TITLE:	Demusz Manufacturing Company, Inc. 
BNUMBER:	    B-290575
DATE:		    August 5, 2002
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Demusz Manufacturing Company, Inc. , B-290575, August 5, 2002

Decision


Matter of:   Demusz Manufacturing Company, Inc.

File:            B-290575

Date:              August 5, 2002

Larry Harper for the protester.
Howard Q. Bain, Esq., and Milton D. Watkins, Esq., Department of the Air
Force, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where request for proposals provided for evaluation of technical
acceptability on pass/fail basis and selection of awardee from among those
offerors whose proposals had been determined technically acceptable through
application of a price/past performance trade-off, contracting officer
reasonably selected awardee's technically acceptable, higher-priced proposal
over protester's technically acceptable, lower-priced one where he
determined that protester's price advantage was outweighed by its lower past
performance rating.

DECISION

Demusz Manufacturing Company, Inc. protests the award of a contract to Dover
Tool Company under request for proposals (RFP) No. F34601-02-R-0079, issued
by the Department of the Air Force for stage 2 support turbine nozzles for
the F110 aircraft.  Demusz contends that its proposal represented the best
value to the government.

We deny the protest.

The RFP in this procurement, which was set aside for small business,
contemplated award of a fixed-price contract to the offeror whose proposal
represented the best value to the government.  Proposals were to be
evaluated on the basis of technical, past performance, and price factors.
The solicitation provided for the evaluation of technical acceptability on a
pass/fail basis and for the selection of an awardee from among those
offerors whose proposals had been determined technically acceptable through
application of a price/performance trade-off.  Past performance and price
were of equal weight.  The solicitation further provided that in evaluating
offerors' past performance, the contracting officer would consider "RYG
Program ratings" on like and similar Federal Stock Classifications
(FSC),[1]  review the offerors' performance on any recent relevant contracts
awarded by the procuring activity, and take into account both his personal
knowledge and any data independently obtained from other government and
commercial sources.

Six proposals were received by the February 15, 2002 closing date, five of
which were determined technically acceptable.  Demusz's overall price of
$1,750,944 was lowest; Dover's price of $1,861,520 was second low.  The
contracting officer assigned Dover a past performance rating of satisfactory
and Demusz (and each of the other three offerors), a rating of marginal.[2]
In assigning the protester a rating of marginal for past performance, the
contracting officer considered the ratings assigned Demusz by the RYG
system, which were green for quality and red for delivery, and information
from the Defense Logistics Agency's Mechanization of Contract Administration
System (MOCAS), which revealed a delinquency rate of 33.3 percent on
Demusz's current contracts.[3]  In addition, the contracting officer
considered Demusz's performance under a prior Air Force contract for the
same item, F34601-99-C-0082, finding that Demusz had experienced trouble in
producing the items on the contract; that the contract delivery date
schedule had been revised several times, resulting in an extension of the
final delivery date from September 2000 to May 2001; that part of the
delivery delay was due to the contractor requesting a waiver/deviation for
20 items; that the Air Force had accepted the waiver/deviation for 12 of the
items, but determined the remaining 8 unacceptable; and that the contract
was completed only after the government agreed to increase the allowable
variation in quantity to --5 percent, thus allowing the contractor to ship
six fewer items.  Price Competition Memorandum at 5.  Dover's satisfactory
rating reflected its RYG system rating of green for both quality and
delivery and its MOCAS contract delinquency rate of 16.7 percent.  The
contracting officer determined that Demusz's price advantage was outweighed
by its significantly lower past performance rating and that Dover's proposal
represented the best value to the government.  Id.  On April 5, the agency
awarded a contract to Dover.

Demusz argues that in making his best value determination, the contracting
officer failed to adequately consider the benefits of its proposal, which,
according to the protester, include its lower price, its experience (and
Dover's lack of experience) in manufacturing the part, its having previously
obtained first article approval for the part, and its superior machinery and
equipment.

Where an award is to be based on the best value to the government, a
cost/technical trade-off may be made in selecting an awardee, subject only
to the test of rationality and consistency with the stated evaluation
factors.  Eng'g and Prof'l Servs., Inc., B?262179, Dec. 6, 1995, 95-2 CPD ï¿½
266 at 4.  In this regard, price/past performance trade-offs are permitted
when, as here, such trade-offs are consistent with the solicitation's
evaluation scheme.  USA Elec., B-275389, Feb. 14, 1997, 97-1 CPD ï¿½ 75 at 3.

The protester argues that it should have received a higher technical score
than Dover because it has better machinery and equipment and has already
obtained first article approval for the item.  The solicitation provided for
the evaluation of technical acceptability on a pass/fail basis, however;
accordingly, it was consistent with the evaluation scheme set forth in the
RFP for the contracting officer not to further distinguish between Demusz
and Dover on the basis of technical merit once he had determined that their
proposals were technically acceptable.  To the extent that the protester is
objecting to the fact that the RFP provided for the evaluation of technical
acceptability on a pass/fail, as opposed to comparative, basis, a protest
based upon an alleged impropriety in a solicitation must be filed prior to
the time set for receipt of proposals.  Bid Protest Regulations, 4 C.F.R. ï¿½
21.2(a)(1) (2002).  Because Demusz did not object to the provision in
question prior to the closing time for receipt of proposals, but instead
delayed raising the issue until after it had been notified of the award to
Dover, this ground of its protest is untimely and will not be considered.

Regarding Demusz's contention that it should have received credit in the
evaluation for its experience in furnishing the part in question to the
government, the RFP did not identify experience as an evaluation factor;
consequently, the agency was under no obligation to credit Demusz for having
previously furnished the item.  Moreover, as noted above, the contracting
officer did in fact consider the quality of Demusz's performance under its
prior contract for this part in his evaluation; rather than concluding that
Demusz's performance under the prior contract demonstrated its ability to
perform the solicited effort successfully, however, he concluded that the
protester's performance

supported the RYG computer generated Delivery component RED rating for
Demusz and further indicated that the government had detected meaningful
quality problems when Demusz had previously manufactured the item and
seriously called into question Demusz's RYG GREEN quality rating, at least
for the item being procured.

 Contracting Officer's Statement of Facts at 11.

Finally, regarding the protester's argument that the contracting officer
failed to consider its price advantage in his trade-off decision, the record
reflects not that the contracting officer ignored Demusz's price advantage,
but rather that he determined that the protester's price advantage was
outweighed by its marginal past performance.  We see nothing irrational in
this determination.

The protest is denied.

Anthony H. Gamboa
General Counsel


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[1] The RYG (Red/Yellow/Green) Program is a Navy/Air Force automated system
that classifies the performance risk associated with a particular vendor by
assigning a color rating to the vendor's quality and delivery performance
history in individual FSCs.  A rating of green signifies low risk; yellow
signifies moderate risk; and red signifies high risk.  A neutral
classification is assigned to suppliers who are first time quoters to the
government for the FSC involved, suppliers otherwise having no past
performance data in the RYG database for the FSC involved, and suppliers
whose past performance data in the RYG database for the FSC involved are
over 3 years old.  See RFP at 33.
[2] The RFP defined a rating of Satisfactory/Confidence as signifying that
"[b]ased on the offeror's performance record, some doubt exists that the
offeror will successfully perform the required effort," and a rating of
Marginal/Little Confidence as signifying that "[b]ased on the offeror's
performance record, substantial doubt exists that the offeror will
successfully perform the required effort[;] [c]hanges to the offeror's
existing processes may be necessary in order to achieve contract
requirements."  RFP at 34.
[3] While the RYG system rates a contractor's performance within a
particular stock class, MOCAS does not differentiate among stock classes.