TITLE:  Cherokee Information Services, B-287270, April 12, 2001
BNUMBER:  B-287270
DATE:  April 12, 2001
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Cherokee Information Services, B-287270, April 12, 2001

Decision

Matter of: Cherokee Information Services

File: B-287270

Date: April 12, 2001

Michael I. Hodges for the protester.

John D. Inazu, Esq., Department of the Air Force, 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

1. Agency did not conduct unequal discussions where agency held technical
discussions with awardee, whose technical proposal was initially evaluated
as containing a number of weaknesses, while conducting no technical
discussions with protester, whose initial proposal did not contain any
weaknesses or deficiencies.

2. Agency was not obligated to advise protester during discussions that its
price was higher than awardee's, where the agency considered protester's
price reasonable given its technical approach.

DECISION

Cherokee Information Services (CIS) protests the award of a contract to
Business Plus Corporation (BPC) under request for proposals (RFP) No.
F44650-01-R-0002, issued by the Department of the Air Force for operating a
delivery control center in support of the Air Operations Squadron at Langley
Air Force Base. [1] CIS contends that the agency conducted unequal technical
discussions, and improperly failed to discuss CIS's proposed price.

We deny the protest.

The RFP, issued on August 30, 2000, was restricted to firms certified under
the Small Business Administration's section 8(a) set-aside program, and
contemplated the award of a fixed-price contract for the required support
services for a 6-month phase-in period, a basic year, and up to four 1-year
option periods. [2] The RFP listed past performance, mission capability, and
price as evaluation factors in descending order of importance, with past
performance and mission capability considered primary and of equal
importance. [3] The RFP explained that in assessing past performance, the
agency would rate proposals using a confidence rating scale ranging from
unsatisfactory/no confidence to exceptional/high confidence, or
neutral/unknown. Id. sect. 9. The RFP also stated that the subfactors within the
mission capability area would be evaluated by applying the following
color/adjectival ratings: blue (exceptional), green (acceptable), yellow
(marginal), or red (unacceptable). Id. Price was to be evaluated for
reasonableness relative to the government's independent estimate, the
offeror's technical approach, and the other offerors' prices. Id. Award was
to be made on the basis of the proposal deemed to represent the best value
to the government.

Following the initial evaluation, the Air Force retained CIS's, BPC's, and a
third firm's (Offeror A) proposal within the competitive range. The agency
then initiated discussions by submitting evaluation notices (EN) identifying
deficiencies, weaknesses, or areas of the proposals requiring clarification
to BPC and Offeror A. On December 11, the contracting officer (CO) informed
CIS that discussions were being held, and that although its proposal was
included within the competitive range, there were no clarifications required
or deficiencies in its proposal that needed to be addressed. Agency Report
(AR) exh. 8. By letter dated January 10, 2001, the agency requested final
proposal revisions (FPR), and reevaluated proposals based on the

FPRs, with the following adjectival and color ratings for the three firms
whose proposals were retained within the competitive range:

           MISSION CAPABILITY

            Past    Work    Cont.   Qual.      Prop.   Trans.  Price
            Perf.   Mmgt.                      Mmgt.
                            Pers.   Control                    ($mil)

 CIS        E/High  Blue    Blue    Blue       Green   Green   $4.981

 BPC        E/High  Blue    Green   Blue       Green   Green   4.35

 Offeror    VG/Sig  Green   Green   Green      Green   Green   5.345
 A

AR exh. 18, Proposal Evaluation Report (PER), at 28.

Based on these results, the CO, who was the source selection authority (SSA)
for this acquisition, found that CIS had submitted the highest rated
technical proposal. Id. at 29. The SSA noted that within the mission
capability factor, CIS's blue (exceptional) rating under the program
workload management subfactor reflected the firm's "outstanding
understanding of the mission . . . ." Id. The SSA further noted that CIS's
rating under the contractor personnel subfactor was the only blue
(exceptional) rating assigned, reflecting a highly qualified team, and that
CIS's proposal also earned the highest possible rating under the quality
control plan subfactor. As for price, the record shows that the agency
reviewed all offerors' proposed prices for reasonableness and accuracy, and
found that the variation in total prices was attributable to such factors as
different number of personnel proposed, hourly rates, and other direct costs
and overhead. Id. The evaluators concluded that all three offerors' prices,
including CIS's, were reasonable given their respective technical
approaches.

The SSA reviewed the technical and price evaluations and concluded that the
strengths identified in CIS's proposal, while impressive, did not justify
paying CIS's price premium, considering BPC's lower-priced, highly-rated
proposal. Specifically, the SSA noted that, by comparison, BPC's price was
the lowest of the three firms remaining in the competitive range, and that
the savings over the life of the contract outweighed any benefits that could
be gained from CIS's slightly higher-rated proposal. Accordingly, the SSA
determined that BPC's proposal was the best value to the government, and
awarded the contract to that firm. This protest followed a debriefing by the
agency.

CIS contends that the agency conducted unequal discussions because, although
the agency held technical discussions with BPC and Offeror A, the Air Force
failed to point out any weaknesses, deficiencies, or excesses in CIS's
proposal. In addition, the protester argues that the agency did not engage
in meaningful discussions because it failed to discuss CIS's price. [4]

The Federal Acquisition Regulation (FAR) requires that COs discuss with each
offeror being considered for award "significant weaknesses, deficiencies,
and other aspects of its proposal . . . that could, in the opinion of the
contracting officer, be altered or explained to enhance materially the
proposal's potential for award." FAR sect. 15.306(d)(3). While the precise scope
and extent of discussions are a matter of CO judgment, the agency should
tailor its discussions to each offeror's proposal. FAR sect. 15.306(d)(1); The
Pragma Corp., B-255236 et al., Feb. 18, 1994, 94-1 CPD para. 124 at 9.

The Air Force satisfied its obligation here. The record shows that the
agency conducted technical discussions with BPC and Offeror A because those
firms' initial technical proposals contained a number of evaluated
weaknesses or deficiencies. CIS's proposal, on the other hand, did not have
any significant weaknesses or deficiencies, and therefore the agency
properly found nothing in CIS's technical proposal that needed to be
clarified or revised through discussions. Further, with respect to the only
two evaluation subfactors within the mission capability area where CIS's
proposal was rated green (acceptable)--property management plan and
transition plan--the record shows that the evaluators found that CIS's
proposal demonstrated the firm's ability to successfully manage government
property, and that its overall transition plan met the government's
requirements. AR exh. 18, PER at 11. In view of the evaluators' positive
assessment of CIS's ability to manage government property and its transition
plan, we agree with the Air Force that discussions concerning the two green
(acceptable) ratings were not required. See ITT Fed. Servs. Int'l Corp.,
B-283307, B-283307.2, Nov. 3, 1999, 99-2 CPD para. 76 at 16; MCR Fed., Inc.,
B-280969, Dec. 14, 1998, 99-1 CPD para. 8 at 11, citing DAE Corp., B-259866,
B-259866.2, May 1995, 95-2 CPD para. 12 at 4-5 (an agency is not required to
discuss every aspect of an offeror's acceptable proposal that receives less
than the maximum score).

The protester also argues that the agency improperly failed to discuss its
price. Specifically, CIS contends that even though the CO was aware that the
main factor driving its price was CIS's proposed staffing levels, he did not
engage in meaningful discussions with CIS so as to allow the firm to adjust
its staffing levels, and presumably lower its price.

Under FAR sect. 15.306(e)(3), "the [CO] may inform an offeror that its price is
considered by the Government to be too high, or too low, and reveal the
results of the analysis supporting that conclusion." This language clearly
gives the CO discretion to inform the offeror that its cost/price is too
high, but does not require that the CO do so, especially where, as here, the
agency does not consider the price unreasonable or a significant weakness or
deficiency. See National Projects, Inc., B-283887, Jan. 19, 2000, 2000 CPD
para. 16 at 5; KBM Group, Inc., B-281919, B-281919.2, May 3, 1999, 99-1 CPD
para. 118 at 8-9 (agency did not mislead protester during discussions, even
though award was ultimately made based on price and agency did not inform
protester that its price was higher than awardee's price, where agency did
not believe that protester's price was too high for the approach taken).
Here, the agency reviewed proposed prices and determined that CIS's price
was competitive and not unrealistically high. Accordingly, the agency had no
duty to advise CIS that its price was high compared to that of the
awardee's.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. The mission of the control center is to provide the safe and timely
worldwide delivery of approximately 200 to 300 transoceanic monthly sorties
for the Department of Defense and foreign military aircraft. RFP Statement
of Work para. 1.1.1 at 3. The center serves as the command and control function
for continuous monitoring of all aircraft deliveries.

2. The RFP stated that the procurement would be conducted pursuant to a cost
comparison performed under Office of Management and Budget Circular No.
A-76. The agency states, however, that this acquisition was a direct
conversion to civilian personnel of functions previously performed
exclusively by military personnel in accordance with Air Force Instruction
38-203, Aug. 1, 2000, Chap. 14, which provides policies and procedures for
direct conversions without conducting a formal A-76 cost comparison. These
procedures may found at .

3. Within the past performance factor, the RFP listed performance, quality
of service, management effectiveness, and cost control as subfactors. Within
the mission capability factor, the RFP listed program and workload
management, contractor personnel, quality control plan, property management
plan, and transition as subfactors.

4. CIS also complains that the agency's letter requesting FPRs was confusing
and allowed insufficient time for CIS to prepare and submit its FPR. As with
an offeror who participates in a procurement and then waits until it is not
selected for award to protest alleged improprieties apparent during the
competition, CIS may not participate in an allegedly flawed competitive
process, and then wait to complain about the process only after the firm was
not selected for award. See Precision Signal, Inc., B-250852.2, Apr. 12,
1993, 93-1 CPD para. 309 at 3 n.1 (objection that an RFP's evaluation factor was
"vague and nonspecific as to what was required," raised after award, is
untimely); The Fletcher Constr. Co., Ltd. B-248977, Oct. 15, 1992, 92-2 CPD
para. 246 at 6-7 (protester's allegation that its cost savings ideas were
improperly incorporated into solicitation dismissed as untimely because
protest concerned an alleged impropriety incorporated into the RFP, which
should have been raised prior to the next closing date for receipt of
proposals); Davis Constructors, Inc., B-232954, B-232955, Jan. 12, 1989,
89-1 CPD para. 40 at 3 (allegation that RFP contained defects and ambiguities
and provided insufficient time to prepare and submit proposals untimely
where not raised prior to closing). CIS's objection, therefore, that the
agency's letter requesting FPRs was confusing or allowed insufficient time
for the firm's response, raised after award, is untimely and will not be
considered further. 4 C.F.R. sect. 21.2(a)(1) (2000).