was indicative of
Battelle's [deleted] to accept the provisions of the [deleted]. The
plan is very clear as to the criteria to be used in [deleted]
determinations and as to the government's unilateral discretion to
decide the [deleted] using those criteria. In response to [deleted],
the agency revised the plan. The agency's failure to revise other
aspects of the plan should have apprised Battelle that no additional
changes would be made. By incorporating [deleted] for the first time
in its BAFO, Battelle assumed the risk that its statements [deleted]
to the evaluators and result in [deleted] of its proposal. Cubic
Field Servs., Inc., supra.[31]
PAST PERFORMANCE EVALUATION
In evaluating past performance, the SSEB determined that both
Battelle's and DynPort's proposal should be rated "green" with
"moderate" risk. Battelle challenges this evaluation arguing that
DynPort's rating should have been less favorable. In this regard,
Battelle argues that the agency improperly gave DynPort credit for two
contracts performed by its team member, Porton International. At the
time these contracts were performed, Porton was teamed with [deleted]
a firm which teamed with Battelle for this JVAP procurement. While
Porton had claimed responsibility for developing and producing
botulinum toxoids under both of these contracts, Battelle explains
that [deleted] did all the development and production work while
Porton was simply the marketing and distributing agency for [deleted]
products and services.
The record establishes that the agency's past performance evaluation
was reasonable and in accordance with the stated evaluation criteria.
Advanced Tech. and Research Corp., supra. DynPort's past performance
information showed successful performance by itself and other team
members on eight contracts involving AIDS, influenza, botulinum, and
plague vaccines. The agency specifically noted that one of DynPort's
subcontractors had successfully licensed a vaccine from clinical
trials in only 14 months. Other than its assertions regarding
Porton's contribution, Battelle has produced nothing to indicate that
the agency's rating of [deleted] with [deleted] risk was an
unreasonable evaluation.
With regard to its claims regarding Porton's work on two of the
contracts, Battelle is essentially arguing that the only entity that
may properly list a prior contract for purposes of a past performance
evaluation is the concern which actually performed the work relevant
to that covered in the solicitation. We disagree. The general rule
is that a prime contractor under a government contract is responsible
for the performance of its subcontractors. Neal R. Gross & Co., Inc.,
B-275066, Jan. 17, 1997, 97-1 CPD para. 30 at 4. Further, subcontractors
and joint venturers perform various portions of contracts and,
accordingly, may obtain experience useful in predicting success in
future contract performance. George A. and Peter A. Palivos,
B-245878.2, B-245878.3, Mar. 16, 1992, 92-1 CPD para. 286 at 10
(experience of a proposed subcontractor may be considered in
determining whether an offeror meets a past performance requirement in
a solicitation); see also Commercial Bldg. Serv., Inc., B-237865.2,
B-237865.3, May 16, 1990, 90-1 CPD para. 473 at 6. Where an offeror was
involved as a subcontractor or joint venturer in performing work under
a prior contract similar to work to be included under the instant
contract, such experience may properly be considered in assessing that
offeror's past performance. Phillips Nat'l, Inc., B-253875, Nov. 1,
1993, 93-2 CPD para. 252 at 6. Porton, as prime contractor, was
responsible for managing the performance of the two contracts at issue
and the solicitation here calls for a significant management effort in
directing the work of a number of subcontractors. On this record,
there is no basis to question the agency's consideration of Porton's
prior performance in the evaluation of the DynPort team's
qualifications to perform the JVAP contract.
THE COST EVALUATION
Battelle alleges that the agency failed to perform a proper cost
realism evaluation because it failed to accurately measure the costs
to be incurred under its proposal as compared with DynPort's. In this
regard, when an agency evaluates proposals for the award of a cost
reimbursement contact, an offeror's proposed estimated costs are not
dispositive, because regardless of the costs proposed, the government
is bound to pay the contractor its actual and allowable costs. FAR sec.
15.605(c) (June 1997). Consequently, a cost realism analysis must be
performed by the agency to determine the extent to which an offeror's
proposed costs represent what the contract should cost, assuming
reasonable economy and efficiency. CACI, Inc.,-- Fed., 64 Comp. Gen.
71, 75 (1984), 84-2 CPD para. 542 at 5. When properly documented, our
review of an agency's exercise of judgment in this area is limited to
determining whether the agency's cost evaluation was reasonably based
and not arbitrary. Litton Sys., Inc., Amecon Div., B-275807.2, Apr.
16, 1997, 97-1 CPD para. 170 at 5.
We have reviewed the agency's cost evaluation and its methodology and
find nothing objectionable. The agency performed a detailed and
comprehensive evaluation of the proposed costs, in conjunction with
the proposed approaches of the offerors to arrive at an MPC and total
evaluated MPC. In this regard, the cost team familiarized itself with
the structure and organization of each proposal; identified the
respective roles of the prime and subcontractors; compared the
offeror's BAFO with its CLIN structure; analyzed the cost work
breakdown structure (CWBS); involved the Defense Contract Audit Agency
to evaluate proposed rates for overhead, award fees, and escalation
rates; compared each offeror's integrated master schedule with the
CWBS; evaluated all CLINS; and performed analyses of the offerors'
manufacturing data, clinical trials, surrogate efficacy models, animal
costs, labor, and FDA licensure fee. The evaluators used the
independent government cost estimate in those instances where the BAFO
costs were determined to be insufficient or excessive. These analyses
were combined to arrive at the MPC for each offer. The evaluators
then involved the technical and management teams to evaluate the
uncertainty of each CLIN based on knowledge, experience, and current
data available for each technology proposed. They then calculated the
total evaluated MPC by multiplying an uncertainty percentage times the
total cost of each CLIN in the MPC and adding this to the cost of the
CLIN.
Battelle identified several instances of cost adjustments to DynPort's
proposal which it believed were too small. We have examined these and
find none has merit. For example, Battelle notes that the evaluators
only adjusted [deleted] DynPort's costs for equipment/structural
modifications by [deleted] while its own costs in this area were
adjusted [deleted] by [deleted]. Relying on a [deleted] that
DynPort's facilities may not be operational at the start of contract
performance, Battelle concludes that [deleted] is too small an
adjustment. However, Battelle offers no specific analysis for its
conclusions. Thus, its criticism amounts to mere disagreement with
the evaluation which alone does not render an evaluation unreasonable.
Medland Controls, Inc., supra. Moreover, as observed by the agency,
cost differences and adjustments to each proposal are not directly
comparable due to the offerors' responsibility to propose their own
SOWs in accordance with their unique approaches and CLIN structures.
In this particular instance, the adjustment to DynPort's costs was not
made to account for a lack of facility readiness, but rather was to
account for equipment proposed on DynPort's equipment list for which
no cost was listed in the proposal.
Battelle also questioned the uncertainty evaluation noting that its
MPC was [deleted] adjusted by approximately [deleted] while DynPort's
costs were [deleted] adjusted by approximately [deleted]. Battelle's
basis for objecting to the amount [deleted] to DynPort's costs is its
belief that the agency failed to properly take into account the risk
associated with DynPort's proposed [deleted] approach. Battelle's
arguments are unpersuasive. The agency's uncertainty evaluation well
accounted for the difference in approaches. In this regard, of 14
areas adjusted for uncertainty, DynPort's costs were [deleted]
adjusted [deleted] than Battelle's in 9 areas. In seven of these
nine, DynPort's costs were [deleted] adjusted by at least [deleted]
the percentage that was applied to Battelle's costs. For example,
DynPort's proposal received a [deleted] uncertainty percentage for its
proposed botulinum [deleted] approach, while Battelle's proposal
received only a [deleted] adjustment.[32]
THE AWARD DETERMINATION
Finally, Battelle argues that cost improperly became the dominant
factor in the award determination, even though it was the least
important evaluation factor. It also generally challenges the award
determination based on the alleged flaws in the technical and cost
evaluations. Agency officials have broad discretion in determining
the manner and extent to which they will make use of technical and
cost evaluation results. Cost/technical tradeoffs may be made; the
extent to which one may be sacrificed for the other is governed by the
test of rationality and consistency with the established evaluation
factors. General Servs. Eng'g, Inc., B-245458, Jan. 9, 1992, 92-1 CPD para.
44 at 9.
After being briefed on the original evaluation and those changes
associated with the reevaluation, the SSA weighed the significant
attributes of Battelle's and DynPort's proposals, their performance
ratings, risk ratings, and relative MPCs. In directing award to
DynPort, the SSA stated:
This decision is based on a "Best Value" analysis that shows
little difference in the risk associated with DynPort's and
Battelle's proposals, and emphasizes program integration/program
management while giving latitude to pursue innovative
technologies relying primarily on commercial sector performers.
There is a higher degree of confidence in DynPort's program
management structure and in their ability to develop a close,
cooperative partnership with the Government JVAP Program
Management Office. In addition, DynPort's cost is less.
Based on the SSA's rationale, it is plain that cost was not the sole
determinative factor. Rather, the decision was based on an integrated
assessment of the relative technical/management merit, past
performance, and evaluated cost of the two proposals. As discussed
above, there was nothing unreasonable or objectionable in the agency's
evaluation. Thus, there is no basis for questioning the award
determination due to alleged evaluation flaws. To the extent that
cost may be considered to have become "determinative," where, as here,
the selection authority reasonably concludes that the offers are
essentially equal technically, cost may become determinative
notwithstanding its being of lesser importance in the evaluation
scheme. Cygnus Corp., B-275957, B-275957.2, Apr. 23, 1997, 97-1 CPD para.
202 at 11; Ogilvy, Adams & Rinehart, B-246172.2, Apr. 1, 1992, 92-1
CPD para. 332, at 5. Accordingly, the determination to award to DynPort
is unobjectionable.
The protest is denied.
Comptroller General
of the United States
1. While all three military services (Army, Air Force, and Navy)
participate in the program, the Army serves as the lead agency for the
program.
2. The DOD had earlier considered creation of a government-owned
contractor-operated facility and a contractor-owned
contractor-operated facility to produce the vaccines, but rejected
this approach for economic and other reasons.
3. The option vaccines included seven botulinum monovalents, a
botulinum polyvalent, ricin, staphylococcal enterotoxin B (SEB),
venezuelan equine encephalitis (VEE), combined VEE, eastern and
western equine encephalitis (VEE/EEE/WEE), brucellosis multivalent,
and improved plague and anthrax.
4. Prior to the "Milestone I" decision, USAMRIID performs basic and
applied research and concept exploration in the development and
nonclinical study of candidate vaccines. At "Milestone I," the agency
determines the basic technological approach to be used in vaccine
production, and the candidate vaccine is considered ready to move into
an advanced development phase.
5. Each management and technical factor was divided into the following
subfactors: M-1 (plans for interfacing with the government and
integrating subcontractors for optimizing contract requirements); M-2
(plans for identification, avoidance, and mitigation of technical
risk); M-3 (experience and responsibilities of committed, key, program
management personnel; M-4 (program office structure); M-5 (approach
for integrating data management across different requirements and
groups); M-6 (plan for conduct of special studies; T-2.1 (soundness of
approach to include optimization of production); T-2.2 (understanding
of regulatory issues associated with contract requirements); T-2.3
(understanding of different technical issues associated with contract
requirements); T-2.4 (application of product/process improvements to
reduce product life-cycle cost); T-2.5 (plan for maintenance of
current BD vaccines); T-1.1 (facilities: types, space, capacity,
availability, licensed/approved);
T-1.2 (equipment: types, function, availability).
6. Blue/outstanding; green/satisfactory; yellow/marginal; and
red/unacceptable.
7. Risks were rated as low, moderate, or high.
8. One of the SSEB members employed by USAMRIID, an active duty
officer who serves as chief of USAMRIID's Virology Division, was on
the SSEB technical team. The other, a civilian employee in USAMRIID's
Product Development and Regulatory Affairs Office, was on the SSEB
past performance team. Aerosol testing performed at USAMRIID is done
by its Toxinology Division.
9. See also 5 C.F.R. sec. 2635.101 (1997), titled "Basic Obligation of
Public Service," which provides that government employees must
endeavor to avoid actions which create the appearance of, among other
things, conflicts of interest.
10. When cost comparisons are performed under Office of Management and
Budget (OMB) Circular A-76, the Revised Supplemental Handbook,
provides the following guidance:
As required by the FAR, the Government should establish a
Source Selection Authority, including assurances that
there are no potential conflicts of interest in the
membership of the Authority.
11. See FAR sec. 9.501(d) which provides that a conflict of interest
exists when, "because of other activities or relationships with other
persons, a person is unable or potentially unable to render impartial
assistance or advice to the Government, or the person's objectivity in
performing the contract work is or might be otherwise impaired."
12. Our reliance on FAR subpart 9.5 for guidance in applying the
general requirements of FAR subpart 3.1 is consistent with FAR subpart
3.6 which directs:
The contracting officer shall comply with the requirements
and guidance in [FAR] [s]ubpart 9.5 before awarding a
contract to an organization owned or substantially owned
or controlled by Government employees.
13. FAR sec. 9.505 further provides that:
Each individual contracting situation should be examined
on the basis of its particular facts and the nature of the
proposed contract. The exercise of common sense, good
judgment, and sound discretion is required in both the
decision on whether a significant potential conflict
exists and, if it does, the development of an appropriate
means for resolving it.
14. Following submission of the agency's report, this Office notified
the parties that a hearing would be conducted, advising the parties
that one of the purposes for conducting the hearing would be to
"obtain information regarding the magnitude or significance of
USAMRIID's potential involvement in the actual performance of the
contract."
15. When a subject is exposed to a particular toxin or other agent, it
is referred to as being "challenged." Challenging a subject by
aerosol exposure involves creating a "cloud" of the agent, within a
chamber, which the subject breathes. Because of the potential danger
associated with aerosol exposure, special equipment and facilities are
required.
16. The USAMRIID Commander also advised FRC that its "offer of
participation is non-exclusive, and we are obligated to respond to
similar requests by other respondents to the RFP."
17. The cost estimate carries a date of "July 29, 1996." At the
hearing, the USAMRIID commander explained that this estimate had been
prepared earlier in response to a request from another government
agency unrelated to the JVAP procurement. Tr. at 184.
18. The parties agree that the contractor will have to perform
whatever level of aerosol exposures the FDA requires. In its
post-hearing comments, Battelle states: "There is no dispute that the
specific amount of aerosol challenge studies that the FDA will
ultimately require is unknown." DynPort asserts that, in recent
years, FDA has permitted licensing of vaccines for agents normally
contracted through the air without requiring aerosol challenge studies
to be conducted. Tr. at 265-267.
19. The "Overview" did state: "where information provided in the
initial IMP submission . . . conflicts with that provided in this
Appendix, the technical approach summaries contained in the Appendix
take precedence."
20. The FAR provides that, "[i]n fulfilling their responsibilities for
identifying and resolving potential conflicts, contracting officers
should avoid creating unnecessary delays, burdensome information
requirements, and excessive documentation," and the contracting
officer's judgment regarding existence of a conflict "need be formally
documented only when a substantive issue concerning potential
organizational conflict of interest exists." FAR sec. 9.504(d).
21. At the hearing the USAMRIID Commander testified that total funding
for USAMRIID in fiscal year 1997 was $38 million. Tr. at 191.
22. At the hearing, Battelle presented testimony that it could take
FRC up to 2 years to install the equipment necessary to perform
aerosol exposures at its facility. Tr. at 670. Since a 10-year
contract performance period is anticipated and Battelle, itself,
anticipates limiting testing requirements during the first several
months of contract performance, even under Battelle's scenario, it
would appear that FRC could be able to perform more than 80 percent of
the contract's requirements for aerosol testing requirements at its
own facility.
23. At the hearing, the only USAMRIID evaluator involved in the
evaluation of DynPort's proposal testified that, if DynPort had
proposed to use USAMRIID in more than a backup capacity, he would have
viewed that as a negative aspect of DynPort's proposal. Tr. at
326-328; 487. The second USAMRIID evaluator was only involved in
evaluating the past performance of an offeror other than either
DynPort or Battelle.
24. Battelle also asserts that a conflict existed by virtue of the
fact that a third SSEB evaluator was employed by Walter Reed Army
Institute of Research (WRAIR), and that WRAIR has a cooperative
research and development agreement with one of DynPort's proposed
subcontractors. We have reviewed the record and find the connection
between this subcontractor and WRAIR to be too attenuated to provide
any basis to sustain Battelle's protest. We also note that the record
clearly shows that, throughout the evaluation process, this SSEB
evaluator favored awarding the contract to Battelle.
25. Battelle identifies a number of examples of unreasonable
evaluation ratings and other flaws in the evaluation. We have
examined them all and find that none has any merit. This decision
will address only the more significant allegations.
26. In its pre-hearing comments to the agency report, Battelle argued
that the proposal risk assessment did not follow the evaluation
criteria because there is no evidence that it was performed for each
factor or that it was factored into the evaluation and scoring. The
Proposal Analysis Report explains that proposal risk was evaluated by
the SSEB in terms of the quality control and consistency of the
proposal information to determine whether the proposed approach would
accomplish the SOO. The SSEB also considered whether the proposal
information was of sufficient detail and consistency to allow a cross
walk of data among the various aspects of the proposal. This approach
was required in order to determine the confidence level of the data
used in structuring the total evaluated MPC for each offeror. It is
apparent from the record that the evaluation was conducted for all
aspects of the proposals. Since Battelle's proposal was assigned the
[deleted] and DynPort's proposal was assigned the [deleted] the
absence of individual factor ratings is not prejudicial. Further, the
record reflects that the SSAC and the SSA were briefed on these
proposal risk ratings prior to the award determination.
27. Both methods are designed to produce a vaccine which will trigger
an immune response in the human body without causing the adverse
bodily effects the harmful agent generally causes.
28. Battelle also challenges the evaluators' [deleted] assessment of
DynPort's ability to shorten this process. In Battelle's view, the
FDA will determine when and how a vaccine is approved, and there is no
possibility of the FDA shortening the period for approval to meet
DynPort's proposed schedule. Battelle misses the point of DynPort's
proposal and the evaluated advantage. Nothing in the proposal
indicates that DynPort intended to seek preferential treatment from
the FDA; rather, the agency believed that DynPort's intention to seek
early input and advice from the FDA, coupled with the proposal of a
regulatory affairs manager with previous FDA experience, provided a
credible basis for compression of the schedule.
29. Battelle also notes an "inconsistency" in the evaluation of
DynPort's facilities as [deleted], while evaluating its equipment as
[deleted]. Again, there is nothing inconsistent in this evaluation.
The two subfactors address different aspects of this technical factor;
proposed facilities may be acceptable while at the same time not all
required equipment is available. Further, the agency assigned a
[deleted] risk rating to both subfactors.
30. In a related argument, Battelle identified a number of instances
wherein it believed the evaluators were biased towards DynPort's
proposal, as evidenced by ignoring DynPort deficiencies and
overemphasizing slight flaws in Battelle's proposal. As indicated in
our discussion of the conflict issue above, we found no evidence of
bias on the part of the evaluators. In this regard, we have reviewed
the examples of unequal treatment cited by Battelle and find that none
have merit. For example, in the general comments preceding the
technical evaluation report on Battelle's proposal, the SSEB noted
that Battelle's exclusive enlistment of some contractors with
experience in the development of BD vaccines had the effect of
precluding other offerors from teaming with them and obtaining
technical information such as the test schedule for the current BD
vaccine stockpile. In the general comments concerning DynPort's
proposal, the SSEB observed that DynPort was prohibited from teaming
with existing (named) BD vaccine producers. Battelle argued that the
agency unfairly criticized it for forming exclusive teaming agreements
even though that represented normal and good contracting practice. As
observed by the agency, the quote regarding DynPort is taken out of
context. The entire quote merely indicates the SSEB's satisfaction
with DynPort's ability to create a satisfactory team notwithstanding
Battelle's teaming agreements: "Prohibited from teaming with existing
BD vaccine producers . . . DynPort brought together a team of vaccine
producers, capable of meeting the requirements in the RFP." Here,
Battelle's exclusive agreements provided it with access to data on
current developmental BD products which were not available to the
other offerors. Since the general comments in question are simply
statements of fact, not used to convey an advantage or disadvantage to
any offeror, there is no basis to conclude that the comments were
objectionable or unreasonable.
31. Battelle also contends that the agency failed to provide it with
meaningful discussions on the [deleted] and [deleted]. We disagree.
While contracting agencies must furnish information to offerors in the
competitive range as to the areas in their proposals which are
believed to be deficient so that offerors may have an opportunity to
revise their proposals to satisfy the government's requirements (FAR sec.
15.610(c)(2) (June 1997); Pan Am World Servs., Inc. et al., B-231840
et al., Nov. 7, 1988, 88-2 CPD para. 446 at 11), an agency need not reopen
discussions to resolve technical deficiencies first introduced in an
offeror's BAFO. Ogden Support Servs., Inc., B-270354.2, Oct. 29,
1996, 97-1 CPD para. 135 at 7. Technical/schedule issues with regard to
the [deleted] were not apparent until submission of Battelle's BAFO.
Issues concerning Battelle's views on risk allocation under the
[deleted] were discussed at length prior to submission of BAFO's.
However, in its BAFO Battelle for the first time asserted that
attaining "excellent" ratings in certain areas would require
[deleted], which was likely [deleted]. At that point, the agency was
not required to reopen discussions.
32. In its pre-hearing comments, Battelle for the first time raised
new examples of flaws it perceived in the agency's cost evaluation.
Where a protester files supplemental protest grounds, each new ground
must independently satisfy the timeliness requirement of our Bid
Protest Regulations, which do not contemplate the piecemeal
presentation or development of protest issues. QualMed, Inc.,
B-257184.2, Jan. 27, 1995, 95-1 CPD para. 94 at 12-13. This includes the
identification of "examples" of flaws in the evaluation generally
alleged in the initial protest. Id. Such new issues must be filed
within 10 calendar days after the protester knew or should have known
the basis for its protest. Bid Protest Regulations, 4 C.F.R. sec.
21.2(a)(2) (1997). Here, Battelle did not raise these matters until
it filed its pre-hearing comments more than 10 days after receipt of
the agency report. Accordingly, these matters are untimely and not
for consideration. In any event, the new examples are no more
meritorious than those originally raised by the protester. For
example, Battelle notes that it proposed [deleted] for unusually
hazardous insurance while DynPort proposed none, intending to seek
indemnification by the government. As observed by the protester in
its argument, the agency eliminated the consideration of this
insurance in all offerors' cost evaluations because of the widely
different proposals. Since all offerors were treated the same, there
is nothing objectionable in the agency's decision.