BNUMBER: B-280521.2; B-280521.4
DATE: October 15, 1998
TITLE: Techniarts Science & Technology Corporation, B-280521.2; B-
280521.4, October 15, 1998
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Matter of:Techniarts Science & Technology Corporation
File:B-280521.2; B-280521.4
Date:October 15, 1998
Judith H. Deitz for the protester.
David R. Johnson, Esq., Kathleen C. Little, Esq., and Robert J.
Rothwell, Esq., McDermott, Will & Emery, for Johnson Controls World
Services, Inc., an intervenor.
John E. Lariccia, Esq., Martin F. McAlwee, Esq., and Marian E.
Sullivan, Esq., Department of the Air Force, for the agency.
Linda C. Glass, Esq., Glenn Wolcott, Esq., and Paul I. Lieberman,
Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
Agency's discussions with protester were meaningful and not misleading
where agency advised firm of areas where proposal needed
clarifications or revisions and in response to agency's concerns,
protester elected to propose the more costly technical solution.
DECISION
Techniarts Science & Technology Corporation (TSTC) protests the award
of a contract to Johnson Controls World Services, Inc. (JCWS) under
request for proposals (RFP) No. F08650-98-R-0013, issued by the
Department of the Air Force for visual information end products and
technical services in support of pre-launch, launch, post-launch, and
non-launch operations, also called the Visual Information Technical
Contract (VITC). TSTC asserts that JCWS's proposal was unbalanced,
and that the Air Force improperly evaluated JCWS's technical proposal
and conducted misleading discussions with TSTC.
We deny the protest.
The RFP, issued on May 20, 1997, contemplated the award of a
fixed-price, indefinite-delivery, indefinite-quantity, labor-hour
contract for a base period with four 1-year options. The contract is
to obtain visual imaging end products for launch and non-launch events
for the 45th Space Wing and NASA's Kennedy Space Center. Offerors
were to propose a fixed price per event for Basic Launch Image
Acquisition Packages (camera/equipment setups and operations for
missile launches and shuttle launches and landings), and Launch Image
Acquisition Services (covering launches, landings, slips and scrubs).
Additionally, offerors were to propose a price per hour for over and
above image acquisition requirements (requested still, motion picture,
and video coverage for non-launch activities and government equipment
maintenance support). Film, digital images and video processing and
print products were to be proposed on a schedule identifying
additional products with prices for each product. RFP sec. B. The VITC
also contained five separately priced contract data requirements
lists. RFP sec. B.
The RFP listed as the evaluation criteria technical/management factors
(consisting of project management and image acquisition/processing/end
products), cost, and general considerations. All technical evaluation
factors, when combined, were approximately equal to cost. General
considerations were of lesser importance but were to be an important
consideration in the award decision. RFP sec. M-2.a. The RFP also
provided that proposals would be evaluated for proposal risk, which
would involve an assessment of the risk associated with the offeror's
proposed approach to accomplish the requirements. RFP sec. M-2.d.
Proposals were also to be evaluated for performance risk, which would
involve an assessment of the probability of the offeror successfully
accomplishing the proposed effort based on the offeror's demonstrated
relevant present and past performance.[1] RFP sec. M.e. The RFP further
provided that for the purpose of evaluating proposals, rental charges
for the use of non-mandatory government-owned facilities and equipment
which the contractor proposed to use would be added to the
bid/proposal price. RFP sec. M-900.
While the RFP stressed that the government was seeking innovative
approaches for performance of the VITC, it also recognized that
offerors who propose significant capital investment in new technology
and updated equipment would accept the greatest risk in performance of
the contract, and therefore the evaluation criteria were structured so
that offerors proposing to perform the VITC in substantially the same
manner as the existing contract would meet the evaluation standards.
To exceed the standards, a proposal had to offer contract performance
which would provide superior customer support while providing
technical solutions which would reduce overall VITC support costs
(contract costs plus other support costs such as maintenance of
facilities and equipment). RFP sec. M-2.b.
Five initial proposals were received by the June 20, 1997 closing
date. After evaluation of these proposals, the Air Force determined
that they all contained informational deficiencies and format errors.
Amendment No. 0003 was issued to clarify common problem areas and
allow offerors an opportunity to revise their proposals. Amendment
No. 0003 also added clause M-901, which established a revised
methodology for computing the total evaluated price for award
purposes. This evaluation methodology was based upon a weighted
average formula for the products described in exhibit C (additional
products) to the RFP and was designed to place emphasis on the pricing
for the most requested items. Under this formula, offerors proposing
lower prices for items seldom ordered and higher prices for items
frequently ordered would earn a higher total evaluated price for the
end products.
Each offeror submitted a revised proposal by the September 19 closing
date. Each revised proposal was evaluated for performance and
proposal risk in addition to being evaluated under a color/adjectival
rating scheme for each of the evaluation factors.[2] After evaluation
of the revised proposals, a competitive range determination was made.
TSTC's proposal was initially excluded from the competitive range on
the basis that it did not reasonably address the essential
requirements of the RFP and that the extent and nature of the
deficiencies were such that to remedy them would require the
submission of virtually an entirely new proposal. TSTC protested its
exclusion to our Office, whereupon the agency reinstated TSTC in the
competitive range.
Discussions were held with the four competitive range offerors and
numerous clarification requests and points for negotiations were
issued. On May 29, 1998, a request for best and final offers (BAFO)
was issued to the competitive range offerors. BAFOs were received
from all four offerors and were evaluated. Three competitive range
offerors, including TSTC and JCWS, were considered to represent
significant technical strengths because of their mix of commercial
management practices and innovative technical solutions and low
proposal risks; however, JCWS's price was significantly lower than
that of the other offerors. The source selection authority (SSA)
concluded that these three offerors provided exceptional approaches to
Project Management and Imaging Acquisition, Processing and End
Products. The three offerors exceeded the requirements for four of
the eight subfactors under the project management evaluation factor
and met the requirements for the remaining four subfactors. The
evaluated ratings and costs of these offerors were as follows:
OFFEROR PROJECT MGMT.IMAGE
ACQUISITION COST
JCWS Blue Blue $134M
OFFEROR A Blue Blue $154M
TSTC Blue Blue $169M
Because JCWS's proposal thus offered the lowest cost of the three
technically equal proposals, on June 19, the SSA determined that JCWS
offered the best overall value to the government and contract award
was made to JCWS on June 26. TSTC was provided a debriefing on July 3
and this protest was subsequently filed on July 7.
TSTC's objections to the agency's evaluation of proposals is
essentially based on its allegation that the agency changed the
evaluation criteria without notifying offerors. It is TSTC's position
that in accordance with the solicitation's statement of objectives,
the agency evaluators should have assigned higher ratings to offerors
proposing to use less government-furnished equipment (GFE) and
government-furnished facility (GFF) and to offerors making substantial
investments in new capital equipment.
The evaluation of proposals is a matter within the discretion of the
contracting agency. Our Office will question the agency's evaluation
only where it lacks a reasonable basis or conflicts with the stated
evaluation criteria for award. SC&A, Inc., B-270160.2, Apr. 10, 1996,
96-1 CPD para. 197 at 7.
We do not agree with TSTC that the agency failed to evaluate proposals
in accordance with the evaluation criteria. Contrary to the
protester's argument that the highest ratings must be reserved for
offerors using the least GFE/GFF, the RFP did not provide for
evaluation of proposals in this manner. The RFP specifically provided
that "[i]n determining that a proposed technical solution exceeds the
standards and merits a rating of exceptional (blue), the Government
will consider all significant benefits of the approach, whether or not
specifically identified in the proposal, which will provide superior
customer support and technical solutions which will reduce
government-furnished VITC support in the form of facilities and
equipment." RFP sec. M-2.b. The record demonstrates that the agency's
evaluation was unobjectionable and consistent with the stated
evaluation criteria. The agency evaluators rated JCWS's proposal
exceptional (blue) with a low proposal risk because it contained
significant strengths with no significant weaknesses. Consistent with
the solicitation evaluation criteria, the SSA viewed JCWS's proposed
84-percent reduction in GFF as offering contract performance which
will provide superior customer support with a reduction in overall
VITC support costs, and therefore as deserving an exceptional rating.
In support of its protest against the evaluation of proposals, TSTC
also maintains that the agency failed to conduct meaningful
discussions with TSTC because the agency failed to inform TSTC that
the agency wanted "the lowest cost solution to its needs, one that
would pay token homage to the Statement of Objectives goals while
actually maintaining a reliance on existing GFE." Protest at 17.
TSTC contends that, during discussions, the agency consistently
directed it toward the higher-priced technical solutions that met the
statement of objectives.
In negotiated procurements where discussions are held with offerors,
they must be meaningful, which means that sufficient information must
be furnished to offerors in the competitive range as to the areas in
which their proposals are believed to be weak so that offerors have a
reasonable opportunity to address those areas of weakness which could
have a competitive impact. The government does not satisfy its
obligation by misleading an offeror or by conducting prejudicially
unequal discussions. Lucas Place, Ltd., B-238008, B-238008.2, Apr.
18, 1990, 90-1 CPD para. 398 at 4. Here, we do not find that the
discussions were improper or misleading.
The record shows that TSTC was downgraded initially because it failed
to demonstrate that it met the contract requirement for supporting
three back-to-back events; failed to demonstrate the ability to meet
the 4-hour turn-around time for motion picture film processing; failed
to provide evidence of subcontractor commitments, describing their
roles, responsibilities and capabilities in performance of VITC;
failed to describe setup and operational processes for handling and
processing classified film products; and relied on the government for
coordination of contractor processes instead of associate contractor
agreements. Memorandum from Contracting Officer to TSTC 1 (Dec. 12,
1997). In its revised proposal, submitted in response to amendment
No. 0003, TSTC discussed three options for reducing costs and
increasing customer responsiveness relative to processing, printing,
finishing, captioning, packing and distributing still film products.
During discussions, TSTC was advised on several occasions that it had
failed to provide its strategy to meet the RFP delivery requirements
and that it was TSTC's responsibility to select which option it
believed to be most viable to meet RFP requirements. In response,
TSTC discussed the pros and cons of its different proposed solutions
without selecting a particular solution. It was only after continued
prodding by the agency that TSTC stated that its third proposed
solution was the optimal solution that met all requirements. Thus,
TSTC proposed to establish a commercial still laboratory in Port
Canaveral and perform as much work as possible in that facility,
subcontracting to other commercial facilities only that specialized
work that cannot be economically justified in-house. On this basis,
TSTC's proposal was rated blue (exceptional) for the project
management factor and the imaging acquisition, processing, end
products. The evaluators concluded that TSTC provided overall
superior technical solutions for acquiring images by proposing
advanced cameras and a new state-of-the-art processing facility
providing a selection of end products not currently available, albeit
at a higher cost to the agency.
The record shows that during discussions, it was never suggested to
TSTC what solution would best meet the RFP requirements. Rather, the
agency merely requested explanations as to TSTC's method for complying
with the requirements. For example, with respect to the 4-hour
delivery requirements, TSTC was advised that it had failed to identify
its chosen strategy for meeting this requirement. TSTC DR-1R. With
respect to the requirement for three back-to-back events, TSTC was
asked to clarify how it could handle three such events, in light of
its statement that its normal production capacity could only support
two events during a week. TSTC CR-27. Here, the agency merely
requested that TSTC select its strategy and explain how its proposed
solution would meet the requirements. Based on its own business
judgment of how best to satisfy the agency's requirements, TSTC
eventually proposed a more costly solution. We see nothing misleading
or improper about the agency's conduct during discussions.
TSTC also argues that, based on the awardee's low price, the awardee
will be unable to meet the RFP's delivery requirements and the
requirement for supporting three back-to-back events, and therefore
contends that these requirements must have been relaxed for the
awardee. However, the record shows that the agency did not relax any
of the RFP requirements for the awardee and reasonably concluded that
the awardee demonstrated that it could meet all the RFP requirements,
including delivery, at its proposed price. The record shows that, as
a result of a detailed price analysis, the agency found JCWS's price
to be reasonable and realistic and an accurate reflection of JCWS's
proposed technical solution for meeting the RFP requirements. The
evaluators concluded that JCWS demonstrated in detail how it could
meet the 4-hour and 24-hour delivery requirements through its proposed
use of off-site subcontractors, as well as some on-site work; the
agency also determined that JCWS integrated the work processing both
by quantity and technology. The evaluators concluded that both TSTC's
and JCWS's proposed solutions provided exceptional approaches to
meeting the requirements. However, the evaluated cost of JCWS's
solution was approximately $30 million less than TSTC's, and thus
offered the best overall value to the government.
Finally, the record simply does not support the protester's contention
that the agency changed its award criteria to give greater emphasis to
price. As stated above, the RFP provided that price and technical
were equal. Here, the SSA determined that three offerors, including
TSTC and JCWS were essentially technically equal, with all receiving
blue (exceptional) ratings for both technical evaluation factors, and
made award to JCWS because its total evaluated price was significantly
lower than that of the other offerors. Once the SSA determined that
the proposals were essentially technically equal, price properly
became the determinative factor. Oglivy, Adams & Rinehart,
B-246172.2, Apr. 1, 1992, 92-1 CPD para. 332 at 5.
Since we conclude that the agency properly evaluated TSTC's proposal
and did not mislead TSTC during discussions, TSTC is not an interested
party to maintain its other protest issues concerning the awardee's
proposal. Under the bid protest provisions of the Competition in
Contracting Act of 1984, 31 U.S.C.A. sec. 3551-56 (West Supp. 1998),
only an "interested party" may protest a federal procurement. That
is, a protester must be an actual or prospective bidder or offeror
whose direct economic interest would be affected by the award of a
contract or by the failure to award the contract. 4 C.F.R. sec. 21.0(a)
(1998). Determining whether a party is sufficiently interested
involves consideration of a party's status in relation to a
procurement. Where there are intermediate parties that have a greater
interest than the protester, we generally consider the protester to be
too remote to establish interest within the meaning of our Bid Protest
Regulations. Panhandle Venture V; Sterling Inv. Properties,
Inc.--Recon., B-252982.3, B-252982.4, Sept. 1, 1993, 93-2 CPD para. 142 at
2; The Law Co., B-248631, Sept. 10, 1992, 92-2 CPD para. 165 at 4. A
protester is not interested if it would not be in line for award if
its protest were sustained. Abre Enters., Inc., B-251569.2, Mar. 16,
1993, 93-1 CPD para. 239 at 4.
Here, TSTC lacks the direct economic interest necessary to qualify as
an interested party to maintain its other issues. As explained above,
while TSTC's proposal received a blue (exceptional) rating and had the
highest total evaluated price of all the competitive range offerors,
another offeror's proposal was also rated blue (exceptional), and its
total evaluated price was significantly lower than TSTC's. Because
TSTC has not protested the evaluation of this offeror's technically
equal, lower-priced proposal, even if we were to sustain the protest
with respect to the awardee's proposal, TSTC would not be next in line
for award. Accordingly, TSTC is not an interested party to protest
JCWS's evaluation and award.
The protest is denied.
Comptroller General
of the United States
1. The possible evaluation ratings for proposal risk and performance
risk were high, moderate, and low.
2. The color/adjectival ratings were blue/exceptional,
green/acceptable, yellow/marginal, and red/unacceptable.