TITLE: Colmek Systems Engineering, B-291931.2, July 9, 2003
BNUMBER: B-291931.2
DATE: July 9, 2003
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Colmek Systems Engineering, B-291931.2, July 9, 2003
Decision
Matter of: Colmek Systems Engineering
File: B-291931.2
Date: July 9, 2003
Craig G. Adamson, Esq., and Craig A. Hoggan, Esq., Dart, Adamson &
Donavan, for the protester.
Richard Dale, II, Esq., Department of the Navy, for the agency.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest that contracting agency improperly evaluated protester's proposal
is denied where the record shows that the evaluation was reasonable and
consistent with the solicitation's stated evaluation criteria, which
logically encompassed the area for which the protester's proposal was
downgraded.
DECISION
Colmek Systems Engineering, Inc. protests the award of a contract to RD
Instruments (RDI) under request for proposals (RFP) No. N00174-02-R-0067,
issued by the Department of the Navy for the production, delivery, and
support of the MK 15 MOD 0 Underwater Imaging System for use by the Navy's
explosive ordnance disposal forces. Colmek argues that the Navy
improperly evaluated its proposal and improperly made award on the basis
of initial proposals, without conducting discussions.
We deny the protest.
To eliminate hazardous ordnance that jeopardizes military operations, the
Navy's explosive ordnance disposal forces must search, detect, locate, and
classify mines and other explosive threats during explosive ordnance
disposal mine counter-measure operations. The Navy anticipates that the
integration of navigation and sonar tools in the underwater imaging system
(UIS) it is procuring here will enhance warfighter effectiveness by
allowing a single diver to operate the tools simultaneously and will
greatly enhance underwater area searches and location capabilities. The
UIS consists of a diver-held unit, two navigation beacons for long
baseline navigation, a battery and battery charger, ancillary equipment,
and supporting documentation. RFP Statement of Work (SOW) P: 1.0.
The solicitation anticipated the award of an indefinite-delivery,
indefinite-quantity contract with fixed-price and cost-plus-fixed-fee
orders to perform various services over a 10-year period. Since this is
the initial production contract for the UIS, the contractor is first
required to conduct a pre-production evaluation of the build-to-print
technical data package (TDP) to resolve any TDP deficiencies that would
make it impossible to produce, fabricate, or assemble the contract items
in the quantities specified in exact accordance with the TDP, and to
incorporate any necessary changes prior to production. SOW P: 3.1. After
this process has been completed, the contractor is required to fabricate
four first article test units. Pending first article test acceptance, and
if funded, the contractor is required to fabricate, build, assemble, and
test up to 222 UIS units performing all inspections, calibration
procedures, checkout procedures, and packaging necessary for delivery to
the government. Id. P: 3.2. Finally, the contractor is required to
provide various services in support of the UIS units over the life of the
contract. Id. P:P: 3.3, 3.4.
Award was to be made to the firm whose offer represented the best overall
value to the government following a two-phase evaluation process. Under
the first phase, the Navy planned to consider, on a pass/fail basis,
whether a submission included the offer/proposal, technical approach
information, offeror capability information, a small business
subcontracting plan (if applicable), and cost and price information. Only
those submissions receiving a *pass* rating could be considered for
further evaluation. Under the second phase, the Navy planned to evaluate
offers against four factors: technical approach, offeror capability,
small business subcontracting plan (if applicable)[1], and cost/price.
The technical approach factor was more important than the offeror
capability factor, which was significantly more important than
cost/price. RFP S: M.I. The technical approach factor was comprised of
five subfactors worth a total of 100 points: summary, pre-production and
production evaluation, production plan, supply support services, and
engineering services. These subfactors are listed in descending order of
importance except for the least important summary subfactor. Id. The
offeror capability factor was comprised of two subfactors, relevant
experience and past performance; the former was more important than the
latter. Id.
Source selection was to be determined using a specified methodology. The
first step was to determine the *promised value* which, in this
procurement, was the total point score awarded under the technical
approach factor. RFP S: M.II.(1). The second step was to assign a level
of confidence assessment rating (LOCAR) to each offeror's capability
(including relevant experience and past performance) using a scale
indicating the degree of confidence the Navy had in the firm's ability to
succeed.[2] RFP S: M.II.(2). The third step was to determine the Navy's
level of confidence and expected value associated with each offeror. The
level of confidence was a subjective rating that would reflect the degree
to which the Navy believed an offeror was likely to keep the promises it
made in its offer. The expected value was to be ascertained by
multiplying the promised value by the LOCAR and was to be expressed in
terms of a percentage. RFP S: M.II.(3). To determine which offeror
represented the best value to the government, the Navy was to make a
series of paired comparisons among the offerors, trading off the
differences in the non-price factors against the difference in most
probable price between the offerors. If the offeror with the higher
expected value had the higher price, the Navy had to decide whether the
margin of higher expected value (that is, the greater prospects for
success) was worth the higher price. RFP S: M.II.
The solicitation stated that the Navy planned to award the contract on the
basis of initial proposals, without conducting discussions. RFP S: M.I.
As a result, offerors were told that their proposals should contain their
best terms from a technical, cost/price, relevant experience and past
performance standpoint. If considered necessary by the contracting
officer, however, discussions would be conducted only with those offerors
determined to have a reasonable chance for award. Id.
RDI and Colmek were the only firms that submitted offers. The Navy's
evaluation panel conducted an evaluation of both firms' proposals, with
the following results:
+------------------------------------------------------------------------+
| |Colmek |RDI |
|-----------------------------------------------+------------+-----------|
|Technical Approach |74.0 |97.5 |
|Summary (10 points) | 4 | 9.88|
|Pre-production and Production Evaluation (30 | 19 | 29.75 |
|points) | 19.5| 23.25 |
|Production Plan (25 points) | 17.5| 19.88 |
|Supply Support (20 points) | 14 | 14.75 |
|Engineering Services (15 points) | | |
|-----------------------------------------------+------------+-----------|
|LOCAR Determination/Offeror Capability |0.81 |0.95 |
|Relevant Experience |Satisfactory|Excellent |
|Past Performance |Excellent |Good |
+------------------------------------------------------------------------+
+------------------------------------------------------------------------+
| |Promised Value |X |LOCAR |Expected Value |Evaluated Cost/Price|
|--------+----------------+--+------+---------------+--------------------|
|Colmek |74.00 |X |.81 |60 |$6,743,935 |
|--------+----------------+--+------+---------------+--------------------|
|RDI |97.50 |X |.95 |93 |$8,613,493 |
+------------------------------------------------------------------------+
The narrative report from the technical evaluation panel (TEP) summarized
the bases for Colmek's technical approach factor scores. Under the
summary subfactor, the Navy found that Colmek had not sufficiently
demonstrated that the requirements had been analyzed, evaluated, and
synthesized into approaches, plans, and techniques that should result in
the delivery of systems and services that address all requirements and
will be beneficial to the overall program. The Navy stated that its most
significant concern was Colmek's ability to build acoustic transducers,
and that it was also concerned that Colmek failed to clearly convey its
understanding of magnetic signature requirements. The evaluators could
not determine how the firm could produce and support an acoustic aspect of
the system, and found that Colmek's ability to evaluate the TDP during the
pre-production evaluation and over the life of the contract was a
significant weakness. Technical Evaluation Chairperson's Final Report at
4. Under the pre-production evaluation subfactor, which required the
offeror to describe its approach for conducting a TDP review, including
the labor hours required to conduct the pre-production evaluation, the
Navy found that, among other things, the level of effort outlined in
Colmek's proposal did not appear to be sufficient and Colmek's ability to
conduct the pre-production evaluation relevant to acoustic and magnetic
signature areas was significantly lacking the categories of personnel to
properly certify the adequacy and accuracy of the TDP. Id. at 5. Under
the production plan subfactor, the Navy found that Colmek's failure to
discuss how it intended to assemble acoustic transducers and meet the
requirements was a minor weakness. Id. With respect to Colmek's relevant
experience, the agency noted that Colmek had *good experience in
electronics but [had] satisfactory or poor experience with acoustic
transponders, underwater housings, diver-held equipment and low magnetic
signature requirements.* Id. at 6.
In contrast, the Navy found no weaknesses in RDI's proposal under the
technical approach factor save for a minor weakness under one subfactor;
the Navy concluded that RDI's approaches, plans, and techniques were
*extremely* or *significantly* beneficial to the overall program. Id. at
7-8. The evaluation panel also found that RDI had more than 20 years of
relevant experience and had demonstrated more than 10 years of experience
in UIS functional areas of navigation, sonar transducers, electronic
systems, underwater housings, and diver-held equipment. Id. at 8.
The source selection authority (SSA) reviewed these findings and noted
that RDI offered 33 more points of expected value, which meant, according
to the SSA, that the Navy was *33 percent more confident* that RDI would
perform successfully than Colmek. Business Clearance Memorandum at 17.
She also noted that the price difference between the two offerors was
$1,869,558, or 21.7 percent. She considered the effort that was to be
performed and found that, while the UIS was a build-to-print item, many
aspects of the procurement were very complex and required technical
expertise and understanding. The SSA explained that RDI's technical
proposal contained very few weaknesses and many strengths, resulting in
its 97.5 percent promised value. On the other hand, Colmek's technical
proposal had several weaknesses and very few strengths, resulting in its
74 percent promised value. She also pointed out that RDI had extensive
relevant experience in manufacturing hand-held systems and that Colmek had
no experience in manufacturing similar systems. The SSA concluded that
paying an additional $56,653.27 per expected value point over a 10-year
period was worth the additional technical and experience capability the
Navy would obtain from RDI, and that RDI's offer represented the best
value to the government. Id. Award was made to RDI on January 23, 2003.
On February 1, Colmek filed an agency-level protest challenging the award
to RDI. After the Navy denied its agency-level protest, Colmek filed this
protest in our Office. Colmek's protest enumerated 30 separate challenges
to the award, each of which was fully addressed by the Navy in its agency
report. Colmek's comments on the agency report were limited to two
issues.[3] The protester argues that the Navy improperly downgraded its
proposal for its failure to address transducer subassemblies, and that the
Navy improperly awarded the contract based upon initial proposals, without
conducting discussions.
Colmek first contends that the Navy unreasonably downgraded its proposal
for its failure to address the assembly of transducers, arguing that the
solicitation did not require such information.
In reviewing protests against an agency's evaluation of proposals, we
examine the record to determine whether the agency's judgment was
reasonable and consistent with stated evaluation criteria and applicable
statutes and regulations. Lear Siegler Servs., Inc., B-280834,
B-280834.2, Nov. 25, 1998, 98-2 CPD P: 136 at 7. Solicitations must
describe the factors and significant subfactors that will be used to
evaluate the proposals and their relative importance, and the evaluation
of proposals must be based solely on the factors and subfactors contained
in the solicitation. Federal Acquisition Regulation (FAR) S:S:
15.203(a)(4), 15.303(b)(4). In performing the evaluation, however, the
agency may take into account specific, albeit not expressly identified,
matters that are logically encompassed by the stated evaluation criteria.
Cobra Tech., Inc., B-272041, B-272041.2, Aug. 20, 1996, 96-2 CPD P: 73 at
3.
The Navy explains that the UIS allows divers to precisely navigate
underwater, scan underwater sonar images and view an underwater map of the
route in and out of mine fields. The UIS uses navigational beacons to
receive and transmit acoustic signals that the diver-held unit (DHU)
interprets to precisely display to the divers their location in the
minefield. Transducers--which provide digital signals that are
interpreted by processors and output as visual display information to the
divers on the DHU--are component parts in the DHU and the floating
beacons. The UIS does not operate without functioning transducers.
Agency Supplemental Report at 1-2. The TEP chairperson explains that UIS
assembly requires the encapsulation of underwater assemblies and testing
requires the use of calibrated acoustic measurement facilities. The UIS
has four transducers that require the potential contractor to follow
assembly procedures delineated in the TDP. For example, the transducer on
the master beacon, which contains 33 separate components, requires the
contractor to fabricate the assembly from piece parts purchased from
various sources and electrically test the assembly in multiple stages in
accordance with a TDP drawing. Once the transducer is assembled and
electrically tested, it is mounted onto a beacon assembly and acoustically
tested in accordance with another drawing. This test requires the
manufacturer to have test facilities and equipment to measure acoustic
source level output. TEP Chairperson's Declaration P: 3.
The Navy argues that the solicitation instructions and evaluation factors
logically encompassed a discussion of transducer assembly. Our review of
the solicitation leads us to agree with the Navy.
The SOW described the program requirements in their entirety. As relevant
here, during the pre-production evaluation, the contractor is required to
resolve any TDP deficiencies that would make it impossible to *produce,
fabricate, or assemble the contract items in the quantities specified in
exact accordance with the TDP.* SOW
P: 3.1. After the pre-production evaluation, the contractor is to embark
upon the production fabrication process, which requires it to *fabricate,
build, assemble, and test each UIS performing all inspections, calibration
procedures, checkout procedures, and packaging necessary to deliver
production UISs to the Government.* Id. P: 3.2.
Section L of the solicitation described the information offerors were
required to include in their proposals, and section M of the solicitation
described how the Navy planned to evaluate proposals under each of the
technical approach subfactors. With respect to the summary subfactor, the
RFP stated, *The proposal summary shall provide a concise statement of the
Offeror's understanding of the overall concept of the work being proposed
and provide a comprehensive plan for addressing the program
requirements.* RFP S: L at 90. The Navy planned to evaluate the
offeror's *understanding of the overall concept of the work being proposed
and the comprehensive plan for addressing the program requirements. RFP
S: M at 96. With respect to the production plan subfactor, the RFP
stated, *The Offeror shall describe in detail their plan for manufacturing
the required quantity of production units,* and the plan shall *address
all actions that are necessary to produce, test, and deliver acceptable
systems.* RFP S: L at 90. The Navy planned to evaluate the offeror's
*plan for manufacturing the required quantity of production units* and the
offeror's *proposed actions that are necessary to produce, test, and
delivery acceptable systems.* Id.
In view of the fact that the program requirements included the assembly of
the UIS units, the fact that section L of the RFP required offerors to
provide a comprehensive plan for addressing the program requirements and
manufacturing the units and section M of the RFP informed offerors that
the Navy planned to evaluate these plans, and the fact that the assembly
of transducers is an important aspect of the program requirements, we find
that the Navy's consideration of offerors' plans to assemble the
transducers was logically encompassed by the solicitation's evaluation
criteria and the agency's downgrading of Colmek's proposal for failure to
discuss these matters was proper.[4] Cobra Tech., Inc., supra.
Colmek also argues that it was unreasonable for the contracting officer to
award the contract based on initial proposals, without conducting
discussions. Colmek states that only two proposals were submitted in
response to the solicitation, and that there was a wide price variation
between these proposals. The firm asserts that the major reason for the
price discrepancy was its level of effort estimate for the pre-production
evaluation, which the Navy believed to be insufficient, and argues that
this concern, which led the Navy to conclude that it did not understand
the requirements, could have been clarified during discussions. Colmek
also argues that the Navy's concern about its plans to assemble the
transducers could have been clarified during discussions.
There generally is no obligation that a contracting agency conduct
discussions where, as here, the RFP specifically instructs offerors of the
agency's intent to award a contract on the basis of initial proposals.
FAR S: 15.306(a)(3); Robotic Sys. Tech., B-278195.2, Jan. 7, 1998, 98-1
CPD P: 20 at 11. The contracting officer's discretion in deciding not to
hold discussions is quite broad. Our Office will review the exercise of
such discretion only to ensure that it was reasonably based on the
particular circumstances of the procurement. Robotic Sys. Tech., supra.
We find no circumstances here that call into question the agency's
decision not to engage in discussions.
The protest is denied.
Anthony H. Gamboa
General Counsel
------------------------
[1] The small business subcontracting plan factor was not applicable here
because both firms submitting offers were small businesses.
[2] The scale was 0 to .4 for *less confident*; .6 to .94 for *more
confident*; *.95 to 1.0 for *most confident*; and .5 for neutral. RFP S:
M.II.(2).
[3] Since Colmek did not pursue the numerous other allegations it made in
its protest, we consider them to be abandoned and do not address them
further. Atlantic Coast Contracting, Inc., B-291893, Apr. 24, 2003, 2003
CPD P: 87 at 4 n.3.
[4] Colmek has not rebutted the Navy's position concerning the importance
of the transducers and their assembly. In addition, the Navy states that
the UIS must also comply with a certain military specification as a safety
measure to operate near magnetically influenced mines--otherwise, the UIS
will detonate magnetically influenced mines, most likely killing or
seriously injuring the diver(s). The Navy points out that Colmek's
proposal was also downgraded due to its insufficient approach to the
subject of magnetic signatures, and Colmek has not rebutted the Navy's
position regarding this aspect of its evaluation.