TITLE:  ITT Industries, Inc., B-294389; B-294389.2; B-294389.3; B-294389.4, October 20, 2004
BNUMBER:  B-294389; B-294389.2; B-294389.3; B-294389.4
DATE:  October 20, 2004
**********************************************************************
   Decision

   Matter of:   ITT Industries, Inc.

   File:            B-294389; B-294389.2; B-294389.3; B-294389.4

   Date:              October 20, 2004

   Kevin P. Connelly, Esq., Joseph J. Dyer, Esq., Grace Bateman, Esq., Z.
Taylor Shultz, Esq., and Amanda B. Weiner, Esq., Seyfarth Shaw LLP, and
Thomas C. Wheeler, Esq., Kevin P. Mullen, Esq., Sheila C. Stark, Esq., and
Eliza P. Nagle, Esq., Piper Rudnick, for the protester.

   David A. Churchill, Esq., Kevin C. Dwyer, Esq., William R. Stoughton,
Esq., Kathy C. Weinberg, Esq., Kristen G. Schulz, Esq., Cynthia J.
Robertson, Esq., James A. Trilling, Esq., and David Fagundes, Esq., Jenner
& Block, for General Dynamics Decision Systems, an intervenor.

   Joshua Kranzberg, Esq., Walter Harbort, Jr., Esq., Mark A. Sagan, Esq.,
Paula K. Pennypacker, Esq., Denise M. Marrama, Esq., Frank V. Di Nicola,
Esq., and MichaelA A. Stephens, Esq., U.S. Army Materiel Command, for the
agency.

   Sharon L. Larkin, Esq., and David A. Ashen, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1.  Protest of technical and performance risk evaluation is denied, where
record supports the agency*s assessment of offerors* proposed joint
tactical radio systems and otherwise indicates that proposals were
evaluated fairly and in accordance with stated evaluation criteria.

   2.  Cost realism analysis is unobjectionable, where record shows that the
technical evaluators and Defense Contract Audit Agency evaluated proposed
costs; this information was considered by the source selection authority
in making his award decision; and the protester has not shown that
additional costs were likely to be incurred during performance.

   DECISION

   ITT Industries, Inc. (ITT) protests the Department of the Army*s award of
a contract to General Dynamics Decision Systems (GDDS), under request for
proposals (RFP) No. DAAB07-03-R-E808, for the development of joint
tactical radio systems (JTRS).  ITT challenges the evaluation of proposals
and resulting source selection decision.

   We deny the protest.

   The JTRS, which are being developed through a series of acquisitions
called *clusters,* are software-defined programmable radios that will
replace all existing tactical radios for the Department of Defense
warfighters.  This procurement is the JTRS *Cluster 5* acquisition, under
which the awardee will develop three discrete *form factors,* or radio
sets:  handheld, manpack, and small form fit radios.[1]  The handheld
radio is held in the hand or worn on the uniform; the manpack radio is
mounted in a vehicle or helicopter, or carried in a soldier*s rucksack;
and the small form fit radio will be integrated into other equipment. 

   The solicitation contemplated that the JTRS Cluster 5 requirements would
be met using a *spiral development acquisition approach.*  During *Spiral
1,* the contractor will design, develop, test, document, and deliver
single-channel handheld radios, twoA manpack radios, and ancillary items
such as vehicle mounting bases, power adapters, battery chargers, charger
base stations, and antennas.  During *SpiralA 2,* the contractor will
design, develop, test, document, and deliver handheld, manpack, and small
form fit radios (and ancillary items) that expand on Spiral 1
capabilities.  The radios are to comply with mandatory performance
requirement specifications (PRS) and the statement of work.  The RFP also
included *objective* PRS, which are desired but are not mandatory. 

   The RFP contemplated award of a contract with a cost-plus-award-fee system
development and demonstration phase effort; fixed-price options for
limited production of Spiral 1 radios and ancillary items;
fixed-price-incentive-with-successive-targets options for production of
Spiral 2 radios and ancillary items; and the acquisition of support
services on a time-and-materials basis.  (The cost-plus-award-fee effort
constitutes approximately 20 percent of the overall contract value, while
the fixed-price options together constitute approximately 80A percent of
the contract value.  Source Selection Authority (SSA) Final Briefing, Cost
Factor SlideA 5).  The period of performance is from JulyA 16,A 2004
through December 30, 2011. 

   The RFP provided that award would be made to the offeror whose proposal
was determined to represent the best value, based upon three evaluation
factors:  technical, performance risk, and cost/price.  The technical
evaluation factor consisted of five subfactors, listed in descending order
of importance:  (1) risk mitigation, schedule, test and evaluation for
Spiral 1 (hereafter referred to as the Spiral 1 subfactor); (2) system
design; (3)A systems engineering; (4) risk mitigation, schedule, test and
evaluation for Spiral 2 (hereafter referred to as the Spiral 2 subfactor);
and (5) small business participation plan.  The technical factor was
*significantly more important than* performance risk, which was
*significantly more important than* price.

   Both ITT and GDDS submitted proposals that were included in the
competitive range.  After conducting several rounds of discussions, the
Army requested final proposal revisions.  Based upon the detailed
evaluation reports and briefings prepared by the Source Selection
Evaluation Board (SSEB), the SSA rated the offerors* final proposals as
follows:

   +------------------------------------------------------------------------+
|A                                    |GDDS             |ITT             |
|-------------------------------------+-----------------+----------------|
|Technical (overall)                  |Good             |Good            |
|-------------------------------------+-----------------+----------------|
|A    |Spiral 1                       |Acceptable       |Good            |
|     |-------------------------------+-----------------+----------------|
|     |System Design                  |Outstanding      |Good            |
|     |-------------------------------+-----------------+----------------|
|     |Systems Engineering            |Outstanding      |Good            |
|     |-------------------------------+-----------------+----------------|
|     |Spiral 2                       |Acceptable       |Good            |
|     |-------------------------------+-----------------+----------------|
|     |Small Business Participation   |Acceptable       |Good            |
|-------------------------------------+-----------------+----------------|
|Performance Risk                     |Moderate         |Moderate        |
|-------------------------------------+-----------------+----------------|
|Evaluated Price/Cost                 |$1,442,786,000   |$1,447,395,000  |
+------------------------------------------------------------------------+

   Source Selection Decision (SSD) at 4.

   The SSA determined that GDDS*s proposal represented the best value, based
upon its evaluated *superior design and better long-term solution that
enhances operational capability and logistics supportability throughout
the projected life of the program.*  SSD at 8.  Specifically, the SSA
noted several strengths offered by GDDS*s proposal, including:  (1) the
GDDS team*s higher level of software capability as certified using the
Software Engineering Institute Capability Maturity Model; (2)A the greater
use of common core modules across all form factors, which maximizes reuse
of circuit card assemblies for Spiral 2, thus reducing future acquisition
costs, facilitating logistics support, and improving operational
capability; (3) the ability to run all waveforms on each of the radio
channels, rather than on only one of them; and (4) inclusion of a
removable [REDACTED], thus enhancing maintainability by permitting repair
or replacement of only the [REDACTED], rather than requiring repair of the
entire radio.  Although the SSA recognized that there was some schedule
risk associated with GDDS*s need to obtain certification of its
cryptographic module from the National Security Agency (NSA), he found
that this risk was offset by the superior design and technical strengths
of GDDS*s proposal.[2]  Given the technical advantages and price
superiority of GDDS*s proposal, and the *essentially equal* ratings for
performance risk, the SSA selected GDDS for award.  Upon learning of the
selection of GDDS, and after being debriefed, ITT filed this protest.

   Where an evaluation is challenged, our Office will not reevaluate
proposals, but instead will examine the record to determine whether the
agency*s judgment was reasonable and consistent with stated evaluation
criteria and applicable statutes and regulations.  U.S. Facilities, Inc.,
B-293029, B-293029.2, Jan. 16, 2004, 2004 CPD P 17 at 6.  In this regard,
it is an offeror*s obligation to submit an adequately written proposal for
the agency to evaluate.  United Defense LP, B-286925.3 et al., Apr. 9,
2001, 2001 CPD P 75 at 19.

   Based upon our review of the record, we find no basis to question the
Army*s determination that GDDS*s proposal was more advantageous than
ITT*s.  We discuss ITT*s principal arguments below.

   TECHNICAL EVALUATION

   External Coupler

   ITT contends that GDDS*s proposal did not comply with a mandatory PRS
requirement that the *Manpack [radio] Sets and antennas supplied for
frequencies below 30 MHz [i.e., high frequencies] shall have a performance
(range/radiation efficiency) equal to or greater than the legacy radios
and antennas for that band of operation.*  PRS P 3.22.c.  Relying on a
statement in GDDS*s proposal that [REDACTED], ITT asserts that GDDS*s
manpack radio cannot operate at high frequencies without the aid of an
external coupler, [REDACTED].  Thus, concludes ITT, GDDS*s proposal was
not compliant with PRS P 3.22.c. 

   We find ITT*s position unpersuasive.  Specifically, we find reasonable the
Army*s interpretation that GDDS*s reference to [REDACTED] indicated only
that GDDS was proposing [REDACTED], and not that an external coupler was
required for high frequency use.  In this regard, the Army explains, and
GDDS confirms, that the capability to operate with [REDACTED] facilitated
the operation of GDDS*s radios with [REDACTED], which was a separate
objective, but not a mandatory requirement, of the PRS.  Contracting
Officer*s Statement (COS), Sept. 12, 2004, at 3; GDDS Comments, Sept.A 27,
2004, at 6; see PRS P 3.22.e (*It is an objective that the Manpack [radio]
Sets operate with all legacy antennas for frequencies below 30 MHz.*). 
Further, the Army*s interpretation is consistent with the fact that GDDS
specifically indicated compliance with the frequency requirements of PRS S
3.22.c in its proposal, stating that each manpack radio set *covers all
JTR[S] specified-frequency ranges [REDACTED].*  GDDS Technical Proposal,
SA 3.2.6.2.4; see GDDS Technical Proposal, attach. 1 to Vol. 1,
atA 388.[3]  Given GDDS*s express statement of compliance with the
frequency requirements of the PRS, and ITT*s failure to point to anything
in GDDS*s proposal that reasonably called into question GDDS*s compliance,
we find no basis to question the agency*s determination that GDDS*s
proposed radios were in compliance with PRS PA 3.22.c.[4] 

   NSA Certification

   ITT protests that, in evaluating GDDS*s proposal, the evaluators ignored
the risk relating to NSA certification (which is an information security
requirement of the RFP, PRS P 3.17.2.1.i), by failing to properly *count*
the risk as weaknesses under the Spiral 1, Spiral 2, and systems
engineering subfactors.  Our review of the record, however, confirms that
the agency did in fact consider the potential for information security
risk when evaluating GDDS*s proposal under the Spiral 1, Spiral 2, and
systems engineering subfactors.  Specifically, the SSEB, in its final
evaluation, determined that GDDS*s proposal presented some risk associated
with timely obtaining required NSA certification, but found that the risk
related only to the program schedule and not to systems engineering.  That
is, the agency found that certain design features, such as [REDACTED],
although not a risk in terms of engineering design, nevertheless required
additional NSA certification that might delay the program schedule. 
Because the risk was schedule-related only, the SSEB determined that
weaknesses should be assessed only under Spiral 1 and SpiralA 2 factors,
as these factors specifically refer to *Risk Mitigation, Schedule, Test
and Evaluation.*  SSEB Final Report, GDDS, Subfactors Spiral 1, SpiralA 2,
and Systems Engineering.  The SSA also took GDDS*s proposal weakness into
account in making his best value determination.  SSD at 5, 6.  Thus, our
review of the record indicates that the Army fully considered the
schedule-related risk relating to obtaining the required NSA
certification.[5]

   Small Business Participation

   ITT contends that the agency should not have rated GDDS*s proposal
acceptable under the small business participation subfactor, because the
proposal specified small business participation goals that were
significantly below the small business goals established by the Department
of Defense and incorporated in the RFP.  We find ITT*s argument to be
without merit.  In this regard, the Army found that although GDDS*s
proposal specified lower small business participation goals than desired,
the proposal nonetheless was *acceptable* because these were goals rather
than requirements, and GDDS had an *outstanding track record of providing
significant subcontracting opportunity to Small Business.*  SSD at 7. 
Although ITT contends that the agency should not have considered GDDS*s
history in evaluating this subfactor, section M specifically provided
that, in evaluating proposals under the small business participation plan
subfactor of the technical factor, the agency would consider the offeror*s
record of utilizing small business concerns.  RFP S M, P 4.1.2.  In these
circumstances, we conclude that the Army reasonably determined that GDDS*s
failure to specify small business participation goals at the desired
levels, while a weakness, nevertheless did not render the proposal
unacceptable.[6]

   Software Certification

   ITT asserts that the Army failed to treat offerors equally when evaluating
the respective teams* level of software capability as certified using the
Software Engineering Institute (SEI) Capability Maturity Model (CMM).  In
this regard, the agency assigned GDDS*s proposal a significant strength
under the systems design subfactor because *the majority of [GDDS*s]
software is being developed by team members that are certified at [SEI
CMM] Level [REDACTED] which reduces risk in the system software design
effort to a greater extent than does [ITT,] which has the majority of the
software being developed by team members that are certified at SEI CMM
LevelA [REDACTED].*  SSD at 5.  ITT contends that its proposal also was
deserving of a significant strength for Level [REDACTED] certification
because the majority of its software, according to ITT, is being developed
by one of its subcontractors, who is Level [REDACTED] certified. 

   We agree with the agency, however, that ITT*s proposal did not clearly
show that the software capability of its team was equivalent to that of
GDDS*s team.  Specifically, in discussing software certification, ITT*s
proposal stated that [REDACTED] firms developing software are Level
[REDACTED] certified, whereas [REDACTED] of the remaining firms (including
ITT) are Level [REDACTED] certified, and [REDACTED] firm is only Level
[REDACTED] certified.  ITT Technical Proposal at V2S2-29-30.  In contrast,
GDDS*s proposal indicated that [REDACTED] firms developing software
(including GDDS) are Level [REDACTED] certified, while another firm,
although currently certified at Level [REDACTED], is planning to achieve
Level [REDACTED] certification by May 2004, and [REDACTED] firm is
currently undergoing Level [REDACTED] certification.  GDDS Technical
Proposal, SA 2.1.2.2.  Although ITT*s proposal did state that its
LevelA [REDACTED] certified subcontractor will take the *lead role in the
software [Integrated Product Team],* nothing in the proposal indicated
that this firm would be developing the majority of the software, as ITT
now claims.  To the contrary, ITT*s proposal reasonably indicated that a
majority of the software processes would be performed only at Level
[REDACTED].  ITT Technical Proposal, Fig.A 2.1.2.2-1, at V2S2-30.  In
these circumstances, the agency reasonably concluded that GDDS*s proposal
was more advantageous in this regard.

   Core Module Manufacturing

   ITT contends that the Army did not treat offerors equally in evaluating
core module manufacturing capability.[7]  In this regard, the agency
assigned GDDS*s proposal a significant strength under the Spiral 2
subfactor because, at the relevant time in performance, *the formation of
[REDACTED] team members to qualify for core module manufacturing and
provides a better pool for follow-on competitive awards than does the
strength in [ITT*s] approach of qualifying [REDACTED] team members.*  SSD
at 6.  ITT contends that it will qualify more teams per form factor by the
relevant time in performance than will GDDS.  However, the record shows
that only [REDACTED] of ITT*s team members will perform [REDACTED] in the
development of core modules.  According to the agency, this will restrict
the ability of the other firms to compete [REDACTED].  In contrast, since
all four GDDS team members serve as [REDACTED], the firms are better able
to compete [REDACTED] for follow-on contracts.  Accordingly, we find the
assessment of a significant strength to GDDS*s proposal, but not to ITT*s,
to be reasonable. 

   Waveform Storage

   ITT contends that proposals were unfairly evaluated with respect to the
number of waveformsa**a**that is, software-defined signalsa**a**that could
be stored in the radio sets.  The RFP specified that the JTRS radio sets
were to have sufficient storage capacity to store at least 2 waveforms for
each small form fit radio, at least 6A waveforms for each handheld radio,
and at least 10 waveforms for each manpack radio.  PRS PA 3.5(f)-(h).  The
agency assigned GDDS*s proposal a significant strength and ITT*s proposal
a strength for exceeding these requirements. 

   Although ITT asserts that its proposal also was entitled to a significant
strength in this regard, the record supports the Army*s determination that
GDDS*s proposal exceeded the requirements to a greater extent than did
ITT*s.  GDDS proposed to store [REDACTED] waveforms (rather than the
required minimum of 2) in the small form fit radios, [REDACTED] waveforms
(rather than the required minimum of 6) in the handheld radios, and
[REDACTED] waveforms [REDACTED] (rather than the required minimum of 10
for the whole radio) in the manpack radio.  GDDS Technical Proposal,
Figs.A 119, 139 and S 2.2.3.1.1.4.E.  In contrast, ITT proposed to store
[REDACTED] waveforms in the small form fit radios; [REDACTED] waveforms in
the handheld radios; and [REDACTED] waveforms in the manpack radios.  ITT
Technical Proposal atA V2S2-36.  ITT stated later during an equipment
demonstration that the number of waveforms stored in [REDACTED] exceeded
[REDACTED], and received credit for this capability.  ITT Equipment
Demonstration, Waveform Storage, at 13; SSA Final Briefing, ITT Slide 19. 
Thus, while ITT at most only indicated that it would exceed the storage
requirements for [REDACTED] (based on the equipment demonstration
representation), GDDS proposed to exceed the requirements for [REDACTED]. 
Although ITT now contends that the memory capacity of its radio sets
exceeds that of GDDS*s, and thus that ITT*s handheld and short form fit
radios can store more waveforms, it was not clear from ITT*s proposal that
the available memory would result in these radio sets being able to store
more wave forms than ITT specified in its proposal.  Since the relevant
PRS requirement was stated in terms of the number of waveforms that could
be stored, and not in terms of the amount of memory capacity, and ITT*s
proposal expressly indicated the number of waveforms that could be stored,
we find no basis to question the agency*s resulting conclusion that,
because the number of wave forms proposed to be stored by ITT was less
than the number proposed by GDDS, GDDS*s proposal was superior in this
regard.

   ITT also complains that only GDDS*s proposal received a significant
strength for its ability to run all waveforms on each channel of the
dual-channel manpack radios, which was a PRS objective, PRS S 3.2.1.e,
despite the fact that ITT*s radios assertedly have the same capacity. 
However, ITT*s proposal provided only for the [REDACTED]; it did not
indicate that each channel could support every identified waveform,
[REDACTED].[8]  ITT Technical Proposal atA V2S2a**58-59.  To the contrary,
ITT*s proposal indicated that ITT*s *channel 1* cannot support [REDACTED],
and its *channel 2* cannot support [REDACTED].  Id.  As the agency
explains, if one or the other of ITT*s channels malfunctions, the
remaining channel cannot run all waveforms and thus certain communications
become impossible.  COS, Sept.A 12,A 2004, at 5.  In these circumstances,
we find that the Army reasonably concluded that GDDS*s proposal, but not
ITT*s, met the PRS objective for the ability to run all waveforms on all
channels, and that as a result, only GDDS*s proposal deserved a
significant strength in this area.

   Common Core Modules

   ITT challenges the Army*s evaluation of the offerors* proposed approaches
with respect to common core modules.  Again, core modules are
interchangeable assemblies, which are the building blocks of the different
types of radio sets.  The core modules here include Radio Frequency (RF)
components, Baseband (digital signal processing) components, and
Communications Security (COMSEC) for the various radio form factors
required by the solicitation.  ITT asserts that, although both ITT and
GDDS proposed common core modules, the agency unfairly credited only
GDDS*s proposal with a significant strength, while it credited ITT*s with
only a strength. 

   The record, however, shows that GDDS proposed to use [REDACTED] common
core modules to achieve required RF, Baseband, and COMSEC functionality
for all form factors, while ITT proposed to use [REDACTED] modules to
achieve the same functionality.  The agency viewed GDDS*s solution, with
fewer modules necessary to achieve the same functionality, to be more
advantageous because it *maximizes the reuse of circuit card assemblies
for Spiral 2, reducing future acquisition costs and the logistics
footprint[,] and providing improved operational capability to the end
user.*  SSD at 5.  Based on our review, we find this conclusion
reasonable.[9]       

   [REDACTED] HMI

   ITT asserts that GDDS*s proposal was unfairly credited with a strength for
proposing [REDACTED] human-machine interface (HMI)a**a**that is,
[REDACTED]--while assessing a weakness to ITT*s proposal for proposing
[REDACTED] HMIs.  An HMI is where the radio operator and radio physically
interact.  In the case of the JTRS Cluster 5 radio, the HMI consists of
the radio control knobs, ona**off switch, keypad, buttons and display
readouts.  According to the Army, the use of [REDACTED] HMIs requires
[REDACTED] training packages, which is considered a disadvantage.  ITT
contends that there are numerous references in its proposal to a
[REDACTED] HMI, including words such as [REDACTED].

   ITT*s proposal, however, also included pictures of the proposed types of
radios (handheld, manpack, and small form fit) in both single- and
dual-channel layout, which clearly displayed [REDACTED] HMIs.  E.g., ITT
Technical Proposal, Fig.A 2.0a**3, at V2S2-5.  As the pictures show,
[REDACTED].  Although ITT contends that the pictures were not intended to
illustrate what the actual radios would look like since the radios have
not yet been developed, nothing in the proposal stated that the pictures
were not representative of what ITT proposed.  It was ITT*s obligation to
submit a clear and unambiguous proposal, United Defense LP, supra, at 19,
and it must bear the consequences where its proposal does not reflect its
intended approach.[10]

   AC Power

   ITT asserts that GDDS*s proposal was unfairly credited with a strength for
proposing the capability for its handheld radio to operate on AC power
while the radio*s battery is simultaneously recharging, while ITT*s
proposal did not receive a strength for proposing the *same process.*  The
record confirms, however, that there were meaningful differences between
the proposals in this regard.  Whereas GDDS proposed to recharge its
handheld unit using [REDACTED], GDDS Technical Proposal, S 3.2.6.1.1, ITT
proposed to use [REDACTED].  ITT Technical Proposal atA V2S3-8, 28-29,
33.  The agency found that ITT*s design would be significantly more
cumbersome in that a soldier could not [REDACTED], but instead would first
have to [REDACTED].[11]  Agency Comments, Sept.A 24, 2004, at 1; ITT
Individual Evaluator Report at 3.  Based on our review, we find that the
agency could reasonably view GDDS*s approach to recharging the radio
battery to be less cumbersome and more advantageous than ITT*s.

   COS, Aug. 30, 2004, at 25.)   ITT has pointed to no comparable advantage
offered by its removable [REDACTED].

  +----------------------------------------------------------------------------+
  |A   |Conforming to|Cost    |Contract |Managing      |Customer    |Percentage|
  |    |Specification|Control |Schedules|Subcontractors|Satisfaction|of Work   |
  |    |             |        |         |              |            |Performed |
  |----------------------------------------------------------------------------|
  |ITT TEAM  (overall moderate rating)                                         |
  |----------------------------------------------------------------------------|
  |ITT |Low          |Low     |Low      |Low           |Low         |[REDACTED]|
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Low     |Low      |Low           |Low         |[REDACTED]|
  |A   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |High         |Moderate|High     |High          |Low         |[REDACTED]|
  |B   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Low[12] |High     |Low           |Low         |[REDACTED]|
  |C   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Low[13] |Low      |Low           |Low         |[REDACTED]|
  |D   |             |        |         |              |            |          |
  |----------------------------------------------------------------------------|
  |GDDS TEAM (overall moderate rating)                                         |
  |----------------------------------------------------------------------------|
  |GDDS|High         |Moderate|Moderate |High          |Moderate    |[REDACTED]|
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Low     |Low      |Low           |Low         |[REDACTED]|
  |A   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Moderate|Low      |Low           |Low         |[REDACTED]|
  |B   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Moderate|Low      |Low           |Low         |[REDACTED]|
  |C   |             |        |         |              |            |          |
  |----+-------------+--------+---------+--------------+------------+----------|
  |Sub |Low          |Low     |Low      |Low           |Low         |[REDACTED]|
  |D   |             |        |         |              |            |          |
  +----------------------------------------------------------------------------+

   SSA Final Briefing, Performance Risk Slides 23, 40.

   ITT*s overall moderate risk rating was largely attributable to the
performance of its Subcontractor B, which had failed to meet the
requirements, or was rated unsatisfactory, by multiple references on two
of the three contracts evaluated.  The most significant performance issues
arose under the JTRS Cluster 1 contract, the predecessor contract to the
effort here, where Subcontractor B acted as the prime contractor. 
According to the references, Subcontractor B incurred *cost, schedule, and
performance overruns,* and was having difficulties with its
subcontractors, which problems the agency attributed largely to the prime
(ITT*s Subcontractor B).  However, Subcontractor B also received
unsatisfactory ratings under another contract in multiple performance
areas.  In fact, Subcontractor B received exclusively satisfactory ratings
under only one of its referenced contracts, which was evaluated by only
one reference.  ITT Performance Risk Assessments. 

   Within the GDDS team, GDDS received moderate risk ratings in three of the
performance areas (cost control, contract schedules, and customer
satisfaction), and high risk ratings in two areas (conforming to
specifications and managing subcontractors).  These ratings primarily were
due to performance issues arising under a *Digital Modular Radio* (DMR)
contract.  Although the evaluation ratings reflected the performance
problems on the DMR contract, the agency took into account that GDDS had
*inherited* this contract through an acquisition after the performance
problems had arisen, and also that GDDS received satisfactory ratings for
two other relevant contracts.[14]  The Army assigned moderate risk ratings
under cost control to two of GDDS*s subcontractors, based on their
performance as subcontractors under the Cluster 1 contract (the same
contract for which ITT*s Subcontractor B was evaluated), but rated these
firms low risk in other performance areas based on the agency*s conclusion
that the remaining performance issues were largely attributable to the
prime contractor, and also because these firms received numerous favorable
assessments under four other contracts (two contracts for each firm) in
each of these performance areas.  GDDS Performance Risk Assessments; COS,
Sept.A 12, 2004, atA 20, 22, 28. 

   In sum, considering the strengths and weaknesses of each teams* past
performance, the agency found that both proposals warranted an overall
moderate risk rating, meaning that there was *some doubt* that the
offerors could perform the proposed effort. 

   ITT raises a number of arguments as to why the performance risk assessment
was unreasonable.  We have reviewed each of ITT*s challenges and find that
they furnish no basis for questioning the evaluation.  We discuss the more
significant arguments below.

   ITT complains that the agency gave greater weight to the performance
problems associated with its Subcontractor B*s Cluster 1 performance than
it did to the performance problems of GDDS*s Subcontractors B and C on
this same effort.  However, as noted above, the agency took into
consideration that many of the performance issues cited were attributable
more to ITT*s Subcontractor B*s performance as a prime contractor than to
the performance of the subcontractors (GDDS*s Subcontractors B and C)
performing under the contract.  Also, the agency took into account that
ITT*s Subcontractor B did not perform satisfactorily under another of its
contracts, whereas GDDS*s subcontractors performed satisfactorily under
all other contracts referenced.  COS, Sept. 12, 2004, at 24-28.  Although
ITT disagrees with the agency*s overall assessment of its Subcontractor
B*s Cluster 1 performance relative to the other firms, it has not shown
that the agency*s conclusions were unreasonable. 

   ITT asserts that its Subcontractor B*s high risk rating for subcontractor
management should not have been considered in the evaluation because only
ITT, and not Subcontractor B, will be managing subcontractors under this
effort.  In this regard, ITT notes that the RFP stated that performance
risk would be *based on the relevancy and recency of . . . past
performance . . . as it relates to the probability of successful
accomplishment of the RFP requirements.*  RFP S M, P 4.2.  This same RFP
section, however, further provided that the agency would evaluate the
record of the offeror, including *its proposed major subcontractors and/or
team members,* in *managing subcontractors.*  Id.  In any case, we find
that the agency could reasonably view the performance of ITT*s
Subcontractor B in managing subcontractors as relevant to its performance
here.  ITT proposed Subcontractor B as [REDACTED], with responsibilities
including [REDACTED].  ITT Technical Proposal at V2S2-29-30.  Given the
proposed leadership role for Subcontractor B, we cannot find the agency*s
evaluation of the firm*s ability to manage subcontractors to be
unreasonable.  

   ITT asserts that the agency should have given greater weight to GDDS*s
poor performance under the DMR contract, and that this performance should
have resulted in an overall high risk rating for the team.  However, as
noted above, in rating the GDDS team, the agency took into account that
GDDS had inherited the DMR contract after the initial performance problems
had arisen; that GDDS had performed satisfactorily on two other relevant
contracts; and that generally the other team members of the GDDS team had
demonstrated successful contract performance.  Given these considerations,
the Army was unable to conclude that *significant doubt* existed as to the
GDDS teams* ability to perform, as would be required for an overall high
risk rating, but only that *some doubt* existed as to performance. 
Accordingly, the agency assigned GDDS an overall moderate performance risk
rating.  Although ITT disagrees with this assessment, it has not shown it
to be unreasonable.

   Our review of an agency*s cost realism analysis is limited to whether the
analysis is reasonably based and is not arbitrary.  Systems Integration &
Research, Inc., et al., Ba**279759.2 et al., Feb. 16, 1999, 99-1 CPD P 54
at 7-8.  In this regard, an agency is not required to conduct an in-depth
cost analysis or to verify each and every item in conducting a cost
realism analysis; rather, the evaluation requires the exercise of informed
judgment by the contracting agency, which is in the best position to make
this cost realism determination.  Id.  The record here shows that an
adequate cost realism analysis was performed.

   A 

   As noted above, the contract here is primarily fixed-price.  Only
approximately 20A percent of the effort is cost-plus-award-fee and thus
requires that the agency perform a cost realism analysis.  Although the
contemporaneous record of the agency*s cost realism analysis amounts to
little more than briefing slides to the SSA, the agency has subsequently
explained that, in conducting its analysis, the technical team reviewed
the offerors* price proposals--including the proposed labor category mix,
labor hours, types and quantities of materials, and types and quantities
of other direct costs--to determine whether these were overstated or
understated in light of the offerors* technical approaches.  Declaration
of Contract Price Analyst, Aug. 26, 2004, P 2; COS, Aug. 30, 2004, at 12;
Declaration of SSEB Chair, Sept. 9, 2004, P 2.  InA addition, the Defense
Contract Audit Agency audited both offerors and their team members, and
performed a *verification of all rates and factors used to develop the
cost proposals and a review of the proposed direct material, subcontract
and other direct costs for understatement.*  Declaration of Contract Price
Analyst, Aug. 26, 2004, P 4; COS, Aug. 30, 2004, at 12.  The SSA was
briefed on the results of the cost realism analysis and considered this in
his source selection decision.  SSA Final Briefing, Cost Factor Slides
1-10; SSD at 8; Declaration of SSA (Sept. 17, 2004) P 3.  No upward
adjustment to GDDS*s proposed costs was deemed necessary.

   A 

   ITT argues that the agency explanation of its cost realism analysis, which
was provided in the post-protest report to our Office, is little more than
*post-hoc rationalizations* and must be accorded little or no weight,
given the lack of contemporaneous documents to support it.  See Boeing
Sikorsky Aircraft Support, Ba**277263.2, B-277263.3, Sept. 29, 1997, 97-2
CPD P 91 at 15.  However, while we accord greater weight to
contemporaneous source selection materials, we will nonetheless consider
the entire record, including statements and arguments made in response to
a protest, in considering whether an agency*s source selection decision is
supportable.  Id.  Where post-protest explanations provide sufficient
detail by which the rationality of an evaluation decision can be judged,
it is possible to conclude that the agency had a reasonable basis for the
decision.  Jason Assocs. Corp., B-278689 et al., Mar. 2, 1998, 98-1 CPD
PA 67 at 6.  Post-protest explanations that provide a detailed rationale
for contemporaneous conclusions may, as is the case here, simply fill in
previously unrecorded details, and will generally be considered in our
review of the rationality of the selection decision as long as those
explanations are credible and consistent with the contemporaneous record. 
Id. 

   A 

   ITT has not furnished any basis upon which to call into question the
agency*s explanation of its cost realism analysis, nor has ITT shown that
the evaluated cost of GDDS*s proposal was significantly understated. 
Specifically, with regard to NSA certification, ITT essentially argues
that the fact that the agency found schedule risk associated with GDDS*s
need to obtain the required NSA certification required the agency to
upwardly adjust GDDS*s proposed price.  However, the mere fact that a
proposal poses some risk does not necessarily require an agency to
upwardly adjust the proposal costs to reflect what may or may not happen
in different circumstances, where the agency believes that what is
proposed is most likely to happen.  Vinnell Corp., B-270793, B-270793.2,
Apr. 24, 1996, 96-1 CPD PA 271 at 6.  Here, the agency did not find that
additional costs were likely to be incurred, and we find no basis to
question this conclusion.  With regard to ITT*s contention that costs must
be added for an omitted external coupler, as noted above, we find no basis
to conclude that an external coupler is required.  In summary, we find
that the agency*s cost realism evaluation is unobjectionable. 

   A 

   Anthony H. Gamboa

   General Counsel

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

   [1] There are 12 variants of the small form fit form factor. 

   [2] In this regard, the PRS incorporated various NSA specifications,
standards, and criteria.  PRS P 2.1.3.

   [3] The provided [REDACTED].  GDDS Comments, Sept. 17, 2004, at 5a**6;
GDDS Comments, Sept.A 27, 2004, at 7; Declaration of GDDS Electrical
System Engineer, Sept. 14, 2004, P 13; Declaration of GDDS Electrical
System Engineer, Sept. 27, 2004,  P 5; see GDDS Price Proposal at
Aa**2419.  Although the antenna design is not described in detail in
GDDS*s proposal, the solicitation did not require a detailed description
of the antenna design. 

   [4] In the alternative, ITT speculates that if GDDS now includes
impedance-matching circuitry or an external coupler with its high
frequency antenna, then GDDS*s solution would exceed the weight, volume,
and power requirements of the PRS.  GDDS*s speculation, however, supposes
that GDDS must now add something to its proposal in order to render it
compliant with PRS PA 3.22.c.  As discussed above, there is no basis for
concluding that additional equipment beyond that included in GDDS*s
proposed approach was necessary in order to meet the mandatory PRS
frequency requirements. 

   [5] In any event, as of the time of evaluation, ITT*s cryptographic module
also had not been certified by NSA.  Although it has subsequently been
certified, it must undergo additional certification when embedded into the
radio.

   [6] We note that the SSA*s apparent expectation that, based on its track
record, GDDS would in fact provide significant subcontracting
opportunities to small business concerns was consistent with GDDS*s
explanation in its proposal of this area.  Specifically, GDDS explained in
its proposal that the shortfalls were *primarily due to difficulties in
estimating procurement activities for products that are not fully
developed at this time. . . .  As the development activities mature,
General Dynamics expects the small business participation percentages to
increase.*  GDDS Price Proposal at A3-7. 

   [7] Core modules are interchangeable assemblies, which are the building
blocks of the different types of radio sets.  An example of a core module
is a modem card, which can be installed in multiple computers.  The core
modules here comprise approximately 90 percent of the radio sets.  COS,
Aug. 30, 2004, at 17.

   [8] Although ITT disputes whether GDDS*s radios can run all waveforms on
each channel without the aid of an external coupler to operate over high
frequency waveforms, as discussed above, we find no basis for concluding
that an external coupler is required, or that GDDS*s radios cannot operate
over all required waveforms as proposed.

   [9] ITT argues for the first time in supplemental comments that the agency
improperly limited its evaluation to only core modules for RF, Baseband,
and COMSEC functionality, and did not consider other common aspects of
offerors* designs.  This argument, filed more than 10 days after ITT*s
receipt of documents forming the basis for the protest ground, is
untimely.  4 C.F.R. S 21.2(a)(2) (2004).  In any case, the record does not
support ITT*s contention that the agency focused only on the core modules
for RF, Baseband, and COMSEC functionality.  See, e.g., SSA Final
Briefing, GDDS Slide 10 ([REDACTED]).      

   [10] ITT asserts that the agency was obligated to hold discussions
concerning the evaluated weaknesses associated with its proposed HMI. 
However, we note that the weaknesses assessed were not viewed by the
agency as significant weaknesses or deficiencies, and thus they did not
have to be raised during discussions.  See Federal Acquisition Regulation
SA 15.306(d)(3); MCR Fed., Inc., B-280969, Dec. 14, 1998, 99a**1A CPD P 8
at 11.     

   [11] We note that ITT also proposed [REDACTED] for its single-channel and
duala**channel radios.  ITT Technical Proposal at V2S3-33. It is not clear
from theA proposal whether [REDACTED] must also be purchased. 

   [12] The Army explains that the low risk ratings for ITT*s Subcontractors
C and D in the cost control area were erroneous.  According to the agency,
Subcontractors C and D did not have any past performance information in
the cost control area and, thus, the ratings should have been neutral. 
COS, Aug. 30, 2004, atA 8.

   [13] As noted above, this rating was in error.

   [14] Only one reference gave GDDS an unsatisfactory rating (in one area)
under these other contracts, and the agency considered that GDDS
implemented a satisfactory corrective action plan to address the concern. 
COS, Sept.A 12, 2004, at 21.