TITLE:  Sabreliner Corporation, B-290515; B-290515.2; B-290515.3, August 21, 2002
BNUMBER:  B-290515; B-290515.2; B-290515.3
DATE:  August 21, 2002
**********************************************************************
Sabreliner Corporation, B-290515; B-290515.2; B-290515.3, August 21, 2002

   DOCUMENT FOR PUBLIC RELEASE                                                
The decision issued on the date below was subject to a GAO Protective      
Order.  This redacted version has been approved for public release.        

   Decision
    
Matter of:   Sabreliner Corporation
    
File:            B-290515; B-290515.2; B-290515.3
    
Date:              August 21, 2002
    
Kenneth B. Weckstein, Esq., Raymond R. Fioravanti, Esq., and Tammy
Hopkins, Esq., Epstein Becker & Green, for the protester.
Christopher R. Yukins, Esq., Leigh A. Bradley, Esq., and Kristen E. Ittig,
Esq., Holland & Knight, for Canadian Commercial Corporation/Orenda
Aerospace Corporation, the intervenor.
Clarence D. Long, III, Esq., Department of the Air Force, for the agency.
John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  Agency's evaluation of the protester's and awardee's past performance
is unobjectionable where the evaluation was reasonably based and
consistent with
the evaluation criteria set forth in the solicitation and applicable
statutes and regulations.
    
2.  The integrity of the protest process does not permit a protester to
argue that the agency improperly interpreted the solicitation and
governing regulations as allowing the successful contractor to purchase
materials for use in the contract directly from the government where the
protester was informed of, shared, and benefited from that interpretation
during the procurement process.
    
3.  Agency's determination that the awardee's proposal was acceptable
cannot be considered reasonable where the contemporaneous record does not
evidence that the agency meaningfully evaluated a relevant and apparently
significant section of the awardee's technical proposal, and the agency,
in defending the protest, states that its intent is to enter into
post-award negotiations with the awardee regarding
the protested aspects of the awardee's technical approach that should have
been evaluated during the procurement process.
DECISION
    
Sabreliner Corporation protests the award of a contract to Canadian
Commercial Corporation/Orenda Aerospace Corporation under request for
proposals (RFP) No. F34601-02-R-53859, issued by the Department of the Air
Force, for the repair and overhaul of J85 engines and their components.[1]

   We deny the protest in part and sustain it in part.

   The RFP provided for the award of a fixed-price, indefinite-quantity
contract for a base period of 3 years with four 1-year options.  The RFP
stated that award would be made to the offeror whose proposal represented
the best value to the government, based upon the following evaluation
factors:  technical, past performance, and price.  RFP S: M-002(a).  The
RFP provided that technical proposals would be evaluated only for
technical acceptability, and that the technical evaluation factor was
comprised of four subfactors--transition, management, personnel, and
participation of small disadvantaged business.  RFP S: M-002(c).  The RFP
also stated that *[a]n unacceptable subfactor assessment will result in an
overall technical unacceptable rating.*  RFP S: M-002(g).  The RFP added
that, in selecting a proposal for award, *[t]radeoffs [would] only be made
between price and past performance,* with past performance being
considered significantly more important than price.  RFP
S: M‑002(b).

   With regard to the transition subfactor to the technical evaluation
factor, the RFP requested that proposals include *a comprehensive plan*
detailing how the contractor proposed to meet the requirement that, within
the first 24 months of contract performance, the successful contractor
*transition from GFM [government furnished materials] to CFM [contractor
furnished materials].*  RFP S: M-002(c);
see RFP S: L.3.2.  The RFP added that this transition phase was *not to
exceed 24 months.*  RFP, app. A, Technical Requirements Document (TRD) S:
3.1.1.  Offerors were advised elsewhere that they were *allowed to
transition prior to the 24‑month deadline.*[2]  Intervenor's
Submission (May 30, 2002), exh. 3, Agency Clarifications to RFP (Feb. 5,
2002), response 3. 

   The RFP included a price schedule that included, for each period of the
contemplated contract (base, 1st option, 2nd option, etc.), exhibit line
items (ELIN) that set forth the engine or other item to be repaired,
overhauled, or modified, and a best estimated quantity for each engine or
item.  RFP, exhs. A-E.  The RFP also included an estimate for *over and
above* work, not included in ELINs, of 38,371 labor hours in the base
period and 8,194 hours in each of the option periods.  Offerors were
instructed to complete the schedule by inserting unit prices for the
ELINs, and a fixed-hourly rate for the *over and above* work for the base
and option periods of the contract. 

   The RFP informed offerors that their price proposals would be evaluated by
adding the ELIN prices provided for the base and option periods, and the
product of the estimated hours and labor rates for the *over and above*
work.  The RFP added here that *to normalize proposals to account for use
of CFM within the first 2 years, the Government will add GFM costs at the
ELIN level for all months prior to the contractor conversion to CFM.*  RFP
S: M-002(e).

   The agency received proposals from only Sabreliner (the incumbent
contractor) and Orenda by the solicitation's closing date.  The proposals
were evaluated, and the agency provided each offeror with written
discussions through the issuance of evaluation notices (EN).  AR, Tab 11,
ENs.  The offerors' responses to the ENs were received and evaluated, and
final revised proposals (FRP) were requested and received.  Sabreliner's
and Orenda's proposals were both evaluated as acceptable under each of the
four technical evaluation subfactors, and both received *very
good/significant confidence* ratings under the past performance
factor.[3]  AR, Tab 11, Source Selection Decision, at 2-4.

   With regard to price, Sabreliner's prices (with the *over and above*
prices included) for the base period and options periods 1 through 4 were,
respectively, $33,055,665, $26,286,044, $26,850,540, $27,759,485, and
$28,882,861, for a total of $142,834,595.  Orenda's prices (with the *over
and above* prices included) for the base period and options periods 1
through 4 were, respectively, $39,916,114, $18,469,784, $18,615,683,
$21,530,470, and $24,496,209, for a total of $123,028,261.  AR, Tab 11,
Price Competition Memorandum, at 5.

   Sabreliner proposed to use GFM for the first 24 months of the contract,
and because of this and in accordance with the terms of the solicitation,
see RFP M-002(e), the agency added $23.6 million (approximately $1 million
per month) to Sabreliner's price for evaluation purposes in order to
account for the 24 months of costs to the agency of providing the GFM;
accordingly, for evaluation purposes, Sabreliner's price totaled
$166,434,595.  Similarly, because Orenda proposed to use GFM for only the
first 6 months of the contract, the agency added $5,899,998
(proportionately the same as the adjustment to Sabreliner's price) to
Orenda's price for evaluation purposes in order to account for the 6
months of costs to the agency of the GFM; accordingly, for evaluation
purposes, Orenda's price totaled $128,928,259. 
AR, Tab 11, Price Competition Memorandum, at 10.
    
In making its source selection determination, the agency first noted that
both Orenda's and Sabreliner's proposals had received the same ratings
under the technical evaluation subfactors and past performance factor. 
Turning to price, the agency noted that Orenda's price, without the
adjustment for the materials costs associated with the offerors' different
GFM-to-CFM transition periods, was $19,806,399, or 16 percent, lower than
Sabreliner's price.  The agency added that after the application of the
adjustment for materials costs associated with the offerors' GFM-to-CFM
transition periods, the price advantage associated with an award to Orenda
grew to $37,506,401 (or approximately 29 percent).  Given that the
proposals received the same technical and past performance evaluation
ratings, and the significantly lower price of Orenda's proposal, the
agency selected Orenda's proposal for award as representing the best value
to the government.  AR, Tab 11, Source Selection Decision.  After
requesting and receiving a debriefing, Sabreliner filed these protests.

   Sabreliner first protests the agency's evaluation of both its and Orenda's
proposal under the past performance factor.  Our Office will examine an
agency's evaluation of an offeror's past performance only to ensure that
it was reasonable and consistent with the stated evaluation criteria and
applicable statutes and regulations, since determining the relative merit
of an offeror's past performance is primarily a matter within the
contracting agency's discretion.  TRW, Inc., B-282162, B-282162.2, June 9,
1999, 99-2 CPD P: 12 at 3.
    
Here, the RFP requested that offerors submit detailed information
regarding their past performance.  For example, offerors were requested to
submit information regarding five to seven contracts that they had
performed, and three to five contracts for each proposed subcontractor
that will perform 25 percent or more of the work here.  RFP S: L.4.1.  For
each contract cited, offerors were permitted to submit up to five pages
explaining, among other things, the relevance of the work performed under
the cited contracts to the work contemplated by this RFP.  RFP S: L.4.3. 
The agency evaluated the information submitted by Sabreliner and Orenda,
and issued ENs to each of the offerors regarding certain of the
information submitted.  AR, Tab 11, PRAG Final Report S:S: 2.1.5, 2.2.5. 
    
    
    
The agency concluded, after evaluating all of the information submitted,
that Sabreliner's past performance indicated that the firm had
successfully performed a number of contracts that *exhibited a high degree
of relevancy to the proposed effort.*  The agency noted, however, that
Sabreliner's past contracts differed from that to be awarded here in that
they were performed using GFM, rather than requiring a transition from GFM
to CFM and the subsequent performance of the contract using CFM.  The
agency considered this in its overall assessment that Sabreliner and its
proposed subcontractor had *relevant, strong current and past performance
in most areas identified in the solicitation,* and rating of Sabreliner
under the past performance factor as *very good/significant confidence.* 
AR, Tab 11, PRAG Final Report S: 2.2.6.
    
With regard to Orenda, the agency noted that its past and current
performance included, among other things, a *contract for the Canadian Air
Force with a scope of work greater than the proposed effort on a more
complex engine.*  In assessing the relevance of Orenda's successful
performance of this contract to the RFP here, the agency noted that the
overhaul and repair work was being performed using *100% CFM.*  AR, Tab
11, PRAG Final Report S:S: 2.1.1.  The agency also found, however, that
one of Orenda's proposed subcontractors lacked certain experience relevant
to the RFP here, and that this introduced *some doubt of successful
contract performance.*  The agency balanced the proposed subcontractor's
lack of certain relevant experience with Orenda's *relevant, strong
current and past performance in all areas identified in the solicitation,*
and evaluated Orenda under the past performance factor as *very
good/significant [confidence].*  Id. at S: 2.1.6. 
    
Sabreliner argues that the agency erred in performing its evaluation
because Sabreliner has experience through performing contracts using GFM
that is relevant to the tasks that Sabreliner would have to perform under
this RFP when it transitioned to performing the contract using CFM. 
Sabreliner thus concludes that the agency's concern that it had not
performed a contract similar in size and scope using CFM is misplaced. 
The protester also argues that the agency should have further downgraded
Orenda's proposal under the past performance factor, given Orenda's
proposed subcontractor's lack of certain relevant experience. 
    
In our view, Sabreliner's protest here consists of nothing more than its
mere disagreement with the agency's judgment.  In this regard, we cannot
find unreasonable the agency's evaluation of Sabreliner's proposal under
the past performance factor as very good/significant confidence when
Sabreliner lacked direct experience performing a contract requiring a
GFM-to-CFM transition and subsequent performance using CFM as will be
required here.  Nor can we find unreasonable the agency's evaluation of
Orenda's past performance as set forth in its proposal as very
good/significant confidence, notwithstanding its proposed subcontractor's
lack of certain relevant experience, given that Orenda was found to have
*relevant, strong current and past performance in all areas identified in
the solicitation* (as opposed to *most areas* for Sabreliner), including
the performance of a contract using CFM.[4]
    
Sabreliner next protests that the agency should have evaluated Orenda's
proposal
as unacceptable under the transition subfactor to the technical evaluation
factor. 
As mentioned previously, Orenda's proposal included a transition plan that
provided, among other things, for the transition from performing the
contract using GFM to performing the contract using CFM after the first
6-month period.  Sabreliner points out that Orenda's proposed approach to
transitioning to CFM after the first 6 months of the contract includes the
purchase by Orenda of the materials required to accomplish this transition
directly from the Air Force and the Defense Logistics Agency (DLA).  AR,
Tab 18, Orenda's FRP, at 39.  Sabreliner argues that the agency's
acceptance of Orenda's proposal was improper because nothing in the
solicitation, or in any regulation or statute, authorizes a firm to
purchase such property directly from a government supply source, such as,
and including, DLA.  Instead, the protester contends that such property
must be disposed *through competitive bid procedures, and contract with
the highest bidder.*  Protest (May 14, 2002) at 8.  Sabreliner also
contends that *[u]nder the terms of the Solicitation, the DLA is not
identified as a source for CFM,* and argues that it was unaware, to its
competitive disadvantage, that such an arrangement was possible. 
Supplemental Protest
(July 1, 2002) at 3; Protester's Comments (July 3, 2002) at 19.

   We need not address the propriety of the agency's permitting Orenda to
purchase materials from the government for use as CFM (which DLA and the
Air Force contend is proper) because Sabreliner was afforded the benefit
of submitting its proposal based on obtaining CFM from the government in
the same manner to which it now objects, and therefore cannot claim to
have been prejudiced by the agency's actions.  That is, as explained
below, Sabreliner was aware that the successful contractor would be able
to purchase materials directly from the government, and that such
materials would be considered CFM when used in performing the contract. 
Indeed, the record suggests that Sabreliner's proposal included just such
an approach to accomplishing the solicitation's requirements.
    
Sabreliner's initial proposal provided that Sabreliner would complete the
transition from GFM to CFM within 24 months, and that *Sabreliner's plan
for transitioning from GFM to CFM 24 months into the contract contains no
reliance or assumptions regarding post-transition availability of residual
GFM to satisfy CFM requirements.*  Sabreliner explained here that its view
was based upon, among other things, a clause in the solicitation
interpreted by Sabreliner as providing that residual GFM *would be
'surplus material,'* and its use was thus not permissible.  AR, Tab 5,
Sabreliner's Initial Proposal, vol. 1, at 9.  Sabreliner noted in its
proposal that *[w]hile it does not seem reasonable or logical that
material provided by the Government as GFM is not suitable for use as CFM,
the fact remains that this residual GFM seems to fit the definition of
'Government surplus material' and would require a specific, overt action
by the Government to permit its use as CFM.*  Id. at 10.  Sabreliner's
initial proposal thus concluded that *Sabreliner has decided to place no
reliance on GFM availability to satisfy CFM requirements.*  Id. at 9.

   During discussions, the agency provided Sabreliner with a written EN
referencing the above-quoted sections of Sabreliner's initial proposal,
and informing Sabreliner that *[t]his issue was reviewed by legal and it
was determined that under the circumstances of GFM[-]to[-]CFM transition
that residual GFM at the end of the 24[‑]month period will not be
considered surplus and will be available for contractor purchase at
cost.*  AR, Tab 11, EN-B-T-002 to Sabreliner.

   Sabreliner responded to the EN by stating that it *appreciates and
acknowledges the Government's legal review and favorable determination on
the contractor's right to purchase residual GFM at cost at the end of the
24 month transition period and to not be impacted by the 'surplus
material' restrictions.*  The protester added here that it would
*incorporate any expected costs savings* in its FRP.  AR, Tab 11,
Sabreliner Response to EN-B-T-002.  In this regard, the record reflects
that Sabreliner reduced its proposed price for the 3-year base period of
the contract, which covers the not-to-exceed 24-month transition period
from GFM to CFM and the remaining performance using only CFM, from
$43,093,599 to $33,055,665.  AR, Tab 11,
Price Competition Memorandum, at 5.

   As the foregoing demonstrates, Sabreliner was informed and clearly
understood that the successful contractor would be able to purchase
directly from the government at cost any residual GFM, that is, materials
that remained in the government's possession after the successful
contractor's GFM-to-CFM transition.[5]  Additionally, Sabreliner's
understanding that it could purchase these materials at cost directly from
the government after its GFM-to-CFM conversion, and use these materials as
CFM, was reflected in its FRP, as evidenced by Sabreliner's response to
the agency's EN (where it acknowledged its ability to purchase the
materials directly from the government at cost and explained that the
expected cost savings would be reflected in its FRP), and the $10 million
reduction in price for the base period set forth in Sabreliner's FRP. 
Consequently, we conclude that Sabreliner cannot now be permitted to argue
that Orenda's proposal should be rejected because Orenda proposed to
purchase directly from the government at cost any materials remaining
after Orenda's proposed GFM-to-CFM conversion, and to use the materials as
CFM.  The integrity of the protest process does not permit a protester to
argue the unreasonableness of an agency's interpretation of the
solicitation or governing regulations where the protester was informed of,
shared, and benefited from that interpretation during the procurement. 
AAI Eng'g Support, Inc., B-257857, Nov. 16, 1994, 95-1 CPD P: 2 at 3-4;
Picker Int'l, Inc., B-249699.3, Mar. 30, 1993, 93-1 CPD P: 275 at 7.

   Sabreliner would distinguish its situation from Orenda's on the theory
that, although it was informed that it could purchase directly from the
government at cost any materials remaining *at the end of the 24 month
transition period* and use the materials as CFM, Orenda was permitted to
purchase and use the materials as CFM at the end of its 6-month transition
period.  Protest (May 4, 2002) at 8; Protester's Response to Agency's
Request for Partial Dismissal (May 30, 2002) at 4.
    
Although Sabreliner is correct that that the two approaches differ as to
the duration of the transition period, this difference is, in our view,
the result of the offerors' differing approaches to accomplishing the
requirements of the RFP, rather than any improper action by the agency. 
That is, under either proposal, there is a transition period from GFM to
CFM that is complete when the contractor, rather than using GFM, is
performing the contract using materials it purchased from the government
(until the supply is exhausted) and/or a commercial source.  Nothing in
the solicitation required that offerors propose a 24-month transition
period.  Rather, as mentioned previously, the solicitation clearly
provided, and Sabreliner does not argue otherwise, that the transition
period was *not to exceed 24 months* and could be shorter.  RFP, app. A,
TRD S: 3.1.1; Intervenor's Submission (May 30, 2002), exh. 3, Agency
Clarifications to RFP (Feb. 5, 2002), response 3.

   In any event, the record does not evidence a reasonable possibility that
Sabreliner was prejudiced by the agency's actions here.  Both of the
offerors explained in their proposals that they expected that the
government's supply of materials would be depleted or consumed during the
second year of contract performance, and as such, they intended to
increasingly rely on a commercial source at that time.  AR, Tab 5,
Sabreliner's Proposal, vol. I, at 5; Tab 18, Orenda's Proposal, at 39.  In
fact, Orenda specifically informed the agency that any anticipated savings
from its purchase of materials directly from DLA *applied . . . to the
base period only.*  AR, Tab 11, EN‑A‑P-002, Orenda Response. 
Accordingly, any price advantage that Orenda could have obtained from
transitioning from GFM to CFM after 6 months using materials purchased
directly from the government, rather than 24 months as proposed by
Sabreliner, would be reflected in only the 3-year base period of the
contract.  With this in mind, we note that for the base period of the
contract, when Orenda, as argued by Sabreliner, enjoyed its improper
competitive advantage due to the agency's actions, its proposed price was
19 percent lower than Sabreliner's, after adjustment for GFM usage as
required by the RFP.  However, for the option periods of the contract,
when this alleged improper advantage would not apply, the record reflects
that Orenda's proposed price was 24 percent lower than Sabreliner's.  In
our view, the fact that the price advantage associated with Orenda's
proposal was even more pronounced during the option periods is
inconsistent with Sabreliner's claim that the agency's actions were
prejudicial to it with regard to its price for the base period of the
contract.[6]
    
In sum, we need not decide whether the agency's acceptance of Orenda's
proposal, which provides for the purchase of materials directly from the
government for use
as CFM in performing this contract, was improper, where the record
reflects that Sabreliner was aware that such an approach was considered
permissible by the agency, appeared to adopt such an approach in its
proposal, and was not prejudiced by the agency's allegedly improper
actions.

   Sabreliner next protests that the agency should have evaluated Orenda's
proposal as *unacceptable* under the transition subfactor to the technical
evaluation factor because the proposal's transition plan imposed terms and
conditions upon both the Air Force and DLA that were neither contemplated
by the solicitation nor appropriate.  Protest (July 1, 2002) at 4-6;
Protester's Comment (July 10, 2002) at 10‑15.  Specifically,
Orenda's proposal included that following at its *Plan for GFM to CFM*:
    
During the first six months following award of the contract we propose to
operate using GFM.  We ask that during this period the Air Force and
Defense Logistics Agency (DLA) cancel all outstanding Purchase
Requisitions for J85 unique, depot level material.  The only exception
will be for emergency procurements needed to support operations during the
first year of the contract period.
At the end of the initial six months, Orenda will purchase all the J85
unique, depot level material held by DLA/USAF.  We will also enter into
negotiations to assume responsibility for all of the outstanding DLA/USAF
contracts for this material.  This will relieve the Government of any
charges related to termination for convenience and, at the same time
assure a continuous supply of parts.
This material will be used to support production during the next six
months of the contract period . . . . We estimate that the DLA material
(with some exceptions) will be sufficient for the second six-month period
(completing the first year of the contract period).
AR, Tab 18, Orenda's FRP, at 39. [7]  Sabreliner contends that *under
Orenda's proposal, contractors and agencies that have authority to
purchase J85 parts through DLA and who already have placed orders for
parts will have their orders cancelled,* and that *allowing Orenda to
'assume responsibility' over such contracts would constitute an illegal
sole-source award.*  Supplemental Protest (July 1, 2002) at 4-5. 
Sabreliner contends here that Orenda's proposed approach, involving the
assumption of other contracts also poses *a myriad of performance risks
that [the Air Force] did not assess,* and *represent[s] an additional
price* regarding whatever costs may be associated with *renegotiating* all
these contracts that the Air Force has not considered or evaluated.  Id. 
Sabreliner also contends that Orenda's proposal essentially provides for a
contract with the Air Force that requires the
Air Force to *shift to Orenda responsibility over Air Force contracts . .
. [and] to assume responsibility over DLA contracts,* even though the Air
Force *presumably is not even a party to the DLA contracts to which Orenda
refers.*  Protester's Comments (July 10, 2002) at 11.
    
The Air Force responded to this aspect of Sabreliner's protest only by
pointing out the difference between the *depot level material* that is the
subject of Orenda's proposal and *common repair parts,* and contending
that because *[t]here is no 'arrangement' between the Air Force and Orenda
or between the Air Force, DLA and Orenda whereby illegal contracts will be
entered into by the parties,* the protester's argument here is without
merit.  AR (July 5, 2002) at 2-3.
    
Because the agency's response did not indicate whether the agency had
considered the above-quoted language in Orenda's proposal during the
procurement process, the record did not reflect that any review of the
language had been performed, and the agency report was, in our view,
conclusory and did not adequately respond to the concerns raised by the
protester, our Office requested additional information from the Air
Force.  In particular, we asked how the above-quoted language was
interpreted by the Air Force during the procurement process and whether
there were any communications between Orenda and the Air Force or DLA
regarding the language.
    
The Air Force responded by explaining, without citation to anything in the
record, that its *interpretation was that after award we would meet with
all players to determine the quantity of assets available from DLA and the
flow of these parts to Orenda, both as GFM and CFM.*  The Air Force added
that, in its view, *[w]hat Orenda submitted was a 'plan' for transition,*
and that *[t]he plan is negotiable--the intent would not change but the
process itself is negotiable.*  Agency Response to Interrogatories (July
12, 2002) at 4.  The agency also stated that to its knowledge there had
been no communications between Orenda and DLA regarding Orenda's proposed
approach (which generally provided for DLA's cancellation of all
outstanding purchase requisitions for J85 unique, depot level material as
well as the *assumption* of all DLA contracts for this material).[8]  The
Air Force claimed that it *and all prospective offerors, including Orenda,
had extensive exchanges regarding transition strategies* prior to the
issuance of the solicitation, and that these exchanges had *continued
through the formal solicitation process.*  Id. at 5. 
The Air Force did not, however, cite or otherwise point to anything in the
record that evidenced that the agency had either evaluated, addressed in
discussions with Orenda, or otherwise considered, the above-quoted
language in Orenda's proposal.
    
In reviewing an agency's evaluation of proposals, we examine the record to
determine whether the agency acted reasonably and consistent with the
evaluation factors as well as applicable statutes and regulation. 
Implicit in this is that the evaluation must be documented in sufficient
detail to show that it was reasonable and bears a rational relationship to
the announced evaluation factors.  While we accord greater weight to the
contemporaneous record in determining whether an evaluation was
reasonable, post-protest explanations that are credible and consistent
with the contemporaneous documentation will be considered in our review. 
Satellite Servs., Inc., B-286508, B-286508.2, Jan. 18, 2001, 2001 CPD P:
30 at 7. 
    
As noted above, the RFP requested that offerors submit a transition *plan
that addresses specific approach and methodology for completing the . . .
transition from GFM to CFM.*  RFP at S: L.3.2.  The RFP further stated in
this regard that proposals would *be evaluated on their approach and plan
to complete the . . . transition from GFM to CFM,* and that *[a]s a
minimum, [the transition] subfactor is met when the offeror[']s approach
demonstrates a comprehensive plan . . . meeting all CFM requirements,
including forecasting, material sources, requisition processes, ordering
schedule, and establishment of vendor contracts.*  RFP S: M-002(c).
    
There is nothing in the contemporaneous record showing that the Air Force
evaluated, or otherwise considered, whether the above-quoted language in
Orenda's proposal rendered its transition plan unacceptable. 
Additionally, as the above discussion indicates, in responding to our
Office's questions, the Air Force did not point to anything in the record
evidencing any such consideration or evaluation.  Accordingly, the record
reflects that the Air Force failed to meaningfully evaluate a significant
and potentially costly aspect of Orenda's transition plan, that is,
Orenda's approach to *meeting all CFM requirements,* including its
proposed *material sources.*  While it may be that the above-quoted
language in Orenda's proposal does not render its transition plan
unacceptable or entail significant costs, we simply cannot conclude on
this record that the agency's evaluation of Orenda's proposal under the
transition subfactor to the technical factor was reasonably based or
consistent with the transition evaluation subfactor set forth in the RFP. 
Matrix Int'l Logistics, Inc., B‑272388.2, Dec. 9, 1996, 97-2 CPD P:
89 at 10 (agency's evaluation of two competing proposals as technically
equal lacked a reasonable basis where the record does not contain adequate
documentation or an explanation for the agency's conclusion).
    
Nor does the Air Force's response, that it will negotiate with Orenda
after award regarding that firm's transition plan, satisfactorily address
the concerns raised by
the protester.  In our view, it was improper to award a contract to a firm
on the presumption that the offeror's plan for a potentially significant
and costly aspect of the performance of the contract would be negotiated
after award instead of during the procurement process.  The RFP
specifically provided for the evaluation of each offeror's *plan* to
accomplishing the transition from GFM to CFM, and the agency simply failed
to do this (even though the plan was incorporated as part of the
contract). 
    
To argue that the agency's failure to meaningfully evaluate a material
part of Orenda's proposal is excusable on the basis that the plan's
*process itself is negotiable* and will be considered and negotiated after
award ignores the contracting by negotiation process set forth in part 15
of the FAR.  That process generally provides that in negotiated
acquisitions, an agency is to evaluate proposals in accordance with the
evaluation factors set forth in the solicitation, document its evaluation
of proposals, if appropriate negotiate with offerors through the conduct
of discussions and allow offerors to revise their proposals, and select a
proposal for award based upon the selection criteria set forth in the
solicitation.  FAR S:S: 15.304-15.308.  The negotiated acquisition process
as described in the FAR and set forth in this RFP does not contemplate the
selection of an inadequately evaluated proposal for award with the intent
to negotiate the process by which the offeror will accomplish the agency's
requirements at some later point in time.  See Global Assocs. Ltd.,
B-271693, B‑271693.2, Aug. 2, 1996, 96-2 CPD P: 100 at 5 (protest
sustained where the awardee's proposal was at best unclear as to its
compliance with a material requirement of the solicitation, and the
agency's post-award communications with the awardee to clarify the
awardee's proposal in this regard constituted improper post-best and final
offer discussions).  Accordingly, we sustain Sabreliner's protest on the
basis that the agency's evaluation of Orenda's proposal as acceptable
under the transition subfactor to the technical evaluation factor was not
reasonably based.[9]
    
The protest is sustained in part and denied in part.
    
We recommend that the agency evaluate Orenda's transition plan, and
document this evaluation.  If the agency determines as a result of this
evaluation that discussions are necessary, it should reopen discussions
with Orenda and Sabreliner, and request and evaluate new FRPs.  If the
agency concludes that Orenda is no longer in line for award, it should
terminate the contract awarded to Orenda and award a contract to
Sabreliner.  We further recommend that the Air Force reimburse Sabreliner
for the costs of filing and pursuing its protest, including reasonable
attorney's fees, to the extent that those costs were incurred in
connection with Sabreliner's assertion that the agency unreasonably
evaluated Orenda's proposal as acceptable under the transition subfactor
to the technical factor.  Sabreliner's certified claim for costs,
detailing the time spent and cost incurred, must be submitted to the
agency within 60 days of receiving this decision.  4 C.F.R. S: 21.8(f)(1)
(2002).
    
Anthony H. Gamboa
General Counsel

    
    

   ------------------------

   [1] Although issued by the Air Force, the contract awarded under the RFP
is for the J85 overhaul and repair program for the Air Force, Navy,
National Aeronautics and Space Administration, and foreign military sales
customers.  Agency Report (AR) at 1.
[2] The transition from performing the contract using GFM to performing
the contract using CFM had been emphasized by the agency during an
industry day/pre‑solicitation conference, and was the subject of a
number of clarifications issued by the agency during the solicitation
process.  For example, the record reflects that during the industry day
the agency stressed that it was *looking for ideas from industry on the
most effective way to accomplish this transition.* 
AR, Tab 4, Industry Day Briefings (Nov. 15-16, 2001).
[3] The following adjectival ratings were used in the evaluation of the
offerors' past performance as set forth in their proposals: 
exceptional/high confidence, very good/significant confidence,
satisfactory/confidence, neutral/unknown confidence, marginal/little
confidence, unsatisfactory/no confidence.  AR, Tab 11, Performance Risk
Assessment Group (PRAG) Final Report S: 1.2.3; see RFP S: M-002(f).
[4] Sabreliner's contention that the agency failed to conduct meaningful
discussions with it because the agency did not inform Sabreliner during
discussions of its view that Sabreliner had less than optimal past
performance, given that it lacked CFM experience, is similarly without
merit because this did not constitute a finding of adverse past
performance, but rather was a relatively minor concern.
[5] We also note that the Air Force specifically informed potential
offerors through questions and answers posted prior to the proposal due
date that *if items become DLA managed, then [they] become CFM.*  Repair,
Overhaul, and Modification of J85‑GE-4/5/13/17/17A/21/100 Engines
and MISTR J85:  Questions and Answers Submitted by Contractors, No. 8(e)
(http://www.fedbizopps.gov).
[6] Moreover, as the agency made clear during the procurement process, the
materials available from the government would be sold to the contractor
*at cost,* and there is nothing in the record to suggest that the agency's
adjustment to the offerors' price proposals of approximately $1 million
per month for each month the offerors proposed to continue using GFM was
in any way inflated above cost.  In short, we fail to see, and Sabreliner
has not explained, why a proposal's evaluated price would differ in any
significant way, should the firm propose to purchase certain of the
requisite materials from the government and use those materials as CFM,
and thus include those costs in its proposal, or have the government
provide the same materials as GFM without cost to the offeror with the
offeror's proposed price being adjusted accordingly under the price
evaluation scheme.
[7] In accordance with the terms of the RFP, Orenda's technical proposal
(including the section that set forth the above-quoted language) was
incorporated and made part of the contract awarded to Orenda under the
RFP.  RFP at 22; Agency Response to Interrogatories (July 12, 2002) at 5.
[8] DLA also has advised our Office that it is not aware of any such
communications.
[9] Sabreliner also challenges the price evaluation of Orenda's proposal,
contending among other things that it was improper because it failed to
consider the potential costs associated with above-quoted language in
Orenda's proposal.  We need not address this issue separately because we
expect it to be encompassed in the agency's corrective action.