TITLE:  Columbia Research Corporation, B-284157, February 28, 2000
BNUMBER:  B-284157
DATE:  February 28, 2000
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Columbia Research Corporation, B-284157, February 28, 2000

Decision

Matter of: Columbia Research Corporation

File: B-284157

Date: February 28, 2000

Garry Grossman, Esq., Phyllis E. Andes, Esq., and Elizabeth N. Forgotson,
Esq., Fenwick & West LLP, for the protester.

Steve R. Conway, Esq., Department of the Navy, for the agency.

Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency improperly eliminated protester's proposal from
competitive range is sustained where record shows that protester's proposal
was broadly comparable to the competitive range proposals from a technical
standpoint, and agency improperly failed to consider protester's cost
advantage in making its competitive range determination.

DECISION

Columbia Research Corporation (CRC) protests the exclusion of its proposal
from the competitive range under request for proposals (RFP) No.
N61331-99-R-0002, issued by the Coastal Systems Station, Naval Surface
Warfare Center, for technical and specialty engineering support services for
Naval Special Warfare development and acquisition programs and life cycle
sustainment management for various Navy systems. CRC asserts that the agency
improperly eliminated its proposal from the competitive range.

We sustain the protest.

The RFP contemplated the award of a cost-plus-fixed-fee, indefinite-quantity
contract for 5 years. RFP at 50. The RFP required offerors to submit
technical, management and cost proposal volumes, RFP sect. L.1.1(a), and
contained detailed instructions on the type, comprehensiveness, and
structure of the information to be contained in each volume. RFP sect. L, at
38-48. Section M of the RFP stated:

Proposals will be evaluated for the degree of understanding demonstrated,
the technical excellence or lack thereof within the factors, and the level
of competence proposed within each factor where appropriate. Risk
assessments will be performed as to the risk of successful performance
within each factor. The factors for evaluation are as follows:

Technical Factors

Factor 1.0--Quantity and Quality of Technical Personnel

Factor 2.0--Understanding of the Requirement and Technical Approach to
Supporting the [Statement of Work] Functional Task Areas

Factor 3.0--Sample Problems

Factor 4.0--Past Performance and Sample Products

Management Factors

Factor 1.0--Management/Admin Organization

Factor 2.0--Current Manning and Peak Load Capability, Facilities, Phase-in
Plan, and Subcontracting plan

RFP sect. M.1.0, Evaluation of Volumes I and II--Technical and Management
Proposals.

In the technical area, factors 1, 2, and 4 were considered equal and each
was significantly more important than factor 3; within the management area,
factors 1 and 2 were equal. The technical and management factors together
were considered significantly more important than cost; the technical
factors were four times more important than the management factors. RFP
sect. M.1.0. Award was to be made to the responsible offeror whose proposal was
deemed most advantageous to the government. RFP sect. M.3.0, at 53.

Four proposals were received. Members of a technical evaluation review panel
(TERP) evaluated the initial proposals by assigning each an adjectival
(unacceptable, acceptable, excellent, or outstanding) and risk (low,
moderate, or high) rating under each technical and management factor. Each
TERP member also provided narrative explanations for the ratings given. The
TERP chairperson then first converted the adjectival and risk ratings to
numerical ratings in accordance with a predetermined formula to arrive at a
total technical score, and then calculated a total normalized numerical
rating for each proposal. The cost proposals then were subjected to a cost
realism analysis. The following table shows the results of the technical
evaluation and evaluated costs for the four proposals the agency received:

 Offeror   Raw/Normalized     Evaluated
           Tech. Scores       Cost

 C         86.9/100           $21,938,257

 D         73.5/85            20,047,448

 CRC       68.2/78            18,044,218

 B         46.3/53            18,297,915

Agency Report (AR ), exh. O, Pre-Negotiation Business Clearance Memorandum,
Oct. 20, 1999, at 7.

The TERP chairperson prepared a consolidated report based on the results of
the evaluation and forwarded it to a contract award review person (CARP).
The TERP report contained the average adjectival and risk ratings calculated
under each factor for all proposals, as well as the evaluators' narrative
comments in support of the assigned ratings. Based on his review of the TERP
reports, the CARP recommended to the contract specialist that only the
proposals of offerors C and D be retained in the competitive range. AR, exh.
J, CARP Report, Oct. 14, 1999, at 1. The CARP specifically represented, on
the basis of the evaluation results, that, even if given an opportunity to
correct deficiencies, there was only a remote possibility that the proposals
submitted by CRC and offeror B could be improved sufficiently to surpass the
scores earned by the remaining two proposals. Id.

The contract specialist agreed with the CARP's recommendation, finding that
the only way that CRC's proposal could earn a technical score sufficiently
high to be included in the competitive range would be with a "complete
rewrite of [CRC's] proposal." AR, exh. N, Competitive Range Determination,
Oct. 26, 1999. The contracting officer concurred with that conclusion, id.,
and the contract specialist prepared a pre-negotiation business clearance
memorandum for a contract review board (CRB), which approved the
recommendation that CRC's and offeror B's proposals be excluded from the
competition. AR, exh. O, Pre-Negotiation Business Clearance Memorandum, Oct.
20, 1999, at 7, and exh. P, CRB Approval Record. By facsimile transmission
dated November 4, the agency notified CRC that its proposal had been
excluded from the competitive range.

CRC asserts that, contrary to the agency's conclusions, the weaknesses
identified in its proposal are comparable in nature to those identified in
the competitive range proposals, and its proposal is essentially comparable
overall to the competitive range proposals. CRC concludes that there was no
reasonable basis for the agency to find that its proposal would require a
major rewrite in order to have a reasonable chance for award, and that its
proposal therefore should have been included in the competitive range.

In establishing a competitive range, agencies are required to include all of
the most highly rated proposals (unless they decide to further limit the
range for purposes of efficiency). Federal Acquisition Regulation (FAR)
sect. 15.306(c). Under the regulation, agencies properly may eliminate proposals
that are deemed to have no realistic prospect for award. SDS Petroleum
Prods., Inc., B-280430, Sept. 1, 1998, 98-2 CPD para. 59 at 5. However,
judgments regarding which proposals are included in a competitive range must
be made in a relatively equal manner. An agency, therefore, cannot
reasonably exclude a proposal from the competitive range where the strengths
and weaknesses found in that proposal are similar to those found in
proposals included in the competitive range. Nations, Inc., B-280048, Aug.
24, 1998, 99-2 CPD para. 94 at 4-5.

On the basis of the record before us, we find that the Navy unreasonably
excluded CRC's proposal from the competitive range because: (1) there is no
material distinction between it and the proposals in the competitive range
from a technical standpoint, and (2) the agency failed to consider cost in
excluding CRC's technically acceptable proposal from the competitive range.

First, the record shows that, compared to offeror D's competitive range
proposal, the CRC proposal was found technically superior and lower in risk
under two of the four technical evaluation criteria (factors 2 and 4, which,
under the terms of the RFP, were more important than factor 3), and
essentially equal under one of the two management evaluation criteria. AR,
exh. J, CARP Report, Oct. 14, 1999. (CRC's management proposal was also
found to offer an overall lower risk than offeror D's management proposal.
Id.) The aggregate scores of CRC's and offeror D's proposals were relatively
close--68.21 versus 73.47 raw points. Id.

The TERP's narrative statements describing the relative strengths of the
protester's and competitive range offerors' proposals also are broadly
similar. For example, under technical factor 1, quantity and quality of
technical personnel, CRC's and the two competitive range proposals were
found to include strong resumes reflecting special operations forces
experience. AR, exhs. F, H, I, Consensus Evaluation Reports. Similarly, both
the protester's and offeror C's proposals were found, under technical
evaluation factor 4, past performance and sample products, to show strong
experience in the ‘spec war' programs. AR, exhs. F, H, Consensus
Evaluation Reports. While the evaluation narratives for the three proposals
obviously are not identical, and all three proposals had particular areas
where they were considered stronger than the others, the evaluation
materials, when read as a whole, suggest a broad similarity at least between
CRC's and offeror D's proposals, and nothing in the evaluation narratives
suggests that either competitive range proposal was somehow fundamentally
stronger than the protester's.

Examining the issue from another perspective, the deficiencies identified in
the three proposals appear similar, such that nothing in the evaluation
materials suggests that the protester's proposal will require fundamentally
greater revision than the competitive range proposals. Ten weaknesses were
noted in CRC's proposal, [1] compared to 12 for offeror D and 7 for offeror
C. AR, exh. O, Pre-Negotiation Business Clearance Memorandum, Oct. 20, 1999,
at 17-18, attachs. 23 and 24. These deficiencies appear to be similar in
nature and magnitude. For example, CRC failed to address the solicitation's
requirement for engineers qualified in the area of human factors engineering
and acoustical and signature reduction technology. Both competitive range
proposals had similar personnel deficiencies--offeror C failed to include a
required computer programmer or adequate trades personnel, AR, exh. O,
Pre-Negotiation Business Clearance Memorandum, Oct. 20, 1999, at attach. 23,
while offeror D did not include personnel with adequate knowledge of
maritime special operations forces (as opposed to airborne special
operations forces). Id.
at attach. 24. Another of the cited deficiencies in CRC's proposal was the
failure to provide a phase-in plan detailing how out-of-town proposed
personnel would be relocated. AR, exh. O, Pre-Negotiation Business Clearance
Memorandum,
Oct. 20, 1999, at 17. Similarly, the agency included in offeror D's
discussion materials a request for information detailing how several
out-of-town proposed key employees would be moved to the place of
performance. Id. at attach. 24.

The record also shows the agency found that both competitive range offerors'
proposals failed to demonstrate an adequate understanding of at least one
(and in some cases more than one) major area of the requirements. Offeror C
failed to demonstrate an understanding of the use of the agency's so-called
3M failure data collection and analysis reporting system, and did not
demonstrate an adequate fabrication capability to meet the RFP requirement
to fabricate and maintain specialized equipment such as the SEAL delivery
vehicle (essentially a small submersible device used to deliver personnel
behind enemy lines). AR, exh. O, Pre-Negotiation Business Clearance
Memorandum, Oct. 20, 1999, at attach. 23. Offeror D failed to describe how
it would perform specific tasks in at least five areas under the
solicitation, with the agency noting that the proposal had a tendency to
just state that the offeror knew what needed to be done but failed to state
how the tasks would be accomplished. Id. at attach. 24. These failures to
comprehensively

address some aspect of the requirement are similar to those identified in
the CRC proposal; the protester's proposal was found, for example, to have
inadequately demonstrated its understanding of the agency's special warfare
data base system. Id. at 17.

We conclude that the evaluation record does not show that there was a
material difference--in terms of quantity or magnitude--in the weaknesses
identified in CRC's and the competitive range offerors' proposals, and that
the agency has failed to establish in its response to the protest that there
was such a difference.

We are also concerned that the record indicates that the Navy failed to
consider cost in making its competitive range determination. Agencies may
not eliminate a technically acceptable proposal from the competitive range
without taking into consideration the relative cost or price of that
proposal to the government. Kathpal Techs., Inc.; Computer & Hi-Tech
Management, Inc., B-283137.3 et al., Dec. 30, 1999,
2000 CPD para. __ at 9.

It appears that the competitive range determination here turned solely on
the agency's conclusion that CRC and the other offeror eliminated from the
competitive range would have to completely rewrite their proposals to
achieve a technical score high enough to be in line for award. In this
regard, the agency's decision document states as follows:

Columbia Research Corporation (CRC) and [offeror B] were found outside the
competitive range because of their lower technical scores. The lower cost
and technical scores for CRC and [offeror B] reflect their proposal strategy
of having a lower level manning mix. The only way they could achieve a
technical score high enough to be placed in the position of award would be a
complete rewrite of their proposals.

AR, exh. N, Competitive Range Determination, Oct. 26, 1999. CRC enjoyed an
evaluated cost advantage of approximately 21 percent over offeror C's
highest-rated technical proposal, and 11 percent over offeror D's
second-rated technical proposal. [2] Given the magnitude of CRC's cost
advantage and the closeness of CRC's proposal's technical ranking to that of
the competitive range proposals (even without considering the apparent
substantive similarity of the proposals, as discussed above), the agency
could not eliminate CRC's proposal from further consideration without
evaluating the relative value of those cost savings to the government.

We note that, to the extent the quoted reference to CRC's lower-level
staffing mix arguably indicates that the agency gave some consideration to
cost, the agency's conclusion is not supported by the record. None of the
technical or cost evaluation materials prepared in connection with the
agency's review of the CRC proposal reflect such an observation, and
staffing mix was not included in the list of weaknesses in CRC's proposal.
On the other hand, the record does include such a finding with respect to
offeror D's proposal. Specifically, the record states as follows (regarding
a review by an individual in the activity's engineering branch):

He reviewed the cost proposals for realism based on Labor Mix and
compatibility with the corresponding technical proposals and found three (3)
acceptable as submitted. One of the proposals [offeror D's] reflects a
greater level of support at the Mid and Junior levels than the Government
estimate, which would result in a lower overall proposed cost than would be
expected if the labor mix were more in line with the Government estimate.
The technical evaluation should address the relative strength or weakness of
this mix.

AR, exh. O, Pre-Negotiation Business Clearance Memorandum, Oct. 20, 1999,
attach., Cost Realism Analysis Memorandum, Sept. 9, 1999, at 2. Offeror D's
labor mix also was designated as an area for discussions. AR, exh. O,
Pre-Negotiation Business Clearance Memorandum, Oct. 20, 1999, at attach. 24.
[3] Thus, to the extent cost was considered at all in connection with the
agency's competitive range determination, any such consideration was based
on an erroneous assessment, and improperly reflected negatively on CRC's
proposal. [4]

In view of the foregoing, we sustain CRC's protest. We recommend that the
Navy include CRC's proposal in the competitive range and that the firm be
given an opportunity to revise its proposal pursuant to meaningful
discussions with the agency. We further recommend that the Navy reimburse
CRC the reasonable costs associated with filing and pursuing its bid
protest, including reasonable attorneys'

fees. 4 C.F.R. sect. 21.8(d)(1) (1999). CRC's certified claim for costs,
detailing the time spent and the costs incurred must be submitted to the
agency within 60 days of receiving this decision. 4 C.F.R. sect. 21.8(f)(1).

The protest is sustained.

Comptroller General

of the United States

Notes

1. The pre-negotiation business clearance memorandum identifies eight
numbered weaknesses, but materials subsequently prepared by the agency
identify a total of 11 weaknesses; of these 11, the agency acknowledges that
one was incorrect.

2. This 11-percent cost advantage may be understated. As discussed below,
offeror D's proposal reflected a relatively low-level staffing mix, which
obviously gave the firm an advantage in preparing its cost proposal. In
addition, the record shows that offeror D did not include any general and
administrative overhead or materials handling charges in its cost proposal;
the addition of these cost elements will also necessarily affect its overall
evaluated cost.

3. We point out as well that the technical evaluation materials prepared for
offeror D do not show that the evaluators took cognizance of this relative
weakness in the firm's proposal; this leads us to question further the
validity of the agency's having ranked offeror D's proposal ahead of CRC's
in the initial evaluation, which was relied upon to eliminate the CRC
proposal from the competitive range.

4. CRC also challenges the technical evaluation on several grounds and
alleges that the evaluation materials reflect bias on the part of the
evaluators. Given our recommendation that CRC's proposal be included in the
competitive range for the reasons discussed, CRC's allegations relating to
the technical evaluation are academic, and there is no basis in the current
record to suggest that the evaluators will act in a biased manner in
reevaluating the revised proposals.