TITLE: B-298502; B-298502.2; B-298502.3; B-298502.4; B-298502.5, MD Helicopters, Inc.; AgustaWestland, Inc., October 23, 2006
BNUMBER: B-298502; B-298502.2; B-298502.3; B-298502.4; B-298502.5
DATE: October 23, 2006
**********************************************************************************************************************
B-298502; B-298502.2; B-298502.3; B-298502.4; B-298502.5, MD Helicopters, Inc.; AgustaWestland, Inc., October 23, 2006

   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: MD Helicopters, Inc.; AgustaWestland, Inc.

   File: B-298502; B-298502.2; B-298502.3; B-298502.4; B-298502.5

   Date: October 23, 2006

   John S. Pachter, Esq., Jonathan D. Shaffer, Esq., Stephanie D. Capps,
   Esq., Tamara F. Dunlap, Esq., Mary Pat Gregory, Esq., and Erin R. Karsman,
   Esq., Smith Pachter McWhorter PLC, for MD Helicopters, Inc., and Craig A.
   Holman, Esq., David S. Black, Esq., and Eric L. Yeo, Esq., Holland &
   Knight LLP, for AgustaWestland, Inc., the protesters.

   Thomas L. McGovern III, Esq., Michael F. Mason, Esq., Allison D. Pugsley,
   Esq., and Brian C.J. Berry, Esq., Hogan & Hartson LLP, for EADS North
   America Defense Co., an intervenor.

   Brian E. Toland, Esq., Vera Meza, Esq., Roger Cornelius, Esq., and
   Lawrence Runnels, Esq., Department of the Army, for the agency.

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

   DIGEST

   1. In a best value negotiated procurement for Light Utility Helicopters,
   protest of a lower technically rated, higher-priced offeror is denied,
   where the detailed evaluation record evidences that the evaluators
   performed a comprehensive and thorough evaluation of each offeror's
   proposal and reasonably determined that the protester's proposal was
   technically inferior and did not provide the best value to the government.

   2. In a best value negotiated procurement for Light Utility Helicopters,
   protest of a higher technically rated, higher-priced offeror is denied,
   where the source selection authority considered the significant strengths
   and weaknesses of each offeror's proposal, and reasonably determined that
   the protester's higher technically rated proposal was not worth the
   additional $800 million over the awardee's $3.9 billion proposal.

   DECISION

   MD Helicopters, Inc. (MDHI) and AgustaWestland, Inc. (AWI) protest the
   award of a contract to EADS North America Defense Company (EADS), issued
   by the Department of the Army under request for proposals No.
   W58RGZ05-05-R-0519 for Light Utility Helicopters (LUH).

   We deny the protests.

   I. BACKGROUND

   The Army currently uses a mix of rotary wing aircraft to accomplish
   administrative and logistical missions and to support the Army National
   Guard. In some instances, these aircraft have reached their serviceable
   life; in other instances, the aircraft are much more capable than is
   required for the role and thus are more expensive to operate and maintain.
   The LUH is intended to replace these helicopters by providing reliable and
   sustainable general and administrative support in non-hostile, non-combat
   environments at reduced acquisition and operating costs. The missions of
   the LUH are primarily light general support (including aerial transport of
   personnel, supplies, and maintenance support), General Force Medical
   Evacuation (MEDEVAC), reconnaissance, and test and training support. RFP,
   Statement of Work (SOW) paras. 1.1, 1.2. To facilitate a "rapid path" to
   fielding the LUH, the agency sought a Federal Aviation Administration
   (FAA) certified, commercially available aircraft to satisfy the LUH
   requirement, and to rely on contractor logistics support (CLS). RFP sect.
   A, para. 3.

     A. The Solicitation

   The RFP contemplated the purchase of an estimated 352 aircraft over a
   10-year contract period, with an initial estimate of 16 aircraft to be
   purchased during the base year and additional aircraft to be purchased
   through subsequent option years.[1] In addition to the aircraft, the RFP
   provided for the purchase of hardware and support, such as MEDEVAC B kits,
   hoist B kits, CLS, training, contractor field teams, engineering services,
   and other supporting hardware and services during the course of the
   contract. RFP sect. A, para. 1; sect. B; amend. 11, Pricing Template.
   Prices were to be proposed on a fixed-price per unit basis over a
   projected 10-year period, with cost-reimbursable items for travel,
   material, and transportation.[2] RFP sect. B.

   The RFP provided for a "best value" evaluation of FAA certification (which
   was evaluated as a "go/no go" criteria) and five other evaluation factors:
   price, technical, producibility/management (P/M), logistics, and past
   performance. Price was stated to be more important than technical,
   technical more important than P/M, and price and technical combined were
   significantly more important than P/M, logistics, and past performance.
   P/M and logistics were stated to be of equal importance and each was more
   important than past performance. RFP sect. M-6, para. 2.0. The
   solicitation also provided that risk would be considered in the evaluation
   of "each factor, subfactor, and element." Id. para. 1.3.

   The RFP advised offerors that, under the technical factor, proposals "will
   be evaluated to determine the degree of confidence that the Offeror[']s
   proposed aircraft will be operationally effective and suitable for the
   LUH[']s intended mission roles." The technical factor contained three
   equally rated subfactors: avionics/electronics, aircraft performance, and
   physical characteristics. Each of these subfactors contained a number of
   "elements," which correlated to various threshold requirements set forth
   in the SOW.[3] The aviation/electronics subfactor contained six elements
   (listed in descending order of importance): communication/navigation
   suite, systems operability, image intensification compatibility,
   intercommunications system, electromagnetic vulnerability, and cockpit
   voice recorder/flight data recorder (CVR/FDR). The aircraft performance
   subfactor contained 10 elements (listed in descending order of
   importance): performance, endurance, internal/external load, autorotation,
   operational range, handling qualities, cruise airspeed, fuel
   compatibility, operational environment, and startup timeline. The physical
   characteristics subfactor contained 12 elements (listed in descending
   order of importance): cabin size, force protection, survivability, hoist,
   wire strike protection, system growth potential, nuclear biological and
   chemical contamination survivability, open port and pressure refueling,
   human factors engineering, transportability, fire suppression bucket, and
   crew equipment stowage. Id. para. 2.3.

   The elements identified above in bold type represent the five mandatory
   elements identified in the RFP; that is, proposals had to show that the
   proposed aircraft would meet these mandatory requirements no later than
   the scheduled first delivery of aircraft to be eligible for award. Id. All
   other elements were considered to be "tradable." With tradable elements, a
   proposal could still be eligible for award if it failed to meet the
   minimum threshold requirements for the tradable elements; the agency
   considered the relative importance of the tradable elements under the
   RFP's evaluation scheme and the risk to the mission of an offeror failing
   to meet the requirements in evaluating a proposal's strengths and
   weaknesses. GAO Hearing Transcript (Tr.) at 169-71; Contracting Officer's
   Statement in Response to MDHI Protest (Aug. 18, 2006) at 22-23. The RFP
   also advised that the agency "may more favorably consider proposed
   solutions that exceed SOW requirements for all technical elements except
   for electromagnetic vulnerability, [CVR/FDR], autorotation, open port and
   pressure refuel, and fire suppression bucket"; for these excepted
   elements, the RFP stated that the agency would only evaluate whether the
   proposed solutions met the SOW requirements. RFP sect. M-6, para. 2.3.

   For the P/M factor, the RFP listed two subfactors (in descending order of
   importance): producibility/manufacturing (P/Mfg) and management. The P/Mfg
   subfactor did not contain elements, but provided for the evaluation of
   production rate capacity, which included the evaluation of production rate
   capability (including integrated master schedule, facilities/tooling,
   process validation, manpower, vendor base, and production certification),
   government acceptance, and storage and unit flyaway. This subfactor also
   included the evaluation of "risk and realism" of the offeror's proposed
   delivery schedule. RFP sect. M-6, para. 2.4.1. The management subfactor of
   the P/M factor contained seven elements (listed in descending order of
   importance): program management approach, configuration management
   approach, quality management approach, system safety approach, performance
   specification and configuration list, subcontracting plan/small business
   utilization approach, and system engineering approach. Id. para. 2.4.2

   The logistics factor of the RFP identified four subfactors: logistics
   support approach; reliability, availability, and maintainability (RAM);
   training approach; and other logistics support approaches. The logistics
   support approach subfactor was stated to be significantly more important
   than the next two subfactors--RAM and training approach--which were stated
   to be of equal importance and, combined, were more important that the
   fourth subfactor, other logistics support approaches. Id. para. 2.5.

   The RFP provided that past performance would be evaluated based on the
   offerors' and their major subcontractors' performance "as it relates to
   the probability of successful accomplishment of the LUH requirement." The
   RFP further stated that the agency would evaluate performance during the 3
   years preceding the solicitation, considering information obtained from
   the proposals, various government databases, customer survey
   questionnaires, and other sources. Id. para. 2.6.

   The price factor contained two subfactors--total production price and
   total O&S price--which were to be added together to derive the overall
   total price. Id. para. 2.2.a. The RFP stated that an offeror's proposed
   price would not be given an evaluation rating, but would be evaluated for
   "its aggregate total price, its reasonableness in relation to the effort
   proposed, and any perceived unbalanced pricing." Id. para. 2.2.b.

   The RFP required offerors to provide their pricing for applicable items
   identified in section B of the solicitation by completing a mandatory
   "pricing template." Detailed information about completing the pricing
   template was provided in section L of the solicitation. RFP sect. L-23,
   para. 2. The template was essentially a series of spreadsheets wherein
   offerors would insert their fixed unit prices for the various contract
   line item numbers (CLINs) in applicable cells, and the template would
   calculate the projected price over the 10-year contract period for the
   various pricing components (or over a 20-year period in the case of O&S
   and fuel costs). The template specified estimated unit quantities and
   flight hours, and included probabilities, weighting factors, and
   escalation factors (where applicable) that offerors could not change so
   that each offeror would be evaluated on an "equitable basis." Contracting
   Officer's Statement in Response to MDHI Protest (Aug. 18, 2006) at 10-12.
   The only "variable" was the unit prices that each offeror entered into the
   template. Id. at 10.

   For O&S costs, which mostly consisted of CLS, the RFP provided two
   "scenarios" under which O&S pricing would be computed. For each scenario,
   the RFP stated that the government would use the "weighted average price
   per year" for each of the CLS CLINs pertaining to that scenario. This
   weighted average price was to be computed in each scenario by applying a
   probability factor (which was specified in the pricing template) to each
   range of hours and rates for that CLIN in the stated year. The weighted
   average price for each year was to be multiplied by 50 percent and the
   results summed to give the total proposed O&S price.[4] The RFP provided
   that CLS and fuel prices would be projected to 20 years by averaging the
   offeror's proposed price for years 8, 9, and 10, and applying an
   escalation factor of 2.1 percent per year to the average cost. Id. at 11;
   RFP sect. M-6, para. 2.2.2.

     B. Evaluation

   Five offerors responded to the RFP and were invited to make a limited
   presentation of their proposals to the agency in advance of the initial
   evaluation. After the presentations, the agency conducted an initial
   evaluation to determine if proposals met the go/no go criteria for FAA
   certification and the five mandatory technical requirements. The agency
   eliminated one offeror's proposal from the competitive range.

   For the four offerors that remained in the competitive range (including
   MDHI, AWI, and EADS), the agency allowed a "source selection performance
   demonstration" (SSPD) of each offeror's aircraft. The SSPD, as provided
   for in the RFP, was intended to verify whether the demonstrated aircraft
   differed from the offeror's proposed aircraft. RFP sect. M-6, para. 1.2.
   During the SSPD (which consisted approximately of a 4-hour block of time,
   Tr. at 408), the agency tested the aircraft against several of the
   performance and configuration requirements set forth in the SOW that
   corresponded to technical elements evaluated under the RFP. The SSPD was
   intended to verify and finalize the evaluation, but was not given a
   separate rating. RFP sect. M-6, para. 1.2. The agency completed its
   initial evaluation and held discussions with the four offerors remaining
   in the competitive range, which included the issuance of "Errors,
   Omissions, and Clarifications," as well as additional written and
   face-to-face discussions.[5]

   After discussions were completed and the offerors submitted their final
   proposal revisions (FPR), the agency conducted its final evaluation. The
   evaluation (both initial and final) was conducted using a database system,
   whereby each evaluator entered his or her ratings and comments for each
   proposal under element, subfactor, and factor headings; these ratings and
   comments were "rolled up" into an overall element, subfactor, and factor
   rating assessment. Factor, subfactor, and element "leads" were appointed
   to ensure that the evaluation was conducted in accordance with the RFP and
   to perform the "roll up" of ratings. The factor leads reported the
   evaluation results to a source selection evaluation board (SSEB), which
   was appointed to review proposals, issue the evaluation report[6], and
   provide briefings and consultations to the source selection advisory
   council (SSAC)[7] and source selection authority (SSA). Advisors were also
   appointed to assist with the evaluation, including representatives of the
   FAA to assist with FAA certification issues. The advisors, evaluators,
   factor leads, SSEB, and SSAC included members that were experienced
   aviators or experts in their field of evaluation; the SSAC also included
   two members that were "users" of the aircraft. Tr. at 38, 189-92, 194,
   205, 212, 241-42, 276, 283. The SSA did not have aviation experience, but
   had "responsibilities that covered all of the Army's programs, including
   Army aviation," and testified that he sufficiently understood the LUH
   mission and the statement of work as it related to the mission. Tr. at 11,
   44.

   After reviewing and considering the technical reports and evaluator
   comments, the SSEB assigned adjectival and risk ratings to each proposal
   under each of the factors, subfactors, and elements identified in the
   solicitation. With regard to the technical elements generally, a proposal
   was rated "satisfactory" if it met the "threshold" requirement for the
   element as stated in the SOW; a proposal received a rating of "good" if it
   exceeded the threshold requirement, and a rating of "excellent" if it
   exceeded the threshold requirement by a specified "objective" amount. The
   objective amounts, which the agency refers to as "stretch goals," Tr. at
   199, were not set forth in the RFP, but were defined in the source
   selection plan (SSP) (an internal agency document). Agency Hearing Book,
   exh. W, SSP, append. B, exh. 1, Merit Rating System for Technical Factor.
   These "objectives" represented the amounts in excess of the requirements
   that the agency considered would benefit the mission and thus were
   deserving of the highest adjectival rating. Tr. at 208, 254-55. According
   to the agency, far exceeding the objective for an element was of
   diminishing value to the mission and was considered in terms of the
   increased cost to the agency associated with exceeding the objective. Tr.
   at 121-22, 208, 247, 254-55. A proposal received a rating of "marginal" or
   "unsatisfactory" for an element if it did not meet the threshold
   requirement.[8] Agency Hearing Book, exh. C, SSA Final Briefing, Slide 8;
   exh. W, SSP, append. B, exh. 1, Merit Rating System for Technical Factor.

   Risk ratings of "low," "moderate," and "high" also were assigned to
   proposals under each of the factors, subfactors, and elements. These
   ratings were defined as follows:

     Low Risk: Has little potential to cause disruption of schedule, increase
     in price, or degradation of performance. Development/integration and FAA
     certification of modifications proposed or offered to an existing FAA
     certified helicopter model submitted for evaluation in SSPD, would
     likely cause no adverse impact to delivery. Normal contractor effort and
     normal Government monitoring will probably minimize any difficulties.

     Moderate Risk: Can potentially cause some disruption of schedule,
     increase in price, or degradation of performance.
     Development/integration and FAA certification of modifications proposed
     or offered to an existing FAA certified helicopter model submitted for
     evaluation in SSPD, would likely cause some adverse impact to delivery.
     Special contractor emphasis and close Government monitoring will
     probably minimize difficulties.

     High Risk: Likely to cause significant disruption of schedule, increase
     in price, or degradation of performance. Development/integration and FAA
     certification of modifications proposed or offered to an existing FAA
     certified helicopter model submitted for evaluation in SSPD, would
     likely cause significant adverse impact to delivery. Risk may be
     unacceptable even with special contractor emphasis and close Government
     monitoring

   Agency Hearing Book, exh. W, SSP, at 62-63; id., exh. C, SSA Final
   Briefing, Slide 9.

   Adjectival and risk ratings were assessed in this manner for both the
   initial and final evaluation, and detailed briefings were provided to the
   SSAC and SSA.[9] At the final briefing, the factor leads and SSEB made
   presentations to the SSAC and SSA to explain the proposal ratings (both
   adjectival and risk) for each offeror's proposal under the various
   factors, subfactors, and elements. These individuals highlighted for the
   SSA the significant differences between proposals, discussed the value of
   aircraft attributes in terms of the LUH mission requirements, and
   responded to questions from the SSAC and SSA. Tr. at 17-20, 241, 244. A
   comprehensive series of power point slides was provided to the SSA
   summarizing the evaluation. As reported to the SSA in these slides, the
   final factor and subfactor evaluation ratings, as relevant here, were as
   follows:

+-------------------------------------------------------------------------------+
|                            |      MDHI      |      EADS      |      AWI       |
|----------------------------+----------------+----------------+----------------|
|Price                       | $4,251,356,442 | $3,880,000,723 | $4,747,162,454 |
|                            |                |                |                |
|                            | Moderate Risk  |    Low Risk    |    Low Risk    |
|----------------------------+----------------+----------------+----------------|
||Total Production Price     |   [REDACTED]   |   [REDACTED]   |   [REDACTED]   |
||---------------------------+----------------+----------------+----------------|
||Total O&S Price[10]        |   [REDACTED]   |   [REDACTED]   |   [REDACTED]   |
|----------------------------+----------------+----------------+----------------|
|Technical                   | Marginal/High  |Satisfactory/Low|    Good/Low    |
|----------------------------+----------------+----------------+----------------|
||Avionics/Electronics       |  Satisfactory  |  Satisfactory  |  Satisfactory  |
||---------------------------+----------------+----------------+----------------|
||Aircraft Performance       |    Marginal    |  Satisfactory  |   Excellent    |
||---------------------------+----------------+----------------+----------------|
||Physical Characteristics   |  Satisfactory  |  Satisfactory  |      Good      |
|----------------------------+----------------+----------------+----------------|
|Producibility/Management    | Marginal/ High |    Good/Low    |    Good/Low    |
|----------------------------+----------------+----------------+----------------|
||Producibility/Manufacturing|    Marginal    |      Good      |      Good      |
||---------------------------+----------------+----------------+----------------|
||Management                 |    Marginal    |  Satisfactory  |  Satisfactory  |
|----------------------------+----------------+----------------+----------------|
|Logistics                   |Satisfactory/Low|Satisfactory/Low|Satisfactory/Low|
|----------------------------+----------------+----------------+----------------|
||Logistics Support Approach |  Satisfactory  |  Satisfactory  |  Satisfactory  |
||---------------------------+----------------+----------------+----------------|
||RAM                        |    Marginal    |  Satisfactory  |      Good      |
||---------------------------+----------------+----------------+----------------|
||Training Approach          |      Good      |      Good      |      Good      |
||---------------------------+----------------+----------------+----------------|
||Other Support Approach     |  Satisfactory  |  Satisfactory  |  Satisfactory  |
|----------------------------+----------------+----------------+----------------|
|Past Performance            |    Moderate    |      Low       |      Low       |
+-------------------------------------------------------------------------------+

   Agency Hearing Book, exh. C, SSA Final Briefing, Slides 38, 43, 47-49, 57,
   62, 67-68, 75, 80, 85-86, 91; Agency Report (AR), DVD Tab 37, Price
   Negotiation Memorandum, at 13. The technical element ratings for each of
   the technical subfactors were reported as follows:

   +------------------------------------------------------------------------+
   |                           |     MDHI     |     EADS     |     AWI      |
   |---------------------------+--------------+--------------+--------------|
   |Avionics/Electronics       | Satisfactory | Satisfactory | Satisfactory |
   |Subfactor                  |              |              |              |
   |---------------------------+--------------+--------------+--------------|
   ||Communication & Navigation|     Good     | Satisfactory | Satisfactory |
   ||Suite*                    |              |              |              |
   ||--------------------------+--------------+--------------+--------------|
   ||Systems Operability       | Satisfactory | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Image Intensification     | Satisfactory |     Good     |     Good     |
   ||Compatibility             |              |              |              |
   ||--------------------------+--------------+--------------+--------------|
   ||Intercommunications System|     Good     | Satisfactory |     Good     |
   ||--------------------------+--------------+--------------+--------------|
   ||Electromagnetic           | Satisfactory | Satisfactory | Satisfactory |
   ||Vulnerability             |              |              |              |
   ||--------------------------+--------------+--------------+--------------|
   ||CVR/FDR                   |Unsatisfactory|Unsatisfactory| Satisfactory |
   |---------------------------+--------------+--------------+--------------|
   |Aircraft Performance       |   Marginal   | Satisfactory |  Excellent   |
   |Subfactor                  |              |              |              |
   |---------------------------+--------------+--------------+--------------|
   ||Performance*              | Satisfactory | Excellent**  |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Endurance                 |Unsatisfactory| Satisfactory |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Internal/External Loads   |Unsatisfactory|Unsatisfactory|     Good     |
   ||--------------------------+--------------+--------------+--------------|
   ||Autorotation              | Satisfactory | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Operational Range         | Satisfactory | Excellent**  |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Handling Qualities        | Satisfactory | Satisfactory |     Good     |
   ||--------------------------+--------------+--------------+--------------|
   ||Cruise Airspeed           |Unsatisfactory|    Good**    |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Fuel Compatibility        |     Good     |     Good     |     Good     |
   ||--------------------------+--------------+--------------+--------------|
   ||Operational Environment   |Unsatisfactory|Unsatisfactory|Unsatisfactory|
   ||--------------------------+--------------+--------------+--------------|
   ||Startup Timeline          |Unsatisfactory|Unsatisfactory|Unsatisfactory|
   |---------------------------+--------------+--------------+--------------|
   |Physical Characteristics   | Satisfactory | Satisfactory |     Good     |
   |Subfactor                  |              |              |              |
   |---------------------------+--------------+--------------+--------------|
   ||Cabin Size*               | Satisfactory |  Excellent   |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Force Protection*         | Excellent**  |    Good**    |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Survivability*            | Satisfactory |     Good     |     Good     |
   ||--------------------------+--------------+--------------+--------------|
   ||Hoist                     | Satisfactory | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Wire Strike Protection    |     Good     | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||System Growth Potential   |Unsatisfactory| Excellent**  |  Excellent   |
   ||--------------------------+--------------+--------------+--------------|
   ||Nuclear Biological and    | Satisfactory | Satisfactory | Satisfactory |
   ||Chemical Contamination    |              |              |              |
   ||Survivability             |              |              |              |
   ||--------------------------+--------------+--------------+--------------|
   ||Open Port and Pressure    |   Marginal   |   Marginal   | Satisfactory |
   ||Refueling                 |              |              |              |
   ||--------------------------+--------------+--------------+--------------|
   ||Human Factors Engineering |     Good     | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Transportability          | Satisfactory | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Fire Suppression Bucket   | Satisfactory | Satisfactory | Satisfactory |
   ||--------------------------+--------------+--------------+--------------|
   ||Crew Equipment Stowage    | Satisfactory | Satisfactory |     Good     |
   +------------------------------------------------------------------------+

   Id., Slides 33-35, 53-55, 71-73.

   +------------------------------------------------------------------------+
   |The elements in the chart with a single asterisk (*) reflect the five   |
   |mandatory elements; the other listed elements were tradable. The        |
   |elements in the chart with double asterisks (**) reflect areas where the|
   |offeror's performance specification (which was required to be provided  |
   |with the proposal) identified a lower performance capability than that  |
   |reflected in the offeror's technical volume. Where the agency could     |
   |ascertain from the technical volume, configuration list, SSPD, and other|
   |evaluation information that the aircraft would meet the higher          |
   |performance attribute (as stated in the technical volume rather than the|
   |performance specification), the agency assigned the higher rating to the|
   |offeror's proposal. Contracting Officer's Statement in Response to AWI  |
   |Protest (Aug. 31, 2006) at 3-4, 6; Tr. at 33, 144-45. The SSEB          |
   |identified these areas to the SSA in the final evaluation briefing.     |
   |Agency Hearing Book, exh. C, SSA Final Briefing, Slides 54-55; exh. D,  |
   |Aircraft Characteristics Chart; Tr. at 286-87.                          |
   +------------------------------------------------------------------------+

   The P/M element ratings were reported as follows:

   +------------------------------------------------------------------------+
   |                               |     MDHI     |    EADS    |    AWI     |
   |-------------------------------+--------------+------------+------------|
   |Producibility/Manufacturing    |   Marginal   |    Good    |    Good    |
   |(P/Mfg)                        |              |            |            |
   |-------------------------------+--------------+------------+------------|
   |Management                     |   Marginal   |Satisfactory|Satisfactory|
   |-------------------------------+--------------+------------+------------|
   ||Program Management Approach   | Satisfactory |Satisfactory|Satisfactory|
   ||------------------------------+--------------+------------+------------|
   ||Configuration Management      |Unsatisfactory|Satisfactory|Satisfactory|
   ||Approach                      |              |            |            |
   ||------------------------------+--------------+------------+------------|
   ||Quality Management Approach   | Satisfactory |Satisfactory|Satisfactory|
   ||------------------------------+--------------+------------+------------|
   ||System Safety Approach        |   Marginal   |Satisfactory|    Good    |
   ||------------------------------+--------------+------------+------------|
   ||Performance Specification &   |   Marginal   |Satisfactory|  Marginal  |
   ||Configuration List            |              |            |            |
   ||------------------------------+--------------+------------+------------|
   ||Subcontracting Plan/Small     | Satisfactory |Satisfactory|Satisfactory|
   ||Business Utilization          |              |            |            |
   ||------------------------------+--------------+------------+------------|
   ||Systems Engineering Approach  | Satisfactory |    Good    |    Good    |
   +------------------------------------------------------------------------+

   Id., Slides 41-42, 60-61,78-79.

   In addition to the briefing slides, the SSA was also provided with a
   detailed chart (prepared by the SSAC) that identified the SOW's threshold
   requirements for each of the technical elements and each offeror's
   proposed capability with regard to that element, as a means of comparing
   the offeror's proposals to each other and to the SOW requirement. For
   example, under the endurance element, the threshold requirement was listed
   as "2.8 hours + 30 minute reserve" and the capability of the three
   proposals at issue in this protest were identified to be "1.9 [hours] +
   30 [minutes]" for MDHI, "2.8 [hours] + 30 [minutes]" for EADS, and "3.64
   [hours] + 30 [minutes]" for AWI. Agency Hearing Book, exh. D, Aircraft
   Characteristics Chart. Areas where an offeror's proposal did not meet the
   capability were identified in red. The SSA was also provided with summary
   charts identifying key characteristics, or aircraft attributes, of each
   proposal and a list of airframe features. Id. The purpose of the charts
   was "to get a look behind the colors of all the different elements of what
   the SSA would be seeing." Tr. at 194.

   During the final briefing, the SSA "went through this chart meticulously
   to find out if there was value in those attributes above and beyond what's
   listed on the chart." Tr. at 119; see Tr. at 29. Where the SSA had
   questions about an aircraft's capabilities or the value of the attributes
   in terms of the mission, he consulted the experts--that is, the "users,"
   factor leads, SSEB, and SSAC.[11] Tr. at 18, 27, 181. The factor leads
   also raised areas of concern with the SSA. Tr. at 244. At the conclusion
   of the briefing, the SSA felt that he had a sufficient understanding of
   the offerors' proposals in terms of the LUH mission profile, and that he
   possessed adequate information to make an informed best-value decision.
   Tr. at 37-38.

     C. Source Selection Decision

   Based on the information provided to him and relying on the expertise of
   the factor leads, SSEB, SSAC, and aircraft "users," the SSA selected EADS
   for award.

   With regard to MDHI's proposal, the SSA concurred that the proposed
   aircraft deserved only a marginal rating under the technical factor
   because it exceeded only two of the five required elements, exceeded
   threshold requirements for only four tradable elements, and did not meet
   threshold requirements for eight other tradable elements. The SSA also
   concurred that MDHI's proposal presented high risk under this factor
   because of "five incomplete FAA certifications and inadequate information
   to support proposed certification by first delivery," and because the
   proposal lacked information regarding radio certification. In addition,
   the SSA noted technical risk in MDHI's small cabin size, since it appeared
   that medical equipment stowage could interfere with litter loading. AR,
   DVD Tab 8, Source Selection Decision Document (SSDD), para. 10.

   The SSA concurred with the marginal and high risk rating assessed to
   MDHI's proposal under the P/M factor, in part, because MDHI had not
   produced significant quantities of its aircraft since 2001, and because
   its proposed manufacturing plan and integrated master schedule were
   inconsistent and did not support the proposed production schedule. MDHI,
   like all the offerors, received a satisfactory and low risk rating under
   the logistics factor. Id.

   The SSA also concurred with the moderate risk rating assessed to MDHI's
   proposal under the past performance factor. In the SSDD, the SSA discussed
   MDHI's past problems with financial and cost management that led to
   difficulties in meeting delivery schedules and problems with vendors, but
   also recognized that Patriarch Partners, LLC had acquired a controlling
   interest in MDHI in July 2005, and that this led to financial and
   management improvements. [12] The SSA specifically noted recent
   improvements with vendor relationships and customer service, but found
   that the lack of a strong vendor base provided moderate risk to successful
   completion of the LUH requirements. Id.

   In sum, the SSA found MDHI's proposal did not present the "best value" to
   the government. Id.

   With regard to EADS's and AWI's proposals, the SSA noted that both were
   "mature, proven manufacturers, offering aircraft currently in production
   and providing convincing production planning information supporting their
   ability to produce aircraft at the rates desired by the Government." Id.
   para. 12. The SSA found little distinction between the proposals under the
   P/M factor; both received good ratings.[13] As he noted, both offerors
   proposed to transfer production from Europe to the United States and
   presented "viable plans for these transfers and evidence of comparable
   experience in establishing new production lines" and, thus, both proposals
   were rated low risk under the P/M factor. Id.

   The SSA found that the primary areas of distinction between AWI's and
   EADS's proposals were under the technical factor. Id. para. 15. Under this
   factor, the SSA recognized that AWI's proposal was superior to
   EADS's--EADS's proposal received a satisfactory rating whereas AWI's
   proposal received a good rating; both received a rating of low risk. The
   technical superiority of AWI's proposal was primarily due to the fact that
   the firm "is offering a larger aircraft that meets or exceeds more of the
   attribute thresholds than the aircraft offered by EADS." Id. para. 12. The
   SSA noted that both offers exceeded four of the five required elements,
   identified the elements in which AWI's proposal was rated superior to
   EADS's, and discussed the elements in which EADS's proposal did not meet
   the threshold requirements. The SSDD reflected that the SSA "considered
   the relative importance of these elements and whether or not the
   additional capability that [AWI's] aircraft would provide to the Army and
   the Army National Guard (ARNG) [was] worth the additional cost of this
   aircraft," and that he determined that "the additional capability of
   [AWI's] aircraft was not worth the additional approximately $800 million
   in price.[14] Id. para. 13.

   In discussing some of the technical elements in the SSDD, specifically the
   elements where AWI's proposal was rated superior to EADS's,[15] the SSA
   stated that he did "not see [a] significant benefit to the Government in
   paying a significantly higher price for an aircraft that exceeds these
   attributes over an aircraft that meets them." Id. para. 14. The SSA also
   considered the mission impact of three tradable elements where EADS failed
   to meet the requirements--CVR/FDR, internal/external load, and open port
   and pressure refueling. The SSA noted that the mission impact for failing
   to meet the CVR/FDR requirement was low because this was a future
   requirement and a "safety investigation issue (post accident)," not a
   "mission impact issue." Id. The SSA also found that EADS's failure to meet
   the internal/external load and open port and pressure refueling elements
   "would not hinder the ability of the EADS aircraft to perform the LUH
   mission." Id.

   The SSA concluded:

     The technical differences between the [AWI and EADS] aircraft provide no
     convincing argument that purchasing the [AWI] aircraft at the
     significantly higher price would offer significantly greater benefit to
     the Army for the intended light utility mission than the lower priced,
     but technically satisfactory, aircraft offered by EADS.

   Id. para. 15. The SSA selected EADS for award of the contract and these
   protests followed.

   II. ANALYSIS

   Both AWI and MDHI raise numerous challenges to the evaluation conducted
   under each of the evaluation factors and to the source selection decision.
   MDHI asserts that its proposal was rated too low under each of the
   factors, and AWI asserts that EADS's proposal was rated too high or that
   AWI's proposal was not rated high enough in comparison to EADS's. AWI
   asserts that its and EADS's proposals were rated unequally under the
   technical and P/M factors, specifically complaining about the evaluation
   of many of the technical factor elements. Both offerors challenge the
   agency's assessment of EADS's price. The protesters generally complain
   that the agency failed to follow the evaluation criteria, or misevaluated
   proposals against those criteria, and that the SSA's source selection
   decision was flawed.

   In reviewing protests against allegedly improper evaluations and source
   selection decisions, it is not our role to reevaluate proposals. Rather,
   our Office examines the record to determine whether the agency's judgment
   was reasonable and in accord with the RFP criteria. Abt Assocs., Inc.,
   B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 4. A protester's mere
   disagreement with the agency's judgment does not establish that an
   evaluation was unreasonable. UNICCO Gov't Servs., Inc., B-277658, Nov. 7,
   1997, 97-2 CPD para. 134 at 7.

   Based on our review of the extensive record provided in this case,[16] we
   find that the agency's evaluation and source selection decision were
   reasonable. Although we have considered all of the protesters' numerous
   arguments, we discuss only some significant or representative examples
   below.

     A. Technical Factor

       1. AWI's Protest Grounds

   AWI asserts that the agency overrated EADS's proposal under eight
   technical elements (performance, endurance, operational range, cruise
   airspeed, cabin size, systems growth potential, force protection, and
   human factor engineering),[17] and treated AWI's and EADS's proposals
   unequally under four elements (performance, operational range, cabin size,
   and system growth potential) where the proposals both received excellent
   ratings, even though AWI assertedly offered superior capability.[18] AWI's
   Comments (Sept. 6, 2006) at 48-65; AWI's Post-Hearing Comments at 38-46.
   AWI complains that the ratings assessed do not give proper "credit" to its
   "vastly superior technical solution."[19] AWI's Comments (Aug. 31, 2006)
   at 24.

   With regard to the protester's challenges to the evaluation ratings in
   general, it is well established that ratings, be they numerical,
   adjectival or color, are merely guides for intelligent decision-making in
   the procurement process. Where the evaluation and source selection
   decision reasonably address the underlying bases for the ratings,
   including advantages and disadvantages associated with the specific
   content of competing proposals, in a manner that is fair and equitable and
   consistent with the terms of the solicitation, the protester's
   disagreement over the actual adjectival or color ratings is essentially
   inconsequential, in that it does not affect the reasonableness of the
   judgments made in the source selection decision. Cherry Road Techs.;
   Electronic Data Sys. Corp., B-296915 et al., Oct. 24, 2005, 2005 CPD
   para. 197 at 12-13.

   As indicated above, the Army provided a voluminous and detailed record of
   its evaluation and source selection decision. As illustrated through the
   examples discussed below, this extensive analysis shows that the agency
   evaluated the relative merits of each aspect of the proposals, including
   essentially all of the examples cited by AWI, and assessed ratings in a
   fair and equitable manner, consistent with both the RFP and the rating
   definitions set forth in the SSP.[20] That is, consistent with section
   M-6, para. 2.3, the record confirms that the agency evaluated the
   technical attributes and capabilities of each offeror's aircraft in terms
   of whether the aircraft was "suitable for the LUH[']s intended mission
   roles." In applying the adjectival rating definitions, the agency
   similarly considered not only whether threshold requirements were met, but
   also the extent to which capability above the SOW's stated threshold
   requirements would provide value to the LUH mission. The record shows that
   when an offeror's proposal reached the objective, or "stretch goal," the
   agency gave the proposal the highest possible rating.

   The RFP did not require that proposals be given favorable consideration
   for each and every element exceeded, or suggest that the value to the
   agency of exceeding a requirement was limitless. In fact, the RFP
   identified five elements where proposals would not be given any favorable
   credit for exceeding the requirement and, as to the other elements, the
   RFP stated only that the agency "may" (not shall) more favorably consider
   proposed solutions that exceed the SOW. RFP sect. M-6, para. 2.3. This
   permissive language recognizes that each element was to be considered in
   terms of its suitability for the LUH mission. Id.

   AWI's arguments essentially are that its aircraft can fly farther, faster,
   and can carry more people and more weight than EADS's aircraft; that this
   extra capability is "essential to mission success"; and that its proposal
   should have been recognized more favorably as a result. See, e.g., AWI's
   Comments (Sept. 6, 2006) at 65. During the hearing, as each of the
   elements was discussed, the witnesses repeatedly explained that the agency
   gave AWI's proposal "credit" for its superior capability, but found that
   this capability (which the agency acknowledged exceeded the "stretch
   goals" for several technical elements and was superior to the capability
   offered by EADS for several elements) did not justify paying an additional
   $800 million because it did not provide significant additional value to
   the mission. As the agency witnesses explained in detail, larger
   efforts--such as the Hurricane Katrina response--would be accomplished by
   larger, heavier, faster aircraft such as the Blackhawk or Chinook. While
   the LUH could play a role in Katrina-type responses by providing a
   smaller, cheaper aircraft to provide "light general support" to near-range
   areas during disaster recovery missions (see SOW para. 1.2.), the agency
   did not intend that longer or larger rescue missions be performed by the
   LUH; rather, these longer, larger missions would continue to be performed
   by larger, more expensive aircraft with the suitable capabilities. Tr. at
   31-32, 44-48, 201-03, 208, 246; Contracting Officer's Statement in
   Response to AWI Protest (Sept. 6, 2006) at 13. The intended goal of the
   RFP was to replace only the larger aircraft that are currently performing
   smaller missions because these larger aircraft have too much capability
   for the smaller missions and are thus more expensive to operate. SOW para.
   1.2; Tr. at 114.

   In sum, although AWI complains that it was not given "enough" credit for
   its superior capability, we find that the agency appropriately recognized
   and gave "credit" to the proposal in accordance with the RFP, and that
   these capabilities were appropriately taken into consideration in the
   best-value analysis. Based on the agency's reasonable discussion and
   assessment of relative advantages and disadvantages associated with the
   specific content of proposals, we find that AWI's disagreements with the
   actual ratings to be inconsequential, given that they do not affect the
   reasonableness of the judgments made in the source selection decision. See
   Cherry Road Techs.; Electronic Data Sys. Corp., supra, at 12. We discuss
   several examples below.

         a. Performance

   With regard to the evaluation of the performance element, under which both
   AWI's and EADS's proposals were rated excellent, AWI asserts that
   proposals were rated unfairly and unequally and that EADS's proposal was
   overrated. The SOW threshold requirement for performance provided that

     The LUH shall be able to hover out of ground effect (HOGE) under sea
     level standard day conditions (0' PA, 59DEGF) environment while in the
     MEDEVAC mission configuration with an internal mission load [of 1,304
     pounds] . . .

   SOW, annex A, para. A.2.2.1. The rating definitions for this element, as
   set forth in the SSP, provided that a proposal would receive a
   "satisfactory" rating for meeting this requirement, a "good" rating if the
   aircraft could HOGE with a load of greater than 1,484 pounds at the stated
   conditions, and an "excellent" rating if the aircraft could HOGE with a
   load of greater than 1,664 pounds at the stated conditions.[21] Agency
   Hearing Book, exh. W, SSP, at 44. EADS exceeded the threshold by 477
   pounds (the aircraft could load 1,781 pounds) and AWI exceeded the
   threshold by 1,511 pounds (the aircraft could load 2,815 pounds). Agency
   Hearing Book, exh. D, Aircraft Characteristics. Both proposals received
   excellent ratings for exceeding the objective.

   In considering the value of AWI's superior proposal, the SSAC
   representative explained that capability above the "stretch goal" here
   "was not that important . . . [i]n terms of the LUH mission" because
   heavier load missions were not within the typical LUH mission profile and
   would be handled by other aircraft available to the Army. Tr. at 200-01.
   Thus, he concluded that the additional load that AWI's aircraft could
   carry was not worth the significantly higher price. Tr. at 113-16, 200,
   234-35. The SSA was made aware of this difference in aircraft
   characteristics and concurred with the assessment of value. Agency Hearing
   Book, exh. D, Aircraft Characteristics; Tr. at 111-16. Based on our
   review, we find these conclusions to be fair and reasonable.

         b. Operational Range

   AWI also asserts that proposals were rated unfairly and unequally and that
   EADS's proposal was overrated under the operational range element, under
   which both proposals received excellent ratings. The SOW threshold for
   this element provided that the "LUH should have an operational range of a
   minimum of 217 Nautical Miles." SOW, annex A, para. A.2.2.5. The rating
   definitions provided that a proposal would receive a "satisfactory" rating
   if the aircraft's range capability was "217 through [less than] 239
   nautical miles," a "good" rating if the range capability was "239 through
   [less than] 261 nautical miles," and an "excellent" rating if the range
   capability was "more than 261 nautical miles." Agency Hearing Book, exh.
   W, SSP, at 46. EADS's aircraft was evaluated as achieving a range of 303
   nautical miles whereas AWI's aircraft was evaluated as achieving a range
   of 460 nautical miles. Agency Hearing Book, exh. D, Aircraft
   Characteristics. Since both proposals exceeded the threshold by the
   "objective" or "stretch goal" amounts, both reasonably received an
   excellent rating.

   In considering the value of AWI's superior proposal, the SSAC
   representative explained that LUH missions are typically point-to-point
   missions that occur at close range, and that the LUH would not be expected
   to fly at long ranges. Since distances above the 261 nautical mile
   objective were not likely to be traveled in LUH missions, the additional
   distance that the AWI helicopter could travel (199 additional nautical
   miles) was not seen as having significant value to the agency. Tr. at
   202-03, 263-65. Here too, the SSA was aware of the differences between the
   aircraft and concurred with the evaluators' assessment of the value of
   AWI's superiority under this element. Agency Hearing Book, exh. D,
   Aircraft Characteristics; Tr. at 117, 123. Based on our review, we find
   the agency's conclusions reasonable and fair.

         c. Cabin Size

   AWI also asserts that the proposals were rated unfairly and unequally and
   that EADS's proposal was overrated under the cabin size element, under
   which both proposals were rated excellent. The cabin size requirement is
   defined in two operational scenarios: standard mission configuration and
   MEDEVAC. Under the standard mission configuration, the threshold
   requirement was for the aircraft to hold six passenger seats and restraint
   systems. SOW, annex. A, paras. A.1.1, A.2.3.1.2. The threshold requirement
   for the MEDEVAC requirement was for the aircraft to have sufficient space
   to accommodate two NATO standard litters. Id. para. A.2.3.1.1. The rating
   definitions provided that a proposal would receive a "satisfactory" rating
   if it met the threshold requirements, and a "good" rating if it met the
   requirements and "either accommodates an additional NATO standard litter
   (total of three) or seats seven when not in the MEDEVAC configuration." A
   proposal would receive a rating of "excellent," if it met the requirements
   and "either accommodates two or more additional NATO standard litters
   (total of four or more) or seats eight or more when not in the MEDEVAC
   configuration." Agency Hearing Book, exh. W, SSP, at 49.

   EADS's cabin could accommodate 9 seats or two litters; AWI's cabin could
   accommodate 12 seats or two litters. Agency Hearing Book, exh. D, Aircraft
   Characteristics. Both EADS's and AWI's proposals were reasonably given an
   excellent rating for exceeding the objective.

   Here, again, the agency recognized the differences in cabin size, but
   determined that the extra size available in AWI's aircraft did not provide
   a significant value to the agency to justify award at the higher price. As
   the SSAC representative explained, the LUH mission requirements were to
   carry two MEDEVAC patients, a medical attendant, and the aircraft
   crew--this would be four to six persons. Offering 9 seats (like EADS) or
   12 seats (like AWI) was still far in excess of what the Army expected
   would be necessary to perform LUH missions. Tr. at 214-15. The LUH mission
   was not to perform large scale rescue operations, where a larger cabin
   size might be important. Tr. at 215. Considering the LUH mission, the
   evaluators determined that the extra capacity offered by the AWI aircraft
   provided little value to the agency. Tr. at 214-15; Contracting Officer's
   Statement in Response to AWI Protest (Sept. 6, 2006) at 6-7. We find this
   conclusion, and the ratings assigned, to be fair and reasonable.

         d. Endurance

   AWI asserts that EADS's proposal, which was rated satisfactory, was
   overrated under the endurance element. The SOW provided that

     The LUH should have an endurance capability of at least 2.8 hours of
     operation (plus 30-minutes of fuel reserve) without refueling or the use
     of auxiliary fuel. This attribute must be attainable in the standard
     mission configuration . . . The endurance scenario is described as: (a)
     Two minutes of engine warm-up at Maximum Continuous Power (MCP); (b)
     Flight of 2.8 hours consisting of (i) a takeoff at sea level and climb
     to 4,000 feet, (ii) cruise for best endurance power setting/speed, and
     (iii) a descent to landing.

   SOW, annex. A, para. A.2.2.2. The rating definitions for endurance
   provided that a proposal would receive a "satisfactory" rating for meeting
   this requirement, a "good" rating for having an endurance capability of
   "more than 3.5 [hours] through [less than] 3.8 hours" in the stated
   operational conditions, and an "excellent" rating for having an endurance
   capability of "[greater than or equal to] 3.8 hours." Agency Hearing Book,
   exh. W, SSP, at 44-45. EADS's aircraft was found to have "2.8 [hours] +
   30 [minutes]" of endurance capability and was rated satisfactory, while
   AWI's aircraft was found to have "3.64 [hours] + 30 [minutes]" of
   endurance capability and was rated excellent.[22] Agency Hearing Book,
   exh. D, Aircraft Characteristics.

   As the record shows, AWI's proposal received a higher rating than did
   EADS's under this element in recognition of the superior capability of
   AWI's aircraft. In terms of value to the agency, the SSA noted that

     from a mission standpoint and talking to some pilots, nobody barely uses
     the 2.8 [hours] . . . So 2.8 [hours] is really overkill when it comes to
     actually conducting the mission. So 3.6 [hours] would be something that
     we would probably never get to or never have to use or take advantage
     of.

   Tr. at 69; see Tr. at 217-19. Given the RFP's description of the LUH
   mission to provide "light general support" and other services (SOW para.
   1.2) that, according to the agency, will not likely require a flight time
   of longer than 2.8 hours, we find no error in the agency's determination
   that the additional value offered by AWI's aircraft was not significant.

   AWI asserts, however, that EADS's aircraft does not meet the tradable
   endurance threshold requirement and should not have been rated
   satisfactory. In the initial evaluation, the SSEB gave EADS's proposal a
   "marginal" rating under this element because EADS's aircraft was found to
   be 7.5 minutes short of meeting the endurance requirement. In this regard,
   the SSEB noted that when sufficient fuel was loaded into the aircraft for
   EADS to both perform the pre-flight warm-up and to fly 2.8 hours (plus 30
   minutes of fuel reserve), the total weight of EADS aircraft exceeded its
   "maximum takeoff weight" (MTOW).[23] Because an aircraft is not permitted
   to fly when its weight exceeds its MTOW, the SSEB concluded that EADS
   would have to reduce its fuel weight, meaning that with less fuel the
   aircraft could not fly as long. AWI Hearing Book, exh. 11, SSEB Initial
   Report, EADS's Endurance Element Rollup, at 17.

   This issue was raised with EADS during discussions. AR, DVD Tab 29.1,
   EADS's EOC No. 38. In response, EADS made a few small equipment changes to
   its aircraft that slightly reduced its MTOW, and quoted in its FPR a
   statement from the FAA that

     Under the conditions you describe (aircraft will not be lift-off until
     the total mass is equal to/less than the certified maximum take-off
     mass), it would be permissible to perform engine start-up and
     system/preflight checks at a higher mass. I concur with your assessment
     of the [Federal Aviation Regulation Part] 29 requirements for maximum
     weight, as it applies to [EADS's proposed aircraft].

   EADS's Comments in Response to AWI Protest (Aug. 31, 2006), exh. 4, EADS
   FPR, Technical Volume, at III-50. Based in part on this FAA statement, the
   agency agreed that EADS could load its aircraft with fuel in excess of its
   MTOW to perform its on-the-ground warm-up, so long as this excess fuel was
   burned off before takeoff.[24] When considered in this manner, the fuel
   available at takeoff was sufficient to meet the endurance requirement and
   EADS's proposal rating was changed to satisfactory. Id., exh. 6, SSEB
   Final Report, EADS Technical Evaluator Comments, at 12; AWI Hearing Book,
   exh. 15, SSEB Final Report, EADS Endurance Element Rollup, at 17.

   AWI complains that the agency "waived" a requirement of the solicitation
   by allowing EADS to burn off warm-up fuel on the ground prior to take off
   in order to satisfy the endurance element. It argues that the plain
   meaning of the "endurance scenario" in the SOW is that the MTOW must be
   calculated to include both the 2.8 flight hours (plus 30 minutes of fuel
   reserve) and 2 minutes of engine warm-up at MCP. (MCP is the maximum power
   an aircraft can achieve.) According to AWI, if warm-up is performed at
   MCP, the aircraft will necessarily become airborne, so the weight of the
   warm-up fuel must be included in computing the MTOW that will be used in
   determining whether the aircraft meets the endurance requirement.
   Declaration of AWI's Expert (Aug. 31, 2006) paras. 9-10.

   The agency explains that warm-up is never conducted at MCP; to do so may
   result in an aircraft becoming airborne before the aviator could conduct
   the necessary on-the-ground pre-flight checks, which would be unsafe.
   Declaration of Performance Subfactor Lead (Sept. 15, 2006) para. 3.
   According to the performance subfactor lead, the warm-up scenario,
   specifically the reference to 2 minutes at MCP, is merely an "analytical
   tool" that provides a "standardized method for analysis/planning purposes
   to estimate how much fuel would be burned during the normal time that the
   aircraft spends on the ground, prior to takeoff, while the pilots execute
   all of the preflight checks." Id. The subfactor lead notes that nothing in
   the RFP even speaks to, much less prohibits, warm-up fuel being burned off
   before takeoff. Id. para. 5.

   We agree with the agency's interpretation of the solicitation and the
   application of warm-up fuel to the evaluation of EADS's endurance
   capability. The plain language of the SOW, in our view, is only that the
   offeror's LUH must have an "endurance capability of at least 2.8 hours
   (plus 30-minutes of fuel reserve)." This capability requirement does not
   prohibit warm-up fuel, as mentioned in the endurance scenario, from being
   burned off on the ground prior to takeoff. To conclude otherwise would be
   to require an aircraft to perform its warm-up while in the air, which
   would be at odds with the normal practice of pilots performing pre-flight
   checks on the ground before liftoff. The more reasonable interpretation of
   the SOW, in our view, is that the endurance scenario is a guide for
   estimating how much fuel will be burned off during warm-up and, while the
   aircraft must have the capacity to hold this extra fuel, it may be burned
   off prior to takeoff in order to not exceed the MTOW at lift-off.

   The agency witnesses and an aviation expert have explained that it is
   common practice to use a "standard metric" to estimate warm-up fuel, and
   that most aircraft load extra fuel into their aircraft to burn off during
   warm-up. Tr. at 225, 300; Declaration of Performance Subfactor Lead (Sept.
   15, 2006), paras. 3, 5. Indeed, as noted by EADS, AWI's flight manual
   recognizes the propriety of filling the fuel tank beyond the MTOW in
   recognition that the excess fuel will be burned prior to takeoff. See
   EADS's Comments in Response to AWI Protest (Aug. 31, 2006) at 21; exh. 16,
   AWI Rotorcraft Flight Manual, at 1-2. Furthermore, the FAA statement to
   EADS appears to concur that this is an acceptable practice. Based on this
   record, we find that the agency reasonably concluded that EADS's aircraft
   met the endurance requirement.[25]

         e. Performance Specification

   AWI (and MDHI) complain that EADS's proposal was rated too high under the
   performance, operational range, cruise airspeed, force protection, and
   system growth potential elements. Under these elements, EADS's technical
   proposal described capabilities that exceeded the SOW requirements,
   although the proposal's performance specification only represented that
   EADS's aircraft would meet the SOW requirements for these elements. The
   agency evaluated the proposal using the higher capabilities offered in the
   technical volume, rather than the lower capabilities offered in the
   performance specification. The protesters contend that EADS's proposal
   should have been given the lower ratings associated with the performance
   specification.

   The RFP required, among other things, that offerors include in their
   proposals a "performance specification" and a "configuration list," which
   together were to be evaluated as an element under the management subfactor
   of the P/M factor. Section L of the solicitation provided that the
   performance specification "shall be based on the attributes delineated in
   Annex A [of the SOW] and shall replace Annex A upon contract award." RFP
   sect. L-23, para. 2.5.2.5; see id. sect. C-1 (performance specification
   and configuration list "will be incorporated into the contract as one of
   the pertinent attachments"). Although EADS's performance specification
   recited the Annex A requirements for the elements in question, the firm's
   technical volume, configuration list, and the performance of its aircraft
   during the SSPD all demonstrated to the agency that the offered aircraft
   exceeded these attributes. Contracting Officer's Statement in Response to
   AWI Protest (Aug. 31, 2006) at 3-4, 6. Since the entirety of the proposal
   was incorporated into the contract (not just the performance
   specification),[26] the agency concluded that EADS would be bound to the
   higher performance offered in its proposal and therefore evaluated the
   proposal using the higher attributes. Tr. at 147-48.

   The crux of AWI's argument is that because the performance specification
   takes precedence over the other areas of the proposal, it therefore should
   have been controlling in the evaluation. We disagree. The order of
   precedence clause included in the RFP provided that

     In the event of a conflict between the Statement of Work (SOW) and the
     contractor[']s proposed approach (having been incorporated as a part of
     the contract), performance of the requirement(s) in the SOW shall have
     ultimate priority. However, the contractor is not relieved of fulfilling
     its obligation and adhering to the incorporated approach unless such
     adherence would result in the failure to accomplish a requirement of the
     SOW. . .

   RFP sect. H-4 (emphasis added). Thus, since the contract incorporates
   EADS's proposal, we think that EADS has agreed to be bound to perform at
   the higher levels promised in the proposal, even though its performance
   specification recited the lower levels stated in the SOW.

   AWI also argues that the disparity between the performance specification
   and technical proposal poses performance risk. In this regard, the agency
   recognized that there could be some contract risk if EADS were to assert
   that it was only bound by the performance specification, but found this
   risk to be low. Since the technical proposal had been incorporated into
   the contract, and since EADS's FAA certification was based on the higher
   capabilities described in the proposal and not the lower performing
   capabilities outlined in the performance specification, the agency
   believed that the risk of EADS providing a lower performing aircraft was
   low. Contracting Officer's Statement in Response to AWI Protest (Aug. 31,
   2006) at 6-8. The SSA was briefed on the disparities between the proposal
   and performance specification, as well as the accompanying proposal risk,
   and concurred with the evaluators' conclusions. Agency Hearing Book, exh.
   C, SSA Final Briefing Slides 54, 55; exh. D, Aircraft Characteristics
   Chart; Tr. at 165-67, 286-87. Based on our review, we find no error in the
   agency's evaluation.

         f. Technical Risk

   AWI also asserts that EADS's aircraft poses technical risk that was not
   reflected in the agency's low risk rating. It asserts that EADS's aircraft
   failed to meet the internal/external load requirement and other "important
   attributes" (discussed below) that will cause "degraded performance," that
   the EADS's aircraft is "old" and is based on 35-year old legacy
   technology, and that the aircraft has recently crashed twice. AWI Protest
   (July 24, 2006) at 69-70.

   As noted by AWI, EADS failed to meet the threshold requirements for
   internal/external load, CVR/FDR, operational environment, and startup
   timeline.[27] All four of these elements were "tradable" elements, meaning
   that a proposal could still be considered for award if rated
   unsatisfactory under the elements. We note that CVR/FDR, operational
   environment, and startup timeline were the least important elements under
   two of the technical subfactors, which was consistent with the agency's
   view of the relative lack of importance of these elements in terms of the
   mission. For example, the SSA viewed CVR/FDR (which is what laymen refer
   to as the "black box" or recorder) as a "future requirement" with no
   mission impact; its purpose is only to record data for post-accident
   investigations. Tr. at 78; AR, DVD Tab 8, SSDD, para. 14.

   With regard to the internal/external load element, where AWI received a
   good rating in contrast to EADS's unacceptable rating, the SOW required
   that the proposed aircraft have the capability to HOGE "in a high/hot
   (4,000' pressure altitude/95DEG Fahrenheit) environment" with an internal
   mission load of 1,250 pounds and an external mission load of 2,200 pounds.
   SOW, annex. A, paras. A.2.2.3.1, A.2.2.3.2. The agency notes that all
   offerors' aircraft, with the exception of AWI's significantly larger
   aircraft, failed this attribute.[28] The SSA determined (after consulting
   with the "users") that EADS's failure to meet the internal/external load
   requirement had only a "low" mission impact on the agency. Tr. at 78-82,
   177. As the SSA discussed in his SSDD:

     Lesser or greater internal/external load capabilities have relatively
     little impact on any of the[] core missions, e.g. either [AWI's or
     EADS's] aircraft is fully capable of meeting MEDEVAC mission
     requirements (2 litter patients and crew members), and lifting and
     hoisting of injured/rescued personnel is well within the capability of
     either aircraft. General support missions will make tradeoffs between
     fuel and cargo, so the mission impact of not meeting the
     internal/external load attribute is low.

   AR, DVD Tab 8, SSDD, para. 14. While the additional capability of AWI's
   aircraft under this element was recognized by the SSA as a "desirable
   attribute," the SSA determined that the fact that EADS "does not meet
   [this] tradable attribute[] would not hinder the ability of the EADS
   aircraft to perform the LUH mission." Id. Moreover, it was found that the
   extra weight and distance that AWI's aircraft could travel did not provide
   significant value to the agency in terms of the mission intended for LUH
   aircraft. Contracting Officer's Statement in Response to AWI Protest (Aug.
   18, 2006) at 46-47; Tr. at 213-14.

   In sum, we find no error in the agency's evaluation of technical risk
   based on EADS's unsatisfactory ratings for these tradable elements, or in
   the evaluation of AWI's superiority under these elements, given that the
   impact to the mission was reasonably determined to be low.

   We also find no merit to AWI's argument that the age of EADS's aircraft
   poses increased risk to performance. As explained by the intervenor, the
   aircraft offered by EADS (the EC/UH-145) is the marketing name for the BK
   117 C2,

     which is the latest in the line of the BK 117 aircraft. Although the
     history of the BK 117 dates back 27 years, the aircraft has evolved and
     modernized to meet current regulations and incorporate the latest
     technologies. The UH-145 has been available in the US commercial market
     for only 3 years. EADS delivered [the] first UH-145 in France in 2002.
     While the UH-145 has its roots in the BK 117, its front end comprises
     new avionics and composites, as well as new blades. . . [T]he UH-145 is
     a modern aircraft, with a state-of-the-art hingeless main rotor system,
     lightweight and crashworthy composite airframe, advanced avionics and a
     low-workload integrated cockpit.

   EADS's Comments in Response to AWI Protest (Aug. 31, 2006) at 26-27. AWI
   has not provided any probative evidence showing that EADS's aircraft is
   "old" or based on legacy technology that poses a risk to aircraft
   performance as claimed.[29]

   With regard to EADS's aircraft crash history, AWI cites to a media report
   that the EADS helicopter crashed on two occasions in the Pyrenees in
   France. This information did not come to the agency's attention until June
   21, 2006, after receipt of FPRs. The government conducted an
   investigation, and an internal review was performed by the LUH project
   manager. Shortly after the article was published, an announcement was made
   by French aviation officials withdrawing plans to impose restrictions,
   because the crashes were found to have been caused by the "extreme
   conditions involved in alpine search and rescue" and not due to problems
   with the EADS aircraft. Declaration of LUH Project Manager (Aug. 18, 2006)
   para. 2. As part of its investigation, the agency queried the FAA
   regarding these incidents and found that the FAA was not aware of any
   restrictions or limitations currently or previously placed on this
   aircraft. Id.; Contracting Officer's Statement in Response to AWI Protest
   (Aug. 18, 2006) at 54. In light of the agency's thorough investigation,
   and the findings that the crashes were due to weather conditions and not
   aircraft malfunction, we find no basis to challenge the agency's
   conclusion that the EADS's aircraft presented low technical risk.

       2. MDHI's Protest Grounds

   MDHI primarily challenges the evaluation of its own proposal under the
   technical factor, where MDHI received a marginal and high risk rating,
   contending that the rating does not accurately reflect the merits of
   MDHI's proposal. It asserts that the assessment of "deficiencies" under
   tradable requirements deviates from the RFP evaluation scheme, because it
   rendered MDHI's proposal ineligible for award and treated non-mandatory
   elements as "mission essential mandatory requirements." MDHI's Comments
   (Aug. 31, 2006) at 17-18. Seemingly inconsistent with that argument, MDHI
   also contends that the rating assessments do not take into account
   "mission criticality" of any of the failed attributes. MDHI's Comments
   (Sept. 6, 2006) at 2. MDHI also complains that its proposal deficiencies
   were considered more significant than the same deficiencies in EADS's
   proposal, thus demonstrating unequal treatment.

   With regard to MDHI's general complaint about the use of the term
   "deficiency," the record shows that the agency explained to offerors how
   proposals would be evaluated and how the agency would use the term
   "deficiency" in the evaluation. As offerors were advised, deficiencies
   would be assessed for failing to meet a requirement, but a deficiency
   under a "mandatory" requirement would preclude award, whereas a deficiency
   under a "tradable" requirement would not. AR (Aug. 20, 2006), exh. L, MDHI
   Discussion Slides, at 9. As indicated above, under the tradable elements,
   a deficiency, or "[f]ailure to meet a threshold requirement[,] . . . was
   captured in the adjectival rating for that element, considered in the
   subfactor rollup, and ultimately considered in the best value decision."
   Contracting Officer's Statement in Response to MDHI Protest (Aug. 31,
   2006) at 6. The use of the term "deficiency" was applied in the same
   manner to all offeror's proposals, as were the rating definitions set
   forth in the SSP.[30]

   Consistent with these definitions, MDHI's technical proposal received a
   satisfactory or better rating under each of the five mandatory
   requirements; seven unsatisfactory ratings under the tradable technical
   elements of CVR/FDR, endurance, internal/external load, cruise airspeed,
   operational environment, startup timeline, and system growth potential;
   and a marginal rating for the open port and pressure refueling tradable
   element. In contrast, EADS's and AWI's proposals received fewer
   unsatisfactory ratings, and higher ratings under many of the elements,
   including a number of excellent ratings. Therefore, the overall technical
   rating of MDHI's proposal was significantly inferior to the ratings of
   both EADS's and AWI's proposals. The record shows that the SSA properly
   took into account the significance of these ratings in terms of their
   impact on the suitability of MDHI's aircraft for the LUH mission, and
   reasonably considered this information in concluding that MDHI's
   technically inferior proposal with a price that was $400 million higher
   than EADS's price did not offer the best value to the government. AR, DVD
   Tab 8, SSDD, para. 4.

   Although MDHI challenges the assessment of specific deficiencies,
   weaknesses, and ratings under several of the technical elements, we have
   reviewed the record and find that the agency properly evaluated MDHI's
   proposal in accordance with the RFP in a fair and reasonable manner.
   Contrary to MDHI's complaints, the record is replete with evidence that
   the agency took into account "mission criticality" or utility when
   assessing evaluation ratings. We also find no merit to MDHI's contention
   that the agency was too harsh in its criticisms of MDHI's proposal, or
   that there was unequal treatment, in the evaluation of various elements of
   the technical factor. We discuss a few representative examples of MDHI's
   challenges to the evaluation below.

         a. Internal/External Load

   MDHI contends that its proposal was misevaluated under the
   internal/external load element. As indicated above, the SOW required that
   the proposed aircraft have the capability to HOGE with an internal mission
   load of 1,250 pounds and an external mission load of 2,200 pounds. SOW,
   annex. A, paras. A.2.2.3.1, A.2.2.3.2. MDHI's proposed aircraft had an
   internal and external load of 942 pounds,[31] and EADS's aircraft had an
   internal and external load of 1,107 pounds. Agency Hearing Book, exh. D,
   Aircraft Characteristics Chart. Thus, both MDHI's and EADS's proposals
   were rated unsatisfactory for the internal/external load element. However,
   MDHI's proposal received a marginal rating for the performance subfactor
   (under which internal/external load was evaluated), while EADS's proposal
   received a satisfactory rating. Agency Hearing Book, exh. C, SSA Final
   Briefing, Slides 34, 54.

   MDHI complains that the agency gave too much weight to the
   internal/external load failure in evaluating MDHI's proposal in contrast
   to EADS's proposal, considering that the agency found the failure not to
   be mission critical for EADS. However, as the record shows, MDHI's lower
   performance subfactor rating (and overall technical factor rating) was not
   due to a difference in treatment of the proposals under the
   internal/external load element. Rather, MDHI's lower rating was due to the
   fact that MDHI's proposal also received four additional unsatisfactory
   ratings (two more than EADS), and was rated inferior to EADS's proposal
   under four of the ten elements that were evaluated under this subfactor.
   While it is true that mission suitability was expressly discussed in the
   SSDD as to why EADS's unacceptable rating for this tradable element was
   not critical, AR, DVD Tab 8, SSDD, para. 14, this discussion only
   addressed EADS's proposal because EADS was in line for award and MDHI's
   significantly inferior and higher-priced proposal was not.

         b. Open  Port and Pressure Refueling

   MDHI complains that its proposal was unfairly evaluated under the open
   port and pressure refueling element. The SOW required that "[t]he LUH
   should be capable of being refueled using standard commercial pressure
   systems" and that the "LUH should also be capable of being refueled using
   open port refuel systems." SOW, annex. A, para. A.2.3.8. The SSP provided
   that a proposal would receive a "marginal" rating if the aircraft could be
   refueled by either commercial pressure systems or open port refuel
   systems. Agency Hearing exh. W, SSP, at 52. Neither MDHI's nor EADS's
   aircraft could be refueled using an open port system, so both proposals
   were rated "marginal" for this element.

   Again, MDHI asserts that the agency was willing to tradeoff this
   requirement only for EADS and not MDHI, thus treating the requirement as
   mission critical only for MDHI's aircraft. MDHI's Comments (Sept. 8, 2006)
   at 7. However, the record does not support MDHI's contention. In fact,
   both proposals received a "satisfactory" rating under the physical
   characteristics subfactor (under which this element was evaluated) based
   upon a reasonable roll-up of the ratings of all of the elements, and there
   is no evidence that the agency considered the mission criticality of these
   offerors' failures to meet this requirement differently. Although here,
   too, mission criticality was discussed in the SSDD with regard to EADS's
   unacceptable rating for this tradable element,[32] but was not discussed
   with regard MDHI's unacceptable rating, AR, DVD Tab 8, SSDD, para. 14,
   this discussion only addressed EADS's proposal because EADS was in line
   for award and MDHI's significantly inferior and higher-priced proposal was
   not.

          c. CVR/FDR

   MDHI contends that its proposal was misevaluated under the CVR/FDR
   element. The SOW required that "[t]he LUH should have a digital [CVR] and
   digital [FDR] that satisfies the requirement of Title 14 CFR Part 27 . . .
   and/or Part 29 . . . ." SOW, annex A, para. A.2.1.6. Both MDHI's and
   EADS's proposals were rated unsatisfactory under the CVR/FDR element
   because neither offeror included with its aircraft a compliant CVR/FDR.

   MDHI argues that its proposal was superior to EADS's proposal under this
   element because MDHI's aircraft assertedly provided some limited data
   recording capability and EADS's aircraft did not. However, the agency
   advised MDHI during discussions that this approach did not meet the SOW
   requirements and MDHI elected not to make any changes in its FPR. AR (Aug.
   20, 2006), exh. N, MDHI Discussions Recap, at 6. In contrast, as MDHI
   admits, EADS offered to provide a CVR/FDR that met the requirements of the
   SOW as a separately priced option to the contract. MDHI's Comments (Aug.
   31, 2006) at 18. Thus, while neither firm met the requirement of this
   element as part of its base contract, EADS at least provided an option
   that met the requirement. However, the agency reasonably rated both
   proposals unsatisfactory for not meeting the requirement as part of the
   base contract.

   MDHI again complains that the agency found EADS's failure to provide a
   CVR/FDR to have a low mission impact, but did not make a similar finding
   with regard to MDHI. Contrary to MDHI's argument, the record does not show
   that MDHI's failure under this element was a significant reason why it
   received an overall marginal technical rating. Both MDHI's and EADS's
   proposals received acceptable ratings under the avionics/electronics
   subfactor despite the unacceptable rating under the CVR/FDR element, and
   while the SSDD discussed mission criticality only in connection with
   EADS's proposal for this element, AR, DVD Tab 6, SSDD, para. 14, this
   discussion occurred because EADS, and not MDHI, was in line for award.

          d. Technical Risk

   MDHI challenges the agency's rating of MDHI's proposal as "high" risk
   under the technical factor. It complains that the agency's risk assessment
   is "based on wholly insubstantial or trivial grounds" and that the agency
   failed to consider MDHI's risk mitigation strategies. MDHI Protest (July
   14, 2006) at 15.

   As the agency explains, MDHI's risk rating was due to a number of issues,
   none of which singularly drove the high risk rating, but all of which,
   when combined, posed a significant risk to performance. Contracting
   Officer's Statement in Response to MDHI Protest (Aug. 18, 2006) at 29-32;
   Contracting Officer's Statement in Response to MDHI Protest (Aug. 31,
   2006) at 6. For example, the agency found, among other things, that MDHI's
   aircraft lacked five FAA certifications,[33] its radios were not
   certified, the antenna configuration was not specified, there existed
   image intensification compatibility issues, and there were concerns
   whether the aircraft cabin size was sufficient to stow both medical
   equipment and the patient litter. Agency Hearing Book, exh. C, SSA Final
   Briefing, Slide 36; Contracting Officer's Statement in Response to MDHI
   Protest (Aug. 18, 2006) at 29-32. MDHI disagrees with the agency's
   assessment that any or all of these issues posed technical risk. For
   example, MDHI asserts that its proposal was unfairly "downgraded" for
   lacking FAA certifications, while EADS's proposal was not similarly
   criticized. However, the record shows meaningful differences between the
   two proposals in this respect. Whereas MDHI lacked five FAA
   certifications, EADS lacked only two, and EADS had provided the agency
   with detailed plans and schedules for these certifications that
   demonstrated to the agency that EADS would be able to obtain the
   certifications by the first aircraft delivery date, as was required by the
   RFP. See MDHI's Comments (Sept. 8, 2006), exh. 5, SSEB Final Report, EADS
   Technical Factor Rollup, at 2. In contrast, the agency, in consultation
   with the FAA advisor on the SSEB, concluded that the larger number of
   certification issues pending for MDHI's aircraft posed a risk that MDHI
   would be unable to obtain all of the certifications by first delivery.
   Contracting Officer's Statement in Response to MDHI Protest (Aug. 18,
   2006) at 30. Although MDHI now claims it is "on the verge of
   certification" and that "all that was required was submittal to the FAA,"
   MDHI Protest (July 14, 2006) at 16, the FAA certification issue was raised
   with MDHI during discussions and MDHI did not respond in a way that
   alleviated the agency's concern. See Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 30-31. Based on this record,
   we find that the agency's concern of increased risk because of the lack of
   five FAA certifications was reasonable and did not represent unfair or
   unequal evaluation.

   MDHI also challenges the agency's assessment of risk with regard to the
   image intensification compatibility element, contending that it adequately
   mitigated the risk in its FPR. The SOW for the image intensification
   compatibility element required that "[t]he LUH aircraft, cabin, and
   cockpit lighting and displays/consoles should be Class A compatible with
   image intensification devices and systems (Night Vision Goggles)." SOW,
   annex. A, para. A.2.1.3. During the SSPD, the agency identified several
   issues of compatibility and raised these with MDHI during discussions.
   Although the agency reports that MDHI responded in its FPR that it could
   "apply fixes and deliver a [Night Vision Goggle] compatible aircraft for
   production," the agency found that MDHI did not provide sufficient
   information to demonstrate that the firm could achieve the required
   compatibility by first production. AR (Aug. 31, 2006), exh. F, SSEB Final
   Report, MDHI Avionics/Electronics Subfactor Rollup, at 2. Therefore, after
   considering MDHI's FPR response, the agency determined that "it is likely
   that some impact to program schedule will occur" to resolve the
   compatibility issues.[34] Id.; exh. G, MDHI Image Intensification
   Capability Element Rollup, at 1. Based on our review of the record, we
   find the agency's judgment reasonable.

   In sum, the record shows that the agency reasonably evaluated the myriad
   of issues that collectively resulted in MDHI's "high" risk rating.
   Although MDHI disagrees with this assessment, it has not shown it to be
   unreasonable.

     B. P/M Factor

   Under the P/M factor, the agency rated AWI's and EADS's proposals as good
   with low risk, and MDHI's proposal as marginal with high risk. The
   protesters complain that their proposals were rated too low and that
   EADS's proposal was rated too high.[35]

   As noted above, the RFP provided that P/M would be evaluated under two
   subfactors. The P/Mfg subfactor was to be evaluated for the "extent to
   which the proposed approach demonstrates an adequate and reasonable
   methodology for achieving the production rate capacity." RFP sect. M-6,
   para. 2.4.1. Elements within the management subfactor were to be evaluated
   on the basis of "thoroughness, completeness, and adequacy." RFP sect. M-6,
   paras. 2.4.2.1-2.4.2.4.

   Based on his review, the SSA found AWI's and EADS's proposals to be
   "fairly comparable" under the P/M subfactor. Tr. at 130. Both proposals
   offered a number of strengths that provided similar benefits to the
   agency. For example, both were found to be "mature, proven
   manufacturer(s)," to have had similar production rates, and to have
   currently manufactured aircraft overseas. Both proposed to transfer
   production to a United States facility--AWI to an established facility in
   Texas and EADS to a facility in Mississippi. Agency Hearing Book, exh. C,
   SSA Final Briefing, Slides 59, 77. The agency found that both transfers
   provided some, albeit low, risk to the agency. Id., Slides 62, 80;
   Contracting Officer's Statement (Aug. 18, 2006) at 20, 55. There were some
   differences in noted strengths and risks, including slight differences in
   the risk associated with transferring facilities. In total, however, the
   SSA determined these differences to be "a wash." Tr. at 137-38; see Tr. at
   282, 289.

   With regard to MDHI's proposal, the agency was concerned that MDHI would
   only be able to meet the government's minimum quantities, that its
   production plan and integrated master schedule were inconsistent and did
   not support the proposal's proposed schedule, and that its performance
   specification and configuration list were incomplete. The agency noted
   that MDHI had not had significant production flow since 2001 and that it
   had only produced on average two aircraft per year from 2003 to 2005. The
   agency also found risks and weaknesses associated with MDHI's vendor base,
   manpower and assembly line issues, and incomplete and inconsistent
   production plan. Agency Hearing Book, exh. C, SSA Final Briefing, Slides
   39-40. The SSA recognized many of these risks and weaknesses in his source
   selection decision. AR, DVD Tab 8, SSDD, para. 10.

   Although the protesters complain that the evaluation was unreasonable,
   based on our review of the record, we find that the agency performed a
   thorough and fair evaluation of proposals under the P/M factor, and drew
   reasonable conclusions about the offerors' approaches. We discuss a few of
   the protesters' specific challenges below.

       1. AWI's Protest Grounds

   AWI asserts that its proposal was not given enough credit for numerous
   asserted strengths under the P/Mfg and the manufacturing subfactors of the
   P/M factor. AWI Protest (July 24, 2006) at 36-43. The record shows that
   many of the strengths that AWI contends were ignored were in fact
   expressly recognized in the evaluation. For example, the final briefing to
   the SSA specifically notes as strengths AWI's established Texas facility,
   its available manpower, and the firm's integrated master schedule
   management approach, all of which AWI complains were ignored or not
   sufficiently credited. Agency Hearing Book, exh. C, SSA Final Briefing,
   Slides 76-77. With regard to other asserted strengths, the agency
   responded with reasonable explanations as to why those features either
   contributed to the proposal's low risk rating, or why the features did not
   provide sufficient benefits to justify a higher adjectival rating. See,
   e.g., Contracting Officer's Statement in Response to AWI Protest (Aug. 18,
   2006) at 19-28.

   For example, with regard to the configuration management approach element
   of the management subfactor (for which AWI's proposal was rated
   "satisfactory"), AWI asserts that its proposal deserved an "excellent"
   rating because it included a [REDACTED] to review change requests. As the
   agency points out, however, this was only one consideration within the
   element. Other considerations included the evaluation of MEDEVAC kits,
   hoist kits, painting and marking, and unique identification. Since AWI
   only met the requirements for these and the other areas considered under
   the element, and did not exceed them, we find reasonable the agency's view
   that the proposal deserved a rating of satisfactory and not excellent. Id.
   at 25-26.

   AWI also complains that EADS's facility transfer is far more risky than
   AWI's, and that EADS's proposal should have been penalized for weaknesses
   and risk associated with its facilities, manpower, and vendor base. AWI
   Protest (July 24, 2006) at 70-74. AWI contends that, unlike AWI, which has
   an established facility and experienced personnel already located in
   Texas, EADS must construct its facility in Mississippi, hire personnel,
   and obtain United States vendors, so that the transfer of operations poses
   greater risk.

   However, as the agency explains, EADS proposed to accomplish the transfer
   with a 3-phase plan that included establishing a "duplicate" production
   line, so that if EADS ran into any problems with the transfer, it could
   still continue with 100 percent of the production from its German
   facilities. EADS also provided a detailed plan and schedule for
   transferring the facility and increasing manpower. Contracting Officer's
   Statement in Response to AWI Protest (Aug. 18, 2006) at 58-59. In
   addition, EADS's proposal identified numerous successful production
   transfers similar to the one proposed for the LUH, which the agency found
   also helped to minimize the risk. AWI's Comments (Aug. 31, 2006), exh. 19,
   SSEB Final Report, EADS P/M Factor Rollup, at 1. EADS also proposed to
   establish United States vendors as "second sources . . . to augment
   EADS'[s] current vendor base." Contracting Officer's Statement in Response
   to AWI Protest (Aug. 18, 2006) at 56. Thus, while the agency recognized
   EADS's facility transfer posed some risk under the P/M factor, it
   reasonably concluded the risk to be low.

   In comparison, AWI also proposed to transfer facilities. Although its
   Texas facility was already established (and was credited as a strength),
   the proposal presented similar risks to EADS's in the transfer of the
   production line to the facility. In this regard, the agency noted that AWI
   still had to increase manpower, add new United States vendors, and
   construct a new storage and flyaway hangar for the aircraft. Id. at 22. It
   also had to duplicate the "tooling and processes" of its Italian facility
   at the Texas facility. AR, DVD Tab 25.4, SSEB Final Report, AWI P/M Factor
   Rollup, at 1. Like EADS, the agency noted that AWI had facilities that
   could remain as back-up sources for the LUH aircraft. Id. The agency found
   that both firms relied on overseas vendors, but unlike EADS, AWI did not
   offer to include qualifying United States vendors as second sources;
   without backup sources, AWI's proposal could, in the long term,
   potentially cause greater risk than EADS's in this regard. Contracting
   Officer's Statement in Response to AWI Protest (Sept. 6, 2006) at 8;
   EADS's Comments in Response to AWI Protest (Aug. 31, 2006) at 31-32. All
   issues considered, however, the agency reasonably determined that the risk
   associated with facility transfer was not a significant discriminator
   between these two proposals. Tr. at 137-39, 282.

   AWI complains that several other strengths associated with its proposal,
   or risks and weaknesses associated with EADS's proposal, were ignored by
   the agency in the evaluation of the P/M factor, which led to an unequal
   evaluation of EADS's and AWI's proposals. These asserted discriminators
   include parts obsolescence, "Class I" changes, changes in vendors
   resulting from facility transfers, conflicts between EADS's performance
   specification and its technical proposal, and AWI's asserted strengths for
   purchase orders and a "unique modular design." AWI's Comments (Sept. 6,
   2006) at 66-68. AWI asserts that the evaluation was flawed because these
   issues were not brought to the SSA's attention. While it is true that each
   and every proposal feature (or asserted strength) was not discussed with
   the SSA, the record shows that the agency highlighted the most significant
   proposal features and discriminators to enable the SSA to make a reasoned,
   informed decision. As illustrated by the following examples, we find the
   evaluation of these issues to be reasonable.

   As discussed above, the evaluation of the offerors' facility transfers,
   vendor changes, and EADS's performance specification were conducted
   reasonably and fairly, and the results were accurately reported to the
   SSA. See Agency Hearing Book, exh. C, SSA Final Briefing, Slides 59, 77;
   exh. D, Aircraft Characteristics. The fact that AWI stated in its proposal
   that it had already issued purchase orders to buy components for 120
   aircraft was reasonably characterized by the SSA as a "so-what?" (meaning
   that this was not a significant discriminator to the agency). Tr. at 140.
   In this regard, the agency found that AWI's proposal did not indicate what
   parts were purchased, Contracting Officer's Statement in Response to AWI's
   Protest (Aug. 18, 2006) at 21, and AWI has not shown that this resulted in
   a significant benefit to the agency. AWI's modular design was considered
   and balanced against other weaknesses and risks in AWI's proposal. See
   Contracting Officer's Statement in Response to AWI Protest (Sept. 6, 2006)
   at 13-14.

   With regard to parts obsolescence and "Class 1" changes, AWI's complaint
   is that EADS's proposal reflects "vagueness" in who will be responsible
   for the costs of training and costs associated with certain types of
   changes, and that EADS proposes to resolve these issues through equitable
   adjustments during the performance of the contract. AWI's Comments (Aug.
   31, 2006) at 36. In its evaluation of EADS's proposal, the agency
   identified this as a risk to performance, but determined that the risk was
   low. Id., exh. 11, SSEB Final Report, EADS P/M Factor Rollup, at 1. AWI
   complains that its proposal should have been rated superior to EADS's
   proposal because it did not contain similar risks. The record does not
   support AWI's arguments. EADS's equitable adjustment clause states:

     If a design change, supplier change, or an alternative change in
     technology [occurs], the US Army and EADS-NA Defense may jointly
     evaluate opportunities for equitably sharing cost and schedule impact.

   EADS's Comments in Response to AWI Protest (Sept. 9, 2006), exh. 5, EADS
   FPR, P/M Approach, at IV-118d. Whether an equitable adjustment is
   permitted is left to the discretion of the contracting officer. Id.; Tr.
   at 278. Under EADS's approach, equitable adjustments may occur with "Class
   I" changes, but "Class II changes not directed by the Government will not
   be considered as basis of equitable adjustment." AR, DVD Tab 33.4, EADS
   FPR, P/M Approach, at IV-113. Given the contracting officer's discretion
   whether to agree to an equitable adjustment, we have no basis to question
   the agency's evaluation of EADS's approach as low risk. Moreover, AWI
   similarly proposed that it would propose an "Engineering Change Proposal"
   to equitably share the costs with the government if there were any changes
   to the initial hardware configuration over the aircraft's life cycle.
   Second Declaration of EADS's Cost Expert, exh. 21, AWI FPR, P/M Approach,
   at 5. Our review of the record shows little difference between the two
   proposal approaches in this regard.

   In sum, AWI has not shown that its and EADS's proposals were unreasonably
   evaluated under the P/M factor.

       2. MDHI's Protest Grounds

   MDHI challenges the numerous weaknesses identified in the evaluation
   relating to both its adjectival and risk rating under the P/M factor. It
   asserts that some are addressed in its proposal or were mitigated by the
   infusion of capital and takeover by Patriarch; that others were only a
   "mere formality" or "de minimus"; and that the P/M factor evaluation
   record is inaccurate, inconsistent, and incomplete.[36] MDHI's Comments
   (Aug. 31, 2006) at 21-22; MDHI's Comments (Sept. 6, 2006) at 5-7.

   The agency has responded to each of the challenged areas, reasonably
   explaining why MDHI's proposal was assessed weaknesses or posed risks to
   performance under the P/M factor. Many of these explanations were not
   rebutted by the protester, and we find the unrebutted record sufficient to
   demonstrate the reasonableness of the agency's conclusions. MDHI's
   arguments with regard to the remaining issues reflect only its
   disagreement with the agency, and, based on our review, we find the
   agency's evaluation of this factor unobjectionable.

   For example, our review of the record shows that the agency reasonably
   found weaknesses and risk associated with MDHI's production rate capacity,
   which caused the agency to question whether the firm could provide more
   than the minimum government quantities. The agency found that MDHI's
   asserted production rate capacity was not supported by other areas of the
   firm's proposal, such as its discussions of facilities and tooling,
   process validation, manpower, and the firm's vendor base. The integrated
   master schedule was found to be only "minimally supported" and inaccurate.
   The agency was further concerned about MDHI's "low production rate
   history," and the firm's lack of experience in managing a program of the
   magnitude and complexity of the LUH. The agency reasonably determined
   that, if MDHI were to receive award, it would have to engage in a
   "significant ramp-up" and increase its manpower 150 percent above its
   current level. The agency also noted that MDHI was still in the process of
   bringing back vendors who had not been paid under MDHI's prior management,
   but had no plans to qualify "second sources" as back-up to these "single
   source" vendors to ensure against an interruption in the parts supply. The
   agency also found that MDHI's proposal talked about manufacturing parts
   "in-house," but provided no plan or time-frame to accomplish this, and the
   firm did not discuss the associated risks and potential impacts to parts
   availability. All of these issues reasonably and substantially contributed
   to MDHI's marginal and high risk rating under the P/M factor. AR, DVD Tab
   16.4, SSEB Final Report, MDHI P/M Factor Rollup, at 1-2; see Contracting
   Officer's Statement in Response to MDHI Protest (Aug. 18, 2006) at 32-40.

   MDHI asserts that it addressed many of these issues in its FPR and in a
   March 31, 2006 letter in response to discussions, but the agency
   reasonably found that the firm did not adequately respond to the agency's
   concerns. For example, while MDHI argues that new management addressed the
   vendor payment issues, the agency found that the vendor base was still in
   the process of being re-established, and since the vendors were all single
   sources, schedule delays could occur if there were problems with any of
   the vendors. AR DVD Tab 16.4, SSEB Final Report, MDHI P/M Factor Rollup,
   at 2. Thus, the agency considered MDHI's response, but reasonably found
   that there were still issues that presented risk. AR, DVD Tab 8, SSDD,
   para. 10.

   MDHI also complains that some criticisms involving missing proposal
   information amount to "mere formality" and elevate "form over substance."
   MDHI's Comments (Aug. 31, 2006) at 22. For example, it contends that the
   agency unreasonably assessed weaknesses for MDHI's failure to identify
   sole sources with unique production processes, and for MDHI's failure to
   show that its performance specification met the requirements of the SOW.
   We find that not only was this information required by the RFP, but also
   the failure to provide this information could reasonably be found to
   result in risk to performance. Parts with unique production sources could
   result in schedule delays if production problems occur with the source;
   knowing which vendors have unique production sources allows the agency to
   identify which parts are flight critical and which would pose a "much more
   serious problem" if the source "were to go out of business or stop
   production of that item." Contracting Officer's Statement in Response to
   MDHI Protest (Sept. 6, 2006) at 11; Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 35. Although MDHI generally
   asserted in its proposal that it "will meet all system attributes of the
   SOW Annex A," AR, DVD Tab 15.4, MDHI FPR, P/M Approach, at 97, this
   general statement could reasonably leave doubt in the agency's mind
   whether MDHI would in fact meet the requirements, especially given all of
   the other informational deficiencies and inconsistencies in MDHI's
   proposal.[37] Contracting Officer's Statement in Response to MDHI Protest
   (Aug. 18, 2006) at 37; AR, DVD Tab 16.4, SSEB Final Report, MDHI P/M
   Factor Rollup, at 1; Agency Hearing Book, exh. C, SSA Final Briefing,
   Slides 39-40.

   MDHI also complains that there are "inherent inconsistencies" in the
   evaluation. MDHI's Comments (Sept. 6, 2006) at 6. For example, with regard
   to the evaluation of obsolescence, the agency found that

     MDHI outlined an adequate obsolescence plan. However, since their
     aircraft was designed in 1994, they state that they do not anticipate
     any obsolescence issues for the LUH program. There is a risk that MDHI
     is not giving obsolescence the requisite level of attention.

   AR, DVD Tab 16.4, SSEB Final Report, MDHI P/M Factor Rollup, at 2. MDHI
   complains that the high risk rating is inconsistent with the finding that
   the plan was "adequate" and is also inconsistent with the low risk rating
   given to EADS, especially given the "age" of EADS's aircraft and the
   weaknesses the agency found with regard EADS's proposed obsolescence
   mitigation approach.[38] We think that the agency's concern was reasonable
   that MDHI's proposal may have posed a greater risk than the problems found
   in EADS's proposal. Based on this record, the agency reasonably could find
   that MDHI's failure to give the requisite level of attention to
   obsolescence carries far more risk than the problems found in EADS's
   proposal. In any case, as noted above, obsolescence mitigation was just
   one of many areas of concern that led to MDHI's high risk rating for this
   factor. MDHI's proposal included a number of other risks that were not
   present in EADS's proposal and which reasonably contributed to the
   "aggregate" risk rating of high. Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 31, 2006) at 12. Based on our review, we
   find no inconsistency in this evaluation.

   In sum, we find no error in the agency's evaluation of proposals under the
   P/M factor. [39]

     C. Past Performance Factor

   MDHI contends that the agency inconsistently and unfairly evaluated MDHI's
   and EADS's proposals under the past performance factor. The past
   performance evaluation was performed by the performance risk assessment
   group (PRAG) in accordance with the requirements of the RFP. As noted
   above, the RFP stated that the past performance of each offeror and its
   major subcontractors would be evaluated during the 3 years preceding the
   solicitation for schedule, quality of performance, business relations and
   customer satisfaction, and financial/cost management. RFP sect. M-6,
   paras. 2.6.2 , 2.6.4.

   With regard to EADS, the PRAG noted that the firm had proposed its UH-145
   aircraft, which had been in production for the commercial market as the BK
   117 since 2001, and that EADS had produced approximately 83 aircraft in 5
   years. The PRAG considered 33 relevant contracts and 36 customer responses
   for EADS's major subcontractors. While the PRAG noted that EADS did not
   cite any relevant contracts or provide customer surveys for EADS's work as
   a prime contractor (all of the past performance was from EADS's proposed
   subcontractors), it did not find this problematic since EADS was proposed
   to perform only 1 percent of the work, and that work was in "program
   management and contract management oversight." The PRAG found that the
   "vast amount of experience in producing, training, sustaining and
   maintaining helicopters to perform the remaining 99% of the LUH
   requirement" was to be performed by EADS's subcontractors. AR, DVD Tab.
   34.5, SSEB Final Report, EADS Performance Risk Assessment, at 16.

   EADS's performance history revealed mostly "very positive" comments and
   many "exceptional" ratings. One negative comment revealed a concern about
   translation errors in training manuals, but EADS's plan to correct this
   error, in the minds of the PRAG, "mitigated" this concern. The PRAG
   considered the risks associated with EADS's proposed transfer of its
   facilities from Germany to Mississippi, and found that the risk was low,
   in part because EADS had successfully transferred production from one
   country to another "multiple times." Id. at 16-17. The PRAG also
   considered data received from the Defense Contract Audit Agency (DCAA),
   which demonstrated that EADS was "capable of producing a quality product,
   meeting the negotiated schedules and doing both within the negotiated
   cost." Id. at 17.

   Based on its evaluation, the PRAG found no weaknesses and two strengths in
   the experience of EADS's subcontractor team and in the firm's "solid
   financial position and capability to perform the LUH requirement." Id. The
   PRAG rated EADS's proposal as "low" risk under the past performance
   factor.

   MDHI complains the EADS's proposal was undeserving of a low risk rating.
   MDHI argues that the facility transfer, the training manual translation
   errors, and a concern about parts availability that EADS's addressed
   during discussions, pose higher risk than was noted by the PRAG or
   reported to the SSA. However, as noted above, the agency fully considered
   these issues, including EADS's discussion responses, and, in our view,
   reasonably determined that the risk to EADS's performance was low.

   MDHI nevertheless asserts that the lack of past performance information
   from EADS itself should have resulted in a "neutral" rating at best, or a
   "moderate" or "high" rating, given that EADS is performing only 1 percent
   of the work. Again, we find that this issue was fully considered, and that
   the agency reasonably concluded that since EADS's subcontractors were
   performing essentially all of the aircraft production, manufacturing, and
   training work, their past performance was most relevant and demonstrated
   that the EADS team would successfully perform this contract.

   With regard to MDHI, the PRAG noted that the firm had proposed its MD
   Explorer aircraft, which had been in the commercial marketplace since
   1995. MDHI had produced approximately 100 aircraft in the past 11 years.
   The PRAG considered 15 relevant contracts and 30 customer surveys received
   for MDHI and its major subcontractors. The PRAG's research revealed a
   history of numerous financial and performance problems prior to MDHI's
   acquisition by Patriarch. The PRAG also noted improvement that occurred
   after the takeover, but found that not all of the problems had been
   resolved:

     The majority and controlling interest of MDHI was acquired by Patriarch
     . . . in July 2005. Prior to this acquisition, MDHI was on the verge of
     bankruptcy, delinquent on all debt and delinquent on a very high
     percentage of spare parts and service orders, both Government and
     commercial. Additionally, they had lost most of their vendor base, had
     numerous vacant top level management positions and had lost significant
     market share and customer acceptance. All of this was due to lack of
     financial capital and ineffective management by previous ownership.
     Since being acquired by Patriarch, MDHI has shown much improvement from
     July 2005 to the present in their management team, financial capability,
     supply chain/vendor base, aircraft production, and spare parts supply.
     They are still in the process, however, of rebuilding their supply chain
     for production and spare parts supply. While they show an upward trend
     in meeting delivery schedules for spare parts support, they are
     currently still missing deliveries on spare parts orders. This company
     is basically operating as a new startup company with the exception of
     having an established product fleet of 3,500 aircraft to support and
     maintain.

   AR, DVD Tab 16.5, SSEB Final Report, MDHI Performance Risk Assessment, at
   9.

   The PRAG found two strengths in MDHI's past performance, relating to a
   "robust quality inspection program" and the "informative and very well
   organized" past performance proposal. The PRAG did not find any
   weaknesses, but noted several "concerns" that contributed to the moderate
   risk rating. These concerns related to credit terms with MDHI's major
   suppliers, that delivery schedules were still delinquent on some vendor
   contracts, and that MDHI was still "basically operating as a `new
   start-up' company trying to reestablish their supply chain and reignite
   their production line." Id. at 12. Concluding that a low risk rating was
   inappropriate because "more time is needed to completely recover from the
   repercussions of financial distress this company has experienced over the
   past three years," id. at 13, the PRAG rated MDHI's proposal "moderate"
   risk under the past performance factor.

   MDHI asserts that the PRAG's evaluation of its proposal improperly
   emphasized MDHI's performance problems prior to the Patriarch acquisition,
   and did not adequately take into account MDHI's discussion responses,
   which explained how the Patriarch takeover addressed these issues.
   However, the RFP specifically provided that performance history for the 3
   years preceding the solicitation would be evaluated, and the pre-Patriarch
   performance occurred within that 3-year timeframe. The evaluation shows
   that the agency fully considered the improvement to MDHI's performance
   since Patriarch took over the management of MDHI and provided financial
   support. However, the agency also noted that some vendor issues remained.
   Although MDHI complains that the characterization of its company as a "new
   start-up" company is unfair, given that MDHI is, in many ways, starting
   over with new management and with rebuilding relationships with its
   vendors, we find this assessment on balance to be reasonable.

   In sum, based on our review of the record, we find that the agency's
   evaluation of past performance was reasonable.[40]

     D. Price Factor

   Both AWI and MDHI protest the evaluation of EADS's price. They complain
   that the record does not explain the "drastic" reduction in EADS's
   proposed price from initial to final proposal, and that EADS's final
   price, especially its proposed CLS price, is "unbalanced" because it is
   unreasonably low. They assert that the agency failed to perform a proper
   "reasonableness" or "realism" analysis, or a proper risk assessment of
   EADS's price. MDHI also challenges the evaluation of its own price
   proposal.

   The agency correctly explains that, with the exception of a small
   component of the effort that was cost-reimbursable, the vast majority of
   the work (including CLS) was fixed-price and, as such, a realism analysis
   was not required in the absence of a solicitation provision requiring such
   an analysis. See Mantech Sec. Tech. Corp., B-297133.3, Apr, 24, 2006, 2006
   CPD para. 77 at 9. Furthermore, the purpose of a "reasonableness" analysis
   is to ensure that prices are not unreasonably high, as opposed to
   unreasonably low, Cherry Road Techs.; Electronic Data Sys. Corp., supra,
   at 18, and the protesters complain only that EADS's price is too low.

   The 132-page Price Negotiation Memorandum (and additional eight
   attachments to that document), the 39-page price analysis report, the SSEB
   price factor summary reports, and supporting documents show that the
   agency conducted a detailed, thorough analysis of each offeror's proposed
   price, including the overall price and the price for each of the following
   components: production, CLS, training, cost-reimbursable items, fuel, and
   other services. The agency fully analyzed each firm's pricing template and
   discussed the basis for each firm's proposed price, noting strengths and
   weaknesses and risks of the pricing approach. The agency noted changes
   from initial to final pricing, and discussed such things as proposed
   inflation factors and economic price adjustment (EPA) clauses, where made
   applicable by the offeror's proposal. The findings of the price evaluation
   team were reported to the SSA during the SSA's final briefing. We find
   this analysis to sufficiently support the agency's conclusion that EADS's
   FPR price was fair and reasonable.

   The offerors' initial and final prices were as follows:

  +----------------------------------------------------------------------------+
  |    |Initial   |Final Total   |Initial CLS|Final CLS  |Initial   |Final     |
  |    |Total     |              |           |           |Production|Production|
  |    |          |              |(PY1-PY-20)|(PY1-PY-20)|          |          |
  |----+----------+--------------+-----------+-----------+----------+----------|
  |EADS|[REDACTED]|$3,880,000,723|[REDACTED] |[REDACTED] |[REDACTED]|[REDACTED]|
  |----+----------+--------------+-----------+-----------+----------+----------|
  |AWI |[REDACTED]|$4,747,162,454|[REDACTED] |[REDACTED] |[REDACTED]|[REDACTED]|
  |----+----------+--------------+-----------+-----------+----------+----------|
  |MDHI|[REDACTED]|$4,251,356,442|[REDACTED] |[REDACTED] |[REDACTED]|[REDACTED]|
  +----------------------------------------------------------------------------+

   AR, DVD Tab 37, Price Negotiation Memorandum, at 12-13; AWI's Comments
   (Sept. 6, 2006) at 39, 41. As can be noted from this table, all offerors
   made adjustments to their FPR pricing.

   MDHI increased its price after discussions in response to the agency's
   concern about MDHI's profitability. During discussions, MDHI admitted that
   its initial pricing was too low because it was based on "old prices" and a
   "flawed bid strategy." AR (Aug. 20, 2006), exh. G, Letter from MDHI to
   Army dated March 31, 2006, at 13.

   AWI reduced its overall, CLS, and production prices; but its overall price
   remained higher than EADS. AWI's higher overall price was caused by
   [REDACTED].

   EADS similarly reduced its overall, CLS, and production prices, although
   the largest reduction occurred under CLS. EADS explained that the
   significant reduction in its CLS pricing was primarily due to
   clarifications and changes in the RFP regarding the evaluation of CLS
   pricing,[41] as well as staffing and other changes to its proposal.[42]
   Declaration of EADS's Cost Expert (Sept. 5, 2006), paras. 10-18. The
   agency found that EADS had adequately explained and supported this price
   reduction, and that EADS's final CLS pricing, which was in line with the
   other offerors and higher than AWI's, was reasonable. Contracting
   Officer's Statement in Response to AWI Protest (Aug. 31, 2006) at 26.

   The protesters argue that EADS did not sufficiently explain its CLS price
   reduction, and that the "drastic" drop in CLS price should have triggered
   the agency to request additional explanation for the price reduction, or
   led the agency to conclude that EADS's proposal presented performance or
   schedule risk. However, based on EADS's documentation of its CLS approach
   and pricing methodologies, which we conclude the agency reasonably found
   adequate, the agency had no reason to further question EADS's regarding
   its CLS pricing. Id. at 25. Given that EADS's CLS pricing was in line with
   the other offerors and was higher than AWI's, we have no reason to
   conclude that EADS's CLS pricing is unreasonably low, unbalanced, or poses
   a risk to performance. Similarly, we find that the record sufficiently
   explains the basis for EADS's price reductions in areas of its proposal
   other than CLS, and that the agency's evaluation of those areas was
   reasonable as well.

       1. AWI's Remaining Price Protest Grounds

   AWI raises a number of other challenges to EADS's low risk assessment
   under the price factor. AWI Protest (Aug. 14, 2006) at 38-43. Although we
   discuss only a few of the issues below, we have reviewed all of AWI's
   arguments and find them to be without merit.[43]

   For example, AWI asserts that the equitable adjustments that EADS proposed
   in response to "Class I" changes and replacing obsolete parts adds risk to
   schedule and performance because they are not permitted by the RFP. In
   this regard, AWI argues that the RFP required that pricing for CLS support
   "shall be inclusive of all effort necessary to ensure continued support in
   the event of parts obsolescence." RFP sect. H-2, para. 2(i). However, as
   discussed above, EADS's proposal for sharing costs was left to the
   discretion of the contracting officer whether to accept or reject, and
   therefore did not violate the RFP. We note that AWI's proposal, too,
   contained proposals for cost sharing similar to EADS and did not violate
   the RFP. In any event, the record shows that the agency considered the
   risk of EADS's obsolescence approach in the price analysis and reasonably
   found the risk to be low. As the agency explains, this type of cost
   sharing approach is "not uncommon" and, given that the LUH parts are used
   also on other EADS's aircraft, "the commercial market will likely incur
   part of the non-recurring expense associated with finding/developing a
   replacement part." AR, DVD Tab 37, Price Negotiation Memorandum, at 81.
   Also contributing to the low risk rating was the fact that the EADS
   aircraft is a "relatively new product line and changes in core
   technologies or suppliers [are] not anticipated within this 10 year
   contract." AR, DVD Tab 34.1, SSEB Final Report, EADS Price Factor Summary,
   at 5. AWI disagrees with this analysis, but has not shown it to be
   unreasonable.

   AWI also contends that EADS's approach of amortizing [REDACTED] of its
   non-recurring costs relating to its facility transfer and certain
   non-recurring CLS-related costs over 352 aircraft (the maximum quantity
   under the contract) poses "significant financial risk to EADS, which will
   translate into schedule and performance risk" if the agency fails to
   purchase the maximum number of aircraft. AWI Protest (Aug. 14, 2006)
   at 40-41. However, given that EADS is a very large, financially sound
   company, we fail to see how amortizing this relatively small amount over a
   $3.9 billion contract poses "significant financial risk" as alleged.

   In sum, based on our review of the record, we find no basis to sustain any
   of the protest grounds raised by AWI regarding the evaluation of the price
   factor.

       2. MDHI's Remaining Price Protest Grounds

   MDHI also protests the evaluation of its proposal under the price factor.
   It asserts that it was misled during discussions to believe that its
   financial models would be accepted "in lieu of" the pricing template; that
   the agency either misinterpreted or failed to evaluate the financial
   models submitted with MDHI's FPR; and that the pricing template "double
   counted" escalation and certain probabilities, thus overstating MDHI's
   price by approximately $800 million. Declaration of MDHI's Acting Chief
   Executive Officer (Sept. 8, 2006) para. 2; MDHI's Comments (Aug. 31, 2006)
   at 8-10.

   MDHI's contention that it was misled was based on its face-to-face
   discussions with the agency regarding its price. In these discussions,
   there was "extensive discussion on the methodology that MDHI had used in
   pricing both the aircraft and the CLS," and the agency "expressed concern
   that there were many unknowns involved in MDHI's priced offer."
   Contracting Officer's Statement in Response to MDHI Protest (Aug. 18,
   2006) at 8. During these discussions, MDHI provided "example financial
   models" (which MDHI asserts were "newly designed") to illustrate how it
   developed its pricing. Declaration of MDHI's Chief Executive Officer (Aug.
   30, 2006), paras. 8, 9. At the conclusion of these discussions, the agency
   encouraged MDHI to provide supporting information (including the financial
   models) with its FPR to explain its pricing. Contracting Officer's
   Statement in Response to MDHI Protest (Aug. 18, 2006) at 9. MDHI included
   with its FPR actual financial models along with the pricing template and
   section B pricing required by the RFP. The summary sheet for the pricing
   template was missing from the FPR, so the agency requested, and MDHI
   provided, the summary sheet after the closing date for receipt of FPRs.
   Id. at 13.

   The record does not support MDHI's contention that it was misled during
   discussions to believe that its financial models would be accepted "in
   lieu of" the pricing template. Such oral advice clearly would be
   inconsistent with the RFP requirement that offerors must submit their
   prices in the pricing template included in the RFP. RFP sect. L-23, para.
   2.3.1(c); sect. A, Narrative at 8. In fact, although the agency admits it
   "encouraged" the protester to submit its financial models to "substantiate
   its proposed prices," the agency denies telling MDHI that these models
   would be accepted "in lieu" of the pricing template required by the RFP.
   Contracting Officer's Statement in Response to MDHI Protest (Aug. 18,
   2006) at 14.

   The conclusion that MDHI was not misled is supported by the fact that
   nothing in MDHI's FPR states, or even suggests, that the firm's financial
   models were to be substituted for the pricing templates; in numerous
   passages, MDHI makes clear that the pricing template included the firm's
   proposed prices for evaluation. For example, MDHI's FPR states:

        * All requested information is included in the Pricing Template
          (Attachment 4) and in Section B (Attachment 5). AR, DVD Tab 15.1,
          MDHI, Business and Pricing Volume, sect. 2.3.1.c.
        * All prices, quantity ranges, associated prices within the confine
          of that range and maximum quantity limitations are identified in
          the Pricing Template. Id. sect. 2.3.1.g.
        * Aircraft pricing is presented in the Pricing Template (Attachment
          4). . . . In the spirit of transparency, MDHI has attached its
          bottom up pricing model (Attachment 3, Unit Cost Build). Id. sect.
          2.3.2.b
        * The Pricing Template delineates the composite prices per flying
          hour [and] pricing for [CLS], Over and Above Depot Maintenance,
          Contractor Field Teams and Procedural Trainer Support. Id. sect.
          2.3.2.d.
        * The Pricing Template contains a forecast for pricing potential
          years eleven though twenty utilizing the RFP's model. Id. sect.
          2.3.3.a.

   See also Contracting Officer's Statement in Response to MDHI Protest (Aug.
   18, 2006) at 14-15.

   With regard to MDHI's claim that the pricing template inflated its price,
   MDHI contends that because its unit prices for CLS already included
   escalation and the agency's stated probabilities, the pricing template
   "double counted" these costs when the template used the unit prices to
   calculate price. However, we note that it was MDHI's sole responsibility
   to insert the appropriate unit prices into the template. It was evident
   from the template where probabilities and escalation would be applied,[44]
   and if those elements needed to be removed from the unit prices, then it
   was MDHI's duty, not the agency's, to remove them before MDHI inserted the
   unit prices into the template.[45] In fact, in its initial protest, MDHI
   admits that the unit prices that it inserted in the pricing template were
   incorrect because of an error of MDHI, not the agency:

     Under severe time constraints, persons who had not built the models
     pulled highlighted Target Prices without recognition that high hours for
     each of the three ranges were locked into the Pricing Template with the
     probabilities to also be calculated in the Pricing Template. As such,
     not the Target Prices, but the Best Prices would have to be taken to
     represent the high end hours and/or weighted average probabilities
     removed from the CLS Pricing Model.

   MDHI's Protest (July 14, 2006) at 7. In other words, according to MDHI,
   its own employee(s) failed to recognize that the firm's unit prices also
   contained the probabilities and escalation and inserted the wrong prices
   in the pricing template for CLS pricing.

   We do not agree with MDHI that the agency should have known that the CLS
   unit prices in the template were in error. The financial models are very
   complex and even with MDHI's explanation during this protest (through
   declarations and attachments and illustrations), it is not entirely clear
   how the agency should have been able to identify the asserted errors. As
   MDHI now explains, the agency would have had to engage in a series of
   calculations to "extrapolate" what MDHI intended to be its CLS unit
   prices. Declaration of MDHI's Acting Chief Executive Officer (Aug. 30,
   2006), paras. 11, 17, exh. 1. However, no clear instructions for this
   exercise were provided to the agency with MDHI's FPR, and nothing in the
   FPR put the agency on notice that such a difficult analysis needed to be
   done.[46] In fact, nothing in the FPR identified to the agency that MDHI
   was offering rates different from those placed by MDHI in the appropriate
   fields in the pricing template. Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 15. As EADS's cost expert
   convincingly explains, MDHI's unit prices and escalation can all be linked
   (without any apparent inconsistencies) from MDHI's financial models, to
   the pricing template, and to MDHI's section B through manual entries of
   MDHI, and thus the computations complained of appear to be the result of
   MDHI's actions and not the result of any error in the pricing template or
   action of the agency. See Declaration of EADS's Cost Expert (Aug. 31,
   2006).

   MDHI also asserts that the agency unfairly assessed risk under the price
   factor relating to its CLS pricing. As the agency explains, it found risk
   because "MDHI proposed a constant, flat rate for CLS for all Program
   Years" and the rates did not fluctuate as flight hours increased. AR, DVD
   Tab 16.1, SSEB Final Report, MDHI Price Factor Summary, at 5. The agency
   expected to see variations in CLS rates from year to year, "most likely
   higher rates in the early years and a downward trend as fixed costs were
   spread over larger numbers of flying hours and the offeror became more
   efficient in providing CLS support." Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 19. MDHI's "flat rate"
   approach suggested to the evaluators that the firm may not be accounting
   for all of the RFP requirements, which could potentially result in "upward
   price risk." AR, DVD Tab 16.1, SSEB Price Factor Evaluation Report (June
   2006) at 14-15. The agency found that, based on the firm's financial
   models, MDHI's utilization of this "flat rate" approach would mean that
   MDHI would not make a profit on CLS until the sixth program year and would
   have to obtain financing to sustain CLS until that time. AR, DVD Tab 37,
   Price Negotiation Memorandum, at 47. Although MDHI asserts that its
   financial models fully support its flat rate approach, MDHI has not shown
   that its approach is without risk.[47]

   MDHI similarly challenges the agency's finding of price risk associated
   with the firm's proposed EPA clause. The evaluation documents state that
   MDHI's clause was missing a "Labor or composite Labor/Material index," and
   that the clause contained "floor and ceiling limitations of 2% (up or
   down)" that were "significantly" lower than the firm's initial proposal
   (which included a 5-percent limitation). AR, DVD Tab 16.1, SSEB Final
   Report, MDHI Price Factor Summary, at 5. This lower ceiling, the agency
   concluded, "will result in an increased likelihood [that] the EPA clause
   will be exercised, increasing the price the Government will pay." AR,
   DVD Tab 37, Price Negotiation Memorandum, at 47. Although MDHI contends
   that the "missing" labor index information is contained in its FPR and
   financial models, this argument has no bearing on the agency's primary
   concern, which was MDHI's "significantly" lower limitation. Therefore,
   while MDHI may be correct that its proposal contained the required labor
   index information, it does not appear that this was a significant driver
   in the assessment of risk under this factor.[48]

     E. "Best Value" Determination

   AWI complains that the SSA failed to perform, or adequately document, his
   cost-technical tradeoff analysis of AWI's higher technically rated
   proposal against EADS's lower-priced proposal. More specifically, AWI
   complains that the SSDD is only seven pages long and fails to discuss most
   of the technical elements where AWI's proposal was superior to EADS's. AWI
   contends that the SSA either was not aware of, or did not adequately
   consider, the technical advantages of AWI's proposal and whether they were
   worth the additional $800 million in cost.[49]

   An SSA may select a lower-priced, lower technically rated proposal if he
   or she decides that the price premium involved in selecting the
   higher-rated, higher-priced offer is not justified given the acceptable
   level of technical competence available at the lower cost. The determining
   element is not the difference in technical merit, per se, but the
   contracting agency's judgment concerning the significance of the
   difference. In making this determination, the SSA has broad discretion,
   and the extent to which technical merit may be sacrificed for cost, or
   vice versa, is limited only by the requirement that the tradeoff decision
   be reasonable in light of the established evaluation and source selection
   criteria. CVB Co., B-278478.4, Sept. 21, 1998, 98-2 CPD para. 109 at 8.

   As detailed above, the record shows that the SSA was provided with a
   comprehensive briefing of the offerors' proposals, which highlighted for
   the SSA significant strengths, weaknesses, and discriminators in each
   proposal. Agency Hearing Book, exhs. C-F, SSA Final Briefing Materials;
   Tr. at 17, 56. During the briefing, the SSA "probed" behind the briefing
   materials and asked questions of the expert evaluators and "users." Tr. at
   18-21, 29. In reviewing the materials, the SSA did not just "put blinders
   on," but instead "went through [the briefing chart] meticulously to find
   out if there was value in those attributes above and beyond what's listed
   on that chart." Tr. at 119. From this briefing, the SSA fully understood
   the relative differences in capability between the EADS and AWI proposals
   in terms of the mission and did not "trivialize" AWI's proposal strengths,
   as asserted by AWI. Tr. at 37-38, 227. In fact, given the detailed,
   voluminous record in this case and the complexities in this procurement,
   the SSA reasonably relied on the expertise of the factor leads, LUH
   "users," SSEB, and SSAC to advise him of the value of exceeding, or
   failing to meet, attributes relative to the mission.[50] Although it is
   true that the SSA did not separately quantify the value for each element,
   Tr. at 68, 180-81, this was not required and does not mean that the SSA
   failed to perform any analysis of value as AWI appears to argue. See FAR
   sect. 15.308 (SSA's "documentation need not quantify the tradeoffs that
   led to the decision").

   Contrary to AWI's arguments, the SSA considered essentially all of the
   areas where AWI's aircraft capability exceeded EADS's, including those
   elements where both offers received the same rating.[51] He considered the
   offerors' proposed capabilities under the technical elements
   "individually" and then "cumulatively" to determine whether AWI's
   technical superiority in the "totality" was worth the additional cost. Tr.
   at 67, 117, 122-23. Although the SSA did not discuss each and every
   element in the SSDD as AWI would have liked, the record shows that the
   relative differences between the proposals under each of these elements
   were thoroughly documented in a well-reasoned and rational SSEB report,
   and a detailed summary of these findings was briefed to the SSA and
   considered in his decision. Agency Hearing Book, exhs. C-F, SSA Final
   Briefing Materials; Tr. at 17-21, 204. The SSDD highlighted the key
   discriminators among offerors' proposals, albeit not all of the elements
   that AWI would have liked the SSA to agree were discriminators, and
   illustrates a well-reasoned and sufficiently detailed selection decision
   that clearly credits AWI's strengths and technical superiority, but
   explains why its proposal was not worth $800 million over EADS's highly
   rated $3.9 billion proposal.

   Based on our review of the record, and considering that price was the most
   important factor in the evaluation, we find that the SSA's decision to
   select the lower technically rated, lower-priced proposal for award was
   reasonable.

   The protests are denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] The RFP provided for a base year with ten 1-year options. The first
   option period coincided with the base year. RFP sect. B; amend. 11,
   Pricing Template.

   [2] Operations and support (O&S) (including CLS) and fuel prices were
   provided by offerors for a 10-year period, but, according to the
   solicitation, were projected out to a 20-year period through a fixed
   escalation factor that the agency applied to all offers. Agency Report
   (AR), DVD Tab 37, Price Negotiation Memorandum, at 12-13; RFP sect. L-23,
   para. 2.3.3; sect. M-6, para. 2.2.2; amend. 11, Pricing Template.

   [3] The SOW set forth "threshold" requirements for various attributes and
   capabilities of the desired aircraft, including those that were evaluated
   as elements under the technical factor.

   [4] The 50 percent multiplier was specified in the RFP to eliminate an
   overstatement in O&S prices as a result of the overlap in services between
   the two scenarios.

   [5] During discussions, the agency also updated the pricing template and
   revised its CLS pricing evaluation as described above. These updates were
   published in amendments 10 and 11 to the RFP. Further discussions were
   held to explain the pricing template. Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 15-16.

   [6] The SSEB report was over a thousand pages long and consisted of
   factor, subfactor, and element roll-ups, as well as the underlying
   evaluator comments. AR, DVD Tabs 16, 25, and 34, SSEB Final Reports for
   MDHI, AWI, and EADS.

   [7] The SSAC was appointed to perform a comparative analysis of the
   evaluation results and to assist the SSA.

   [8] Ratings were more specifically defined in the SSP for each of the
   elements evaluated, taking into account the specific attributes being
   evaluated under that element. Agency Hearing Book, exh. W, SSP, append. B,
   exh. 1, Merit Rating System for Technical Factor. The general scheme,
   however, is reflected above.

   [9] Additional briefings were held with the SSA throughout the procurement
   to discuss the source selection plan, the LUH mission requirements, and to
   otherwise keep the SSA apprised of the evaluation. Tr. at 249-53.

   [10] The prices reflected in the above table for the total O&S price
   subfactor include CLS pricing, fuel costs, and cost-reimbursable items of
   travel, materials, and transportation. AR, DVD Tab 37, Price Negotiation
   Memorandum, at 13.

   [11] For example, the SSA asked a number of questions about
   internal/external load, systems growth potential, and open port and
   pressure refueling (tradable elements where EADS's aircraft was rated less
   than satisfactory) to make sure that EADS's aircraft would nevertheless
   adequately meet the mission needs of the LUH users; the SSA found no basis
   not to select EADS's proposal for award. Tr. at 25, 27, 79, 82, 87.

   [12] Patriarch manages the funds that hold majority ownership of MDHI. AR
   (Aug. 20, 2006), exh. G, Letter from MDHI to Army (Mar. 31, 2006) at 2,
   10.

   [13] Both proposals also received the same ratings under the logistics and
   past performance factors.

   [14] With regard to EADS's and AWI's proposed pricing, the SSA recognized
   that AWI offered a lower CLS price (approximately [REDACTED] lower) over
   the evaluated 20 years, and that the acquisition price for the aircraft
   was approximately [REDACTED] higher, which averaged to be approximately
   [REDACTED] more per aircraft. The SSA also recognized that AWI proposed
   higher prices for [REDACTED]. AR, DVD Tab 8, SSDD, para. 13.

   [15] The SSA identified these elements as intercommunications system,
   endurance, handling qualities, crew equipment, cruise airspeed, and force
   protection. AR, DVD Tab 8, SSDD, para. 14.

   [16] In addition to the detailed, voluminous record provided by the
   agency, the parties submitted numerous rounds of briefs discussing the
   protest issues. Our Office conducted a hearing, where we took the
   testimony of five witnesses, including the SSA and a member of the SSAC,
   who was the LUH project manager and an aviation expert and had extensive
   knowledge and expertise concerning the areas evaluated in the offerors'
   proposals, the LUH mission requirements, and the statement of work. The
   protesters and intervenor also employed experts to assist with the
   litigation and to present arguments in this protest. We have considered
   all of this information in rendering our decision.

   [17] AWI initially protested the evaluation of many more of the technical
   elements, but either withdrew its protest grounds or failed to rebut the
   agency's explanation of the evaluation. AWI also withdrew its protest
   ground that EADS's proposal did not meet the minimum requirements for the
   required elements of cabin size and force protection. Nevertheless, we
   have reviewed the evaluation of all of the elements and find it to be
   reasonable.

   [18] AWI similarly argues that its and EADS's proposals were treated
   unequally in the evaluation of endurance, internal/external load, cruise
   speed, and crew equipment. However, AWI's proposal received ratings
   superior to EADS's under each of these elements. This demonstrates that
   AWI's superiority under these elements was in fact recognized. Our review
   of the record shows the evaluation ratings of these elements to be fair
   and not unequal.

   [19] AWI also asserts that the agency "normalized" or "trivialized" AWI's
   technical superiority under nine technical elements (intercommunications
   system, endurance, handling qualities, crew equipment stowage, cruise
   airspeed, force protection, CVR/FDR, internal/external load, and open port
   and pressure refueling). AWI's Post-Hearing Comments at 15-20. However,
   the record shows that the proposal superiority of AWI to EADS under these
   elements was recognized through the higher adjectival ratings that AWI's
   proposal received for each of the elements. Based on our review, we find
   no error in the evaluation of these elements, and we find that AWI's
   superiority was accounted for in the source selection.

   [20] AWI protests that the ratings definitions stated in the SSP
   (specifically, the "objectives" or "stretch goals" associated with
   excellent ratings for each of the technical factor elements) constituted
   unstated criteria and established ceilings upon which AWI was not given
   credit for exceeding. AWI's Post-Hearing Comments at 46-48. We first note
   that agencies are not required to announce their rating definitions in the
   solicitation. D.N. Amer., Inc., B-292557, Sept. 25, 2003, 2003 CPD
   para. 188 at 6 n.6. In this case, the "objectives" articulated in the SSP
   for each of the evaluation elements under the technical factor bear a
   rational relationship to the RFP's announced evaluation criteria that
   proposals would be considered for suitability to the LUH mission. See RFP
   sect. M-6, para. 2.3. The record shows that the agency reasonably
   evaluated proposals consistent with the RFP and without establishing
   arbitrary "ceilings" as AWI suggests.

   [21] The excellent rating represented the agency's "objective," or
   "stretch goal," for this element.

   [22] The record does not explain why AWI's proposal received an excellent
   rating under this element, given that the aircraft apparently did not meet
   the 3.8-hour objective requirement necessary to receive an excellent
   rating.

   [23] The MTOW is the maximum weight, as certified by the FAA, that an
   aircraft can weigh when it lifts off from the ground.

   [24] AWI contends that the agency did not have a reasonable basis for
   relying on the FAA statement quoted in EADS proposal and that the agency
   should have considered the lack of formal FAA "certification" as a risk in
   EADS proposal. AWI's Post-Hearing Comments at 35-37. However, AWI has not
   demonstrated that FAA certification on this point was required or that the
   agency's reliance on the FAA statement, which is consistent with common
   aviation practice, was unreasonable. Furthermore, the FAA representatives
   on the evaluation teams, who were tasked with identifying FAA
   certification issues, did not identify this as an area of concern. Tr. at
   475.

   [25] AWI also argues that offerors were treated unequally under this
   scenario because EADS was allowed to "exclude" warm-up fuel from the
   applicable calculations and the other offerors were not. However, as the
   agency explains, the warm-up fuel was accounted for in evaluating every
   offeror's endurance calculations. Tr. at 442; Declaration of Performance
   Subfactor Lead (Sept. 15, 2006) para. 4.

   [26] Because the agency incorporated EADS's entire proposal into the
   contract, not just the performance specification, thereby binding EADS to
   perform in accordance with all aspects of its proposal, AWI's argument
   that the technical proposal is only "non-binding" "marketing materials"
   and "fluffery" is unpersuasive.

   [27] AWI's proposal was similarly rated unsatisfactory under the
   operational environment and startup timeline elements.

   [28] Although EADS's aircraft has an internal or external load capability
   of 1,107 pounds, AWI's aircraft has a capability of 2,442 pounds. AR, DVD
   Tab 8, SSDD, para. 14.

   [29] For the same reasons, we find no merit to AWI's contentions that the
   age of EADS's aircraft also should have resulted in lower adjectival and
   higher risk ratings under the P/M and logistics evaluation factors.

   [30] MDHI also complains that the use of the term "deficiency" for
   evaluating tradable elements violates the Federal Acquisition Regulation
   (FAR) because the FAR specifically notes that deficiencies refer to
   "material failures," which render a proposal unacceptable and thus
   ineligible for award. See FAR sect. 15.001. Clearly, the agency intended a
   generic use of the word deficiency here.

   [31] Although MDHI asserted that its aircraft could achieve a higher
   internal load of 1,019 pounds and a higher external load of 1,419 pounds,
   the agency found that this greater load capability could only be achieved
   by reducing both the endurance fuel capability and altitude/temperature
   conditions specified in the SOW. Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 18, 2006) at 24.

   [32] The SSA found that EADS's failure under the open port and pressure
   refueling element caused "moderate" "mission impact" that ultimately did
   not affect the source selection in view of the other factors involved in
   the decision. AR, DVD Tab 8, SSDD, para. 14. As he stated in the SSDD,
   EADS's failure to meet this tradable attribute "would not hinder the
   ability of the EADS aircraft to perform the LUH mission." Id.

   [33] The five missing certifications for MDHI's proposal were: "dual pilot
   [Instrument Flight Rules], Chelton [Electronic Flight Instrument System],"
   "cruise airspeed at 6,500 pounds," "dual pivoting litter lift system,"
   "engine inlet barrier filter," and "pressure refuel capability." Agency
   Hearing Book, exh. C, SSA Final Briefing, Slide 36.

   [34] MDHI also asserts that the risk assessment is inconsistent with the
   "satisfactory" rating that MDHI's proposal received under the image
   intensification compatibility tradable element. The agency explains that
   while MDHI's proposed "fixes" could result in compatibility (and thus the
   proposal was rated satisfactory), there was some risk that compatibility
   would not be achieved by first delivery. Contracting Officer's Statement
   in Response to MDHI Protest (Aug. 31, 2006) at 6-7; Contracting Officer's
   Statement in Response to MDHI Protest (Aug. 18, 2006) at 31. We find no
   error, or inconsistency, in this reasoning.

   [35] AWI initially also protested the evaluation of its and EADS's
   proposals under the logistics factor. It abandoned these arguments when it
   failed to respond to the agency report, which fully addressed these
   issues. Knowledge Connections, Inc., B-297986, May 18, 2006, 2006 CPD
   para. 85 at 2 n.2. In any event, we have reviewed the evaluation of this
   factor, and find it to be reasonable and in accordance with the RFP.

   [36] For example, MDHI complains that the evaluation was "incomplete" in
   that some element reports for the P/Mfg subfactor were left blank in the
   SSEB report. The agency explains that this is because there were no formal
   "elements" identified in the RFP for this subfactor. The blank reports
   were a function of the database used to create the SSEB report, and not
   the result of an incomplete evaluation. Contracting Officer's Statement in
   Response to MDHI Protest (Aug. 31, 2006) at 10.

   [37] To the extent that MDHI complains that its performance specification
   was evaluated differently than EADS's, we note that EADS addressed each of
   the SOW requirements in its performance specification, while MDHI
   addressed only those requirements it would not meet.

   [38] These weaknesses involved the proposed equitable adjustment for
   certain changes and some "vagueness" in the discussion of cost sharing,
   discussed previously.

   [39] MDHI complains that EADS's proposal was misevaluated under the P/M
   factor in other ways. It contends that EADS's proposal presented high risk
   because: (1) EADS owns 80 percent of Airbus, a company that has a history
   of design problems and cost and schedule overruns; (2) EADS is facing a
   "demand of several billion dollars" from another company for the 20
   percent of Airbus that EADS does not own; and (3) as a German-French
   conglomerate, EADS's management is "complex" in that it combines
   duplicative leadership from both its German and French components. MDHI
   Protest (July 14, 2006) at 26-27. However, MDHI does not explain how any
   of this information will impact the schedule or performance under this
   contract, or how the information relates to the RFP's evaluation criteria.
   In this regard, the record evidences that Airbus has no role in the
   performance of the LUH contract. MDHI also contends that high risk is
   associated with EADS's proposal due to the firm's plan to transfer its
   facilities from Germany to Mississippi, and because of the two crash
   incidents that occurred in France. However, as we discussed above, the
   agency thoroughly evaluated these issues and reasonably found them to
   present low risk to performance.

   [40] MDHI also protests the reasonableness of the agency's responsibility
   determination of EADS. It contends that the agency "ignored material
   evidence demonstrating EADS'[s] non-responsibility," citing to post-award
   media reports that two executives of EADS and Airbus were "ouste[d]" over
   allegations of insider trading and that a class action lawsuit has been
   filed by EADS's shareholders in the Netherlands alleging claims of insider
   trading. MDHI Protest (Aug. 14, 2006) at 21. Our Office does not review
   affirmative determinations of responsibility, except where the protest
   alleges that definitive responsibility criteria in the RFP have not been
   met or identifies evidence "raising serious concerns that, in reaching a
   particular responsibility determination, the contracting officer
   unreasonably failed to consider available relevant information." Bid
   Protest Regulations, 4 C.F.R. sect. 21.5(c) (2006). The contracting
   officer states that she had seen a news article reporting allegations of
   insider trading prior to award, but did not consider the news media to be
   "reliable data" and considered the allegations to be just that,
   allegations that had not yet been proven. Contracting Officer's Statement
   in Response to MDHI Protest (Aug. 18, 2006) at 42. MDHI has not met its
   burden of showing that the contracting officer unreasonably failed to
   consider this information.

   [41] Amendment 10 informed offerors that two CLS scenarios would be
   evaluated, considering 50-percent totals from each scenario.

   [42] MDHI asserts that EADS's staffing reductions are offset by other
   staffing increases, but the protester has provided no evidence to suggest
   that these staffing increases were not also reflected in EADS's pricing.

   [43] AWI asserts that EADS's proposal has a provision containing a minimum
   guarantee, which AWI argues contradicts section H-6 of the RFP. This
   protest ground, raised for the first time in AWI's September 6, 2006
   comments, is untimely because it was not raised within 10 days of receipt
   of the record that provided the basis for protest. See Bid Protest
   Regulations, 4 C.F.R. sect. 21.2(a)(2).

   [44] The pricing instructions and the discussions that the agency held
   with the offerors explained how escalation and probabilities would be
   applied. Contracting Officer's Statement in Response to MDHI Protest (Aug.
   18, 2006) at 16.

   [45] With regard to escalation, the pricing template did not include
   escalation for program years 1 through 10, and MDHI's CLS unit prices for
   years 11 through 20 were "deflated to 2006 dollars." Declaration of EADS's
   Cost Expert (Aug. 31, 2006), paras. 68-70.

   [46] While MDHI asserts that its explanations of the financial models
   during discussions should have made it clear to the agency how to
   calculate MDHI's price, the models used during discussions (which were
   introduced for the first time at that meeting) were only "examples" and
   "newly designed" and did not contain the variables that were added into
   the models submitted with MDHI's FPR. See Declaration of MDHI's Acting
   Chief Executive Officer (Aug. 30, 2006), paras. 8, 9, 15.

   [47] MDHI asserts that the agency should have reopened discussions to
   raise its concerns about MDHI's flat rate approach and to alert the firm
   of the "discrepancies" between the pricing template and its financial
   models. MDHI's Comments (Sept. 8, 2006) at 11; MDHI's Comments (Aug. 31,
   2006) at 11-12. However, these issues were first introduced by MDHI in its
   FPR, and there is no duty to reopen discussions to address these matters.
   ITT Fed. Sys. Int'l Corp., B-285176.4, B-285176.5, Jan. 9, 2001, 2001 CPD
   para. 45 at 7 n.8.

   [48] MDHI does not dispute the assessment of risk due to the floor and
   ceiling limitations.

   [49] MDHI also protests the source selection decision, based on the
   asserted "flaws" in the evaluation of each of the evaluation factors. MDHI
   Protest (July 14, 2006) at 29; MDHI's Comments (Aug. 31, 2006) at 24-25.
   However, as we have discussed above, we find this evaluation to be
   reasonable. Since MDHI's proposal was lower technically rated and higher
   priced than EADS's proposal, a cost-technical tradeoff was not required.
   Gentex Corp.--W. Operations, B-291793 et al., Mar. 25, 2003, 2003 CPD
   para. 66 at 29.

   [50] This reliance upon the aviation experts and LUH "users" was
   especially reasonable given that the SSA lacked aviation experience. Tr.
   at 208-09. It does not evidence that the SSA failed to exercise his own
   independent judgment, as AWI alleges. See AWI's Post-Hearing Comments, at
   30.

   [51] Although AWI complains that the SSA did not perform any tradeoff
   under the P/M and logistics factors, AWI's Post-Hearing Comments, at
   25-26, the record shows that the SSA reasonably considered there to be
   little distinction between the AWI and EADS proposals under these factors.
   AR, DVD Tab 8, SSDD, para. 12.