TITLE:  Data Monitor Systems, Inc., B-291791, March 27, 2003
BNUMBER:  B-291791
DATE:  March 27, 2003
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Data Monitor Systems, Inc., B-291791, March 27, 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:    Data Monitor Systems, Inc.
    
File:             B-291791
    
Date:              March 27, 2003
    
Donald E. Barnhill, Esq., Barnhill & Associates, for the protester.
Craig A. Holman, Esq., and Kara L. Daniels, Esq., Holland & Knight, for
Phoenix Management, Inc., an intervenor.
Gregory H. Petkoff, Esq., Department of the Air Force, for the agency.
Susan K. McAuliffe, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest of selection of slightly higher-priced offeror with higher-rated
past performance is denied where selection decision was consistent with
solicitation scheme and reflected a reasonable price/past performance
tradeoff.
DECISION
    
Data Monitor Systems, Inc. (DMS) protests the selection of Phoenix
Management, Inc. (PMI) under request for proposals (RFP) No.
F04666-01-R-0003, issued by the Department of the Air Force for base
operation services at Beale Air Force Base.  The Air Force issued the RFP
in connection with an Office of Management and Budget (OMB) Circular A-76
commercial activities study.  DMS questions the agency's evaluation of
proposals, contends that the agency should have given greater weight to
the extent of each offeror's aircraft maintenance experience due to the
importance of the base's aircraft reconnaissance work, and argues that the
agency improperly determined that PMI's higher-rated, slightly
higher-priced proposal offered the best value to the agency.
    
We deny the protest.
    
The Air Force issued the RFP to select a commercial offeror to compete
against the government's in-house *most efficient organization* (MEO)
pursuant to the procedures of the OMB Circular A-76 cost comparison
process.[1]  The RFP provided that the agency would select the *best value
offeror* whose proposal was most advantageous to the government
considering three evaluation factors--technical capability, past
performance, and price.  Technical proposals, to be evaluated on a
pass/fail basis, were to be reviewed for performance management, technical
capability, and program management to meet the RFP's detailed performance
requirements.  The technical evaluation was to assess each offeror's
understanding of, and ability to comply with, the RFP's performance
requirements.
    
Tradeoffs were to be made among the technically acceptable proposals on
the basis of two approximately equal factors, past performance and price. 
Past performance was to be evaluated through an integrated assessment of
risks and strengths demonstrated in the recent performance of relevant
contracts.  Past performance was to be assessed under six *business
units*:  information technology; communications; transportation; supply;
human resources; and aircraft maintenance.  The RFP did not provide
relative weights for the six business units.  Price proposals were to be
evaluated for reasonableness and the firm's understanding of performance
requirements.  The solicitation advised that selection of a higher-priced
offeror was permitted where the SSA reasonably determined that the
higher-priced offeror's superior past performance outweighed the cost
difference between proposals. 
    
The five offers received by the agency were included in the competitive
range, discussions were conducted, and proposal revisions were reviewed. 
Each of the technical proposals was considered acceptable and received a
*pass* rating.  The Performance Risk Assessment Group (PRAG) evaluated
offeror past performance strengths and weaknesses under each of the six
business units (i.e., information technology, communications,
transportation, supply, human resources, and aircraft maintenance).  The
DMS proposal, with an evaluated price of $80,327,922, received a past
performance rating of *very good/significant confidence,* for presenting
little doubt that the offeror will perform the requirements successfully. 
The PMI proposal, evaluated at $85,410,430 (i.e., approximately 6.3
percent higher than the evaluated price of the DMS proposal), received an
*exceptional/high confidence* past performance rating for presenting
essentially no doubt that the offeror will successfully perform the
required effort.  Two other proposals were rated lower for past
performance than the DMS and PMI proposals; one of those proposals was
lower-priced and one was higher-priced than the protester's proposal.  The
fifth offeror's proposal was rated as high as PMI's proposal, but offered
a higher price than that offered by PMI.  The SSA's final tradeoff review
focused primarily on the PMI and DMS proposals.
    
In reviewing the relevance of the offerors' past performance information,
the SSA noted that PMI had demonstrated more relevant, higher-rated past
performance experience than DMS under several of the business units
evaluated.  PMI's past performance references had rated the firm's
performance as exceptional, the highest rating available, for supply,
transportation, communications, human resources, and information
technology.[2]  The SSA concluded that, although some concern had been
raised by the PRAG as to PMI's limited experience under the remaining
business unit, aircraft maintenance, the concern was limited to only one
of six business units, the firm did show exceptional performance of at
least two of seven work areas within the aircraft maintenance unit, the
balance of the RFP's aircraft maintenance work involved routine agency
maintenance procedures, and the firm's consistent exceptional past
performance in all other areas reasonably demonstrated essentially no
doubt that the firm would successfully perform the RFP's overall
requirements.
    
Comparing DMS's lower-priced, lower-rated proposal with PMI's, the SSA
determined that PMI's superior past performance outweighed the 6.3 percent
price premium associated with selection of PMI under the RFP.   PMI
consequently was selected as the *best value offeror* to compete in the
second phase of the cost comparison study with the MEO.  Following a
detailed debriefing, DMS filed this protest.  DMS alleges that the agency
improperly evaluated proposals and unreasonably selected PMI's
higher-priced proposal as representing the best value to the agency.
    
In reviewing an agency's proposal evaluation, we examine the record to
ensure that it was reasonable and consistent with the solicitation's
evaluation terms and applicable statutes and regulations.  Digital Sys.
Group, Inc., B-286931, Mar. 7, 2001, 2001 CPD P: 50 at 7.  In deciding
between competing proposals, tradeoffs, such as between past performance
and price, may be made.  The propriety of the tradeoff does not depend on
the mere difference in technical scores or ratings, but on the
reasonableness of the source selection official's judgment concerning the
significance of the difference.  Id.  An offeror's mere disagreement with
the agency does not render the source selection unreasonable.  See
Encorp-Samcrete Joint Venture, B‑284171, B-284171.2, Mar. 2, 2000,
2000 CPD P: 55 at 4.
    
DMS primarily challenges the high overall past performance rating assigned
to the PMI proposal despite that firm's limited aircraft maintenance
experience.  DMS argues that, since Beale Air Force Base houses the 9th
Reconnaissance Wing, and the base operation services described in the RFP
support the group's critical need to fly and maintain its aircraft, for
evaluation purposes under the RFP, the aircraft maintenance business unit
should have been considered more important to the review of past
performance and a determination of an offeror's anticipated successful
performance of the RFP requirements.
    
DMS, which was rated highest for past performance under the aircraft
maintenance business unit, based on the experience of its aircraft
maintenance subcontractor, has not provided sufficient support for its
contentions of impropriety in the evaluation of offeror past performance. 
First, contrary to DMS's apparent view, the RFP did not assign greater
weight to the aircraft maintenance business unit than the other five
business units--under which units PMI had received the highest possible
ratings.  The six business units to be evaluated in terms of offeror past
performance were identified in the RFP in terms of relevant areas of work,
but no varying weights among the six subfactors were provided.  In the
absence of any indication of the relative weight of evaluation criteria,
it is proper for an agency to give equal weight to the listed
criteria--here, the six business units therefore were reasonably
considered to be of equal weight in the evaluation of past performance. 
See Logicon RDA, B-252031.4, Sept. 20, 1993, 93-2 CPD P: 179 at 7.  To the
extent DMS contends that the aircraft maintenance business unit should
have been assigned greater weight in the RFP's evaluation scheme, its
protest is untimely.  To be timely, such an alleged solicitation
impropriety had to be protested prior to the closing time for the receipt
of proposals.  Bid Protest Regulations, 4 C.F.R. S: 21.2(a)(1) (2003).
    
DMS generally alleges that PMI's limited experience under one of the six
equally weighted business units should have lowered the firm's overall
past performance rating substantially.  We do not agree.  DMS apparently
has chosen to ignore the documented strengths of PMI's overall exceptional
past performance under the remaining five business units.  Our review of
the record supports the reasonableness of the agency's findings of PMI's
demonstrated ability and strong performance of the vast majority of the
business units' detailed performance requirements and the overall
exceptional rating assigned to the proposal for past performance.  As the
agency reports, given the straightforward nature of the anticipated
routine aircraft maintenance, and the multitude of exceptional past
performance ratings the firm received relevant to all of the business unit
requirements, including exceptional ratings from references regarding
PMI's performance of some relevant aspects of the overall aircraft
maintenance requirements, we see no basis to question the reasonableness
of the agency's determination of essentially no doubt that PMI will
successfully perform the RFP's full requirements.[3]
    
As stated above, in his detailed tradeoff analysis, the SSA considered the
many strengths associated with the PMI proposal, including its past
performance references' exceptional ratings for the performance of
contracts relevant to five of the six business units.  For the remaining
business unit, aircraft maintenance, the SSA noted the reported
exceptional performance by PMI of at least a limited amount of work
directly relevant to the aircraft maintenance business unit.  On the other
hand, DMS showed no experience under the human resources unit, a lack of
MSS Data Systems experience relevant to the information technology unit, a
lack of systems control experience for the communications unit, and only
limited (in terms of smaller magnitude) experience under the
transportation unit.  Given the agency's need for successful performance
of requirements under each of the six equally important business units and
the documented strengths in PMI's overall past performance experience, we
find no merit to the protester's challenge to the reasonableness of the
SSA's determination that the superiority of PMI's higher-rated proposal
warranted the slight price premium associated with it.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    

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

   [1] The procedures for determining whether the government should perform
an activity in-house, or have the activity performed by a contractor, are
set forth in OMB Circular A-76 and the Circular's Revised Supplemental
Handbook.  This protest concerns the competition among private-sector
firms to be selected for comparison with the MEO; such a competition is
conducted much as any competitive federal procurement is conducted.
[2] PMI's past performance references evaluated the firm's performance as
*exceptional* for 11 of 15 contracts reviewed, and *very good* for the
balance.  The majority of DMS's 12 contracts that were reviewed were
evaluated by DMS's references as *very good* (for 6 of the 12 contracts);
4 were rated *exceptional* and 2 were rated *satisfactory.*
[3] We also note that, to the extent DMS argues for the first time in its
comments that the evaluation of past performance under the communications
business unit was unreasonable and that DMS's proposal unreasonably was
downgraded under the unit for a lack of satellite communications (SATCOM)
experience, while PMI's was not, the protester has failed to support its
contention.  Rather, our review of the record supports the lower rating
assigned to DMS's proposal.  The record clearly shows that although both
DMS and PMI were found to lack the referenced SATCOM experience, DMS was
downgraded under the communications unit primarily for lacking critical
systems control experience, while PMI, on the other hand, was the only
offeror to demonstrate relevant, favorable experience in this area.