TITLE: ViaSat, Inc., B-291152; B-291152.2, November 26, 2002
BNUMBER: B-291152; B-291152.2
DATE: November 26, 2002
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ViaSat, Inc., B-291152; B-291152.2, November 26, 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: ViaSat, Inc.
File: B-291152; B-291152.2
Date: November 26, 2002
James J. Regan, Esq., John E. McCarthy Jr., Esq., Kent R. Morrison, Esq.,
Daniel R. Forman, Esq., David Z. Bodenheimer, Esq., and
Elizabeth W. Newsom, Esq., Crowell & Moring, for the protester.
Joseph C. Port Jr., Esq., Robert J. Conlan, Esq., Mark P. Guerrera, Esq.,
Richard L. Larach, Esq., Beth Ann Isenberg, Esq., Jonathan Adam DeMella,
Esq., Courtney J. Edmonds, Esq., and Sally H. Jamieson, Esq., Sidley
Austin Brown & Wood, for Titan Systems Corporation, an intervenor.
Maj. Ed. Beauchhamp, and Denise Maramma, Esq., United States Army Materiel
Command, for the agency.
Paul I. Lieberman, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Evaluation of protester's past performance as presenting a moderate
performance risk is unobjectionable where the agency reasonably based the
assessment on consideration of significantly negative performance
evaluations under contracts that protester specified as relevant in its
proposal; protester's explanations and attempts during discussions to
minimize or disavow the relevance of the unfavorably rated performance and
to disassociate itself from the adverse performance information were
considered by the agency, which reasonably concluded that the explanations
did not provide any basis to ignore the poor performance under relevant
contracts listed and performed by the protester.
2. Uniformly favorable assessments of awardee's past performance under
numerous contracts that explicitly satisfied the relevancy criteria under
the solicitation provided a reasonable basis for the agency to evaluate
the awardee's past performance as presenting a low performance risk.
3. Protester's contention that various alleged technical enhancements
under its proposal were not considered and credited by agency is
contradicted by the evaluation record, which reflects that the agency
recognized the items at issue and gave protester evaluation credit in
several instances where it was warranted, but reasonably declined to
credit the protester for other features that constituted nothing beyond
satisfying the solicitation requirements, or consisted of unsupported
assertions that were not substantiated by the technical proposal.
4. Where the record reflects that agency's evaluation of technical
proposals is reasonable and consistent with the solicitation evaluation
criteria, protester's repeated disagreements concerning the relative
merits of different areas of the respective proposals does not provide a
valid basis to question the propriety of the evaluation.
5. Agency's cost realism analysis was reasonably based in part on
favorable Defense Contract Audit Agency (DCAA) reports that were provided
orally to agency during course of evaluation, as evidenced by e-mail, even
though a final DCAA report confirming the previously conveyed interim
evaluations was not transmitted until after the award determination had
been made.
6. Agency's cost/technical tradeoff and resulting award determination
which is reasonable, documented and consistent with the solicitation
criteria is unobjectionable.
DECISION
ViaSat, Inc. protests the award of a contract to Titan Systems Corporation
for certain satellite communications systems under request for proposals
(RFP) No. DAAB07-02-R-D403, issued by the United States Army
Communications and Electronics Command (CECOM). ViaSat objects to
numerous aspects of the agency's evaluation of the proposals, most
particularly with respect to the performance risk factor, and contends
that the resulting award determination is arbitrary and unreasonable.
We deny the protest.
BACKGROUND
The solicitation, issued on May 14, 2002, sought proposals for the design
and development of a Ka-Band satellite augmentation terminal (KaSAT)
system, a lightweight, mobile, flexible, modular, and scalable integrated
tactical military satellite communications terminal system that operates
in the military Ka frequency band over the wideband gapfiller satellite
system. The RFP calls for the contractor to develop, test, document and
deliver 10 developmental KaSAT systems, consisting of 8 transit case
systems and 2 shelter-mounted systems. RFP S: A-4.2.
The solicitation provides for a best‑value award on the basis of
four evaluation factors: technical, performance risk, cost, and small
business participation, with the technical factor significantly more
important than performance risk, which in turn is more important than
cost, which is more important than small business participation. RFP S:
M-A. The bulk of the contract award is cost-reimbursement, consisting of
cost-plus-award-fee (CPAF) and cost-plus-fixed-fee (CPFF) contract line
items (CLIN), and a small time and material (T&M) CLIN; the contract also
contains a relatively minor fixed-price CLIN. With respect to the CPAF,
CPFF and T&M CLINs, the solicitation provides that the proposed cost would
be evaluated for realism by determining the government's prediction of the
probable cost of the offeror's specific technical approach and, if
necessary, adjusting the probable cost. RFP S: M-C.3(a). The fixed-price
CLIN price (for five units) is added to the total probable cost to
calculate a total cost, with respect to which the RFP contained a
$22,000,000 ceiling. RFP S: M-C.3(d).
Three initial proposals were received by the June 17, 2002 closing date.
The ViaSat and Titan proposals were evaluated as susceptible of being made
technically acceptable while the third proposal was evaluated as
technically unacceptable. On July 10, a competitive range was established
consisting of the Titan and ViaSat proposals. On July 11, discussions
were commenced in the form of the issuance of written items for
negotiation (IFN) to each offeror, with 26 IFNs issued to Titan and 38 to
ViaSat. Agency Report (AR) at 8. After initial responses were received,
three additional IFNs were issued to Titan and two were issued to ViaSat.
After responses to all of the IFNs had been received, teleconferences were
conducted with each offeror on July 23 to provide each offeror with an
opportunity to clarify and discuss its written responses to the IFNs.
Id.
The offeror's revised proposals were reviewed and an interim evaluation
was completed on July 25. Final proposal revisions were solicited from
both offerors on July 26, with a July 30 closing date. Neither offeror
made any changes, and the final evaluation was completed on August 2.
Under the final evaluation rollup, Titan's proposal received a technical
rating of *good,* a performance risk rating of *low risk,* and a small
business participation rating of *good,* at a total proposed cost of
$21,888,994; ViaSat's proposal received a technical rating of *good,* a
performance risk rating of *moderate risk,* and a small business
participation rating of *acceptable,* at a total proposed cost of
$18,397,700. AR at 9.
In making her award determination, the source selection authority (SSA)
noted Titan's relatively higher evaluation under the small business
participation factor. The SSA determined that while both proposals were
evaluated as *good* overall under technical, Titan's proposal was actually
technically superior as evidenced by its having been evaluated as offering
a relatively greater number of strengths both major and minor with respect
to meeting the objectives of the KaSAT requirement, as well as presenting
fewer minor weaknesses than ViaSat's proposal. Titan also presented a low
to moderate risk in the technical factor with only five areas of moderate
risk versus ViaSat's moderate risk based on nine evaluated risk areas,
thus, in the SSA's view, ViaSat presented a greater risk for timely
accomplishment of the KaSAT program requirements. The SSA also considered
the lower performance risk presented by Titan's relatively higher rated
past performance as reflecting little doubt that Titan would be able to
successfully perform, while ViaSat's project management and schedule
problems presented some doubt that it could perform the proposed effort.
The SSA concluded that the combined effect was that she had confidence
that Titan could successfully complete the contract, and she determined
that Titan's evaluated advantages outweighed the cost advantage presented
by the ViaSat proposal. Accordingly, the SSA selected Titan for award on
August 6. AR, Tab 80, Source Selection Decision, at 4-5. After receiving
notice of the award and a debriefing, ViaSat filed this protest with our
Office.
PROTEST ALLEGATIONS
ViaSat's underlying protest premise is that it submitted a lower cost
proposal which received a technical rating that was equal to the Titan
proposal's technical rating, therefore, the respective performance risk
evaluations were determinative. Protest at 2. ViaSat contends that the
performance risk evaluations were fundamentally flawed, asserting that
Titan's *low risk* evaluation was unsupported, and that ViaSat's *moderate
risk* rating should have been a *low risk* rating. Id. In addition,
ViaSat asserts that there were numerous improprieties in the technical
evaluation of both offerors proposals, insisting that ViaSat's superior
experience and expertise was reflected in its technical proposal, and that
the agency failed to conduct meaningful discussions with ViaSat regarding
various perceived weaknesses in ViaSat's technical proposal, and with
respect to ViaSat's past performance. ViaSat further contends that the
agency's cost realism analysis of Titan's proposal was defective, and
asserts that overall, *[t]his flawed evaluation culminated in an improper
tradeoff analysis that favored award to Titan.* Id.
PERFORMANCE RISK EVALUATION
ViaSat's Past Performance
ViaSat details its allegedly exceptional qualifications, and propounds its
status as *the leading supplier of Mobile Satcom terminals to the
Department of Defense (DOD) markets.* Protest at 5. ViaSat also recites
numerous corporate acquisitions which have contributed to the breadth of
its product line and established its position as a leading-edge provider
in the field of satellite communication technologies. Protest at 5-6. In
essence, ViaSat postulates that its superior background and qualifications
entitle it to a low risk past performance rating, and that its evaluation
must be relatively better than that of Titan, whom ViaSat contends
*possesses very little experience in hardware development generally, and
satellite communication,* and thus is entitled to *no better than a
'[n]eutral' rating.* Protest at 23. The record reflects that the agency
received significantly adverse reference assessments of ViaSat's past
performance under three contracts, as a result of which ViaSat's proposal
was evaluated as presenting a moderate risk, rather than given the low
risk rating to which ViaSat believes it is entitled.
Under the performance risk factor, the RFP called for an assessment of the
relative risks associated with an offeror's likelihood of success in
performing the requirements as indicated by that offeror's record of past
performance. RFP S: M‑C.2. The solicitation provided for an
assessment based on the quality, relevancy and recency of the offeror's
past performance, and that of its major subcontractors, as it relates to
the probability of successful accomplishment of the required effort. The
RFP indicated that the considerations for assessing past performance
consist of all aspects of cost, schedule and performance including, among
other things, the offeror's record of conforming to specifications,
forecasting and containing costs on cost-reimbursement contracts, and
adherence to contract schedules, including the administrative aspects of
performance. RFP S: M‑C.2(a). The solicitation also provided that
a negative finding under any of these elements may result in an overall
high-risk rating. RFP S: M-C.2(b).
The RFP instructed offerors to submit a description of all relevant
government and industry contracts and major subcontracts performed during
the past 3 years, and specifically defined relevant contracts as those for
*tactical satellite terminals or any major components such as antennas,
RF/IF conversion and or amplification, modems, etc.* RFP amend. 5, at 4.
In response to these instructions, ViaSat listed nine contracts in its
proposal, stating that these represented *programs that have direct
relevance to the KaSAT program including similar modem, security, antenna,
and RF efforts.* AR, Tab 55, ViaSat Performance Risk Proposal, at 1. The
agency received favorable reference reports for ViaSat under six of the
listed contracts. However, the agency also received significantly
negative past performance reports with respect to project management
deficiencies and failure to meet schedules from ViaSat's references under
the other three listed contracts, denominated as the *Flex Modem*
contract, the *MIDS* contract, and the *Connexion* contract. As a result,
ViaSat's proposal was evaluated as presenting a moderate performance risk
rather than a low risk.
Under the Flex Modem contract, ViaSat's references provided information
that while ViaSat[1] eventually met expectations for technical
performance, it did not achieve the original expectations, that ViaSat's
deliveries were late to the severe detriment of the program, and that its
project management and schedule were unsatisfactory. The agency issued
two IFNs to ViaSat, one seeking an explanation of ViaSat's design and
fabrication responsibilities and its relationship with the prime
contractor, the other indicating that the reference had detailed ViaSat's
problems in project management and schedule, noting that the original
schedule was not achieved, that there had been a significant overrun, and
that ViaSat's achievement against the revised schedule was variable. AR,
Tab 57, ViaSat's IFN Responses, Nos. B-26, B-31. In response, ViaSat
explained that it had performance responsibilities for the design of
modules that subsequently was used to fabricate the prototype modules and
final units, and was a subcontractor to the prime on a modem development
program, and continued on as a consultant after design of the prototype,
but did not perform actual fabrication. ViaSat took the position that its
work had been accurately completed and delivered on schedule. Id. The
agency took note of ViaSat's disagreement with respect to its
responsibility for the reported deficiencies and its defense of its
performance, but ViaSat had conceded it was responsible for much of the
early hardware design, which was used as the basis for the fabrication,
which provided a basis for the evaluators to conclude that ViaSat's
participation as a subcontractor contributed to the schedule and
performance problems, and that ViaSat had at least partial
responsibility. AR, Tab 86, ViaSat's Performance Risk Evaluation Reports,
Final Report at 13.
Under the MIDS contract, ViaSat's reference indicated that ViaSat was
unsatisfactory under project management because the units delivered are in
different configurations making interchangeability a significant problem,
and that the schedule was met only after the buying command twice extended
the schedule for consideration. The agency issued an IFN advising ViaSat
of the reference information that the MIDS units are currently in
different configurations, making parts interchangeability a significant
problem, that there were weaknesses in parts control, that a major
subcontractor supplying a key component had a low first pass yield with
resulting significant delays in fielding units to the original schedule,
and that ViaSat's subcontractor control had been weak. AR, Tab 57,
ViaSat's IFN Responses, at IFN B-30. ViaSat responded by agreeing that
there had been delays, with respect to which it had negotiated an
equitable adjustment, and blamed the problems on the complexity of the
product and on ViaSat's reliance on a government furnished technical data
package which it claimed was inconsistent, incomplete and deficient. As a
result ViaSat states that it made assumptions regarding design and
operation which affected interchangeability, and which required redesign
at ViaSat's expense. ViaSat pointed out that it is taking steps to
rectify the deficiencies, and asserted that *none of the root-cause issues
apply to the KaSat program,* noting that it does not have any high-risk
modules or subcontracts identified in its proposed approach. Id. The
evaluators concluded that ViaSat's response confirmed the problems; the
response indicated that ViaSat had underestimated the effort and
difficulty of the project, and, notwithstanding the alleged data package
defects, ViaSat's interpretation of the data package was an issue.
Under the Connexion contract, ViaSat's reference rated ViaSat's
performance as unsatisfactory under effectiveness of project management
and timeliness of performance, noting ViaSat's late deliveries, unforeseen
development problems and overly optimistic schedule management. The
agency issued IFN B-29 apprising ViaSat of this information, in response
to which, ViaSat conceded that it was a key participant in the development
of system level specifications, and that it had run into multiple
difficulties that delayed schedule performance and ultimately resulted in
late deliveries. ViaSat's defense was that this was a technically
innovative program, and that the KaSAT contract did not present the same
risks for similar development and schedule problems because of the
approach taken by ViaSat. Id. at IFN B-29. The evaluators recognized
that ViaSat did not dispute the deficiencies in its response and concluded
that the risks were relevant. AR, Tab 86, ViaSat's Performance Risk
Evaluation Reports, Final Report, at 12. As a result of ViaSat's past
performance deficiencies under these three contracts, ViaSat's proposal
was evaluated as presenting a moderate performance risk.
In its protest, ViaSat takes exception to the agency's consideration of
these negative references arguing variously that the reference information
was faulty, that the adverse performance pertained to irrelevant past
performance issues, and reflected a misapplication of the RFP evaluation
criteria, and that ViaSat had addressed the perceived past performance
weaknesses in its responses to various IFNs, but that CECOM ignored the
information that ViaSat provided. Protest at 11. In our view, none of
ViaSat's arguments are supported by the evaluation record and, therefore,
provide no basis to call into question the reasonableness of the agency's
evaluation.
The evaluation of past performance is a matter within the discretion of
the contracting agency, which our Office will review in order to ensure
that it was reasonable and consistent with the stated evaluation
criteria. NLX Corp., B-288785, B-288785.2, Dec. 7, 2001, 2001 CPD P: 198
at 7. An agency's past performance evaluation may be based on a
reasonable perception of inadequate prior performance, regardless of
whether the contractor disputes the agency's interpretation of the
underlying facts. Ready Transp., Inc., B-285283.3, B‑285283.4, May
8, 2001, 2001 CPD P: 90 at 5. A protester's mere disagreement with the
agency's judgment is not sufficient to establish that the agency acted
unreasonably. Birdwell Bros. Painting & Refinishing, B-285035, July 5,
2000, 2000 CPD P: 129 at 5.
Here, notwithstanding ViaSat's contrary interpretation of the information
summarized above, in fact, ViaSat's IFN responses substantially confirmed
the negative references, while providing a variety of excuses, attempting
to attribute the conceded deficiencies to other entities, and seeking to
discount the shortcomings as not relevant to the current effort. Thus,
for example, ViaSat argues that the project management and scheduling
deficiencies that were assessed under the Connexion contract *are not
relevant to the work called for under the KaSAT procurement, and
therefore, CECOM could not properly rely on that work as a basis for
downgrading ViaSat under the Performance Risk factor.* Protest at 20.
The simple answer is that ViaSat had itself claimed in its proposal, and
the agency evaluation confirmed, that the work performed by ViaSat under
these contracts is directly relevant to the requirements under the present
solicitation because it was for tactical satellite terminal systems and
major system components. In our view, ViaSat simply cannot plausibly
avail itself of the defense that it is entitled to receive credit for
having performed these contracts because they are directly relevant, but
it may not be penalized for its poor performance thereunder because the
particular elements in question do not pose a risk under ViaSat's
explanation of the approach that it proposes here. This is a specious
dichotomy and is inconsistent with the RFP criteria; the agency reasonably
concluded that the contracts were relevant both for purposes of
establishing that ViaSat had relevant experience and for assessing the
quality of ViaSat's performance in obtaining that experience.
As for the various mitigating explanations and excuses now provided by
ViaSat, its claim with respect to the MIDS contract is representative.
ViaSat argues that *any performance issues that may have been attributable
to ViaSat under the MIDS contract stemmed exclusively from problems with
[ViaSat's] rogue subcontractor* Protester's Comments at 38. The simple
answer is that a *rogue subcontractor* defense does not provide any basis
to excuse ViaSat's performance deficiencies as the prime contractor. A
prime contractor under a government contract is normally responsible for
the performance of its subcontractors. Neal R. Gross & Co., Inc.,
B‑275066, Jan. 17, 1997, 97-1 CPD P: 30 at 4. ViaSat has not
provided any credible basis to conclude otherwise here.
ViaSat also argues that the agency failed to conduct meaningful
discussions with respect to its past performance. As detailed above, the
agency specifically disclosed the relevant adverse reference information
to ViaSat through detailed IFNs, and considered ViaSat's responses to the
IFNs. In order to satisfy its obligation to conduct meaningful
discussions with competitive range offerors, while an agency is required
to lead the offerors into areas of their proposals that require revision
or amplification, the fact that an offeror's responses do not fully
satisfy the evaluators provides no basis to conclude that the discussions
were inadequate. Ryan Assocs., B-274194 et al., Nov. 26, 1996, 97-1 CPD
P: 2 at 6-7. The record shows that the agency here conducted meaningful
discussions. Its determination that the explanations and excuses offered
by ViaSat were unpersuasive provides no basis to object to the
discussions. ViaSat's attempts to provide a more favorable picture of its
performance history than drawn by the agency does not alter the fact that
there was sufficient evidence for the agency to conclude that the firm's
proposal warranted a moderate risk performance rating. As noted above,
the solicitation expressly provided that a negative finding under any
element, such as scheduling, was sufficient to warrant a high risk rating.
ViaSat's past performance references for three separate contracts each
provided a reasonable basis for a negative finding under more than one
performance element. Accordingly, ViaSat has offered no credible basis to
object to the agency's application of the past performance evaluation
criteria in downgrading of ViaSat's rating to *moderate risk,* and its
conclusion that *some doubt exists* that ViaSat could perform the proposed
effort, in view of the substantial evidence of performance shortcomings by
ViaSat in specified areas of concern under relevant contracts.
Titan's Past Performance
Titan listed seven relevant contracts, all of which the agency determined
were relevant because they are for systems or major components of systems
for tactical satellite terminals, specifically including major components
for this KaSAT procurement. This satisfies the explicit definition of
relevancy provided in the solicitation. ViaSat's objection is premised on
its claim that Titan's experience *pales* in contrast to ViaSat's, as a
result of which ViaSat contends that *no rational basis existed for
CECOM's decision to accord Titan a lower performance risk rating than
ViaSat.* Protester's Comments at 41. ViaSat's predicate is that it has
more and better relevant contracts, based on its definition of relevance
as pertaining to the design and development of complete satellite terminal
systems, rather than components. Protester's Comments at 43. ViaSat's
objection is misplaced because it ignores the definition of relevance
contained in the RFP, which specifically encompasses major components as
well as complete systems. Accordingly, ViaSat has not provided any valid
basis to question the evaluated relevance of Titan's past performance.
As to the evaluations, the record is clear that the references for all
seven contracts identified by Titan provided uniformly favorable
responses, and did not identify any areas of poor performance, thus
providing a reasonable basis for Titan's low risk evaluation. AR, Tab 91,
Titan's Performance Risk Evaluation Reports, at 3-4. ViaSat contends that
the agency should have gone behind the references, and points to allegedly
adverse past performance information available elsewhere. We disagree.
Where the agency contacted all of Titan's references, which provided
uniformly favorable responses for all seven demonstrably relevant
contracts, without indicating or identifying any shortcomings, we see no
reason to require the agency to seek out other sources of allegedly
adverse information. Accordingly, there is no basis to question Titan's
performance risk rating, and we conclude that the past performance risk
evaluations for both offerors are unobjectionable.
TECHNICAL EVALUATION
ViaSat initially believed that its technical proposal had been evaluated
as equal to Titan's, and argued that *[g]iven Titan's lack of background
and experience in Satcom terminal development and its dearth of
preexisting Titan hardware components to adapt to meet the solicitation
requirements, it was unreasonable for CECOM to conclude that Titan was the
equal of ViaSat* with respect to the feasibility of its technical
approach. Protest at 30. In fact, as summarized above, while the Titan
and ViaSat technical rollups were both *good,* Titan's proposal was
evaluated as presenting more strengths and fewer weaknesses than the
ViaSat proposal, as well as lower risk, and was considered technically
superior by the SSA. ViaSat has critiqued numerous aspects of the
technical evaluation of both proposals, contending that the agency's
findings are unsupported by or contrary to the record,
are inconsistent in the manner of assigning strengths and weaknesses to
the respective proposals, and assess unsubstantiated weaknesses in
ViaSat's proposal. Protester's Comments at 52.
In essence, ViaSat presents a comprehensive reevaluation of the two
proposals in which it draws conclusions contrary to those reached by the
agency. That is not the applicable standard; in reviewing a protest
against an agency's evaluation of proposals, we examine the record to
determine whether the agency's judgment was reasonable and consistent with
the stated evaluation criteria and applicable statutes and regulations.
Ostrom Painting & Sandblasting, Inc., B-285244, July 18, 2000, 2000 CPD P:
132 at 4. A protester's mere disagreement with the agency's judgment in
its determination of the relative merit of competing proposals does not
establish that the evaluation was unreasonable. C. Lawrence Constr. Co.,
Inc., B-287066, Mar. 30, 2001, 2001 CPD P: 70 at 4. Here, we find that
the agency's evaluation of ViaSat's technical proposal was reasonable and
consistent with the evaluation criteria.
ViaSat lists 10 enhancements that it contends it offered but which the
agency allegedly failed to recognize and credit as strengths in ViaSat's
technical proposal. In particular, ViaSat refers to what it denominates
as: (1) significantly enhanced data rate; (2) dynamically modifiable
modem; (3) MF-TDMA modem; (4) burst-rate flexibility; (5) flexible network
topology; (6) automatic QPSK/BPSK switching; (7) simultaneous
connectivity; (8) graceful degradation; (9) bandwidth on demand; and (10)
split beam operation. Supplemental Protest at 2.
The agency report establishes that each of the putative enhancements was
in fact recognized by the agency, and several were credited as strengths,
while in other instances the features were not considered to warrant
favorable consideration either because they did not represent any
advantage beyond the solicitation requirements, or because the purported
advantages were nothing more than unsubstantiated assertions. For
example, the allegedly *significantly enhanced data rate* consists of
nothing beyond ViaSat's compliance with the solicitation requirements,
coupled with an assertion that higher speed was possible under ideal clear
sky conditions that were not consistent with the model set forth in the
solicitation, and therefore were not considered a strength by the
evaluators. AR at 27.
In fact the record reflects that ViaSat proposal was credited with minor
strengths for its proposed MF-TDMA modem, burst rate flexibility, graceful
degradation and bandwidth on demand, and with a major strength for
flexible network topography. AR at 27-32. Thus, ViaSat was given
evaluation credit in the form of evaluated strengths for many of the
features for which it now claims it did not receive credit; as to the
rest, the agency reasonably evaluated the alleged enhancements as either
not adding material value to the proposal, or as insufficiently
substantiated to warrant credit. ViaSat's disagreement with these
assessments does not provide a basis to question an evaluation which on
its face is reasonable and consistent with the
solicitation criteria. ViaSat's objections to the other technical
evaluation areas in both its and Titan's technical proposal similarly
reflect ViaSat's strong disagreements, and are similarly without merit.
As it did in the past performance context, ViaSat also asserts that the
agency failed to afford it meaningful discussions with respect to its
technical proposal. In the same manner as with the past performance
issues, IFNs were provided with respect to the agency's numerous concerns,
and ViaSat responses were considered, but were not found to completely
alleviate all of the agency's concerns. As explained above, the fact that
the agency did not agree that ViaSat's explanations were completely
sufficient does not provide any basis to conclude that the agency failed
to conduct meaningful discussions, notwithstanding ViaSat's disagreement
in this regard.
COST REALISM
ViaSat contends that the agency failed to conduct an adequate cost realism
analysis, objecting particularly to the fact that no upward cost
adjustments were made to Titan's proposal. Where an agency evaluates
proposals for award of a cost-reimbursement contract, an offeror's
proposed estimated costs are not considered controlling, since these
estimated costs may not provide valid indications of the final actual
costs that the government is required, within certain limits, to pay.
Advanced Communication Sys., Inc., B-283650 et al., Dec. 16, 1999, 99-2
CPD P: 3 at 5. Accordingly, a cost realism analysis must be performed when
a cost-reimbursement contract is contemplated. FAR S: 15.404-1(d)(2). A
cost realism analysis is the process of independently reviewing and
evaluating specific elements of each offeror's proposed cost estimate to
determine whether the estimated proposed cost elements are realistic for
the work to be performed, reflect a clear understanding of the
requirements, and are consistent with the unique methods of performance
and materials described in the offeror's technical proposal. FAR S:
15.404-1(d)(1). Because the agency is in the best position to make this
cost realism determination, our review is limited to determining whether
its cost evaluation was reasonably based and not arbitrary. Kalman & Co.,
Inc., B-287442.2, Mar. 21, 2002, 2002 CPD P: 63 at 9. The fact that no
adjustments are made to any offeror's proposed costs provides no basis to
object to the determination if it otherwise satisfies this standard. PAE
Gmbh Planning and Constr., B-250470, Jan. 29, 1993, 93-1 CPD P: 81
at 6-7. Thus ViaSat's underlying basis for objection, by itself, is
without merit.
Here, in performing his cost realism analysis, the cost factor chairman
reviewed the cost proposals himself and relied as well on input from
technical evaluators and from the Defense Contract Audit Agency (DCAA).
The technical evaluators reviewed and evaluated Titan's proposed labor
category mix, labor hours, types and quantities of materials and other
direct costs and concluded that the proposal was adequate based on the
technical approach and that no adjustments were warranted to the efforts
as proposed. A similar review was conducted and the same conclusion was
reached with respect to ViaSat's proposed costs. In this respect,
agencies are not required to conduct in-depth cost analyses to verify each
and every proposed cost element in conducting a cost realism evaluation,
ManTech Envtl. Tech, Inc., B‑271002 et al., June 3, 1996, 96-1 CPD
P: 272 at 8, providing the agency does not engage in disparate treatment
in evaluating the respective cost proposals. DynCorp Int'l, LLC,
B-289863, B-286863.2, May 13, 2002, 2002 CPD P: 83 at 10. Here, both
proposals were subjected to the same scope of review in this respect.
The cost factor chairman also sought and received DCAA cost realism input
on Titan's cost proposal and that of its subcontractors. DCAA reviewed
and accepted the proposed direct labor rates, indirect expense rates, cost
of money factors direct material costs and other direct costs and found
them without exception.[2] This information was orally conveyed to the
cost factor chairman during the course of the procurement. DCAA
subsequently also provided a final summary document, after the award
determination had been made, detailing these recommendations. ViaSat
argues that this summary document establishes that no cost analysis was
conducted before award. However, the record establishes that the document
was merely a confirmation of what had previously been conveyed, compiled
in final form, and thus provides no basis for objection.
AWARD DETERMINATION
ViaSat primarily objects that the alleged evaluation flaws resulted in an
arbitrary and unreasonable decision to award to Titan, and further
contends that the award decision was not supported by any tradeoff
analysis. Protest at 34. Agency officials have broad discretion in
determining the manner and extent to which they will make use of technical
and cost evaluation results. Where a solicitation provides for a best
value procurement and, as here, emphasizes the significantly greater
importance of technical factors over cost, an agency has considerable
discretion to award to an offeror with a higher technical rating and
higher evaluated cost. Systems Integration & Dev., Inc., B‑271050,
June 7, 1996, 96-1 CPD P: 273 at 6. Further, there is no requirement that
an agency attach specific dollar values to the benefits associated with a
technically superior proposal. WPI, B‑288998.4, B‑288998.5,
Mar. 22, 2002, 2002 CPD P: 70 at 10. As to ViaSat's contention that no
tradeoff analysis was conducted, the SSA's award determination, summarized
above provides that analysis. In view of Titan's documented superiority
in all of the non-cost areas, the
SSA's conclusion that Titan's greater likelihood of successful performance
of the RFP requirements outweighed the associated cost premium is
unexceptionable.
Because we have concluded that ViaSat's objections to the evaluation are
without
merit, the alleged evaluation flaws provide no basis to question the
cost/technical tradeoff and resulting award determination.
The protest is denied.[3]
Anthony H. Gamboa
General Counsel
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[1] The actual entity performing under the Flex Modem contract was a
predecessor contractor, subsequently acquired by ViaSat, which now
operates as the Comsat Laboratories division of ViaSat, and is proposed to
perform aspects of ViaSat's responsibilities as the prime contractor under
this RFP. ViaSat agrees that Comsat's performance as a subcontractor
under this contract properly is attributable to the protester.
[2]DCAA verified the proposed current indirect rates for Datron, a Titan
subcontractor, but was unable to confirm the accuracy of Datron's use of
that same rate for future years because Datron had not prepared budgetary
forecasts for the entire period of performance. The cost factor chairman
concluded that there was no reason to adjust this rate upward since it was
common practice to utilize such current rates in the evaluation of future
year rates. In this regard, ViaSat had similarly failed to prepare future
budgetary forecasts, and had used its current rates, and no adjustments
had been made to ViaSat's cost. In view of this similar treatment of both
offerors, we see no basis for objection in this regard.
[3]ViaSat has raised a substantial number of other collateral issues and
arguments, each of which we have considered and find without merit.