BNUMBER:  B-280928; B-280928.2; B-280929; B-280929.2 
DATE:  December 4, 1998
TITLE: Westinghouse Government and Environmental Services Company,
Inc., B-280928; B-280928.2; B-280929; B-280929.2, December 4, 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: Westinghouse Government and Environmental Services Company, 
Inc.

File:      B-280928; B-280928.2; B-280929; B-280929.2

Date:      December 4, 1998

Stanley R. Soya, Esq., Richard J. Vacura, Esq., and Sheila C. Stark, 
Esq., Piper & Marbury, and Hopewell H. Darneille III, Esq., Verner, 
Liipfert, Bernhard, McPherson and Hand, for the protester.
Harvey G. Sherzer, Esq., Jeffrey N. Eisenstein, Esq., Lee P. Curtis, 
Esq., Scott Arnold, Esq., and Douglas S. Manya, Esq., Howrey & Simon, 
for Bechtel National, Inc., the intervenor.  
Gena E. Cadieux, Esq., James S. Carey, Jr., Esq., and Patricia D. 
Graham, Esq., Department of Energy; and Rebecca K. Cressy, Esq., 
Robert D. Hogue, Esq., William A. Longwell, Esq., Michael J. Glennon, 
Esq., John M. Davis, Esq., and Kelly K. Swartz, Esq., Department of 
the Navy, for the agencies.
Adam Vodraska, Esq., John L. Formica, Esq., and James A. Spangenberg, 
Esq., Office of the General Counsel, GAO, participated in the 
preparation of the decision.

DIGEST

1.  Protest that the contracting agencies unreasonably evaluated the 
protester's and awardee's competing proposals is denied where the 
record demonstrates that the evaluation was reasonable.

2.  Award to the offeror submitting the higher priced, technically 
superior proposal in response to a solicitation which provided that 
technical merit was more important than price is unobjectionable where 
the contracting agencies reasonably determined that the awardee's 
superior technical proposal was worth the additional cost.

DECISION

Westinghouse Government and Environmental Services Company, Inc. 
(GESCO) protests the award of contracts to Bechtel National, Inc. 
(BNI) by the Pittsburgh Naval Reactors Office, Department of Energy 
(DOE), and the Naval Sea Systems Command, Department of the Navy, 
under request for proposals (RFP) Nos. DE-RP11-98PN38001 and 
N00024-98-R-4064, respectively, a joint procurement for the management 
and operation of the Bettis Atomic Power Laboratory, and for design, 
development, improvement, and maintenance of naval nuclear propulsion 
plants.  

We deny the protests.

Bettis is a government-owned, contractor-operated research and 
development facility dedicated to the Naval Nuclear Propulsion Program 
(also known as the Naval Reactors (NR) Program), a joint program of 
DOE and the Navy.  Report at 2.[1]  The NR Program performs activities 
of crucial importance to national security by ensuring the safe and 
effective use of nuclear propulsion on board the Navy's 
nuclear-powered warships and submarines.  Id.  These ships constitute 
a large portion of the Navy's combat fleet and call on numerous ports 
throughout the world; the submarines currently deploy more than half 
of the nation's strategic nuclear weapons.  Id.

The successful offeror under the RFPs will be required to manage and 
operate Bettis in support of the NR Program.  The work includes the 
design, development, and testing of high-power, long-life reactor 
plants for Navy ships and submarines; the maintenance, operation and 
modification of the Navy's Expended Core Facility; reactor design and 
evaluation studies of new and improved methods of nuclear propulsion; 
and maintenance and operation of the various test facilities at the 
Bettis site.  DOE RFP (Tab 2)  sec.  C at 1-3.  The offeror will also be 
required to perform research and development to ensure continued safe 
and reliable nuclear propulsion, the modification and upgrading of 
existing nuclear propulsion plant components, nuclear plant operator 
training, nuclear plant operation and servicing engineering, nuclear 
plant planning yard engineering, refueling overhaul, and delivery of 
any reports or technical data requested or required by the government.  
Navy RFP
(Tab 1) at 2-3, 8-10. 

The RFPs contemplated the award of two cost-plus-fixed-fee contracts 
(one DOE, one Navy) to a single offeror for a 5-year base period with 
one 5-year option.[2]  Report at 3; Navy RFP (Tab 1) at 4-5, 26-27; 
DOE RFP (Tab 2)  sec.  B at 1, F.  The RFPs stated that the awards would 
be made to the responsible offeror submitting the proposal 
representing the best value to the government, price and other factors 
considered, and listed the following technical evaluation factors and 
subfactors:

     Factor (1) - Management
        Subfactor (a) - Independent Technical Judgment
        Subfactor (b) - Transition Plan
        Subfactor (c) - Corporate Resources

     Factor (2) - Past Performance

     Factor (3) - Environmental, Safety and Health Compliance
        Subfactor (a) - Environmental Compliance
        Subfactor (b) - Safety and Health Compliance

Joint RFP (Tab 3)  sec.  M at 3-4.  The RFP informed offerors that the 
technical evaluation factors were listed in descending order of 
importance, with the management factor being significantly more 
important than the past performance, and environmental, safety and 
health compliance evaluation factors.  Id. at 4.  The RFP added that 
the subfactors of the management factor were listed in descending 
order of importance, with the independent technical judgment subfactor 
being significantly more important than transition plan and corporate 
resources evaluation subfactors.  Id.  The RFP stated that the 
subfactors of the environmental, safety and health compliance factor 
were of equal importance.  Id.

The RFP provided detailed instructions for the preparation of 
proposals.  Id.  sec.  L
at 3-17.  For example, the RFP required proposals to include, among 
other things, a brief executive summary, a technical proposal volume 
limited to 50 pages and organized to respond to the evaluation factors 
and subfactors, and past performance references.  Id. at 7-12.  
Because the RFPs provided for the award of both contracts to the same 
contractor, each offeror was required to submit a single proposal in 
response to the RFPs.  Id. at 1,  sec.  M at 3.  Offerors were also advised 
that the government intended to award the contracts without 
discussions.  Id.  sec.  M at 1.

For price, offerors were to propose a fixed fee as a discount from the 
maximum fee established by the RFP.  Id.  sec.  L at 13-15, M at 4.  The 
agencies explain that the RFP did not request cost proposals from 
offerors because the government controls "the vast majority" of the 
costs incurred for the operation of Bettis and had "the clearest 
possible understanding of its potential costs."  Report at 4-5.  The 
RFP estimated the potential costs to total approximately $5 billion 
for the base and option periods, and $6.25 billion with certain other 
potential work.  RFP amendment 4 (Tab 4) at 2-4.

The RFPs set forth a number of requirements that are somewhat unique.  
For example, with regard to personnel, the RFPs provided that at the 
time the awardee commences performance, all incumbent employees will 
become employees of the awardee and will retain equivalent base pay 
and employee benefits.  DOE RFP
(Tab 2)  sec.  H at 8-9; Joint RFP (Tab 3)  sec.  M at 2.  The RFP required the 
contractor to establish a separate pension plan to which the assets 
and liabilities of the Bettis segment of the current incumbent's 
pension plan will be transferred.  DOE RFP (Tab 2)  sec.  H at 8. 

The RFP also required that the successful offeror certify that it will 
establish a separate legal entity responsible for all contract 
activities, specifically, a wholly-owned subsidiary incorporated by 
the offeror to perform work solely for the NR Program.  Joint RFP (Tab 
3)  sec.  K at 9.  The RFP added that the offeror, as the parent company, 
"shall during the term of the contract own all outstanding shares" in 
the established entity, and could not transfer any stock in the Bettis 
entity without the prior approval of the government.  Id.  The RFP 
required offerors to guarantee performance by the established entity, 
and to certify in their proposals that any corporate involvement in 
Bettis operations would be limited to that necessary to satisfy 
corporate fiduciary responsibilities.  Id.

The RFPs established a June 8, 1998, closing date for receipt of 
proposals.  Navy RFP (Tab 1) at 1; DOE RFP (Tab 2) at 1.  The agencies 
received proposals from six offerors, including GESCO (the incumbent 
contractor) and BNI, by the closing date.[3]  Report at 5; Abstract of 
Proposals (Tab 12).  The proposals were provided to a Technical 
Evaluation Review Panel (TERP).  Report at 5-6.  The TERP rated BNI's 
proposal as "excellent" under each of the subfactors to the management 
factor and under the past performance factor, and as "outstanding" 
under each of the subfactors to the environmental, safety and health 
compliance evaluation factor.[4]  TERP Report (Tab 32) at 3.  The TERP 
rated GESCO's proposal as "excellent" under the independent technical 
judgment and transition plan subfactors to the management factor, as 
well as the past performance factor and each of the subfactors to the 
environmental, safety and health compliance factor, and "good" under 
the corporate resources subfactor to the management factor.  Id. at 8.

The TERP submitted the results of its evaluation and a detailed 
summary of its narrative findings for each proposal (including its 
assessments of each proposal's strengths, weaknesses, and risks) to a 
Contract Award Review Panel (CARP).  Report at 5, 7.  The CARP 
reviewed the TERP report and obtained clarifications from the TERP.  
CARP Report (Tab 33) at 3.  Based upon its review of the proposals, 
the CARP adjusted the proposals' adjectival ratings to increase BNI's 
proposal rating under the independent technical judgment subfactor 
from "excellent" to "outstanding," and decrease GESCO's rating for the 
safety and health compliance subfactor from "excellent" to "good."  
Id. at 3-5.  After finalizing the adjectival ratings, the CARP 
calculated numeric scores for each proposal under the evaluation 
subfactors and factors, as well as an overall technical score.  Id. at 
5-6.  BNI's proposal received an overall technical score of 357.25 at 
a total evaluated price (fixed fee) of $79 million, and GESCO's 
proposal received an overall score of 282.75 at a total evaluated 
price (fixed fee) of $58.4 million.  Id.  The CARP concluded that 
BNI's higher-rated technical proposal warranted paying the higher 
price, and recommended that the contracts be awarded to BNI.  Id. at 
6-8.

The CARP prepared and submitted a report to the agencies' source 
selection authorities (SSA) summarizing the overall evaluation 
results.  Report at 9; CARP Report (Tab 33).  This report included the 
findings of the TERP, the CARP's justification for its modifications 
to the TERP's ratings, and the CARP's recommendation for award and 
rationale for that recommendation.  CARP Report (Tab 33).  The SSAs 
adopted the CARP's recommendation for award and the contracts were 
awarded to BNI on August 13.  Report at 5, 9; Source Selection 
Decision Memoranda (Tabs 34 and 35).  GESCO requested and received a 
debriefing, Report at 9, and filed its protests with our Office.

GESCO challenges the reasonableness of the agencies' evaluation under 
virtually all of the evaluation factors and subfactors.  The protester 
also complains that, in a number of instances, the agencies' 
evaluation was inconsistent with the evaluation factors set forth in 
the RFP. 

The evaluation of technical proposals is a matter within the 
discretion of the contracting agency since the agency is responsible 
for defining its needs and the best method of accommodating them.  
Matrix Int'l Logistics, Inc., B-277208, B-277208.2, Sept. 15, 1997, 
97-2 CPD  para.  94 at 4.  In reviewing an agency's evaluation, we will not 
reevaluate technical proposals, but instead will examine the agency's 
evaluation to ensure that it was reasonable and consistent with the 
solicitation's stated evaluation criteria.  Id.  An offeror's mere 
disagreement with the agency does not render the evaluation 
unreasonable.  Id.  Based upon our review of the record, and, as 
discussed below, we find that the agencies' evaluation of GESCO's and 
BNI's proposals was reasonable and in accordance with the terms of the 
RFP.  

The primary focus of GESCO's protests is the agencies' evaluation of 
GESCO's and BNI's proposals under the independent technical judgment 
subfactor.  As mentioned previously, this is the most important 
subfactor of the most heavily weighted evaluation factor--management.

As relevant to the independent technical judgment subfactor, the RFP 
required that offerors submit a management plan addressing how they 
planned "to ensure the separate Bettis business entity continues to 
provide unbiased, independent technical recommendations to the [NR 
Program]."  Joint RFP (Tab 3)  sec.  L at 8.  Specifically, the RFP 
requested that the management plan address, among other things, the 
relationship the separate Bettis business entity would have to the 
rest of the offeror's organization, including the degree of its 
technical independence.  Id.  The plan was also to address any 
corporate reporting requirements, financial requirements or goals, or 
other corporate requirements to be imposed on the Bettis entity, as 
well as any incentives (financial or otherwise) for the managers of 
the separate Bettis business entity which would be based on the parent 
corporation's financial results, stock price, or any other objectives 
external to the separate Bettis business entity.  Id. at 9.   

In evaluating GESCO's proposal under the independent technical 
judgment subfactor, the TERP found that GESCO's proposal demonstrated 
"an in-depth appreciation for and understanding of the critical 
importance of Bettis's technical independence to the continued success 
of the [NR Program]."  TERP Report (Tab 32) at 66.  The TERP noted, 
however, that GESCO's management plan had a major weakness in that its 
proposal did not address whether a separate board of directors would 
be appointed for Bettis and, if so, its composition and relationship 
to the Bettis general manager.  Id. at 67.  The TERP also assessed 
GESCO's proposal as having moderate risk, noting that, although GESCO 
stated in its proposal that it is being acquired by a new corporate 
entity and that the Bettis contracts will be honored, the proposal 
provided no details as to how GESCO could guarantee "that the new 
parent corporation will agree with the Bettis relationship and/or the 
Bettis [general manager's] autonomy."  Id.  The evaluators concluded 
that GESCO's proposal merited an "excellent" rating under the 
independent technical judgment evaluation subfactor.  Id. at 66.

The protester essentially contends that the evaluators should have 
rated its proposal as "outstanding" rather than "excellent" under the 
independent technical judgment subfactor.  See Aug. 28 Protest at 
8-10.  Specifically, the protester argues that, in assessing its 
proposal as having moderate risk, the TERP used an unannounced 
evaluation criterion by considering the pending sale of GESCO and 
expecting GESCO to address how it would guarantee that the new parent 
corporation would continue to recognize the autonomy of the Bettis 
entity and its general manager.  Id. at 9-10. 

The agencies note that, notwithstanding the moderate risk assessed by 
the TERP for GESCO's failure to address the impact of its pending sale 
on the Bettis entity's independence, GESCO's proposal would still not 
have received an "outstanding" rating under the independent technical 
judgment subfactor because the TERP, as noted above, also assessed 
GESCO's proposal as having a major weakness with regard to its 
proposed board of directors for Bettis.  Report at 12.  In this 
regard, the source selection plan provided that a proposal could not 
receive an outstanding rating under a factor or subfactor if it was 
evaluated as having any major weaknesses, and the protester has not 
contested this aspect of the evaluation of its proposal.[5]  Source 
Selection Plan (Tab 7) at 16.

In any event, we believe that the pending sale of the protester's 
organization to an as-yet unidentified parent corporation could 
properly be considered under the independent technical judgment 
subfactor.  The evaluators' concern here went to the failure of 
GESCO's proposal to address, in light of its announced pending sale 
and resulting change in corporate ownership, how GESCO would ensure 
the autonomy of the Bettis operation and its ability to provide 
independent technical advice to the NR Program.[6]  The agencies' 
evaluation of this aspect of GESCO's proposal as posing a moderate 
risk was consistent with the RFP's evaluation factors, because, as 
mentioned previously, the RFP specifically provided that proposals 
would be assessed under the independent technical judgment subfactor 
to evaluate how the offeror planned to ensure that the separate Bettis 
business entity would continue to provide unbiased, independent 
technical recommendations to the NR Program.  Based on our review, the 
TERP's rating of GESCO's proposal as "excellent" (rather than 
"outstanding") under the independent technical judgment subfactor was 
reasonable and consistent with the terms of the solicitation.[7]

The protester next contests the agencies' evaluation of BNI's proposal 
under the independent technical judgment subfactor as "outstanding."  
Sept. 21 protest
at 6-7, 9-10.  Specifically, the protester argues that this rating was 
unreasonable given BNI's proposed "Reward for Performance" management 
incentive plan.
Id. at 6-7. 

BNI's proposal stated that under its proposed Reward for Performance 
incentive plan "a portion of the annual profits earned by all of the 
Bechtel companies is distributed back to our employees in the form of 
an annual bonus."  BNI Technical Proposal at 9.  The proposal added 
that "[DELETED]."  Id.  The proposal explained that "[DELETED]."  Id.  
The proposal noted that the "Reward for Performance program is funded 
[DELETED]."  Id. at 9.  In evaluating BNI's proposal, the TERP 
specifically noted BNI's Reward for Performance Program as a major 
strength.[8]  TERP Report (Tab 32) at 11.  

The agencies explain that in evaluating proposals under the 
independent technical judgment subfactor they considered whether the 
Bettis managers would "be rated on external corporate matters such as 
profitability or how other portions of the corporate entity are 
performing."  Hearing Transcript (Tr.) at 27.[9]  The agencies state 
in this regard that Bettis personnel have "to do a technical job for 
us and that's where their minds should be and their efforts devoted."  
Tr. at 27-28.  Accordingly, the agencies explain that their primary 
concern was not the source of the incentive plan's funds, but rather 
whether an incentive plan "rated an individual based on 
profitability," which in the agencies' view may prove to be a 
distraction to Bettis managers.  Id.

The agencies found that the primary strength of BNI's plan was that 
BNI proposed to rank the Bettis managers based on customer 
satisfaction.  Tr. at 67-68, 70-71, 147, 149.  Specifically, the 
agencies found that under "[BNI's] incentive plan . . . the managers' 
performance would be rated . . . based on issues relating to customer 
satisfaction and satisfactory accomplishment of their technical and 
programmatic responsibilities, all of which are in direct support of 
the naval nuclear propulsion program."  Tr. at 25.  The agencies 
viewed BNI's proposed management incentive plan as "essentially 
equivalent" or "comparable" to the current Bettis incentive plan which 
was referred to in Appendix A of the DOE RFP.[10]  Tr. at 61, 64-65.

The protester contends that instead of considering BNI's management 
incentive plan as a major strength under the independent technical 
judgment subfactor, the evaluators should have concluded that BNI's 
management incentive program constituted a weakness or risk.  Sept. 21 
Protest at 6-7.  According to the protester, Bechtel's company-wide 
incentive plan increases the potential for parent company involvement 
in the Bettis operation because the size of the Bechtel management 
bonus pool is [DELETED].  Id. at 6.  The protester also asserts that 
this [DELETED] threatens to compromise the independence and judgment 
of Bettis management in negotiating "arm's length" contracts with 
other Bechtel businesses.  Id.

The protester's contentions that BNI's management incentive plan poses 
a threat to Bettis's independent technical judgment are unfounded.  In 
this regard, we first note that the contractor's fee percentage is 
fixed by the contract, with the estimated costs set by the government, 
and thus "there was nothing that a Bettis manager could really do to 
affect the profit that would go to the parent corporation."  Report at 
22; Tr. at 147-48.  Indeed, BNI's proposal itself states that "[o]nce 
our fee has been set through NR/DOE's acceptance of our offer, our 
corporate financial goals are met."[11]  BNI Technical Proposal at 11.

Further, the agencies have procedures in place to ensure an "arm's 
length relationship" between the Bettis contractor and its parent 
corporation and affiliates; specifically, the contractor's purchasing 
system must be documented and approved by the government, subcontracts 
over certain dollar amounts ($25,000 for cost-reimbursement contracts, 
$100,000 for fixed-price contracts) must be approved by the 
government, and, under DOE regulations applying to Management and 
Operations (M&O) contracts, any purchases from contractor-affiliated 
sources must be conducted as if such purchases were from a third party 
and generally must be awarded competitively.  Report at 22; Tr. at 
148.  Such provisions clearly vitiated any risk of the kind alleged by 
the protester.

The protester next argues that BNI's management incentive plan poses a 
risk that Bettis management could be negatively affected by potential 
financial downturns experienced by Bechtel.  Sept. 21 Protest at 6.  
According to the protester, a significant reduction in [DELETED] could 
result in a smaller bonus pool for the Bettis entity which would in 
turn result in smaller bonuses for Bettis managers and thus could 
negatively affect the morale and retention of key Bettis employees.
Nov. 3 Comments at 9.

The evaluators did not consider the source of funds for BNI's 
incentive plan to warrant concern because even if a large corporation 
such as Bechtel somehow had insufficient profits available for paying 
management incentives, BNI "would earn enough fee off the Bettis 
contract to pay those bonuses even if the overall corporation was 
losing money" and that, if necessary, the government would allow BNI 
"to charge [the cost of the incentive program] as an allowable cost" 
through a contract change.  Tr. at 172, 174-76, 183-84.  The protester 
has not demonstrated that the evaluators' judgment in this regard was 
unreasonable.

Finally, the protester maintains that BNI's proposal to allow Bettis 
managers to participate in its company-wide management incentive plan, 
which in 1997 provided bonuses for senior managers ranging from 
[DELETED] percent of their annual salary (with an average bonus of 
[DELETED] percent), would result in a far less attractive bonus 
package than the current Bettis plan, which GESCO proposed to continue 
(as described in DOE RFP  sec.  J, Appendix A, the current plan provides 
for bonuses of up to 33 percent of annual compensation).  Sept. 21 
Protest at 6.  According to the protester, a reduction in the 
potential bonus available to the managers could result in "morale 
problems" at Bettis, which should have been considered by the 
evaluators.  Id.  The protester further asserts that the changed level 
of potential bonuses in BNI's proposed management incentive plan does 
not comply with the RFP requirement that all current employee base 
salary and benefits remain the same.  Nov. 3 Comments at 10; Nov. 12 
Comments at 12-14.

In our view, the evaluators' determination that the bonuses provided 
by BNI's incentive plan and the current Bettis incentive plan were 
"essentially equivalent" or "comparable" was reasonable.  GESCO has 
provided no basis for its contention that BNI's proposed incentive 
plan is "far less" attractive than the current plan.  In this regard, 
neither GESCO's proposal nor its protest reveals the actual bonuses 
awarded, including whether any of the bonuses given under the current 
Bettis incentive plan were as much as 33 percent.  In contrast, BNI's 
proposal described the actual bonus ranges resulting from the 1997 
bonus pool allocated to BNI, based on BNI corporate annual salaries, 
and its proposal did not limit a Bettis manager's bonus to [DELETED] 
percent of annual compensation.  BNI Technical Proposal
at 12; Tr. at 64.  Indeed, the evaluators reasonably did not regard 
BNI's 1997 corporate bonus range to be "locked in" for the Bettis 
contracts but, instead, found that BNI had proposed the framework of 
an incentive plan essentially equivalent to the current plan, with the 
particulars of BNI's incentive plan to be agreed upon after award, as 
all offerors were allowed to do.  See Tr. at 158.  Further, contrary 
to the protester's assertion, the RFP only required each offeror to 
agree to provide the same basic pay and benefits as the incumbent's 
employees are currently receiving, which BNI unequivocally committed 
to do, and not the precise incentive plan referred to in Appendix A of 
the DOE RFP.  See BNI Proposal Vol. I Qualification Criteria; Tr. at 
81-82.

In sum, we find that the agencies could reasonably conclude that BNI's 
management incentive plan was a strength rather than a weakness or 
risk under the independent technical judgment subfactor.

The protester next objects to the TERP's determination during its 
evaluation of BNI's proposal under the independent technical judgment 
subfactor that a corporate policy memorandum formalizing the 
autonomous nature of the Bettis relationship with the rest of BNI, and 
prohibiting the recruitment of Bettis employees by other corporate 
entities, constituted a major strength.  Sept. 21 Protest at 9.  The 
protester points out that the TERP, in its report, referred to this 
document as a "draft corporate policy memorandum," and argues that 
because the document was "merely a draft" it should not have been 
considered.  Id.  This argument is without merit.

BNI's proposal states that Bechtel has "drafted a corporate procedure 
delineating the interactions between [the Bettis entity] and the other 
Bechtel companies," and includes a copy of the corporate policy 
memorandum setting forth these procedures.  BNI Technical Proposal at 
4-5.  The memorandum is not marked "draft," or otherwise referred to 
as a preliminary or tentative version of BNI's corporate policy.  
Accordingly, notwithstanding the TERP's use of the term "draft" in 
describing the corporate policy memorandum, the only reasonable 
interpretation of BNI's proposal is that, as recognized by the TERP, 
the policy memorandum represents what is actually being committed to 
by BNI as its corporate policy. 

The protester also argues that the CARP acted unreasonably in 
adjusting the rating of BNI's proposal under the independent technical 
judgment subfactor from "excellent" to "outstanding."  Oct. 19 
Comments at 30-33.  The protester points out that, in evaluating BNI's 
proposal, the TERP determined that BNI's proposal contained a major 
weakness in that it did not adequately specify the extent of the 
limits that the corporate policy memorandum placed on the Bettis 
general manager's authority in the areas of finance and acceptance of 
corporate risk.  Id.
at 30-31. 

In increasing BNI's rating under the independent technical judgment 
subfactor to "outstanding," the CARP specifically recognized that the 
TERP had assessed this major weakness for BNI's proposal.  CARP Report 
(Tab 33) at 3-4.  The CARP noted, however, that another, more complete 
copy of BNI's corporate policy memorandum was set forth in the 
Executive Summary of BNI's proposal.  Id. at 4.  Based on this new 
information, the CARP concluded that the limits placed on the Bettis 
general manager by BNI's memorandum were explained and acceptable.  
Id.  Further, in upgrading BNI's rating, the CARP assessed an 
additional major strength for a feature in BNI's corporate policy memo 
not considered by the TERP but contained in the portion of the 
memorandum reproduced in the Executive Summary of BNI's proposal.  Id.

The protester does not specifically contest the substance of the 
rationale given by
the CARP for changing the TERP's adjectival rating to "outstanding."  
Instead, the
protester argues that the CARP's review of the copy of BNI's corporate 
policy
memorandum reproduced in the Executive Summary of BNI's proposal, as 
well as a
complete copy of the memorandum provided by BNI at the request of the
evaluators, was improper because the RFP required offerors to address 
corporate
policy statements in the technical proposal, and was tantamount to BNI 
exceeding
the RFP's 50-page technical proposal limitation.  Oct. 19 Comments at 
31-32.  The protester's arguments are without merit because, under the 
source selection plan, the CARP was not limited to reviewing the 
technical volume of the proposals, as was the TERP.  See Tab 7.

We also do not view as improper the CARP's review of a complete copy 
of the memorandum supplied by BNI at the evaluator's request because, 
again, this was clearly the same memo reproduced in BNI's technical 
proposal.  Further, the CARP specifically stated in its report that 
the information already in BNI's proposal was itself sufficient for 
the rating upgrade, and that the complete copy of BNI's memorandum it 
later received merely "reinforced" the rating upgrade to 
"outstanding."  CARP Report (Tab 33) at 4.  The protester has simply 
not shown why the CARP's adjustment of BNI's proposal's rating under 
the independent technical judgment subfactor from "excellent" to 
"outstanding" was unreasonable or otherwise improper.

In sum, while GESCO clearly disagrees with the agencies' evaluations 
of the proposals under the independent technical judgment subfactor, 
and specifically the evaluators' judgment that BNI's management 
incentive plan was reasonably considered a strength because the 
incentives for BNI's managers will be based on their performance in 
accomplishing NR Program objectives (rather than corporate 
profitability), its disageement with the agencies' technical judgment 
does not render this aspect of the evaluation unreasonable.  McDonnell 
Douglas Corp., B-259694.2, B-259694.3, June 16, 1995, 95-2 CPD  para.  51 at 
19. 

GESCO next protests that the agencies' evaluation of its proposal 
under the corporate resources evaluation subfactor as "good" (rather 
than "excellent" or "outstanding") was both unreasonable and 
inconsistent with the terms of the solicitation.  Aug. 28 Protest at 
12-17; Sept. 21 Protest at 12-14.

The RFP required that offerors demonstrate their "ability to manage a 
pension fund for at least 2,700 people consistent with [Cost 
Accounting Standards (CAS)] and [Employee Retirement Income Security 
Act of 1974 (ERISA)] standards," and specified that this would be 
evaluated under the corporate resources subfactor to the management 
factor.  Joint RFP (Tab 3)  sec.  L at 10; Report at 37.

In evaluating GESCO's proposal as "good" for the corporate resources 
subfactor, the TERP noted GESCO's experience with large numbers of 
employees in pension plans as a major strength, and GESCO's proposal 
for a [DELETED] (comprised of [DELETED] representatives) to oversee 
the Bettis pension plan as a minor strength.  TERP Report (Tab 32) at 
70.  However, the TERP also determined that GESCO's experience 
constituted a major weakness because the current Bettis pension plan, 
which is administered by GESCO's parent corporation, "is significantly 
underfunded, as is the corporate pension plan."[12]  Id. at 71.  The 
TERP observed that GESCO's "proposal notes they will ensure the 
pension plan is fully funded in the future . . . but fails to address 
the current situation or plans to ensure improved performance in the 
future."[13]  Id.

The protester contends that it was improper for the agencies to 
consider the underfunded status of the current Bettis pension plan 
under the corporate resources subfactor.  Aug. 28 Protest at 12-17; 
Sept. 21 Protest at 12-14.  The protester argues that, although the 
solicitation provided that an offeror's ability to manage a large 
pension fund would be evaluated, the solicitation did not specifically 
request information regarding the funding status of pension plans, and 
thus the agencies' consideration of funding status was inconsistent 
with the terms of the solicitation.  Aug. 28 Protest at 12-17; Sept. 
21 Protest at 12-14.

Although the RFP did not specifically request offerors to provide the 
funding status
of pension plans they manage, the evaluators' consideration of 
Westinghouse's performance in administering the current Bettis pension 
plan was appropriately encompassed under the corporate resources 
subfactor in evaluating GESCO's proposal.  This evaluation subfactor 
clearly put offerors on notice that the agencies intended to consider 
information that would demonstrate an offeror's ability to manage a 
pension plan of the size required for Bettis consistent with CAS and 
ERISA standards.  In this regard, as pointed out by the agencies, even 
where the pension plan or plans managed by an offeror were consistent 
with CAS and ERISA standards, the funding status of those plans is 
indicative of an offeror's ability to manage a pension plan.  Report 
at 36-44.

The protester asserts that, in accordance with the solicitation, the 
assets and liabilities of the current Bettis plan will be transferred 
to the successful contractor, with the government assuming the plan's 
liabilities.  Aug. 28 Protest at 13.  The protester argues that 
because of this, the underfunded status of the current Bettis plan 
should not have been considered by the evaluators as relevant to the 
merits of GESCO's proposal.  Id. at 13-17.  We disagree.  The 
management of the current Bettis pension plan, where GESCO is the 
incumbent contractor, is not so significantly different from what will 
be required in the management of the new plan for it to be 
unreasonable for the agencies to have considered the management of the 
current Bettis plan in evaluating GESCO's ability to manage a pension 
fund of that size.  See Report at 40-41.

The protester next argues that "[t]o the extent . . . GESCO's past 
history with respect to its corporate pension plan is relevant to the 
. . . evaluation," the agencies' assessment of a major weakness 
because of the plan's underfunded status was unreasonable.  Aug. 28 
Protest at 13-14.  GESCO asserts in this regard that the agencies 
wrongly concluded that "underfunding is per se proof that the plan was 
not properly managed and that GESCO is responsible for the 
underfunding."
Oct. 19 Comments at 41.  

The record reflects that the current Bettis plan, although separately 
accounted for since 1988, has been part of, and managed under, the CBS 
(formerly Westinghouse) corporate pension plan.  Report at 37.   The 
record shows that Westinghouse's corporate pension plan, including the 
Bettis segment, has been underfunded for many years, and that the 
level of underfunding has increased.  Id.  While GESCO offers 
mitigating explanations for the increase in the underfunding of the 
Bettis segment of the Westinghouse corporate pension plan, Oct. 19 
Comments at 41-48, it is undisputed that the Bettis segment as well as 
the corporate pension plan itself remain significantly underfunded.  
See Nov. 3 Comments at 18.  Given this situation, the evaluators' 
assessment of a major weakness because GESCO's proposal "fails to 
address the current [underfunding] situation or plans to ensure 
improved performance in the future" was reasonable because GESCO's 
proposal simply does not discuss the longstanding underfunded status 
of the current Bettis pension plan or its management.  TERP Report 
(Tab 32) at 71.

The protester also argues that BNI should not have received an 
"excellent" rating for the corporate resources subfactor, because BNI 
did not disclose the funding status of the pension plans that it 
administers and that it described in its proposal.  Sept. 21 Protest 
at 13-14.

The TERP assessed BNI a minor weakness for its failure to disclose the 
funding status of its pension plans, notwithstanding that the 
evaluators independently found that one of BNI's plans was actually 
overfunded (the funding status of the other two remained unknown).  
TERP Report (Tab 32) at 16.  GESCO does not assert (and the record 
does not indicate) that the two plans for which funding status appears 
unknown are actually underfunded.  Because of this and GESCO's failure 
to challenge any other aspects of the agencies' evaluation of BNI's 
proposal under the corporate resources subfactor, we have no basis to 
find unreasonable the agencies' "excellent" rating.

The protester next challenges the agencies' evaluation of both its and 
BNI's proposals as "excellent" under the past performance evaluation 
factor.  Aug. 28 Protest at 24-26; Sept. 21 Protest at 19-24.  For 
example, the protester argues that it should have received a higher 
rating under this factor than BNI because of its performance as the 
current and past Bettis contractor and as the contractor on other and 
large and complex M&O and Research and Development (R&D) contracts.  
Aug. 28 Protest at 24-25; Oct. 19 Comments at 65, 68.  The protester 
points out here that BNI's proposal provided past performance 
information for only one M&O contract (at the DOE Nevada Test Site), 
and argues that BNI's other past performance experience, including its 
performance of Management and Integration (M&I) contracts, is of "very 
little relevance" to the performance of the contracts to be awarded 
under these RFPs.  Sept. 21 Protest at 21-24; Oct. 19 Comments at 68.

GESCO's past performance at Bettis was evaluated as a major strength 
by the agencies.  See TERP Report (Tab 32) at 72.  The TERP clearly 
considered the size and complexity of GESCO's contracts, as well as 
its quality of performance, in assessing GESCO's past performance.  
Id.  For example, the TERP found that GESCO "has demonstrated 
successful performance over a broad range of other very large and 
complex contracts in the nuclear industry, some of which are much 
larger in scope than the Bettis contract."  Id.  The TERP added here 
that "these contracts clearly demonstrate [GESCO's] ability to manage 
large operations involving multiple subcontractors, and complex 
nuclear, environmental, safety and health responsibilities."  Id.  

With regard to BNI's past performance, the TERP noted that BNI had 
limited involvement with R&D operations on the scale of Bettis, and it 
was accordingly assessed a minor weakness for this aspect of its 
proposal; however, the TERP found that BNI's proposal did demonstrate 
a large range of relevant past performance in the nuclear power 
industry.  Id. at 17.  For example, the TERP found that BNI's past 
performance included "very large and complex multiyear contracts in 
excess of $1 Billion."  Id.  The TERP noted that this experience 
included "contracts with several DOE sites including the Nevada Test 
Site, Oak Ridge, Savannah River, and Brookhaven National Laboratory."  
Id.  The TERP report adds that "[c]ustomers generally rate Bechtel's 
performance as excellent with no unfavorable reports."  Id.     

The agencies explain that, because the contract contemplated by the 
RFP "requires the management of an existing entity [Bettis] with 
operations already in place," it considered an offeror's "corporate 
ability to manage contracts of comparable size and complexity . . . to 
be more important than actual corporate experience in the M&O work to 
be performed."  Report at 61.  The agencies add that there are enough 
similarities between the performance of M&I type contracts and the 
performance of the M&O type of work required for Bettis to render past 
performance of M&I contracts relevant in the past performance 
evaluation.  Id. at 61-62.  In this regard, the agencies explain that 
although the work required under M&O contracts involving nuclear 
facilities "is indeed, complex and difficult . . . M&I contracts, 
which, in general, require management of a site as well as 
environmental cleanup, are also complex and difficult."  Id. at 61.  
The agencies note that, while under an M&I contract a contractor 
assumes management of an M&O site and manages and operates the site at 
a reduced level, the reduction in operations may be offset by the 
complexities of environmental remediation.  Id. at 61-62.  The 
agencies conclude that because an M&I contract requires many of the 
same tasks as an M&O contract (as well as its own unique set of 
skills) it was reasonable to consider BNI's performance of such 
contracts to be relevant.  Id. at 62-64.  Although the protester 
clearly disagrees with the agencies' position regarding the relevance 
of BNI's past performance of M&I contracts, the protester's 
disagreement does not render the agencies' judgments unreasonable.  
McDonnell Douglas Corp., supra.

Further, although the agencies did consider BNI's past performance of 
M&I contracts to be relevant, they did not, as the protester suggests, 
equate BNI's past performance of these contracts to GESCO's past 
performance of M&O and R&D contracts, including the Bettis contract.  
Indeed, as mentioned above, the TERP assessed BNI's proposal as having 
a minor weakness because of its limited involvement with R&D 
operations on the scale of Bettis.  That being said, we cannot find, 
based upon the record here, that the agencies acted unreasonably in 
evaluating both GESCO's and BNI's past performance as "excellent," 
given BNI's extensive history with large and complex contracts in the 
nuclear industry. 

The protester also argues that the TERP, in arriving at the past 
performance ratings, did nothing more than average the numerical 
scores associated with the past performance ratings from the offerors' 
references and therefore did not reasonably and independently assign 
ratings for this factor.  Sept. 21 Protest at 20.  The protester's 
assertion here is not supported by the record.  Specifically, the 
record reflects that while the TERP did calculate a past performance 
score based upon the ratings received from the references, this was 
not the only aspect of the agencies' overall assessment of each 
offeror's past performance.  As noted above, the agencies also 
considered and prepared narratives discussing the relevancy of the 
offerors' past performance, including the size and complexity of the 
work performed.  See TERP Report (Tab 32) at 17, 72.  Indeed, 
according to the record, the TERP informed the CARP that in assessing 
past performance, it "considered relevance of past performance to be 
of equal importance with customer scores."  TERP Report Clarifications 
(Tab 30) at 2.   

The protester also complains that the evaluation record does not show 
that the evaluators considered negative information about BNI's 
performance [DELETED].  Sept. 1 Protest at 21-24.

The negative past performance information referred to by the protester 
is [DELETED] and attached to the information returned to the 
evaluators by the [DELETED] reference.  BNI Past Performance 
References (Tab 16).  According to the agencies, this information was 
considered by the TERP during its evaluation, but was not viewed as 
warranting the assessment of a weakness for BNI's past performance.  
Report at 56-57, 65.  The agencies explain that the [DELETED] also 
included many favorable statements concerning BNI's performance and 
rated BNI's performance as "excellent" in three of five past 
performance categories.  Report 
at 57.  The agencies add that none of the other past performance 
references included negative information about BNI, and that these 
references generally rated BNI's performance as excellent or 
outstanding, including on some other large and complex projects 
considered relevant to the Bettis contracts by the evaluators.  Id.  
The agencies conclude that, because of the considerations noted above, 
the TERP chose not to document the negative information about BNI's 
performance [DELETED].  Id.  Based upon this explanation as well as 
our review of the record, the fact that the evaluation documents fail 
to indicate that the TERP considered the particular negative past 
performance noted above does not itself provide a basis for finding 
the agencies' evaluation of BNI's proposal unreasonable.  

GESCO protests that the agencies evaluation of its proposal under the 
environmental compliance subfactor to the environmental, safety and 
health compliance factor was unreasonable and inconsistent with the 
RFP.  Aug. 28 Protest at 17-19; Sept. 21 Protest at 14-15.

The RFP requested that offerors provide a "summary of all fines, 
notices of violation, notices of noncompliance, citations, or 
comparable regulatory enforcement documents received over the past 5 
years associated with the operation of industrial, commercial, or 
research facilities."  Joint RFP (Tab 3)  sec.  L
at 12.  The RFP added that "[f]or any issues identified, describe 
actions taken to resolve/mitigate the situation."  Id.

In evaluating GESCO's proposal under the environmental compliance 
subfactor as "excellent," the TERP noted that GESCO had, for example, 
"wide ranging environmental experience including managing operations 
which required obtaining over 750 environmental permits."  TERP Report 
(Tab 32) at 74.  However, the TERP also found that GESCO's proposal 
contained a major weakness in that GESCO had received 43 notices of 
"violation and/or noncompliance" with environmental laws or 
regulations, which did "not compare favorably to the high standards of 
the NR Program."  Id.  

The protester argues that the TERP's conclusion that GESCO's 
environmental compliance record does not compare favorably to the high 
standards of the NR Program amounts to the use of an undisclosed 
evaluation criterion.  Aug. 28 Protest at 19; Sept. 21 Protest at 
14-15.  GESCO complains that nowhere in the RFP are offerors 
specifically alerted that the "standards of the NR Program" would be 
considered in evaluating their environmental compliance record.  Aug. 
28 Protest
at 19; Sept. 21 Protest at 14-15.

We agree with the agencies that NR standards of environmental 
compliance were directly encompassed by and related to the 
environmental compliance subfactor.  Report at 49.  In asking offerors 
to detail their record of environmental compliance, the RFP clearly 
put offerors on notice that their record of environmental compliance 
would be evaluated.  Given the mission and history of the NR Program, 
it should come as no surprise that the program requires the highest 
standards of environmental compliance and that the agencies sought 
such standards from the offerors here.
  
The protester next contends that the TERP's assessment of a major 
weakness for GESCO's receipt of the 43 notices of violation or 
noncompliance "ignores the context in which the notices of violation . 
. . were issued."  Oct. 19 Comments at 53.  Specifically, the 
protester asserts, among other things, that it "has successfully 
managed and operated more highly toxic and hazardous waste sites than 
any other contractor in the U.S. [and] has wide-ranging experience 
managing and operating sites that are highly regulated and require 
extensive permitting compliance."  Id.  The protester concludes that, 
given the scope and difficulty of the projects it has performed, the 
"43 notices of violations is a small relative number" and, 
accordingly, that "the major weakness is not supported by the factual 
record."  Id.
 
The protester's argument here constitutes nothing more than its 
disagreement with the agencies' evaluation.  As mentioned above, the 
evaluators specifically considered the context of GESCO's performance 
history with regard to environmental compliance, and nonetheless found 
that GESCO's record of 43 notices of violation and/or noncompliance 
was significant.  The protester has not provided any persuasive 
analysis in support of its position that the 43 notices in fact 
constituted a relatively small number compared to its overall 
performance history.  Accordingly, we cannot find the agencies' 
evaluation was unreasonable in rating GESCO's proposal under the 
environmental compliance subfactor as "excellent" (rather than 
"outstanding").

GESCO protests that the agencies evaluation of its proposal under the 
safety and health compliance subfactor to the environmental, safety 
and health compliance factor was inconsistent with the terms of the 
RFP.  Aug. 28 Protest at 19-21;
Sept. 21 Protest at 15-16.

The RFP requested that offerors address this subfactor by, among other 
things, providing a "summary of accident and injury records, including 
fatal accidents and accidents leading to major property damage 
(greater than $100,000 per event)," as well as a "list of all fines, 
penalties, other citations, or comparable regulatory enforcement 
documents levied by outside organizations (DOE, OSHA, etc.) over the 
last five years."  Joint RFP (Tab 3)  sec.  L at 12. 
     
As mentioned previously, the TERP rated GESCO's proposal as 
"excellent" for the safety and health compliance subfactor.  The TERP 
noted that GESCO's proposal contained minor weaknesses, because, among 
other things, GESCO chose to engage in what the TERP characterized as 
"selective reporting" about its past safety record.  TERP Report (Tab 
32) at 75-76.  Specifically, the TERP noted that GESCO "reported its 
favorable lost workday case rate statistics for the five year period . 
. . January 1, 1993 - December 31, 1997."  Id. at 76. The TERP found, 
however, that GESCO, in reporting no fatalities or major property 
damage events in the last 5 years, based this claim upon a different 
reporting period which instead covered June 9, 1993 through June 8, 
1998.  Id.  In performing its evaluation of the offerors' proposals 
under the safety and health compliance subfactor, the TERP reviewed 
DOE accident/injury records, and discovered that a Westinghouse/GESCO 
employee was fatally injured and died on June 14, 1993, as the result 
of an industrial accident which occurred on June 7, 1993--2 days prior 
to the reporting period for fatalities and property damage used by 
GESCO in its proposal.[14]  Id.

After reviewing the TERP report, the CARP decided to change the TERP's 
adjectival rating for GESCO under the safety and health compliance 
subfactor from "excellent" to "good" based on the following rationale:

     The TERP considers that [GESCO] only has minor weaknesses and no 
     major weakness in this subfactor.  The TERP considers [GESCO] 
     engaged in selective reporting regarding safety and health 
     compliance history.  On the one hand, five-year lost/restricted 
     workday case rate statistics are provided for all of 1993 while, 
     on the other hand, five-year accident and fatality rates start on 
     June 9, 1993, the day after [GESCO] experienced an on the job 
     fatality with major property damage.  The CARP considers 
     [GESCO's] selective reporting and the severity of the unreported 
     incident to be a major weakness.

CARP Report (Tab 33) at 5.

The protester contends that in rating GESCO's proposal as "good" for 
the safety and health compliance subfactor the agencies unreasonably 
downgraded GESCO's proposal based upon their determination that the 
proposal lacked candor in that it failed to report the June 7, 1993 
accident in its proposal and because of the "severity of the 
[unreported] incident."  Aug. 28 Protest at 19-21; Sept. 21 Protest at 
15-16.  GESCO asserts that the information in its proposal was not 
presented in a manner that lacked candor but was consistent with the 
way the information was kept in the company's record keeping system, 
and that the information was accurate and complied fully with the 
RFP's request for information from the last 5 years.  Aug. 28 Protest 
at 21; Sept. 21 Protest at 16.

In our view, the evaluators reasonably characterized GESCO's failure 
to report the June 7, 1993 accident in its proposal as "selective 
reporting," in that GESCO used two different reporting periods (on 
adjoining pages of its proposal) in describing its safety and health 
records.  Although the unreported accident itself may have happened 2 
days outside of the 5-year reporting period based upon the proposal 
due date, the injured worker actually died a week after the accident 
occurred, and within any reporting period.  Thus, in light of this 
information, GESCO's statement that its facilities had no fatal 
incidents in the last 5 years could reasonably cause the agencies 
concern.  Given the undisputed severity of the accident, and the 
agencies' reasonable determination that GESCO's proposal lacked 
candor, we find nothing unreasonable in the agencies' evaluation of 
GESCO's proposal as "good" under the safety and health compliance 
subfactor.

GESCO protests that the agencies' evaluation of its and BNI's 
proposals under the environmental compliance and safety and health 
compliance subfactors evidences "disparate treatment."  See Sept. 21 
Protest at 17-18.  In this regard, the protester points out that BNI's 
proposal was evaluated as "outstanding" under these subfactors even 
though BNI has limited experience as an M&O contractor.  Id.  GESCO 
asserts that, because of its substantial experience as an M&O 
contractor, it "logically has a greater risk of environmental, safety 
and health compliance issues," and that this "greater risk" was not 
considered by the agencies in evaluating either BNI's or GESCO's 
proposal.  Id. at 18.

The record reflects that the agencies appreciated the fact that, given 
GESCO's greater amount of relevant M&O contract experience, GESCO has 
a greater risk of environmental, safety and health compliance issues, 
and evaluated GESCO accordingly.  See TERP Report Clarifications (Tab 
30) at 3; TERP Report (Tab 32) at 74.  Moreover, the protester errs 
factually in stating that, unlike GESCO, BNI is not managing and 
operating sites or engaging in ongoing operating activities that could 
give rise to environmental compliance violations.  As noted by the 
evaluators, BNI's past performance includes contracts with several DOE 
sites, including nuclear facilities, involving management and 
operation, environmental cleanup and restoration, as well as other 
activities at major facilities with the potential for environmental, 
safety and health compliance violations.  See TERP Report (Tab 32) at 
17, 19.  Accordingly, this aspect of the protests is without merit.

GESCO contends that the agencies cost/technical tradeoff 
recommendation and decision were based solely on technical merit, and 
essentially failed to consider price.  Sept. 21 Protest at 25-27.  The 
protester points out that the CARP reduced the value of BNI's price 
premium to a percentage of the total potential Bettis program cost 
rather than comparing it to the price the government would have to pay 
to GESCO, the second highest ranked offeror.[15]  Id.  

In making its cost/technical tradeoff, the CARP considered a number of 
factors.  The CARP noted, for example, that BNI's proposal received 
the highest technical rating of any of the six proposals received.  
CARP Report (Tab 33) at 7.   Specifically, the CARP noted in making 
its cost/technical tradeoff recommendation that BNI's proposal was the 
only to receive an "outstanding" rating under the independent 
technical judgment subfactor (the most important subfactor under the 
most heavily weighted evaluation factor).  Id.  The CARP noted that 
the "[r]eceipt of anything but unbiased technical recommendations" 
from the Bettis contractor could result in, among other things, 
"expensive rework in shipyards or supplier plants, or costly recovery 
actions wherever [naval nuclear propulsion plants] operate around the 
world."  Id.  The CARP concluded that "[u]nder these circumstances, 
the difference between the adjectival ratings of Outstanding and 
Excellent for the Independent Technical Judgement subfactor is 
considered to be worth a significant difference in price."  Id. 

The CARP added that a number of other factors entered into its award 
recommendation, including BNI's environmental, safety, and health 
record, which was evaluated as "outstanding" and, as indicated, 
considered to be superior to that of any of the other offerors.  Id. 
at 8.  In this regard, the CARP stated that "[s]hutdown and recovery 
costs from a single loss of life, serious personnel injury, or major 
property loss incident could easily exceed the premium associated with 
selecting [BNI's] superior technical proposal."  Id.  The CARP's 
cost/technical tradeoff recommendation also mentions that BNI's 
management incentive plan would be funded from [DELETED], rather than 
by the agencies as an allowable cost, which could result in a saving 
to the government of approximately $[DELETED] per year.  Id.  The CARP 
also noted that only BNI's proposal received a rating of at least 
"excellent" under each of the RFP's factors and subfactors.  Id.
at 7.  The CARP concluded that BNI's approximate total price premium 
of $20 million more than GESCO's second highest rated technical 
proposal was "considered by the CARP to be [a] reasonable amount[] to 
pay for the outstanding attributes of the [BNI] proposal, which are 
considered extremely critical to the continued long-term success of 
Naval Nuclear Propulsion efforts at the Bettis Atomic Power 
Laboratory."  Id. at 6-7 (emphasis in original). 

The record reflects that the agencies' cost/technical tradeoff 
recommendation and decision were thoughtful and consistent with the 
terms of the RFP in that all required factors, including price (the 
least important factor in the evaluation scheme), were considered.  
With regard to price, it is apparent from the CARP report that in then 
stating that the amount of this premium "also represent[s] only .3% . 
. . of the combined estimated cost base of the Department of Navy and 
Department of Energy contracts to be awarded of $6.25 billion," the 
CARP was only presenting the amount of BNI's cost premium in different 
terms, and was not failing to consider the premium.  Id. at 7.  
Further, since the CARP report itself listed the total evaluated 
prices (fixed fee) for BNI ($79 million), GESCO ($58.4 million), and 
the other offerors, for the base and option periods of the contracts, 
the CARP was plainly aware of the difference in the total prices, not 
merely BNI's $2 million annual premium over GESCO.  Id. at 6.  In sum, 
the agencies recognized the extent of the price premium, adequately 
explained why they believed BNI's higher-rated proposal was worth that 
premium, and reasonably selected that proposal for award.[16]   See 
Matrix Int'l Logistics, Inc., supra, at 14.

The protests are denied.

Comptroller General
of the United States

1. DOE and the Navy filed a joint administrative report responding to 
the protests.  References to the agencies' combined legal memorandum 
and contracting officers' statement will be to the page of the 
"Report."  References to an exhibit attached to the Report will be to 
the "Tab" number of the exhibit.

2. The Navy and DOE RFPs were issued jointly and share the same 
section K (representations and certifications), section L 
(instructions, conditions, and notices to offerors) and section M 
(evaluation factors for award).  The shared sections are hereinafter 
referred to as the "joint RFP."

3. Bettis has been operated by Westinghouse Electric Corporation (now 
CBS Corporation) since 1948.  Report at 2, 3.  During this 50-year 
period, Westinghouse's contracts were awarded on a sole-source basis.  
Id. at 3.  On May 27, 1998, shortly before the June 8, 1998 due date 
for proposals, CBS incorporated GESCO as a wholly-owned subsidiary.  
Id. at 14.   

4. The source selection plan provided that proposals could be rated as 
either outstanding, excellent, good, marginal, or unsatisfactory under 
the past performance factor and each of the subfactors to the 
management and environmental, safety and health compliance factors.  
Source Selection Plan (Tab 7) at 16-18.

5. The protester concedes that GESCO's technical proposal did not name 
the Bettis board of directors, but asserts that BNI also failed to do 
so.  Oct. 19 Comments
at 19 n.5.  However, as evident from the language in the TERP report 
(Tab 32)
at 67, it was not the failure to disclose the names of the members of 
the boards of directors that concerned the evaluators, but that GESCO 
did not address the relationship of the board of directors of the 
Bettis entity to its general manager.  Contrary to the protester's 
assertion, BNI addressed this in its technical proposal
at 3. 

6. The protester argued that the government should have conducted 
discussions so that GESCO could have addressed the evaluators' 
concerns about the pending sale. Aug. 28 Protest at 10.  In their 
report, the agencies explained why no discussions were warranted in 
this regard.  Report at 19-21.  Since the protester did not respond in 
its comments to the agencies' explanation we view this aspect of the 
protest as abandoned.  See Terex Cranes, Inc., B-276380, June 10, 
1997, 97-1 CPD  para.  209 at 5-6.

7. We also find that the evaluators' concerns were reasonable in that 
the guarantees provided by GESCO (including, for example, the 
guarantee requiring the government's approval of the transfer of stock 
of the wholly-owned Bettis subsidiary) do not themselves address 
completely the preservation of Bettis's relationship and autonomy 
after the pending sale to new corporate ownership.  

8. As mentioned previously, the CARP changed BNI's proposal's rating 
under the independent technical judgment subfactor from "excellent" to 
"outstanding."  In doing so, the CARP did not specifically mention 
BNI's management incentive plan, but rather noted that the upgrade was 
consistent with the source selection plan in that it was based upon 
the proposal's major strengths far exceeding the requirements of the 
solicitation and its lack of any major weaknesses.  CARP Report (Tab 
33) at 3-4.

9. Because the record contained no contemporaneous evidence that the 
evaluators considered whether BNI's incentive plan posed a threat to 
Bettis's technical independence from other Bechtel businesses, our 
Office conducted a hearing on this issue, with the TERP Chairman and 
the CARP Chairman appearing as witnesses.

10. Appendix A sets forth the human resources policies allowable as 
costs under the contracts.  DOE RFP (Tab 2)  sec.  J, Appendix A.  
Regarding incentive compensation, Appendix A specified that:

            The contractor should provide specific language regarding 
            policies in accordance with [a DOE order].  The following 
            is the current language: The Contractor has established an 
            Incentive Compensation Plan . . . .  Total actual payments 
            to Laboratory employees under the plan for performance 
            during any calendar year will be considered reasonable and 
            allowable costs under this contract up to a limit of
            .44 percent of the Laboratory's gross annual payroll for 
            the year.  Individual employee's incentive awards will be 
            no more than 
            33 percent of their annual compensation.

Id. at 10.

11. During the November 6 hearing at our Office the protester pointed 
out that figure 12 in BNI's technical proposal included a ranking 
worksheet from Bechtel's 1997 Reward for Performance Program, which 
labeled one of four performance rating criteria as "[DELETED]."  BNI 
Technical Proposal at 11-12.  According to the protester, the 
reference to profitability should have been negatively considered by 
the agencies in their evaluation of BNI's proposal under the 
independent technical judgment evaluation subfactor.  

The record shows that the evaluators recognized that figure 12 
included a "[DELETED]" performance rating criterion rather than the 
"[DELETED]" criterion described in detail in BNI's proposal.  The 
evaluators reasonably viewed figure 12 as an example of BNI's 
[DELETED] incentive plan ranking worksheet which, as indicated in the 
proposal's detailed narrative, would be adapted to the ranking 
criteria BNI proposes to use for this contract by replacing the 
"[DELETED]" performance rating criterion with the "[DELETED]" rating 
criterion detailed in BNI's proposal.  Tr. 43-57; 169-70. 

12. According to the protester, as of January 1, 1997, the Bettis 
segment of the Westinghouse pension plan was 54.9 percent funded while 
the overall Westinghouse plan was 77.5 percent funded.  Nov. 3 
Comments at 18.

13. The agencies noted that

            The Corporate management of the Corporate pension plan of 
            the incumbent contractor, Westinghouse, who received the 
            second highest rated technical proposal, has left the 
            Department of Energy responsible for a projected $65.8 
            [million] pension fund deficit in an era when many 
            companies have experienced overfunding due to more 
            proficient pension fund management.

CARP Report (Tab 33) at 8.

14. The TERP also noted that this accident led to $333,700 in property 
damage to the worksite.

15. The protester also argues that the cost/technical tradeoff 
determination was unreasonable because its and BNI's proposals were 
unreasonably evaluated.
Sept. 21 Protest at 24-25.  Because, as set forth in the analysis 
above, we find that the agencies' evaluation was reasonable, the 
protester's contention here is without merit.

16. During the course of the protests GESCO made a number of other 
related contentions having to do with the propriety of the agencies' 
evaluation of proposals and selection of BNI for award.  Although not 
every one of these contentions is specifically addressed in this 
decision, each was carefully considered by our Office and found to be 
either insignificant in view of our other findings, or invalid based 
upon the record as a whole.