BNUMBER:  B-280511.2; B-280511.3 
DATE:  October 19, 1998
TITLE: GTS Duratek, Inc., B-280511.2; B-280511.3, October 19, 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:GTS Duratek, Inc.

File:     B-280511.2; B-280511.3

Date:October 19, 1998

Mary Ita Snyder, Esq., Kevin P. Mullen, Esq., Richard J. Vacura, Esq., 
and Carl L. Vacketta, Esq., Piper & Marbury, for the protester.
Raymond Fioravanti, Esq., and Kenneth B. Weckstein, Esq., Epstein 
Becker & Green, for Allied Technology Group, Inc., an intervenor.
Elizabeth Rivera, Esq., and Sandra D. Jumper, Esq., Department of the 
Navy, for the agency.
Tania Calhoun, Esq. and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  Protest that contracting agency improperly determined that 
awardee's proposal met the solicitation's minimum technical 
requirements is sustained where the proposal is ambiguous, at best, 
with respect to whether it met certain requirements and where the 
contemporaneous evaluation documentation shows serious concerns 
regarding the awardee's technical acceptability that were not 
resolved.

2.  Protest that contracting agency improperly evaluated offerors' 
past performance is sustained where the record shows that, with 
respect to both offerors, the agency ignored relevant information that 
was personally known to one of the agency evaluators, and where the 
agency failed to comply with the solicitation's evaluation criteria 
with respect to the past performance evaluation.

DECISION

GTS Duratek, Inc. (GTSD)[1] protests the award of a contract to Allied 
Technology Group, Inc. (ATG) under request for proposals (RFP) No. 
N00604-97-R-1001, issued by the Department of the Navy for the 
comprehensive reduction and disposal of radioactive waste generated by 
the Pearl Harbor Naval Shipyard (PHNS) in Pearl Harbor, Hawaii.  GTSD 
challenges as improper the Navy's conclusion that ATG's proposal met 
the solicitation's minimum technical requirements; the Navy's 
evaluation of offerors' past performance; and the Navy's failure to 
reconcile the pricing assumptions on which offerors based their 
pricing.  

We sustain the protests.

BACKGROUND

The solicitation, issued January 24, 1997, requests the services of a 
firm to pick up PHNS's radioactive waste from designated locations on 
the West Coast; transport the waste to a licensed processing facility; 
process and/or volume-reduce the waste via designated methods; and 
provide further transportation of the material to a licensed disposal 
facility, as required.  RFP  sec.  C1.1B.  The RFP's statement of work 
(SOW) set forth detailed requirements for each designated processing 
and/or volume-reduction method, including supercompaction, 
incineration/vitrification, metal melting, and the resin, 
sluicing/dewatering process.  RFP  sec.  C1.3.  

The successful offeror was to be awarded a fixed-price requirements 
contract to perform these services over 1 base year and 1 option year.  
RFP  sec.  A.1, B.1.  Firms wishing to be considered for award were 
required to submit proposals consisting of technical, past 
performance, and price volumes.  Each is at issue here.
  
Offerors' technical volumes were to describe and define their 
understanding of and compliance with all requirements contained in the 
RFP/SOW.  Among other things, offerors were asked to explain how they 
complied with the RFP's requirements concerning special licenses and 
permits, various methods of radioactive material processing, 
radiological concerns, transportation, and emergency response plans.  
RFP  sec.  L.101.C.2.  

Offerors' past performance volumes were to include all data and 
information demonstrating the overall quality of past performance on 
same or similar requirements with approximately the same per year 
dollar value.  RFP  sec.  L.101.C.1.  
The overall quality of each offeror's past performance was to be 
"highly influential" in determining the relative merits of the overall 
proposal and in selecting the offeror whose proposal was considered 
most advantageous to the government. 
RFP  sec.  L.101.C.3.B.  

Offerors' price volumes were to include section B of the RFP with a 
price proposed for each line item.  RFP  sec.  L.101.C.4.  The sum of all 
line items was to result in the estimated total amount for both 
contract periods.  RFP  sec.  B.1.

Award was to be made to the offeror whose proposal met the minimum 
technical requirements and offered the best past performance to the 
government; past performance was more important than price.  RFP  sec.  
M.100.b.  Section M.100.a. identified the following evaluation 
factors:

        1.Technical (Minimum Requirements) which are of equal 
          importance:
          a. Special Licenses
          b. Radioactive Material Processing
          c. Radiological Concerns
          d. Transportation
          e. Emergency Response Plan
        2.Past Performance
          a. Quality of Service
          b. Timeliness of Performance
          c. Cost Control
          d. Customer Satisfaction
        3.Price

The degree of importance of price was to increase with the degree of 
equality of the proposals in relation to the other factors on which 
selection was to be based, or when price was so significantly high as 
to diminish the value of the technical and past performance factors to 
the government.  RFP  sec.  M.100.d.  The government might make award to 
other than the lowest-priced offeror or to the offeror with the best 
past performance rating if the contracting officer determined that 
doing so would result in the greatest value to the government.  RFP  sec.  
M.100.e. 

Three firms submitted proposals by the March 21, 1997 extended closing 
date.  The contracting officer established a competitive range of 
two--ATG and GTSD--based upon the initial findings of the technical 
evaluation board (TEB).  Between May 2 and June 25, the Navy issued 
amendment Nos. 0005 through 0010.  During this same period the Navy 
also conducted six rounds of written discussions, each of which 
generated revised proposals.  The TEB also conducted its past 
performance evaluation, rating ATG's proposal "excellent" to GTSD's 
"good."  Both firms submitted BAFOs on June 27, 1997.

The Navy's review of ATG's BAFO led to the conclusion that the firm 
had an excellent past performance rating and that it was the 
lowest-priced, technically acceptable offeror.  However, since ATG's 
BAFO disclosed a recent termination for default on an Army contract, 
and since ATG was a small business, the Navy requested a preaward 
survey to ensure that ATG was financially and technically capable of 
performing the contract.  Addendum to Pre-Negotiation Memorandum, Oct. 
30, 1997, at 1.  In an unrelated matter, the Navy decided to reopen 
discussions to address concerns regarding the government's liability 
associated with contractors' speculative accumulation of radioactive 
metal for future recycling applications.  Id. 
  
Between October 31, 1997, and January 9, 1998, the Navy issued 
amendment Nos. 0011 through 0016.  During this same period the Navy 
also conducted four rounds of written discussions, each of which 
generated revised proposals.  Both firms submitted second BAFOs on 
January 29.

The Navy later determined that it had incorrectly considered most of 
the findings raised by ATG's preaward survey to be issues of 
responsibility when they were, instead, unresolved technical issues.  
Addendum to Pre-Negotiation Memorandum, Feb. 25, 1998.  The 
contracting officer decided to reopen discussions to allow ATG an 
opportunity to review and address these technical findings.  Id.

The Navy issued ATG its preaward survey discussion questions on 
February 27,[2] and requested clarifications to ATG's response.  ATG 
provided these clarifications on May 7.  Both offerors subsequently 
submitted their third and final BAFOs. 

The apparent basis for the source selection decision is the following 
paragraph from the Post-Negotiation Business Clearance Memorandum, at 
56:

     The offer from [ATG] is the best value to the government since it 
     has been determined to be technically acceptable; [ATG] received 
     an overall past performance rating of excellent in comparison to 
     [GTSD's] rating of good and was determined responsible . . . ; in 
     addition ATG is the low offeror vice [GTSD's] prices and ATG's 
     proposed prices are fair and reasonable based on a price analysis 
     and competition.    

Award was made to ATG on June 18.  GTSD filed its initial protest 
after its debriefing, and has filed two supplemental protests during 
the course of this proceeding.  GTSD primarily contends that the Navy 
improperly concluded that ATG's proposal met the Navy's minimum 
technical requirements with respect to metal melting; the Navy 
improperly conducted a mechanistic evaluation of the offerors' past 
performance which failed to consider the nature of the underlying 
contracts and failed to consider negative past performance information 
regarding ATG; and the Navy improperly failed to reconcile the pricing 
assumptions on which offerors based their pricing.[3]

EVALUATION OF ATG'S TECHNICAL PROPOSAL

GTSD argues that the Navy improperly concluded that ATG's proposal met 
the solicitation's minimum requirements--in other words, was 
technically
acceptable--with respect to metal melting.  GTSD first alleges that 
ATG improperly proposed to decontaminate most of the metals and 
release them to a commercial foundry for uncontrolled reuse, in 
contravention of the RFP's requirement that all metals be processed 
through a radioactive foundry and recycled to qualified users only.  
GTSD also alleges that ATG's proposal failed to designate the next 
user of the recycled metal melt products, in contravention of the 
RFP's requirement to do so. 

Background

The solicitation requires the contractor to be able to process 
radioactive waste using an array of methods, but the Navy estimates 
that 75 percent of the work will involve metal melting.[4]  
Post-Negotiation Business Clearance Memorandum at 39.  Section C1.3.C. 
of the solicitation sets forth the metal melting specifications.

The contractor is required to provide metal melt recycling services 
for radioactively contaminated ferrous and non-ferrous metal scrap, 
parts, subassemblies, tools, machines, tanks, demineralizers, and 
components.  RFP  sec.  C1.3.C.(1), (2), and (3).  At the time initial 
proposals were submitted, the RFP permitted the contractor to mix 
metals originating from PHNS with those originating from other sources 
as long as the resulting ingot was recycled and transferred to a 
facility holding a current radioactive materials license for 
possession of by-product materials or was an authorized Department of 
Energy (DOE) facility.  RFP  sec.  C1.3.C.(5).

In its initial proposal ATG stated that it would provide metal melt 
and recycling services according to section C1.3.C. of the 
solicitation.  That is, ATG planned to receive the material at its 
facility; disassemble and/or size-reduce the metals; place the metals 
in containers; and ship these containers to its metal-melting 
subcontractor.  The subcontractor would melt the metal and return the 
resulting ingots to ATG for recycling.  ATG Initial Proposal at 6-7.  
ATG stated that it "may use these [ingots] for internal shielding or 
other recycling applications."  Id. at 7.

In its Fourth/Fifth Revised Proposal, at 4, ATG advised the Navy that 
its pricing structure assumed that:

     DELETED. . . . This is consistent with paragraph C1.13[5]. . . . 
     DELETED Accordingly, our technical and pricing approach to this 
     bid takes a literal approach to C1.13 . . . . 

The Navy's Request for ATG's Sixth Revised Proposal, at 1-2, asked ATG 
to clarify this statement.  The Navy instructed:  

     It is the intent of the prospective contract that all ferrous and 
     non-ferrous metal items shipped, undergo the metal melt process 
     by foundry melting to the maximum extent practicable.  The free 
     release clause (C1.13) . . . is intended for support material 
     that is normally used in shipment of metal items, e.g. wood, 
     dunnage, tie downs and plastic wrap.  Request you review your 
     prices in light of this clarification and confirm if this 
     procedure will be met.  

In its Sixth Revised Proposal, at 3, ATG reiterated that it planned to 
follow the approach explained in its Fourth/Fifth Revised 
Proposal--i.e., DELETED.  ATG advised that if its interpretation was 
not correct, and it was so directed by the Navy, it would process the 
materials through a radioactive foundry regardless of the level and 
the nature of the present contamination.  If so directed, it would 
adjust its prices accordingly in its BAFO.  Id.

The next Navy communication with ATG, its first BAFO request at 1, 
instructed ATG as follows:  "All ferrous and non-ferrous metals are to 
be processed through a radioactive foundry regardless of level and the 
nature of the contamination."  ATG's BAFO was silent on the issue of 
its metal melting approach, and the Navy apparently assumed that the 
issue was resolved in accordance with its instruction.  See Agency 
Report, Sept. 8, 1998, at 2, 10.

In an unrelated matter, the Navy reopened discussions to address a 
Naval Sea Systems Command (NAVSEA) concern that the provisions used by 
some activities in contracts for radioactive metal melting and 
recycling services might be inadequate to prevent a contractor from 
speculatively accumulating radioactive metal for uncertain future 
recycling applications.  If such speculative accumulation occurred and 
the contractor was unable to recycle or dispose of the metal, the 
government could still retain liability for radioactive metals of 
government origin.  Letter from NAVSEA to Shipyard Commands 1 (Sept. 
11, 1997).  NAVSEA proposed the addition of a contract provision which 
was added to section C1.3.C. of this solicitation by amendment No. 
0011.  That amendment deleted the prior grant of permission to mix 
metals and replaced it with the following language:[6]

     (5)Metals originating at [PHNS] shall not be mixed or co-mingled 
        with other generators' waste materials.

     (6)The contractor shall not speculatively accumulate metals of 
        [PHNS] origin for uncertain future recycling applications.  
        Metals of [PHNS] origin shall be processed into recycled 
        product and in the possession of the next user within 12 
        months of the date such metals are received by the contractor 
        . . . The next user of the recycled product shall be a 
        facility holding a current radioactive material license or a 
        [DOE] facility.  The contractor agrees that if the [PHNS] 
        metal cannot be sold as a recycled product within
        12 months, the contractor shall dispose of such metal at the 
        US Ecology burial site (the licensed disposal site for 
        radioactive waste of [PHNS] origin) at no additional expense 
        to the government.

The Navy's Request for ATG's Eleventh Revised Proposal raised the 
findings of the preaward survey team.  At pages 2-3 of the request, 
the Navy references the requirement to provide ferrous and non-ferrous 
metal melt recycling services for radioactively contaminated metal, as 
well as the prohibition against speculative accumulation of PHNS 
metals for uncertain future recycling applications, and sets forth the 
following findings: 

     ATG has no current plans for the disposition of the metal melted 
     ingots.  They do not have a contract in place for delivering a 
     product made of recycled radioactive ferrous metal to a facility 
     holding a current radioactive material license or a [DOE] 
     facility.  Therefore, ATG cannot execute the recycling of 
     radioactive ferrous metal in a timely manner as required by the 
     solicitation.

                    .     .    .   .    .

     In addition to the lack of plan or capability to recycle 
     radioactive ferrous metals, . . . ATG has no plans to 
     specifically address the elemental constituents of . . . 
     nonferrous metals.  The lead content of such metals is sufficient 
     to result in such metals being regulated as hazardous waste . . . 
     in the event the metals become a waste material. . . . Without 
     specific disposition plans for recycled radioactive brass and 
     bronze materials, ATG cannot recycle radioactive non-ferrous 
     metals in a timely manner as required by the solicitation, and 
     the failure to do so would result in an accumulation of 
     radioactive hazardous waste.

The Navy cautioned ATG that its response to each finding must be in 
sufficient detail to convey a complete understanding of that finding, 
and must provide a viable solution showing its complete compliance 
throughout the term of the contract.  Failure to provide sufficient 
information for the Navy to determine that its proposal was 
"completely technically acceptable" might result in a determination 
that the proposal was technically unacceptable.  Id. at 6.

In its Eleventh Revised Proposal, at 2-3, ATG complained it had not 
known that the lead levels of non-ferrous metals would be sufficiently 
hazardous to render any blended metal melt product a mixed waste if 
not recycled.  ATG submitted that the best solution for the government 
might be to "follow the approach identified below which is consistent 
with ATG's initial bid approach for this procurement and which falls 
within the RFP wording[:]"

                         DELETED

ATG further stated, "Given that the RFP wording would allow this 
approach (the RFP did not specify that a radioactive foundry must be 
used but simply that metal melting must be used), this approach falls 
squarely within the four corners of the procurement as well as within 
ATG's bid approach. . . . if the Government follows the prudent course 
identified above, a new BAFO is not required.  ATG will provide the 
approach identified in 1-3 above at the prices set forth in the second 
BAFO."
Id. at 4.

ATG also stated that it had given the Navy its "self-recycling option" 
for melted metals, and now identified two "potential" DOE recycling 
options by name.  Hence, ATG contended, it had committed to recycle 
the materials both through self-recycle needs as a licensed user of 
radioactive materials and via DOE for its internal requirements for 
shielding.  The firm argued that GTSD did not have an exclusive 
contract with DOE for metal melt recycle, and that some DOE 
contractors will no longer accept shielding from GTSD due to quality 
issues.  ATG asserted that its proposed recycling approach was no more 
speculative than GTSD's, as "DOE is willing to accept shielding from 
either of us if DOE has a current need."  Id. at 4-6.

The Navy's Request for ATG's Twelfth Revised Proposal, at 1, states 
that ATG's Eleventh Revised Proposal "has been reviewed" and requests 
some specific clarifications.  Two of these requests are at issue 
here.

First, the Navy acknowledged that ATG's response offered a totally 
different approach to processing metals--DELETED.  However, the Navy 
does not repeat its explicit prohibition against this approach or make 
any comment on it.  Instead, the Navy narrowly focuses on what it 
believes to be ATG's misunderstanding regarding the lead levels of the 
non-ferrous metals to be provided under the contract and, with this 
focus as the backdrop, asks ATG to explain the process it intends to 
use to provide recycling services for PHNS's non-ferrous materials.  
Id. at 1-2.  ATG's Twelfth Revised Proposal, at 2, answers the Navy's 
narrow question in a fashion that does not clarify whether it intends 
to use the approach that had previously been prohibited.  

Second, the Navy disclosed its serious concerns regarding ATG's plans 
for the disposition of melted metal products:

     Availability of a known recycling outlet for radioactive metal is 
     a key aspect of determining the technical acceptability of your 
     offer.  If ATG has assurance from DOE that DOE will accept 
     radioactive recycled metal from ATG, or if ATG has written 
     information from DOE that DOE will accept radioactive recycled 
     metal from any provider of such recycled metal that meets DOE's 
     technical acceptance requirements, please provide PHNS with such 
     information in your response.  The Navy also has serious concerns 
     regarding the technical acceptability of self-use by ATG as an 
     outlet for Navy origin metal.  Retention of radioactive metal for 
     self-use could be considered by a regulatory agency to be 
     speculative accumulation or a sham recycling, particularly since 
     we saw no evidence of previous use of such material at your 
     facility.  Further, we believe that continued possession of 
     Navy-origin material at a facility under contract with the Navy 
     for processing radioactive material could result in continuing 
     Navy liability for the eventual disposition of such material.  

Navy's Request for ATG's Twelfth Revised Proposal at 2.

In its Twelfth Revised Proposal, at 3, ATG insisted that its internal 
uses for the materials are legitimate recycle uses by a licensed user 
of radioactive materials and that it has significant needs for 
shielding materials.  ATG also conceded there are no firm requirements 
for its potential DOE recipients--one indicated a willingness to 
accept material from ATG's metal melt subcontractor and ATG had spoken 
to the other regarding its willingness to accept material from either 
contractor if funding was available.  However, ATG again argued that 
it had at least equal ability to recycle to DOE as did GTSD, and 
discounted the Navy's concerns regarding its potential liability for 
internal use materials.

The only evidence that ATG's Twelfth Revised Proposal was reviewed is 
a one-page document which states, without further comment, "In 
reviewing [ATG's Twelfth Revised Proposal] it has been determined that 
ATG is able to perform the requirements and specifications of [the 
solicitation] and is technically acceptable."  TEB Review of ATG 
Revised Proposal, May 11, 1998.  The letter is signed by an individual 
who was not a member of the TEB.  Id.; see Pre-Negotiation Business 
Clearance Memorandum at 6.

Discussion

Where, as here, an RFP requires the submission of information showing 
technical acceptability, each offeror must include sufficient 
information in its proposal to establish compliance with the 
solicitation's technical requirements.  Pacific Consol. Indus., 
B-260650.2, Oct. 25, 1995, 95-2 CPD  para.  247 at 3.  The procuring agency 
is responsible for evaluating the data submitted by an offeror and 
ascertaining if they provide sufficient information to determine the 
acceptability of the offeror's services; we will disturb this 
technical determination only if it is shown to be unreasonable.  
Inframetrics, Inc., B-257400, Sept. 30, 1994, 94-2 CPD  para.  138 at 3.  
While we do not make an independent determination of the merits of a 
technical proposal, the agency's judgment must have a rational basis 
and be consistent with the stated evaluation criteria.  Pacific 
Consol. Indus., supra.  Consistent with this requirement, an agency 
must document its technical determinations in sufficient detail to 
show they are not arbitrary.  Id.  Where there is inadequate 
supporting rationale in the record for the agency's determination of 
technical acceptability, we cannot conclude that the agency had a 
reasonable basis for its determination.  See Northwest EnviroService, 
Inc., B-247380.2, July 22, 1992, 92-2 CPD  para.  38 at 5.  Here, we cannot 
conclude that the Navy's determination that ATG's proposal was 
technically acceptable had a reasonable basis.  

GTSD and the Navy agree that the RFP required that "all metals, 
ferrous or nonferrous, must be processed through a radioactive 
foundry."  Agency Report, Sept. 8, 1998, at 10.  At various points in 
this procurement ATG has insisted that "the RFP did not specify that a 
radioactive foundry must be used but simply that metal melting must be 
used."  ATG's Eleventh Revised Proposal at 4.  ATG's interpretation 
apparently is based upon the introductory language in RFP  sec.  C1.1.:  
"The contractor shall process radioactive waste by . . . recycling 
radioactively contaminated metals by foundry melting . . . " 

To be reasonable, an interpretation of a solicitation must be 
consistent with the solicitation when read as a whole and in a manner 
giving effect to all of its provisions.  Herman Miller, Inc., 
B-241582, B-241582.2, Feb. 19, 1991, 91-1 CPD  para.  184 at 4.  The 
solicitation plainly states that the contractor will be provided 
radioactively contaminated metal that must be recycled by foundry 
melting.  Even if ATG had any basis to think that its interpretation 
was consistent with the RFP, the Navy clearly notified it to the 
contrary in its first BAFO request by saying:  "All ferrous and 
non-ferrous metals are to be processed through a radioactive foundry 
regardless of level and the nature of the contamination."  Navy's 
First BAFO Request of ATG at 1.  This communication itself was 
sufficient to place ATG on notice of the actual requirement.  
Environmental Techs. Group, Inc., B-237325, 
Jan. 24, 1990, 90-1 CPD  para.  101 at 3-4.

With the RFP's requirement in mind, we turn to ATG's proposal and 
briefly recap the relevant exchanges between the Navy and ATG.  In its 
Sixth Revised Proposal, ATG stated that it planned to DELETED and 
processing through a commercial, that is, non-radioactive, foundry 
when possible.  In its next communication with ATG, the Navy clearly 
told ATG that all metals must be processed through a radioactive 
foundry regardless of the level and nature of the contamination.  
ATG's first BAFO was silent on this issue, and in a subsequent 
revision (its Eleventh Revised Proposal)--and the last time ATG 
explicitly addressed this issue--ATG suggested, yet again, that it 
planned to DELETED in contravention of the RFP's requirements.

Given the statements by ATG on this issue in the various versions of 
its proposal, the proposal was, at a minimum, ambiguous as to whether 
ATG would comply with a material requirement of the solicitation--the 
requirement to process all metals through a radioactive foundry.  In 
the absence of any evidence in the record to show that the ambiguity 
was resolved, it was unreasonable for the Navy to conclude that ATG's 
proposal was acceptable, and we sustain the protest on this ground.[7]  
Pacific Consol. Indus., supra, at 3-4. 

We turn now to GTSD's contention that ATG failed to meet the RFP's 
minimum technical requirements regarding the recycling of metal melt 
products because it did not designate the next user of the recycled 
products. 

The metals had to be processed into recycled product and "in the 
possession of the next user" within 12 months of receipt, and "[t]he 
next user of the recycled product shall be a facility holding a 
current radioactive material license or a [DOE] facility."  RFP  sec.  
C1.3.C.6.  There is no explicit requirement to "designate" the next 
user of the recycled products, and the only indication of the Navy's 
interpretation of the requirement is found in its discussion questions 
put to ATG.

ATG's primary plan for the disposition of the recycled metal melt 
products was its "self-use option."  As discussed in detail above, the 
Navy had "serious concerns regarding the technical acceptability of 
self-use by ATG as an outlet for Navy origin metal," particularly 
since it had seen no evidence of such use during the preaward survey.  
The Navy cited the potential for speculative accumulation or a sham 
recycling, and expressed concern regarding continuing Navy liability 
for the eventual disposition of such material.  Navy's Request for 
ATG's Twelfth Revised Proposal at 2.  Neither ATG's Twelfth Revised 
Proposal nor its Third BAFO retreated from its "self-use option."

ATG also had "potential" DOE sources for the recycled material.  As 
discussed in detail above, the Navy believed that availability of a 
"known" recycling outlet for radioactive metal was a key aspect of 
determining the technical acceptability of ATG's proposal.  The Navy 
specifically requested some concrete evidence of DOE's willingness to 
accept the material at issue.  Id.  ATG did not provide any such 
concrete information in its Twelfth Revised Proposal or in its Third 
BAFO.  It merely reiterated its contention that neither offeror could 
guarantee a DOE user.[8]  ATG's Twelfth Revised Proposal at 3.

The record shows, then, that the Navy's "serious concerns" regarding 
ATG's plans to recycle the melted metal products had a bearing on the 
technical acceptability of the firm's proposal, and that ATG's plans 
did not change after it was apprised of these concerns.  What the 
record does not show is why, in the face of these "serious concerns," 
ATG's proposal was found to be technically acceptable.  In the absence 
of any rationale for this decision, we cannot conclude that the Navy's 
assessment of ATG's proposal as technically acceptable was reasonable, 
and we sustain the protest on this basis.  Pacific Consol. Indus., 
supra.    

PAST PERFORMANCE

Background

The Navy planned to evaluate each offeror's performance under existing 
and prior contracts for services that were the "same or similar in 
scope, magnitude, and complexity to this requirement," and to focus on 
information that demonstrated "quality of performance relative to the 
size and complexity of the requirement under consideration." RFP  sec.   
L.101.C.3.E.  The RFP set forth past performance subfactors and 
provided a narrative explanation of the areas under consideration.  
Past performance information was to be collected using Contractor Past 
Performance Data Sheets, but the government might contact references 
other than those identified as well.  Id.

GTSD's past performance volume discussed its performance of various 
Navy contracts for services such as those required here, including a 
PHNS contract for radioactive metal melting and recycling services.  
GTSD also submitted five Contractor Past Performance Data Sheets, none 
of which referenced the PHNS contract.  The Navy sent surveys to each 
reference identified on GTSD's Contractor Past Performance Data Sheets 
and received responses from three of these.  Using these surveys, the 
Navy evaluated GTSD's past performance by reviewing the adjectival 
responses given to each question, as well as any comments, and by 
noting which of the services required here were performed under the 
surveyed contracts.  The TEB evaluated GTSD's past performance as 
"good" and concluded that the services evaluated were the "same for 
[GTSD] in the areas of metal melt and resin processing."  
Post-Negotiation Business Clearance Memorandum at 20.  The contracting 
officer concurred.  Id. at 21.  

The Navy's Request for GTSD's Third Revised Proposal included a copy 
of each past performance survey and asked for GTSD's review and 
comment.  GTSD replied that it had no comment on the past performance 
information provided by PHNS.[9]  GTSD's Third Revised Proposal.  The 
issue of GTSD's past performance was not revisited until after these 
protests were filed.

ATG's past performance volume included five Contractor Past 
Performance Data Sheets, three for its own contracts and one for each 
of its two subcontractors' contracts.  The Navy sent surveys to each 
reference and received responses from four--all of ATG's references 
and one from ATG's metal melt subcontractor.  Using these surveys, the 
Navy evaluated ATG's past performance in the same fashion as it 
evaluated GTSD's past performance.  The TEB evaluated ATG's past 
performance as "excellent" and concluded that the services evaluated 
were "similar" for ATG.  Post-Negotiation Business Clearance 
Memorandum at 20.  The contracting officer concurred.  Id. at 21.  

The Navy's Request for ATG's Third Revised Proposal included a copy of 
each past performance survey and asked for ATG's review and comment.  
ATG provided comments in its Third Revised Proposal; there is no 
evidence that these had any effect on ATG's rating.  The Navy 
telephoned ATG's past performance references twice before award to 
confirm the prior ratings, but ATG's rating did not change.

The only evidence in the record that the offerors' respective past 
performance ratings were compared in making the source selection 
decision is the following statement:  "[ATG] received an overall past 
performance rating of excellent in comparison to [GTSD's] rating of 
good."  Post-Negotiation Business Clearance Memorandum at 56.  

Discussion

In its first supplemental protest GTSD argued that the Navy improperly 
failed to consider its "most relevant" contract, the PHNS contract for 
radioactive metal melt and recycling services.  The Navy replied that 
since GTSD had not submitted a Contractor Past Performance Data Sheet 
for the PHNS contract, it had not sent out a survey for that contract.  
The Navy stated, however, that after the protest was filed it obtained 
a past performance survey from the contracting officer's 
representative (COR) on the PHNS contract, as well as another survey.  
The Navy stated that it had reevaluated GTSD's past performance 
inclusive of these two surveys and that the results had not changed.  
GTSD was still evaluated as "good," but the surveys contain several 
negative comments about GTSD's performance.  Addendum #1 to 
Post-Negotiation Memorandum at 2; Addendum #2 to Post-Negotiation 
Memorandum at 1; Reevaluation of GTSD's Past Performance.

While we understand the Navy's rationale for initially not sending out 
a past performance survey on the PHNS contract, we do not understand 
the Navy's failure to consider the information in its possession 
regarding GTSD's performance on that contract.  The record shows that 
this contract was deemed so relevant to the requirements at issue that 
it served as a basis for the government estimate.
Post-Negotiation Business Clearance Memorandum at 54.  Moreover, the 
COR for that contract, the individual who eventually completed the 
past performance survey, was a member of the TEB for this procurement.  
PHNS Past Performance Survey; Pre-Negotiation Business Clearance 
Memorandum at 6.  Under the circumstances, the agency could not 
reasonably ignore personally known information about GTSD's prior 
experience on the PHNS contract merely because the firm did not submit 
a Contractor Past Performance Data Sheet for that contract.  See 
Safeguard Maintenance Corp., B-260983.3, Oct. 13, 1995, 96-2 CPD  para.  116 
at 12.  While there is no legal requirement that all past performance 
references be included in a valid review of past performance, some 
information is simply too close at hand to ignore.  See International 
Bus. Sys., Inc., B-275554, Mar. 3, 1997, 97-1 CPD  para.  114 at 5.  

We agree with GTSD that the Navy's post-protest reevaluation of GTSD's 
past performance does not cure the defective initial evaluation.  
Under
FAR  sec.  15.610(c)(6), competitive range offerors must be provided with 
"an opportunity to discuss past performance information obtained from 
references on which the offeror had not had a previous opportunity to 
comment."  An agency does not satisfy its obligation to conduct 
meaningful discussions with competitive range offerors where the 
agency fails to inform an offeror of adverse past performance 
information.  Biospherics, Inc., B-278278, Jan. 14, 1998, 98-1 CPD  para.  
161 at 8.  Notwithstanding the Navy's evaluation of GTSD's proposal as 
"good," the post-protest surveys contain negative past performance 
information and GTSD was unquestionably entitled to comment on that 
information.  Since it is reasonably possible that GTSD's past 
performance rating could have improved had it been given meaningful 
discussions, we sustain the protest on this basis.  Id. at 9.   

GTSD also contends that the Navy improperly failed to consider 
negative information concerning ATG's past performance which the Navy 
learned during ATG's preaward survey and which bears upon the RFP's 
past performance subfactors.  We agree.

The evaluation of past performance was to focus on information 
pertaining to four equally important areas:  quality of service, 
timeliness of performance, cost control, and customer satisfaction.  
Section L.101.C.3.B. of the RFP explained:  

     The offeror's record of conforming to specification and standards 
     of good workmanship, adherence to contract schedules, providing 
     required reports and schedules, the administrative aspects of 
     management, quality control process and the offeror's reputation 
     for reasonable and cooperative behavior will all be considered in 
     the areas listed above.

PHNS's preaward survey of ATG raised numerous concerns, three of which 
are summarized here.  First, there was no evidence of a documented 
system for determining inspection, test, and measurement requirements, 
which raised minor concerns regarding quality assurance.  Second, 
there was evidence that ATG had significant backlogs in unprocessed 
waste which raised concerns regarding the firm's ability to timely 
process waste.  Third, ATG's shipments to PHNS's designated burial 
site had been suspended on numerous occasions for violating the site's 
requirements for land burial, and PHNS considered the possibility of 
suspensions and/or loss of its burial permit to be unacceptable.  
ATG's Preaward Survey, Quality Assurance, at 3; ATG's Preaward Survey 
Report, Technical Support Evaluation, at unnumbered pages 5 and 10; 
Post-Negotiation Business Clearance Memorandum
at 45-46.

The Navy skirts GTSD's argument that it improperly failed to consider 
these matters in the context of the past performance evaluation by 
relying on the fact that these matters were considered during the 
technical evaluation.  That is not at issue.  The Navy did not 
consider the findings of the preaward survey in the context of the 
past performance evaluation, and the question here is whether its 
failure to do so was improper.  

At least some of the concerns that came to light during ATG's preaward 
survey are related to at least some of the RFP's past performance 
evaluation subfactors--quality of service, timeliness of performance, 
cost control, and customer satisfaction.  Again, an agency may not 
simply ignore personally known information about an offeror's prior 
experience simply because it is not listed in the proposal.  Safeguard 
Maintenance Corp., supra; see also International Bus. Sys., Inc., 
supra.  Here, the Navy not only possessed the preaward survey results 
and considered them in another context, but several PHNS 
representatives participated in the preaward survey.  In our view, it 
was simply not reasonable for the Navy to set aside this information 
without at least considering whether it had any impact on ATG's 
"excellent" past performance rating.  See Pearl Properties; DNL 
Properties, Inc., 
B-253614.6, B-253614.7, May 23, 1994, 94-1 CPD  para.  357 at 7-8.  

Finally, GTSD argues that the Navy improperly failed to consider 
whether the efforts described in ATG's references were sufficiently 
similar to the requirements of the instant procurement to warrant an 
excellent rating without some adjustments to account for the variance 
between the size, complexity, and type of work performed and that 
required by PHNS.

Evaluation of an offeror's past performance is a matter within the 
discretion of the contracting agency, and we will not substitute our 
judgment for a reasonably based past performance rating.  However, we 
will question such a conclusion where it is not reasonably based or is 
undocumented.  PMT Servs., Inc., B-270538.2, Apr. 1, 1996, 96-2 CPD  para.  
98 at 6.  In addition to the reasons set forth above, the Navy's past 
performance evaluation was unreasonable because it failed to comply 
with the stated evaluation criteria.

The Navy's consideration of whether a contract was the "same" or 
"similar" to the required services was cursory at best.  The Navy 
considered a contract for a few of the services required here, even 
those services that are marginal to the overall effort, to be 
"similar" to the requirements at issue.  The Navy was apparently 
satisfied as long as all of the required services were covered, even 
if only a few services were performed under each contract.  Such a 
consideration does not address the requirement to evaluate performance 
for services that were the "same or similar in scope, magnitude, and 
complexity to this requirement," particularly since this requirement 
includes an array of comprehensive services.  The Navy's failure to 
comply with the evaluation criteria extended to its comparison of 
proposals for the source selection, a failure which was particularly 
critical since the overall quality of each offeror's past performance 
was to be "highly influential" in determining the relative merits of 
the overall proposal and in selecting the offeror whose proposal was 
considered most advantageous to the government.
RFP  sec.  L.101.C.3.B.  

PRICE ANALYSIS

GTSD contends that the Navy improperly failed to reconcile the pricing 
assumptions on which offerors based their pricing with respect to the 
resin disposal line items.

Section C1.3.D. of the solicitation set forth the resin disposal 
specifications.  Contractors are required to provide disposal services 
for resin and resin catch tanks; these services include sluicing, 
dewatering and proper disposal of resins.  Any water obtained in the 
dewatering process shall be incinerated.  Services also include 
recycling of the metal catch tank using the metal melt process.
RFP  sec.  C1.3.D.(1), (2).

The solicitation contained two sub-line items for resin disposal at 
issue here.
Sub-line item 0004AA requests a price for "Resin Disposal (includes 
weight of Demineralizer)."  Sub-line item 0004AB requests a price for 
"Remove resin, process by vitrification or incineration at the option 
of the shipyard and metal melt the demineralizers."  RFP  sec.  B.1. 

Amendment No. 0012 contained a series of questions and answers about 
the procurement.  Item No. 4 read as follows:

     Q:  We assume item 0004AA is for the disposal of both the resins 
     and the demineralizer and that where the resin activities are low 
     enough to meet our vitrification criteria (<200 mR/hr), 0004AB 
     would come into effect.

     A:  Item 0004AB (incineration/vitrification) apply for resin 
     activities within the limits of your plant equipment.  For resin 
     activities greater than plant equipment limitations, Section D 
     (Resin, sluicing/dewatering process) applies.

     Note:The resin activity will exceed 200 [millirems/hour] and may 
     be as high as 10 [rems/hour]. . . . 

GTSD's pricing proposal advised that it priced sub-line item No. 
0004AB using the assumption that all incoming resins would have 
radiation levels DELETED.  GTSD's Tenth Revised Proposal, Section 
B.1., Note 1; GTSD's Initial Technical Proposal at 5.  ATG's pricing 
proposal advised that it priced sub-line item No. 0004AB using the 
assumption that all incoming resins would have radiation levels 
DELETED.  ATG's Ninth Revised Proposal, Section B.1.  Both offerors 
provided separate pricing for sub-line item No. 0004AA, and ATG priced 
resins with DELETED under that sub-line item.

GTSD contends it did not know it could price the disposal of resins 
with greater radiation levels under sub-line item No. 0004AA, DELETED.  
According to GTSD, the response to the question in amendment No. 0012 
did not inform offerors that resin activities greater than plant 
equipment limitations could be priced under sub-line item No. 0004AA, 
but only that such resin activities would utilize section D of the 
SOW, the resin, sluicing/dewatering process.

We are not persuaded by this argument.  While the structure of these 
CLINs is confusing, and the Navy may wish to make it more clear, we 
think the response set forth in amendment No. 0012 was sufficiently 
clear to have put GTSD on notice that it could price the resins with 
greater levels of radiation under sub-line item No. 0004AA.  The 
response does not specifically say that such resin activities may be 
priced under sub-line item No. 0004AA, but the reference to the 
section of the SOW that addresses the resin, sluicing/dewatering 
process could only refer to that sub-line item.

CONCLUSION AND RECOMMENDATION

We conclude that the Navy improperly determined that ATG's proposal 
met the solicitation's minimum technical requirements.  We also 
conclude that the Navy improperly conducted its past performance 
evaluation by ignoring relevant information with respect to both 
offerors and by failing to comply with the solicitation's evaluation 
criteria.  

We recommend that the Navy reopen discussions, amend the solicitation 
if necessary, and perform a proper proposal evaluation and source 
selection decision.  If the Navy selects GTSD for award, it should 
terminate the contract with ATG and make award to GTSD.  We also 
recommend that the protester be reimbursed the costs of filing and 
pursuing its protests, including reasonable attorneys' fees.  Bid 
Protest Regulations, 4 C.F.R.  sec.  21.8(d)(1) (1998).  The protester 
should submit its certified claim for such costs, detailing the time 
expended and the costs incurred, directly to the contracting agency 
within 60 days after receipt of this decision.

The protests are sustained.

Comptroller General
of the United States        

1. The entity initially involved in the procurement, Scientific 
Ecology Group, Inc., was purchased by GTSD prior to the submission of 
second best and final offers (BAFO).  GTSD's Seventh Revised Proposal 
at 1.  

2. The Navy advised GTSD that discussions had been reopened but that 
it needed no clarifications or revisions regarding its proposal.  
Navy's Eleventh Request for GTSD's Revised Proposal.

3. Our review of GTSD's remaining allegations shows them to be without 
basis.

4. The Navy estimates that the contractor will melt just over 1.6 
million pounds of metal during the course of the contract.  RFP  sec.  B.1. 

5. Section C1.13 of the RFP, "Material Release as Industrial Scrap," 
sanctioned the "[f]ree release [of] any uncontaminated materials for 
[disposal] as 'clean' industrial waste; i.e. external wood 
shoring/dunnage, tie-downs, lead, aluminum or any other materials that 
would reduce unnecessary radioactive waste."  

6. Amendment No. 0011 also rephrased the clause at C1.13, "Material 
Release as Industrial Scrap," to clarify its meaning consistent with 
the Navy's previous instruction to ATG.

7. ATG's comments suggest that it does plan to use the DELETED 
approach.  Comments, Sept. 14, 1998, at 2-4.

8. While the Navy and ATG contend that GTSD had no guaranteed DOE 
outlets for its recycled product, the record shows that GTSD's plans 
in this regard are more concrete than those of ATG.  GTSD's Initial 
Proposal, Introduction at 1;
Volume I at 3.

9. GTSD was given an opportunity to comment on this past performance 
information in accordance with Federal Acquisition Regulation (FAR)  sec.  
15.610(c)(6) (June 1997) (competitive range offerors must be provided 
with "an opportunity to discuss past performance information obtained 
from references on which the offeror has not had a previous 
opportunity to comment").