TITLE:  Dynacs Engineering Company, Inc., B-284234; B-284234.2; B-284234.3, March 17, 2000
BNUMBER:  B-284234; B-284234.2; B-284234.3
DATE:  March 17, 2000
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Dynacs Engineering Company, Inc., B-284234; B-284234.2; B-284234.3, March
17, 2000

Decision

Matter of: Dynacs Engineering Company, Inc.

File: B-284234; B-284234.2; B-284234.3

Date: March 17, 2000

James S. Ganther, Esq., Ganther & Fee, for the protester.

Michael A. Hordell, Esq., Gadsby & Hannah, for Federal Data Corporation, an
intervenor.

Bernard J. Roan, Esq., National Aeronautics & Space Administration, for the
agency.

Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. In evaluating awardee's past performance, procuring agency reasonably
decided not to consider information that awardee had experienced transition
problems in performing an ongoing contract, where awardee explained that
performance problems in fact were not the result of its actions, and
cognizant contracting officials had not actually assigned awardee a negative
performance rating at the time of past performance evaluation.

2. There is no prohibition against an agency's raising items during second
round of discussions that it discussed with the offeror during the first
round.

DECISION

Dynacs Engineering Company, Inc. protests the award of a contract to Federal
Data Corporation (FDC) under request for proposals (RFP) No. 3-094978,
issued by the National Aeronautics and Space Administration (NASA) for the
development and operation of international space station facilities, and the
development and performance of microgravity experiments. Dynacs protests
that NASA misevaluated its and the awardee's proposals, held improper
discussions with the awardee and conducted an inadequate
cost/price/technical tradeoff. [1]

We deny the protest.

The solicitation provided for proposals to be evaluated under three equal
factors--mission suitability, cost/price and past performance. RFP sect. M.3
(a). Mission suitability was comprised of four subfactors--understanding the
requirement, management plan, key personnel, and corporate resources. RFP
sect. M.4. Proposals were to be assigned a point score and an adjectival rating
for each subfactor, as well as the overall mission suitability factor. Id.
Past performance also was evaluated with an adjectival rating. RFP sect. M.8.
With respect to cost, the solicitation was comprised of both fixed-price and
cost-reimbursement items, and accordingly provided for both a price analysis
(of the fixed-price items) and a cost realism analysis (of the
cost-reimbursement items). RFP sect. M.5. In addition, the mission suitability
score was to be adjusted based on the cost realism analysis. RFP sect. M.6.
Award was to be made to the offeror that submitted the proposal offering the
best value to the government. RFP sect. M.3.

Four offers were received and, following an initial evaluation by the source
evaluation board (SEB), two--Dynacs's and FDC's--were included in the
competitive range. NASA held discussions with both offerors and requested
that each submit a final proposal revision (FPR-1). After FPR-1 was
received, the agency held a second round of discussions and asked offerors
to submit a second final proposal revision (FPR-2). Following the evaluation
of FPR-2, both Dynacs, with a score of 881, and FDC, with a score of 740,
were rated very good under the mission suitability factor. Contracting
Officer's Statement (COS), Jan. 7, 2000, at 10, and both were also rated
superior for past performance. Source Selection Statement (SSS) at 8, 9.
With respect to cost/price, FDC's proposal was evaluated at [DELETED] lower
than Dynacs's, and FDC also was found to have offered a very favorable share
ratio (the percentage of costs FDC would absorb in the event of cost
overruns on the cost-reimbursement items). SSS Addendum (SSSA) at 4. The
source selection authority (SSA) reviewed the evaluation results, and
determined that FDC's proposal offered the best value to the government. SSS
at 10. Award thus was made to FDC, and this protest followed.

PAST PERFORMANCE

The solicitation provided that the past performance of the offerors and any
subcontractors and teaming partners would be assigned an adjectival rating
of superior, satisfactory or unsatisfactory, based on their demonstrated
accomplishment of work of similar magnitude, scope and complexity to the
work required by the RFP. RFP sect. M.8. Dynacs argues that the agency, in
assigning FDC a superior rating, unreasonably failed to consider negative
past performance information regarding FDC's performance of an ongoing NASA
contract at the Glenn Research Center (GRC). In this regard, during the
first round of discussions, before offerors submitted FPR-1, the SEB learned
that the contracting officer's representative (COR) administering that
contract intended to give FDC a negative performance rating for its
transition effort. COS, Jan. 7, 2000, at 7.

We review an agency's evaluation of an offerors' past performance only to
ensure that it was reasonable and consistent with the stated evaluation
criteria and applicable statues and regulations, since assessing the
relative merits of competing offerors' past performance (and of their
proposals overall) is primarily a matter of administrative discretion. A
protester's mere disagreement with the agency's judgment does not establish
that the evaluation was unreasonable. The Communities Group, B-283147, Oct.
12, 1999, 99-2 CPD para. 101, at 5, 6.

The evaluation in this area was reasonable. After learning of the COR's
potential negative rating, NASA asked FDC to respond to this information.
FDC did so, both explaining its position, and sending the SEB a copy of the
response it had sent to the COR. According to FDC's response, the transition
effort did not go well for reasons other than FDC's actions; FDC maintained
that the follow-on contractor caused many of the problems. Letters from FDC
to NASA (Sept. 10 and 13, 1999). Since the COR had not actually assigned FDC
a negative final rating, the SEB considered the issue unresolved and did not
use it to downgrade FDC in the past performance evaluation. COS, Jan. 7,
2000, at 8. We see nothing improper in the SEB's actions. Since the COR had
not provided a final rating by the time the SEB was completing its past
performance evaluation, and FDC provided a response in which it denied that
it was responsible for the difficult transition, it was reasonable not to
automatically attribute the problems to FDC. We think the SEB therefore
reasonably could conclude that the information available did not support a
finding of deficient past performance, and thus did not warrant downgrading
FDC. See The Communities Group, supra.

DISCUSSIONS

Dynacs asserts that, during the second round of discussions, NASA improperly
raised issues with FDC relating to its proposed staffing that NASA already
had raised during the first round of discussions. Dynacs maintains that it
was improper to afford FDC a second opportunity to respond to its concerns
and that, if FDC had not been given a second opportunity to correct the
deficiencies, the deficiencies would have remained and Dynacs would have
been entitled to the award.

Even if the protester is correct that NASA raised the same concerns in both
rounds of discussions (NASA disputes this), doing so was not improper.
Solicitations issued after January 1, 1998, such as the one here, are
governed by the Federal Acquisition Regulation (FAR), as amended by Federal
Acquisition Circular (FAC) No. 97-02. The FAR part 15 rewrite included in
this version of the regulation revised the provisions that apply when an
agency is contracting using negotiated procedures, including those
provisions governing exchanges with offerors after the receipt of proposals,
as set forth in FAR sect. 15.306. The prior version of the FAR contained
provisions that could be read to limit the extent to which agencies
conducted ongoing discussions with an offeror. For example, agencies were
prohibited from engaging in technical leveling (helping an offeror to bring
its proposal up to the level of other proposals through successive rounds of
discussions, such as by pointing out weaknesses resulting from the offeror's
lack of diligence, competence, or inventiveness in preparing the proposal).
See FAR sect. 15.610(d) (June 1997); Professional Servs. Group, Inc.,
B-274289.2, Dec. 19, 1996, 97-1 CPD para. 54 at 5. Agencies were also cautioned
against reopening discussions after receipt of best and final offers unless
it was clear that the information already available was inadequate to
reasonably justify contractor selection and award. FAR sect. 15.611(c) (June
1997). These restrictions were eliminated by the part 15 rewrite. The
current FAR does not discourage agencies from resolving a given proposal
weakness or deficiency by means of multiple rounds of discussions with the
offeror. See FAR sect. 15.306; Spectrum Science & Software, Inc., B-282373, June
22, 1999, 99-1 CPD para. 114 at 4. Indeed, we think that both the stated primary
objective of discussions--to maximize the government's ability to obtain the
best value, based on the requirements and evaluation factors set forth in
the solicitation, FAR sect. 5.306(d)(2)--and, more significantly, the definition
of discussions--which includes bargaining, consisting of persuasion,
alteration of assumptions and positions, and give and take, FAR
sect. 15.306(d)--arguably presuppose that there may be multiple discussions
regarding an issue. Nothing in the regulation suggests that further
discussions on an issue are impermissible simply because they may occur on
separate occasions, over a period of time. We conclude that there was
nothing improper in the agency's raising the same concerns in two rounds of
discussions with FDC. [2]

MISSION SUITABILITY

As explained above, section M.6 of the solicitation provided that the
mission suitability scores would be adjusted based on the realism of
offerors' proposed costs. The adjustment would be based on the percentage
difference between the agency's most probable cost analysis and the
offeror's proposed costs, in accordance with a table set forth in section
M.6. NASA deducted 10 points from Dynacs's mission suitability score under
the understanding the requirements subfactor based on its finding that
Dynacs's proposed cost for the cost-reimbursement items was [DELETED] what
the agency determined was the most probable cost for those items.

Dynacs claims this reduction was improper, arguing that, based on its
reading of the RFP, any adjustment to its mission suitability score was to
reflect an analysis of its total proposed cost, that is, the cost for both
cost-reimbursement and fixed-price items; NASA therefore improperly adjusted
Dynacs's score based only on the cost-reimbursement items. Dynacs concludes
that, since its total price for all items was within [DELETED] percent of
the agency's most probable cost determination, no points should have been
deducted from its mission suitability score.

Our Office will not sustain a protest unless the protester demonstrates a
reasonable possibility that it was prejudiced by the agency's actions, that
is, unless the protester demonstrates that but for the agency's actions, it
would have had a substantial

chance of receiving the contract award. Black & Veatch Special Projects
Corp.,
B-279492.2, June 26, 1998, 98-1 CPD para. 173 at 8; see Statistica, Inc. v.
Christopher,
102 F.3d 1577 (Fed. Cir. 1996).

Based on our review of the record, even if Dynacs were correct (NASA
maintains that it properly reduced Dynacs's score), Dynacs would not receive
the award. In this regard, while the SSA took note of the difference in
Dynacs's and FDC's point scores (881 versus 740) he did not base his award
decision on the scores. Rather, the SSA looked beyond the point scores to
the merits of the offerors' proposals. The SSA considered that both offerors
were rated very good under mission suitability, SSS at 10, and
notwithstanding the 10-point reduction based on the cost realism adjustment,
determined that Dynacs's proposal was superior to FDC's under the
understanding the requirements subfactor. Since the SSA therefore was well
aware of the superiority of Dynacs's proposal in this area when he made the
award decision, there is no reason to believe that adding 10 points to
Dynacs's score would have had any effect on that decision. In the final
analysis, the SSA simply concluded that any technical advantages available
from Dynacs's proposal were more than offset by FDC's [DELETED] cost/price
advantage and [DELETED]. [3] SSS at 10.

SUPPLEMENTAL PROTEST

On February 18, Dynacs submitted a supplemental protest in which it argues
that NASA did not adequately document the process by which it obtained
authorization from the Associate Administrator for Procurement to reopen
discussions. As NASA points out, however, while the agency is required to
obtain the Administrator's permission to reopen discussions, there is no
requirement that it provide formal documentation or a specific justification
for doing so. See NASA FAR Supplement sect. 1815.307(b)(ii). Thus, there is no
legal basis for this protest ground. Dynacs also argued that NASA did not
perform a cost realism analysis of FDC's FPR-2, and that there thus was no
apparent basis for the increase in FDC's mission suitability score based on
FPR-2. In response, NASA provided documentation showing that it did perform
a cost realism analysis of FDC's FPR-2, NASA Statement, Feb. 22, 2000,
at 1-2, 3, and Dynacs no longer argues that the second analysis was not
performed. Instead, Dynacs now questions whether the documentation is
genuine. However, there is no evidence, or reason to believe, that the
documents are not authentic.

The protest is denied.

Comptroller General
of the United States

Notes

1. In its initial protest, Dynacs also asserted that the agency improperly
penalized Dynacs twice for cost realism, failed to hold meaningful
discussions with Dynacs, applied unstated evaluation criteria, and gave
cost/price undue weight in the
cost/price/technical tradeoff. The agency addressed each of these issues in
its report, and Dynacs did not rebut the agency's arguments in its report
comments. Accordingly, we consider these issues abandoned. See RGII Techs.,
Inc.--Recon. and Protest, B-278352.2, B-278352.3, Apr. 14, 1998, 98-1 CPD
para. 130 at 5 n.4.

2. We note that, even under the prior version of the FAR, a procuring agency
properly could reopen discussions to discuss a previously raised item when
the agency felt such action was necessary to resolve its concerns before
making an award. See Telos Corp., B-279493.3, July 27, 1998, 98-2 CPD para. 30
at 9-11; Prospective Computer Analysts, Inc., B-275262.2, Feb. 24, 1997,
97-2 CPD para. 22 at 3-5. Here, it appears NASA's reason for reopening
discussions on the same items--it believed it had not discussed, or
adequately discussed, certain deficiencies, see COS, Jan. 28, 2000,
at 3-5--would meet this standard.

3. In Dynacs's January 18, 2000 comments in response to the agency report,
Dynacs for the first time argued that the cost/price/technical tradeoff was
improper because NASA did not consider the risk associated with FDC's cost
proposal. This argument is based on a document Dynacs received from NASA on
December 22, 1999. Since Dynacs did not raise the argument within 10 days of
that date, it is untimely. 4 C.F.R. sect. 21.2(a)(2) (1999). In any case, our
review of the source selection decision demonstrates that the SSA was aware
of the risks in FDC's cost/price proposal; the SSA believed that, even with
these risks, the potential savings from FDC's proposal were substantial. SSS
at 10.