TITLE:  Specific Systems, Ltd., B-292087.3, February 20, 2004
BNUMBER:  B-292087.3
DATE:  February 20, 2004
**********************************************************************
Specific Systems, Ltd., B-292087.3, February 20, 2004

   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:   Specific Systems, Ltd.
    
File:            B-292087.3
    
Date:              February 20, 2004
    
Richard J. Vacura, Esq., Holly Emrick Svetz, Esq., Peter C. Sales, Esq.,
and John R. Zitko, Esq. Morrison & Foerster, for the protester.
Clarence D. Long, III, Esq., and Paul S. Davison, 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.  Agency reasonably concluded that awardee*s proposal was technically
acceptable based on evaluation of 25 of more than 100 technical
requirements, where solicitation did not require evaluation of each and
every requirement and only required offerors to respond to the 25
requirements, and awardee*s proposal did not suggest it would not comply
with any of the requirements.
    
2. Under a solicitation providing for *Technically
Acceptable-Performance/Price Tradeoff* evaluation scheme, agency*s award
to lower-priced, lower-rated proposal is unobjectionable, where agency
reasonably concluded that [REDACTED] percent price differential was not
worth *marginal* differences in performance ratings so as to justify award
to the higher-rated offeror.
DECISION
    
Specific Systems, Ltd. (SSL) protests the award of a contract to American
Turbo Systems (ATS) under request for proposals (RFP) No.
F09603-02-R-70366, issued by the Department of the Air Force for
roof-mounted air conditioner modules (RACM) that will be used to cool
aircraft avionics systems while maintenance personnel work on aircraft.
    

   We deny the protest.
    
The RFP, issued April 12, 2002 as a small business set-aside, provided for
award of a fixed-price contract for 3 first-article RACM units and 240
production RACM units, with three yearly options for additional RACM
production units.  Award was to be made using *Technically
Acceptable-Performance/Price Tradeoff* procedures.  That is, the RFP
provided that proposals would first be evaluated to determine if they were
technically acceptable, and for those that were acceptable, tradeoffs
would then be made between past performance and price, with past
performance being *significantly more important than* price.  RFP S:
M-900(a).   
    
Under the technical acceptability factor, the RFP stated that proposals
would be evaluated *to determine if the offeror provides a sound,
compliant approach that meets the requirements of the Purchase Description
[PD] for [the RACM] . . . and demonstrates a thorough knowledge and
understanding of those requirements and their associated risks.*  RFP S:
M-900(b)(1).  The PD was an attachment to the RFP and identified over 100
mandatory requirements for such things as materials, design and
construction, performance, verification, and packaging of the RACM.  With
regard to the technical proposal requirements, the RFP required *[t]he
following information [to] be provided [which] will be evaluated to
determine acceptability in accordance with Section M-900* and listed
25 paragraphs of the PD, and instructed offerors that *[p]roposals shall
describe the offeror*s proposed approach to performing the requirements
set forth in [these 25 enumerated] paragraphs of the [PD].*[1]  RFP
S: L‑900(d)(2).
    
For those proposals found technically acceptable, the RFP stated that past
performance would be assessed for relevance and confidence in the
offeror*s ability to accomplish the proposed effort, and that price would
be computed by multiplying the number of required RACM units by the
proposed prices.
    
Four offerors, including SSL and ATS, responded to the RFP by the May 17
due date.  The Air Force determined that discussions were necessary, and
submitted to each offeror *Evaluation Notices* (EN) concerning weaknesses,
deficiencies, and issues for clarification identified under the technical,
past performance, and price factors.  Offerors submitted their responses
to the ENs and final proposal revisions by September 20. 
    
The agency evaluated proposals and EN responses, and determined that all
four proposals were technically acceptable.  The agency assessed past
performance ratings based on a review of information provided in the
proposals, performance questionnaires, Air Force databases, and by the
Defense Contractor Management Agency (DCMA); and evaluated price in
accordance with the RFP. 
    
ATS*s proposal received a rating of *Marginal/Little Confidence* under the
past performance factor and was priced at $27 million; SSL*s proposal
received a rating of *Satisfactory/Confidence* under the past performance
factor and was priced at [REDACTED]; and the other two offerors* proposals
received ratings of *Satisfactory/Confidence,* but were much higher priced
than ATS*s and SSL*s proposals.[2]  The Air Force selected ATS for award
in February 2003, finding that the higher past performance ratings of
SSL*s and the other offerors* proposals were not worth the associated
additional price.     
    
SSL timely protested the award to ATS, contending, among other things,
that ATS*s proposal was technically unacceptable in that it did not
demonstrate compliance with many of the PD requirements, and that the
agency*s evaluation was unreasonable.  SSL later withdrew the protest
after the parties reached a settlement agreement, in which the agency
agreed to *consider the issues raised in the protest* and *make a new
award decision based on the re-evaluation of all proposals.*  Protest,
exh. 3, Settlement Agreement. 
    
The Air Force re-evaluated the proposals for technical acceptability,
specifically considering each offeror*s proposal responses to the 25
paragraphs of the PD listed in section L of the RFP, and affirmed its
determination that each proposal was technically acceptable, documenting
its technical analysis and responding to each of the technical
non-compliance allegations raised in the earlier protest. 
    
The agency also affirmed its earlier past performance evaluation.  The Air
Force again assessed ATS*s proposal a rating of *Marginal/Little
Confidence,* based on the fact that only limited feedback was available
from its customers.  The source selection authority (SSA) noted, however,
that the information available from ATS*s customers, as well as government
sources, showed ATS to be a *satisfactory* contractor with a *high rating
for technical skills.*  The SSA also favorably considered the fact that
ATS had experience in air cycle technology and is a manufacturer of, and
operates a repair facility for, the current air conditioning unit that the
RACM is to replace, noting the similarities in technology between these
two units, but also recognizing that ATS*s experience was only on
*semi-relevant* contracts.  Agency Report (B‑292087.3), Tab 4,
Revised Source Selection Decision, at 3. 
    
The SSA assessed SSL*s proposal a higher rating of
*Satisfactory/Confidence,* based primarily on the *considerable*
experience of its subcontractor in [REDACTED].  The SSA also considered
positively that the subcontractor had participated in [REDACTED].  The SSA
considered SSL*s experience with ground support equipment and vapor cycle
air conditioners, but noted that the information concerning SSL*s
performance history was *limited* and pertained to *semi-relevant*
contracts where SSL was not the prime contractor.  The SSA noted that SSL
would be responsible for overall performance of the contract and would
perform [REDACTED] percent of the manufacturing, and with limited
performance history available, there was *some doubt* as to its ability to
perform these functions.  Id.
    
In performing its past performance/price tradeoff, the SSA concluded that
even though SSL*s proposal had received a higher rating for past
performance, the differences in confidence levels between the two
offerors* proposals was *marginal,* given that limited information was
available with regard to both SSL and ATS, and that SSL*s higher rating
was due primarily to the performance history of its subcontractor.  The
SSA also noted that ATS*s lower rating was not due to negative history,
but only to limited information, and in fact favorable customer ratings
suggested to the agency that ATS could satisfactorily perform.  The SSA
thus determined that the [REDACTED] percent differential in price was not
worth the higher confidence rating, and selected ATS for award.  Id. at
3-4.  This protest followed.
    
SSL challenges the Air Force*s determination that ATS*s proposal was
technically acceptable.  SSL complains that ATS did not address, and the
Air Force did not evaluate, each of the paragraphs of the PD, and thus
asserts that the Air Force cannot reasonably conclude that ATS*s proposal
was technically acceptable.  SSL argues that section M of the RFP requires
evaluation of each of the PD requirements, and that the Air Force relaxed
the evaluation requirements for the benefit of ATS by considering
compliance only with the 25 paragraphs listed in section L.  
    
A solicitation must be read as a whole and in a reasonable manner, giving
effect to all its provisions.  Davies Rail and Mech. Works, Inc.,
B-278260.2, Feb. 25, 1998, 98‑1 CPD P: 134 at 6.  Contrary to SSL*s
assertion, the RFP did not require that offerors demonstrate compliance
with, or that the agency evaluate, each of the more than 100 PD
requirements.  Rather, the RFP required only that offerors respond to the
25 requirements set forth in section L that the agency determined were the
most important.  Although section M required that the Air Force evaluate
whether each offeror*s technical proposal *meets the requirements of the
[PD],* it does not specify that all of the requirements must be evaluated
and, when read in concert with section L, which required proposals to
address only the 25 requirements, the agency was not required to
specifically evaluate a proposal*s compliance with the other PD
requirements. 
    
As a general rule, a proposal need not show compliance with each aspect of
a solicitation where the solicitation does not require such a showing. 
Joppa Maint. Co., Inc., B-281579, B-281579.2, Mar. 2, 1999, 2000 CPD P: 2
at 3.  While it is true that a proposal that creates doubt whether the
offeror is agreeing to meet a material requirement may not be accepted for
award, even where the solicitation did not require the proposal to show
compliance with that requirement, Mine Safety Appliances Co; Interspiro,
Inc., B-247919.5, B-247919.6, Sept. 3, 1992, 92‑2 CPD P: 150 at 3,
there is no evidence in the record here suggesting that ATS would not
comply with all of the PD requirements.[3]  Thus, the agency reasonably
determined that ATS*s proposal was technically acceptable.[4]       
    
SSL also challenges the reasonableness of the Air Force*s past
performance/price tradeoff, based largely on its assertion that ATS is not
technically acceptable.  However, as noted above, we find no error in the
agency*s technical evaluation.  In any case, even where price is the least
important evaluation factor, an agency may properly select a lower-priced,
lower-rated proposal if it decides that the price premium involved in
selecting a higher-rated, higher-priced proposal is not justified.   NAPA
Supply of Grand Forks, Inc., B-280996.2, May 13, 1999, 99-1 CPD P: 94 at
5.
    
Based on our review of the record, we find that the Air Force reasonably
concluded that the [REDACTED] percent price differential in price did not
justify award to SSL.  As noted above, the agency found the differences
between the two firms* past performance ratings to be *marginal.*  The
grounds for that finding were, in our view, reasonable:  ATS*s lower past
performance ratings were due to limited, rather than negative, past
performance information; favorable customer ratings suggested to the
agency that ATS could satisfactorily perform; and SSL had only limited
performance information available concerning its performance as a
subcontractor on semi-relevant contracts, which caused the agency to have
*some doubt* as to SSL*s ability to successfully perform as a prime
contractor on this contract.  Although SSL disagrees with the agency*s
judgment that the past performance distinctions were *marginal,* it has
not shown this judgment to be unreasonable.  UNICCO Gov*t Servs., Inc.,
B‑277658, Nov. 7, 1997, 97-2 CPD P: 134 at 7.
    
SSL finally asserts that ATS does not have adequate financial resources,
facilities, personnel, or experience to perform the contract and that the
agency unreasonably determined that ATS was responsible.  Affirmative
determinations of responsibility are a matter reserved to the discretion
of the contracting agency, which our Office generally will not review
unless the protest alleges that definitive responsibility criteria in the
solicitation were not met, or identifies evidence raising serious concerns
that the contracting officer unreasonably failed to consider available
relevant information or otherwise violated statute or regulation. 
4 C.F.R. S: 21.5(c) (2003); International Roofing & Bldg. Constr., Inc.,
B-292833, Nov. 17, 2003, 2003 CPD P: 212 at 3.  SSL*s protest does not
fall under either of these exceptions.  Although SSL provides examples of
*evidence* (such as DCMA comments) that it asserts demonstrate that ATS is
not a responsible contractor, the record shows that the agency considered
all of this information in reaching its responsibility
determination.[5]     
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    
    
    

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

   [1] These 25 requirements involved some of the design and construction and
performance specifications that the agency determined were the most
important.  Contracting Officer*s Statement at 3. 
[2] The RFP defined *Satisfactory/Confidence* as *[b]ased on the offeror*s
performance record, some doubt exists that the offeror will successfully
perform the required effort.*  *Marginal/Little Confidence* was defined as
*[b]ased on the offeror*s performance record, substantial doubt exists
that the offeror will successfully perform the required effort.  Changes
to the offeror*s existing processes may be necessary in order to achieve
contract requirements.*  RFP S: M‑900(b)(2)(iii).
[3] While SSL and its consultant point to several PD requirements which
ATS did not address in its proposal, SSL has produced no evidence that
ATS*s proposed solution will not comply with these requirements, and the
protester has pointed to nothing in ATS*s proposal that could reasonably
be viewed as creating doubt about whether ATS was agreeing to comply with
any of them. 
[4] In its protest, SSL provided a statement from a consultant contesting
the agency*s evaluation of ATS*s proposal for technical acceptability. 
This consultant focused on some of the 25 PD requirements, primarily
arguing that ATS*s proposal did not contain sufficient information to show
compliance with these requirements.  In its report, the agency responded
in detail to each of the consultant*s arguments regarding the 25 PD
requirements.  Since SSL did not respond to the agency*s explanation in
its comments on the report, we consider these arguments to be abandoned. 
TN-KY Contractors, B‑291997.2, May 5, 2003, 2003 CPD P: 91 at 3
n.2.  SSL*s protest allegations challenging the past performance, critical
subcontractor, and price evaluation were similarly responded to by the
agency and SSL failed to address these issues in its comments on the
agency report, and thus we consider these allegations to be abandoned as
well.   
[5] To the extent that SSL contends that the responsibility standards of
Federal Acquisition Regulation S: 9.104-1 were not met, these requirements
are only *general standards* of responsibility involving the exercise of
subjective business judgments, and are not definitive responsibility
criteria, that is, specific objective standards established by the agency
as a pre-condition for award and included in the solicitation. 
International Roofing & Bldg. Constr., Inc., supra, at 4.