TITLE:  Magney Grande Distribution, Inc., B-286981, March 22, 2001
BNUMBER:  B-286981
DATE:  March 22, 2001
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Magney Grande Distribution, Inc., B-286981, March 22, 2001

Decision

Matter of: Magney Grande Distribution, Inc.

File: B-286981

Date: March 22, 2001

Carol Magney Grande and Stephanie M. Grande for the protester.

Thomas S. Hogan, Jr., Esq., and Deborah McCall, Esq., The Hogan Law Firm,
for ITD of Destin, Inc., an intervenor.

Chris E. Hagberg, Esq., Department of the Navy, for the agency.

Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest of agency's award of a contract to the offeror that submitted the
significantly lower-priced proposal of two otherwise essentially comparable
proposals is denied where record supports the reasonableness of the agency's
evaluation and award determination.

DECISION

Magney Grande Distribution, Inc. protests the award of a contract to ITD of
Destin, Inc. under request for proposals (RFP) No. N65540-00-R-0040, issued
by the Department of the Navy for transient voltage surge suppressors
(TVSS). [1] The protester, a previous sole-source TVSS supplier to the Navy,
challenges the agency's evaluation of the ITD proposal and the agency's
award to the firm. [2]

We deny the protest.

The RFP, issued on May 9, 2000, contemplated the award of a fixed-price
requirements contract for four types of TVSS units for a 3-year period. The
solicitation provided that award would be made to the responsible offeror
whose offer was found to be most advantageous to the government, price and
other factors considered. The following factors were to be considered in
evaluating the proposals: technical, past performance/pertinent experience,
and price. The RFP provided that technical and past performance, when
combined, were more important than price. The RFP set out certain
performance specifications for the TVSS units, and incorporated by reference
several military specification standards and electrical code standards. RFP
sect.sect. 3.0, 5.1(b). Certain supporting third-party test data--demonstrating the
TVSS product's compliance with various performance specifications--was
required to be submitted by the successful contractor prior to obtaining a
release for manufacture. RFP sect. 4.1. Post-award first article testing was to
be conducted to demonstrate compliance with the RFP's performance
specifications. RFP para. 52.209-3, sect. 6.0.

For the evaluation of past performance, offerors were to provide information
on recent contracts for "like or similar items" and information
demonstrating their experience in the design and manufacture of TVSS. RFP
sect. 5.3.1. The information was to be used for a determination of the firm's
responsibility and for evaluation of the firm's past performance/pertinent
experience. Id.

Of the 10 proposals received by the extended closing time on June 30, only
Magney Grande's and ITD's proposals were found to be technically acceptable.
Although the performance testing data was not required until after award,
Magney Grande included prior testing data in its proposal, and the proposal
was credited for it. Technical Evaluation Memorandum at 2. The ITD proposal,
on the other hand, was noted as having an informational weakness for not
including all of the data provided by the protester; the evaluators found
the weakness to be minor, however, since, under the RFP's terms, the
performance demonstration data could be provided after award. Id.; Agency
Report at 6. Based upon ITD's technical product specifications, including
some test data, and technical manuals, the newly designed ITD TVSS units
were found to be fully compliant with the solicitation's technical
requirements. Pricing Memorandum at 2.

Both firms' proposals were favorably evaluated for past performance based on
information provided by the offerors and gathered by the agency regarding
the firms' experience with the TVSS or similar items. Magney Grande's high
past performance rating was based on favorable customer/fleet feedback
concerning the firm's recent TVSS product performance and customer service.
Technical Evaluation Memorandum at 2; Magney Grande TVSS Technical Data
Sheets at 2.

ITD's and its manufacturer's (Guardian Manufacturing, Inc.) past performance
information was also favorably rated. The agency considered information
regarding the firms' TVSS design, manufacturing, and sales experience with
substantially similar products of equal complexity and a number of
government and commercial contracts for other TVSS products. Pre-Award
Survey Report at 9-10, 15-16, and 22-24. The experience and capability of
ITD and Guardian were reviewed and confirmed by the Defense Contract
Management Agency (DCMA), which conducted pre-award site surveys at each of
those firms' facilities. DCMA determined ITD and Guardian had substantial
experience demonstrating the firms' capability to successfully perform the
contract. Id.; Agency Report at 32-33.

Upon review of the evaluation record and proposals, and DCMA's unqualified
pre-award survey recommendation for award to ITD, which was supported by
agency technical evaluation personnel, and the significantly lower price
offered by ITD, the contracting officer awarded the contract to ITD. Pricing
Memorandum at 2; Agency Report at 34. This protest followed.

Magney Grande principally protests the propriety of the agency's source
selection, contending that the Navy should have found that the protester's
product, despite its higher price, offered the best value to the government.
[3] Before addressing those challenges, however, we note that the protester
has filed a substantial number of additional challenges regarding this
procurement which are untimely or otherwise not for our review. The
protester, for instance, contends that the agency violated procurement
integrity rules by failing to safeguard its proposal submission. In this
regard, Magney Grande states that when its representative came to the
agency's facilities, prior to the closing time for the receipt of proposals,
to pick up certain first article units the protester had submitted
prematurely, the representative noticed that two of the boxes had been
opened (for identification purposes, the agency reports), and that one of
the opened boxes contained a copy of the firm's proprietary proposal in
response to the RFP. Magney Grande argues that the integrity of its proposal
was compromised, since it may have been improperly viewed (by the agency or
awardee) prior to the closing time for proposal submission.

In addition to our concerns regarding the timeliness of this protest
challenge (filed months after the contracting agency confirmed that the
proposal information was not disclosed), our review of the record shows that
Magney Grande merely speculates that someone may have been able to enter the
secured storage area and view its proposal (despite the swipe-card security
entrance protections in operation at the location and the agency's asserted
confidence that the proposal information was not disclosed). The firm fails
to provide any evidence, and we see no basis in the record to conclude, that
its information was improperly disclosed.

Magney Grande also protests the agency's affirmative determination of ITD's
responsibility, asserting that it has discovered some financial and other
information, regarding previous challenges to actions by ITD or its
principals, which, the protester believes, demonstrates a lack of integrity
by ITD and thus, ineligibility to receive the award. Our Office does not
review affirmative determinations of responsibility absent a showing of
possible bad faith on the part of government officials or that definitive
responsibility criteria in the solicitation were not met. 4 C.F.R. sect. 21.5(c)
(2000). Since the protester does not allege bad faith by the agency or that
definitive responsibility requirements were not met by ITD, the matter is
not for our review. [4] M-Cubed Information Sys., Inc., B-284445,
B-284445.2, Apr. 19, 2000, 2000 CPD para. 74 at 9-10.

Magney Grande's remaining protest contentions mostly relate to the agency's
evaluation of ITD's proposal and its selection of ITD for award. The
protester generally alleges that ITD and its manufacturer are inexperienced
contractors that have not proven themselves as reliable TVSS sources. Magney
Grande alleges that, since ITD and Guardian have never manufactured or
supplied the proposed TVSS units, ITD cannot meet the RFP's requirements for
testing or a technical description of the item offered. [5] Magney Grande
also questions the agency's consideration of favorable past performance
information about prior ITD TVSS contracts under which ITD provided a
different TVSS product from that which it offered under the RFP. The
protester contends that, since technical merit was more important than price
under the RFP, its proven product, despite its higher price, should have
been the best value choice for award.

Assessing the merits of competing proposals and deciding which proposal
offers the best value are within the discretion of the contracting agency.
Our Office therefore will not question an agency's evaluation or award
determination where it is reasonably based and consistent with the terms of
the solicitation and the underlying procurement statutes and regulations.
Global Assocs., Ltd., B-275534, Mar. 3, 1997, 97-1 CPD para. 129 at 3. A
protester's mere disagreement with the agency does not render the evaluation
unreasonable. American Native Med. Transport, L.L.C., B-276873, Aug. 5,
1997, 97-2 CPD para. 73 at 3-4. Even where a solicitation provides that
technical criteria are more important than price, an agency properly may
select a lower-priced, lower technically scored proposal if it reasonably
decides that the cost premium involved in selecting the higher-rated
proposal is not justified. Oshkosh Truck Corp., B-252708.2, Aug. 24, 1993,
93-2 CPD para. 115 at 8; see General Offshore Corp., B-246824, Apr. 1, 1992,
92-1 CPD para. 335 at 5. Where source selection officials reasonably regard
proposals as being essentially comparable under the technical requirements
of solicitation, cost can become the determining factor in making award
notwithstanding that the evaluation criteria assigned cost less importance
than technical factors. The Parks Co., B-249473, Nov. 17, 1992, 92-2 CPD
para. 354 at 4.

Despite the protester's speculation that ITD failed to provide in its
proposal complete and detailed technical product specifications, drawings,
and manuals, as required by the RFP, our review of the proposal and
evaluation record confirms that the ITD proposal includes comprehensive
technical submissions which were carefully evaluated by the agency and
reasonably found to be in full compliance with the RFP's requirements. [6]
In fact, there is no indication in the evaluation record of any
determination of technical superiority of the protester's proposed TVSS
products; rather, both proposals were found to be technically acceptable.
While Magney Grande's proposal included additional performance testing data
that ITD's did not, the lack of complete performance testing data in ITD's
proposal was noted only as a minor informational weakness (i.e., not a
failure to meet RFP requirements) since, under the terms of the RFP, the
data could be provided after award, prior to the release for manufacture.
Agency Report at 6. In short, our review of the evaluators' worksheets and
notes supports the agency's view that the proposals, overall, were
considered essentially technically comparable.

Similarly, both offerors were highly rated for past performance and
experience. ITD's proposal, containing substantial information about other
contracts for similar products, was favorably reviewed, and information
about ITD's and Guardian's experience and past performance were favorably
evaluated as part of a comprehensive pre-award site survey conducted by
DCMA, assisted by Navy technical personnel familiar with the current
requirements. Numerous similar, equally complex contract requirements were
found to have been successfully performed, on schedule, by the firms.
Pre-Award Survey Report at 10, 22-24. [7] DCMA concluded that ITD (and
Guardian) showed complete capability to successfully perform the contract
and recommended that award be made to the firm. Id at 8.

The protester is simply incorrect in its assertions that newly-designed TVSS
units and past performance information regarding different TVSS units, as
was provided by the ITD proposal, must be evaluated as technically inferior
to "proven" TVSS units supported by past performance information about those
units, as was provided by Magney Grande's proposal. The RFP did not include
any pre-award qualification standards or otherwise indicate that prior
testing of a product was preferred; likewise, the RFP did not require past
performance information regarding only the exact product proposed. Rather,
first article testing was to be performed after award to demonstrate the
technical performance of the proposed units, and past performance
information for similar product experience was all that was required to
support a determination of sufficient experience and capability. RFP sect.sect. 4.0,
5.3.1., and 52.209-3. Our review of the record, including ITD's proposal and
pre-award survey information, supports the reasonableness of the agency's
evaluation of the firm's proposal.

The record shows that, contrary to Magney Grande's allegations, the source
selection authority did not award this contract by considering price alone.
As stated above, the contracting officer reviewed the evaluation documents
(which, as stated above, did not show any meaningful differences between the
proposals' compliance with solicitation requirements in terms of perceived
technical superiority), the comprehensive pre-award survey recommendations
of DCMA (which were fully supported by agency technical personnel), and the
significant disparity in the two offerors' prices. In view of the
significant price difference, and the technical closeness of the proposals,
where both firms had substantial, relevant experience, the source selection
authority's decision to award the contract to ITD is reasonable and
supported by the record.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The TVSS units protect sensitive electronic equipment by absorbing
excessively high transient voltages. They are to be suitable for use on
existing shipboard and land-based Navy electrical supply systems, and are to
be placed at interfaces between shipboard electrical power distribution
systems and individual connected user equipment and distribution panels. RFP
Addendum at sect.sect. 1.0-2.1.

2. Magney Grande also filed numerous other challenges to the procurement.
Our review of those additional challenges, however, shows that they fail to
meet our timeliness rules or otherwise warrant no further review by our
Office. Accordingly, only a brief discussion of the allegations is included
in this decision.

3. The record shows that, on November 1, 2, and 20, Magney Grande filed
various protest challenges with the contracting agency. The firm's
subsequent protest to our Office, incorporating those earlier protest
allegations, was filed before the contracting agency had issued a decision
on the agency-level protests.

4. Another protest allegation lodged by Magney Grande is that it did not
receive timely notice of the award. The agency report shows that the
allegation is factually incorrect in that the protester was notified of the
award only 1 day after the contract was signed and executed by the
contracting officer. Agency Report at 7. Additionally, to the extent Magney
Grande continues to assert that the agency is prohibited from using any of
Magney Grande's proprietary technical data in the administration of the ITD
contract, that contention, which in any event merely anticipates improper
agency action, relates to a matter of contract administration not for our
review. 4 C.F.R. sect. 21.5(a). Magney Grande also argues that if discussions
were held with ITD, they should have been held with Magney Grande to tell
the protester that its price was much higher than ITD's. The record shows,
however, that the challenged communication by the agency to ITD to which
Magney Grande refers concerned only minor clarifications requested of ITD,
not discussions. Federal Acquisition Regulation sect. 15.306(a), (b).

5. Magney Grande additionally contends that the agency has improperly waived
for ITD's TVSS units certain long-term testing requirements (including
18-month field-testing) that were imposed on the Magney Grande TVSS units
several years ago, prior to Magney Grande's receipt of a sole-source
contract from the agency. The long-term testing cited by the protester was
not a stated requirement of this competitive procurement. If the protester
believed that the RFP should have such tests, instead of or in addition to
the first article tests, to be timely, Magney Grande had to have protested
the matter prior to the closing time for receipt of proposals. 4 C.F.R. sect.
21.2 (a)(1); Engelhard Corp., B-237824, Mar. 23, 1990, 90-1 CPD para. 324 at 7.
To the extent the protester contends that ITD will not be held to the RFP's
performance testing requirements, this contention concerns a matter of
contract administration not for review by our Office. 4 C.F.R. sect. 21.5(a). We
note, however, that ITD has reported to our Office that, during the course
of this protest, its TVSS units satisfactorily passed all of the RFP's first
article testing requirements. Letter from The Hogan Law Firm to GAO, Jan. 5,
2001.

6. Magney Grande is not represented by an attorney admitted to a protective
order and therefore did not have access to any protected source selection
information in the record. The protester's contentions regarding the
awardee's proposal's lack of technical information are speculative, since
the protester has not viewed the ITD proposal; Magney Grande and the
intervenor received informative, but redacted, copies of all protest
submissions. Our Office received and reviewed the full, unredacted
submissions, including the protected agency report, proposals, evaluator
notes, pre-award survey findings and source selection record. Our discussion
of the evaluation and proposals, however, in this publicly available
decision, is necessarily general and limited.

7. As did Magney Grande's proposal, ITD's proposal contained letters of
praise from past customers for its "great" and "superior" technical and
field customer service and support. As Magney Grande speculates, some of the
past performance information provided by ITD relates to ITD‘s
experience as a former supplier of the same type of TVSS proposed by Magney
Grande here (which unit had been manufactured by the same firm that produces
Magney Grande's proposed units). Contrary to Magney Grande's position,
however, there is no basis to conclude that the firm improperly submitted
this information for review or that this experience could not be considered
by the agency in assessing the firm's past performance simply because it
relates to a different, but similar, product. On the contrary, the RFP
specifically requested past performance information regarding like or
similar items (i.e., not only identical items).