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
**********************************************************************

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.