TITLE:  McDonald Construction Services, Inc., B-285980; B-285980.2, October 25, 2000
BNUMBER:  B-285980; B-285980.2
DATE:  October 25, 2000
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McDonald Construction Services, Inc., B-285980; B-285980.2, October 25, 2000

Decision

Matter of: McDonald Construction Services, Inc.

File: B-285980; B-285980.2

Date: October 25, 2000

Thomas E. Abernathy IV, Esq., Smith, Currie & Hancock, for the protester.

Robert A. Emmanuel, Esq., Emmanuel, Sheppard & Condon, for Greenhut
Construction Services, Inc., the intervenor.

Thomas W. Burt, Esq., and Larry E. Beall, Esq., U.S. Army Corps of
Engineers, for the agency.

Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protester's contention that the agency unreasonably evaluated its proposal
because it was downgraded under three separate evaluation areas for the same
deficiency is denied, where the record shows that the agency evaluated the
protester's proposal in accordance with the criteria announced in the
solicitation, the criteria assessed separate aspects of the proposals, and
the deficiencies noted reasonably related to all three evaluation areas at
issue.

DECISION

McDonald Construction Services, Inc. protests the award of a contract to
Greenhut Construction Services, Inc. under request for proposals (RFP) No.
DACA01-00-R-0009, issued by the U.S. Army Corps of Engineers for the
construction of a hospital central energy plant at Eglin Air Force Base,
Florida. McDonald challenges the evaluation of its proposal and contends
that the agency improperly conducted discussions with the awardee, while it
failed to conduct similar discussions with McDonald.

We deny the protest.

BACKGROUND

The RFP, issued on March 1, 2000, contemplated the award of a fixed-price
contract for the construction of the required plant, which generally
consists of a steel frame building with slab on grade floor and concrete
foundation. The building is to be a free-standing central energy facility
housing the existing chiller and boiler assets which will be relocated from
the main hospital to the new plant. Offerors were required to submit fixed
prices for the basic requirement, for each of four option items, and a total
price. Offerors were instructed to submit proposals in two separate
volumes--performance capability (volume I), and "pro forma" requirements
(volume II). The RFP contained detailed instructions on the type of
information required to be included in each volume.

Section 00120 of the RFP explained that a source selection evaluation board
(SSEB) would evaluate volume I of the proposals in the areas listed below.
Volume II, which was to include such items as contractor representations and
certifications, bonds, standard form 1442, the schedule, and subcontracting
plan, was to be evaluated separately on a "go or no-go" basis; the financial
statement, which was also to be included in volume II, was not to be
evaluated. Price was not to be numerically scored but was to be evaluated
for fairness and reasonableness. The RFP stated that the technical area
(i.e., performance capability) and price were equal in importance. In
addition, the RFP stated that the government may make award without
discussions, and cautioned offerors to provide their best terms in the
initial proposals. Award was to be made to the offeror whose proposal was
deemed most advantageous to the government.

The RFP listed the following subfactors for evaluating volume I and their
relative importance (maximum point values for each subfactor shown were not
provided in the RFP but were set out in the instructions provided to the
SSEB).

 Factor/Subfactor         Value

 Vol. I--Perf.
 Capability

 Organization             200

 Specific Personnel       125

 Specialized Experience   200
 on Similar Type of
 Work

 Preliminary Quality      100
 Control Plans

 Preliminary Project      60
 Schedules

 Past Perf. on            40
 Utilization of Small
 Bus. Concerns

 Safety Program           75

Total Points 800

Nine firms submitted proposals by the time set on June 8 for receipt of
initial proposals, ranging in total price from McDonald's low price of
$5,565,007 to $7,602,895; Greenhut submitted the second lowest total price.
As for technical scores, the protester's proposal was ranked seventh while
Greenhut's proposal was ranked first. The following table shows the results
of the evaluation of initial proposals and the SSEB's consensus scores for
the protester, the awardee, and the three highest-rated firms:

 Offeror     Score  Price

 Greenhut    513    $6,029,000

 Offeror B   413    6,051,000

 Offeror C   383    6,068,300

 Offeror D   372    6,252,777

 McDonald    349    5,565,007

The SSEB identified no material deficiencies or significant weaknesses in
Greenhut's proposal that would render the firm ineligible for award. By
contrast, the SSEB found that all other eight proposals, including
McDonald's proposal, contained either material deficiencies or significant
weaknesses, which, according to the SSEB, could have been cured if
discussions were held. The SSEB determined, however, that discussions were
not necessary because those eight proposals did not offer any significant
advantages over Greenhut's acceptable offer. In particular, the SSEB noted
that Greenhut's proposal earned the highest technical score, exceeding the
second highest-rated proposal (offeror B) by 100 points, and the protester's
proposal by 164 points. Based on the results of the initial evaluation, the
SSEB recommended to the source selection authority (SSA) that Greenhut be
awarded the contract. The SSA agreed with the SSEB's recommendation and
awarded the contract to Greenhut. This protest followed a debriefing by the
agency.

PROTEST ISSUES

McDonald primarily argues that the agency improperly evaluated its proposal.
Specifically, the protester contends that the agency improperly downgraded
its proposal under three separate evaluation subfactors (organization,
specific personnel, and preliminary quality control plans) for the same
deficiency the SSEB identified, relating to McDonald's proposed "contractor
quality control" (CQC) system manager. The protester also argues that the
agency failed to obtain adequate competition. In a supplemental protest,
McDonald alleges that the agency improperly conducted discussions with the
awardee, thus allowing that firm to cure deficiencies in its proposal
related to Greenhut's CQC system manager, but failed to conduct similar
discussions with McDonald. [1] McDonald also challenges the agency's
price/technical tradeoff decision.

Untimely Protest Issue

In its comments, McDonald asserts for the first time that the evaluation of
its proposal under the "specialized experience on similar type of work"
subfactor was unreasonable. This new argument is untimely raised.

Under our Bid Protest Regulations, protests not based upon alleged
solicitation improprieties must be filed not later than 10 days after the
basis for protest is known. 4 C.F.R. sect. 21.2(a)(2). Where a protester
initially files a timely protest and supplements it with new and independent
grounds of protest, the new allegations must independently satisfy these
timeliness requirements; our Regulations do not contemplate the unwarranted
piecemeal presentation of protest issues. Litton Sys., Inc., Amecom Div.,
B-275807.2, Apr. 16, 1997, 97-1 CPD para. 170 at 4 n.1. Here, while McDonald's
initial protest was filed in a timely manner, McDonald did not challenge the
evaluation of its proposal under the "specialized experience on similar type
of work" subfactor. McDonald was aware of this basis of protest, at the
latest, upon its receipt of the agency report on August 31, but did not
raise this new issue within 10 days after McDonald received the report.
McDonald's comments, filed on September 18, were not filed within the 10-day
period prescribed by our Regulations because we granted SDS's request for an
extension of time within which to file them. See 4 C.F.R. sect. 21.3(i). An
extension for purposes of filing comments, however, does not waive the
timeliness rules with regard to new grounds of protest. SDS Petroleum
Prods., Inc., B-280430, Sept. 1, 1998, 98-2 CPD para. 59 at 4 n.3. Accordingly,
this new protest issue is untimely, and will not be considered. [2]

ANALYSIS

Proposal Evaluation

McDonald contends that the agency unreasonably downgraded its proposal under
the organization, specific personnel, and preliminary quality control plans
subfactors for the same deficiency related to its proposed CQC system
manager. The protester does not challenge the reasonableness of the
deficiency finding itself. Instead, McDonald contends that the agency
improperly "triple-counted" that deficiency, which, according to McDonald,
should have affected its technical score only under the specific personnel
evaluation subfactor. As explained in greater detail below, we disagree with
the protester's position.

The evaluation of technical proposals is a matter within the contracting
agency's discretion, since the agency is responsible for defining its needs
and the best method of accommodating them. Federal Envtl. Servs., Inc.,
B-260289, B-260490, May 24, 1995, 95-1 CPD para. 261 at 3. In reviewing an
agency's technical evaluation, we will not reevaluate the proposals, but
will examine the record of the evaluation to ensure that it was reasonable
and in accordance with the stated evaluation criteria. Id. As explained in
detail below, based on our review of the record, we conclude that the three
evaluation subfactors on which the protester relies were aimed at assessing
different, discrete aspects of the proposals, and that the deficiency the
SSEB noted in McDonald's proposal concerning the CQC system manager's
educational qualifications and minimum experience was reasonably related to
both the specific personnel and preliminary quality control plans evaluation
areas, and was distinct from the deficiency in McDonald's proposal that the
SSEB identified under the organization subfactor.

Specific Personnel

The RFP contained specific personnel requirements under the quality control
organization section. See RFP sect. 01451, CQC, para. 3.4 Quality Control
Organization, at 3. Under this section, the RFP required offerors to
identify a CQC system manager, an individual within the onsite work
organization who is to be responsible for overall management of CQC and has
the authority to act in all CQC matters for the contractor. Id. para. 3.4.2, CQC
System Manager, at 3. In addition, the RFP required that the proposed CQC
system manager be a graduate engineer, graduate architect, or a graduate of
construction management, with a minimum of 5 years construction experience
on construction similar to the contemplated contract. Id. This information,
pertaining to proposed key personnel, was to be evaluated under the specific
personnel subfactor, which stated as follows:

Specific Personnel. The offeror must provide the requested information to
identify and demonstrate that its key personnel meet minimum qualifications
necessary, including satisfactory experience in similar type work, to
manage, . . . subcontract acquisition and management functions.

RFP para. 3.2.2, at 2.

The SSEB found that under this subfactor, McDonald's proposed onsite CQC
system manager, a high school graduate, did not meet the RFP's minimum
formal educational requirements. Agency Report exh. J, SSEB Consensus
Scoresheets, McDonald. The protester does not take issue with this specific
deficiency, arguing instead that the SSEB improperly downgraded its proposal
for this deficiency under the organization and preliminary quality control
plans subfactors, thus "triple-counting" the deficiency. McDonald maintains
that this deficiency properly should have affected its score only under the
specific personnel subfactor. As discussed in detail below, we disagree.

Preliminary Quality Control Plans

As relevant here, the RFP advised that the successful offeror is required to
"implement a formal quality control program which will ensure high quality
construction." RFP sect. 00110, para. 2.5.1. The RFP specifically stated that the
successful offeror "shall expand the preliminary plans to comply with
section 01451," related to CQC. Id. Offerors were further required to
address, at a minimum, several items in each preliminary plan, including
authorities, tasks, functions, and minimum qualifications required for each
proposed position in their quality control organization. Id. para.para. 2.5.1.1,
2.5.1.2. Offerors were required to describe in their proposals the
authority, assigned tasks, and functions of the CQC manager and each key QC
position. Id. sect. 00110, para. 2.5.1.1. This information was to be evaluated as
follows:

Plans for Quality Control. The offeror must submit the required information
to demonstrate understanding of the contract's "Inspection of Construction"
and "[CQC]" requirements and to demonstrate that the offeror has an
effective quality control system for construction, [and] meeting the
contract requirements.

RFP para. 3.2.4, at 4.

The SSEB noted that McDonald's proposal failed to describe the authorities,
tasks, and functions of the mechanical and electrical quality control
personnel as required by sect. 00110, para. 2.5.1.1 of the RFP, and failed to
describe their minimum educational qualifications, as required by RFP
para.para. 2.5.1.1 and 2.5.1.2. The SSEB also found that McDonald's proposal
"deviated" from the RFP's minimum educational qualifications for the onsite
CQC system manager. Agency Report exh. J, SSEB Consensus Scoresheets,
McDonald, at 4. The SSEB designated these as three separate deficiencies in
the proposal. Id.

The protester argues that it was improper for the evaluators to note the
same deficiency regarding the educational qualifications and experience of
its proposed CQC system manager under both the specific personnel and the
preliminary quality control plans subfactors. We disagree. There was nothing
inherently improper in the SSEB's considering the same deficiency under
different evaluation criteria. An agency may properly downgrade a firm under
more than one criterion based on the same information or deficiency where
the deficiency affects the acceptability of the firm's proposal in more than
one area. Greenbrier Indus., Inc., B-252943, Aug. 11, 1993, 93-2 CPD para. 91 at
3. The specific personnel criterion, which included an assessment of the
proposed CQC system manager's qualifications, was intended to assess whether
the proposed individual met the RFP's minimum educational qualifications and
had relevant experience in similar type work. Thus, the SSEB properly
considered McDonald's proposed CQC system manager's qualifications under
this subfactor. The preliminary quality control plans subfactor, on the
other hand, was aimed at determining whether offerors satisfactorily
demonstrated their understanding of the contract's quality control system
for construction. Based on our review of the record, we conclude that these
criteria were aimed at assessing different, discrete aspects of the
proposals, and that the deficiency the SSEB noted in McDonald's proposal
concerning the CQC system manager's educational qualifications and minimum
experience was reasonably related and relevant to both the specific
personnel and preliminary quality control plans evaluation areas.
Accordingly, we have no basis to question the evaluation of McDonald's
proposal in these areas.

Organization

Regarding the information to be evaluated under the organization subfactor,
the RFP stated as follows:

Organization. The offeror must provide the requested information concerning
its organization. The offeror must demonstrate that it has the necessary
structure and resources within its organization to manage, control, and
administer the construction operations, quality control program and
subcontracts. This must be achievable with other projected on-going work.
The offeror must agree and demonstrate that it will self-perform at least 20
[percent] of the on-site contract work. This work is defined in Section
00110: Proposal Submission Requirements.

Id. sect. 00120, Evaluation of Proposals, para. 3.2.1.

Under this subfactor, the SSEB found that McDonald had failed to describe in
its proposal the onsite mechanical and electrical CQC personnel under the
Quality Control Team Organization, as required under sect. 00110, para. 2.2.2.4 and
sect. 01451, para. 3.4.2, and noted this as a deficiency in its proposal. Agency
Report exh. J, SSEB Consensus Scoresheet, McDonald, at 1.

Our review of the record shows that McDonald failed to provide in its
proposal information demonstrating that it has the necessary structure and
resources within its organization to manage, control, and administer the
construction operations, quality control program and subcontracts. Given
that the organization subfactor was directed at assessing the offerors' CQC
organizational structure and available resources to effectively manage the
contract, the protester's failure to describe in its proposal the onsite
mechanical and electrical CQC personnel in its organization as required by
the RFP was appropriately considered under this evaluation subfactor.
Further, this deficiency--related to McDonald's mechanical and electrical
CQC personnel--is distinct from, and unrelated to, the other deficiencies
described above concerning its proposed CQC system manager. Accordingly,
McDonald's contention that the agency improperly considered the deficiency
regarding its proposed CQC manager under this subfactor clearly is not
supported by the record.

McDonald also contends that in awarding the contract to Greenhut based on
initial proposals, the agency failed to obtain adequate competition. In this
connection, the protester argues that the agency should have conducted
discussions rather than making award on initial proposals because the SSEB's
concerns regarding its CQC system manager could have been easily cured.

The protester's contention that the agency should have held discussions with
McDonald to cure deficiencies in its proposal is without merit. The RFP
clearly stated that the agency may make award on the basis of initial
offers, without discussions. RFP sect. 00120, para. 7.1, at 7. In this regard,
offerors were specifically cautioned to provide their best terms for both
price and technical in their initial submissions, and to not assume that
they would be included in the competitive range for discussions, if
discussions were required. Id. In such cases, the burden is on the offeror
to submit an initial proposal that adequately demonstrates its merits.
Norden Sys. Inc., B-255343.3, Apr. 14, 1994, 94-1 CPD para. 257 at 7-8.

Here, the record shows that the evaluators identified several deficiencies
in McDonald's proposal under the organization, specific personnel,
specialized experience on similar type work, and preliminary quality control
plans evaluation subfactors. In addition to the specific deficiencies
discussed here, the SSEB identified several other weaknesses and
disadvantages in McDonald's proposal which, together with the deficiencies,
reasonably caused the SSEB to downgrade the proposal in those areas. In
addition, as already stated, the SSEB identified no material deficiencies or
significant weaknesses in Greenhut's proposal, and, in fact, noted numerous
advantages in that firm's offer. Agency Report exh. K, SSEB Final Report, at
1. By contrast, the SSEB found that all other eight proposals, including
McDonald's, contained either material deficiencies or significant
weaknesses, and that, even if those deficiencies or weaknesses were
corrected through discussions, those proposals did not offer any significant
advantages over Greenhut's acceptable offer. Id. para. 6, at 3. Given that nine
firms responded to the RFP, and that the agency properly accepted Greenhut's
proposal without discussions, the protester's contention that the agency did
not obtain adequate competition is without merit.

Supplemental Protest

In a supplemental protest, McDonald argues that after receipt of initial
proposals and before award, the agency improperly conducted discussions with
Greenhut, thus allowing that firm to cure deficiencies in its proposal
related to its proposed CQC system manager, while failing to hold similar
discussions with McDonald regarding its CQC system manager.

The agency explains that following the initial evaluation, the SSEB
determined that Greenhut had apparently intended to propose one of three
individuals [DELETED], listed in various areas of its proposal, as its CQC
system manager. It is undisputed that on June 16, 2000, the agency
telephoned Greenhut in an effort to clear up this apparent ambiguity. The
record shows that by fax of that same date, in response to the agency's
inquiry, Greenhut submitted a new "Key Personnel--Construction" form
designating a fourth individual, [DELETED], as its CQC manager. In addition,
Greenhut submitted a revised narrative of its preliminary quality control
plans describing [DELETED] authority, tasks, and functions, as well as her
formal educational background and relevant experience with similar projects.
Greenhut also included with this submission a revised organizational chart
which replaced [DELETED] as the CQC system manager. (We note that [DELETED]
was not proposed in Greenhut's initial proposal.) The SSEB reviewed
Greenhut's June 16 submission, considered it acceptable, but did not change
Greenhut's relatively high technical score. The agency takes the position
that the communication it had with Greenhut was merely a clarification, not
discussions, and thus maintains that it was not required to hold discussions
with McDonald or with any other firm.

We need not address this contention since it is clear from the record that
McDonald did not suffer competitive prejudice as a result of the agency's
action. 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
award. McDonald-Bradley, B-270126, Feb. 8, 1996, 96-1 CPD para. 54 at 3; see
Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996). Here,
even assuming that McDonald is correct that the agency's communication with
Greenhut constituted discussions, thus requiring the agency to conduct
discussions with other offerors whose proposals were in the competitive
range, in view of McDonald's overall low technical score and relative
standing, and given that the SSEB identified no significant technical
advantages in the protester's proposal, it is clear that McDonald's proposal
would not have been included within the competitive range.

Federal Acquisition Regulation sect. 15.306(c) provides that:

(1) Agencies shall evaluate all proposals . . . and, if discussions are to
be conducted, establish the competitive range. Based on the ratings of each
proposal against all evaluation criteria, the contracting officer shall
establish a competitive range comprised of all of the most highly rated
proposals, unless the range is further reduced for purposes of efficiency .
. . .

We do not read this language to require agencies to retain in the
competitive range a proposal that is not among the most highly rated ones or
that the agency otherwise reasonably concludes has no realistic prospect of
award. SDS Petroleum Prods., Inc., supra, at 5. An agency may properly
determine whether to include a proposal within the competitive range by
comparing the proposal evaluation scores and the proposal's relative
standing. A proposal that is technically acceptable need not be included in
the competitive range when, relative to other acceptable offers, it is
determined to have no realistic prospect of being selected for award. Matrix
Gen., Inc., B-282192, June 10, 1999, 99-1 CPD para. 108 at 3-4. Here, as a
result of the several deficiencies the SSEB identified in McDonald's
proposal, it was downgraded to an extent that it did not have a realistic
prospect of being selected for award because there were at least two other
competitively priced, acceptable proposals that earned significantly higher
technical ratings. [3] Accordingly, we view it as so unlikely that
McDonald's proposal would have been included within the competitive range
that we conclude that McDonald did not suffer any competitive prejudice as a
result of the allegedly improper action. See, e.g., Matrix Gen., Inc., supra
(firm which submitted fifth ranked technical proposal out of ten offers and
third lowest price was properly excluded from the competitive range). [4]

Finally, McDonald is not an interested party to challenge the agency's
tradeoff decision which resulted in the award to Greenhut. Under our Bid
Protest Regulations, a party is not interested to maintain a protest if it
would not be in line for award if the protest were sustained. 4 C.F.R.
sect. 21.0(a). Here, since as a result of the agency's evaluation, which we find
reasonable, McDonald's technical proposal was ranked seventh, and since in
addition to Greenhut's, several other higher-rated, reasonably priced
proposals remained eligible for award, McDonald is not an interested party
to challenge the agency's tradeoff decision because, even if its protest
were sustained, those intervening offerors, not McDonald, would be in line
for award. See, e.g., U.S. Constructors, Inc., B-282776, July 21, 1999, 99-2
CPD para. 14 at 5; Marine Pollution Control Corp., B-270172, Feb. 13, 1996, 96-1
CPD para. 73 at 3-4; Dick Young Prods. Ltd., B-246837, Apr. 1, 1992, 92-1 CPD
para. 336 at 8.

The protest is denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. The agency argues that McDonald is not an interested party to maintain
the protest. See 4 C.F.R. sect. 21.0(a) (2000). According to the agency, and the
intervenor agrees, even if the three allegedly improper deficiencies related
to the CQC system manager were removed from McDonald's proposal, its score
would increase by 9 "percentage" points, improving its overall score by only
12 points (from 349 to 361 points), which would not be sufficient to have a
material impact on the award decision. These parties' analysis is flawed. In
this regard, we note that the evaluators deducted a total of 243 points from
McDonald's technical score under the three subfactors at issue (worth a
maximum of 425 points). If we found that McDonald's arguments regarding the
evaluation of its proposal had merit and sustained its protest, it is
possible that upon reevaluation its total score could improve significantly
and that, given McDonald's low price, the agency could determine that
McDonald's proposal is most advantageous to the government. See
International Data Prods., Corp.; I-Net, Inc.; and Dunn Computer Corp.,
B-274654 et al., Dec. 26, 1996, 97-1 CPD para. 34 at 5 (protesters rated eighth
and ninth in overall technical merit are interested parties to challenge
evaluation of their proposals where both offered lower prices and
solicitation called for award to the offeror found most advantageous to the
government); Rome Research Corp., B-245797.4, Sept. 22, 1992, 92-2 CPD para. 194
at 6 (fourth-ranked firm which offered lowest proposed costs is an
interested party to challenge the evaluation of its proposal). We therefore
consider McDonald an interested party to challenge the evaluation of its
proposal.

2. Further, McDonald's argument in its September 18 comments that the
evaluation of its proposal under this RFP was inconsistent with the
evaluation of a proposal it submitted under a different RFP to the same
agency involving a different construction project, is similarly untimely. In
any event, each acquisition stands on its own, and the evaluation and
relative ranking of McDonald's proposal under another procurement are
irrelevant to determining the reasonableness of the evaluation here. See
Renic Corp., Gov't Sys. Div., B-248100, July 29, 1992, 92-2 CPD para. 60 at 5.

3. The record shows that based on the initial evaluation, the two most
highly rated proposals--Greenhut's and offerors B's--earned 513 and 413
points, respectively, while the SSEB assigned McDonald's proposal only 349
points, which resulted in the protester's proposal being ranked seventh out
of nine. The record further shows that Greenhut's and offeror B's total
prices were within a relatively narrow range of $22,000 from each other, and
both were approximately 94 percent of the government's independent estimate
of $6.4 million for the project. The evaluation record further shows that
the SSEB identified no significant technical advantages in McDonald's
proposal, while it identified 14 advantages in Greenhut's proposal and
4 advantages in offeror B's proposal.

4. In reaching our conclusion, we recognize that agencies may not eliminate
a technically acceptable proposal from the competitive range without
considering 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. 6 at 9. This does not mean, however, that the
mere fact that McDonald's price was less than the ultimate awardee's would
have required the agency to include it within the competitive range. See L&M
Tech., Inc., B-278044.5, May 8, 1998, 98-1 CPD para. 131 at 4, citing Intown
Properties, Inc., B-250232, Jan. 14, 1993, 93-1 CPD para. 43 at 6.