TITLE: HDL Research Lab, Inc., B-294959, December 21, 2004
BNUMBER: B-294959
DATE: December 21, 2004
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Decision
Matter of: HDL Research Lab, Inc.
File: B-294959
Date: December 21, 2004
Johnathan M. Bailey, Esq., and Theodore M. Bailey, Esq., Bailey & Bailey,
P.C., for the protester.
Capt. Victor G. Vogel and John J. Reynolds, Esq., U.S. Army Materiel
Command, for the agency.
Paul E. Jordan, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Where award was made on the basis of initial proposals and agency
reasonably found that protester's proposal contained numerous
informational deficiencies and weaknesses, agency reasonably excluded
proposal from consideration for award.
DECISION
HDL Research Lab, Inc. protests the award of a contract to Custom
Manufacturing &A Engineering, Inc. (CME) under request for proposals (RFP)
No. W15P7T-04-R-C006, issued by the U.S. Army Communications-Electronics
Command (CECOM) for tactical power supplies (TPS). HDL principally
challenges the evaluation of its proposal.
We deny the protest.
The RFP sought proposals for new designs of the TPS (part Nos. PP-2953D/U
and PP-6224C/U) to replace the existing TPS (part No. PP-6224B/U), used
in support of SINCGARS radios, Patriot missiles, and various helicopters.
The RFP contemplated the award of a fixed-price, indefinite-delivery,
indefinite-quantity (ID/IQ) contract.
Offerors were to furnish technical and management proposals detailing
their designs, along with first article testing (FAT) plans in accordance
with detailed instructions in RFP section L. Proposals were to be
evaluated under four factors, listed in descending order of importance
(with related subfactors)--technical (design and reliability test
program); management (contractor logistics support (CLS )/warranty
program, facilities, pre-production and FAT schedule, and quality system);
performance risk; and price. To be considered for award, a proposal had
to be rated not less than acceptable in every subfactor. RFP SA M.A.
Award was to be made on a ``best value'' basis, without discussions. Id.;
RFP SA L.2 at 63 (incorporating by reference Federal Acquisition
Regulation (FAR) SA 52.215-1(f)(4)).
Nine offerors, including HDL and CME, submitted proposals. The source
selection evaluation board found that only CME's proposal was acceptable.
It rated HDL's proposal unacceptable under the technical factor,
susceptible to being made acceptable under the management factor, and low
under the proposal risk factor. No discussions were conducted with the
offerors. After reviewing the evaluation reports, including the
associated strengths and weaknesses of the proposals, the source selection
authority (SSA) determined that CME's proposal was the best value and
selected it for award. After receiving a debriefing, HDL filed this
protest.
HDL asserts that every deficiency and weakness identified by the
evaluators was either mistaken, not related to the contract requirements,
or otherwise unreasonable. In reviewing a protest of an agency's proposal
evaluation, our review is confined to a determination of whether the
agency acted reasonably and consistent with the terms of the solicitation
and applicable statutes and regulations. United Def. LP, B-286925.3 et
al., Apr. 9, 2001, 2001 CPD PA 75 at 10-11. A protestor's mere
disagreement with the agency's judgment is not sufficient to establish
that the agency acted unreasonably. Command Mgmt. Servs., Inc.,
B-292893.2, June 30, 2004, 2004 CPD 168 at 3. We have reviewed all of
HDL's challenges to the evaluation and find that none has merit. We
address what we view as HDL's primary arguments below.
In evaluating HDL's proposal, the evaluators found seven weaknesses and
eight deficiencies, including five deficiencies under the design
subfactor. The deficiencies, and many of the weaknesses, were principally
based on the firm's failure to satisfy various informational requirements
in its proposal. For example, despite the RFP's requirement for detailed
information, HDL's proposal lacked any information on its parts
obsolescence program; did not address the required stacking requirement;
did not address expedited returns; and did not make clear its
maximum/available facilities production capacity or identify the labor
force necessary for support of full production.[1]
HDL asserts that there was no reasonable basis for downgrading its
proposal for these reasons, because the information in question either was
not required by the RFP or was in fact provided. For example, with regard
to the parts obsolescence program, HDL asserts that, because neither the
specifications nor the SOW required the establishment of a parts
obsolescence program, it was not required to include one in its proposal.
Protest at 18. This argument is without merit. The RFP provided that
each offer ``shall explain its program for identifying and replacing
obsolete parts during the course of the contract [and] . . . shall also
explain how it intends to update the User's Guide to reflect the new
parts.'' RFP SA L at 4. Section M provided that the offeror's parts
obsolescence approach would be evaluated to determine its effectiveness
during the course of the contract. The agency explains that the 5-year
duration of the contract made it prudent to request information on each
offeror's parts obsolescence approach/program for evaluation. The agency
anticipated that, due to the RFP's performance specification approach,
many changes would take place during the course of the contract at the
component level, and concluded that it thus was imperative that offerors
address how they would handle parts obsolescence, particularly with regard
to the user's guide which, in the agency's past experience, often included
erroneous parts information due to a lack of updating. Agency Report (AR)
at 2. While the RFP did not require the establishment of a parts
obsolescence program, it did require offerors to explain how they would
handle the issue. Since HDL's proposal did not provide the required
explanation, the agency reasonably downgraded HDL's proposal on this
basis.
With regard to the stacking test, HDL notes that the testing requirement
derives from the cover design requirement--the contractor was to design a
new cover to protect the front panel assembly, such that rough handling
and stacking would not cause breakage or damage to the assembly or cover.
Protest at 19; RFP S L atA 4-5. The RFP advised in this regard that the
current design used steel pins and hinges that were easily broken. SOW at
SA 3.0 A.1. HDL asserts that its proposal adequately addressed this
requirement and that it should have been clear from its design that it
eliminated the possibility of damage to latches from stacking. This
assertion is without merit. The RFP required that proposals describe the
cover design and provided that the design would be evaluated to determine
if it would meet the government's requirements. RFP S M at 2. In this
regard, it called for a stacking test to show the cover's capability to
withstand the weight of 10 stacked TPSs. SOW SA 3.0 A.1. While HDL's
proposed design [deleted] making HDL's design unclear. Since HDL's
proposal did not otherwise explain how its design would meet the
stacking/rough handling requirements, the agency reasonably determined
that the proposal lacked required information, and was deficient, on this
basis.
Regarding expedited returns, the RFP required proposal of a CLS plan that
included a maximum ``turn around time'' (receipt at repair facility to
return to customer) of 21A days. SOW P 3.14(d). The RFP instructed
offerors that their CLS program description shall also address
``provid[ing] faster turn around times than required by the SOW for simpler
repairs/replacements.'' RFP SA L at 5. HDL asserts that its proposal met
this requirement by describing its plan [deleted]. HDL Management
Proposal at 4. According to HDL, this plan was for the ``sole and
exclusive purpose of meeting and exceeding (providing faster than) the
21-day turn-around time.'' Comments at 18. HDL's assertion is without
merit. Notwithstanding the RFP's clear requirement that the CLS program
address providing faster turn-around times, HDL's proposal does not do
so. It describes HDL's plans and procedures, but it does not mention
providing faster turn-around times. Instead, its plan's only reference to
turn-around time is in its opening statement that ``[t]he 21 consecutive
day requirement shall be met'' through the described plan. HDL Management
Proposal at 4. While HDL believes the evaluators should have deduced
that its plan would result in faster turn-around times, nothing in its
proposal led to such a conclusion. Since HDL's proposal only addressed
meeting, but not moving faster than, the 21-day requirement, the agency
reasonably determined that the proposal lacked required information, and
was deficient, on this basis.
As for the available facilities production capacity and labor force
deficiency, HDL notes that its proposal described its physical plant and
available expansion space; referenced its testing and inspection
capabilities; and proposed to accomplish the work with its existing human
and equipment resources. Protest at 28. HDL thus asserts that its
proposal provided all necessary information. This assertion is without
merit. The RFP required offerors to show present production capabilities
and/or well defined plans to obtain the necessary production facilities
that will enable it to produce the power supplies at the required delivery
rate. RFP SA L at 6. While HDL's proposal provided the information
outlined above, it did not mention what capacity percentage of its current
automated testing and optical inspection equipment would be dedicated to
this production and whether it could handle maximum production. Likewise,
HDL's proposal did not address whether the 100-150 units per month
production volume required by the RFP had ever been maintained at its
facility for in-house cable assemblies, power supplies, and warranty
repair, meeting all contractual delivery requirements.[2] AR at 15.
While HDL proposed to use its current workforce to accomplish the
requirements, its proposal did not identify the labor force necessary to
support full production. Since HDL's proposal lacked evidence showing its
high volume production capability, the agency reasonably downgraded HDL's
proposal on this basis.
An offeror is responsible for affirmatively demonstrating the merits of
its proposal and risks the rejection of its proposal if it fails to do
so. Arctic Slope World Servs., B-284481, B-284481.2, Apr. 27, 2000, 2000
CPD PA 75; DBA Sys., Inc., B-241048, Jan.A 15, 1991, 91-1 CPD PA 36
at 4. In our view, the agency reasonably concluded that these and other
deficiencies and weaknesses were sufficient to render HDL's proposal
unacceptable under the technical factor and only susceptible to being made
acceptable under the management factor. Since the RFP provided that
proposals must be found acceptable under all subfactors in order to be in
line for award, the agency properly rejected HDL's proposal.
HDL suggests that the agency should have conducted discussions to provide
HDL an opportunity to correct the identified deficiencies. However, there
generally is no obligation for an agency to 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 SA 15.306(a)(3);
Colmek Sys. Eng-g, B-291931.2, July 9, 2003, 2003A CPD PA 123 at 7. The
contracting officer's discretion in deciding not to hold discussions is
quite broad. Our Office will review the exercise of that discretion only
to ensure that it was reasonable based on the particular circumstances of
the procurement. Id. We find no circumstances here that call into
question the agency's decision not to engage in discussions.
HDL asserts that the best value determination was flawed because the SSA
did not compare the relative strengths and weaknesses of its and CME's
proposals, and also did not consider the fact that HDL's FAT price was
lower. However, because CME's proposal was the only technically
acceptable proposal, and since the RFP warned offerors that the agency
intended to award on the basis of initial proposals, the agency was not
required to consider HDL's proposal or its lower FAT price in making its
award decision. Exploration Prods., B-279251.2, B-279251.3, June 1,
1998, 98-2 CPD P 15 at 11-12.
The protest is denied.
Anthony H. Gamboa
General Counsel
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[1] The first two deficiency examples were assessed under the technical
factor, under which HDL's proposal was rated unacceptable. The other two
deficiencies were assessed under the management factor and contributed to
its rating of susceptible to being made acceptable under that factor.
While these deficiencies were potentially correctable, in the absence of
discussions, these ratings effectively resulted in making HDL's proposal
unacceptable under the management factor as well.
[2] In its comments on the agency's report, HDL for the first time asserts
that its proposal contained evidence of its high production capacity (200
units per month) in the past performance section of its proposal.
Comments at 20. However, HDL's proposal did not explain how the high
volume production of that unit demonstrates the capability to meet the
multiple production and repair requirements of the RFP. Further, this
capacity was not referenced in HDL's management proposal or otherwise
identified as information HDL intended to have considered to meet this
requirement. In this regard, HDL's proposal was assessed another
deficiency for failing to include a required detailed cross-reference
matrix correlating applicable proposal submission requirements to proposal
paragraphs. See RFP SA L at 3. In our view, the evaluators were not
required to search throughout HDL's proposal to identify every reference
that might support a given RFP requirement; evaluators are not required
to infer an offeror's intent from an inadequately detailed proposal.
Leach Mgmt. Consulting Corp., B-292493.2, Oct. 3, 2003, 2003 CPD PA 175 at
5.