BNUMBER:  B-280133; B-280133.2           
DATE:  September 3, 1998
TITLE: Electronic Data Systems Corporation, B-280133; B-280133.2,
September 3, 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:Electronic Data Systems Corporation

File:B-280133; B-280133.2          
        
Date:September 3, 1998

David S. Cohen, Esq., Andrew B. Katz, Esq., John J. O'Brien, Esq., 
Alex D. Kondï¿½, Esq., and Laurel Ann Hockey, Esq., Cohen Mohr LLP, for 
the protester. 
John W. Chierichella, Esq., Catherine E. Pollack, Esq., Fried, Frank, 
Harris, Shriver & Jacobson, for BDM International, Inc., an 
intervenor. 
Maj. Jonathan C. Guden, Department of the Army, 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

Protest that agency significantly understated the savings associated 
with the identified discriminators in its technical proposal, 
including time savings for travelers and authorizing officials 
resulting from proposed accelerated deployment of new official travel 
system, is denied where:  (1) solicitation assigned only limited 
weight to deployment in the technical evaluation; and (2) agency 
reasonably focused on budgetary savings generated by a reduction in 
staffing rather than more intangible, incidental time savings and 
quality of life enhancements for travelers and authorizing officials. 

DECISION

Electronic Data Systems Corporation (EDS) protests the Department of 
the Army's award of a contract to BDM International, Inc., under 
request for proposals (RFP) No. DAMT01-97-R-1003, for a new official 
travel system and travel management services.  EDS primarily 
challenges the best value determination.

We deny the protest.

The solicitation contemplated award of a fixed-price requirements 
contract for a base period of 5 years, with three 1-year options, for:  
(1) a new travel management software system, designated the Common 
User Interface (CUI), to be deployed to Department of Defense (DOD) 
users worldwide; (2) operation and maintenance of the CUI; and (3) 
travel management services with respect to official travel performed 
by travelers assigned to organizations in Defense Travel Region (DTR) 
6 (comprised of the states of North Dakota, South Dakota, Nebraska, 
Minnesota, Iowa, Missouri, Wisconsin, Illinois, Michigan, Kentucky, 
and Indiana, and other designated areas).  The CUI is an automated 
software system that will facilitate travel management by allowing DOD 
travelers to use their personal computers to handle functions that 
were previously performed on paper and in multiple steps, ensuring 
compliance with DOD travel policies, performing financial and 
accounting functions (such as "should cost" estimates, financial 
settlement computation, and electronic fund transfers), and 
maintaining travel data.

The solicitation provided for award to be made to the "responsible 
Offeror whose offer represents the best overall value to the 
Government" under the following four criteria (listed in descending 
order of importance):  (1) written proposal, comprised of factors for 
performance work statement (PWS) (with subfactors for CUI 
architecture, CUI functionality, CUI support and travel management 
services), past performance/prior experience/financial history, and 
subcontracting plan; (2) demonstration; (3) price/fees, including 
cost/price and point-of-sale discount (including discount for official 
air travel services and rebate of a percentage of the commissions 
received on all non-air travel services); and (4) oral presentation.  
RFP  sec.  M.7, Basis for Contract Award and Relative Importance of 
Evaluation Areas (Official).  The solicitation stated that price/fees 
were "significantly less important than the combined evaluation of the 
written proposal, demonstration, and oral presentation."  Id.   

Two proposals, from BDM and EDS, were received by the closing time.  
Both were included in the competitive range.  Following discussions 
with the offerors, the Army requested best and final offers (BAFO).  
Based upon its evaluation of BAFOs, the source selection evaluation 
board (SSEB) rated the proposals as follows:

                                           BDM          EDS

WRITTEN PROPOSAL                                  

    PWS (Overall)                    Good         Good

       CUI Architecture                 Good         Good

       CUI Functionality                Good         Good

       CUI Support                      Good         Good

       Travel Management                Good         Excellent

    Performance/Experience/Financial (Overall)GoodGood

       Past Performance                 Excellent    Good

       Prior Experience                 Good         Good

       Financial History                Satisfactory   Satisfactory

     Subcontracting[1]               Good         Good

DEMONSTRATION                        Good         Good

PRICE/FEES                                        

    Cost/Price                       $263.7 million$[DELETED]

    Less Discount (original/corrected)[2]$[DELETED]$[DELETED]

    Net Cost (original/corrected)    $[DELETED]   $[DELETED]

ORAL PRESENTATION                    Satisfactory Good            

In addition, as part of its evaluation of BAFOs, the source selection 
advisory council (SSAC) established a working group to identify and 
quantify discriminators between the proposals.  The evaluators 
identified 37 discriminators, of which 28 were advantages offered by 
EDS's proposal and 9 were advantages offered by BDM's.  Ten of the 37 
discriminators were evaluated as having a determinable value; 6 of 
these were evaluated as offering direct dollar cost savings and 4 were 
evaluated as offering opportunity cost savings generated from a 
reduction in required time and effort on the part of DOD personnel.  
The direct cost discriminators totalled $107.58 million for EDS's 
proposal and $180,000 for BDM's; the opportunity cost discriminators 
totalled $130.46 million for EDS's proposal and $5.6 million for 
BDM's. 

The SSAC found that while EDS's proposal had an advantage with respect 
to its written proposal--based on EDS's advantage with respect to the 
PWS, compared to BDM's slight advantage with respect to 
performance/experience/financial--and oral presentation, BDM's 
proposal had an advantage with respect to price/fees.  (Neither 
proposal had an advantage with respect to the demonstration.)  The 
SSAC concluded that "the value-added benefits that EDS proposed were 
not compensatory to the higher price/fees proposed by EDS," which were 
[DELETED] BDM's.  SSAC Memorandum for the Source Selection Authority.         

Likewise, the source selection authority (SSA) concluded that the 
"slightly more advantageous PWS and Oral Presentation" rating of EDS's 
proposal did not offset the "significantly more advantageous 
Price/Fees" of BDM's proposal.  Source Selection Decision Statement, 
Defense Travel Region Six, Official Travel Services, at 4.[3]  In this 
regard, as part of his "best value judgment," the SSA specifically 
determined that the increased value for EDS's software associated with 
the identified discriminators "is an optimistic value and that the 
opportunity [cost] savings in particular are speculative and will not 
materially [a]ffect DOD's bottom line costs."  Id.  For example, the 
SSA noted that opportunity cost savings of 205 staff years ($61.458 
million) were attributed to EDS's proposal based on the calculation 
that the greater ease-of-use of EDS's CUI screens would save 4 minutes 
per travel record transaction.  The SSA concluded that "given that 
making travel arrangements is a small part of most DOD employees' 
tasks, I cannot conclude that the DOD will eliminate, save or reduce 
any of the 205 positions based upon the use of one CUI versus 
another."  Id.  The SSA determined that in view of the advantage held 
by BDM's proposal in the performance/experience/financial, 
subcontracting and price/fees areas, BDM's proposal was the best value 
overall.  Upon learning of the resulting award to BDM, EDS filed this 
protest.

QUANTIFICATION OF DISCRIMINATORS

EDS argues that the agency significantly understated the savings 
associated with the identified discriminators and, as a result, the 
advantages offered by EDS's proposal were not adequately considered in 
the source selection decision.  EDS primarily challenges the agency's 
calculation of the savings associated with EDS's proposal of an 
accelerated schedule for CUI deployment.  In this regard, section 
F.5.2 of the RFP listed performance locations within DTR 6 and set 
forth a date for each location by which full contract performance was 
to commence; overall, full contract performance within DTR 6 was to 
commence within 2 years of award.  In addition, section F.5.3 listed 
performance commencement dates for a small number--approximately 
214--of the many locations outside DTR 6.  Although the agency 
expected that complete worldwide deployment of the CUI would take 
place within the contract's 5-year base period, Contracting Officer's 
Statement, July 10, 1998, at 11, the RFP did not establish a detailed 
schedule for deployment of the CUI to all DOD sites worldwide.

While BDM's proposal was evaluated as offering DTR 6 deployment in 
accord with the 2-year solicitation schedule, its "[a]ggressive 
worldwide deployment schedule" of 38 months was rated a strength.  
SSAC Memorandum for the Source Selection Authority, Attached 
Evaluation of BDM Performance Work Statement, CUI Support, CUI 
Deployment to DOD Users.  EDS's proposal of complete DTR-6 deployment 
within 12 months and worldwide deployment within 24 months also 
received a strength for an "[a]ggressive deployment schedule."   SSAC 
Memorandum for the Source Selection Authority, Attached Evaluation of 
EDS Performance Work Statement, CUI Support, CUI Deployment to DOD 
Users.  In addition, EDS's proposed accelerated deployment schedule 
was identified as a discriminator between the proposals which was 
likely to result in direct--rather than opportunity cost--savings of 
$38.05 million.  In calculating this level of savings, the agency 
assumed that (1) direct monetary savings would only occur in 
connection with administrative personnel, not travelers and 
authorizing officials; (2) yearly savings from use of EDS's CUI would 
total $76.1 million (the savings at contract year 8--i.e., after full 
deployment and transition); and (3) the government would be able to 
take advantage of only 6 months of EDS's proposed acceleration.  The 
Army credited EDS with only 6 months of acceleration because of 
limitations imposed by the time the Army would require to transition 
from the current commercial travel contracts in effect for the various 
sites, train government personnel in use of the system and draw down 
the government's excess travel management capacity, and because of the 
risk that EDS would be unable to deploy as proposed.  Declaration of 
SSEB Chief of Cost Team, July 27, 1998, at 2-3; SSAC Memorandum for 
the Source Selection Authority, Attached DTS Value Analysis.

EDS challenges the Army's determination that DOD would save only $38.5 
million as a result of EDS's proposed accelerated deployment schedule.  
EDS asserts in this regard that the agency's determination that DOD 
could take advantage of only 6 months of acceleration was inconsistent 
with provisions of the RFP that, in EDS's view, suggested that a 
24-month deployment schedule would be feasible.  Further, the 
evaluation allegedly ignored the single most important component of 
the protester's claimed additional savings--cost savings related to 
the time saved by travelers and authorizing officials under the new 
travel management system were not considered in the agency 
calculation.  EDS Comments, July 17, 1998, at 36; EDS Comments, Aug. 
5, 1998, at 12.  According to EDS, the agency acted unreasonably in 
limiting its calculation of savings to those that will accrue to 
administrative personnel; EDS asserts that travel reengineering 
studies generally have included travelers' and authorizing officials' 
time savings when calculating the total possible savings.  In this 
regard, EDS notes that in a 1997 study prepared for DOD's travel 
reengineering officials, approximately $312 million of the 
approximately $402 million overall yearly savings attributed to the 
new travel system when fully implemented were associated with time 
savings accruing to travelers and authorizing officials.  Initial 
Economic Analysis, DOD Travel Reengineering Project, Sept. 10, 1997, 
at 6-1; EDS Comments, July 17, 1998, at 42-43. 

We find that EDS has not shown that its proposal was entitled to 
significantly greater credit in the cost/technical tradeoff for its 
proposed accelerated CUI deployment.  In this regard, an agency may 
not give weight or consideration to a factor in the best value 
determination that is disproportionate to the weight assigned to that 
factor under the RFP's technical and price/cost evaluation scheme.  
Here, the record shows that EDS's proposal in fact did receive a 
strength for an aggressive deployment schedule under the CUI 
Deployment to DOD Users evaluation element.  That element, however, 
was only one of seven evaluation elements set forth in the RFP under 
the CUI Support subfactor, which itself was only one of four 
subfactors under the PWS factor, which, in turn, was only one of three 
factors under the Written Proposal criterion, and that criterion was 
only one of four evaluation criteria.[4]  Attributing a value 
exceeding $200 million to accelerated CUI deployment would, in our 
view, have meant giving that element weight grossly disproportionate 
to its weight in the RFP evaluation scheme. 

Moreover, we conclude that in deciding whether to pay a significantly 
higher price (approximately $[DELETED]), the Army reasonably 
discounted the cost impact of additional time savings and quality of 
life enhancements for travelers and authorizing officials resulting 
from EDS's accelerated deployment and easier-to-use CUI screens.  We 
think the SSA reasonably determined that since travel administration 
is not the primary duty of travelers and authorizing officials, any 
increased time that travelers and authorizing officials will be able 
to devote to their primary duties under EDS's approach will not in 
fact result in any cost savings through personnel reductions.  
Declaration of Chief of Cost Team, July 27, 1998, at 12-13.  

DOD's Economic Analysis, cited by EDS, is not inconsistent with this 
conclusion.  That study recognized that "[i]n practice, Traveler[s'] 
and [Authorizing Officials'] primary mission performance should 
improve because less time is consumed in travel process activities," 
and that the calculated savings under the agency's program analysis 
and evaluation model are "extremely high" because the model treats 
time savings on the part of travelers and authorizing officials as 
tangible savings.  Economic Analysis at 4-7.  However, the Economic 
Analysis recognized the distinction between direct, tangible monetary 
savings from staffing reductions and opportunity cost savings, finding 
that:    

     the savings in the Traveler and Mission areas are reductions of 
     the lost mission time spent by Travelers and [Authorizing 
     Officials] conducting travel processes.  Although measurable, 
     these savings are not tangible in that reductions to DOD 
     Travelers or [Authorizing Officials] are not feasible results of 
     an improved travel system.

Id. 

In summary, deployment considerations were only assigned limited 
weight under the solicitation, and in determining the extent of the 
credit to be given in this regard, the agency reasonably focused on 
savings generated by a reduction in staffing rather than more 
intangible, incidental time savings and quality of life enhancements 
for travelers and authorizing officials.  We find nothing in EDS's 
arguments that would lead us to conclude that any additional savings 
that could reasonably be expected to result from EDS's discriminators 
would have altered the technical evaluation and offset BDM's 
significant price advantage in the cost/technical tradeoff.[5] 

DISCUSSIONS   

EDS argues that the Army failed to conduct meaningful discussions and, 
indeed, misled it during the discussions that were held regarding its 
proposal, by questioning EDS concerning its ability to meet the 
accelerated deployment schedule, but failing to advise EDS that the 
agency viewed its proposed accelerated deployment as not achievable 
and of no value to the government.[6]  EDS asserts that it proposed a 
significantly more costly approach in order to accelerate deployment.  
(According to EDS, "its entire bidding strategy [DELETED] were all 
driven by the need to meet the accelerated two year schedule."  EDS 
Comments, July 27, 1998, at 30.)  

EDS's argument is based on an incorrect premise--that the Army did not 
consider EDS's proposed accelerated deployment to be of value.  
Although the Army did not believe that it could take advantage of all 
of the proposed acceleration, it credited EDS's proposal with 6 months 
of acceleration and assigned the proposal a technical strength on this 
account.  Further, EDS had no reasonable basis for assuming that it 
would receive additional credit; the solicitation did not require 
consideration of savings from accelerated deployment in the evaluation 
of price/fees, and only assigned deployment considerations a limited 
weight in the technical evaluation.[7]

BDM'S PRICE

EDS argues that the source selection decision was flawed because the 
SSA was unaware of, and thus failed to take into account, the concern 
expressed by the evaluators, that BDM's proposal included the cost for 
as few as [DELETED] staff years per year--based on a calculation of 
one staff year for every $114,000 in price--for CUI operations and 
maintenance (O&M); approximately 300 staff years were assumed in the 
government's most probable cost (GMPC) estimate, and the evaluators 
concluded that the cost of additional required staff could total as 
much as $[DELETED] over the life of the contract.[8]  BDM Consensus 
Evaluation Worksheet (Official) (BAFO) at 3-4; BDM Individual 
Evaluation Worksheet, Best and Final Offer (BAFO) Official, E. G. 
Dickens Jr.; Declaration of SSEB Chief of Cost Team, July 27, 1998, at 
14-16.   

The record indicates that the SSAC determined that the issue was not 
significant, and thus that the SSA need not be briefed on it, because 
BDM had reaffirmed the sufficiency of its staffing during discussions, 
its overall price was within (albeit at the lower end of) the cost 
range in the agency's GMPC,[9] and the solicitation provided for award 
of a fixed-price contract under which the contractor would be 
responsible for any additional costs of performing the statement of 
work.  SSAC Chairman Memorandum, July 2, 1998, at 3-4; Contracting 
Officer's Statement, July 10, 1998, at 49-50; Declaration of SSEB 
Chief of Cost Team, July 27, 1998, at 14-16.  Reflecting this latter 
fact, the solicitation neither established minimum staffing levels nor 
required the submission of proposed staffing levels or of detailed 
cost and pricing data in support of an offeror's proposed approach.  
Although the solicitation did generally provide that "[e]xcessively 
high or low cost/price may be deemed to indicate a lack of 
understanding of the requirements of this solicitation," RFP  sec.  
M.7.3(a), BDM's overall price was not viewed as excessively low--it 
was within the cost range in the agency's GMPC.  Furthermore, the fact 
that BDM's technical proposal received the same final overall rating 
as did EDS's under the Written Proposal evaluation criterion, a rating 
EDS has not shown to be unreasonable, indicates that the Army viewed 
BDM's overall understanding of the solicitation favorably.  In these 
circumstances, and in view of BDM's significant price advantage and 
favorable technical evaluation, this argument provides no basis for 
disturbing the award.

The protest is denied.

Comptroller General
of the United States

1. SSAC Memorandum for the Source Selection Authority, Attached 
Area/Factor/Subfactor/Element [Evaluation].

2. Contracting Officer's Statement, July 10, 1998, at 30-31.

3. In addition to the advantages of BDM's proposal as identified by 
the SSAC, the SSA concluded that BDM's proposal also was more 
advantageous with respect to subcontracting, due primarily to BDM's 
past performance in this regard. 

4. EDS suggests that consideration of its accelerated deployment 
schedule also would have been appropriate under other evaluation 
factors, including:  (1) Logistics Support, another evaluation element 
under the CUI Support subfactor; (2) CUI Implementation, also an 
evaluation element under the CUI Support subfactor; (3) CUI Deployment 
to Travel Management Service Contractors, another evaluation element 
under that subfactor; and (4) CUI Functionality, a subfactor under the 
PWS factor.  RFP  sec.  L.8.1.1.1.  However, even considering these 
evaluation areas, the solicitation assigned deployment considerations 
only limited weight in the evaluation.

5. EDS argues that BDM's proposal should be rejected as unacceptable 
because its proposed delivery schedule is noncompliant with both the 
required performance schedule for the DTR 6 sites (RFP  sec.  F.5.2) and 
that for the (approximately 214) sites outside DTR 6 for which 
performance dates were specified (RFP  sec.  F.5.3).  However, EDS's 
protests in this regard were first filed more than 6 weeks after its 
counsel received a copy of BDM's proposal (under the protective order 
issued in this case) and thus are untimely.  4 C.F.R.  sec.  21.2(a)(2) 
(1998); EDS Comments, July 27, 1998, at 20-24; EDS Comments, Aug. 5, 
1998, at 28-36.  In any case, as maintained by the Army and BDM, this 
aspect of EDS's protest is based on a misreading of BDM's proposal.

6. The Army advised EDS during discussions that its proposal "did not 
provide convincing evidence that the offeror can deploy the CUI 
globally in the time frame proposed," and "did not provide convincing 
evidence that the offeror can implement the CUI in the time frame 
proposed."   EDS Discussion Items, Nos. 27, 28.

7. Although arguably inconsistent with the agency's determination that 
EDS's accelerated deployment was of value to the government, we note 
that, during discussions, EDS was specifically advised in writing that 
the agency characterized EDS's proposal to accelerate deployment to be 
an approach that only:  "Meets Requirement; Not Considered 
Enhancement."  Evaluation of EDS [Defense Travel System] Proposal 
Enhancements, at 1.  This notice further supports the conclusion that 
EDS had no reasonable basis for assuming that it would receive 
additional credit for its accelerated deployment.  Further, the Army 
specifically cautioned EDS during discussions that its "price for CUI 
Operations and Maintenance (O&M) is too high."  EDS Discussion Items, 
No. 44.   

8. In a further evaluation of BDM's proposal undertaken after EDS 
filed its protest, the agency determined that the cost team had failed 
to include subcontractor costs in its calculations of staffing; the 
agency determined that consideration of subcontractor inputs could add 
as many as [DELETED] additional staff, for a total possible O&M 
staffing (based on $114,000 per staff year) of [DELETED].  Declaration 
of SSEB Chief of Cost Team, Aug. 5, 1998, at 11-12.  In contrast, 
EDS's proposal was evaluated as assuming [DELETED] staff years and as 
including the cost of [DELETED] staff years at the 
government-calculated rate of $114,000 per staff year.  Declaration of 
SSEB Chief of Cost Team, July 27, 1998, at 15.      

9. The agency cost evaluators noted that "[w]e would expect BDM's 
proposal cost to be nearer the lower end of the GMPC estimate because 
the lower end estimate is based on a solution that uses the Travel 
Manager software, which is the software BDM is using in their 
solution."  BDM Consensus Evaluation Worksheet (Official) (BAFO) at 2.