TITLE:  SAMS El Segundo, LLC, B-291620; B-291620.2, February 3, 2003
BNUMBER:  B-291620; B-291620.2
DATE:  February 3, 2003
**********************************************************************
SAMS El Segundo, LLC, B-291620; B-291620.2, February 3, 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:   SAMS El Segundo, LLC
    
File:            B-291620; B-291620.2
    
Date:              February 3, 2003
    
William A. Roberts III, Esq., David M. Southall, Esq., Jonathan L. Kang,
Esq., and Phillip H. Harrington, Esq., Wiley Rein & Fielding, for the
protester.
Eric J. Marcotte, Esq., and Scott A. Schipma, Esq., Winston & Strawn; and
Mark R. Hartney, Esq., Allen Matkins Leck Gamble & Mallory, for LA Air
Force Base SMC, LLC, an intervenor.
John D. Inazu, Esq., and James A. Harley, Esq., Department of the Air
Force, for the agency.
Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.  General Accounting Office has bid protest jurisdiction to consider
protest where, notwithstanding the concomitant sale of government real
property, the transaction includes the procurement of property or services
by the government. 
    
2.  Protest that contracting agency improperly evaluated selected
offeror's technical proposal is denied where the record shows that the
evaluation was reasonable and consistent with the stated evaluation
criteria. 
    
3.  Where solicitation provides for evaluation of past performance on the
basis of projects completed within the 5 years preceding the closing date
for receipt of proposals, agency properly elected not to consider selected
offeror's past performance outside this 5-year period.
    
4.  Protest challenging agency's source selection decision is denied where
the record shows that the decision was reasonable and consistent with the
stated *best value* evaluation criteria; the source selection authority
reasonably determined that the proposals were technically equal,
notwithstanding the assigned evaluation ratings, and that the selected
offeror's proposal represented a lower overall cost to the government.
    
    
DECISION
    
SAMS El Segundo, LLC (SES) protests the selection of LA Air Force Base
SMC, LLC (Kearny) under a request for proposals (RFP) issued by the Space
and Missile Systems Center (SMC), Air Force Space Command, Department of
the Air Force, for the Systems Acquisition Management Support (SAMS)
project.[1]  SES argues that the agency's evaluation of the offerors'
proposals as well as the agency's selection decision in favor of Kearny
were improper.
    
We deny the protests.
    
BACKGROUND
    
Section 2861 of the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (the Act), Pub. L. No. 106-398, 114 Stat. 1654 (2000),
authorizes the Secretary of the Air Force to convey, by sale or lease, all
or part of the real property at Los Angeles Air Force Base (LAAFB),
California; the Act also provides that the only consideration that the Air
Force can receive for the conveyed real estate is *the design and
construction on [unconveyed] property . . . of one or more facilities to
consolidate the [SMC] mission and support functions.*  As originally
enacted, the statute also established that if the consideration received
by the Air Force (i.e., the value of the facility constructed) exceeded
the value of the real property conveyed, then the agency could *lease
back* the facility from the developer for a period up to 10 years, with
the Air Force taking title to the facility at the end of the lease
period.  Id. S: 2861(c).
    
On July 17, 2001, the Air Force issued an RFP for the SAMS project.  The
initial RFP stated, in broad terms, the agency's desire to exchange up to
57 acres of LAAFB real property for approximately 580,000 square feet of
office space. [2]  Phase I RFP at 3.  The RFP also informed offerors that
the selection process for the SAMS project would occur in three phases. 
In Phase I, the Air Force intended to select no more than five offerors
who demonstrated the highest probability of success.[3]  In Phase II, in
which offerors were to submit detailed business and technical proposals
for the actual execution of the SAMS project, the Air Force intended to
select the offeror proposing the best value to the agency.  Phase I RFP,
app. D, SAMS Source Selection Process, at 4.  In Phase III, the agency
planned to conduct final negotiations with the selected offeror to
finalize the remaining financial contingencies and to complete the
administrative details of implementing all agreements for award to the
selected offeror.  The solicitation established that the Phase III
negotiations would be *administrative in nature and [would] not encompass
issues that affect the basis for the [Phase II] source selection
decision.[4]  Id.
    
Six offerors submitted proposals in response to the Phase I RFP.  Among
the Phase I offerors selected by the Air Force for participation in Phase
II were SES and Kearny.[5]
    
On January 24, 2002, the Air Force issued the Phase II RFP for the SAMS
project, with its modified objective of exchanging up to 57 acres of LAAFB
real property for approximately 560,000 square feet of office space at no
additional cost.  It is the competition under this solicitation that is
the subject of this protest.  The solicitation notified offerors that the
basis for the Phase II selection decision would be *best value,* based on
the integrated assessment of the evaluation factors, and could involve the
tradeoff of cost and noncost factors.  Phase II RFP at 9.  The RFP
identified the following evaluation factors, in descending order of
importance, and subfactors, of equal importance within each factor:
    

   +------------------------------------------------------------------------+
|1.  Cost to the Air Force[6]                                            |
|------------------------------------------------------------------------|
|2.  Financial Strategy                                                  |
|------------------------------------------------------------------------|
|3.  Facility Capability                                                 |
|------------------------------------------------------------------------|
|                     |A.  Building Core and Shell                       |
|                     |--------------------------------------------------|
|                     |B.  Tenant Improvements                           |
|                     |--------------------------------------------------|
|                     |C.  Integration with Area B Facilities            |
|------------------------------------------------------------------------|
|4.  Project Management                                                  |
|------------------------------------------------------------------------|
|                     |A.  Project Execution Plan                        |
|                     |--------------------------------------------------|
|                     |B.  Project Management Team                       |
|------------------------------------------------------------------------|
|5.  Proposal Risk                                                       |
|------------------------------------------------------------------------|
|6.  Past Performance                                                    |
+------------------------------------------------------------------------+

    
Id. at 9-10.  The solicitation expressed the relative importance of the
cost factor by stating as follows:
    
Affordability of the project is a major consideration of this source
selection.  The goal is to achieve no additional cost to the Air Force. 
Therefore, affordability is defined as the combination of *cost to the Air
Force* and *financial strategy* employed by an offeror, which minimizes
the additional funds the Air Force would have to provide.
    
NOTE:  Funding for the SAMS project is not currently available; neither
has it been programmed in the Air Force budget.  Any requirement for
funding, in addition to the land to be conveyed, is unattractive from a
budgetary perspective.
    
Id. at 13.
    
Although termed *cost to the Air Force,* the agency contemplated that the
cost gap set forth in an offeror's Phase II proposal would in fact become
the basis of a fixed-price contract between the selected offeror and
agency for the construction of the proposed SAMS facility through Phase
III administrative negotiations.  The solicitation informed offerors that
resolution of the Phase III administrative details and execution of the
real estate agreements were contingent upon satisfactory evidence that the
successful offeror had, among other things, *[o]btained a firm commitment
for both construction and permanent financing, on the terms set forth in
the Successful Offeror's [Phase II] proposal . . . .*  Phase II RFP, app.
D, SAMS Source Selection Process, at 16.  Additionally, at a hearing that
our Office conducted on the protests, the person who served as both the
Air Force chief evaluator and SAMS project manager testified that the
Phase III negotiations would result in a fixed-price relationship between
the parties, such that the agency's liability was limited to the selected
offeror's Phase II cost gap.  Hearing Transcript (Tr.) at 76-81.
    
SES and Kearny each submitted initial Phase II proposals by the March 25
closing date, and final proposal revisions by the August 6 closing date. 
An Air Force source selection evaluation team (SSET) evaluated and rated
the proposals as to the financial strategy, facility capability, project
management, and past performance factors utilizing a color-coded
descriptive rating system:  blue, green, yellow, and red.  The
solicitation described the color ratings as follows:
    

   +------------------------------------------------------------------------+
|Color       |Rating             |Rating (for Past Performance)          |
|------------+-------------------+---------------------------------------|
|Blue        |Exceptional        |Exceptional/High Confidence            |
|------------+-------------------+---------------------------------------|
|Green       |Acceptable         |Very Good/Significant Confidence       |
|------------+-------------------+---------------------------------------|
|Yellow      |Marginal           |Satisfactory/Confidence                |
|------------+-------------------+---------------------------------------|
|Red         |Unacceptable       |Marginal/Little Confidence             |
+------------------------------------------------------------------------+

                                                  
Phase II RFP, app. D, SAMS Source Selection Process, at 9-12.  The RFP
also established that the proposal risk factor would be rated as high,
moderate, or low, and that the cost factor would not be color rated but
would be evaluated for *completeness,* *reasonableness,* and *realism.* 
Id. at 12-14.
    
As set forth above in the discussion of the unique statutory framework of
the SAMS project transaction, the Act established that if the value of the
office facility to be constructed exceeded the value of the LAAFB real
property conveyed, then one means by which the Air Force could overcome
the cost gap was to *lease back* the facility from the developer for a
period up to 10 years.[7]  During Phase II, the Air Force observed that
SES had submitted an alternate proposal in which the offeror's financial
strategy was contingent upon a 30-year leaseback period.  On July 26 the
Air Force formally suggested to the congressional representative for the
district in which LAAFB is located, certain *technical corrections* to the
original Act, to include permitting a leaseback period of up to 30 years. 
AR, Tab 39, Letter from Air Force to Offerors Regarding Proposed
Legislative Changes, at 2.  At the time of both the agency's final
evaluation of proposals and the Phase II selection decision, however, the
statutory changes sought by the Air Force for the SAMS project had yet to
be enacted into law.[8]
    
On August 20, the SSET briefed the agency source selection advisory
council (SSAC) as to its evaluation and ratings of the proposals of Kearny
and SES, which were as follows:
    

   +------------------------------------------------------------------------+
|      |Factor                                                           |
|------+-----------------------------------------------------------------|
|      |Cost      |Financial|Facility Capability|Project    |Past        |
|      |(in       |Strategy |                   |Management |Performance |
|      |millions) |         |                   |           |            |
|------+----------+---------+-------------------+-----------+------------|
|SES   |$29 (10 yr|Blue     |Blue               |Blue       |Blue        |
|      |lease)    |         |                   |           |            |
|      |$13 (30 yr|         |                   |           |            |
|      |lease)    |         |                   |           |            |
|-----------------+---------+-------------------+-----------+------------|
|    |Risk (10 yr |Moderate |Low                |Low        |N/A         |
|    |lease)      |         |                   |           |            |
|----+------------+---------+-------------------+-----------+------------|
|    |Risk (30 yr |High     |Low                |Low        |N/A         |
|    |lease)      |         |                   |           |            |
|-----------------+---------+-------------------+-----------+------------|
|      |          |         |                   |           |            |
|------+----------+---------+-------------------+-----------+------------|
|Kearny|$13 (10 yr|Green    |Blue               |Blue       |Blue        |
|      |lease)    |         |                   |           |            |
|-----------------+---------+-------------------+-----------+------------|
|    |Risk        |Moderate |Low                |Low        |N/A         |
|----+------------+---------+-------------------+-----------+------------|
+------------------------------------------------------------------------+

    
AR, Tab 9, Briefing to the SSAC, at 15. 
    
The SSET determined the overall cost for each proposal as follows:
    

   +------------------------------------------------------------------------+
|Costs & Funding Sources     |SES            |SES        |Kearny         |
|(in millions)               |(10 Year Lease)|(30 Year   |(10 Year Lease)|
|                            |               |Lease)     |               |
|----------------------------+---------------+-----------+---------------|
|Total Project Costs         |$112.5         |$112.5     |$115.5         |
|----------------------------+---------------+-----------+---------------|
|Land Value                  |         $62.6 |  $62.6    |  $54.7        |
|----------------------------+---------------+-----------+---------------|
|Tax Increment Financing     |$22            |  $38.6    |  $47.7        |
|----------------------------+---------------+-----------+---------------|
|Brownfields Grant           |N/A            |N/A        |$2             |
|----------------------------+---------------+-----------+---------------|
|Cost Gap                    |$27            |$11        |       $11     |
|----------------------------+---------------+-----------+---------------|
|AF Management Reserve       | $2            |  $2       |$2             |
|----------------------------+---------------+-----------+---------------|
|Gap with Management         |         $29   |       $13 |       $13     |
|Reserve[9]                  |               |           |               |
+------------------------------------------------------------------------+

   Id. at 7, 13, 17.
    
The SSET chairman informed the SSAC of his view that both offerors had
submitted exceptional proposals that were substantially equal in terms of
non-cost factors.  AR, Nov. 27, 2002, at 7, Contracting Officer's
Statement at 7; Tr. at 72.  At the conclusion of the briefing, the SSET
recommended that the agency's selection decision be based on existing
statutory authorization, and therefore, that Kearny should be selected, as
its cost gap was manageable and not contingent on potential legislative
amendments.  AR, Tab 9, Briefing to the SSAC, at 20-21.
    
On August 23, the SSAC (and the SSET) briefed the agency source selection
authority (SSA).  While accepting the SSET's evaluations and ratings of
the offerors' proposals, the SSAC chairman recommended the selection of
SES contingent on enactment of 30-year leaseback authority (by the end of
fiscal year 2002), and the selection of Kearny if the legislation did not
pass.[10]  AR, Tab 10, Briefing to the SSA, at 31, 33, 35.  The SSA did
not immediately make a decision, believing that the selection of the
recommended proposal, SES's 30-year leaseback proposal, would be premature
and unsupportable based on existing legislation.  AR, Tab 43, SSA Email
Messages, at 1-2; Tr. at 217-18.
    
Subsequent to the briefing and prior to a source selection decision being
made, certain events transpired.  SES's proposal had included the idea of
*swapping* a portion of one LAAFB-conveyed parcel for a slightly larger
adjacent tract of land occupied by the Federal Aviation Administration
(FAA).[11]  On September 13 and 24, SES notified the contracting officer
that the FAA land swap had fallen through, in whole or in part, because of
the FAA's security concerns.  AR, Tab 48, SES Letter Regarding FAA Land
Swap; Tab 50, SES Clarification Letter Regarding FAA Land Swap. 
Consequently, the Air Force determined that the cost gap for SES's
alternative proposals had increased to $14.4 - $14.9 million for the
30-year leaseback option, and $30.9 million for the 10-year leaseback
option.  Additionally, as of the end of fiscal year 2002, Congress had yet
to enact any change in SAMS project leaseback authority.  As a result of
the revision to SES's cost gap, and the fact that amended statutory
authorization for the SAMS project had yet to be obtained, the SSAC
chairman informed the SSA that he had changed his recommendation and now
recommended the selection of Kearny.  Tr. at 460-61. 
    
On September 30, the SSA determined that the proposals of Kearny and SES
were essentially equal as to all noncost factors, and that Kearny's
proposal represented a lower overall cost to the Air Force.  Based on an
integrated assessment of all evaluation factors, the SSA determined that
Kearny's proposal represented the best value to the Air Force.  AR, Tab
12, Source Selection Decision, at 4.  These protests followed.
    
In its original and first supplemental protests, SES raises numerous
issues that can be grouped into two categories.  First, in various ways,
SES alleges that the agency's evaluation of Kearny's proposal, other than
as to cost-related factors, was improper.  Second, SES alleges that the
agency's selection decision was unreasonable and not in accord with the
RFP's stated award scheme.[12]  Although we do not here specifically
address all of SES's complaints about the evaluation of proposals and the
agency's selection decision, we have fully considered all of them and find
that they afford no basis to affect the agency's selection decision.
    
THRESHOLD ISSUES
    
Our analysis begins with the question of whether this protest is within
the jurisdiction of our Office, a matter we raise, even though no party
has challenged our jurisdiction here.  The authority for our Office to
decide bid protests is based on the Competition in Contracting Act of 1984
(CICA), 31 U.S.C. S:S: 3551-56 (2000), and provides for consideration of
challenges to solicitations by federal agencies for offers for contracts
for the procurement of property or services, as well as challenges to the
award or proposed award of such contracts.  31 U.S.C. S: 3551(1).  Our
Office has previously determined that where a contractual transaction
includes the delivery of goods or services to the government, the contract
is one for the procurement of property or services within the meaning of
CICA, and therefore is encompassed by our bid protest jurisdiction.  See
Starfleet Marine Transp., Inc.,
B-290181, July 5, 2002, 2002 CPD P: 113 at 6; Government of Harford
County, Md.,
B-283259, B-283259.3, Oct. 28, 1999, 99-2 CPD P: 81 at 4.  As the SAMS
project transaction involves the government's acquisition of a facility
(in this instance, valued in excess of $100 million), we conclude that the
contract to be awarded here is one for the procurement of property and is
within our bid protest jurisdiction.
Separate from the question of our jurisdiction is the question of what
competition requirements apply (and, in particular, whether CICA's
standards for full and open competition apply).  We need not resolve that
question with regard to the Act here, because the protest issues raised by
SES all challenge the propriety of the agency's actions in light of the
terms of the solicitation.  We note, however, that there is a legal
presumption that CICA's competition requirements apply *except in the case
of procurement procedures otherwise expressly authorized by statute.*  10
U.S.C. S: 2304(a)(1) (2000); see Jacobs COGEMA, LLC, B-290125.2,
B-290125.3, Dec. 18, 2002, 2002 CPD P: __ at 10.  Here, the Act is silent
as to the applicability of CICA and it does not establish any alternative
procurement procedures (other than the general framework cited earlier in
this decision).
    
EVALUATION OF KEARNY'S PROPOSAL (OTHER THAN AS TO COST)
    
SES argues that the Air Force's evaluation of Kearny's proposal under both
the facility capability and the past performance factors was irrational
and unsupported.  Specifically, SES contends that because of Kearny's
planned use of *Flexirock* as its exterior building material for the SAMS
facility, the SSET's rating of Kearny's proposal as exceptional as to
facility capability was unreasonable.  SES also argues that the Air Force
incorrectly rated Kearny's past performance as exceptional/high confidence
in light of the bankruptcy filing of Kearny's architect, which the agency
learned about prior to the Phase II selection decision. 
    
The evaluation of proposals is a matter within the agency's discretion,
since the agency is responsible for defining its needs and the best method
for accommodating them.  U.S. Textiles, Inc., B-289685.3, Dec. 19, 2002,
2002 CPD P: 218 at 2.  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 procurement statutes and regulations.  See Shumaker Trucking &
Excavating Contractors, Inc., B-290732, Sept. 25, 2002, 2002 CPD P: 169 at
3.  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.  Our review of the
record, including the written proposals, the pleadings, and testimony
taken during the hearing in this matter, provides us no basis to find the
Air Force's evaluation here unreasonable or otherwise objectionable. 
    
The RFP set forth various building requirements and design guidance for
the construction of the SAMS facility.  With regard to building materials,
the solicitation established a list of *approved and recommended
architectural materials for LAAFB* that included, among other things,
*exterior cement plaster.*  Phase II RFP, app. A, SAMS Complex Facility
Requirements and Design Guide, at 12.  The solicitation also created
minimum durability requirements for the constructed SAMS facility; for
exterior walls/primary weather-barrier elements, the RFP required a
*minimum 50 years functional and aesthetic service life, excluding joint
sealers.*  Id. at 84.  While the facility capability factor consisted of
three subfactors--building core and shell, tenant improvements, and
integration with Area B facilities--an offeror's choice of exterior
building material was evaluated only under the first subfactor, and was
not part of the agency's evaluation of proposals under the latter two
subfactors.  Tr. at 34-36, 46-47.
    
In its final proposal revision, Kearny changed the building material it
planned to use for the exterior for the SAMS facility to Flexirock, which
the proposal described as a *modified cement plaster system.*  AR, Tab 7,
Kearny's Final Proposal Revision, Vol. III, Facility Capability, at 4. 
The SSET recognized and took into account in the final evaluation of
proposals Kearny's change to Flexirock for its exterior building
material.[13]  Tr. at 36-39.  The SSET determined that Flexirock, a brand
name for a specific type of exterior cement plaster system application,
constituted an approved building material that also met the RFP's
durability requirements.[14]  Tr. at 38-40, 49.  The agency found that
Kearny's use of Flexirock met, but did not exceed, the solicitation's
requirements in all regards.  Tr. at 40.
    
The SSET also determined, as part of its evaluation with regard to the
building core and shell subfactor, that other aspects of Kearny's proposal
did exceed the RFP's requirements and constituted strengths.  These
included:  a tailored architectural design which did an excellent job of
portraying the state-of-the-art concept sought in the RFP; the *dynamics
and articulation* of the SAMS facility; the high quality of facility
aesthetics; the site layout and landscaping (including an integrated
conference center and stand-alone child development center); a *brace
frame* structural system for the buildings; and the conveyance to the Air
Force of an adjacent parcel of Kearny-owned land, which significantly
improved LAAFB force protection, parking, and traffic flow.  AR, Tab 10,
SSA Briefing, at 24-25; Tr. at 24-31.  Based on the identified strengths,
the SSET rated Kearny's proposal as exceptional as to the building core
and shell subfactor.  Similarly, the SSET evaluated and rated Kearny's
proposal as exceptional with regard to the tenant improvements and
integration with Area B facilities subfactors, thereby resulting in an
overall rating of exceptional as to facility capability.
    
We find no basis to question the agency's evaluation here.  The record
demonstrates that the Air Force reasonably determined that Kearny's
proposal was rated as exceptional as to facility capability
notwithstanding Kearny's planned use of Flexirock as the exterior building
material.  The SSET determined that Flexirock met the solicitation's
requirements in all regards.  Moreover, it was not Kearny's use of
Flexirock that was the basis for the agency's evaluation rating with
regard to the building core and shell subfactor.  The agency identified
numerous strengths in Kearny's proposal, which together justified the
agency's exceptional rating for this subfactor.  Lastly, as Kearny's use
of Flexirock was not part of either the tenant improvements or integration
with Area B facilities subfactors, we find no basis to question these
aspects of the agency's facility capability evaluation.
    
SES does not challenge any of the strengths identified in Kearny's
proposal, or dispute that an offeror's choice of exterior finish was only
part of the building core and shell subfactor evaluation.  Instead, SES
argues that (1) during discussions, in which the offerors each proposed
various *deletive items* to the agency in an effort to reduce the cost
gap, the Air Force informed SES that the proposed use of exterior
insulation and finish system (EIFS) was not a desirable, quality exterior
building material; and (2) Flexirock is a little-used EIFS-type material
that is, in fact, inferior to EIFS.  Accordingly, SES alleges that the
agency failed to treat offerors equally by accepting Kearny's proposed use
of Flexirock while discouraging SES from proposing use of EIFS.  We
disagree.
    
In the course of developing the solicitation, the Air Force did determine
that EIFS was not an acceptable building material because of moisture
retention problems, and intentionally excluded it from the approved
materials list.  Tr. at 50-51, 55.  Also, during Phase II discussions when
SES suggested the replacement of the its planned exterior building
material with EIFS, the agency did state that this was not an acceptable
deletive item even if it resulted in a cost gap reduction to SES's
proposal.  AR, Tab 31, Agency Briefing Regarding SES's Proposed Deletives,
at 3.  However, the protester has offered no evidence for its assertion
that Flexirock is an EIFS-type material or that it is inferior to EIFS,
and we therefore find the agency's assessment unobjectionable.[15]
    
SES also protests that the agency's evaluation of Kearny's proposal as to
the past performance factor was improper.  Specifically, SES argues that
given the Chapter 11 bankruptcy filing of Kearny's architect, Nadel
Architects, Inc., the SSET's rating of Kearny's proposal as exceptional as
to past performance in the Phase II evaluation process was unreasonable. 
We disagree.
    
The Air Force first evaluated each offeror's past performance in Phase I
of the SAMS project selection process.  There, the Phase I RFP required
offerors to *[d]escribe a minimum of two [qualifying] projects, individual
or phased development, completed within the last five (5) years, where the
offeror served as the primary developer.*  Phase I RFP at 9-10.  The
initial solicitation also informed offerors that the agency's evaluation
of past performance *will assess the confidence in the offeror's ability
(which includes, if applicable, the extent of its subcontractors, teaming
partners involved), to successfully accomplish the proposed project based
on the offeror's demonstrated relevant past and present work record.*  Id.
at 14.  As part of the Phase I evaluation of proposals, the SSET rated
Kearny's past performance as exceptional.
    
The Phase II RFP informed offerors that the agency's evaluation of past
performance would be carried forward from Phase I.  However, the
solicitation established that the Phase I past performance evaluation
would be *updated if necessary if additional information [became]
available.*  Phase II RFP at 10.  The RFP also set forth a list of
reportable events that *if any occur, must be reported at once by an
offeror responding to this solicitation,* to include the
*[b]ankruptcy/reorganization of any of the participating entities of
offeror's proposal.*[16]  Phase II RFP, app. B, Basic Instructions for
Proposal Preparation and Notice to Offerors, at 9.
    
On September 5, SES informed the Air Force of its finding that Kearny's
architect, Nadel, had filed for bankruptcy prior to the submission of
Phase I proposals.  Contracting Officer's Statement at 13.  The Air Force
subsequently learned that Nadel had filed for Chapter 11 bankruptcy
reorganization in August 2001 as the result of a civil judgment in which
Nadel was found partially liable for the negligent administration of a
1986 project that resulted in a defective building.  AR, Tab 45, Letter
from Nadel to Kearny Regarding Bankruptcy, at 1-2.  Although the agency
did not learn of Nadel's bankruptcy until after completing its final
evaluation of proposals, the Air Force reconsidered its evaluation of
Kearny's past performance.[17]  The SSET determined that the event which
resulted in Nadel's bankruptcy filing could not properly be considered as
part of the past performance evaluation of offerors because it was outside
of the 5-year performance period established by the solicitation.[18] 
Contracting Officer's Statement at 14.  Ultimately, the SSET determined
that no change to Kearny's past performance rating was warranted.
    
An agency's evaluation of past performance, like the evaluation of other
aspects of an offeror's proposal, is a matter within the discretion of the
contracting agency and will not be disturbed unless unreasonable or
inconsistent with the terms of the solicitation or applicable statutes and
regulations.  See Jacobs COGEMA, LLC, supra; Acepex Mgmt. Corp., B-283080
et al., Oct. 4, 1999, 99-2 CPD P: 77 at 3.  Where a solicitation
contemplates the evaluation of offerors' past performance, an agency has
discretion to determine the scope of the offerors' performance histories
to be considered, provided all proposals are evaluated on the same basis
and consistent with the solicitation requirements.  Systems Mgmt., Inc.;
Qualimetrics, Inc.,
B-287032.5, B-287032.6, Nov. 19, 2001, 2002 CPD P: 29 at 4-5.  From our
review of the record, there is no basis to object to the agency's
evaluation.
    
Here, the agency fully considered Nadel's bankruptcy and its impact on
Kearny's past performance evaluation prior to its source selection
decision.  The contracting officer determined that Nadel was but one of
Kearny's subcontractors, and not a financial backer of the Kearny
proposal.  Tr. at 369-70.  The agency also concluded that the lawsuit that
resulted in Nadel's bankruptcy was not related to building design, but to
construction administration--a function that Nadel would not be performing
for Kearny as part of the SAMS project.  Tr. at 374.  Moreover, as the
solicitation provided for the evaluation of past performance on the basis
of projects completed within the last 5 years, the agency properly
determined that Nadel's
15-year old performance was not relevant to the past performance
evaluation here.  See Wind Gap Knitwear, Inc., B-261045, June 20, 1995,
95-2 CPD P: 124 at 3.  Accordingly, we find the agency's evaluation of
Kearny's past performance to be both reasonable and consistent with the
solicitation.
    
SOURCE SELECTION DECISION
    
In addition to challenging the evaluation of proposals, SES protests the
agency's source selection decision.  SES argues that the Air Force's
selection of Kearny's proposal as representing the best value to the
government was unreasonable, disregarded the technical superiority of
SES's proposal, and departed from the source selection plan as set forth
in the solicitation.  We preface our discussion here by briefly reviewing
SES's proposal and the agency selection decision.
    
The RFP established that under the financial strategy factor, the agency
would evaluate each offeror's ability to demonstrate an effective
financial plan for the SAMS project, to include the ability to secure a
complete financing package and to raise all required equity.  Phase II RFP
at 13.  The ability of an offeror to maximize the value of the land
conveyed by the Air Force, thereby making the cost gap to the agency as
small as possible, was an important part of the financial capability
evaluation.  SES's financial strategy for the SAMS project involved many
different structuring, financing, and development aspects in an effort to
fund the construction of the new SAMS facility at minimum cost to the Air
Force.  Two specific aspects of SES's financial strategy of relevance here
are the residential development of the Lawndale Annex and the offeror's
cost savings sharing provisions.
    
As set forth above, one of the three parcels of real property that the Air
Force planned to convey to the selected offeror was the Lawndale Annex,
consisting of approximately 13 acres located in Hawthorne, California.  At
the time the Air Force issued the Phase I RFP, the Lawndale Annex was
zoned by the City of Hawthorne for heavy industrial use, although that
zoning was then inconsistent with the City's *general plan.*  AR, Tab 23,
Letter from City of Hawthorne to Air Force Regarding Zoning, at 2.  While
the Air Force had previously tried to have the City of Hawthorne rezone
the Lawndale Annex to permit residential development, those efforts had
been sporadic and unsuccessful.  In fact, the contracting officer
acknowledged that when the Air Force debriefed SES regarding the offeror's
Phase I proposal in which residential development of the Lawndale Annex
was contemplated, the agency believed that there was *no way* that the
City of Hawthorne would agree to the idea.  Contracting Officer's
Statement at 15.
    
In response to the offerors' initial Phase II proposals, in which both
Kearny and SES planned for the residential development of the Lawndale
Annex, the Air Force again pursued the rezoning issue with the City of
Hawthorne.  Beginning in April 2002, the SAMS project manager and an Air
Force real estate consultant met repeatedly with City of Hawthorne
officials to discuss the zoning/general plan conflict over use of the
Lawndale Annex.  AR, Nov. 27, 2002, at 12.  On June 4, the LAAFB commander
formally requested that the City of Hawthorne permit residential use for
the Lawndale Annex.  AR, Tab 26, Letter from Air Force to City of
Hawthorne Mayor Regarding Lawndale Annex Zoning, at 1.  On July 8, the
City Council of the City of Hawthorne held a public hearing in which it
approved the rezoning of the Lawndale Annex so as to permit residential
development.  AR, Tab 28, Hawthorne City Ordnance No. 1745, July 8, 2002,
at 1-2.
    
Both before and after submission of its initial Phase II proposal, SES
also worked with the City of Hawthorne to achieve residential use for the
Lawndale Annex.  On or about January 31, 2002, SES provided the City of
Hawthorne with a detailed tax analysis showing the benefits of residential
use versus retail/commercial use; SES also provided the Air Force with a
copy of its analysis.  Protest, Oct. 28, 2002, at 20; Contracting
Officer's Statement at 15.  The protester asserts, and the contracting
officer agrees, that SES's determined efforts resulted in persuading the
City of Hawthorne to reverse its position and permit the residential use
of the Lawndale Annex.[19]  Protest, Oct. 28, 2002, at 20; Contracting
Officer's Statement at 15. 
    
The SSET subsequently recognized the benefit to the agency of SES's
initiative and effort with regard to the development of the Lawndale
Annex.  In the narrative presentation of its evaluation to the SSA, the
SSET stated that a strength of SES's proposal under the financial strategy
factor was that SES *[m]aximized value of the Lawndale property;
proactively worked with [the City of] Hawthorne to pursue residential
zoning.*  AR, Tab 10, SSA Briefing, at 17.
    
A second aspect of SES's financial strategy related to the type of
contractual arrangement and cost the offeror proposed to the Air Force. 
As set forth above, the cost factor did not evaluate an offeror's total
cost for the SAMS project, but only the incremental cost to the Air Force
for construction of the SAMS facility over and above the value of the land
conveyed to the selected offeror.  Additionally, it was the agency's
intent and all parties' understanding that the cost gap proposed by the
offeror selected in Phase II would become the basis of a fixed-price
contract after completion of administrative negotiations in Phase III.
    
SES's final proposal revision not only set forth the offeror's cost gap
for the SAMS project, but also identified and quantified various
contingences included within that cost.[20]  Supplemental AR, Tab 3, SES
Final Proposal Revision, Cost and Financial Strategy, at II-2.  As part of
its financial strategy, SES then proposed that in addition to agreeing to
a guaranteed maximum price, which provided the Air Force with the benefits
of a fixed-price contract, it would establish a cost savings sharing
arrangement as follows:
    
Should the overall project cost net of revenues be less than projected,
the Air Force would receive 60% of unused contingency and other savings
until a zero gap is reached, and 40% thereafter, such amounts to be
calculated after [the construction subcontractor's] share in any savings
of the portion of contingency allocated to the construction contract.
    
Supplemental Agency Report, Tab 3, SES Final Proposal Revision, Executive
Summary, at I-2.  SES's savings sharing arrangement made more than $5
million in savings potentially available to the Air Force.  AR, Tab 10,
SSA Briefing, at 18.  
The agency evaluators were not of one mind in the evaluation of SES's cost
savings sharing provisions as part of the financial strategy factor.  The
SSET chairman believed that the savings sharing provisions of SES's
proposal did not add benefit to the agency because the savings were
speculative in nature and would only be realized during the design and
construction of the SAMS facility--at a point too late to be used to
reduce the cost gap.  Tr. at 74-75, 89, 111.  By contrast, the SSET member
who served as chief for the financial strategy evaluation factor believed
that SES's cost savings sharing idea was a benefit even if it did not
reduce the cost gap because it effectively created a partnership between
the Air Force and the offeror for the management of costs during contract
performance.  Tr. at 402.  Ultimately, the SSET chairman deferred to the
view of the factor chief on this point.  Contracting Officer's Statement
at 7.  The SSET members agreed that SES's cost savings sharing provision
was the determining strength that resulted in SES's exceptional
rating.[21]  Tr. at 74-75, 401, 407-08.
    
In its narrative presentation to the SSA, the SSET also identified SES's
cost savings sharing provisions as a strength under the financial strategy
factor.  Specifically, the SSET stated that SES's proposal provided the
agency with the benefits of a fixed- price contract together with the
sharing of cost savings and revenue increases.  AR Tab 10, SSA Briefing,
at 17.  The SSET also explained in greater detail the potential for $5
million in savings, the speculative nature of the savings, and how any
savings would be realized only during construction and would not reduce
the SAMS project cost gap.  AR, Tab 10, SSA Briefing, at 18; Tr. at
403-04, 463-64.  The SSET also informed the SSA of its conclusion that
SES's savings sharing provision was the financial strategy strength that
*drove the [exceptional] rating.*  Tr. at 401, 462-63.
    
While the SSA adopted the SSET's conclusion that SES's and Kearny's
proposals were essentially equal under the facility capability, project
management, proposal risk, and past performance factors, he rejected the
SSET's view as to the financial strategy factor. [22]  AR, Tab 12, Source
Selection Decision at 3-4; Tr. at 493.  Regarding that factor, where the
SSET had rated Kearny as acceptable and SES as exceptional, the SSA
stated:
    
The SSET rated [SES's] financial strategy exceptional because it included
a cost sharing structure.  While both offerors provided a guaranteed
maximum price, [SES] proposed sharing unused contingencies 60% - 40% with
the Air Force until a zero gap is reached, and 40% thereafter.  Kearny
also proposed cost sharing of tax increment financing, which would bring
cost savings to the project.  The Kearny strategy was acceptable and would
add benefit to the Air Force; however, their concept was not as well
defined.  Although the SSET found [SES's] financial strategy to be
exceptional because of this cost sharing arrangement, I did not consider
this to be a discriminator as the contingency nature of the cost savings
made them speculative.
    
AR, Tab 12, Source Selection Decision, at 3.  The SSA's conclusion in this
regard may have determined the outcome of the competition, and therefore,
its reasonableness is a key issue to this protest.  It was because he
concluded that the proposals of SES and Kearny were essentially equal as
to all noncost factors, and that the cost gap for Kearny's proposal ($13.1
million) was smaller than the cost gap for either of SES's alternate
proposals ($30.9 million under a 10-year leaseback, and $14.4 - $14.9
million for a 30-year leaseback), that he determined that the selection of
Kearny represented the best value to the Air Force.  Id. at 3-4.
    
In its protest SES argues that the SSA improperly disregarded the SSET's
evaluation of proposals and unreasonably determined that the proposals of
Kearny and SES were essentially equal as to financial strategy,
notwithstanding SES's higher evaluation rating.  Citing to the rating
differences between the proposals, SES argues that the SSA improperly
downgraded its evaluated advantage under the financial strategy factor. 
SES also argues that while the RFP provided that the SSA could make
cost/technical tradeoffs, the solicitation did not permit the SSA to alter
the evaluation ratings of offerors.
    
Adjectival ratings and point scores are but guides to, and not substitutes
for, intelligent decision making.  See Shumaker Trucking & Excavating
Contractors, Inc., supra.  They are tools to assist source selection
officials in evaluating proposals; they do not mandate automatic selection
of a particular proposal.  Jacobs COGEMA, LLC, supra; PRC, Inc.,
B-274698.2, B-274698.3, Jan. 23, 1997, 97-1 CPD P: 115 at 12.  Those
officials have broad discretion in determining the manner and extent to
which they will make use of, not only the adjectival ratings or point
scores, but also the written narrative justification underlying those
technical results, subject only to the tests of rationality and
consistency with the evaluation criteria.  Development Alternatives, Inc.,
B-279920, Aug. 6, 1998, 98-2 CPD P: 54 at 9; Midwest Research Inst.,
B-240268, Nov. 5, 1990, 90-2 CPD P: 364 at 4.  Where, as here, a
higher-level official determines that the lower-level evaluators' ratings
do not reflect the actual technical value of proposals and the selection
decision is protested, the agency must show that its ultimate
determination is reasonable, with sufficient detail to permit our Office
to review the determination for reasonableness.  See KPMG Consulting LLP,
B-290716, B-290716.2, Sept. 23, 2002, 2002 CPD P: 196 at 13; Chemical
Demilitarization Assocs., B-277700, Nov. 13, 1997, 98-1 CPD P: 171 at 6.
    
Contrary to the protester's assertions, the SSA possessed the inherent
authority to reject, in whole or in part, the evaluations performed by the
SSET on his behalf; this authority does not flow from the solicitation. 
The SSA also provided a detailed written analysis supporting his findings,
based not only on the offerors' adjectival ratings, but also on the SSET's
narrative discussion and oral presentation explaining those adjectival
ratings.  AR, Tab 10, SSA Briefing; Tr. at 452-54.  Under most of the
RFP's evaluation criteria, the SSA reasonably determined that the SSET's
evaluation ratings accurately reflected the essential equivalency between
the SES and Kearny proposals.  As to financial strategy, the SSA properly
looked behind the adjectival ratings to determine whether significant
technical differences existed such that SES's proposal was technically
superior regardless of the assigned ratings.  PRB Assocs., Inc., B-277994,
B-277994.2, Dec. 18, 1997, 98-1 CPD P: 13 at 12.  The SSA reasonably
determined that the strength that resulted in SES's evaluated
advantage--its cost savings sharing provision--was too speculative in
nature to constitute a discriminator between the offerors.  While SES
argues that the SSA should not have regarded its cost savings sharing
provisions as speculative, in our view, this amounts to mere disagreement
with the agency's evaluation, which does not render it unreasonable.  KPMG
Consulting LLP, supra. 
    
The protester also argues that the SSA failed to acknowledge and/or give
it credit for various strengths in its proposal identified by the agency
evaluators.  Specifically, SES asserts that, as evidenced by his source
selection decision, the SSA ignored SES's superior design aesthetics for
the SAMS facility as well as its innovative approach for the residential
development of the Lawndale Annex.  SES alleges that by disregarding these
key SES advantages, the agency failed to follow the RFP evaluation plan
and unreasonably selected Kearny.  We disagree.
    
There is no requirement that an SSA restate each of an offeror's strengths
when comparing proposals, and nothing unreasonable about the decision to
not elevate any of these strengths to the selection decision.  Medical
Dev. Int'l, B-281484.2,
Mar. 29, 1999, 99-1 CPD P: 68 at 14.  Here, the record shows that, in
considering whether any of the differences between the two proposals
amounted to discriminators, the SSA had received and reviewed the SSET's
findings in full, which described both aspects of SES's proposal to which
the protester now refers.  As evidenced by his selection decision, the SSA
was fully aware of the view that SES's proposal had superior design
aesthetics.  Quite simply, the SSA did not fail to take this aspect of
SES's proposal into account; instead, he reasonably determined that this
difference was not a discriminator, or decisive factor, in his selection
decision.  The fact that the protester believes that its design
aesthetics, even though not an evaluation factor or subfactor, were an
important discriminator between the two proposals is, again, an expression
of mere disagreement.  As to SES's innovative idea for the residential
development of the Lawndale Annex, which was determined a strength, the
fact that the SSA did not specifically mention this feature does not mean
he did not consider it, and there is no requirement that he give SES the
credit the protester apparently believes it was due.

   As the SSA reasonably determined that the proposals of SES and Kearny were
essentially equal as to all noncost factors, and that the cost gap for
Kearny's proposal was smaller than the cost gap for either of SES's
alternate proposals (so that no cost/technical tradeoff analysis was
needed), we see no basis to find unreasonable the SSA's selection of
Kearny's offer as representing the best value to the Air Force.  The fact
that no tradeoff analysis was required as part of the source selection
decision here does not negate the fact that the agency properly adhered to
the RFP's best value selection basis.  See Weber Cafeteria Servs., Inc.,
B-290085.2, June 17, 2002, 2002 CPD P: 99 at 6.
    
Lastly, SES contends that the agency must now *re-perform,* or reconsider,
its selection decision in favor of Kearny.  As explained above, subsequent
to the agency's Phase II selection decision, and still prior to the
contract award that will occur subsequent to the Phase III administrative
negotiations, Congress enacted legislation that now authorizes a 30-year
leaseback period for the SAMS project.  Citing to our decision in Dual,
Inc., B-280719, Nov. 12, 1998, 98-2 CPD P: 133, SES argues that where, as
here, a material change occurs prior to contract award, the agency must
reevaluate proposals in light of that material change before proceeding
with the planned award.
    
In Dual, which involved the procurement of flight training systems, the
awardee represented in its proposal that its flight simulation division
and its employees would perform the contract work.  The agency's
evaluation of proposals relied upon those representations.  Prior to
contract award, the awardee entered into an agreement to sell its flight
simulation division and to transfer the affected employees to the
acquiring company; this was a material change to the awardee's proposal. 
Because the awardee never advised the agency of the impending sale, the
agency never evaluated the awardee's actual employees and facility
capabilities as they existed at the time of award.  Consequently, our
Office determined that the agency's evaluation, as well as source
selection determination which was based entirely upon the results of the
evaluation, were flawed.
    
We find our decision in Dual inapposite to the circumstances here.  In
Dual, the material change in circumstances (i.e., the impending sale of
the awardee's facility) occurred prior to the agency's selection decision
and caused the propriety of that decision to be placed into doubt.  By
contrast, the *material change* in the SAMS transaction (i.e., the
enactment of revised authority) occurred after the Air Force's selection
decision and does not cast doubt on the propriety of the decision already
made.  While the agency has not yet made contract award here, given the
unique nature of the SAMS project transaction, we recognize the agency's
need for finality in its selection decisions.  In our view, while the Air
Force has the discretion to reconsider its selection decision, there is no
requirement that it do so.  In any event, we fail to see how
reconsideration of its source selection decision in light of the amended
statutory authorization could reasonably be expected to result in a
different outcome, given that the agency already evaluated and considered
SES's alternative 30-year leaseback proposal as part of its source
selection decision, based on anticipation of modified SAMS project
authority; the agency already determined that Kearny's proposal had a
smaller cost gap than either of SES's alternative proposals; and the
proposals were otherwise found to be essentially equal.
    
The protests are denied.
    
Anthony H. Gamboa
General Counsel
    

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

   [1] SES was alternatively known and referred to during the selection
process as *Mar Ventures.*  Likewise, LA Air Force Base SMC, LLC, a joint
venture comprised of Kearny Real Estate Company, Catellus Development
Corp., and Morgan Stanley Real Estate Fund, was alternatively known and
referred to during the selection process as *Team SMC,* or *Kearny.*
[2] The RFP specified the parcels of real property that Air Force planned
to convey: approximately 42 acres in El Segundo, California (known as Area
A); approximately 13 acres in Hawthorne, California (known as the Lawndale
Annex); and approximately 3.7 acres in Sun Valley, California (known as
the Armed Forced Radio and Television Service Broadcast Center).  In
return, the successful offeror would construct the new SAMS facilities on
the remaining portion of LAAFB--approximately 52 acres in El Segundo,
California (known as Area B).  Phase I RFP at 4; see also Pub. L. No.
106-398, S: 2861(a).
[3] The Phase I selection decision was based on two evaluation factors, in
descending order of importance:  past performance and preliminary project
concept.  Phase I RFP at 14.
[4] If, for whatever reason, the Air Force and the selected offeror were
unable to complete Phase III negotiations within 90 days, then the agency
could either reschedule the milestones or select a new offeror.  Id.
[5] The third offeror selected by the agency for participation in Phase
II, Lennar/Barker Pacific LLC, withdrew from the competition prior to the
Phase II selection decision.
[6] The cost factor did not evaluate the total cost of the SAMS project,
but rather, the additional cost to the Air Force (i.e., the possible need
to expend appropriated funds) over and above the value of the conveyed
land in order to acquire the required facility.  Agency Report (AR), Nov.
27, 2002, at 5; Contracting Officer's Statement at 1.  Accordingly, the
parties refer to cost as the *cost gap.*
[7] Although not expressed in the Act, other options available to the Air
Force to overcome a cost gap were to make total payment using appropriated
funds to the selected offeror upon the completion of construction, or to
reduce the size of the SAMS facility prior to construction.
[8] On December 2, subsequent to both the Air Force's selection of Kearny
and SES's filing of its protest, the president signed into law the Bob
Stump National Defense Authorization Act for Fiscal Year 2003, Pub. L. No.
107-314, 116 Stat. 2458 (2002), section 2841 of which revised the Act so
as to permit leasebacks for up to 30 years for the SAMS project.
[9] The overall cost gaps for each proposal were rounded down to the
nearest whole number as part of the SSET's briefing.  Tr. at 191-94. 
Specifically, the cost gaps were $13.1 million for Kearny's proposal,
$13.3 million for SES's 30-year lease proposal, and $29.9 million for
SES's 10-year lease proposal.
[10] The SSAC chairman believed that SES's superior design aesthetics for
the SAMS facility, particularly a stand-alone conference center, made SES
the best value among offerors that were otherwise equal as to cost and
noncost factors.
Tr. at 60-62, 244.
[11] SES planned to exchange 2 acres of conveyed LAAFB land, improved by
SES with a single level 250 stall (above grade) parking deck, to the FAA
in return for 4 acres of FAA land, for a net value increase of $ 1.6
million.  Supplemental AR, Tab 3, SES Final Proposal Revision, Financial
Strategy, at II-7.
[12] In a second supplemental protest (B-291620.3), SES raises another
issue, contending that the agency's evaluation of Kearny's proposal as to
cost and financial strategy was improper.  We intend to address this
protest in a separate decision to be issued shortly.
[13] While the SSET had deemed Kearny's original exterior building
material (concrete panels mounted on a steel support frame) to be a
strength, Kearny's change to Flexirock resulted in the SSET eliminating
this strength from its evaluation of Kearny's final proposal.  Tr. at
36-37.
[14] The SSET chairman, who was familiar with Flexirock, made multiple
visits to a nearby building that used Flexirock in its design to ascertain
its performance.  Tr. at 48-49, 54.
[15] At the hearing our Office conducted, the agency brought in examples
of both Flexirock and EIFS to demonstrate that Flexirock, a portland
cement-based product, was not similar to EIFS, a product consisting of a
polystyrene foam base with a synthetic stucco finish.
[16] The solicitation also informed offerors that, *[f]ailure to report [a
listed event] would result, at the sole discretion of the Air Force, in an
immediate disqualification of the submitting Offeror from this process.* 
Id.
[17] The Air Force separately determined that Kearny's failure to inform
the Air Force about Nadel's bankruptcy was a *serious integrity issue,*
but one that ultimately did not warrant the disqualification of the
offeror.  AR, Nov. 27, 2002, at 11; Contracting Officer's Statement at 14;
Tr. at 366-67; AR, Tab 46, SSAC Briefing Slides, at 2.
[18] The Air Force also concluded that the extent to which Nadel's
bankruptcy affected the ability of Nadel, or Kearny, to perform was a
matter of contractor responsibility, not past performance.  Contracting
Officer's Statement at 14.
[19] SES estimates that residential use of the Lawndale Annex increased
the value of the property to the Air Force by as much as $18 million. 
Protest, Oct. 28, 2002, at 20.
[20] SES's proposal stated that its cost gap was calculated after
inclusion of a
$4.1 million Area B cost contingency, a $3.9 million additional
contingency for land sale and bond price fluctuation, and a $4 million
interest rate hedge cost.  Id.
[21] The Air Force determined, based on a September 19 clarification
letter, that Kearny's proposal also contained a cost savings sharing
arrangement, Supplemental AR, Tab 21, Letter from Kearny to Agency, Sept.
19, 2002, at 2; Tr. at 105-07; agency evaluators found Kearny's savings
sharing arrangement was also speculative in nature and not as well defined
as that proposed by SES.  Tr. at 110, 114-15, 246.
[22] The SSA determined that although SES's proposal was viewed as having
better aesthetics, this difference was not a decisive factor in his
selection decision in light of the equivalent ratings received by the two
offerors under the facility capability factor and subfactors.  AR, Tab 12,
Source Selection Decision, at 3.