B-298626.2, B-298626.3, Raytheon Company, Space and Airborne Systems, September 27, 2007

TITLE: B-298626.2, B-298626.3, Raytheon Company, Space and Airborne Systems, September 27, 2007
BNUMBER: B-298626.2, B-298626.3
DATE: September 27, 2007
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B-298626.2, B-298626.3, Raytheon Company, Space and Airborne Systems, September 27, 2007

DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.

Decision

Matter of: Raytheon Company, Space and Airborne Systems

File: B-298626.2, B-298626.3

Date: September 27, 2007

Joseph P. Hornyak, Esq., David S. Black, Esq., Michele Mintz Brown, Esq.,
Jennifer A. Short, Esq., and Allison V. Feierabend, Esq., Holland & Knight
LLP, for the protester.

W. Jay DeVecchio, Esq., Donald B. Verrilli, Jr., Esq., Kevin C. Dwyer,
Esq., Darren H. Lubetzky, Esq., and Edward Jackson, Esq., Jenner & Block
LLP, for L-3 Communications Integrated Systems, an intervenor.

Brian E. Toland, Esq., and Tina Marie Pixler, Esq., Department of the
Army, for the agency.

Glenn G. Wolcott, Esq., and Ralph O. White, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Solicitation reasonably put protester on notice that performance of the
solicitation's aircraft "service ceiling" threshold capabilities would be
considered in evaluation of proposals.

2. Agency was reasonably concerned with protester's proposed approach to
performing "service ceiling" aircraft threshold capabilities in that the
approach involved protester's application of a "new operational mode"
relying on [deleted].

3. Agency reasonably evaluated protester's proposal as "marginal" under
the air vehicle subfactor, and as creating "high performance risk," where
protester failed to provide data from engine manufacturer addressing the
impact of protester's "new operational mode."

4. Protester's assertion that awardee's proposal contemplated use of
[deleted] similar to that of the protester's is without merit where record
shows that awardee's aircraft was able to perform threshold capabilities
without [deleted], that use of [deleted] was relied on by awardee to
expedite task performance, and that awardee's proposed use of [deleted]
was consistent with the existing manufacturer documentation for the
aircraft engines.

5. Agency properly assigned only adjectival ratings to offerors' life
cycle costs where solicitation expressly advised offerors that comparison
of numerical cost values associated with life cycle costs would not be a
"driver" in the source selection decision.

DECISION

Raytheon Company, Space and Airborne Systems, protests the Department of
the Army's award of a contract to L-3 Communications Integrated Systems,
pursuant to request for proposals (RFP) No. W58RGZ-06-R-0213, to provide
the joint cargo aircraft (JCA) to the government.[1] Raytheon maintains
that the agency improperly evaluated various aspects of Raytheon's and
L-3's proposals.

We deny the protest.

BACKGROUND

In March 2006, the Army issued solicitation No. W58RGZ-06-R-0213, seeking
proposals to provide the JCA--that is, to provide a "multifunctional
aircraft, able to perform logistical resupply, casualty evacuation, troop
movement, airdrop operations, humanitarian assistance, and Homeland
Security support," with a "primary mission . . . to move
time-sensitive/mission-critical cargo to forward tactical units in remote
and austere locations."[2] Agency Report (AR), Tab 25, Performance Work
Statement (PWS) para. 1.1. The solicitation contemplates award of a
fixed-price requirements contract with three 1-year base ordering periods
and two 1-year option ordering periods.

Section M of the solicitation advised offerors that award would be made on
a "best value" basis and established the following evaluation factors:
technical, [3] price,[4] logistics, management/production and past
performance. [5] AR, Tab 2, RFP para. M-3 (1.1). The solicitation also
contained a purchase description (PD) that established certain aircraft
performance requirements.[6] Among others, the PD contained headings of
"self deployment," "enhanced takeoff and landing performance," "cruise
airspeed," and "service ceiling" under which the particular capabilities
the government sought were identified. AR, Tab 20, PD paras. 5.3.3, 5.3.4,
5.3.5, 5.3.6. For example, under the heading "service ceiling," the PD
identified the following "threshold" capability:

At the beginning of the cruise segment, the [JCA] will have a minimum
service ceiling of 25,000 ft pressure altitude while carrying a standard
crew of four, a 12,000 lb payload and fuel (including a 45 minute
reserve) for a 1,200 nm[nautical mile] mission.

AR, Tab 20, PD para. 5.3.6.1.

Offerors were advised that evaluation would occur in three phases:
phase I, in which proposals would be evaluated on a pass/fail basis for
compliance with the MPS requirements; phase II, in which proposals would
be evaluated against all solicitation requirements[7]; and phase III,
early user survey (EUS) demonstration, during which the performance of
each offeror's aircraft would be assessed against its proposal.[8]

Initial proposals were submitted by Raytheon, L-3, and a third offeror in
June 2006.[9] Raytheon's proposal was based on the commercially available
EADS[10]-CASA[11] C-295 aircraft, powered by a Pratt & Whitney engine.
L-3's proposal was based on the commercially available Alenia C-27J
aircraft powered by a Rolls-Royce engine.[12] The agency performed an
initial review and evaluation of proposals and, thereafter, prepared
multiple written discussion questions for the two offerors.[13]

In reviewing Raytheon's proposal, the agency had concerns regarding the
ability of Raytheon's proposed aircraft to meet certain performance
capabilities. In an EOC to Raytheon dated August 2006, the agency asked
Raytheon:

Please provide the specific certificates, performance analysis software,
test report excerpts, or other official evidence explaining how the CASA
C-295 aircraft meets the requirements of the RFP PD paragraphs 5.3.3
[Self Deployment], 5.3.4 [Enhanced Takeoff and Landing Performance],
5.3.5 [Cruise Airspeed], 5.3.6 [Service Ceiling].

AR, Tab 44, at EOC 164-1.

Raytheon responded that it had "used the same aircraft, aerodynamic and
engine data used during the certification process of the basic C-295
aircraft," but further stated:

In addition to the performance validation previously discussed, a new
operational mode is required using [deleted] to comply with several
requirements of the RFP . . . .

Id. at EOC 164-18.

Reacting to Raytheon's statement that it was proposing a "new operational
mode" during which [deleted], the agency prepared a follow-up discussion
question for Raytheon, making the following observations:

[Raytheon] uses an undefined [deleted] to accomplish performance goals
in the C-295 proposal. . . . [Raytheon] does not state how [deleted] . .
. does not indicate how [deleted] will be employed . . . [and] has not
indicated the impact of [deleted]. . . . These issues affect numerous
areas of evaluation.

AR, Tab 46, at EOC 548-1.

Based on the omissions noted above, the agency sought responses to a
variety of questions regarding Raytheon's "new operational mode,"
including a query as to whether the new usage was certified by the Federal
Aviation Administration (FAA). Id. at EOC 548-2 through EOC 548-3.
Raytheon responded stating:

Usage of this new [deleted] mode ([deleted]) is not currently certified
under FAR [Federal Aviation Regulation Part] 25. However, . . . [t]he
certification program is already underway. . . . [[14]]

AR, Tab 46, at EOC 548-6.

Thereafter, Raytheon participated in phase III of the agency's evaluation,
the EUS demonstration, during which Raytheon was required to demonstrate
selected capabilities of its proposed aircraft. In preparing for the EUS
demonstration, the agency advised Raytheon of various evaluated weaknesses
in its proposal, including performance of the "service ceiling" threshold
capabilities, stating:

The C-295 JCA does not have [deleted] performance to meet the Threshold
service-ceiling requirement of 25,000 feet. . . . The offer states that
the C-295M can achieve a cruise altitude of 25,000 ft., but not at
[deleted]. [[15]]

AR, Tab 48, at IFN TO4-1.

Thereafter, during the EUS demonstration, Raytheon demonstrated compliance
with the "service ceiling" threshold capabilities; however to perform
these capabilities, the aircraft was required to [deleted]. Protest at 16;
AR, Tab 36, Raytheon Final Revised Proposal, vol. 3, at 440 (EOC 392-10).
Confirming the required [deleted] to meet the "service ceiling" threshold
capabilities, Raytheon stated:

Compliance with the PD requirement 5.3.6.1 [service ceiling threshold
capabilities] was demonstrated in the Early User Survey of the C-295
aircraft. . . . The JCA C-295 achieved a cruise altitude of over 25,000
ft. at the beginning of the cruise segment by [deleted].

AR, Tab 48, at IFN T04-2.

The record shows that, throughout the discussion period, the agency
repeatedly requested information from Raytheon regarding the impact of its
"new operational mode" and its proposed [deleted]. In an IFN dated
December 19, 2006, the agency stated:

Results from the EUS indicate that [deleted]. It is unclear what percent
of [deleted] was assumed in the Pratt & Whitney assessment during engine
certification. Earlier discussions with the offeror (October 2006)
indicated that [deleted].[[16]]

Pratt & Whitney Maintenance Manual [deleted], states: "Operators making
[deleted] must submit their mission profile to Pratt & Whitney Canada
for analysis."

AR, Tab 53, at IFN T73-1.

Accordingly, the agency asked Raytheon to:

Provide an assessment of the life and maintenance impacts as a
consequence of [deleted]. Graphs showing the relationship between
[deleted] and [deleted] should be included (this was requested at
Discussions in October 2006).

Id.

Raytheon responded that the requested information was "not available . . .
since it requires a detailed study," represented that Pratt & Whitney
Canada was in the process of conducting the necessary study to address the
agency's concerns, and concluded, "[t]his study will be fully accomplished
and the new use of [deleted] in JCA will be certified by May 2007." AR,
Tab 53, at IFN T73-2, T73-3. Raytheon's response further promised: "Life
and maintenance impacts as a consequence of extended operation in the
[deleted] mode . . . will be provided when P&WC [Pratt & Whitney Canada]
completes their detailed assessment, due by May 2007." Id. Neither the
information requested by the agency, the "life and maintenance impacts,"
nor the promised certification were ever provided.

Final revised proposals were submitted by Raytheon and L-3 on January 31,
2007, and thereafter evaluated by the agency. Overall, both proposals were
assigned the same adjectival ratings, as follows:

+------------------------------------------------------------------------+
| | Technical |Logistics|Management/ | Past | Price |
| | | | | | |
| | | | Production |Performance| |
|---------+-------------+---------+------------+-----------+-------------|
|---------+-------------+---------+------------+-----------+-------------|
|Raytheon |Satisfactory | Good |Satisfactory| Low Risk |$1.77 billion|
|---------+-------------+---------+------------+-----------+-------------|
|L-3 |Satisfactory | Good |Satisfactory| Low Risk |$2.04 billion|
+------------------------------------------------------------------------+

AR, Tab 81, at 5.

However, Raytheon's proposal was rated "marginal" under the air vehicle
subfactor within the technical evaluation factor (the most
heavily-weighted factor), and "high" risk under the air vehicle
performance element within the air vehicle subfactor. AR, Tab 78, at
23-24. In this regard, the technical subfactor ratings were as follows:

+------------------------------------------------------------------------+
| | Air Vehicle | Mission Equipment | Air Safety/Survivability |
|----------+--------------+-------------------+--------------------------|
|Raytheon | Marginal | Excellent | Good |
|----------+--------------+-------------------+--------------------------|
|L-3 | Satisfactory | Satisfactory | Excellent |
+------------------------------------------------------------------------+

AR, Tab 78, at 23, 30, 39, 89, 98, 107.

In making the source selection decision, the source selection authority
(SSA) stated that he "carefully considered the underlying rationale and
ratings at all levels of the evaluation" and determined that the C-27J
aircraft has a "superior military operational envelope," and "provides
superior military utility." AR, Tab 81, Source Selection Decision
Document, at 30-31. The SSA elaborated that, although both proposals were
evaluated as being capable of meeting the same basic performance
requirements, L-3's proposed aircraft demonstrated an ability to exceed
many of the performance requirements by significant margins, whereas
Raytheon's proposed aircraft [deleted]. Further, the SSA noted that
Raytheon's "predicted performance margin[s] may be easily eroded for
cruise airspeed, self deployment and service ceiling," elaborating that
Raytheon's proposed approach "relies heavily on [deleted]" and that
"[w]ithout sufficient documentation to prove otherwise it is reasonable to
expect that [deleted]," concluding "[t]his poses a high performance risk."
Id. at 30-31. Thereafter, the SSA selected L-3's proposal for award
summarizing his cost/technical tradeoff as follows:

For the 5-year instant contract, the price proposed by L-3 for the C-27J
is $2,042,186,555. Raytheon's proposed price for the C-295 is
$1,744,106,086. This equates to a cost difference of $268,080,469 or
approximately 15.1%. Based on the high performance risk of the C-295's
air vehicle, the cost trade-off is justified.

Id. at 31.

Raytheon was subsequently informed that L-3's proposal had been selected
for award, and was provided a debriefing by the agency. This protest
followed.

DISCUSSION

Raytheon first challenges its rating of "marginal" under the air vehicle
subfactor, and the agency's conclusion that Raytheon's proposed [deleted]
created "high performance risk," asserting that these assessments were
unreasonable, or were based on unstated evaluation criteria. More
specifically, Raytheon complains that it was unreasonable for the agency
to be concerned with Raytheon's proposed [deleted] to meet the "service
ceiling" threshold capabilities because those capabilities will not form a
material portion of the overall contract requirements. In making this
assertion, Raytheon refers to an appendix to the solicitation's
performance work statement (PWS), titled "Standard Mission Profiles,"
which contained the following table:

+------------------------------------------------------------------------+
|Mission | Percentage of |
| | |
| |Life Cycle Usage|
|-------------------------------------------------------+----------------|
|Aerial Sustainment | 20% |
|-------------------------------------------------------+----------------|
|Self Deployment | 1% |
|-------------------------------------------------------+----------------|
|Air Delivery -- Dual Airdrop with Low-Level | 2% |
|Ingress/Egress | |
|-------------------------------------------------------+----------------|
|Air Delivery -- Single Airdrop | 2% |
|-------------------------------------------------------+----------------|
|Cargo Transport | 60% |
|-------------------------------------------------------+----------------|
|Tactical Resupply | 15% |
+------------------------------------------------------------------------+

AR, Tab 27, PWS app. 3.

Following this table, the document presented profile information for each
of the above-listed missions, identifying certain characteristics of each
mission in terms of crew, payload, and length of mission. The document
also advised offerors that:

These profiles represent a composite of typical missions likely to be
flown by the [JCA] in support of military wartime operations,
non-wartime operations, and homeland security. . . . The profiles shall
not be construed as all inclusive.

Id.

None of the mission profiles specified all three of the "service ceiling"
threshold capabilities (that is, cruise altitude of 25,000 feet, payload
of 12,000 lb., and mission length of 1,200 nautical miles).[17]
Accordingly, Raytheon argues that the mission profile data in appendix 3
of the PWS effectively eliminated--or should have eliminated--the "service
ceiling" threshold capabilities from consideration in the agency's
evaluation of aircraft capabilities. Raytheon's arguments are based on the
assumption that because the mission profile data in appendix 3 did not
expressly state that performance of a particular mission (for example,
aerial sustainment or cargo transport) would require an aircraft to fly at
25,000 feet for 1,200 nautical miles with a 12,000 lb. payload, those
combined capabilities will form, at most, an insignificant portion of
contract performance and therefore, should not have played a meaningful
role in the source selection process. Raytheon's assertions are neither
consistent with the provisions of the solicitation, nor otherwise
reasonable.

First, as noted above, PWS appendix 3 expressly advised offerors that
"[t]he profiles shall not be construed as all inclusive." Consistent with
this provision, paragraph 5.1.10.2 of the solicitation's PD expressly
notified offerors that, in addition to considering the mission profile
information at PWS appendix 3, offerors must take into consideration
"other specific requirements of this document [the PD]"--including, for
example, the "service ceiling" provisions at PD para. 5.3.6.1. Further,
the same section of the PWS that directed offerors to appendix 3 also
reminded them that the "primary mission" of the JCA is "to move
time-sensitive/mission-critical cargo to forward tactical units in remote
and austere locations." PWS para. 1.0. At the hearing conducted by GAO in
connection with this protest,[18] the technical factor lead evaluator
provided testimony regarding the ongoing requirements associated with
moving cargo to forward units in remote and austere locations, testifying
as follows:

Q. In performing aerial sustainment exercises . . . are they or aren't
they required to fly . . . at least at 25,000 feet, if you know?

A. Yes, I do know, and in many environments, especially in Iraq and
Afghanistan, they are required to fly over mountainous terrain in
high/hot conditions to avoid threats down below such as missiles.

. . . . .

Q. [I]n performing the cargo transport mission . . . are they or aren't
they, expected to fly . . . at least [at] 25,000 feet[?]

A. For certain missions they will be expected to do that yes.

Q. Can you give me an example . . . of missions that would require them
to do that with regard to cargo transport[?]

A. Having served my last two years as lead air vehicle engineer for the
fielded aircraft on the Chinook [one of the aircraft currently
performing logistics missions], they are constantly delivering loads
to [deleted]. That's the location of the site. . . [I]f you are going
to avoid small-arms fire, and missiles, certainly, you would want to
fly at 25,000 feet to deliver your load that is located at [deleted].

Hearing Transcript (Tr.) at 23-27.

Similarly, the SSA testified as follows:

Q. Do you have a feeling for how often the Army is going to need to [meet
the "service ceiling" threshold requirements]?

A. In Iraq and Afghanistan . . . probably daily. Parts of South America,
every time they are down there. In the Western United States, a lot.
So over the globe, a lot.

Tr. at 405.

Solicitations must inform offerors of the basis for proposal evaluation,
and the evaluation must be based on the factors set forth in the
solicitation. Federal Acquisition Regulation (FAR) sect. 15.304. Although
procuring agencies are required to identify all major evaluation factors,
they are not required to specifically list under the stated factors every
area that may be taken into account, provided such areas are reasonably
related to or encompassed by the stated criteria. E.g. AIA-Todini-Lotos,
B-294337, Oct. 15, 2004, 2004 CPD para. 211 at 8.

On the record here, it is clear that the solicitation, along with the
agency's discussions with Raytheon, reasonably put Raytheon on notice that
the agency would evaluate an aircraft's ability to perform the "service
ceiling" threshold capabilities, and that those aircraft capabilities were
important to the agency. In this regard, we find nothing unreasonable in
the agency's concern that, in order to perform these capabilities,
Raytheon was proposing a "new operational mode" that required [deleted],
and that the impact of this new approach had not been meaningfully
addressed by the engine manufacturer nor certified by the FAA. Further,
there is no dispute that the agency repeatedly requested specific data
from Raytheon regarding the impact of its proposed approach, and that the
requested data--though promised--was never provided. On this record, there
is no basis to question the agency's "marginal" rating and "high" risk
assessment, and Raytheon's protest challenging that rating and assessment
as inconsistent with the RFP provisions or unreasonable is without merit.

Raytheon next protests that the agency's source selection decision gave
undue weight to the air vehicle evaluation subfactor, under which
Raytheon's proposal was rated "marginal,"[19] and that the agency's
concerns regarding the risk associated with Raytheon's proposed [deleted]
were disproportionate to the evaluation scheme established in the
solicitation. We disagree.

Evaluating the relative merits of competing proposals is a matter within
the discretion of the contracting agency since the agency is responsible
for defining its needs and the best method of accommodating them, and must
bear the burden resulting from a defective evaluation. Advanced Tech. and
Research Corp., B-257451.2, Dec. 9, 1994, 94-2 CPD para. 230 at 3.
Further, there is no requirement that award discriminators be the most
heavily weighted evaluation factors, Keane Fed. Sys., Inc., B-280595, Oct.
23, 1998, 98-2 CPD para. 132 at 16, and consideration of risk is always
proper in the evaluation of technical proposals, particularly where, as
here, risk is specifically identified as an evaluation factor. E.g.,
Communications Int'l, Inc., B-246067, Feb. 18, 1992, 92-1 CPD para. 194 at
6. Finally, information regarding specific proposal advantages or
disadvantages is the type of information that agencies should make
available to source selection officials to enable them to reasonably
determine whether and to what extent adjectival evaluation ratings
indicate meaningful differences in proposals and the resulting value of
such differences. Israel Aircraft Indus., Ltd., MATA Helicopters Div.,
B-274389 et al., Dec. 6, 1996, 97-1 CPD para. 41 at 7. Such considerations
are the essence of any best value source selection decision. F2M-WSCI,
B-278281, Jan. 14, 1998, 98-1 CPD para. 16 at 8.

Here, the record shows that the SSA specifically considered the underlying
bases for the adjectival ratings assigned at both the factor and subfactor
level, and the record is replete with documentation of the agency's
concerns regarding Raytheon's proposed approach and the risk associated
with Raytheon's failure to meaningfully respond to the agency's
information requests regarding its "new operational mode." In addition to
the discussion questions quoted above, the agency's evaluation
documentation repeatedly address the [deleted] capabilities of Raytheon's
aircraft. For example, the evaluators stated: "[deleted] may negatively
affect [deleted] and [deleted], AR, Tab 42, at 16; "[i]f the actual C-295
JCA [deleted] deviate slightly in the wrong direction, the C-295 JCA's
actual performance may risk not meeting an MPS and some Threshold
requirements," id. at 64-65; and "after repeated requests, [Raytheon] has
failed to document the potential life implications due to [deleted]." Id.
Finally, as noted above, the solicitation expressly advised offerors that
risk "shall be an inherent consideration in the evaluation." RFP para. M-3
(1.3).

Based on our review of the entire record we find no basis to question the
agency's determination that the risk to successful contract
performance--that is, to successful execution of JCA's primary mission to
move cargo to forward tactical units in remote and austere
locations--created by Raytheon's proposed "new operational mode"
outweighed L-3's higher price, and that this assessment was consistent
with the solicitation's evaluation scheme. Raytheon's protest that the
agency's source selection decision did not conform to the solicitation's
stated evaluation factors is without merit.

Following receipt of the agency report responding to its initial protest,
Raytheon supplemented its protest by asserting that L-3's proposed
performance will employ [deleted] in a manner similar to that proposed by
Raytheon and, thus, maintains that the proposals were evaluated unequally.
Based on the record, Raytheon is mistaken.

Raytheon notes that L-3's aircraft flight manuals provide that [deleted].
Second Supp. Protest, July 30, 2007, at 4. However, the record is clear
that L-3's proposed aircraft is capable of performing the solicitation's
threshold capabilities for which L-3 was given credit without [deleted].
Contracting Officer's (CO) Statement (Second Supp. Protest), Aug. 17,
2007, at 6. Specifically, in contrast to Raytheon's [deleted] to [deleted]
meet the "service ceiling" threshold capabilities, L-3's proposal required
[deleted] for [deleted], but not for [deleted], in order to perform those
threshold capabilities. Tr. at 95-96. L-3's proposal did provide that if
[deleted], L-3's aircraft can perform various tasks, including the
"service ceiling" threshold capabilities, in an expedited manner. CO
Statement, supra.; Tr. at 108-16. In short, while Raytheon's aircraft
required [deleted] to [deleted] meet the threshold capabilities, L-3's
proposal demonstrated that if it [deleted], it could perform the
capabilities in an expedited manner.[20] Accordingly, there is no merit to
Raytheon's assertion that the agency performed an unequal evaluation of
proposals.

Finally, Raytheon challenges the agency's evaluation with regard to life
cycle costs, asserting that the agency was required to calculate and
compare numerical values associated with each offeror's anticipated life
cycle costs.[21] The terms of the solicitation are to the contrary.

As discussed above, the solicitation advised offerors that total proposed
prices for estimated CLIN quantities would be considered, evaluated and
compared. In contrast, with regard to evaluation of life cycle costs, the
solicitation expressly advised offerors that "[n]umerical cost values
[associated with life cycle costs] are not a driver in and of themselves"
and that the agency would assign each proposal an adjectival rating based
on program price/cost risk. RFP para. M-3(2.2.2). That is precisely what
the agency did.[22] Accordingly, there is no merit to Raytheon's assertion
that the agency was required to perform a numerical comparison of the life
cycle costs associated with the two proposals.

The protest is denied.[23]

Gary L. Kepplinger
General Counsel

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

[1] The JCA program evolved from the Department of the Army's preparations
to procure a "future cargo aircraft" and the Department of the Air Force's
preparations to procure a "light cargo aircraft." In December 2005, the
Office of the Secretary of Defense directed the Army and Air Force to
combine the two aircraft programs to form the JCA program, and provided
that the Army would serve as the lead agency for the acquisition.

[2] With regard to where the JCA will be employed, the record states that
the JCA is intended to "address operational shortfalls within fixed-wing
cargo mission requirements noted in Operations Enduring Freedom/Iraqi
Freedom," that is, in Afghanistan and Iraq. Agency Report (AR), Tab 81,
Memorandum of Source Selection Decision, at 1.

[3] Under the technical evaluation factor, the solicitation established
three equally weighted subfactors: air vehicle, mission equipment, and
aircraft safety. Each of the subfactors was further divided into various
elements.

[4] The price evaluation factor was divided into two subfactors: proposal
price and life cycle costs. Regarding evaluation of proposal price, the
solicitation stated that the agency would evaluate "the total proposed
price for the estimated quantities specified for each CLIN [contract line
item] for all five years." RFP para. M-3 (2.2.2.1). Regarding evaluation
of life cycle costs, the solicitation stated that each proposal would
receive an adjectival rating assessing "program price/cost risk," further
advising offerors that "[n]umerical cost values [associated with life
cycle costs] are not a driver in and of themselves." RFP para. M-3
(2.2.2).

[5] The solicitation provided that the technical factor was more important
than price, which was more important than either the logistics or
management/production factors, which were of equal importance and both of
which were more important than the past performance factor. All of the
non-price factors combined were significantly more important than price.
RFP para. M-3 (2.0).

[6] Specifically, the PD identified certain capabilities as: "minimum
performance standards" (MPS) that "shall be embodied in the candidate
aircraft" and "shall not be traded against other technical or
non-technical requirements"; "threshold" capabilities that "will be
embodied in the candidate aircraft" but which "may be traded against other
technical and non-technical requirements"; and "objective" capabilities
that "should be offered in the candidate aircraft" (underlining in
original). AR, Tab 20, PD para. 2.0.

[7] In phase II of the evaluation, the agency applied an adjectival rating
system using the terms "Excellent," "Good," "Satisfactory," "Marginal,"
and "Unsatisfactory." AR, Tab 84, Source Selection Plan, at 48. In
addition, section M of the solicitation specifically advised offerors that
proposal risk associated with an offeror's proposed approach would be
evaluated, stating "[r]isk shall be an inherent consideration in the
evaluation." RFP para. M-3 (1.3).

[8] The solicitation stated: "The EUS will not receive an adjectival
rating, but will receive a risk rating." RFP para. M-3 (1.3).

[9] Raytheon submitted two proposals--one based on the C-295 aircraft
which is discussed in this decision, and one based on another aircraft.
The agency subsequently determined that Raytheon's other proposal, along
with the third offeror's proposal, failed to meet the phase I entry gate
requirements; accordingly, those proposals were eliminated from the
competition and are not further discussed.

[10] European Aeronautic Defense and Space Company.

[11] Construcciones Aeronauticas, SA. CASA is the Spanish branch of EADS.

[12] The agency's source selection plan stated that the acquisition
strategy was "based on leveraging the commercial market," noting that
"[t]he intent is to procure a previously developed and fielded, low-risk,
commercially available aircraft." AR, Tab 84, Source Selection Plan, at 6.

[13] Following its initial evaluation, the agency's discussions questions
were labeled "Errors, Omissions, and Clarifications" (EOC); subsequently,
the agency labeled its discussions questions "Items for Negotiation"
(IFN). The agency also conducted oral discussions with both offerors.

[14] Raytheon subsequently provided its certification plan with regard to
its proposed [deleted]. This plan stated, among other things:

The purpose of this document is to define the Certification Plan for the
new improved performance of the C-295 using [deleted]. . . .

[deleted]

As comprised in the C-295 AFM [aircraft flight manual] ([deleted]) this
regime is intended for abnormal or special circumstances.

The proposal of EADS-CASA is to . . . enable using the [deleted] during
normal phases of [deleted].

AR, Tab 50, attach. 1, at 5.

[15] As noted above, the PD identified the following threshold
capabilities under the heading "service ceiling":

AR, Tab 20, PD para. 5.3.6.

[16] The record contains a Raytheon response to another agency request for
information in which Raytheon stated: "[deleted]." AR, Tab 51, at IFN
T71-2.

[17] In fact, none of the mission profiles identified any particular
cruise altitude for any of the missions.

[18] In resolving this protest, GAO conducted a hearing on the record
during which testimony was provided by the agency's technical factor lead
evaluator and the SSA.

[19] As noted above, the air vehicle subfactor was one of three equally
weighted subfactors within the technical evaluation factor (the most
heavily weighted factor).

[20] In any event, the record indicates that even L-3's proposed [deleted]
to expedite task performance was consistent with the existing engine
certification, whereas Raytheon's proposed [deleted] was not. CO
Statement, supra at 1-5; Tr. at 79-88, 108-09.

[21] The life cycle cost information submitted by the offerors regarding
anticipated life cycle costs is not binding on the offerors.

[22] Both proposals received adjectival ratings of "good" with regard to
life cycle costs. AR, Tab 81, at 29.

[23] In addition to the arguments specifically addressed above, Raytheon's
initial and supplemental protests challenge the agency's evaluation of
virtually every non-price evaluation factor and subfactor, expressing
disagreement with the agency's judgments and asserting that Raytheon's
proposal should have been evaluated more favorably and/or that L-3's
proposal should have been evaluated less favorably. We have considered all
of Raytheon's arguments and find no basis for sustaining its protest.