TITLE:  Gentex Corporation--Western Operations, B-291793; B-291793.2; B-291793.3, March 25, 2003
BNUMBER:  B-291793; B-291793.2; B-291793.3
DATE:  March 25, 2003
**********************************************************************
Gentex Corporation--Western Operations, B-291793; B-291793.2; B-291793.3, March
25, 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:    Gentex Corporation--Western Operations
    
File:             B-291793; B-291793.2; B-291793.3
    
Date:              March 25, 2003
    
David Z. Bodenheimer, Esq., Frederick W. Claybrook, Jr., Esq., Amy E.
Laderberg, Esq., and Karen Hastie Williams, Esq., Crowell & Moring, for
the protester.
Ron R. Hutchinson, Esq., Gerard F. Doyle, Esq., and James D. Bachman,
Esq., Doyle & Bachman, for the intervenor.
Clarence D. Long, III, Esq., and Patrick F. Corbin, Esq., Department of
the Air Force, for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
1.     Notwithstanding notice that competition was limited to firms that
held prior contracts under a program definition and risk reduction
contract for aircrew masks, a subcontractor was reasonably found to be
eligible to compete under the terms of the subsequent solicitation for the
development contract for the aircrew masks.
    
2.     Protest that agency's inadvertent release of evaluation material
resulted in an unfair competition is denied, where the record shows that
the release did not provide the awardee with an unfair competitive
advantage or competitively prejudice the protester.
    
3.     Agency reasonably evaluated awardee's proposal under a solicitation
for the development of aircrew masks, where the record shows that the
agency fairly and reasonably considered the respective strengths and
weaknesses of each proposal in accordance with the evaluation criteria and
determined that the awardee's proposal was superior.
    
4.     In a solicitation for the development of aircrew masks, agency did
not hold unequal discussions regarding the affordability of one aspect of
the masks, even though the agency asked the awardee, but not the
protester, a specific question on this matter, where the record shows that
the protester was already aware of the information provided to awardee and
was permitted an equal opportunity to respond.
    
5.     Agency reasonably assigned a weakness to the protester's proposal
for failing to comply with the funding profile identified by the agency,
where consideration of funding constraints was reasonably encompassed
within solicitation evaluation criteria.
    
6.     Where agency inquired whether awardee would consider variation in
quantities and warranty clauses, technical transfusion did not occur, even
though these clauses had been previously offered by the protester, because
agency did not disclose innovative and unique approaches of the protester
and the questions on these matters were neutral on their face.
    
7.     Agency performed a reasonable cost realism analysis on the
cost-reimbursement component and a reasonable price analysis on the
fixed-price components of a procurement for the development of aircrew
masks.
DECISION
    
Gentex Corporation--Western Operations protests the award of a contract to
Scott Aviation[1] under request for proposals (RFP) No. F-41624-02-R-1007,
issued by the Department of the Air Force for the system development,
demonstration, and production of Joint Service Aircrew Masks (JSAM). 
Gentex challenges the awardee's eligibility for award, as well as the
reasonableness of the agency's technical and cost evaluation.
    
We deny the protests.
    
BACKGROUND
    
The JSAM program is for the development, manufacture, and fielding of a
sustainable mask system that, in conjunction with a below-the-neck
clothing ensemble, will provide nuclear, chemical, and biological
protection to enable aircrew to fly in a chemical or biological warfare
environment.  The JSAM generally consists of a hood, oral-nasal mask, and
lens assembly that is supplied with filtered air through a battery-powered
blower system.  The JSAMs are to be produced in different variants--one
for fixed-wing aircraft and one for rotary-wing aircraft. 
    
The acquisition here involves a System Development and Demonstration (SDD)
solicitation, which followed the performance of a Program Definition and
Risk Reduction (PDRR) phase.  The purpose of the PDRR effort was to
perform engineering studies and develop prototypes for government
evaluation.  The SDD effort is intended to finalize product design for
entry into production.  A team led by Gentex and a team led by Science
Applications International Corporation (SAIC) (which included Scott)
developed prototypes under the PDRR phase, which became the basis for
design development in the SDD phase. 
    
The agency contemplated that the teams led by Gentex and SAIC performing
the PDRR contracts would compete under the SDD RFP.  Other potential
offerors were required to give advance notice to the agency of their
intent to compete, and provide certain documentation and material samples
for testing by established dates.  Protest, exh. 2, Commerce Business
Daily Notice.  The team led by SAIC had previously notified the agency
that their team competing for the SDD contract would consist of the same
members as the PDRR contract, but that Scott would be the prime contractor
under the SDD competition.  Agency Report, vol. 21, Tab G.7, PDRR Proposal
Analysis Report, at 19.      
    
The RFP, issued June 18, 2002, provided for the award of a
cost-plus-award-fee contract with fixed-price incentive options for
production quantities.  The RFP included 179 performance
specifications.[2]  These consisted of 6 *key performance parameters*[3]
(which are critical to program performance and *not subject to tradeoff*),
numerous *threshold requirements* (which reflect minimum capabilities) of
which 23 were designated as *high priority,* and numerous *objective
requirements* (which are non‑mandatory desired objectives). 
Offerors were to propose approaches to *develop . . . JSAM systems that
meet the Key Performance Parameters, . . . threshold requirements and as
many of the objective requirements in the [performance specifications] as
practicable within cost and schedule constraints.*  RFP, Statement of
Objectives P: 2.1.
    
Award was to be made to the offeror that provided the *best value* to the
agency, based on an integrated assessment of the evaluation factors and
subfactors.  The evaluation factors were mission capability, proposal
risk, past performance, and most probable life cycle cost (MPLCC).  The
first three factors were of equal importance, and combined were
*significantly more important* than cost.  However, cost was identified as
a *significant consideration* in the selection process.  RFP S: M, at
2-3.   
Under the mission capability factor, proposals were to be assigned a color
rating of blue (exceptional),[4] green (acceptable),[5] yellow (marginal),
or red (unacceptable), based on the *strengths, inadequacies and/or
deficiencies* of each offeror's approach.  Under the proposal risk factor,
proposals were given a high, low, or moderate risk rating, based on the
*the potential for disruption of schedule, increased cost, degradation of
performance, and the need for increased Government oversight, as well as
the likelihood of unsuccessful contract performance.*  Both these factors
included the same four subfactors--key performance parameters, technical
performance and operational utility, program risk mitigation, and
integrated management.  RFP S: M, at 3-5.     
    
The key performance parameters subfactors considered the technical
performance demonstrated by the offeror's PDRR prototypes and potential
for meeting the parameters; *[t]he sub-factor is met when the offeror
effectively and clearly demonstrates that the offeror's proposed design
approach will meet the [parameters] during formal qualification testing.* 
Under the technical performance and operational utility subfactors, the
design's potential to meet threshold requirements was evaluated with
particular emphasis on the high priority threshold requirements. 
Evaluation of this subfactor included consideration of PDRR prototype
performance, SDD design changes, and *an assessment of the impact of . . .
threshold requirements which will not be met*; *[t]his sub-factor is met
when the offeror clearly and effectively demonstrates that the proposed
design(s) will exhibit acceptable performance.*  Under the program risk
mitigation subfactors, the agency evaluated an offeror's approach to
mitigate, *eliminate or lower* specific risks identified in the RFP; some
of these identified risks relate to the performance specifications.  The
offeror's overall program approach was to be evaluated under the
integrated management subfactors.  RFP S: M, at 4-5.       
    
The past performance factor included two subfactors--PDRR team effort and
PDRR prototype quality.  Proposals were given confidence ratings *based on
an analysis of risks and strengths relating to the offeror's past work
record,* including the *offeror's actual performance* of the PDRR
contract.  RFP S: M, at 6.  The PDRR past performance requirements
included consideration of all team members and major subcontractors as
indicators of the prime contractor's performance capability.  PDRR RFP S:
M, at 5.  
    
The MPLCC factor included consideration of SDD, production, operations and
support (O&S), and other costs.  For SDD costs (i.e., work to be performed
on a cost‑plus-award-fee basis), the cost team was to perform a cost
realism analysis in accordance with Federal Acquisition Regulation (FAR)
S: 15.404-1(d), to ensure that the proposed costs were realistic for the
work to be performed.  For production costs (i.e., fixed-price incentive
options), the team was to perform a price analysis in accordance with FAR
S: 15.404-1(b), to ensure that the prices were fair and reasonable.  RFP
S: M, at 7-8.  O&S costs were computed by the agency based upon
information contained in O&S worksheets completed by the offerors.  RFP S:
L, at 34.  The MPLCC for each proposal also included costs to account for
qualification testing and technical risk.  Declaration of Agency Price
Analyst at 3.
    
The RFP also required offerors to submit funding requirements and
schedules that  *must be consistent with any imposed government budgetary
constraints.*  RFP S: L, at 31.  In this regard, the RFP included, *for
informational purposes,* a government funding profile, which the agency
updated twice during discussions to reflect additional information
concerning program funding, including the loss of approximately $3 million
in fiscal year 2003.  Hearing Transcript (Tr.) at 23, 37.
    
Gentex and Scott were the only two offerors to submit proposals by the
July 19 proposal due date.  Oral presentations were held during the weeks
of July 29 and August 2.
    
Extensive discussions were conducted.  As part of the discussions, on
August 23, the agency electronically transmitted to the offerors initial
evaluation slides identifying proposal weaknesses and inadequacies.  In
this transmission, the agency inadvertently sent Scott six evaluation
slides that pertained to Gentex (although the slides did not identify
Gentex by name).  When the error was discovered, the agency contacted
Scott on August 27 and *recalled* the materials.  The agency also notified
Gentex of the error, provided Gentex with a copy of the inadvertently
disclosed slides and, at the written request of Gentex, detailed the
corrective action taken.  The agency received no further inquiry from
Gentex and considered the matter closed.  Contracting Officer's Statement,
Jan. 30, 2003, at 6.  Discussions continued, during which offerors
responded to numerous action items and evaluation notices.  Final proposal
revisions (FPR) were submitted by September 30. 
    
The agency evaluated the FPRs as follows:
    

   +------------------------------------------------------------------------+
|                     |GENTEX                    |SCOTT                  |
|---------------------+--------------------------+-----------------------|
|Mission Capability / |                          |                       |
|Proposal Risk        |                          |                       |
|---------------------+--------------------------+-----------------------|
| |Key Performance    |Green/Moderate Risk       |Green/Moderate Risk    |
| |Parameters         |                          |                       |
| |-------------------+--------------------------+-----------------------|
| |Technical          |Green/Moderate Risk       |Green/Moderate Risk    |
| |Performance and    |                          |                       |
| |Operational Utility|                          |                       |
| |-------------------+--------------------------+-----------------------|
| |Program Risk       |Green/Moderate Risk       |Green/Moderate Risk    |
| |Mitigation         |                          |                       |
| |-------------------+--------------------------+-----------------------|
| |Integrated         |Green/Moderate Risk       |Blue/Low Risk          |
| |Management         |                          |                       |
|---------------------+--------------------------+-----------------------|
|Past Performance     |                          |                       |
|---------------------+--------------------------+-----------------------|
| |PDRR Team Effort   |Satisfactory/Confidence[6]|Satisfactory/Confidence|
| |-------------------+--------------------------+-----------------------|
| |PDRR Prototype     |Satisfactory/Confidence   |Satisfactory/Confidence|
| |Quality            |                          |                       |
|---------------------+--------------------------+-----------------------|
|Most Probable Life   |                          |                       |
|Cycle Cost           |                          |                       |
|---------------------+--------------------------+-----------------------|
| |PDRR               |[deleted]                 |        $     6,967,118|
| |-------------------+--------------------------+-----------------------|
| |SDD                |[deleted]                 |        $   23,043,060 |
| |-------------------+--------------------------+-----------------------|
| |Production         |[deleted]                 |        $ 149,572,583  |
| |-------------------+--------------------------+-----------------------|
| |O&S                |[deleted]                 |        $ 160,257,379  |
| |-------------------+--------------------------+-----------------------|
| |Qualification      |[deleted]                 |        $     1,083,650|
| |Testing            |                          |                       |
| |-------------------+--------------------------+-----------------------|
| |Technical Risk     |[deleted]                 |        $     8,742,206|
| |-------------------+--------------------------+-----------------------|
| |Total MPLCC        |[deleted]                 |        $ 349,665,996  |
+------------------------------------------------------------------------+

    
Source Selection Decision at 23-24; Proposal Analysis Report at 35. 
    
Under the key performance parameters and technical performance and
operational utility subfactors, while both proposals had strengths and
weaknesses and received green/moderate risk ratings, the agency noted
several particular areas where Gentex's proposal was inferior to
Scott's.[7]  For example, the agency found that Gentex proposed more
significant design changes to its PDRR prototypes than Scott, including
substantial changes to major components, whereas Scott's changes were
*primarily refinements.*  It also noted that Gentex was combining its
three PDRR prototypes into two SDD variants, so its fixed-wing design was
*considerably different* from its PDRR prototype.  Source Selection
Decision at 12‑16; see Tr. at 542; Gentex Proposal, Oral
Presentation Slide No. 88.  Additionally, Gentex's battery approach was
found to be based upon a more hazardous chemistry than Scott's, which
would require additional testing, certification, and government oversight
before it could be used.  Also, Gentex's breathing hose was based on a
[deleted] (as opposed to the *H-manifold* proposed by Scott), which the
agency found could result in a complete loss of air (i.e., hypoxia) to the
aircrew member at high altitudes and could result in death if, through
human error, the aircrew forgot to move the hose.  Other distinctions made
by the agency between the proposals included Scott's use of adjustable
bayonets (i.e., hinges that attach the face mask to the hood), which the
agency believed would require less maintenance than Gentex's fixed
standard bayonets.  Source Selection Decision at 9, 12‑16. 
    
Under the integrated management subfactor, the agency found that Scott's
approach *consistently exceed[ed] what the Government envisioned,* which
led to its blue rating.  In addition to other features (such as its
proposed variation in quantities clause, warranty provision, and total
package fielding approach), Scott proposed a high frequency of schedule
analysis to identify problems, which the agency found significantly
reduced the probability of schedule slips.  In contrast, Gentex's
proposal, which received a green rating under this subfactor, was found to
have a *significant weakness* for potential schedule slips due, in part,
to the number of technical and design changes proposed.  In addition,
Gentex's approach was found to significantly exceed the total funding
profile, particularly in fiscal years 2003 and 2004.[8]  Id. at 19-22.   
     
In sum, the agency determined that *[b]y building on the basic design
developed for [the] PDRR, Scott Aviation possesses the groundwork for a
fully acceptable final design which has a much better chance of meeting
program Initial Operating Capability than the Gentex proposal.*  As such,
the source selection authority decided that the Gentex proposal did not
warrant the higher cost premium, and that Scott provided the best overall
value based on the specified evaluation criteria.  Id. at 26.
    
On November 26, award was made to Scott.  These protests followed.   
    
ANALYSIS
    
Scott's Eligibility to Compete
    
Gentex contends that Scott was ineligible to compete because it was not
the prime contractor under the PDRR phase and thus did not meet the
mandatory qualification requirements to participate in this SDD phase. 
According to Gentex, the Commerce Business Daily notice clearly advised
potential offerors that if they were not *contractors* in the PDRR phase,
then they had to provide certain documentation and material samples, which
Scott did not do. 
    
As noted above, a team led by SAIC and including Scott had a PDRR
contract, and SAIC is also a participant in the SDD team led by Scott. 
The RFP, at Section H, contemplated that contractors could deviate from
the initial teaming arrangements, so long as they sought approval from the
agency.  RFP S: H, at 29.  Here, the agency was fully advised by SAIC
during the PDRR phase that the team would be led by Scott when competing
for the SDD contract; nothing in the PDRR contract prohibited such a
switch.  Agency Report, vol. 21, Tab G.7, PDRR Proposal Analysis Report,
at 19.  The team members remained the same.  Furthermore, development of
the PDRR prototype, which reflected Scott's efforts, negated the need to
produce additional documentation and material samples.  Accordingly, we
think that Scott was not precluded from receiving award under the terms of
the RFP.[9]
    
Gentex also contends that Scott should not have been credited with SAIC's
past performance experience.  We disagree.  As a general rule,
subcontractor and team member performance may be considered in assessing
past performance.  Battelle Mem'l Inst., B-278673, Feb. 27, 1998, 98-1 CPD
P: 107 at 22; Phillips Nat'l, Inc., B‑253875, Nov. 1, 1993, 93-2 CPD
P: 252 at 6 (rejecting protester's argument that only the *actual awardee*
was entitled to list prior contract for purpose of past performance).  The
consideration of both the team members' past performance here was
consistent with the RFP, which specifically required consideration of the
PDRR *team effort* (which includes both Scott and SAIC) and prototype
quality (which reflects the work of both Scott and SAIC).  RFP S: M, at
6.  In addition, Scott's lack of prime contractor experience under the
PDRR contract need not have resulted in a lower past performance and
higher risk rating, as contended by Gentex.  As Scott's proposal states,
*SAIC was the logical lead for an effort that was primarily [research &
development] and involved extensive integration with aircraft and [life
support equipment]. . . .  Scott is the logical prime contractor for the
SDD and Production phases, where final development for manufacturing and
production are the primary emphasis.*  Scott Proposal, vol. I, Executive
Summary, at 1.  Based on our review, we think the agency reasonably
considered the PDRR team's experience in finding that Scott's past
performance was satisfactory.[10]
    
Release of Source Selection Information
    
Gentex protests that the agency's inadvertent release to Scott of the six
evaluation slides created an unfair competition.  Gentex complains that
the slides were broadly disseminated within Scott and its team members,
and gave Scott a *huge advantage* by enabling that firm to beef up its
proposal and discussion responses.  It complains that the contracting
officer failed to take adequate corrective action or comply with the FAR
requirements concerning possible Procurement Integrity Act violations. 
    
While an agency is responsible for ensuring that the competition is not
unfair, it has wide latitude in exercising its business judgment to
accomplish this purpose.  FAR S: 1.602-2; see, e.g., Computer Sci. Corp.,
B-231165, Aug. 29, 1988, 88-2 CPD P: 188 at 3‑4 (agency reasonably
exercised discretion in deciding not to exclude offeror from competition,
notwithstanding an inadvertent disclosure of proprietary
information).[11]  Here, the agency determined that the disclosure had *no
affect on the outcome of the source selection,* so no further corrective
action was required.  Contracting Officer's Statement, Jan. 30, 2003, at
6. 
    
As explained above, the agency promptly recalled the slides; it also
reviewed Scott's FPR to ensure that no changes were made that reflected
use of the inadvertently disclosed information.  The agency also notified
Gentex of the disclosure and detailed the corrective action taken. 
(Significantly, Gentex did not lodge an additional complaint at that
time.) 
    
In any event, Gentex has not demonstrated that Scott received an unfair
advantage, or that Gentex was competitively prejudiced.  To the contrary,
our review reveals no evidence that Scott changed its proposal based on
the information contained in the released slides.[12]  Although the slides
disclosed a list of proposal inadequacies identified during initial
evaluations, some of the issues were generically stated so as not to
reveal any proprietary information, or raised concerns common to both
offerors (e.g., quality assurance, system agent protection, vision, field
maintenance).  Our review further indicates that Scott's responses to
action items, evaluation notices, and other discussion questions pertain
to issues specific to Scott, and do not reflect any of the Gentex
information that was revealed in the slides.[13]  See Scott Letter Re: 
Disclosure (Feb. 14, 2003), exhs. B‑F, Scott Responses to Evaluation
Questions. 
    
Evaluation of Offerors' Response to Performance Specifications
    
Gentex contends that the agency improperly and unequally evaluated the
offerors' responses to the performance specifications (primarily, the
threshold requirements).  Gentex complains that the agency disregarded
specification non‑compliances and other weaknesses in Scott's
proposal, downgraded Gentex for allegedly similar weaknesses, and
overlooked Gentex's proposal strengths.  In its protests, Gentex points to
individual performance specifications, and argues that strengths and
weaknesses were unequally assessed, or makes comparisons between how
various requirements were evaluated and argues unequal treatment.   In so
doing, Gentex complains that  Scott did not meet various performance
requirements, or argues that Scott should have received weaknesses for
poor PDRR performance, for not offering fully tested JSAM features, and/or
for being further behind Gentex in the development of these features.
    
In reviewing protests against allegedly improper evaluations, it is not
our role to reevaluate proposals.  Rather, our Office examines the record
to determine whether the agency's judgment was reasonable and in accord
with the RFP criteria and procurement statutes and regulations.  Abt
Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD P: 223 at 4.  A
protester's mere disagreement with the agency's judgment is not sufficient
to establish that the agency acted unreasonably.  Microcosm, Inc.,
B‑277326 et al., Sept. 30, 1997, 97-2 CPD P: 133 at 4.   
    
The central issue here is the agency's evaluation of the threshold
requirements, which were evaluated under the technical performance and
operational utility subfactor.  Under this subfactor, the agency was to
consider PDRR performance, SDD design changes, and proposed solutions to
meeting performance requirements in areas where requirements had not been
met.  Mitigation measures for some of these requirements were further
considered under the proposal risk subfactor, which took into account
whether the offeror's proposed mitigation approach would either *eliminate
or lower* the proposal risk to an *acceptable level.*  RFP S: M, at 5. 
    
In its evaluation, the agency did not isolate compliance with individual
threshold requirements (although it appears that all were evaluated), but,
consistent with this RFP evaluation scheme, undertook a *holistic
approach* when evaluating the individual threshold requirements. 
Tr. at 328.  That is, the agency noted strengths or weaknesses of various
proposal features, which it took into account when evaluating the various
subfactors under the criteria of Section M.  See Agency Report, vol. 12,
Tabs D.5.1-D.5.4, Subfactor Evaluation Summary (Scott); vol. 13, Tabs
D.6.1-D.6.4, Subfactor Evaluation Summary (Gentex).  The agency also
considered that there were 179 performance specifications, some of which
were designated *high priority,* RFP S: L, at 18, and others with
obviously varying degrees of importance, so not every performance
specification strength (or weakness) necessarily translated into a
subfactor strength (or weakness).  Tr. at 91‑92, 158-59 (evaluation
of performance specifications was not a *bean counting exercise*). 
    
Also, given the developmental nature of this contract, the RFP did not
require fully developed and tested prototypes; an *integrated assessment*
of performance criteria was all that was required.  See Tr. at 323 (*You
would never expect a prototype coming out of PDRR to perform 100 percent. 
If that was the case, we could go straight into production.  There would
be no need to do any additional development.*).  As was expected, both
offerors' PDRR prototypes had design or performance problems.  Tr. at
323.  Both offerors proposed design modifications or solutions, which the
agency evaluated.  See, e.g., Agency Report, vol. 12, Tab D.5.2, Subfactor
Evaluation Summary (Scott), at 8-9; vol. 13, Tab D.6.2, Subfactor
Evaluation Summary (Gentex), at 8.  In some instances, these changes could
have negatively affected other areas of the JSAM that perhaps tested
positively during PDRR.  Tr. at 328-29.  In other instances, such as with
Gentex, successful PDRR testing may not have accurately reflected positive
performance, since its SDD design was significantly different from its
PDRR prototypes.  See Tr. 453, 475.  Moreover, tas noted above, Scott took
no exceptions to the specification requirements and as explained below,
the agency could reasonably conclude that Scott's solution satisfied the
specification requirements in question.  Also, both offerors presented
similar PDRR performance problems, but proposed acceptable solutions. 
here were some areas where Gentex was ahead in development, but other
areas where Gentex was behind, and neither Gentex nor Scott was unfairly
evaluated as a result.
    
Both offerors received a green/moderate risk rating under the applicable
subfactors.  This meant that the agency found that their proposals met the
minimum requirements of the performance specifications, but posed some
proposal risk, and demonstrated that their proposed designs would exhibit
acceptable technical performance.  Here, not only does the record show
that Scott took no exceptions to any of the threshold requirements,[14]
    Tr. at 396, but also, as illustrated by the examples discussed below, the
agency could reasonably conclude that Scott's solution satisfied the
threshold requirements in question.  These examples also illustrate that
the agency reasonably and even-handedly considered the particular designs,
and the nature of the particular specification requirements, in fairly
assessing the strengths and weaknesses and development risks of each
proposal with regard to each of these threshold requirements.
    
The first example concerns the valsalva requirements.  Gentex alleges that
Scott's valsalva approach does not comply with the performance
specification that requires the design to allow for one-handed valsalva
maneuvers.  Performance Specification P: 3.4.10.9.  This maneuver
equalizes pressure in the ear by pinching the nose, closing the mouth, and
forcefully exhaling until a *pop* is heard or felt in the ears.  Neither
offeror's PDRR prototype fully complied with this specification.  Agency
Report, vol. 12, Tab D.5.2, Subfactor Evaluation Summary (Scott), at 20;
vol. 13, Tab D.6.2, Subfactor Evaluation Summary (Gentex), at 22.  The
agency determined, based on its technical analysis of the proposals, that
both proposed solutions satisfied the valsalva requirement.  Tr. at
324-25; Agency Report, vol. 12, Tab D.5.2, Subfactor Evaluation Summary
(Scott), at 18, 20; vol. 13, Tab D.6.2, Subfactor Evaluation Summary
(Gentex), at 5.  Scott's proposed solution had not yet been tested because
it proposed design changes to the lens.  Tr. at 312.  However, consistent
with the developmental nature of this procurement, the RFP did not require
testing as conclusive proof of compliance.  To the extent that Gentex
alleges that Scott's *untested* solution was riskier than Gentex's, the
record shows that Scott was given a weakness relating to its valsalva
design changes, and Gentex was not.[15]  Proposal Analysis Report at 16. 
Based on our review, we find that the evaluation of this performance
specification was reasonable and evenhanded.     
    
Two other areas of alleged noncompliance concern requirements that the
JSAM integrate with integrated helmet and display sight systems (IHADDS)
and joint helmet mounted cuing systems (JHMCS).  Performance Specification
P: 3.4.9.4.2.  The IHADDS and JHMCS are visual targeting systems.  Here,
too, both offerors' PDRR prototypes performed poorly as a result of
*interface issues.*  Tr. at 435-36, 445; Agency Report, vol. 12, Tab
D.5.2, Subfactor Evaluation Summary (Scott), at 21; vol. 13, Tab D.6.2,
Subfactor Evaluation Summary (Gentex), at 22-23.  Both offerors proposed
design changes, which the agency found were capable of meeting the
requirements of the performance specifications.  Agency Report, vol. 12,
Tab D.5.2, Subfactor Evaluation Summary (Scott), at 4, 16; vol. 13, Tab
D.6.2, Subfactor Evaluation Summary (Gentex), at 19.     
    
With regard to the IHADDS, Gentex alleged that it is further along in the
testing of its solution than is Scott, so its proposal should have been
found superior.  However, the agency's representative testified that while
Gentex made this assertion during its oral presentation, this was not
supported by government data and Gentex's test data supporting this
assertion has not been provided to the agency.  Tr. at 463.  In any case,
the record shows that Scott was given a weakness relating to design
changes for the IHADDS, and Gentex was not.  Proposal Analysis Report at
16.  Thus, we think that this evaluation was reasonable and not unequal.
    
With regard to the JHMCS, Gentex asserts that it will have fewer
integration problems than Scott because the JHMCS was *specifically
designed to integrate with* the MBU‑20/P mask system, which is the
basis for Gentex's JSAM.[16]  However, as the agency notes, modifications
were necessary to permit JHMCS integration, even with the MBU-20/P.  Tr.
at 484.  Furthermore, Gentex was proposing a number of changes to the
MBU‑20/P, consolidating its three PDRR prototypes into two different
SDD variants, and drastically changing its fixed-wing variant, which
called into question the usefulness of the PDRR data and testing
concerning integration.  Tr. 475; Source Selection Decision at 9.  Thus,
in the agency's view, Gentex's approach was only a *design on paper.* 
Contracting Officer's Statement, Feb. 14, 2003, at 5.  Nonetheless, Scott
was again given a weakness relating to JHMCS design changes, and Gentex
was not, so the evaluation seems reasonable and not unequal.  Proposal
Analysis Report at 16.
    
Gentex also contends that Scott's proposed ground communication unit did
not comply with the performance specification requiring that the JSAM
provide for *intelligible voice communication.*  Performance Specification
P: 3.4.4.  In this regard, Gentex notes that Scott relies on existing
communication units that are currently fielded by the agency and it is
*unknown* whether these units comply with the requirements of the
performance specification, since the units have not been tested against
the JSAM requirements.  Tr. at 367.  Scott acknowledged this in a response
to an agency discussion question.  However, according to Gentex, Scott (in
that same response) also *assumed* non-compliance and proposed only to
undertake a cost-as-an-independent-variable trade study to *determine the
optimum approach.*  Protester's Hearing exh. 7C, Scott Response to Action
Item.  Gentex argues that this solution is insufficient to satisfy the
requirements of the performance specification.  In contrast, Gentex
argues, it offers a voicemitter,[17] plus additional electromagnetic
interference enhancements that exceed the requirements of the performance
specification.  Therefore, Gentex contends, it should have received a
strength while Scott should have received a deficiency for this
performance specification.
    
With regard to minimum compliance, we cannot say that the agency's
determination that Scott's proposal satisfied the agency requirements was
unreasonable, given the particular requirement and the RFP's evaluation
scheme.  First, since testing has not occurred, compliance is currently
*unknown.*  Also, Scott did not take exception to this requirement. 
Tr. at 400-01, 403-04.  Given the developmental nature of this procurement
and Scott's offer to perform a study to find an optimal solution to this
problem, we cannot conclude that Scott's proposal was non‑compliant
on its face.  See Raytheon Co., B-291449, Jan. 7, 2003, 2003 CPD P: __ at
8, 10-11.  Moreover, as indicated above, strict compliance with this
threshold requirement was not required, but the agency could assess
whether the proposed design would exhibit acceptable performance. 
Although it is *unknown* whether Scott's proposed solution would
ultimately comply with the stated intelligible voice communication
requirement, agency representatives testified that the existing
communication equipment proposed by Scott nevertheless exhibited
acceptable performance.  Tr. at 360, 371.
      
With regard to Gentex's communications enhancements, the agency did, in
fact, recognize Gentex's proposed *improve[ments]* in communication unit
performance, Source Selection Decision at 13, but considered them *slight*
with no significant bearing on the overall technical evaluation. 
Contracting Officer's Statement, Feb. 14, 2003, at 3.  The agency
reasonably considered that there were other more significant
specifications relating to JSAM performance, so *in the grand scheme of
things . . . we did not see [ground communications] as a significant
benefit to the government, which is what a strength would be annotated
as.*  Tr. at 374.  Moreover, we note that Gentex proposed that
consideration be given to eliminating some of these communication
enhancements after award of the contract.  See Protester's Hearing exh.
7H, Gentex Oral Presentation Transcript, at 4-5 (suggesting
cost-as-independent-variable tradeoff to remove electromagnetic
interference enhancements).  Although it appears that Gentex's
communications systems may be superior to Scott's, we cannot say, based
upon our review of the record, that the agency's failure to award a
strength was unreasonable or unfair, represented unequal treatment, or had
a prejudicial impact on the evaluation. 
    
Gentex also challenges the agency's evaluation of the vomitus
requirements.  The mask must be able to clear vomit without compromising
flight safety.  The specification includes an *objective requirement*
(desired, but not mandatory) to expel vomit without breaking the JSAM
chemical and biological seal.  Performance Specification P: 3.4.10.12.  
    
Gentex alleges that Scott's JSAM does not meet the minimum vomitus
requirements because Scott's procedures for expelling vomit are complex
and impractical.  We disagree.  Scott's procedures essentially require the
user to remove the mask, empty the vomit, and put the mask back on. 
Protester's Hearing exh. 10B, Scott Response to Evaluation Notice.  The
agency considered the complexity of the instructions and concluded that
they could be performed.  Tr. at 488-89.  We cannot find that the agency's
judgment was unreasonable in this respect.           
    
Gentex also alleges that it deserved a proposal strength because its JSAM
keeps intact the chemical and biological seal when expelling vomit, while
Scott's JSAM does not.  While it is true that under the RFP the agency
*reserved the right to give positive consideration for performance in
excess of threshold requirements, up to the objective requirements,* RFP
S: M, at 4, this was not required.  Here, the agency found that even
though Gentex's JSAM did not break the chemical and biological seal when
an aircrew member vomited, the vomit pooled around the neck, which was
very uncomfortable.  Therefore, the agency decided a strength was not
warranted.  Tr. at 90-91.  We do not find that the agency's determination
was unreasonable.
    
Gentex next alleges that Scott's proposal failed to comply with donning
time requirements.  In this regard, the JSAM must be able to be put on (or
*donned*) within a certain time.  Performance Specification P: 3.4.10.7. 
Here, again, neither offeror's PDRR prototype met the requirements.  Tr.
at 496, 498; Scott Oral Presentation Slide No. 150; Agency Report, vol.
13, Tab D.6.2, Subfactor Evaluation Summary (Gentex), at 23.  Scott
proposed a design improvement that permits easier and faster donning;
Scott also suggested training.  Tr. at 496-97; Protester's Hearing exh.
11C, Scott Response to Action Item.  Although Gentex alleges that Scott's
proposed solution is cumbersome and does not constitute an adequate
solution, the record shows that the agency considered these issues and
concluded that Scott's procedures were adequate and could be performed by
the aircrew within the allotted time.  Tr. at 498.  We cannot find that
this judgment was unreasonable. 
    
Gentex alleges that Scott's JSAM fails to meet the requirement to use
existing Department of Defense *tools and support/test equipment* because
Scott's JSAM could not be tested using SMARTMAN (a system agent testing
procedure).  Performance Specification P: 3.4.14.4.   While it is true
that Scott's PDRR prototype had difficulties forming a seal around the
SMARTMAN headform, Scott also proposed a solution of sealing with a bead
of silicone, which was approved by the company that performs the SMARTMAN
testing and successfully used during the PDRR phase.[18]  Tr. at 518-19. 
Scott also proposed to modify its JSAM to eliminate the problem
altogether.  Agency's Hearing exh. J7, Scott Response to Interim
Evaluation.  Nevertheless, even if Scott's solutions were insufficient,
the specification only requires the use of Department of Defense test
equipment *to the maximum extent practicable.*  Thus, we have no basis to
question this aspect of the evaluation. 
    
Gentex also challenges the agency's evaluation of the bayonets, which are
the hinges that attach the mask to the helmet.  The standard bayonets
proposed by Gentex were fixed in place, so repeated maintenance to
manually adjust the fit, as well as additional adjustments every time an
aircrew member needed to transition from a chemical and biological
environment to a non‑chemical and biological environment, were
required.[19]  However, its bayonets were items in current inventory and
were not assessed a weakness.  Contracting Officer's Statement, Jan. 30,
2003, at 16-17; Tr. at 534-36, 559.  In contrast, Scott offered adjustable
bayonets that allowed easy transition between environments, since manual
adjustment was not necessary, and required little or no maintenance once
installed.  Tr. at 535-36.  These advantages, in the agency's view,
qualified as a significant benefit to the government and thus warranted a
strength for Scott.  Source Selection Decision at 15.  Given the
advantages and disadvantages of the different designs, we think that the
agency's relative assessment of the offerors' bayonets was reasonable and
not unfair.[20] 
    
Gentex also questions the agency's evaluation of hypoxia risks.  Here,
too, both offerors proposed very different design approaches to access
oxygen during flight, and the agency found that Gentex's design posed a
greater risk of fatal hypoxia than Scott's.  As noted above, Gentex
proposed a [deleted] to access oxygen during flight (which provides
gravity-caused loss of consciousness protection), whereas Scott proposed
an *H-manifold.*  With Gentex's design, aircrew could become completely
cut off from air if they failed to manually switch from ground to flight
mode; with Scott, the oxygen source would only be diluted.  While both
could result in some level of hypoxia, the risk with Gentex was much more
severe, to such a degree that the agency believed that the JSAM might not
be qualified as *safe to fly,* which would require redesign and cause
schedule slip.  Source Selection Decision at 13-15.  Although Gentex
argues that its pre-flight test procedures and additional training could
reduce the risk, the agency considered these matters, in light of its
concerns about Gentex's basic approach, and concluded that they did not
eliminate the basis for this weakness.  Based on our review, the agency's
assessment of this weakness in Gentex's proposal was warranted.
    
As indicated, Gentex complains of the agency's comparative assessment of
strengths and weaknesses among the various performance specifications,
asserting that it amounted to unfair unequal treatment.  For example, it
complains that the agency gave it a weakness for proposing training to
eliminate hypoxia risk, but failed to give Scott a weakness for training
solutions to reduce donning time.  However, hypoxia risk and donning
procedures are very different requirements.  Hypoxia could result in
death; the donning issue would seem to entail lesser risks.  The fact that
the agency assessed a weakness for one and not the other, in our view,
does not constitute unequal treatment.  Similarly, Gentex complains that
it was given a weakness for untested battery solutions, whereas Scott's
untested donning procedures were not similarly criticized.  Again, we find
the requirements very different, as are the implications of failed
testing, and the assessment of a weakness for one and not the other was
reasonable and not unfair. 
    
Another issue concerning unequal evaluation is Gentex's argument that
although a weakness was found in its proposal because its proposed
batteries had not been tested, the agency did not similarly downgrade
Scott's proposal, even though its design was further behind in testing or
development than Gentex's in some of the specific areas illustrated
above.  However, as indicated above, Scott was in fact assigned weaknesses
in some of the cited examples--e.g., valsalva, IHADDS, and JHMCS. 
Moreover, Gentex was not penalized in several instances where its design
was further behind in development than Scott's.  For example, for almost
all of the fixed-wing features, Scott was further along in development,
since Gentex's fixed‑wing JSAM was considerately different from any
of its PDRR prototypes, yet Scott did not receive a feature-by-feature
advantage in the evaluation, nor Gentex a feature-by-feature inadequacy. 
Also, in some instances, Gentex was given a credit for PDRR testing of a
feature, even though it had never been tested with the SDD variants.  See,
e.g., Tr. at 546-47, 559 (standard bayonets proposed by Gentex were not
used on two of three PDRR prototypes, but were found to meet the
requirements of the performance specification).
    
Finally, Gentex alleges that certain of its initially evaluated strengths
were ignored or withdrawn in areas that include, for example, Gentex's
MBU-20P mask technology (see note 16, supra), battery system, bayonets,
communications enhancements, and alternative low risk mitigation
programs.  However, upon close examination of the instances cited by
Gentex, and in light of Gentex's proposal revisions and discussion
responses, the record indicates that the agency reasonably determined that
these Gentex proposal features did not exceed the performance
specifications or provide a benefit to the government, and, thus, did not
meet the definition of a strength.  See Contracting Officer's Statement,
Jan. 30, 2003, at 15-16, 18‑19. 
    
In sum, the agency performed an integrated assessment of performance
specifications, taking into account their relative importance and
considering the benefits and drawbacks of each offeror's approach.  We
find no evidence of unequal or unfair treatment in the record, but instead
find the agency's evaluation was reasonable and consistent with the RFP's
evaluation scheme.
    
Key Performance Parameter Evaluation
    
One of the performance specifications that is the subject of Gentex's
protest involves a key performance parameter--that is, a threshold
requirement that was critical to program performance and *not subject to
tradeoff*--which was evaluated under the key performance parameter
subfactor.  There, Gentex alleged that Scott's proposed faceseal fails to
comply with the requirement in Performance Specification P: 3.4.2 to
maintain seal integrity during the application of specified gravity
forces.  However, the cited specification does not apply to the faceseal,
but rather to the oral-nasal seal, which is a different feature of the
JSAM.[21]  Tr. at 569, 597.  The record provides no basis to find that
Scott's oral-nasal seal is not compliant with this key performance
parameter.  Thus, this aspect of Gentex's protest is meritless.   
    
Battery Pack Evaluation
    
One of the most important technical discriminators between the proposals
involved the significantly different battery packs proposed by the
offerors.  Each JSAM includes a battery pack, which powers the blower. 
The blower filters and provides clean air during a chemical and biological
attack.  The battery pack includes both the batteries and assembly. 
Gentex argues that the offerors' respective battery packs were
misevaluated.     
    
Scott ultimately proposed to supply two battery packs--a lithium manganese
dioxide (LiMnO2) battery pack and an alkaline battery pack for each JSAM
(both rotary and fixed-wing).  Either pack could be used with a JSAM, but
it was intended that the LiMnO2 pack would be used in cold weather
environments or when under chemical or biological threat, and the alkaline
battery pack would be used in warm weather climates or on training
missions.  Protester's Hearing exh. 3G, Scott Response to Evaluation
Notice, at 2.  The LiMnO2 pack proposed by Scott has already been tested
and approved for use by the armed services, and it is currently in
inventory.  Tr. at 89, 392‑93. 
    
Gentex proposed [deleted].
    
The agency gave Scott a strength for its battery approach because (1)
safety certification requirements for alkaline batteries are significantly
reduced inasmuch as alkaline battery chemistry is less volatile than other
battery approaches, (2) the non-hazardous nature of alkaline batteries
results in less costly disposal, and (3) Scott's proposed LiMnO2 pack had
already been certified and existed in current inventory.  Source Selection
Decision at 15.  Gentex, on the other hand, received a weakness because
its [deleted] battery pack would require a *higher level of scrutiny
during safety certification* (because of the more volatile chemistry of
LiMnO2 batteries), and would require a *significant amount of government
oversight and cost* to ensure the new battery assemblies could be
successfully developed and qualified.[22]  Id. at 12.  According to the
agency, which consulted with experts on battery issues during the course
of the evaluation, certification for LiMnO2 battery packs is *very
complex,* whereas alkaline battery certification does not require rigorous
testing and is merely a *paper study.*   Tr. at 237-38.   
    
Gentex challenges the agency's assessment of these strengths and
weaknesses for the battery packs, based upon its analysis of the
performance specifications.  It contends that Scott's alkaline batteries
do not meet certain threshold requirements and this renders Scott's
proposal technically unacceptable.  The referenced performance
specifications require that an offeror's battery approach be capable of
performing at certain temperature extremes, for certain durations, and
under certain conditions.  See Performance Specifications P:P: 3.4.11.1.1
(operating temperature), 3.4.14.1 (12-hour operating life), 3.4.11.2
(storage temperature), 3.4.14.8 (shelf life).  While it is clear that the
LiMnO2 pack proposed by Scott meets each of the performance specifications
at issue, the agency concedes that, at least with regard to some of these
specifications, alkaline batteries may not meet the performance
specifications.  See Tr. at 116-17.
    
The agency explains that it evaluated Scott's battery approach as
consisting of both the LiMnO2 and alkaline battery packs, since each JSAM
would be accompanied by both battery packs.  Since the LiMnO2 battery at
all times complies with the performance specifications, the agency
determined that Scott met the requirements of the performance
specifications.  It noted that if Scott had proposed only alkaline
batteries, then the agency might have concluded otherwise, but that was
not the case here.  The option to use the cheaper alkaline batteries in
warm temperatures or non‑threatening environments (e.g., for
training), at the sole discretion of the user, was found to be an
acceptable option to the agency.  Tr. at 126-28, 136-39, 143.
    
We find the agency's explanations reasonable and consistent with the RFP. 
As noted above, the RFP contemplated under the technical performance and
operational utility subfactor that the agency would evaluate *threshold
requirements which will not be met* and determine whether the offeror's
proposed design exhibited acceptable performance.  That is the type of
analysis the agency did here by considering that alkaline batteries may
not be able to meet all performance specifications, but finding that
Scott's battery approach would result in acceptable performance, given
that each JSAM was also accompanied by a fully compliant LiMnO2
battery.[23]  Tr. at 126-27, 136-37.  We find significant that Scott's
battery approach consisted of both battery packs, not just alkaline
battery packs.  Thus, the agency could reasonably conclude that the
battery approach met the requirements of the performance
specifications.[24]
    
We also find the agency reasonably gave Scott a strength for its battery
approach.  The fact that each JSAM was accompanied by a fully compliant
battery (LiMnO2), plus a cheaper alkaline battery to use as a cost savings
measure in non-threatening environments, could reasonably be found to be a
value added to the performance requirements--that is, a feature that
exceeds what was required under the RFP. 
    
The record also reasonably supports the assessment of a weakness for
Gentex's battery and blower system.  Gentex's proposed batteries were
based on a more hazardous chemistry requiring additional certification,
and its blower was a new design that would potentially cause *major
impacts* in meeting system flow and integration requirements.  Source
Selection Decision at 8-9, 12.  The agency's concerns relating to Gentex's
untested and unapproved LiMnO2 battery packs were validated by expert
consultants, Tr. at 235, 238, and were the topic of repeated discussions
with Gentex throughout the evaluation.  See, e.g., Protester's Hearing
exhs. 3D-F, Gentex Responses to Evaluation Notices.  Gentex was given
ample opportunity to revise its battery approach, and indeed did so. 
Protester's Hearing exh. 3C, Gentex Response to Evaluation Notice
(changing from lithium sulfur dioxide to LiMnO2 batteries in response to
safety concerns).  Based upon our review, the agency did not misevaluate
the offerors' battery approaches. 
    
Battery Pack Discussions
    
Gentex also alleges that the agency held unequal discussions concerning
the offerors' battery approaches.  Specifically, Gentex complains that the
agency issued an evaluation notice only to Scott (and not Gentex),
advising that Scott's MPLCC was *unaffordable* and asking if it had
considered alternative battery approaches.  Protester's Hearing exh. 4C,
Scott Response to Evaluation Notice. 
    
The scope and extent of discussions is a matter of contracting officer
judgment.  FAR S: 15.306(d)(3); Biospherics, Inc., B-285065, July 13,
2000, 2000 CPD P: 118 at 5.  While offerors must be provided with an equal
opportunity to revise proposals, discussions need not be identical;
rather, discussions are to be tailored to each offeror's proposal.  FAR S:
15.306(d)(3); WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD P:
68 at 5-6.  We find nothing improper about the scope or extent of
discussions here.
    
After the RFP was issued, on June 18, Gentex notified the agency that the
battery costs were *unrealistic* and, when used to calculate the MPLCC,
would *result in a seemingly unaffordable program.*  Agency's Hearing exh.
B20, Gentex E-Mail to Air Force (July 11, 2002).  It asked the agency to
review the O&S cost assumptions, which it suspected were erroneous.[25] 
Id.  The agency began to investigate this issue.  On July 19, offerors
submitted their initial proposals, and Gentex's O&S costs appeared low
(despite its earlier assertions that O&S costs would cost *billion[s]* and
were *unaffordable*), while Scott's appeared high.  Thus, it seemed to the
agency that Gentex had addressed its affordability concerns in its O&S
input, while Scott appeared unaware of these concerns.  Contracting
Officer's Statement, Feb. 14, 2003, at 9; Tr. at 627.  
    
In early August, the agency issued an evaluation notice to Scott, flagging
for Scott's attention the same issue that Gentex had raised in its e-mail
concerning the unaffordability of the MPLCC.  Tr. at 626-27.  It did not
issue a similar evaluation notice to Gentex because it believed that
Gentex already knew about the issue, since Gentex brought it to the
agency's attention.  Tr. at 627.  At the same time, it issued an action
item to Gentex, asking it to justify its battery pricing because *the
price of current inventory batteries is significantly higher.*  Agency's
Hearing exh. B7, Gentex Action Item (July 31, 2002), at 6.  Gentex had
further discussions with the agency concerning the *myriad of changes and
assumptions going into the O&S work sheet[s].*  Tr. at 54 (Testimony of
Gentex Vice President).  In addition, Gentex received a number of
evaluation notices specifically discussing the MPLCC concerns, as well as
safety and technical concerns the agency had with Gentex batteries.  See,
e.g., Protester's Hearing exh. 3C (agency seeking information concerning
battery safety, development, and impact on life cycle costs) and exh. 3D
(agency requesting information concerning impacts on cost, schedule, and
performance of battery consumption). 
    
On August 28, the agency modified its O&S assumptions, and notified both
offerors of the changed assumptions.  Agency's Hearing exhs. B24 and B25,
Agency E-Mails Re:  Battery Assumptions to Offerors (Aug. 28, 2002).  Both
Gentex and Scott changed their battery approaches after issuance of the
new assumptions and submitted FPRs before September 19.  These changed
approaches are also reflected in various evaluation notice responses that
preceded FPRs.  See, e.g., Protester's Hearing exh. 3C (Gentex Response to
Evaluation Notice) and exh. 4C (Scott Response to Evaluation Notice). 
    
Thus, the record demonstrates that both Gentex and Scott were afforded a
number of opportunities to address concerns that the agency had specific
to each offeror's battery approach, in response to which both revised
their approaches.  With regard to cost concerns, both offerors were
informed of the problems with the O&S assumptions.  Regardless of whether
the concerns were raised by Gentex (by e‑mail), or by the agency (by
evaluation notice to Scott), each offeror was provided the same
information and permitted an opportunity to respond.  We do not find it
unreasonable, or misleading, that the agency questioned Gentex concerning
its apparently low battery costs, as it appeared that Gentex's costs were
significantly lower than current inventory.  Agency's Hearing exh. B7,
Gentex Action Item (July 31, 2002).  Nor do we find it unreasonable that
the agency informed Scott, but not Gentex, that its O&S costs were
unaffordable, since the record indicates that Gentex was already aware of
this issue and had engaged in discussions with the agency in this regard. 
In sum, we find the discussions were meaningful and not misleading. 
    
Funding Profile 
    
Gentex next contends that the agency evaluated the proposals against an
unstated evaluation criterion--compliance with the agency's funding
profile.  It also alleges it was misled by the agency when it was advised
that *Gentex did not need to do anything with the funding profile
information* provided.  Declaration of Gentex Vice President, Dec. 20,
2002, at 3; Tr. at 58-59, 68.  Gentex argues that, under the
circumstances, it should not have been given a weakness under the
integrated management subfactor for failing to comply with this profile.
    
A solicitation must inform offerors of the basis for proposal evaluation,
and the evaluation must be based on the factors and significant subfactors
set forth in the solicitation.  FAR S: 15.304.  However, while agencies
are required to identify evaluation factors and significant subfactors,
they are not required to identify all areas of each factor or subfactor
which might be taken into account, provided that the unidentified areas
are reasonably related to or encompassed by the stated criteria.  MCA
Research Corp., B-278268.2, Apr. 10, 1998, 98-1 CPD P: 129 at 8.   
    
Here, section L of the RFP instructed offerors to take into account
budgetary or funding constraints.  RFP S: L, at 31, 34.  Also, section M
specifically provided that award would be made to the offeror that would
*best meet or exceed the requirements affordably.*  RFP S: M, at 2
(emphasis added).  The integrated management subfactor, under which Gentex
was assessed a weakness because of its failure to adhere to the funding
profile, required consideration of the program objectives, the primary one
of which includes developing the JSAMs *within cost and schedule
constraints.*  RFP S: M, at 5; RFP, Statement of Objectives P: 2.1. 
Funding profiles were provided in the RFP *for informational purposes* and
updated during subsequent written and oral discussions as new information
became available.
    
During one of these discussions, the agency informed offerors that funding
for fiscal year 2003 was being reduced by approximately $3 million.  When
asked by Gentex what it should do with this information, Gentex was told
that it *did not need to do anything* with it.  The agency made this
statement because Gentex's initial proposal was within acceptable
budgetary limits.[26]  Tr. at 28, 41, 46.  However, when Gentex submitted
its FPR, it increased its costs for fiscal year 2003 by several million
dollars, which was the very year in which Gentex was told that the
government had lost funding.  Tr. at 42, 46-47.  We do not think that the
agency was unreasonable for taking this into account.   
    
We also do not think, given the information provided, that Gentex could
reasonably ignore the funding profile, nor do we think that Gentex was
prejudicially misled.  The solicitation makes clear that affordability and
cost constraints were important.  The agency's repeated efforts to update
the funding information emphasized this importance.  Gentex's failure to
heed the information provided does not, in our view, render the agency's
evaluation improper.    
    
Integrated Management Subfactor
    
Gentex also protests the agency's evaluation of Scott under the integrated
management subfactor, where Scott was rated as blue/low risk. 
    
With regard to the evaluation of this subfactor, Gentex first contends
that Scott should not have received strengths for proposing variation in
quantity and warranty clauses, as these were the result of technical
transfusion.  Noting that these clauses were in Gentex's initial proposal
and not Scott's, Gentex complains that the agency's questions to
Scott--*[w]ould you consider putting a variation clause in your contract?*
and *[t]houghts on warranty*--constituted technical transfusion, disclosed
Gentex's technical solutions, revealed aspects of Gentex's price, and
unfairly favored Scott over Gentex.  Agency Report, vol. 16, Tab G.1.4,
Action Item (Aug. 6, 2002), at Nos. 18 and 20.  We do not agree.     
    
Technical transfusion connotes the disclosure of a *unique or ingenious*
technical solution from a competitor's proposal.  Simmonds Precision
Prods., Inc., B‑244559.3, June 23, 1993, 93-1 CPD P: 483 at 8; see
FAR S: 15.306(e) (prohibiting disclosure of *technical solution, including
unique technology, innovative and unique uses of commercial items or any
information that would compromise an offeror's intellectual property*). 
In Simmonds Precision Prods., Inc., supra, the protester contended that an
agency's question of whether the awardee had considered alternative
approaches to a deviations clause constituted technical transfusion.  We
found this did not constitute technical transfusion because the question
appeared neutral on its face, even though the awardee's response then
offered an approach similar to the protester, and did not reveal a unique
or ingenious solution of the protester's.  Simmonds Precision Products,
Inc., supra, at 7-8; see Applied Mathematics, Inc., B‑227930, Oct.
26, 1987, 87-2 CPD P: 395 at 3 (discussions concerning minor management
approaches and contract terms did not constitute technical transfusion).
    
Similarly here, we do not find the agency's questions improper.  The
questions did not impart to Scott any of Gentex's *unique* or *innovative*
ideas, share with Scott the terms of Gentex's clauses, or otherwise reveal
any of Gentex's cost or technical data.  Rather, the questions appear
neutral on their face and, as stated by the contracting officer, are
*typical[ly]* posed by the agency when dealing with fixed‑price
contracts or options.  Contracting Officer's Statement, Feb. 14, 2003,
at 8‑9. 
    
Furthermore, even though both offerors received strengths for offering
these clauses, this does not appear to have been determinative to award. 
Rather, the key discriminator under the integrated management subfactor
appears to have been Scott's far superior approach to management of
schedule risk, as well as a host of other proposal features.  In this
regard, Scott proposed to perform bi-weekly analysis of the critical path
schedule to quickly identify and manage schedule problems.  It also
offered to perform a number of developmental tests itself (rather than
require the government to perform these tests, as typically occurs), which
would further reduce contract performance time and improve the schedule. 
Scott also offered a total package fielding approach to ensure that the
customer received everything it needed to employ a single JSAM package,
which would reduce fielding time and *sustainment* costs.  Source
Selection Decision at 19-20.  These features rendered Scott's integrated
management approach superior to Gentex's, irrespective of the variation in
quantity and warranty clauses.
      
Gentex nevertheless contends that Scott's proposal should have been rated
a weakness under this subfactor because its redesign efforts posed
schedule risks.  The agency recognized, however, that both offerors posed
some risk of schedule slippage as a result of redesign efforts.  See
Source Selection Decision at 20-21.  However, the agency found Scott's
proposal to have only *isolated pockets* of risk, whereas Gentex's were
*numerous and systemic.*  Contracting Officer's Statement, Jan. 30, 2003,
at 23.  Given the more significant changes proposed by Gentex (including
blending three PDRR prototypes into two SDD variants, and modifying major
components), we cannot find these conclusions unreasonable.
    
Based upon our review, we think the record reasonably supports a blue/low
risk rating for Scott under the integrated management subfactor.
    
Cost Evaluation
    
Gentex alleges that the agency performed a flawed and unreasonable
analysis of SDD, production, and O&S costs.  As noted above, these costs
included both fixed‑price (production options) and cost
reimbursement (SDD costs) elements, which required different types of
analysis by the agency.
    
With regard to the SDD costs, when an agency evaluates a proposal
involving the award of a cost reimbursement contract, an offeror's
proposed estimated costs are not dispositive because, regardless of the
costs proposed, the government is bound to pay the contractor its actual
and allowable costs.  FAR S:S: 15.305(a)(1), 15.404‑1(d). 
Consequently, a cost realism analysis must be performed by the agency to
determine the extent to which an offeror's proposed costs represent what
the contract should cost, assuming reasonable economy and efficiency. 
TRW, Inc., B‑282162, B‑282162.2, June 9, 1999, 99-2 CPD P: 12
at 5‑6.  We review an agency's judgment to determine whether the
agency's cost realism evaluation was reasonably based.  Id. 
    
In performing its cost realism analysis of the proposed SDD costs, the
cost team first reviewed each of the offeror's SDD cost elements to ensure
that they conformed to Defense Contract Audit Agency (DCAA) rates.  Tr. at
727; Price Competition Memorandum at 5, 7.  In this regard, the DCAA
evaluated Scott's proposed direct costs and indirect rates (including
labor hours, material and equipment, general and administrative (G&A), and
overhead), and with one exception determined these costs and rates to be
proper.[27]  Agency Report, vol. 14, Tabs D.7.0 - D.8.5, DCAA Audit
Reports.  With regard to the offerors' proposed other direct costs, the
cost team also reviewed the offerors' supporting documentation and
compared the costs to outside commercial sources for reasonableness.  The
agency's price analyst testified that all proposed costs (except one minor
cost of approximately $25,000) were evaluated by the agency.  Tr. at 725.
    
The cost team also obtained the input of the technical team, which
reviewed the offerors' proposed SDD costs to ensure that they were
realistic based on each offeror's proposed approach.  Based on this
review, costs were added to each offeror's proposal for necessary
government qualification testing, as well as for items involving technical
risk where the agency reasonably anticipated there would be costs incurred
beyond those proposed.  The technical risk items, for which costs were
added to Scott's SDD costs, included costs to account for the agency's
belief that Scott had proposed an insufficient number of mask sizes, costs
to account for the agency's belief that a percentage of mask components
would be subject to decontamination hardening, and costs to account for
anticipated additional effort addressing Scott's blower electromagnetic
interference effort.  For Gentex, the technical risk items, for which
costs were added, were also for decontamination hardening and for a blower
electromagnetic interference effort, as well as for retooling or making a
new mold for lenses.  Declaration of Agency Price Analyst at 1‑3;
Price Competition Memorandum at 5, 8; Cost Evaluation Worksheets at 4-11. 
    
Thus, contrary to the protester's assertions, the agency did not abdicate
its duties to the DCAA.  Rather, the agency performed a detailed cost
realism analysis, and it utilized DCAA reports as merely one tool during
evaluation.  
    
Gentex also alleges that Tyco's debts and charges *presumably* were
included in Scott's SDD costs as part of the indirect and overhead rates,
which the agency failed to consider when performing its cost realism
analysis.  There is no evidence that unallowable costs were either
accepted by the agency or included in Scott's proposal.  In addition, the
agency consulted with the Defense Management Contract Agency, which
confirmed that Scott was not responsible for Tyco's debts, including
charges relating to alleged illegal or fraudulent activity.  Agency
Report, vol. 20, Tab G.4, DCMA Preaward Survey, at 7.  We find no reason
to question this aspect of the cost evaluation based on Gentex's
speculation.     
    
As noted, Gentex also challenges the price evaluation of Scott's
fixed-price production options, arguing that this price analysis was
inconclusive and based on insufficient data.  The manner and depth of an
agency's price analysis is a matter within the sound exercise of the
agency's discretion, and we will not disturb such an analysis unless it
lacks a reasonable basis.  Ventura Petroleum Servs., Inc., B-281278, Jan.
21, 1999, 99-1 CPD P: 15 at 5.
    
Here, the agency first compared the offerors' fixed prices with the
government estimate and with each other, as contemplated by the RFP.  RFP
S: M, at 8.  The results of the price analysis, at that point, were
*inconclusive.*  Contracting Officer's Statement, Jan. 30, 2003, at 11. 
The agency thus took a number of additional steps to verify the
reasonableness of the fixed prices using cost analysis techniques,
including determining that the proposed efforts were sufficient to satisfy
the RFP requirements, and reviewing each major cost element of the
proposed fixed prices, based upon the cost data submitted by the offerors,
for reasonableness and adherence to DCAA reviewed rates and factors. 
Price Competition Memorandum at 6, 8, Cost Evaluation Worksheets 3,
12-21.  Based on this review, the agency determined that both offerors'
fixed prices were fair and reasonable.  Although Gentex contends that the
agency should have better documented its review and sought additional
information to verify price reasonableness, we think the agency's analysis
was sufficiently documented and reasonable.[28]
    
With regard to O&S costs, offerors completed worksheets concerning the
five top cost drivers, including batteries and filters, based upon
government assumptions regarding JSAM usage.  RFP S: L, at 57.  These
assumptions were modified by subsequent e‑mail messages from the Air
Force to the offerors.  Agency's Hearing exhs. B24 and B25, Agency E-Mails
Re:  Battery Assumptions (Aug. 28, 2002).[29]
Gentex argues that the agency's evaluation of Scott's O&S costs was
flawed, in that the adjustments the agency made to Scott's O&S costs
essentially *double-credited* Scott for assumptions that Scott assertedly
had already taken into account in completing the O&S worksheets.  This
argument facially had some appeal because Scott submitted worksheets that
purported to be based on the agency's stated assumptions, and the agency's
adjustments to these worksheets appeared to incorporate those same
assumptions.  However, as noted by the agency, Scott's worksheets were
clearly erroneous not only because the quantities were incorrect and did
not accurately reflect Scott's proposal, but also because it was obvious
that Scott had failed to use the government's assumptions in preparing the
worksheets.  Thus, the agency recalculated Scott's O&S costs, consistent
with the assumptions provided to both offerors, in taking into account
these assumptions only once.  Tr. at 771-76, 780-81, 789; Declaration of
Agency Price Analyst at 2.  That is, the agency did not *double-credit*
Scott for these assumptions.  Tr. at 772-73.  Based on our review, the
agency's evaluation of O&S costs was reasonable and not erroneous.[30]   
    
Cost/Technical Tradeoff
    
Gentex finally contends that the agency failed to perform a proper
cost/technical tradeoff.  However, as concluded above, the agency
reasonably determined that Gentex was technically inferior and proposed a
higher cost.  On these facts, a cost/technical tradeoff was not
required.[31]
    
The protests are denied.
    
Anthony H. Gamboa
General Counsel
    
    
    

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

   [1] Scott Aviation is a division of Scott Technologies, Inc., which is
owned by Scott Technologies Holding Company, Inc., which, in turn, is
owned by Tyco International.
[2] The performance specifications included, among other things,
requirements for chemical and biological protection, gravity protection,
breathing, eye protection, integration and compatibility with existing
aircrew systems, communications integration, mission equipment
integration, and environmental requirements.  
[3] The key performance parameters involve nuclear, chemical, biological,
and gravity protection requirements.
[4] A blue rating indicates that the proposal *[e]xceeds specified minimum
performance or capability requirements in a way beneficial to the
Government.*  RFP S: M, at 4.
[5] A green rating indicates that the proposal *[m]eets specified minimum
performance or capability requirements necessary for acceptable contract
performance.*  RFP S: M, at 4.
[6] Satisfactory/confidence means, *[b]ased on the offeror's performance
record, some doubt exists that the offeror will successfully perform the
required effort.*  RFP S: M, at 7.
[7] Similarly, under program risk mitigation subfactor, both proposals
received a green/moderate rating, although the source selection decision
opined that Scott had a better understanding of the area where both
proposals were considered weak under this subfactor (i.e., anthropometry).
[8] Scott's proposal also was found to exceed the funding profile to a far
lesser degree.  Source Selection Decision at 21.
[9] In any case, the record does not evidence that Gentex was prejudiced
by its professed belief that it could not make a similar change in its
teaming structure.  While Gentex argues that it could have modified its
approach, apparently to have another team member be the prime contractor
which would assertedly have resulted in a significantly lower-priced
proposal, Gentex does not otherwise describe the approach where it would
no longer be the competing offeror or demonstrate the impact of such a
change.
[10] Gentex also challenges the agency's affirmative determination of
responsibility for Scott, contending that the agency failed to take into
account the integrity of Scott's parent company, Tyco.  According to
Gentex, Scott should not have been found responsible because Tyco
officials have been indicted for criminal wrongdoing and fraud.  However,
under the regulations applicable to this protest, our Office does not
review affirmative determinations of responsibility absent a showing of
bad faith or that definitive responsibility criteria in the RFP have not
been met.  4 C.F.R. S: 21.5(c) (2002).  Gentex has not made such a showing
here.  Our Office's revised bid protest regulations, which contemplate
consideration of whether a *contracting officer unreasonably failed to
consider available relevant information or otherwise violated statue or
regulation,* Bid Protest Regulations, 67 Fed. Reg. 79,833, 79,834-36
(2002) (to be codified at 4 C.F.R. S: 21.5(c)), apply only to protests
filed after January 1, 2003, and are thus not applicable to this protest.
[11] Gentex cites a number of cases where we affirmed an agency's decision
to either cancel a solicitation or contract, or disqualify an offeror, in
the face of disclosure that may have resulted in an unfair competition. 
See, e.g., Computer Tech. Assocs., Inc., B-288622, Nov. 7, 2001, 2001 CPD
P: 187 at 4-7; Information Ventures, Inc., B‑241441.4, B-241441.6,
Dec. 27, 1991, 91-2 CPD P: 583 at 5.  However, in those cases, our review
was limited to whether the agency's actions were reasonable; the cited
cases do not indicate that the Air Force was required to reject Scott's
proposal here because of Scott's inadvertent receipt of the slides. 
Computer Sci. Corp., supra.
[12] Moreover, each of the individuals on the Scott team, at the request
of our Office, provided detailed statements explaining the extent of their
review and use of the information and confirming that the slides had been
destroyed.  As the individuals explained, the information *did not make
sense,* was *unclear* or *confusing,* and  *seemed out of context.*  E.g.,
Scott Team Statements at 2-4, 6-7, 10.  The statements affirm that none of
the Scott team members used the information to develop Scott's FPR or
discussion responses, or for any other purpose.
[13] For example, both offerors were given identical *inadequacies* for
quality assurance.  Each offeror was informed:
Contractor has not adequately explained the quality measures that will be
taken to ensure overall system integrity will be met/maintained during
assembly and during final verification prior to system leaving the
contractor's facility.
Initial Evaluation Slides (Scott and Gentex).  Both offerors detailed
their quality control measures in responses to evaluation notices.  We do
not see, and Gentex has not convincingly explained, how Scott received an
unfair advantage as a result.  Similarly, both offerors were informed of
general inadequacies concerning leak paths on which subject the agency
followed up with specific questions directed to each offeror relating to
their very different designs; Scott's responses were specific to its own
design features, and did not appear to include modifications or changes
that would indicate it benefited from the release of information on the
Gentex evaluation slides.
[14] Gentex took exception to two of the performance requirements, one of
which was a high-priority threshold requirement, but later withdrew those
exceptions. 
[15] Gentex also notes that it provided *alternative* techniques to the
valsalva maneuver and suggests that these should have translated into a
proposal strength.  However, its multiple approaches were due, in part, to
the different features of its JSAM variants; neither solution appeared to
exceed the requirements of the performance specification.  See Gentex
Proposal, Oral Presentation Slide No. 190 (stating only that performance
requirement is *met*). 
[16] The MBU-20P is a currently fielded oxygen mask system, which Gentex
proposed to integrate with JSAM components, through additional design
changes, to ensure chemical, biological, and gravity protection.  Tr. at
77-78.  Gentex alleged that it deserved a strength for its MBU-20P mask
technology and experience.  However, as the agency recognized, Gentex
proposed a significant number of proposed design changes affecting this
mask technology, and the exhalation valves on the mask froze during cold
trials.  Contracting Officer's Statement, Jan. 30, 2003, at 16; Agency
Report, vol. 13, Tab D.6.2, Subfactor Evaluation Summary, at 8, 23; Source
Selection Decision at 9.  Thus, we cannot say the agency's failure to give
Gentex a strength in this area was unreasonable. 
[17] The voicemitter is an amplification system to permit voice
transmission and is one method to meet the requirements of the performance
specifications.  Tr. at 366.
[18] The agency discussed similarly sealing Gentex's mask to the headform
with duct tape, Tr. at 528, so it appears that offerors were not treated
unequally in this regard.
[19] While Gentex contends that these adjustments will no longer be
necessary because the MBU-20/P oxygen mask *will be implemented as the
standard oxygen mask on all aircraft,* Gentex Post-Hearing Comments at 92,
the agency specifically denied that the JSAMs will be standardized to the
MBU-20/P or that this would eliminate the requirements for adjusting
Gentex's bayonets.  Tr. at 554.     
[20] Gentex alleges that it should have also received a strength because
its standard bayonet was currently in inventory and needed no further
qualification.  It contrasts this with a strength that Scott received for
batteries that were currently in inventory.  However, as the agency
explained, bayonet testing or qualification was not separately required or
complex, as was the case with batteries, Tr. at 538, so having bayonets in
inventory was not regarded as the same sort of significant benefit to the
government as having the batteries in inventory.
[21] Moreover, according to the agency, in the unlikely event that the
oral-nasal seal breaks and further causes a break in the faceseal, the
risk of chemical or biological invasion is actually reduced under high
gravity forces, since the increased pressure inside the JSAM would push
air (and thus chemical and biological agents) away from the skin, rather
than allowing seepage in.  Tr. at 571.
[22] Gentex proposed a fallback approach to the 4-cell battery pack, but
the agency found that this did not have the performance capability
necessary to power the blower.  Source Selection Decision at 12.
[23] Gentex contends, for the first time in its post-hearing comments,
that the source selection authority was not informed of the alkaline
battery noncompliances.  We will not consider piecemeal protest arguments,
including this new protest issue, which should have been raised in earlier
protest filings in order to be timely.  Military Agency Servs. Pty., Ltd.,
B‑290414 et al., Aug. 1, 2002, 2002 CPD P: 130 at 4 n.4.  (Gentex
makes a similarly untimely argument with regard to the source selection
authority's knowledge of the results of the price evaluation in its
post-hearing comments.)          
[24] Gentex also argues that alkaline batteries are noncompliant with a
performance specification requiring that *[a]ny item of existing equipment
which is modified for JSAM shall have performance equal to or better that
the original equipment.*  Performance Specification P: 3.4.  According to
Gentex, because the batteries power the blower (i.e., an item of existing
equipment), alkaline batteries, due to lesser performance capabilities,
may compromise the blower's performance in certain conditions.  It is not
clear that this performance specification would apply to this situation,
since batteries do not appear to constitute a *modifi[cation]* to the
blower.  Regardless, however, Scott's proposed LiMnO2 battery pack is
fully compliant, so this performance specification would be met.
Gentex also notes that the blower is necessary to provide chemical and
biological protection since it filters hazardous air in a threatening
environment.  If blower performance is compromised by alkaline battery
usage, Gentex argues, then the JSAM fails to meet the key performance
parameter to provide adequate chemical and biological protection. 
Performance Specification P: 3.4.1.  Here, too, Scott's battery approach
was compliant, since each JSAM is accompanied by a LiMnO2 battery pack
that fully meets the requirements of the performance specifications.
[25] The O&S costs are one element of the MPLCC.  Using O&S worksheets,
offerors were required to calculate O&S costs (e.g., consumables and
support equipment) based on certain government-provided assumptions. 
Battery costs were included in these O&S costs because they are
consumables.  Battery costs were also part of the fixed prices for the
production options, inasmuch as battery packs are included with the JSAM
on delivery.  Tr. at 621.        
[26] Gentex was further told, however, that it should *propose according
to your best business solution.*  Tr. at 201.  
    
[27] DCAA recommended that Scott's G&A rate be lowered, which was accepted
by the Air Force.  Price Competition Memorandum at 5.
[28] Gentex also protests that Scott's fixed-price production prices are
unrealistic because they are approximately 35 percent below the government
estimate.  However, this argument provides no basis to challenge the award
because this RFP had no requirement that a price realism analysis be
performed to determine whether the fixed prices were too low.  See CSE
Constr., B-291268.2, Dec. 16, 2002, 2002 CPD P: 207 at 4.
[29] Gentex protests that this amendment of the assumptions was not
formally incorporated into an RFP amendment.  However, both offerors
understood that the revised assumptions applied, and Gentex has not shown
that it was harmed as a result.
[30] Gentex also contends that the agency should have increased Scott's
O&S costs due to its battery approach.  However, the agency reasonably
determined that additional costs were not required, since Scott's LiMnO2
batteries were in current inventory, and its alkaline batteries would
result in cheaper qualification and testing.  Contracting Officer's
Statement, Jan. 30, 2003, at 12-14.
[31] Gentex also contends that an impermissible conflict of interest
exists because the agency hired a SAIC employee as a non-governmental
advisor for this procurement.  However, this individual was removed as an
advisor prior to the issuance of the RFP, and he never participated in any
of the SDD source selection activities.  The agency, therefore, eliminated
any potential conflict of interest.
Gentex also protested various process errors concerning oral
presentations, discussions, and evaluation notice responses.  However, it
abandoned these grounds of protest when it failed to respond to the
agency's report addressing these protest issues.  See Analex Space Sys.,
Inc.; PAI Corp., B-259024, B-259024.2, Feb. 21, 1995, 95-1 CPD P: 106 at
8.