BNUMBER:  B-279217; B-279217.2; B-279217.3; B-279217.4       
DATE:  May 20, 1998
TITLE: Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint
Venture;, B-279217; B-279217.2; B-279217.3; B-279217.4, May 20, 1998
**********************************************************************

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:Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint 
Venture;   Upper Lakes Foods, Inc.

File:B-279217; B-279217.2; B-279217.3; B-279217.4      
        
Date:May 20, 1998

Richard L. Moorehouse, Esq., and Frank K. Peterson, Esq., Holland & 
Knight, for Quaker Valley Meats, Inc./Supreme Sales GmbH, A Joint 
Venture; and Alan M. Grayson, Esq., and Laura J. Mann, Esq., Grayson & 
Associates, for Upper Lakes Foods, Inc., the protesters. 
Jerry L. Hester for Theodor Wille Intertrade, an intervenor.
Portia Bonavitacola, Esq., and Michael Trovarelli, Esq., Defense 
Logistics Agency, for the agency. 
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protests challenging various aspects of agency's technical 
evaluation of proposals are denied where record shows that evaluation 
was reasonable and consistent with stated evaluation criteria.

2.  Agency properly assessed realism of proposals based on offerors' 
showing that prices for commercial items were based on actual, recent 
invoices for products being acquired; agency rated proposals higher 
(and lower risk) where proposed pricing was supported with invoices as 
opposed to vendor quotations.

3.  Protester is not an interested party to challenge eligibility of 
awardees to receive contracts where record shows that, even if 
protester were correct, intervening offerors, not protester, would be 
next in line for award.

4.  Agency's price/technical tradeoffs are reasonable where record 
shows agency weighed technical merit against price in determining that 
one offeror's technically superior, higher-priced proposal represented 
best value for one award, and that another offeror's low-priced, 
technically inferior proposal represented the best value for second 
award.

DECISION

Quaker Valley Meats, Inc./Supreme Sales, GmbH, A Joint Venture, and 
Upper Lakes Foods, Inc. protest the award of two contracts under 
request for proposals (RFP) No. SP0300-97-R-4007, issued by the 
Defense Logistics Agency (DLA) for full line food distribution for all 
military bases, hospitals and United States Navy Ships throughout 
Europe and the Middle East.  The protesters raise numerous objections 
to the agency's evaluation of proposals and source selection 
decisions.

We deny the protests.

BACKGROUND

The RFP contemplated the award of two indefinite-delivery, 
indefinite-quantity contracts, each for a base year with four 1-year 
options, to provide full line food distribution for all military 
personnel and their dependents.  The RFP divided the requirement 
between a northern zone (comprised of northern and central European 
countries) and a southern zone (comprised of southern European and 
Middle Eastern countries), and advised offerors that firms were 
eligible for award of a contract for one, but not both, zones.  The 
RFP further provided that the contractor in each zone would be 
required to serve as a back-up contractor for the other zone where, 
due to unforeseen events, such as a large-scale military mobilization, 
there might be a sudden surge in the requirement for the other zone.

Offerors were required to submit detailed technical proposals showing 
how they intended to accomplish contract performance on a day-to-day 
basis, how they could meet the agency's surge and mobilization 
requirements should an unforeseen event within the zone for which they 
were awarded a contract occur, and how they intended to meet their 
obligation to act as a back-up contractor for the other zone.  For 
evaluation purposes, the RFP specified the following eight criteria, 
in descending order of importance:  Distribution; Experience/Past 
Performance; Quality; Contingencies; Back-Up Zone Plan; 
Procurement/Pricing; Socioeconomic Considerations; and DLA Mentoring 
Business Agreement.  (Each of these criteria had several subelements, 
discussed below.)  Offers were evaluated by assigning an adjectival 
rating of either excellent, good, fair, or poor to each subelement, 
each criterion and the proposal overall.  (Adjectival ratings were not 
assigned under the DLA Mentoring Business Agreement 
criterion--proposals were simply ranked numerically, from first to 
last.) 

Offerors were to submit prices for a selected "market basket" of 120 
core items being procured.  The price of each item was to be comprised 
of two elements, the "delivered price" and the "distribution fee."  
The delivered price represents the amount that the offeror, as prime 
vendor, pays to its supplier for the item.  The distribution fee 
represents the contractor's fee, including profit, for transportation, 
storage and delivery of the food item to its ultimate destination.  
(Thus, for example, an offeror could propose to provide potatoes for 
$1 per pound, with the price reflecting a delivered price of $.75 per 
pound and a distribution fee of $.25 per pound.)  The RFP advised 
that, during the life of the contract, delivered prices would be 
adjusted every 2 weeks to account for market fluctuations.  For 
purposes of substantiating their pricing, firms were asked to provide 
recent invoices that actually reflected the delivered prices being 
proposed; where the firm did not provide an invoice, a vendor quote 
was required.  The distribution fee, on the other hand, was 
essentially a fixed element of the offeror's price, and would only 
change based on the terms of the offer (for example, where a firm's 
price was raised by a stated percentage during an option year).  Award 
was to be made on a best value basis, with technical considerations 
carrying greater weight than price.

The agency received several initial offers for each zone.  After 
evaluating the offers (and eliminating one from further 
consideration), conducting discussions, performing site visits and 
obtaining best and final offers (BAFO), DLA made award to Theodor 
Wille Intertrade for the northern zone and Ebrex Food Services for the 
southern zone.  In both zones, the agency found particularly important 
the fact that the awardees' proposals had received excellent scores 
for the most important evaluation criterion, Distribution.  For the 
northern zone, the agency found that Theodor Wille's excellent 
Distribution rating was sufficiently important that it was willing to 
pay the firm's price premium.  In the southern zone, the agency found 
that Ebrex's excellent Distribution rating, in combination with its 
low price, outweighed its poor ratings elsewhere in the evaluation (in 
particular, its poor ratings in the Contingencies area).

UPPER LAKES' PROTEST

Upper Lakes raises numerous arguments regarding the agency's technical 
evaluation of its and the awardees' proposals.  We have examined Upper 
Lakes' contentions and find them to be without merit.  We discuss the 
most significant arguments below.[1]

Distribution Criterion

Upper Lakes argues that the agency improperly evaluated proposals 
under the Distribution evaluation criterion for the northern zone, 
specifically, that it misevaluated proposals under the product 
availability and location subelements.  Under those subelements, Upper 
Lakes received ratings of good and fair, respectively, while the 
awardee (Theodor Wille) received ratings of excellent under both.[2]  
The focus of Upper Lakes' allegation is the solicitation's requirement 
for deliveries to all points within 48 hours of when an order is 
placed; Upper Lakes contends that it was unreasonable for the agency 
to require deliveries to Bosnia within 48 hours because Bosnia should 
have been considered a "remote" point of delivery within the meaning 
of the RFP, which exempted such areas from the      48-hour 
requirement.

The RFP requires deliveries to be made to all points within 48 hours 
unless the delivery point is deemed "remote."  RFP at 204.  The 
solicitation further specifies numerous remote delivery points 
(primarily located in southern Europe and the Middle East) but does 
not include Bosnia among the remote locations.  Id.  The agency 
explains that Bosnia was not designated as a remote area because the 
RFP as written did not require delivery to numerous points in Bosnia, 
but only to a single staging area delivery point in Croatia.  The RFP 
does provide, however, that although the current requirement is for 
delivery to this single point, in the future the requirement could be 
expanded to 15 delivery points.  RFP at 83.  Upper Lakes' concern 
arises from the possibility that the agency may elect to expand the 
requirement to include the 15 delivery points.

To the extent that Upper Lakes' argument amounts to a challenge 
regarding the RFP's designation of remote points, it is untimely.  The 
delivery requirement for Bosnia--as well as the possible expansion of 
the requirement to include an additional 15 delivery points--was 
clearly spelled out in the RFP, and it also was c/lear from the RFP 
that Bosnia was not designated a remote area.  If Upper Lakes was 
concerned that the 48-hour delivery requirement was infeasible for 
Bosnia, it should have raised its objection prior to the deadline for 
submitting initial offers; protests of alleged solicitation 
improprieties such as this must be filed no later than the closing 
time for receipt of proposals.  4 C.F.R.  sec.  21.2(a)(1) (1998).  Since 
Upper Lakes did not raise the argument until after award, its protest 
in this regard is untimely and will not be considered.

We also find that DLA had a reasonable basis for distinguishing 
between Upper Lakes' and the awardee's proposals in the identified 
areas.  (As noted, Upper Lakes received a fair and good rating under 
the two subelements, while the awardee received excellent ratings.)  
Our Office reviews agency evaluations only to ensure that they are 
reasonable and consistent with the RFP's evaluation criteria.  Magnum 
Prods., Inc.; Amida Indus., Inc., B-277917 et al., Dec. 8, 1997, 97-2 
CPD  para.  160 at 2-3.  The record shows that Upper Lakes, even after 
discussions relating to the matter, was unwilling to commit to meeting 
the 48-hour delivery requirement for Bosnia.  The firm stated instead 
that, while it would endeavor to meet the requirement, it was 
nonetheless a goal rather than a firm commitment, especially in view 
of the possibility that hostilities in the area might impede its 
delivery efforts.  In contrast, the awardee committed to meeting the 
48-hour delivery requirement, even for Bosnia, stating that it would 
use a continuously circulating fleet of satellite-controlled vehicles 
that would be dedicated exclusively to the Bosnia route.  Given the 
RFP's current requirement for delivery to only one location in Croatia 
for deliveries to Bosnia, as well as the awardee's proposal of an 
innovative method for meeting the 48-hour requirement (the use of 
satellite-controlled vehicles), we conclude that the agency had a 
reasonable basis for rating the awardee's proposal superior to Upper 
Lakes' in this area.[3]

Experience/Past Performance

Upper Lakes argues that the agency misevaluated its and the awardees' 
proposals under the Experience/Past Performance criterion.  In the 
southern zone, Ebrex received an overall criterion rating of good, 
with ratings of fair for the experience  subelement and excellent for 
the past performance subelement; Upper Lakes also received an overall 
rating of good, with a good rating for experience and an excellent 
rating for past performance.  In the northern zone, Theodor Wille 
received an overall criterion rating of good, with a rating of good 
for experience and excellent for past performance, while Upper Lakes 
received an overall rating of good, with good ratings for both 
subelements.  Upper Lakes maintains that it should have received 
excellent ratings in both zones because it has the greatest amount of 
relevant experience in performing contracts similar to this 
requirement.

Even if Upper Lakes is correct regarding the evaluation in this area, 
any error did not result in competitive prejudice to Upper Lakes.  
Prejudice is an essential element of every viable protest, and our 
Office will not sustain a protest unless the protester demonstrates a 
reasonable possibility that it was prejudiced by the agency's actions, 
that is, unless the protester demonstrates that, but for the agency's 
actions, it would have had a substantial chance of receiving the 
award.  McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD  para.  54 at 3; 
see Statistica, Inc., v. Christopher, 102 F. 3d 1577, 1581 (Fed.  Cir. 
1996).

For the southern zone, the record shows that Interdyne was ranked 
first technically,  Upper Lakes second and Ebrex third.  (Ebrex was 
ultimately ranked first for award purposes because of its 
significantly lower price--approximately [deleted] less than 
Interdyne's.[4])  Interdyne's proposal received excellent ratings 
under three of the eight major criteria, with an excellent rating 
under the most important criterion, Distribution.  Upper Lakes does 
not challenge the agency's rating of Interdyne's proposal.  In 
comparison, Upper Lakes' proposal received an excellent rating only 
for the least important Socioeconomic Considerations criterion, with 
good or fair ratings for the remaining criteria; significantly, and as 
discussed above, Upper Lakes' proposal properly received only a good 
rating under the Distribution criterion.  Accordingly, even if Upper 
Lakes' arguments regarding the evaluation of proposals under the 
Experience/Past Performance rating were correct (and this resulted 
both in Upper Lakes' proposal's rating being raised to excellent and 
Ebrex's proposal being displaced for award purposes because of a 
reduction in its rating in this area), Interdyne's proposal would 
remain technically superior overall, and under the Distribution 
criterion.  Since Interdyne's proposed price also was [deleted] lower 
(approximately [deleted] less) than Upper Lakes', there is no 
reasonable possibility that DLA would have made award to Upper Lakes 
based solely on a change in its rating under this criterion.  This is 
confirmed by the agency's overall ranking of the proposals in the 
southern zone, which shows that Upper Lakes was ranked last in the 
agency's best value determination.

Similarly, in the northern zone, Upper Lakes' proposal was ranked 
third technically, behind Theodor Wille's and Ebrex's.  As discussed 
above, the Theodor Wille and Ebrex proposals received excellent 
ratings under the Distribution criterion, while Upper Lakes' received 
only a good rating.  The record further shows that Theodor Wille 
received excellent ratings under two other criteria (Contingencies and 
Socioeconomic Considerations), for a total of three excellent ratings, 
while Upper Lakes received only one excellent rating.  In comparison, 
even if Upper Lakes' proposal were rated excellent under the 
Experience/Past Performance criterion, it still would have only two 
excellent ratings, and only a good rating under the Distribution 
criterion.[5]  Since Upper Lakes' proposal was also ranked last 
overall because of its [deleted] higher evaluated price (slightly more 
than [deleted] higher than Theodor Wille's price), it is clear any 
error in the Experience/Past Performance ratings did not competitively 
prejudice Upper Lakes.[6]  Moreover, even if this were not the case 
(and Theodor Wille were not in line for award because of the 
evaluation in the Experience/Past Performance area), Upper Lakes does 
not challenge the agency's ultimate conclusion that Quaker Valley's 
would have been next in line for award based on its technically 
comparable proposal and [deleted] lower (approximately [deleted] lower 
than Upper Lakes) evaluated price.  We conclude that any possible 
error on the part of the agency in evaluating Experience/Past 
Performance was not prejudicial to Upper Lakes.  

Realism

Upper Lakes argues that the awardees' prices are unreasonably low and 
that, if the agency had conducted a realism evaluation of the business 
proposals, it would have discovered this fact.  According to Upper 
Lakes, both awardees' delivered prices (that is, the invoice-based 
prices for the products being procured) and distribution prices were 
low as compared to both its offer and the government estimate for the 
acquisition.

The agency adequately evaluated the proposed prices.  The RFP provided 
that proposals that were unrealistic as to technical approach, 
scheduling or pricing would be found to reflect a lack of 
understanding of the requirement, and that business (price) proposals 
had to be complete, realistic and reasonable.             RFP at 152.  
The RFP further advised that proposals that contained major technical 
or business omissions, or that were out of line as to price, would be 
eliminated from further consideration if the agency determined that 
the deficiencies could not be remedied through discussions.  RFP at 
184.  The solicitation also stated that more consideration would be 
given to proposals based on actual invoice-based prices as compared to 
proposals based on industry quotes.  RFP at 208.  Invoice-based prices 
were deemed more realistic since, unlike industry quotes, they formed 
the basis for a company's prior actual transactions.

The record shows that, in evaluating proposals, the agency did 
precisely what it represented; it assessed realism as reflected by the 
number of invoice-based prices submitted by the offerors.  Under the 
Procurement/Pricing criterion, the agency based its adjectival ratings 
in part on the number of invoice-based prices submitted by the 
offerors.  Thus, Ebrex's proposal was assigned a good rating under the 
pricing plan subelement for the southern zone because it based a 
majority of its prices on invoices.  For the northern zone, Theodor 
Wille's proposal was assigned an excellent rating under this 
subelement because it based its prices for 115 of the 120 core items 
on actual invoice prices.  The record further shows (as discussed in 
more detail below) that the agency assigned an overall moderate risk 
rating to the Quaker Valley proposal precisely because it had 
submitted so few invoice-based prices.  This was a reasonable means of 
assessing realism.[7]    

"Bait and Switch" Prices

Upper Lakes also contends that the awardees have offered a "bait and 
switch" to the agency in the form of unreasonably low delivered 
prices.  According to the protester, the firms will escalate their 
prices immediately after award to avoid losses based on the low 
pricing offered in their proposals.  The protester also contends that 
both awardees' proposals show that the firms intend to violate the 
Berry Amendment, 10 U.S.C.  sec.  2241 note (1994) and the Buy American 
Act,           41 U.S.C.A.  sec.  10a-10d (West Supp. 1998), in performing 
the contract because they will be furnishing foreign products; Upper 
Lakes further contends that the agency improperly failed to apply the 
50-percent price evaluation factor called for under the Buy American 
Act to the awardees' offers before making its award decisions.

We dismiss these allegations because Upper Lakes is not an interested 
party to maintain them.  The record shows that the agency ranked Upper 
Lakes' proposal last overall in both zones, and that in each zone 
there were two lower-priced proposals ranked ahead of Upper Lakes' for 
award purposes.  (For the northern zone, Quaker Valley and MDV/Nash 
Finch were ranked ahead of Upper Lakes.  In the southern zone, 
Interdyne, Inc. and Doughties Foods were ranked ahead.)  Upper Lakes 
does not allege that these firms engaged in a "bait and switch" and, 
in each zone, either of the two interceding firms would be in line for 
award ahead of Upper Lakes, according to the agency's evaluation 
materials.  Upper Lakes also does not allege that any of the 
interceding firms' offers violate either the Berry Amendment or the 
Buy American Act.  Consequently, even if the awardees were eliminated 
from award consideration (either because they were deemed ineligible 
for award by virtue of their failure to abide by the terms of the 
Berry Amendment, or because their offers were not found to be the best 
overall value after application of the Buy American Act 50-percent 
evaluation factor), one of the interceding firms, not Upper Lakes, 
would be in line for award.  Upper Lakes therefore lacks the direct 
economic interest necessary to maintain these bases for protest.  4 
C.F.R.  sec.  21.0(a) (1998); Continental Serv. Co., B-274531, Dec. 17, 
1996, 97-1 CPD  para.  9 at 8.[8]    

Improper Discussions

Upper Lakes argues that the agency engaged in improper post-award 
discussions with Quaker Valley.  In this connection, the agency and 
Quaker Valley discovered during the course of the firm's debriefing 
that the Quaker Valley offer contained a clerical error that resulted 
in the agency's miscalculating Quaker Valley's offered distribution 
cost for one item; specifically, the firm had misplaced a decimal 
point in one of its prices that resulted in the price being 
miscalculated as higher than it actually was.  Upper Lakes alleges 
that the agency improperly accepted the submission of Quaker Valley's 
price preparation spreadsheet to support its claim of a clerical 
error, and that this amounted to improper post-award discussions.

This contention is without merit.  The record shows that the pricing 
sheet in question was included with Quaker Valley's BAFO submission.  
Consequently, the firm did not submit any materials after discovery of 
the clerical mistake; the agency reviewed the question based on 
materials presented with Quaker Valley's BAFO, and thus did not afford 
Quaker Valley an opportunity to revise or modify its proposal, a 
requirement for discussions to have occurred.  FAR  sec.  15.601.

QUAKER VALLEY'S PROTEST[9]

Distribution Criterion

Quaker Valley argues that the agency's evaluation under the 
Distribution criterion was erroneous under two subelements, product 
availability and location.  Regarding product availability, Quaker 
Valley maintains that DLA improperly assigned an excellent rating to 
Theodor Wille's proposal while assigning its proposal only a good 
rating.  According to the protester, the basis for the agency's 
distinguishing between the firms' proposals was their proposed "fill 
rates" (a percentage measurement of the number of cases of items 
ordered versus the number of cases delivered) and the location of 
their warehouses.  As for fill rate, Quaker Valley maintains that 
Theodor Wille's proposal only indicated a rate of 98 percent in Europe 
(that is, outside the continental United States, or OCONUS), and a 
99.5 percent rate for its facilities in the continental United States 
(CONUS).  According to Quaker Valley, a firm's CONUS fill rate is 
irrelevant for purposes of performance in OCONUS (the primary 
performance location), and Quaker Valley's proposed fill rate in 
OCONUS was also 98 percent.  Quaker Valley concludes that there thus 
was no reasonable basis to distinguish between the proposals.  As for 
warehouse location, Quaker Valley maintains that the agency improperly 
failed to credit its proposal under this subelement after discussions, 
during which Quaker Valley proposed a new warehouse in Mainz, Germany 
as a substitute for the warehouse it initially proposed.  Quaker 
Valley notes that Theodor Wille also proposed a warehouse in Mainz, 
for which it received an excellent rating; it concludes that its 
proposal thus should have received the same rating.

These arguments are without merit.  Contrary to Quaker Valley's 
assertion, Theodor Wille's offer in fact unequivocally stated a 99.5 
percent fill rate for CONUS, and  99.8 percent for OCONUS.  The record 
also shows that the awardee proposed to have on hand 60 days worth of 
stock in its inventory, whereas Quaker Valley offered only 45 to 60 
days worth of stock.  In this connection, Theodor Wille offered to 
keep inventory at a level approximating 200 percent of the contract 
requirements, with a view toward totally eliminating possible 
"not-in-stock" situations.  In contrast, Quaker Valley offered a fill 
rate of only 98 percent and stated it would resolve "not-in-stock" 
situations by monitoring product flow with an automated system that 
would flag "not-in-stock" items and advise ordering activities of such 
circumstances the same day an order is placed.  While the protester 
characterizes these distinctions as relatively minor, the magnitude of 
goods being furnished under the contract is such that the agency could 
reasonably discriminate between the proposals on this basis, 
especially in view of the fact that these considerations were 
specifically identified in the RFP as the basis for evaluating 
proposals under the product availability subelement.

The warehouse evaluation also was unobjectionable.  While the revised 
price negotiation memorandum apparently does erroneously refer to 
Quaker Valley's initially-offered facility under the product 
availability subelement, its Mainz warehouse is correctly discussed 
under the location subelement.  The record shows that the agency 
identified several qualitative differences between the protester's and 
Theodor Wille's facilities, which led to the different ratings.  The 
warehouse proposed by Theodor Wille has a larger number of pallet 
slots (it can accommodate 3,000 pallets of dry or chilled goods and 
2,000 pallets of frozen goods, compared to Quaker Valley's, which can 
accommodate only 1,356 pallets of frozen goods and 1,989 pallets of 
dry or chilled goods); has more loading ramps (16 versus 6); and can 
accommodate up to 10 times the required inventory in the event of a 
surge requirement (Quaker Valley's proposed solution in the event of a 
surge would be to increase turnover at the warehouse which would be 
used during normal operations at approximately its capacity).  The 
record also shows that, although both facilities needed modification 
in order to make them acceptable, Theodor Wille did not indicate that 
it required any significant amount of time to effect the 
modifications, whereas Quaker Valley stated that it needed 75 days to 
complete its refurbishment, which included, among other things, 
installation of additional refrigeration equipment.  We conclude that 
the agency did consider Quaker Valley's Mainz facility, and that there 
was a reasonable basis for rating Theodor Wille superior under this 
subelement.

Experience/Past Performance

Quaker Valley also takes issue with the agency's evaluation under the 
Experience/Past Performance criterion, under which the agency assigned 
its and Theodor Wille's proposals overall ratings of good; Quaker 
Valley's was rated good under both subelements, while Theodor Wille's 
was rated good under the experience subelement and excellent under the 
past performance subelement.  The protester maintains that (1) Theodor 
Wille and its primary CONUS subcontractor, Joseph Foodservice, Inc., 
lack experience with contracts similar in magnitude and nature to the 
current requirement, and also lack adequate financial capacity, and 
thus should have received only fair ratings; and (2) in light of 
Quaker Valley's own experience and past performance--it allegedly is 
the only firm that has experience of a similar nature to the present 
requirement because it is a prime vendor contractor to the British 
military under a similar requirement--it should have received 
excellent ratings under both subelements.

The evaluation in this area was unobjectionable.  Regarding the 
experience subelement, the record shows that Theodor Wille performs 
approximately       $10 million worth of food distribution per year, 
and its proposal team (including its subcontractors) performs an 
estimated $168 million worth of food distribution per year.  Theodor 
Wille's CONUS subcontractor, Joseph Foodservice, has experience 
similar to the present requirement as the leading prime vendor 
supplier under the Department of Defense's MWR (morale, welfare and 
recreation) program for Europe, the Middle East and the Caribbean; the 
firm has been performing this contract since 1991 which, although 
somewhat smaller in dollar value than the current requirement, is 
deemed to be more complicated from a logistics standpoint, since it 
involves approximately 100 program orders per week (compared to the 
approximately 20 program orders per week anticipated here).  Theodor 
Wille and its OCONUS subcontractors also have numerous prime vendor 
contracts which reflect similar experience.  For example, Theodor 
Wille's German subcontractor, Pinguin Group, performs food 
distribution for the United States Army, delivering food to 67 
delivery points in Germany and several neighboring countries.  
Further, the record shows that, while the evaluators initially 
questioned the financial capacity of Theodor Wille and its CONUS 
subcontractor, Joseph Foodservice, under the experience subelement, 
their concern was alleviated during the course of the acquisition 
because Joseph Foodservice was purchased by The Institutional Jobbers 
Company, a $250 million food distribution concern.  The evaluators 
found that this injected sufficient economic strength into the overall 
relationship.  We conclude that the agency reasonably assigned both 
Theodor Wille's and the protester's proposals good ratings under this 
subelement.

As for the past performance subelement of the Experience/Past 
Performance criterion, Quaker Valley raises no specific objections 
beyond asserting that its proposal should have received a higher 
rating and Theodor Wille's a lower rating.  This amounts to no more 
than disagreement with the agency's evaluation conclusions, which is 
inadequate to show that the agency's evaluation was unreasonable.  
Pickering Firm, Inc., B-277396, Oct. 9, 1997, 97-2 CPD  para.  99 at 4.  In 
any case, even if Quaker Valley's rating for past performance were 
raised to excellent, this would not have affected the ratings for this 
criterion overall; its proposal still would be only technically equal 
to the awardee's (both would be good/excellent under the subelements 
and good overall) under this criterion.  Therefore, there is no basis 
for questioning the firms' ratings under the Experience/Past 
Performance criterion.

Inspection/Sanitation

Quaker Valley argues that the agency improperly assigned its proposal 
only fair ratings for the inspection/sanitation subelement under both 
the Quality and Back-Up Zone criteria.  The record shows that the 
primary basis for these ratings was the firm's failure to provide 
current sanitary ratings for its warehouse and distribution 
facilities.  The protester maintains that the RFP did not call for it 
to provide such ratings, and notes that it advised the agency of its 
internal inspection procedures and the "ratings" assigned by its 
quality inspectors of either "o.k.," "needs attention" or "critical."  
The protester further asserts that, in any event, its facility is 
approved by the United States Department of Agriculture (USDA), and 
that the USDA does not assign ratings, but merely passes or fails a 
facility.  The protester states that facilities that fail are closed 
until deficiencies are cured, and that its facility has never been 
closed, as it explained to the agency during a site visit.  

There simply is no reasonable basis for the protester's assertion that 
the RFP did not call for sanitary ratings.  The RFP specifically 
called for offerors to indicate the dates of the last sanitary 
inspections and the ratings assigned for all distribution facilities 
to be used during contract performance.  RFP at 189, 192.  In 
addition, the record shows that, although the protester was 
specifically advised during discussions that its proposal did not 
include sanitary ratings, Quaker Valley did not furnish the 
information.  Further, there was no basis for the agency simply to 
infer  from the fact that its United States facility had not been 
closed by the USDA (or from the firm's proposal) that all of its 
proposed distribution facilities were necessarily satisfactory in the 
area of sanitation.  The requirement here--as reflected in Quaker 
Valley's proposal--includes distribution facilities in both the United 
States, where the USDA has authority to inspect facilities, and 
Europe, where it does not; indeed, the RFP specifically called for the 
information for both United States and overseas facilities.  RFP at 
192.  There thus is no basis to question the agency's assignment of 
fair ratings under these two subelements.

Invoice Prices

Quaker Valley takes issue with the evaluation concerning the number of 
invoices the firm presented to support its proposed delivered prices; 
Quaker Valley submitted invoices for only 14 of the 120 core items 
and, on that basis, the agency assigned its proposal a moderate risk 
rating.[10]  Specifically, Quaker Valley contends that it was unaware 
from its reading of the RFP that it could furnish invoices from its 
subcontractors--it believed it could provide invoices only from one of 
its joint venturers--and that, had the RFP been clear in this regard, 
it would have submitted invoices from its subcontractors.  In support 
of its position, Quaker Valley has submitted a letter from one of its 
subcontractors which states that the firm could have produced invoices 
for 55 of the core items.  

The RFP at 208 provided:

     The Government will evaluate the number of top 120 core item 
     delivered prices that are based on actual current invoice prices 
     of the offeror against the number of prices that are based on 
     industry quotes.  More consideration will be given to offers 
     indicating a high number of delivered prices are based on actual 
     invoice prices of the offeror.  The Government reserves the right 
     to validate any or all delivered prices. 

Quaker Valley's reading of the RFP is simply unreasonable.  Nothing in 
the quoted language describing the invoice-based pricing requirement 
limits offerors to submitting invoices only from the prime contractor 
and, in light of the purpose of the requirement (to establish the 
validity of proposed prices), it is not clear why an offeror would 
have read the RFP in this manner.  Quaker Valley's argument places 
great emphasis on the fact that the instruction provision referred to 
"the offeror," but this term also appeared in virtually every other 
instruction provision, and Quaker Valley read those provisions as 
encompassing subcontractor information (for example, in describing how 
it would meet the CONUS warehousing requirement, Quaker Valley 
referred to both its own and a major subcontractor's 
responsibilities).  On a more practical level, moreover, the agency 
represents that even the additional subcontractor invoices Quaker 
Valley has presented here would not have made a material difference in 
the firm's rating.  This is confirmed by the source selection plan, 
which provides that 55 invoices warrant only a fair rating.  (We note 
that, according to the source selection plan, Quaker Valley's proposal 
actually should have received a poor, instead of a fair, rating in 
this evaluation area for including 47 or fewer invoice-based prices.)

Quaker Valley maintains that the agency improperly assigned its 
proposal a moderate risk rating based solely on the small number of 
invoice prices it submitted.  Quaker Valley concludes that this sole 
deficiency did not provide a reasonable basis to assign its proposal a 
moderate risk while assigning a low risk to Theodor Wille's proposal, 
since Theodor Wille will be able to seek adjustments to its delivered 
prices soon after contract award.

This argument is without merit.  As discussed above, Theodor Wille 
supported 115 of its 120 core item prices with invoices showing the 
actual purchase price of the items.  The agency used the level of 
invoice-based pricing, among other things, to assess the realism of 
the proposals.  Central to the assigning of Quaker Valley's moderate 
risk rating was the agency's conclusion that, because of the lack of 
invoice-based prices, Quaker Valley's proposed pricing, which was 
based primarily only on quoted prices, might not be nearly as 
advantageous as it appeared.  In contrast, the agency rated Theodor 
Wille's proposal as low risk because it supported the realism of its 
proposed pricing with evidence that it had actually obtained the 
prices being offered on a vast majority of the core items.  This was a 
reasonable basis upon which to distinguish between the proposals.

Price/Technical Tradeoff
  
Quaker Valley challenges the agency's source selection decision, 
maintaining that since both its and Theodor Wille's proposals received 
overall good ratings, the award to Theodor Wille at a price premium of 
approximately [deleted] dollars was unreasonable.  The protester 
contends that the differences in the ratings of the proposals (such as 
Theodor Wille's higher fill rate) were minor and thus did not warrant 
this price premium.

Agencies enjoy a relatively broad discretion in making best value 
tradeoffs; such tradeoffs are governed only by the test of rationality 
and consistency with the stated evaluation factors.  GTE Hawaiian Tel. 
Co., Inc., B-276487.2, June 30, 1997, 97-2 CPD  para.  21 at 16-17.  

The source selection was reasonable and consistent with the terms of 
the solicitation.  The record shows that the source selection official 
based his decision on the integrated cost and technical evaluation 
that ranked Theodor Wille's proposal first in terms of technical 
merit.  As noted earlier, Theodor Wille's was the only eligible[11] 
competitive range offer in the northern zone to receive an excellent 
rating under the Distribution criterion, the most important evaluation 
area.  The record further shows that the agency gave weight to the 
other technical areas where Theodor Wille received excellent ratings; 
in all, the firm's proposal was awarded 15 excellent and 15 good 
ratings, whereas Quaker Valley scored only        8 excellent, 20 good 
and 2 fair ratings.  (The agency also considered it significant that 
Theodor Wille's proposal had not been assigned any ratings below good 
whereas Quaker Valley's proposal had received fair ratings under the 
inspection/sanitation subelements.)  The agency specifically 
determined that these technical advantages were worth the price 
premium associated with Theodor Wille's 

proposal.  Given that technical considerations were more important 
than price, and the fact that Quaker Valley's price advantage was 
somewhat mitigated by its moderate risk rating, this determination was 
reasonable.[12]

The protests are denied.

Comptroller General
of the United States

1. Among the contentions we will not discuss, for example, is Upper 
Lakes' assertion that the agency misevaluated Ebrex's proposal under 
the mobilization subelement of the Contingencies criterion, 
maintaining that it should not have received an excellent rating for 
this subelement, or a good for the Contingencies criterion.  The 
record shows, however, that Upper Lakes is simply incorrect from a 
factual standpoint; Ebrex's proposal was rated poor under the 
mobilization subelement and poor for the Contingencies criterion in 
the southern zone, where it received award.

2. Upper Lakes asserts that its rating under the Distribution 
evaluation criterion was changed from good to excellent during the 
agency's evaluation of revised proposals, but that this rating change 
was not "implemented."  A review of the consensus evaluation report 
for the firm, however, shows that the rating was not changed.  Rather, 
it is clear that the narrative portion of the price negotiation 
memorandum that discusses the Upper Lakes proposal erroneously notes 
that Upper Lakes' rating under the criterion was changed from good to 
excellent.  The lower, correct, ratings are reflected in the portion 
of the price negotiation memorandum that contains the agency's 
comparative analysis of the proposals, and also in the consensus 
evaluation report.

3. Upper Lakes also argues that Ebrex (the southern zone awardee) 
refused in its northern zone proposal to commit to deliveries to 
Bosnia within 48 hours.  According to the protester, this should have 
negatively affected its proposal rating for the southern zone under 
the Back-Up Zone Plan evaluation criterion because, if Ebrex were 
required to act as the back-up contractor for the northern zone, it 
would not be bound to meet the 48-hour requirement for deliveries to 
Bosnia.  The record shows, however, that Ebrex, in its southern zone 
proposal, committed unequivocally to perform as the back-up contractor 
for the northern zone within the time frames specified in the RFP.  

4. We arrived at this diffference after correction of a mathematical 
error in the agency's calculations of Interdyne's evaluated BAFO 
price; we also use the corrected figure for Interdyne's BAFO below in 
arriving at the difference between its evaluated BAFO price and Upper 
Lakes' evaluated BAFO price.

5. Upper Lakes argues elsewhere that its proposal should have received 
an excellent rating under the rebates/discounts subelement of the 
Procurement/Pricing criterion.  Even if the rating in this area were 
raised, however, Upper Lakes' proposal still would receive only an 
overall good rating under the criterion, the same rating Theodor 
Wille's proposal received.  This would leave Upper Lakes' proposal 
with only two excellent ratings as compared to Theodor Wille's three 
excellent ratings. 

6. We note, in any case (as we point out in our discussion of the 
Quaker Valley protest below), that the agency had a reasonable basis 
for the Experience/Past performance ratings that it assigned to the 
Theodor Wille proposal.

7. We note as well that the agency concluded, based on a comparison of 
the offerors' delivered prices to one another, and to the government 
estimate, that the delivered prices offered were reasonable.  This was 
all DLA was required to do in its price realism analysis, and our 
review of the record indicates that DLA's analysis, and its 
conclusion, were reasonable.  Federal Acquisition Regulation (FAR)  sec.  
15.805-2 (June 1997); see Ameriko, Inc., B-277068, Aug. 29, 1997, 97-2 
CPD  para.  76 at 3.  As for the distribution fee element, no realism 
assessment was necessary since the prices for that aspect of the 
contract were fixed-price in nature.  

8. For the same reason, Upper Lakes in not interested to pursue its 
argument that the agency improperly failed to adhere to the terms of 
the RFP in making award to lower-priced offerors despite the fact that 
the solicitation provided that price would be less important than 
technical merit. 

9. Quaker Valley contended in its original protest that the evaluation 
was improper under the Quality criterion's supplier selection 
subelement, the Contingencies criterion's operational deployment 
subelement, the Back-Up Zone Plan criterion's operational deployment 
subelement and the Procurement Pricing criterion's rebates/discounts 
subelement.  In addition, Quaker Valley argued that the agency engaged 
in improper discussions with Theodor Wille.  In its comments, Quaker 
Valley makes no mention of these contentions.  We deem them abandoned.  
TMI Servs., Inc., B-276624.2, July 9, 1997, 97-2 CPD  para.  24 at 4 n. 3.

10. The parties dispute whether Quaker Valley included invoice-based 
prices for 6 or 14 items.  We use the higher figure--14--alleged by 
Quaker Valley.

11. Ebrex was ineligible because it received award in the southern 
zone.

12. Quaker Valley also challenges the award decision on the ground 
that the percentage difference between the firms' distribution prices, 
which was even greater than the percentage difference between the 
firms' prices overall, should have been more significant in the price 
evaluation, since the delivered prices were unreliable because they 
could change after award.  However, the RFP did not provide for 
according the distribution prices any greater weight.  Moreover, the 
invoice-based pricing requirement operated to ensure that proposed 
delivered prices in fact were reliable.  It was Quaker Valley's 
failure to provide invoice-based prices that led the agency to assign 
the firm's proposal a moderate risk.