TITLE: SDS International, Inc., B-291183.4; B-291183.5, April 28, 2003
BNUMBER: B-291183.4; B-291183.5
DATE: April 28, 2003
**********************************************************************
SDS International, Inc., B-291183.4; B-291183.5, April 28, 2003
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: SDS International, Inc.
File: B-291183.4; B-291183.5
Date: April 28, 2003
Barbara S. Kinosky, Esq., and James S. Phillips, Esq., The Centre Law
Group, for the protester.
Michael A. Gordon, Esq., Holmes, Schwartz & Gordon, for CBD Training,
Inc., an intervenor.
John D. Inazu, Esq., Robert L. Allen, Esq., and Clarence D. Long, III,
Esq., Department of the Air Force, for the agency.
Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency reasonably exercised discretion in implementing recommendation
made in GAO decision, which sustained a protest on the basis that the
agency misevaluated one of the three evaluation subfactors of the mission
capability factor included in the solicitation, when it decided to not
reopen discussions, to not reevaluate past performance (because GAO denied
the protest of this evaluation), and to evaluate all subfactors of the
mission capability factor.
2. Agency reasonably determined that the strengths in the awardee's
proposal that were found to be a significant benefit to the agency were
sufficient to offset the price advantage of the protester's proposal,
which did not offer comparable strengths.
DECISION
SDS International, Inc. protests the award of a contract to CBD Training,
Inc. under request for proposals (RFP) No. F44650-02-R-0009, issued by the
Department of the Air Force, Air Combat Command Contracting Squadron,
Langley Air Force Base Virginia, for aircrew training and courseware
development.
We deny the protests.
The RFP, a small business set-aside issued on April 3, 2002, is for
aircrew training and courseware development at the 57th Wing United States
Air Force Weapons School (USAFWS), Nellis Air Force Base, Nevada, under a
fixed-price contract for a 30-day phase-in period and a base year with 4
option years.
The RFP provided for award on a *best value* basis considering as
evaluation factors past performance, mission capability, risk, and price.
Past performance and mission capability were of equal importance in the
evaluation scheme, followed by risk, with price being of least
importance. Under the mission capability factor, the RFP listed three
subfactors in descending order of importance: (1) training and workload
management, (2) courseware development approach and instructional systems
development management plan, and (3) phase-in. With regard to the first
subfactor, training and workload management, the RFP stated:
This subfactor will be evaluated to insure the offeror is employing
personnel with qualifications commensurate with the requirements of the
SOW and is managing these personnel effectively. This subfactor examines
the contractor's proposed manning levels, personnel qualifications,
personnel mix, and the duties and responsibilities of the site manager.
All manning positions must be fully supported by the contractor's workload
analysis.
RFP at 48.
A number of proposals were submitted. After discussions were conducted
and final proposal revisions submitted, the source selection evaluation
team (SSET) determined the proposals of SDS (the incumbent contractor) and
CBD were the highest rated of those submitted, receiving the following
ratings[1]:
+------------------------------------------------------------------------+
| |Past Performance |Mission Capability/Risk | |
|---| |-----------------------------|Price |
| | |Subfactor|Subfactor|Subfactor| |
| | |No. 1 |No. 2 |No. 3 | |
|---+--------------------------+---------+---------+---------+-----------|
| |Very Good/Significant |Blue |Green |Blue | |
|SDS|Confidence |---------+---------+---------|$15,964,852|
| | |Low |Low |Low | |
|---+--------------------------+---------+---------+---------+-----------|
| |Exceptional/High |Blue |Green |Green | |
|CBD|Confidence |---------+---------+---------|$17,916,218|
| | |Low |Low |Low | |
+------------------------------------------------------------------------+
Initial Agency Report, Tab 14, Source Selection Decision, at 2.
The source selection authority (SSA), after discussions with the SSET
Chair, contracting officer, and other source selection advisors, decided
to increase CBD's rating to blue under the second subfactor of the mission
capability factor on the basis that CBD's proposal--[DELETED]--exceeded
the stated requirements in a beneficial way. The SSA referenced these
strengths (and others) in CBD's proposal in justifying selecting CBD's
higher-priced proposal.
In protesting the award, SDS argued that the source selection was
irrational because the SSA unjustifiably increased CBD's rating under the
second subfactor of the mission capability factor. We sustained the
protests in SDS Int'l, Inc., B-291183,
B-291183.2, Dec. 2, 2002, 2003 CPD P: ___, finding:
[T]he SSA's discussion of the [DELETED] strength does not comport to the
contents of CBD's proposal. This is important here because of the three
strengths discussed by the SSA to justify raising CBD's rating to blue
under this subfactor, the [DELETED] strength was the only one that was
*viewed to be of significant value.* Thus, CBD's blue rating for this
subfactor and the source selection decision identifying this as a
*visionary approach" in justifying the award are not, on this record,
reasonably based.
Id. at 5. On the other hand, we denied SDS's protest challenging the Air
Force's ratings of CBD's past performance as exceptional and SDS's as very
good. We recommended that:
the Air Force reevaluate the proposals, reopen discussions and obtain
revised final proposals, if appropriate, and make a new source selection.
If CBD is not the successful offeror, its contract should be terminated
and a new award made.
Id. at 10.
To implement our recommendation, the Air Force reconvened the SSET and
replaced two of the four members.[2] Since we did not reject the
reasonableness of the Air Force's past performance evaluation, the Air
Force chose not to reevaluate this aspect of SDS's and CBD's proposals.
On the other hand, the Air Force decided to have the reconstituted SSET
reevaluate the prior final proposals of CBD and SDS under all of the
mission capability subfactors, even though our decision found error only
with the agency's evaluation of CBD's proposal under the second
subfactor. Discussions were not reopened, nor were revised proposals
solicited or obtained.
The SSET's reevaluation resulted in the following ratings under the
mission capability factor:
+------------------------------------------------------------------------+
| |Mission Capability/Risk |
| |--------------------------------------------------------------|
| |Subfactor No. 1 |Subfactor No. 2 |Subfactor No. 3 |
|---------+--------------------+--------------------+--------------------|
| |Green |Green |Green |
|SDS |--------------------+--------------------+--------------------|
| |Low |Low |Low |
|---------+--------------------+--------------------+--------------------|
| |Blue |Green |Green |
|CBD |--------------------+--------------------+--------------------|
| |Low |Low |Low |
+------------------------------------------------------------------------+
Agency Report, Tab 28, Source Selection Decision, at 13.
Under the first subfactor, training and workload management, the SSET
reduced SDS's proposal's rating to green from the blue rating it had
received under the initial evaluation.[3] The SSET found two strengths
and no weaknesses in SDS's proposal under this subfactor. One strength
was SDS's [DELETED] that ensured that each training division would have
[DELETED]. The other strength was SDS's proposal to provide an [DELETED]
that went *beyond* the SOW requirements. See Agency Report, Tab 26,
SSET's Worksheets.
In contrast, CBD's proposal retained its blue rating under this
subfactor.[4] The SSET found four strengths in CBD's proposal under this
subfactor. One strength was CBD's proposal of an [DELETED]. A second
strength was CBD's proposal to provide [DELETED]. The third strength was
CBD's proposal to provide an [DELETED].
The final strength was CBD's proposal of a *[DELETED]. Id.
Under the second subfactor, courseware development approach and
instructional systems development management plan, SDS's proposal received
a green rating with two strengths. One strength was SDS's [DELETED],
which standardized [DELETED]. The other strength was SDS's use of
[DELETED]. The SSET also assigned CBD's proposal a green rating under
this subfactor with two strengths.
The strengths were CBD's proposed [DELETED], and CBD's proposal of a
[DELETED]. Id.
Under the third subfactor, phase-in, the SSET also reduced SDS's rating
from blue to green, although it identified a strength in SDS's proposal.
This strength was SDS's proposal of a [DELETED]. CBD's proposal also was
rated green under this subfactor with one strength. This strength related
to CBD's plan to provide a [DELETED] as part of its contractor-furnished
equipment. Id.
Based upon a comparative assessment of the proposals, the SSA concluded
that CBD's superior past performance and technical features were worth the
higher price. In particular, the SSA noted that CBD's proposal to provide
[DELETED] [and] [t]his added benefit is expected to save over 3,000 Air
Force Weapons School Instructor hours every year.* Further, the SSA found
that CBD's proposed [DELETED] was an *innovative approach,* which will
enable CBD's [DELETED]. The SSA also viewed CBD's plan of using an
[DELETED] as an innovative and beneficial approach. Agency Report, Tab
29, Source Selection Decision, at 4-5.
On the other hand, the SSA noted that, even though SDS's proposal
reflected strengths involving their [DELETED], the proposal was *without
any enhancements comparable to those in the CBD proposal.* The SSA found
that SDS's staffing approach did *little more than maintain the status quo
in terms of the overall training approach.* Id. at 5.
The SSA concluded that the additional costs to obtain the superior
training program proposed by CBD over the program proposed by SDS were
worth the added benefit. The SSA also found that [DELETED], and the
agency's confidence in CBD's ability to perform in an exceptional way,
made the difference in price *well worth our investment.* Id. at 6. The
award to CBD was affirmed on January 6, 2003.
These protests followed.
SDS contends that the Air Force acted unreasonably by deciding to
reevaluate the previously submitted proposals of CBD and SDS, as opposed
to reopening discussions and obtaining revised proposals, and by limiting
the reevaluation to only the mission capability factor. SDS argues that
rather than reevaluating proposals, the Air Force merely downgraded its
proposal in the areas where it previously had obtained blue ratings, and
that its proposal should have retained those blue ratings since it had
strengths that exceeded the minimum requirements. SDS complains that in
contrast the agency did not fairly or equally rate CBD's proposal where it
retained its blue ratings. SDS contends that the Air Force's actions
reflect bias, and unequal treatment towards SDS, and maintains the agency
only reevaluated those areas where SDS's scores could be lowered.
In reviewing a protest against an agency's evaluation of proposals, our
Office will not reevaluate proposals but instead will examine the record
to determine whether the agency's judgment was reasonable and consistent
with the stated evaluation criteria and applicable statutes and
regulations. See U.S. Def. Sys., Inc., B-245563, Nov. 3, 1992, 92-2 CPD
P: 317 at 4. A protester's mere disagreement with the agency's judgment
in its determination of the relative merits 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. Based on
our review of the record, including the written proposals, the pleadings,
and hearing testimony, we find no basis to overturn the award.[5]
Here, the SSA, after consulting with the contracting officer and Air Force
legal counsel, made the decisions to (1) not conduct further discussions
and obtain revised proposals, (2) not reevaluate past performance, and (3)
evaluate all subfactors of the mission capability factor. The SSA
explained that he chose not to conduct discussions because the agency
found no weaknesses or deficiencies in the proposals, nor did it need to
ask any questions about the technical proposals. Hearing Transcript (Tr.)
at 286-87. With regard to his decision not to reevaluate past
performance, he relied on the facts that our decision did not take issue
with the agency's prior past performance evaluation of the proposals, that
the past performance records were clear, and that both offerors received
very high ratings. See Tr. at 242, 299-300, 302-03, 307-09, 312. He also
testified that all subfactors, not just the second subfactor, of the
mission capability factor were reevaluated because he sought to have a
*fresh* look taken of the proposals in light of our decision, particularly
since he believed the prior evaluation of the mission capability factor
did not adequately reflect the agency's view that CBD's proposal was in
fact superior overall to SDS's (even discounting the flaws in the
evaluation found in our prior decision), and because he viewed the mission
capability factor as an integrated whole, such that he did not believe
that the second subfactor could alone be the subject of a reasonable
assessment by an SSET with members not familiar with the prior
evaluation. See Tr. 249-50, 279‑82, 290-93, 350, 362-63.
The details of implementing our recommendations for corrective action are
within the sound discretion and judgment of the contracting agency, and we
will not question an agency's ultimate manner of compliance, so long as it
remedies the procurement impropriety that was the basis for the decision's
recommendation.
ST Aerospace Engines Pte, Ltd., B-275725.3, Oct. 17, 1997, 97-2 CPD P: 106
at 5.
On the record before us, we find no basis to question the agency's
actions.
While, as the protester suggests, a more comprehensive method of
implementing our recommendation could have been chosen by the Air Force,
including reopening discussions and obtaining revised proposals and
reevaluating past performance, the agency has stated a reasonable basis
for not performing these actions. Specifically, the record does not show
any weaknesses or deficiencies in SDS's proposal that required
discussions.[6] Moreover, SDS has offered no new evidence, not considered
in our prior decision, that would indicate that the past performance
ratings of SDS and CBD were not reasonable. Finally, it was within the
discretion of the agency to consider the mission capability factor as a
whole, since our prior decision did not preclude this evaluation and it
has offered a reasonable explanation (set forth above) as to why it was
necessary.
As noted, SDS contends that the lowering of its ratings under the first
and third subfactors of the mission capability factor from blue to green
was unreasonable and reflected bias on the part of the evaluators to
improperly justify the agency's prior award decision.
The agency's witnesses testified that these changes in the ratings were
made based on their closer consideration of whether awarded strengths in
the proposals were beneficial to the Air Force in some material way, and
that they determined that some strengths under a subfactor that may exceed
requirements were not significant enough to justify a blue rating. Tr. at
36, 79-80. In performing this evaluation, the evaluators referenced the
RFP's definition of blue: *exceeds specified minimum performance or
capability requirements in a way beneficial to the Air Force.*
RFP at 47. In deciding whether strengths were sufficiently beneficial to
the government to support a blue rating under a subfactor, the agency drew
a distinction between those strengths that were beneficial to the
contractor, in that they primarily related to the contractor's reduction
of its risk of not successfully performing the contract, versus those
strengths that provided significant tangible benefits to the
Air Force beyond the SOW requirements. The evaluators felt that strengths
under a subfactor primarily for the benefit of the contractor related more
to the risk evaluation factor and were not sufficient to justify a blue
rating for that subfactor, whereas strengths under a subfactor with
significant tangible benefits to the
Air Force may warrant a blue rating. See Tr. at 35‑37, 61-63,
79-80, 85-86, 163-67,
172-73.
For example, the SSET found that the strengths under the first subfactor
found for the [DELETED] proposed by SDS did not present material
significant benefits to the Air Force, but primarily reduced the
contractor's risk, because the [DELETED],[7] and SDS's [DELETED].
Tr. at 137‑39, 163-67, 172-73. 177-78. Similarly, the strength
awarded SDS under the third subfactor relating to its *[DELETED]* was
considered to be a proposal feature that tended more to reduce SDS's risk
of successfully performing the contract, such as [DELETED], rather than
adding a significant benefit to the USAFWS program, and thus the SSET felt
that a blue rating was not appropriate for this subfactor. Tr. at 37.
61-63, 216-19.
In contrast, the SSET found that CBD's proposal warranted a blue rating
under the first subfactor primarily because CBD proposed to provide
[DELETED], which the SSET believed would be beneficial to the USAFWS and
its students. See Tr. at 22‑25, 37-40.
SDS maintains that the Air Force unreasonably rated CBD's proposal blue
under the first subfactor. For example, SDS argues that, in contrast to
SDS's proposal, CBD's proposal failed to identify personnel by name and
qualification, or to provide a detailed site organizational chart, but the
proposal was based upon hiring the incumbent's workforce. See Agency
Report, Tab 17, CBD's Proposal at II-2-19.
However, the Air Force's representatives explained that this lack of
specificity was not a major concern because CBD proposed to hire SDS's
incumbent personnel, who already met the contract's qualification
requirements. The SSA explained that he thus viewed the proposals as
essentially equal in this respect since they both relied upon the same
personnel, and that the agency was satisfied with CBD's statements that it
would comply with the SOW requirements because CBD received the highest
rating under past performance, which evidences CBD's ability to field a
qualified workforce. See Tr. at 135, 341. We find this explanation to be
reasonable under the circumstances.
SDS also argues that the Air Force unreasonably evaluated CBD's proposal
[DELETED], contending that no reasonable analysis was made of CBD's
staffing levels to ascertain the realism and achievability of these
promises. The protester complains that very little detail was provided in
CBD's proposal regarding specific tasks, and that it is unlikely that CBD
can satisfy the minimum SOW requirements and also provide [DELETED], given
the hours reflected in its staffing model, especially since CBD's staffing
allegedly reflects half the hours proposed by SDS for similar tasks.
However, the record evidences that the Air Force specifically considered
CBD's staffing in light of its proposal to provide [DELETED]. CBD's
proposal states that *[DELETED].* Agency Report, Tab 10, CBD Evaluation
Notice Response (CBD-4),
at 3-4; Tab 17, CBD's Proposal at II-2-11, II-2-15.
An SSET member testified that the Air Force, through various calculations,
was able to determine that CBD's estimate of staff-hours contained
sufficient flexibility to cover the hours needed to meet these terms in
its proposal. See Tr. at 125-26, 186‑97, 202-09. In this regard,
CBD's proposal was based on the premise that the [DELETED], and on
[DELETED]. See Agency Report, Tab 17, II-2-13 to II-2-19. Thus, the fact
that CBD's proposal reflects fewer I/SME hours than SDS's for certain
tasks does not necessarily indicate that CBD cannot meet its proposal
promises.
In this regard, the [DELETED] proposed by CBD will perform [DELETED] that
would otherwise have to be performed by the [DELETED], as SDS apparently
contemplated in its approach.
While the risk of poor performance when a contractor is forced to provide
services at little or no profit under a fixed-priced contract is a
legitimate concern that should be considered by the agency, the record
here shows that the agency could reasonably conclude that the efficiencies
inherent in CBD's approach would allow it to satisfy the SOW requirements,
the promised [DELETED] support to Air Force instructors, and the
[DELETED].[8] See Burnside-Ott Aviation Training Ctr., Inc: Reflectone
Training Sys., Inc., B-233113, B‑233113.2, Feb. 15, 1989, 89-1 CPD
P: 158
at 11. Based on this record, we cannot say the blue rating awarded CBD's
proposal under the first subfactor was unreasonable.
As indicated, SDS largely objects to the evaluation on the grounds that it
should have received higher color ratings for the strengths proposed in
its proposal. However, color-coded ratings, adjectival ratings, and point
scores are no more than guidelines for intelligent decision making to
assist source selection officials in evaluating proposals; they do not
mandate automatic selection of a particular proposal.
The question ultimately is whether the record supports the agency's
conclusions regarding the relative merits of proposals. See Research for
Better School, Inc., B‑270774.3, June 17, 1996, 96-2 CPD P: 41 at
8-9.
Here, the SSA explained that he did not rely solely on the color ratings,
but he was *far more interested* in the written information underlying the
support for the ratings, in which the benefits to the Air Force of each
proposal were described, which the SSA characterized as *word pictures.*
See Tr. at 254-55, 270. Here, the record indicates that the SSA
reasonably found that the number and nature of the strengths associated
with CBD's proposal provided it with a clear technical advantage over
SDS's proposal. In doing so, the SSA concluded that CBD's technical
approach of [DELETED] was an innovative approach, beyond the *status quo*
nature of SDS's technical approach, worth the additional cost premium.
Based on our review, we cannot find the agency's judgment to be
unreasonable.
While protester argues that the lowering of SDS's ratings, but not CBD's,
from blue to green is indicative of bias on the part of the agency, the
agency representatives testified that the differences in the color ratings
of SDS's proposal between the two evaluations were not of particular
concern to the agency because in the second evaluation the SSET focused
exclusively on evaluating SDS's and CBD's proposals, unlike the prior
evaluation when other offerors were also being considered, and because the
new SSET team made a *fresh assessment* of the proposals with closer
attention paid to the definitions in the color-coded ratings. See Tr. at
15, 36, 63, 77, 163-64, 174-75, 216-17, 219-20, 311. Since we find the
agency has reasonably justified the award to CBD, there is no basis to
challenge the award based on allegations of bias.
The protests are denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] The possible past performance ratings were exceptional/high
confidence, very good/significant confidence, marginal/little confidence,
and unsatisfactory/no confidence. The possible color ratings for the
mission capability factor were blue/exceptional, green/acceptable,
yellow/marginal, and red/unacceptable. The RFP defined blue/exceptional
as when the proposal *exceeds specified minimum performance or capability
requirements in a way beneficial to the Air Force.* The possible risk
ratings were high, moderate, and low. RFP at 47, 49.
[2] The Air Force attributed the staffing changes to scheduling conflicts
encountered by the prior members.
[3] The SSET found that SDS's staffing plan consisted of [DELETED] base
personnel with [DELETED] Instructor/Subject Matter Experts (I/SME), and
[DELETED] personnel, including [DELETED] I/SMEs, after exercise of all
contract options. Agency Report, Tab 26, SSET's Worksheets.
[4] The SSET found that CBD proposed [DELETED] core personnel with
[DELETED] I/SMEs, with [DELETED] core personnel with [DELETED] I/SMEs
after all options were exercised. Agency Report, Tab 26, SSET's
Worksheets.
[5] At the hearing conducted by our Office, the SSA, chairman of the SSET,
and one of the voting SSET members responsible for reevaluating the
proposals provided detailed explanations for the scope of the agency's
reevaluation, the reasons for the changes in only SDS's scores from blue
to green under the first and third subfactors, and the bases for the blue
rating for CBD's proposal under the first subfactor.
[6] While SDS references certain comments in the reevaluation
documentation that SDS was not proposing to furnish a [DELETED] as
evidence that discussions were required, the record indicates that these
comments did not reflect a weakness in SDS's proposal, but were simply a
contrast to CBD's proposal, which received a strength for offering these
items.
[7] The SSET member testified that the reason that the [DELETED] was not
considered a greater benefit to the Air Force was because this individual
was not dedicated to the contract, since his primary duties related to
other SDS work, and
he was available for the USAFWS contract only in the event of shortfalls.
See Tr. at 137‑39.
[8] CBD is clearly obligated to satisfy the promises made in its
fixed-price proposal. The issue here is whether the agency reasonably
evaluated those promises.