TITLE: B-298489.4; B-298489.5, Compunetix, Inc., January 12, 2007
BNUMBER: B-298489.4; B-298489.5
DATE: January 12, 2007
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B-298489.4; B-298489.5, Compunetix, Inc., January 12, 2007

   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: Compunetix, Inc.

   File: B-298489.4; B-298489.5

   Date: January 12, 2007

   James K. Kearney, Esq., Holly E. Svetz, Esq., and Erin L. Roberts, Esq.,
   Womble Carlyle Sandridge & Rice, for the protester.

   Joseph A. Artabane, Esq., Robert F. Condon, Esq., and Maura E. Molloy,
   Esq., Artabane & Belden, for Frequentis USA, Inc., an intervenor.

   Jerald J. Kennemuth, Esq., Laura M. Giza, Esq., Daniel C. Hymer, Esq., and
   John H. Eckhardt, Esq., National Aeronautics and Space Administration, for
   the agency.

   Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   Protest that agency performed an unreasonable evaluation of proposals is
   denied where the record shows that the agency's conclusions were
   reasonable, and were consistent with the stated evaluation scheme and
   applicable procurement statutes and regulations.

   DECISION

   Compunetix, Inc. protests the award of a contract to Frequentis USA, Inc.
   by the National Aeronautics and Space Administration's (NASA) Goddard
   Space Flight Center, pursuant to request for offers (RFO) No.
   NNG05096022R, issued to procure Mission Operations Voice Enhancement
   (MOVE) systems. Compunetix, whose proposal was lower rated and higher
   priced than the awardee's, challenges virtually every evaluation
   conclusion reached by the agency, and contends that Frequentis is not a
   small business eligible for award under this small business set-aside
   procurement.

   We deny the protest.

   BACKGROUND[1]

   The solicitation here was issued on July 29, 2005, and sought offers "for
   the design, acquisition, development, integration, test, delivery and
   maintenance of all hardware, firmware, and software components" for the
   MOVE system configurations to be delivered to each site. RFO, Cover
   Letter, at 1. The Contracting Officer (CO) explains that the MOVE system
   being procured will "provide real time switching, conferencing, and
   monitoring of mission voice services in support of launches, simulations,
   landings, spacecraft emergencies, and critical operations." CO's
   Statement, Nov. 13, 2006, at 6. NASA anticipates replacing its existing
   mission voice systems--which were custom-designed and are aging--with
   standardized products over a 5-year period, followed by product support
   and maintenance for an additional 10 years. Id. To achieve
   standardization, the solicitation anticipates the use of commercial
   off-the-shelf (COTS) hardware and software to the maximum extent possible,
   RFO, Statement of Work (SOW), at 1-2, but also anticipates the development
   of certain products to meet NASA's unique requirements. Id. at 3-8.

   The RFO anticipated the award of what NASA terms "a commercial
   firm-fixed-price hybrid contract with both a basic requirement and
   indefinite delivery indefinite quantity" requirements, RFO at 78, for a
   period of 15 years. The basic requirement is to provide voice systems to
   three NASA centers: Goddard, the Marshall Space Flight Center, and the
   Johnson Space Center. The RFO also includes 15 options for installing the
   MOVE system at various other NASA sites, including the Jet Propulsion
   Laboratory, the Mission Control Center Moscow, and Vandenberg Air Force
   Base. CO's Statement, supra, at 7. The competition was limited to small
   business offerors.

   The RFO advised potential offerors that proposals would be evaluated under
   three factors, in declining order of importance: mission suitability,
   price, and past performance. RFO at 94. Although the price factor was more
   important than past performance, offerors were advised that mission
   suitability and past performance combined would be more important than
   price. Id.

   With respect to the mission suitability factor, the RFO advised that
   proposals would be evaluated using a 1000-point scale, divided into four
   subfactors, as follows: (1) understanding the requirements and technical
   approach, 450 points; (2) management and capabilities, 200 points; (3)
   technical and schedule risk, 300 points; and (4) safety and health plan,
   50 points. RFO at 99. In addition, NASA anticipated assigning adjectival
   ratings to the resulting point scores of: excellent, very good, good,
   fair, or poor. AR, Tab 50, at 15. Similarly, NASA anticipated assigning
   the same adjectival ratings (but not point scores) under the past
   performance evaluation factor, with the addition of a rating of "neutral"
   for offerors without relevant past performance. Id. at 14.

   With respect to price, the RFO advised that the agency would calculate a
   total evaluated price comprised of the price for the basic requirement
   identified above, the price for 13 of the 15 option sites (the 2 remaining
   option sites were deemed less likely to be needed), and the total
   evaluated indefinite-delivery/indefinite-quantity (ID/IQ) price (i.e., the
   price per unit of the ID/IQ items multiplied by the estimated quantities
   needed). RFO amend. 6, at 5-6.

   On September 5, 2005, NASA received proposals from five offerors, which
   were reviewed by a source evaluation board (SEB) team. By the end of an
   evaluation process that stretched over a year until the September 27,
   2006, final award date, the agency held two rounds of discussions;
   obtained two sets of final proposal revisions; eliminated one offer from
   the competitive range; made an initial award decision; took corrective
   action in response to a protest filed with our Office by one of the other
   offerors; again prepared revised evaluation documents and a new selection
   decision; and waited for a decision on a size protest from the SBA, which
   ultimately held that Frequentis is a small business eligible for the award
   of this contract. At the conclusion of this extended process, the results
   of NASA's evaluation were as follows:

   +------------------------------------------------------------------------+
   |             | Mission Suitability |    Past     |Total Evaluated Price |
   |             |                     |             |                      |
   |             | (Points -- Rating)  | Performance |                      |
   |-------------+---------------------+-------------+----------------------|
   |Frequentis   |  822 -- Very Good   |  Very Good  |    $48.3 million     |
   |-------------+---------------------+-------------+----------------------|
   |Compunetix   |  778 -- Very Good   |  Excellent  |    $56.5 million     |
   |-------------+---------------------+-------------+----------------------|
   |Offeror A    |  710 -- Very Good   |  Excellent  |    $44.0 million     |
   |-------------+---------------------+-------------+----------------------|
   |Offeror B    |675 -- Good          |  Excellent  |    $51.0 million     |
   +------------------------------------------------------------------------+

   AR, Tab 50, at 66.

   These results were presented to NASA's selection authority for this
   procurement, who reviewed the evaluation materials and prepared a source
   selection statement memorializing his considerations. AR, Tab 51. He noted
   first that Frequentis received the highest score under the mission
   suitability factor, the most significant evaluation factor, and submitted
   the only proposal rated excellent under the most heavily-weighted mission
   suitability subfactor, understanding the requirement and technical
   approach.[2] AR, Tab 51, at 14. With respect to past performance, the
   selection official noted the difference between the offerors' levels of
   relevant experience and past performance, and concluded that past
   performance was not a significant discriminator between the
   offerors--specifically, he noted that the slightly lower past performance
   rating of very good for Frequentis did not offset the differences in the
   mission suitability ratings and prices. Id.

   The selection official next compared Frequentis to both Compunetix and
   Offeror B, noting that the Frequentis proposal received higher technical
   ratings and offered a lower price than either of the proposals submitted
   by those offerors. He then compared the higher score given the Frequentis
   proposal relative to Offeror A's proposal under the mission suitability
   factor, and under three of the four mission suitability subfactors. Based
   on his assessment of the technical merits of the Frequentis proposal, he
   explained that the "value of the superior mission suitability [score] when
   viewed in terms of the modest additional price" ($48.3 million for
   Frequentis versus $44.0 million for Offeror A), led him to select
   Frequentis for award. Id. at 15. This protest followed.

   DISCUSSION

   In protesting the award decision here, Compunetix, as mentioned above,
   challenges virtually every evaluation conclusion reached by the NASA
   evaluators.[3] Our standard in reviewing such challenges is to examine the
   record to determine whether the agency's judgment was reasonable and
   consistent with stated evaluation criteria, and with applicable statutes
   and regulations. ESCO, Inc., B-225565, Apr. 29, 1987, 87-1 CPD para. 450
   at 7. Based on our review of all of the arguments raised here, the
   agency's detailed responses, and the comprehensive evaluation materials
   provided, we think Compunetix has failed to show that NASA's evaluation
   was unreasonable.

   While we have reviewed all of Compunetix's challenges regarding the
   technical evaluation here, we need not address each in detail. Instead, we
   set forth below two representative examples. First, Compunetix complains
   that NASA unreasonably found that Frequentis deserved a strength for
   offering "a T1 interface that has only one port on a single interface
   card, minimizing the loss of voice circuits in the event of a failure on
   the interface card." AR, Tab 51, at 4. The protester explains that it also
   should have received a strength because, while its T1 interface could
   accommodate up to [deleted] ports on a single interface card, NASA could
   have used only one port per card to minimize the loss of voice circuits in
   the event of a failure. The protester also complained that this result was
   unfair because NASA had instructed that it was "satisfactory" to offer up
   to [deleted] ports per T-1 unit. Initial Protest at 11.

   In answer, NASA explains that while it was willing to accept up to
   [deleted] ports per card, as the protester contended, using [deleted]
   ports per card was not the optimal solution. Agency Memorandum of Law,
   Nov. 13, 2006, at 9. The agency additionally explains that while
   Compunetix met the requirement, Frequentis exceeded it, and the agency
   evaluators reasonably saw this feature as a strength in the proposal.
   Nothing the protester argues in response shows that this conclusion was
   unreasonable.

   Second, and in many ways more significant, is the protester's challenge to
   the weakness assigned the Frequentis proposal by the agency in the area of
   technical and schedule risk.

   As discussed above, NASA's RFO for the MOVE system sought the use of COTS
   hardware and software to the maximum extent possible, but also anticipated
   the modification of products and development of items to meet the agency's
   requirements. RFO, SOW, at 1-8. There is no dispute that the balance of
   commercial items versus modified or development items identified by
   Frequentis in its approach was a subject of concern for the agency. This
   matter was identified by NASA as a weakness and raised during discussions.
   The final evaluation report prepared for this procurement includes the
   following comments on this subject:

     Weakness: The number of concurrent development efforts when combined
     with their complexity represents a technical risk.

     The Government requires capabilities in the MOVE voice systems that are
     based upon large numbers of simultaneous conferences where each
     conference has many participants. The Offeror's hardware that has been
     designed and deployed is dissimilar to the NASA mission environment,
     thus driving elements of redesign throughout the system.

     Although the Offeror has proposed a very effective development
     management plan, and has identified the development efforts and
     associated risks in detail, the concern still remains that the amount
     and complexity of modification that is required and has not been
     performed in the deployment of similar systems; this constitutes a
     technical risk to the Government.

     The number and severity of the development effort leads to an increased
     risk of unsuccessful contract performance.

   AR, Bates Stamped page 7,028.[4] In a distilled form, these concerns are
   also set forth in the selection statement. Specifically, the selection
   authority notes:

     Frequentis USA received one weakness in relation to its development
     effort. Although they proposed a very effective development management
     plan, and identified the development efforts and associated risks in
     detail, the number of concurrent development efforts when combined with
     their complexity represents a technical risk.

   AR, Tab 51, at 6. In the protester's view, the risk described above should
   have been considered a significant weakness, rather than a weakness.

   In our view, the protester's arguments regarding the extent of the
   weakness that should be assigned to the Frequentis proposal due to the
   development efforts required, and the complexity of those efforts, is a
   matter of judgment best reserved for agency evaluators; we will not
   substitute our judgment for the agency's. See Foundation Eng'g Sciences,
   Inc., B-292834, B-292834.2, Dec. 12, 2003, 2003 CPD para. 229 at 3. The
   record shows that NASA clearly recognized and understood this issue, and
   carefully examined the facts surrounding it. The protester cannot claim
   that this weakness was buried in earlier reports, or somehow forgotten;
   instead, the selection official included his own summary of the extent of
   the weakness in his decision selecting Frequentis for award. AR, Tab 51,
   at 6.

   In addition, the agency's supplemental report explains that NASA decided
   this matter did not rise to a significant weakness because

     none of the proposed development was internal to the core switching
     system, and only 3.3 percent of the proposed development--the key set
     interface--was internal to the switch at all. . . . The remaining 96.7
     percent of the development was targeted at keyset or LSA [Local Site
     Administrator subsystem] software development, rightly regarded by NASA
     as less risky. [Citation omitted.] In addition, the amount of
     development that was required was well documented and appeared to NASA
     to be well managed, as evidenced by the Strength awarded to Frequentis
     for its understanding of the risk.

   Supp. Agency Memorandum of Law, Dec. 4, 2006, at 13.

   Finally, we note that five of the seven voting members of NASA's
   evaluation board are career voice system engineers, four of whom authored
   the requirements here. Agency Memorandum of Law, Nov. 13, 2006, at 27.
   Despite the protester's arguments to the contrary, we find it unlikely
   that NASA's evaluators did not understand the issues here, and, as stated
   above, we will not substitute our judgment for theirs based on the
   disagreement of the protester and its expert. See Rockhill Indus., Inc.,
   B-278797, Mar. 16, 1998, 98-1 CPD para. 79 at 4.

   We turn next to the protester's argument that NASA unreasonably evaluated
   Frequentis with respect to its status as a manufacturer and as a result
   improperly failed to find its proposal ineligible for award. Supp.
   Protest, Nov. 20, 2006, at 9. For the reasons set forth below, we think
   the protester's argument ultimately and essentially challenges the
   awardee's size, which is a matter reserved for the SBA, not our Office.

   The RFO here advised that this procurement was a 100-percent small
   business set-aside. The protester's arguments are that Frequentis is not
   itself the manufacturer of this equipment, as required by the SBA's
   regulations, 13 C.F.R. sect. 121.406(a) (2006), and is, therefore, other
   than a small business and ineligible for award.

   In this procurement, Frequentis certified that it was a small business
   under the applicable size standard. When a concern self-certifies that it
   is eligible for award under the applicable size standard, the Federal
   Acquisition Regulation (FAR) provides that the CO shall accept that
   representation unless another offeror challenges the concern's
   representation, or the CO has a reason to question the representation. FAR
   sect. 19.301(b). Although there was initially no outside challenge--that
   came later--the CO raised questions about the extent to which Frequentis
   was relying on a large business subcontractor for manufacturing space.
   After these questions were answered, the CO decided she had no reason to
   further question the self-certification, or to refer the matter to the
   SBA. Supp. CO's Statement, Dec. 4, 2006, at 1-2.

   Although a challenge to the size status of a particular firm is for review
   solely by the SBA, see Bid Protest Regulations, 4 C.F.R. sect. 21.5(b)(1)
   (2006), we have considered protests asserting that an awardee's proposal,
   on its face, evidences a clear intent not to comply with the
   subcontracting limitation applicable to small business procurements. See,
   e.g., KIRA Inc., B-287573.4, B-287573.5, Aug. 29, 2001, 2001 CPD para. 153
   at 3; Parmatic Filter Corp., B-285288, B-285288.2, Aug. 14, 2000, 2000 CPD
   para. 185 at 10. Assuming that we likewise would review a challenge to an
   awardee's intent, as evident from the face of its proposal, to manufacture
   the items being procured under a small business set-aside, there is
   nothing in the record here to support a finding that Frequentis clearly
   indicated it did not intend to comply with the SBA's manufacturing
   requirements. Instead, the CO investigated the issues and was satisfied by
   the answers she received. The SBA then reviewed the matter and
   concluded--as did the CO--that Frequentis is the manufacturer of these
   items for purposes of the SBA size regulations. This question squarely
   raises a matter reserved for the SBA, not our Office.

   In conclusion, as indicated above, we have reviewed all of the issues
   raised in this protest, including the technical challenges not expressly
   discussed above, as well as the allegations that the agency did not
   reasonably evaluate prices (in this fixed-price competition), the
   assessment of past performance was unreasonable, and discussions were
   unequal. In every instance, we have seen nothing in this record to support
   a conclusion that this evaluation was anything other than reasonable and
   well-supported.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] This protest challenges a procurement that has already been the
   subject of two other protests--one resulting in agency corrective action,
   the other withdrawn--and a small business size challenge (which the Small
   Business Administration (SBA) decided in favor of Frequentis). As a
   result, there are numerous procedural events recounted in the record not
   relevant to our current review. Only the details relevant to the protest
   now before us are included in this decision.

   [2] We have omitted the details regarding the scores and ratings given the
   offerors at the mission suitability subfactor level. As the selection
   official indicates however, Frequentis received a higher score under three
   of the four mission suitability subfactors. AR, Tab 50, at 22. Frequentis
   received a lower score than Compunetix under the technical and schedule
   risk subfactor, and was assessed by the evaluators as having a weakness in
   the area of technical and schedule risk. As discussed below, Compunetix
   argues that the evaluators acted unreasonably in not assessing this risk
   as a significant weakness rather than a weakness.

   [3] There is no overstatement here. Under the most heavily-weighted
   mission suitability subfactor (understanding the requirement and technical
   approach), Compunetix first quotes the findings of the evaluators
   supporting their conclusion that the Frequentis proposal offered a
   significant strength under the subfactor. Compunetix then parses the quote
   and raises eight separate arguments regarding how, it, too, should have
   received a significant strength in each of those areas. Similarly, the
   protester raises six separate arguments regarding strengths of Frequentis
   proposal--all alleging that the protester, too, should have received a
   strength in each area. Finally, the protester identifies 28 separate
   features of its proposed system that it argues should have been assigned a
   strength by the agency evaluators. In addition to the 42 separate
   arguments raised regarding the first mission suitability subfactor, the
   protester raises similar challenges to the evaluation of the second and
   third mission suitability subfactors--i.e., management and capabilities,
   and technical and schedule risk. This leads, ultimately, to 58 separate
   contentions regarding the mission suitability factor alone.

   [4] We cite here to the Bates Stamped page in the record because Tab 49 of
   the agency report, which contains the Final Evaluation Report, contains
   two versions of the report. We are citing to the second version, which the
   agency advises contains minor edits of the first version.