BNUMBER:  B-278738; B-278738.2 
DATE:  March 11, 1998
TITLE: Xeno Technix, Inc., B-278738; B-278738.2, March 11, 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:Xeno Technix, Inc.

File:     B-278738; B-278738.2

Date:March 11, 1998

William F. Hanlon for the protester.
Michael J. Gardner, Esq., Clark & Stant, P.C., for George G. Sharp, an 
intervenor.
David H. Turner, Esq., Department of the Navy, for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest against agency determination not to credit protester with 
the experience and performance of its proposed subcontractor is denied 
where protester's proposal indicated that subcontractor would perform 
less than 1 percent of the expected effort; agency could reasonably 
conclude that subcontractor's proposed contribution did not 
significantly bear on the likelihood of successful performance by 
protester such that attribution of subcontractor's record to protester 
was appropriate.

2.  Composition of technical evaluation panel is within the discretion 
of the agency, and where protester has not shown actual bias on the 
part of particular evaluators there is no basis to question the 
composition of the panel.

DECISION

Xeno Technix, Inc. protests the Department of the Navy's award of a 
contract to George G. Sharp, under request for proposals (RFP) No. 
N00140-97-R-1754, for shipboard troubleshooting, repair, and 
maintenance services in the vicinity of Norfolk, Virginia.  Xeno 
primarily challenges the evaluation of technical proposals.

We deny the protest.

The solicitation contemplated award of a time-and-materials contract 
for a 1-year base period, with 4 option years, for troubleshooting, 
repair, and maintenance services for main and auxiliary, hull, 
mechanical and electrical (HM&E) systems aboard government vessels.  
The majority of work to be performed involves shipboard HM&E systems.  
Award was to be made to the responsible offeror whose conforming offer 
was most advantageous to the government, with technical considerations 
more important than price.  The solicitation listed, in descending 
order of importance, the following five technical factors:  (1) 
corporate experience and (2) past performance, which were of equal 
weight; (3) technical approach and (4) management plan, which were of 
equal weight; and (5) personnel resources.

The Navy received proposals from four offerors.  Those submitted by 
Sharp, Xeno, and a third offeror (not relevant here) were included in 
the competitive range.  At the conclusion of discussions, the Navy 
requested best and final offers (BAFO).  While Sharp's proposed price 
($30,207,758) was approximately 5.1 percent greater than Xeno's 
($28,666,119), the Navy determined that Sharp's proposal was 
technically superior.  Sharp's proposal received a highly acceptable 
rating both overall and under each of the technical factors, while 
Xeno's received only an acceptable rating under each technical factor 
and overall.  The agency found that Sharp, the incumbent contractor, 
had "demonstrated extensive experience . . . directly related to all 
aspects of the requirements set forth in the statement of work" (SOW), 
including performing 1,096,000 hours of tasking which was identical in 
magnitude and complexity to the work required under the SOW, and that 
its work under the current contract was "consistently very good . . . 
quality work and . . . on schedule."  Selection Decision Memorandum at 
2; Declaration of [DELETED] at 1-2.  The Navy further determined that 
Sharp's proposal demonstrated "a clear and [thorough] understanding of 
the [SOW] as well as a [thorough] knowledge of the main and auxiliary 
hull, mechanical and electrical systems," such that when considered 
with Sharp's extensive, successful experience and performance, the 
proposal indicated "a high probability of success," with "the 
capability to satisfy all program areas immediately with no loss of 
planning continuity nor loss of time because of learning curve."  
Source Selection Decision Memorandum at 1-2.  The Navy concluded that 
the "significant technical superiority [of Sharp's proposal] far 
outweighs the additional cost" such that Sharp's proposal was most 
advantageous to the government.  Id. at 4.  Upon learning of the 
resulting award to Sharp, Xeno filed this protest with our Office.

PAST PERFORMANCE

Xeno questions its past performance rating (acceptable), arguing that 
the agency failed to take into account additional information 
furnished during negotiations and Xeno's proposed use of Colonna 
Shipyard, Inc. in performing the contract.  

The evaluation of proposals is a matter within the discretion of the 
contracting agency, since the agency is responsible for defining its 
needs and the best method of accommodating them.  Bannum, Inc., 
B-271075 et al., May 22, 1996, 96-1 CPD  para.  248 at 3.  Our Office will 
question an evaluation only where it lacks a reasonable basis or 
conflicts with the stated evaluation criteria.  Id.  

The Navy reasonably determined that Sharp's proposal was superior in 
the technical area; there is no basis to question the agency's 
determination that Sharp's proposal was superior under the experience 
and performance factors, the two most important technical factors.  As 
noted above, Sharp's proposal was found to demonstrate extensive, 
successful experience and performance; its proposal's highly 
acceptable ratings for both experience and performance therefore 
appear reasonable.  In contrast, the agency found that, while Xeno had 
successfully performed under several large Navy contracts, much of the 
experience cited in Xeno's proposal was engineering, design and 
technical support work, rather than the HM&E work that was the focus 
of the requirement here.  Further, with respect to the much more 
limited relevant experience cited by Xeno, the agency determined that, 
while Xeno generally had performed adequately on small jobs, it had 
experienced difficulties with large task orders or with tight 
performance schedules.  Xeno's schedule difficulties were viewed as 
particularly significant since much of the work under the contemplated 
contract was expected to be "emergent repairs" with tight performance 
schedules.  Declaration of [DELETED] at 2.

As for the agency's alleged failure to consider the additional 
information Xeno furnished during discussions, we note that Xeno's 
performance rating actually increased from unacceptable based on its 
initial proposal to acceptable after BAFOs; this indicates that the 
agency did favorably consider the additional information.  In any 
case, Xeno has made no showing that it was entitled to a performance 
rating equivalent to Sharp's rating.  Rather, the record supports the 
agency's determination that Xeno's performance record on relevant 
contracts was mixed.  For example, the agency was advised that:  1 
month after Xeno replaced tubes in two boilers on the USS Grasp, both 
boilers required complete retubing; equipment on the USS Grasp was 
sandblasted without adequate containment measures; Xeno's inability to 
quickly perform HM&E repairs on the USS Conolly necessitated 
transferring the work to Sharp, which successfully completed the work; 
and Xeno had performed unsatisfactory repairs on a beaching ramp on 
the USS Saipan and other repairs reportedly were performed very 
slowly.  

Xeno also questions the Navy's determination not to credit it with the 
experience and performance of its proposed subcontractor, Colonna 
Shipyard.  In this regard, however, Xeno's proposal indicated that 
Colonna would perform less than 1 percent of the expected effort (.87 
percent, or 1,040 of 120,224 hours per year).  BAFO Schedule 
Allocation of Hours.  The agency could reasonably conclude from this 
relatively minor commitment that Colonna's performance experience did 
not significantly bear on the likelihood of successful performance by 
Xeno such that attribution of Colonna's record to Xeno was 
appropriate.  ST Aerospace Engines Pte. Ltd., B-275725, Mar. 19, 1997, 
97-1 CPD  para.  161 at 3 (in determining whether one company's performance 
should be attributed to another, the agency must consider whether the 
work force, management, facilities, or other resources of one may 
affect contract performance by the other).  We conclude that the Navy 
reasonably determined that Sharp's proposal was superior under the 
experience and performance factors.[1]

SUBCONTRACTING

Xeno generally argues that Sharp lacks the skilled trades work force 
and industrial facilities required by the solicitation and needed to 
perform the contemplated work.  However, the solicitation did not 
preclude the use of a subcontractor's work force and facilities in 
performing the contract.  Indeed, the solicitation specifically 
contemplated the use of "subcontracting capabilities, administration, 
and management to accomplish repairs which may require highly 
specialized skills beyond the contractor's internal workforce."  SOW 
section C.1.2(d).  Sharp proposed to perform the contract with an 
integrated team that included two primary subcontractors, and Xeno has 
made no showing that Sharp, which had been successfully performing the 
same requirements for the Navy as the incumbent contractor, lacked the 
requisite work force and facilities when the resources of the proposed 
subcontractors were considered.  

Xeno argues that Sharp's reliance on subcontractors will violate the 
provisions of Federal Acquisition Regulation (FAR) standard clause 
52.219-14, entitled Limitations on Subcontracting (JAN 1991), which 
the solicitation incorporated by reference.  This clause provides, in 
relevant part, as follows:

     (b) By submission of an offer and execution of a contract, the 
     Offeror/Contractor agrees that in performance of the contract in 
     the case of a contract for--

        (1) Services (except construction).  At least 50 percent of 
        the cost of contract performance incurred for personnel shall 
        be expended for employees of the concern.

FAR  sec.  52.219-14.  The Navy responds that there was no basis for it to 
reach this conclusion, since Sharp's proposal did not indicate that 
Sharp would not or could not comply with the limitation on 
subcontracting.  Further, the agency reports that upon receiving 
Xeno's protest in this regard, it contacted Sharp to investigate 
Xeno's claim.  According to the agency, Sharp advised that it would 
primarily use its existing work force, but would supplement that work 
force to meet surge requirements by hiring temporary personnel from 
the large pool of specialized labor available for hire in the Norfolk 
area.  In this regard, the Navy reports that Sharp verified that under 
the incumbent contract, [DELETED] percent of the labor had been 
performed by Sharp personnel.  Legal/Contracting Officer Statement of 
December 23, 1997 at 31.

Xeno's argument is without merit.  Sharp's proposal specifically 
allocated the estimated labor hours for each labor category (as set 
forth in the solicitation) among Sharp and its two subcontractors/team 
members, specifying that Sharp would perform [DELETED] percent of the 
total contract hours.  Best and Final Price Proposal, Attachment 2.  
Nothing else in the proposal indicated that Sharp did not intend to 
meet the requirement.  This being the case, by signing its offer, 
Sharp agreed to comply with the limitation on subcontracting.  

Whether Sharp can comply with the limitations on subcontracting is a 
matter of responsibility, Corvac, Inc., B-254757, Jan. 11, 1994, 94-1 
CPD  para.  14 at 4; we will not review an affirmative determination of 
responsibility absent a showing of possible bad faith on the part of 
contracting officials or that definitive responsibility criteria in 
the solicitation were not met.  Bid Protest Regulations,  sec.  21.5(c), 4 
C.F.R.  sec.  21.5(c) (1997).  Definitive criteria are not in issue, and 
the record provides no basis to conclude that the contracting 
officer's determination in this regard was motivated by bad faith.  
Xeno notes that its president advised an executive director at the 
contracting activity--apparently in a meeting unrelated to this 
procurement which occurred 2 months prior to the award to Sharp--that 
it believed Sharp was circumventing the limitation on subcontracting 
by directly employing personnel under its contracts that were also 
employees of its subcontractor.  This does not by itself evidence bad 
faith on the part of agency officials for failing to investigate the 
matter.  The executive director states that Xeno's president 
characterized the discussion as "off the record," and that, although 
he advised the president to provide in writing any information 
supporting its allegation, the president never submitted a written 
statement detailing and supporting the allegation and otherwise failed 
to pursue the matter.  Declaration of [DELETED].  Under these 
circumstances, there is no basis to question the Navy's affirmative 
determination of responsibility.    

Further, whether Sharp in fact complies with the subcontracting 
limitation in performing the contract is a matter of contract 
administration which is within the ambit of the contracting agency, 
not our Office.  4 C.F.R.  sec.  21.5(a); Lockheed Martin Fairchild Sys., 
B-275034, Jan. 17, 1997, 97-1 CPD  para.  28 at 5.

TECHNICAL EVALUATION COMMITTEE 

Xeno also challenges the composition of the technical evaluation 
committee (TEC), arguing that the TEC lacked adequate technical 
qualifications to evaluate proposals.  In addition, Xeno claims that 
the TEC's findings may have been biased in favor of Sharp as a result 
of an alleged conflict of interest created by the fact that the TEC 
was comprised of two subordinates of [DELETED] at the user activity, 
whose wife works for Sharp [DELETED].

The composition of a technical evaluation panel is within the 
discretion of the contracting agency.  In the absence of evidence of 
bad faith, conflict of interest, or actual bias, we have no reason to 
question the composition of the panel.  Alcan Envtl., Inc., 
B-275859.2, Apr. 11, 1997, 97-1 CPD  para.  139 at 6; Delta Ventures, 
B-238655, June 25, 1990, 90-1 CPD  para.  588 at 3-4; Johns Hopkins Univ., 
B-233384, Mar. 6, 1989, 89-1 CPD  para.  240 at 7.  In particular, we note 
that the opportunity for bias is not a sufficient basis to question an 
award of a contract; where, as here, a protester infers that 
evaluators are biased because of their past experiences or 
relationships, we focus on whether the individuals involved exerted 
improper influence in the procurement on behalf of the awardee, or 
against the protester.  Advanced Sys. Tech., Inc.; Engineering and 
Professional Servs., Inc., B-241530, 
B-241530.2, Feb. 12, 1991, 91-1 CPD  para.  153 at 15. 

We find no evidence of improper conduct.  The record indicates that 
[DELETED] was not a member of the TEC and, although he approved the 
contract data requirements lists included in the solicitation, he did 
not participate in the source selection process.  In this regard, the 
Navy reports that [DELETED] was not authorized to have access to 
source selection information under the solicitation; his subordinates 
on the TEC signed nondisclosure agreements that precluded them from 
revealing source selection information to unauthorized persons, 
including [DELETED]; and there is no evidence that [DELETED] in fact 
was given access to source selection information.  Supplemental Agency 
Report of January 7, 1998, at 4.  In support of its position, the 
agency has submitted declarations from the individuals in question.  
Further, our review of the evaluation record reveals no evidence of 
bias; rather, as discussed, the record indicates that Sharp's proposal 
was reasonably found to be technically superior to Xeno's.[2]    

The protest is denied.

Comptroller General
of the United States

1. While Xeno also challenges the evaluation under the personnel 
factor, asserting that its proposal should have received the same 
rating (highly acceptable) as Sharp's proposal received, our review of 
the record indicates that Sharp's proposal was reasonably found to be 
somewhat more advantageous than Xeno's with respect to personnel.  
Specifically, the record supports the agency's determination that 
while the project managers proposed by both Sharp and Xeno exceeded 
the minimum experience requirements in an advantageous manner, and 
thus were both properly rated as highly acceptable, Sharp's project 
manager possessed significantly more advantageous experience, having 
15 more years of relevant experience (40 versus 25 years) than Xeno's 
manager.

2. Although Xeno's challenge to the technical qualifications of the 
evaluators provides no basis to question the evaluation, we note that 
one of the two TEC members was the Supervisory Production Controller 
(Ships) for the user activity, in which capacity he acted as the 
contracting officer's representative on the incumbent contract.