TITLE:  Science & Management Resources, Inc., B-291803, March 17, 2003
BNUMBER:  B-291803
DATE:  March 17, 2003
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Science & Management Resources, Inc., B-291803, March 17, 2003

   Decision
    
    
Matter of:   Science & Management Resources, Inc.
    
File:            B-291803
    
Date:              March 17, 2003
    
Larry McKee for the protester.
Michael L. Sterling, Esq., Vandeventer Black, for The Bionetics
Corporation,
an intervenor.
John C. Gatlin, Esq., and Milton D. Watkins, Esq., Department of the Air
Force,
for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel,
GAO, participated in the preparation of the decision.
DIGEST
    
Protest that agency misevaluated awardee's past performance and price is
denied where record shows that challenge to past performance evaluation is
based on misunderstanding of the facts, and that price evaluation was
legally adequate in context of a fixed-price contract.
DECISION
    
Science & Management Resources, Inc. (SMR) protests the award of a
contract to The Bionetics Corporation under request for proposals (RFP)
No. F34650-02-R-0035, issued by the Department of the Air Force for
precision measurement equipment laboratory (PMEL) services at Tinker Air
Force Base.  SMR maintains that the agency misevaluated Bionetics's
proposal. 

   We deny the protest.
    
The RFP sought fixed-price offers for a base year, with four 1-year
options.  Award was to be made to the firm submitting the proposal deemed
to offer the best overall value to the government.  Proposals first would
be evaluated for technical acceptability and, among the technically
acceptable proposals, the agency would make a *best value* selection based
on an integrated assessment of past performance (rated as exceptional/high
confidence, very good/significant confidence, satisfactory/confidence,
marginal/confidence, unsatisfactory/no confidence, or neutral/unknown
confidence) and price, with past performance deemed more important than
price. 
    
After receiving and evaluating proposals, the agency rejected one as
technically unacceptable and assigned SMR's and Bionetics's proposals a
performance confidence rating of very good/significant.  Agency Report
(AR), exh. 6, at 2-3.  Since both proposals had received the same
performance/confidence rating, the agency selected Bionetics as the
awardee based on its lower price ($12,296,706.67, versus SMR's price of
$13,603,648.50).  Id. at 3.
    
SMR asserts that the agency misevaluated Bionetics's proposal in the area
of past performance.  According to the protester, Bionetics was a
subcontractor under a prior PMEL contract, and had its subcontract
terminated by the prime contractor.  SMR maintains that the agency was
unaware of this termination when it performed its evaluation, and that
Bionetics's proposal would have received a lower rating had the agency
known all of the facts. 
    
The evaluation of past performance is a matter within the discretion of
the contracting agency, which our Office will review only to ensure that
it was reasonable and consistent with the stated evaluation criteria and
with procurement statutes and regulations.  Sterling Servs., Inc.,
B-286326, Dec. 11, 2000, 2000 CPD       P: 208 at 2-3. 
    
The premise of SMR's allegation--that the agency was unaware of the
termination--is incorrect.  The record shows that the agency's evaluators
were in fact aware of the termination, and that the agency went to some
length to obtain information relating to it, as evidenced by a November 5,
2002 memorandum prepared by the agency's contract specialist.  The agency
conducted two conference calls with representatives of Bionetics relating
to the subject, and also contacted the cognizant contracting agency
personnel.  As a result of these contacts, the agency concluded that the
termination occurred principally as a result of a disagreement between the
prime contractor and Bionetics as to whether Bionetics was entitled to an
adjustment in its compensation under the subcontract as a result of an
unanticipated workload increase.  Memorandum, Nov. 5, 2002, at 1-2.  The
agency concluded that, because Bionetics had been the incumbent contractor
for that requirement for 15 years prior to performing as a
subcontractor,[1] and had performed without incident, and because
performance under the other contract did not improve after Bionetics's
subcontract was terminated, the termination did not warrant penalizing
Bionetics in its past performance rating. 
    
The agency based Bionetics's past performance rating on other materials. 
Specifically, the agency obtained eight past performance questionnaire
responses and six Contractor Performance Assessment Reporting System
(CPARS) reports, and found that Bionetics's performance had been rated
very good to exceptional in the majority of cases.  AR, exh. 7, at 5-6. 
On the basis of this information, as well as the results of its inquiries
into the circumstances surrounding the subcontract termination, the agency
determined that Bionetics's past performance warranted a rating at the
second highest level, very good/significant.  We see nothing unreasonable
in the agency's actions or in its conclusions leading to its rating of
Bionetics's proposal. 
    
SMR also contends that the agency improperly failed to evaluate
Bionetics's price for realism.  According to the protester, had the agency
done so, it would have determined that the price was unrealistically low
in light of the RFP's requirements. 
In support of its position, the protester asserts that, as the incumbent
for the requirement, it knows that the contract cannot be performed for
less than its own proposed price.
    
The RFP provided that the agency would consider the realism of proposed
prices in the context of assessing offerors' technical understanding of
the requirement.  RFP at 63.  Assessing realism in this limited sense is
appropriate in a fixed-price setting, since the risk of possible cost
escalation during contract performance rests with the contractor, not the
government; there is no reason to assess the potential likely cost of
contract performance, since the government's liability is limited to the
value of the fixed-price contract.  PHP Healthcare Corp.; Sisters of
Charity of the Incarnate Word, B-251799 et al., May 4, 1993, 93-1 CPD P:
366 at 5.  The nature and extent of such an analysis are matters within
the agency's discretion, which we will review for reasonableness and
consistency with applicable laws and regulations.  See Cardinal
Scientific, Inc., B-270309, Feb. 12, 1996, 96‑1 CPD P: 70 at 4.

   The agency evaluated Bionetics's price and determined, on the basis of
adequate competition and comparison to the government estimate, that it
was not only reasonable, but also *complete.*  AR, exh. 11, at 6.  The
agency further specifically determined, based on its technical review,
that Bionetics's proposal was *realistic for the work to be performed.* 
AR, exh. 11, at 6.  Nothing in SMR's protest or elsewhere in the record
brings this conclusion into question.  The fact that Bionetics's price was
lower than SMR's did not provide a basis for rejecting or downgrading
Bionetics's proposal; there was no requirement that the agency base the
price evaluation on such a comparison. 
    
SMR asserts that the agency improperly failed to conduct the acquisition
as a small business set-aside, since, according to SMR, there were at
least two small businesses capable of performing the requirement. 
    
Under our Bid Protest Regulations, protests of alleged improprieties on
the face of a solicitation must be filed no later than the closing time
for receipt of initial proposals.  4 C.F.R. S: 21.2(a)(1) (2003).  SMR
states that, after becoming aware of the sources-sought synopsis, it
requested that the agency set the requirement aside for exclusive small
business participation.  The agency declined to do this, maintaining that
there was inadequate small business interest, and thereafter issued the
RFP on an unrestricted basis.  Since the unrestricted nature of the
acquisition was evident from a reading of the solicitation, SMR was
required to raise this basis for protest no later than the deadline for
submitting proposals.  SMR maintains that its assertion
is timely because it did not know that the agency had received an
expression of interest from another small businesses until just prior to
the filing of its protest.  However, SMR states that this allegation was
based on a discussion with another small business concern, and it is not
apparent (SMR does not explain) why it could not have investigated in this
manner prior to the closing time, as soon as it became aware that the
requirement would not be set aside.  Because SMR failed to do so, this
aspect of its protest is untimely and will not be considered.
    
The protest is denied.
Anthony H. Gamboa
General Counsel
    
    
    

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   [1] The requirement had been performed by Bionetics as a large business,
and the subsequent prime contractor received award pursuant to a small
business set‑aside procurement, under which Bionetics was ineligible
to compete.