BNUMBER: B-279811
DATE: July 24, 1998
TITLE: Applied Companies, B-279811, July 24, 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:Applied Companies
File: B-279811
Date: July 24, 1998
Brian J. Donovan, Esq., Peter B. Jones, Esq., and Toni L. DeGasperin,
Esq., Jones & Donovan, for the protester.
Jeffrey I. Kessler, Esq., and John J. Reynolds, Esq., Department of
the Army, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency properly excluded protester's two proposals from the
competitive range where protester's responses to discussion questions
(especially regarding ability to comply with system capacity
requirements, which was identified as a proposal deficiency) lacked
sufficient detail to satisfy agency's concerns about feasibility of
approach and protester's understanding of requirements, and where
record shows that, as a result, protester's proposals no longer had a
reasonable chance for award.
2. Contracting agencies are not obligated to afford all-encompassing
discussions that "spoon-feed" an offeror each item that must be
addressed to improve a proposal; agencies are only required to lead
offerors into the areas of their proposals considered deficient and
requiring amplification.
DECISION
Applied Companies protests the exclusion of its two proposals from the
competitive range under request for proposals (RFP) No.
DAAB07-97-R-E341, issued by the U.S. Army Communications-Electronics
Command (CECOM). Applied challenges the agency's evaluation of its
proposals and contends that the agency failed to conduct meaningful
discussions with the firm.
We deny the protest.
The RFP, as amended, contemplated the award of a fixed-price contract
for 42 split-pack air conditioners (referred to as Environmental
Control Units (ECU)), capable of producing a normal cooling capacity
of 24,000 (24K) British Thermal Units per Hour (BTUH) and a normal
heating capacity of 30,000 BTUH; these ECUs will replace current
18,000 (18K) BTUH units used in Patriot Missile shelters.[1] RFP, sec.
B, at 4. Offerors were to submit detailed technical proposals for the
design and development of the ECUs in accordance with the statement of
work and purchase description specifications included in the RFP.[2]
Section L of the RFP advised offerors that the "technical proposal
should demonstrate a clear understanding of all the features involved
in solving the problems and meeting the technical requirements." RFP sec.
L, para. 3.0, at 58. Each offeror was to describe how it would meet the
performance requirements and schedule. The offeror was to submit
"drawings, sketches, graphs, special analyses (e.g., model test
results), calculation, design data, supporting narrative and/or other
technical information outlining the proposed air conditioner design
and performance characteristics." RFP sec. L, para. 3.1, at 59.
Award was to be made to the offeror submitting the proposal determined
to offer the government the best value, considering the following
evaluation factors: technical; performance risk; and price (the
technical factor was slightly more important than performance risk,
which was slightly more important than price). RFP sec. M-4, para. 1.0, at
62. The technical factor included the following equally-weighted
subfactors: 24K split-pack design; capabilities, plans, personnel,
and facilities; test and evaluation; and contract master schedule.[3]
RFP sec. M-4, para. 2.0, at 62.
Offerors were advised that each technical proposal would be "evaluated
to determine the extent to which the technical requirements have been
addressed and understood . . . [and that mere] statements of
compliance or repetition of the technical requirements without an
intelligent, complete discussion and analysis are unsatisfactory."
RFP, amend. 0008, sec. M-4, para. 3.1(a), at 2. As to the 24K split-pack
design subfactor of the technical factor, offerors were expressly
notified that the agency's evaluation of the "feasibility of approach"
would involve the agency's "level of confidence" in the proposal and
the "completeness, feasibility, soundness of approach, potential risk,
and amount and quality of supporting technical analysis" of the
proposal. Id. para. 3.1(b).
Four proposals, including two from Applied, were received by the
closing date of October 15, 1997. Each of Applied's proposals offered
a different electrical power source technology--one proposed using the
[deleted] generator, and the other proposal offered the [deleted]
(MPI). Both of Applied's initial proposals were found to be
susceptible to being made acceptable, and each was rated as having a
moderate performance risk. One of the other two offerors' proposals
was rated as technically acceptable, the other was considered to be
susceptible to being made acceptable, and both were rated as having
low performance risk. Applied's proposals (at $[deleted] for the
[deleted] proposal, and $[deleted] for the MPI proposal) were
lower-priced than the others (at $[deleted] and $[deleted],
respectively). All four initial proposals were included in the
competitive range.
Discussions were conducted through the issuance, on December 23, of
written items for negotiations (IFN) for each proposal. CECOM issued
52 IFNs to Applied regarding its [deleted] proposal, and 41 IFNs for
its MPI proposal. The cover letter transmitted with the IFNs advised
that the requested information was necessary "to more fully evaluate
[its] proposal" and that its answers must "clearly and fully respond
to each IFN . . . [since the failure] to rectify these deficiencies
may result in [its] proposal being found to be unacceptable." Each
IFN referenced relevant RFP requirements and Applied's associated
proposal sections; and each IFN contained one or more questions, or
requests for additional information, related to a proposal weakness or
deficiency.
The most significant IFN for purposes of this protest was No. C014,
issued to Applied for its [deleted] proposal (which generally mirrored
a separate IFN also issued to the firm for its MPI proposal). The IFN
included the RFP reference for the design and layout of the proposed
technical approach (RFP sec. L, para. 3.1.A.1(a)) and the relevant portion
(volume II) of the protester's proposal, and informed Applied that its
"[deleted]. How will the system capacity of 24,000 BTUH be met?"
Applied submitted its IFN responses by the January 7, 1998 deadline
set for all offerors' responses; this date reflected a 1-day extension
granted in response to Applied's request for additional time in light
of the firm's holiday closure earlier that week.[4] In response to
IFN No. C014 (and a substantially similar IFN for its other proposal),
Applied only generally stated that [deleted], and that, although
[deleted], Applied was unable, given the time allowed, to identify the
claimed incorrect input data. In this regard, Applied stated in its
response that if CECOM had been more specific in identifying the exact
data perceived to be incorrect, it could have assessed whether it
agreed that the data were incorrect. Applied then stated that it had
checked with the [deleted] that had prepared the questioned data, who
confirmed the accuracy of the data; the [deleted] also added that if
data report changes were necessary they "can be done in a matter of
seconds."
The agency found that Applied's IFN responses, primarily regarding the
[deleted] deficiency raised in IFN No. C014, failed to raise the
agency's low level of confidence in the feasibility of the protester's
proposed approach, and similarly failed to cure the agency's concerns
about the offeror's apparent lack of demonstrated understanding of the
critical system capacity requirements. After evaluation of the IFN
responses, the agency determined that Applied's two proposals were
technically unacceptable under the 24K split-pack design subfactor,
and that major revision to the proposals would be necessary to make
them acceptable. Since the proposals received only [deleted] (which
ratings the protester does not challenge), both proposals were
determined to be unacceptable overall for the technical factor.
Technical Factor Evaluation Final Report, February 9, 1998.
Consequently, the Applied proposals were excluded from the competitive
range, due to the agency's determination that they no longer had a
chance of being selected for award when compared to the two remaining
lower-risk, higher technically rated proposals (one rated as good, and
at only a slightly higher price than Applied's proposals, and the
other rated acceptable). Interim Competitive Range Memorandum,
February 9, 1998, at 2.
The protester alleges that during its debriefing, it first learned
that the agency's claimed [deleted] involved the protester's proposed
system's liquid temperature at the evaporator ([deleted]), which the
agency believed was too low to reach system capacity with the
evaporator coil proposed. Applied filed an agency-level protest on
March 7, challenging the exclusion of its proposals from the
competitive range, since the agency, according to Applied, had failed
to conduct proper discussions with the firm. The agency denied that
protest by decision of April 7. This protest followed.
Applied protests the propriety of the agency's technical evaluation of
its ECU design proposals, and the exclusion of those proposals from
the competitive range after discussions.[5] The competitive range
consists of all proposals that have a reasonable chance of being
selected for award. Intown Properties, Inc., B-250392, Jan. 28, 1993,
93-1 CPD para. 73 at 3. In reviewing a determination to exclude a
proposal from the competitive range, we first review the agency's
evaluation of the proposal; we will not reevaluate the proposal, but
will examine the record of the agency's evaluation to ensure that it
was reasonable and in accord with stated evaluation criteria.
Labat-Anderson Inc., B-246071.4, Oct. 9, 1992, 92-2 CPD para. 244 at 6.
The offeror has the burden of submitting an adequately written
proposal and proposal revisions for the agency to evaluate, and an
offeror's disagreement with the agency's judgment is not sufficient to
establish that the agency acted unreasonably. Id. If the agency's
evaluation is reasonable, there is nothing improper in an agency's
making more than one competitive range determination and dropping a
firm from further consideration once it becomes evident that the
offeror no longer has a reasonable chance of receiving the award.
Este Medical Servs., Inc., B-261845.2, Sept. 29, 1995, 95-2 CPD para. 240
at 4; Johnston Communications, B-221346, Feb. 28, 1986, 86-1 CPD para. 211
at 4.
In its IFN response, Applied basically asserted that its ECU design
proposals were technically acceptable because [deleted]--and Applied
basically stated that its data were accurate because its [deleted]
stated that they were accurate. The RFP provided, however, that
general statements of compliance were unacceptable; as the agency
points out, what the protester failed to adequately do in its
proposal, and in its IFN response to the question ("How will the
system capacity of 24,000 BTUH be met?") was to sufficiently describe
how the proposed overall system would accomplish the requisite cooling
levels. The record shows that liquid refrigerant temperature at the
evaporator is just one factor in the proposed ECU's overall operation
and compliance with RFP capacity requirements. Here, it is the
[deleted] (and related data) proposed, including the [deleted] units,
which the agency needed the protester to more fully describe in order
to evaluate the acceptability of the proposed approach for system
capacity, as well as the protester's understanding of the requirement,
but which the protester failed to sufficiently detail.
The contracting officer explains that the conclusion that Applied's
proposed evaporator coil was undersized for system capacity was not
based solely on the [deleted], but on Applied's [deleted] of the
required evaporator capacity, since, for instance, the proposal failed
to allow [deleted]. Contracting Officer Statement at 12. The agency
points out that the other offerors provided for these allowances by
proposing [deleted], and presented data indicating [deleted] than
Applied's system.
Our review of the protest record shows that Applied has not refuted
the reasonable bases upon which the agency questioned the capacity of
its proposed systems. Rather, the firm continues to contend that the
agency was wrong to downgrade and exclude its proposals, since Applied
is an experienced contractor that could revise its proposals to
provide for "further subcooling" to meet the agency's concerns, and
because its [deleted] have been confirmed as sufficient by the
[deleted] that prepared them. Protest at 9; Protester's Comments at
8. These responses, however, are not persuasive, since neither the
additional [deleted] approach nor the [deleted] post-protest
documentation was included in Applied's proposals or IFN submission
for proper, timely evaluation. The time period following an offeror's
proposal's exclusion from the competitive range, including the protest
process, is not the time for an offeror to submit new or more detailed
proposal information for evaluation to satisfy RFP requirements or
attempt to demonstrate an ability to meet those requirements.[6]
The RFP, as stated above, specifically advised offerors that their
proposals had to demonstrate an understanding of the requirements and
advised that the proposed design would be evaluated for "completeness,
feasibility, soundness of approach, potential risk, and amount and
quality of supporting technical analysis." RFP, amend. 0008, sec. M-4, para.
3.1(b), at 2. In our view, the protester's mere general statements of
compliance, even after discussions which included the agency's request
for information regarding system capacity and related data, provided a
reasonable basis for the agency's substantial downgrade of the
proposals under the relevant design factor. The overall low technical
rating assigned to the proposals is further supported, we believe, by
the fact that the protester does not challenge the numerous other
weaknesses and disadvantages cited in its proposals which, in our
view, reasonably support its lower technical ratings and higher
associated risk. Moreover, we think the agency's concerns about the
protester's failure to convincingly detail the feasibility of its
technical approach for the ECU units are also reasonably supported by
the minimal allowance here, if any, for performance failure of any
sort, given the critical role of a properly functioning ECU in the
successful operation of the Patriot Missile systems, and the
protection of the agency's personnel and critical missile-related
computer operations.
In sum, based upon our review of the record, we conclude that the
agency reasonably determined that Applied's proposals no longer had a
reasonable chance for award. Accordingly, there is no basis for us to
question the propriety of the agency's determination to exclude its
proposals from the competitive range after discussions.
Applied protests that its proposal problems, if any, were the result
of the agency's failure to conduct meaningful discussions with the
firm. In particular, Applied states that the agency misled it in
discussions by mentioning, in IFN No. C014, incorrect input data
(without identifying exact [deleted] information being questioned),
when the agency later explained that it was fundamentally concerned
with whether system capacity requirements would be met. We disagree.
The record is clear that Applied's proposals at all times gave the
agency substantial concern as to the firm's actual understanding of
the critical system requirements under the RFP; in particular, the
agency was concerned with how Applied proposed to meet system capacity
requirements, which were paramount to successful performance. Applied
was specifically told that the [deleted] was considered deficient, and
that a complete and detailed response was required from the firm
before its technical proposals could be found acceptable. The record
speaks for itself--the agency directly and meaningfully discussed this
concern by raising the IFN No. C014 bottom-line question: "How will
the system capacity of 24,000 BTUH be met?" In our view, the agency's
mention of perceived incorrect data was not misleading, since the
clear message of the IFN involved how the offeror proposed to meet the
system capacity requirements (in order to evaluate the proposals'
compliance with RFP requirements and the offeror's understanding of
those requirements). The IFN clearly necessitated sufficient
discussion from Applied explaining the proposed system, including
related data, which Applied failed to provide.
While agencies generally are required to conduct meaningful
discussions by leading offerors into the areas of their proposals
requiring amplification, this does not mean that an agency must
"spoon-feed" an offeror as to each and every item that must be revised
or otherwise addressed to improve a proposal. LaBarge Elecs.,
B-266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6; Estes Medical Servs.,
Inc., supra, at 5. Given the RFP and IFN instructions for detailed
explanations of an offeror's proposed approach to system capacity
requirements, it is clear that IFN No. C014, calling for an
explanation of how the system capacity requirements would be met by
Applied, reasonably led the firm into the area of its proposals
identified as a deficiency and in need of amplification or correction.
The protester was reasonably on notice that its proposals in this area
were not adequate to meet RFP requirements, and simply failed to
respond with the specificity requested and required.
The protest is denied.
Comptroller General
of the United States
1. The agency reports that a Patriot Missile shelter's ECU is critical
to the successful operation of the missile system, because it protects
the soldiers operating the system, as well as the sensitive computer
support equipment, from harsh environmental conditions including
extreme temperatures. The agency explains that the split-pack design
refers to operating configurations where the ECU's evaporator and
condenser sections are separated, compared to where they are connected
in one horizontal unit; the 24K BTUH unit is to fit in the shelter
space previously used by the smaller capacity 18K BTUH unit. U.S.
Army Materiel Command Legal Memorandum, May 18, 1998, at 2.
2. The contracting officer explains that the refrigeration cycle for
an ECU unit involves a compressor that pumps hot refrigerant (raising
the pressure of the refrigerant gas) to the condenser coil where the
vapor condenses to a liquid (releasing energy in the form of heat);
the refrigerant (at reduced pressure) in the connecting expansion
valve is fed through the system to the evaporator coil where the
liquid refrigerant (at lower pressure) expands and evaporates,
absorbing heat and lowering the temperature of the evaporator ambient
air. As the contracting officer points out, the "performance of the
refrigerant cycle is dependent upon the interaction of all the
components." Contracting Officer Statement at 6.
3. A fifth, lower-weighted subfactor, small business and small
disadvantaged business subcontracting plan, was not part of the
evaluation, since all the proposals were submitted by small
businesses.
4. On December 29, Applied requested information from the agency
regarding the role of the IFNs in the procurement process and their
effect on the award determination. In that request, Applied
acknowledged that, given the timing of the proceedings, the firm
understood that answers to some of its questions may not be issued
until after award. Although Applied had not received any response
from the agency regarding its procedural questions, the protester
submitted its IFN responses on January 7. Applied now contends that
if it had known the IFN responses would be important to the evaluation
of proposals for award, it would have submitted additional
information. We simply cannot see how Applied was, as it alleges,
misled by the role of the IFN questions and responses, or how it was
reasonably prejudiced by the agency's failure to respond to its
questions prior to the submission of its IFN responses. The IFN cover
sheet clearly set forth that the IFN responses were to be used in the
evaluation of proposals and that noted proposal deficiencies were to
be rectified in the IFN responses. Further, to the extent Applied
contends that it had insufficient time to prepare more detailed IFN
responses, the challenge is untimely. 4 C.F.R. sec. 21.2(a)(1) (1998).
5. In its protest of April 14, Applied also challenged the agency's
determinations regarding some of the additional major and minor
disadvantages found in the Applied technical proposals, as well as the
agency's alleged failure to meaningfully discuss those problems with
the firm. The protester, however, failed to pursue these contentions
in its comments in response to the agency's explanation of its
evaluation determinations; we therefore consider them abandoned. See
The Big Picture Co., Inc., B-220859.2, Mar. 4, 1986, 86-1 CPD para. 218 at
5.
6. In any event, the agency evaluators report that this untimely
submitted technical data also fail to relieve their concerns about the
protester's proposed design and understanding of the overall RFP
requirements, since the BTUH capacity claimed by the protester, unlike
the [deleted] capacities offered by its competitors' systems, does not
allow for additional [deleted] requirements relating to heat generated
by the evaporator motor and other components; also, [deleted], which
was not fully addressed by Applied, raised concerns of possible
[deleted]. Contracting Officer Statement at 12; Draft Government
Replies to Applied's Correspondence of Mar. 2, 4, and 5, 1998. The
record also refutes Applied's contention that other offerors were
found acceptable with similar or less acceptable input data. Those
offerors proposed different coils, with different (higher-rated)
capacities, and, despite the claim of less data having been presented
by another offeror, the record reasonably shows the agency had no
reason to question the technical acceptability of the data presented,
since the higher temperatures and capacities offered by the offeror
fell within expected parameters supported by the agency's experience,
where Applied's proposal information did not.