TITLE:  Aeroflex Test Solutions, B-295380; B-295380.2, February 7, 2005
BNUMBER:  B-295380; B-295380.2
DATE:  February 7, 2005
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   Decision

   Matter of:   Aeroflex Test Solutions

   File:            B-295380; B-295380.2

   Date:               February 7, 2005

   Gary Marcus, Esq., David E. Wolff, Esq., Norman A. Steiger, Esq., Joseph
J. Sisca, Esq., and Henry L. Goldberg, Esq., Goldberg & Connolly, for the
protester.

   Annejanette K. Heckman, Esq., Scott E. Pickens, Esq., and John L. Rice,
Esq., Pillsbury Winthrop, for OmniPhase Research Laboratories, Inc., an
intervenor.

   Angela J. Cosentino, Esq., Department of the Navy, for the agency.

   Paula A. Williams, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest of agency's evaluation of proposals is denied where the record
shows that the evaluation was reasonable and consistent with the
solicitation's evaluation scheme.

   DECISION

   Aeroflex Test Solutions protests the award of a contract to OmniPhase
Research Laboratories, Inc. under request for proposals (RFP) No.
N00164-04-R-8910, issued by the Department of the Navy, Naval Surface
Warfare Center, in Crane, Indiana, for a quantity of continuous wave
illuminator noise test sets (CWINTS) to support the AEGIS shipbuilding
program. [1]  Aeroflex contends that the evaluation and selection decision
were inconsistent with the terms of the solicitation and were
unreasonable.

   We deny the protest.

   Issued on May 27, 2004, and amended several times, the RFP seeks the
production and delivery of a first article unit and an estimated quantity
of the CWINTS units to satisfy the Navy and Foreign Military Sales
requirements.  RFP at 6.  The RFP provided for award of a fixed-price
indefinite-delivery/indefinite-quantity contract with a 5-year ordering
period.  As amended, the RFP stated as follows:

   Offerors may submit an alternate proposal and/or take exception to the RFP
as part of any offer they submit.  The Government will evaluate any
alternate proposal, price and other factors considered, [in accordance
with] the RFP and Source Selection Plan (SSP).

   RFP amend. 1, at 2.  Proposals were to be evaluated under the following
five evaluation factors:  (1) capability; (2) logistics; (3) life cycle
costs (LCC); (4) past performance; and (5) price.[2]  RFP at 60-63.  Award
was to be made to the responsible offeror whose proposal represented the
"best value" to the government, all factors considered.  Id. at 60.

   The RFP contained detailed proposal instructions and identified specific
information that offerors were expected to provide under each evaluation
factor to demonstrate compliance with the RFP's performance specifications
and statement of work.  With regard to price, the RFP required offerors to
submit a separate price volume which was to include, among other things, a
completed pricing matrix with fixed unit and extended prices inserted for
each contract line item number (CLIN), for the base year and each option
year.  RFP at 2-4. [3] 

   OmniPhase and Aeroflex were the only offerors to submit proposals by the
July 19 extended closing date.  The agency evaluated the proposals and the
contracting officer included both of them in the competitive range. 
Thereafter, the agency conducted oral and written discussions with
OmniPhase and Aeroflex.  During discussions, the protester was
specifically advised of the following:

   Aeroflex is reminded that this is a competitive acquisition.  Your
proposed prices are considered to be too high.  It is requested that
Aeroflex submit its most favorable pricing to the Government with the FPR
[final proposal revision], including more favorable pricing for the first
article.  This is a business decision; however, award will be made to the
offeror whose proposal is most advantageous to the Government, price and
other factors considered [in accordance with] the RFP.

   AR exh. 15, FPR from Aeroflex, at 32.

   The protester's response to this discussion question was to submit its
FPR, including the pricing matrix, as required by amendment 3.[4]  The
agency evaluated the two FPRs received with the following results:

   +------------------------------------------------------------------------+
|A                    |OmniPhase                 |Aeroflex               |
|---------------------+--------------------------+-----------------------|
|(1) Capability       |[DELETED]                 |[DELETED]              |
|---------------------+--------------------------+-----------------------|
|(2) Logistics        |[DELETED]                 |[DELETED]              |
|---------------------+--------------------------+-----------------------|
|(3) LCC              |[DELETED]                 |[DELETED]              |
|---------------------+--------------------------+-----------------------|
|(4) Past Performance |[DELETED]                 |[DELETED]              |
|---------------------+--------------------------+-----------------------|
|Overall Rating       |[DELETED]                 |[DELETED]              |
|---------------------+--------------------------+-----------------------|
|Total Evaluated Price|$42,387,248               |[DELETED]              |
+------------------------------------------------------------------------+

   AR exh. 17, BCM, at 7-10, 15-16.

   The evaluators prepared an extensive report that included a summary of
their conclusions regarding each proposal under each area of evaluation,
supported by a more detailed discussion of the strengths and weaknesses of
each proposal.  Because OmniPhase had the higher-rated, lower-priced
proposal, the evaluators recommended award to OmniPhase.  The source
selection authority (SSA) reviewed the evaluation report and award
recommendation and agreed with the evaluators that OmniPhase's proposal
represented the best value, and thus made award to OmniPhase.  Thereafter,
Aeroflex was notified of the agency's source selection decision and, after
receiving a debriefing, this protest followed.

   Aeroflex first asserts that its technical proposal should have been
evaluated higher than OmniPhase's proposal because Aeroflex is "the
incumbent producer" of the CWINTS units and as the "only prior producer of
that Equipment, [Aeroflex] should have received a superior evaluation both
on a technical and past performance criteria."  Protest at 4-5.  In these
circumstances, Aeroflex contends that it was unreasonable for OmniPhase to
have received a higher rating than Aeroflex under these two evaluation
factors.

   In reviewing a protest against an agency's evaluation of proposals, we
examine the record to determine whether the agency's judgment was
reasonable and consistent with the stated evaluation criteria and
applicable statutes and regulations.  Support Servs., Inc., B-282407,
B-282407.2, July 8, 1999, 99-2 CPD P 30 at 3.  The protester's mere
disagreement with the agency's judgment does not establish that the
evaluation was unreasonable.  Hard Bodies, Inc., B-279543, June 23, 1998,
98-1 CPD P 172 at 3.

   The agency disagrees with Aeroflex's characterization of its status as the
"incumbent producer."  Specifically, in responding to Aeroflex's protest,
the agency reports that RDL, Inc., not Aeroflex, was the original
equipment manufacturer and points out that while Aeroflex acquired RDL and
"may have gained ownership of that business's process, [Aeroflex] does not
have the same corporate memory or corporate experience, or even the same
employee staff."  More importantly, the Navy reports, the "RDL contract
was never novated to Aeroflex."  CO's Statement at 16-17.  Aeroflex has
not disputed this information.  In any event, the agency asserts that the
evaluation record shows that it performed a detailed and documented
evaluation of both offerors' proposals and, as discussed above, determined
that OmniPhase's proposal was superior to Aeroflex's with regard to
evaluation factor (1)--capability, and evaluation factor (2)--logistics. 
Based on our review of the record here and considering Aeroflex's failure
to identify any specific error in the agency's evaluation of technical
proposals, we find no merit in Aeroflex's protest that the agency
unreasonably evaluated OmniPhase's technical proposal as the higher
technically rated proposal.

   Aeroflex next protests that it would have been evaluated as having the
lowest overall price if the agency had properly considered what Aeroflex
characterizes as an alternate price proposal consisting of approximately
[DELETED] in savings.  Protest at 4-5.[5]  The protester maintains that
the agency impermissibly failed to evaluate Aeroflex's alternate price
proposal in "establishing Aeroflex's total evaluated price" in "violation
of Section M of the Solicitation, the FAR [Federal Acquisition
Regulation]."  Protest at 4.  In its protest, Aeroflex specifically points
to paragraph 1.4 of its initial cost and pricing proposal which states
that:

   1.4 Spare Parts Pricing Discussions

   Line item 010 of the solicitation allocates up to $2,400,000 for spare
parts.  The design proposed by Aeroflex utilizes the majority of the
[DELETED].  A complete and detailed evaluation of spare parts for both
systems would need to be completed in order to place a final or fixed
dollar value on the savings.  However, based on our knowledge of the
previous failures of the [existing CWINTS units], a reduction in spare
parts of up to [DELETED] could be realized.

   AR exh. 8, Aeroflex's Initial Cost and Pricing Proposal, at 4.

   While it is undisputed that the solicitation specifically allowed offerors
to submit alternate proposals, the RFP also required that offerors submit
fixed unit and extended prices for all CLINs and all option years.  Even
assuming that the language quoted above constitutes an "alternate
proposal," the above-quoted language (as the Navy points out) indicates
that the undefined price reduction (of [DELETED] not approximately
[DELETED]) is dependent on a spare parts evaluation for both
systems--which had not occurred.  In short, Aeroflex's reference (in its
initial proposal) to potential price reduction did not meet the
solicitation requirement for fixed prices, so that, in our view, the price
evaluators appropriately focused on the fixed unit and extended price of
$2,400,000 entered on the pricing matrix in Aeroflex's initial and final
proposals in performing the price analysis.  AR exh. 8, Aeroflex's Initial
Cost and Pricing Proposal, at 11.

   In its FPR, while Aeroflex offered a "straight 4% annual inflation factor
in yearA 3 [through] 5 of the pricing shown" on the firm's FPR pricing
matrix, it also proposed an alternative form of pricing these option years
based on a [DELETED].  AR exh. 15, FPR from Aeroflex, at 3.  As noted
above, the agency evaluated Aeroflex's FPR using the 4 percent inflation
factor for option years 3 through 5 because it was a fixed rate that could
be applied to the protester's fixed pricing for option years 3 through 5. 
As with Aeroflex's undefined spare parts savings, the alternate inflation
factor [DELETED] was an unknown, not a fixed rate which could be used for
evaluation purposes.  Accordingly, the agency had no obligation to
consider, and properly declined to consider, Aeroflex's proposed use of
the referenced price index.

   In sum, we find that the record here demonstrates the reasonableness of
the agency's comprehensive evaluation of the firms' proposals, consistent
with the stated evaluation scheme for award.  We therefore have no reason
to question the reasonableness of the agency's determination that
OmniPhase's higher-rated, lower-priced proposal represented the best value
to the agency.

   Finally, after receipt of the agency report responding to the initial
protest, Aeroflex filed a supplemental protest, asserting that OmniPhase's
initial proposal was late and should have been rejected.  In asserting
that the awardee's initial proposal was submitted late, Aeroflex focuses
on a July 26, 2004 letter from the president of OmniPhase to the agency's
contract specialist which purportedly transmitted the awardee's price
proposal on that date, rather than on the July 19 extended due date

   for receipt of initial proposals.[6]  AR exh. 9.  In addition, Aeroflex
points to agency correspondence and the prenegotiation BCM in which the
agency identifies OmniPhase's proposal as the "July 26" proposal.  AR exh.
11, BCM, at 5 and ARA exh.A 10, E-mail from Contracting Officer to
Aeroflex (Sept. 22, 2004).

   In response, the Navy furnishes an affidavit from the contract specialist
in which she states that "the initial solicitation/offer received from
OmniPhase was hand carried to me at the Naval Surface Warfare Center,
Building 3168, prior to the closing date and time."  Supplemental AR exh.
2, Affidavit from Contract Specialist (Dec. 17, 2004).  As further
support, the agency has furnished our Office with a copy of a security
gate pass issued on July 19 at 1:20 p.m. allowing OmniPhase's president to
visit the contract specialist in Building 3168 at the Navy facility in
Crane, Indiana.  Supplemental AR exh. 4, Gate Pass.  Moreover, the
intervenor has provided copies of travel records for OmniPhase's
president, which shows that he traveled on July 18 through 19 to the area
where the Navy facility is located.  We further note that although there
are two agency documents which refer to the "July 26" proposal from
OmniPhase, the record contains the subsequent award letter from the
contracting officer which bases the award on "OmniPhase's offer of 19 July
2004 as supplement[ed] by Final Proposal Revision of 15 October 2004."  AR
exh. 19, Letter from Contracting Officer to OmniPhase, at 1 (Oct. 29,
2004).  Further, the July 26 correspondence from OmniPhase, which the
protester relies on, appears to reference the existence of a prior
OmniPhase proposal in the Navy's possession.  On the basis of the record
before us, we are not persuaded that the awardee's initial proposal was
not timely submitted.

   The protest is denied.[7]

   Anthony H. Gamboa

   General Counsel

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

   [1] The CWINTS is a narrowband noise tester that is primarily used to
measure the amplitude modulation and frequency modulation noise level of
the CWI signal generated by the radar equipment of the Navy's Mk 99 and Mk
92 AEGIS Fire Control Systems.  Contracting Officer's (CO) Statement at 3;
Agency Report (AR) exh. 11, Business Clearance Memorandum (BCM), at 6.

   [2] The RFP identified various subfactors under each of the non-price
factors.

   [3] As relevant to this protest, amendment No. 2 was issued to clarify the
CLIN structure and to add CLIN 9 for training and CLIN 10 for spare
parts.  In addition, the amendment identified a "plug" number for CLIN 10,
spare parts, as $2,400,000.

   [4] In relevant part, amendment No. 3 instructed the offerors whose
proposals were in the competitive range to submit prices for CLINs 2
through 6 based on the quantity shown on the pricing matrix.  RFP amend.
3, at 3.

   [5] Although the protester claims that its alternate proposal [DELETED]
the existing CWINTS units would extend their useful life, resulting in
additional savings of approximately [DELETED], the Navy correctly notes
that neither this specific savings of [DELETED] per unit nor the quantity
of [DELETED] units was ever presented in Aeroflex's proposal.  See AR exh.
8, Aeroflex's Initial Cost and Pricing Proposal and AR exh. 15, Aeroflex's
FPR.

   [6] In pertinent part, the July 26 letter reads as follows:

   Attached are three (3) copies of Section B that include the pricing
information for the Spare Parts.  I have included the entirety of Section
B to simplify the collating on your end.  . . .  Also, attached are seven
(7) copies of the DD-254 and supporting documentation to include at the
end of Section C-M of our proposal.

   [7] The protester has also raised a number of other issues each of which
we have considered and find without merit.