TITLE: B-298682.3; B-298682.4, Global Solutions Network, Inc., June 23, 2008
BNUMBER: B-298682.3; B-298682.4
DATE: June 23, 2008
*********************************************************************
B-298682.3; B-298682.4, Global Solutions Network, Inc., June 23, 2008

   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: Global Solutions Network, Inc.

   File: B-298682.3; B-298682.4

   Date: June 23, 2008

   Gerald H. Werfel, Esq., Pompan, Murray & Werfel, P.L.C., for the
   protester.

   Kristen E. Ittig, Esq., Arnold & Porter LLP, for Accurate Conceptions,
   LLC, an intervenor.

   Peter F. Pontzer, Esq., Department of the Army, for the agency.

   Paul N. Wengert, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest is denied where agency evaluation of proposals was reasonable
   and conformed to solicitation in most respects, and protester was not
   competitively prejudiced by agency evaluation either of past performance
   information submitted after deadline in solicitation, or additional pages
   in resume for awardee's key personnel.

   2. Protest that awardee's price was unreasonably low is denied where the
   awardee's price was significantly lower than the government estimate, but
   was considered reasonable given the agency's receipt of a similar price
   from a third, highly-rated, offeror.

   DECISION

   Global Solutions Network, Inc. (GSN), a small business, protests the award
   of a contract to Accurate Conceptions, LLC (AC) by the Department of the
   Army under request for proposals (RFP) No. W91QV1-06-R-0033 for task order
   management and financial support for the "HRSolutions" program office. GSN
   argues that the Army misevaluated the proposals, and should have found
   AC's price to be unreasonably low.

   We deny the protest.

   BACKGROUND

   The Army issued the RFP on July 29, 2006, as a commercial item
   solicitation, set aside for historically underutilized business zone
   (HUBZone) small businesses. The RFP sought fixed-price proposals to
   "provide on a daily basis all personnel, equipment, tools, materials,
   supervision, and other items and non-personal services necessary to
   perform Task Order Management and Financial support" to the HRSolutions
   program office. RFP at 3.[1] The RFP anticipated a contract for a 1-year
   base period, followed by four annual options.

   As we noted in an earlier decision involving this procurement, the
   HRSolutions program office is responsible for managing 12
   high-dollar-value indefinite-delivery/indefinite-quantity contracts that
   support Army human resources functions in the areas of personnel services,
   studies and analyses, recruiting and retention, and administrative
   functions. The contractor will be responsible for following up on
   marketing leads and inquiries, assisting in the preparation of performance
   work statements and independent government cost estimates, preparing
   funding documents, conducting task order competitions, and recommending
   the selection of vendors. The contractor will also provide other routine
   business planning, financial management, and related business support.
   Global Solutions Network, Inc., B-298682, Nov. 27, 2006, 2006 CPD
   para. 179 at 1; Contracting Officer's (CO) Statement at 1; see also Global
   Solutions Network, Inc., B-298682.2, Dec. 10, 2007, 2007 CPD para. 223.

   The RFP provided for an evaluation of proposals under four factors:
   technical approach, personnel, past performance, and "price/cost."
   Technical approach proposals were limited to 100 pages, and were required
   to address the offeror's organizational structure, procedures, controls,
   and quality control plan. RFP at 26-27. On a page labeled as "technical
   exhibit 1," the RFP also provided five performance objectives, along with
   a "performance threshold" for each objective. The exhibit stated that the
   "performance thresholds" provided a brief description of the minimum
   acceptable levels of service. RFP at 62.

   Under the personnel factor, the RFP required offerors to submit resumes
   for certain key personnel--i.e., the contract manager, a financial
   specialist, and a risk assessment specialist. RFP at 56. The RFP provided
   that resumes "shall be limited to two (2) pages . . . for each key
   personnel . . . ." RFP at 26. The evaluation of personnel was to consider
   both the qualifications of key personnel and the organizational structure.
   The technical approach and personnel factors were to be rated
   adjectivally, with "exceptional" as the best rating, followed by "very
   good," "good," "marginal," and "unacceptable." RFP at 28.

   With respect to past performance, the RFP provided that each offeror was
   required to distribute copies of a past performance questionnaire form to
   its references, and to identify those references in the proposal. The form
   requested that references insert ratings ranging from excellent, to good,
   acceptable, marginal, or unsatisfactory (or not applicable) for 28
   specific issues, and provide an overall rating. The RFP also instructed
   that, "[t]he completed past performance questionnaire shall be emailed by
   the reference to the Contracting Officer . . . or [sent] by facsimile to
   [the contracting officer's fax] by the proposal due date." RFP at 26. Past
   performance was to be rated as low, moderate, high, or unknown risk. RFP
   at 29.

   As amended, the RFP also stated that "[t]he proposed cost/price will be
   evaluated for completeness and reasonableness." RFP amend. 1. The RFP
   defined price reasonableness as an "evaluat[ion] to determine if any
   [elements of the price] are unreasonably high or low in relation to the
   offeror's technical approach and in comparison to the Independent
   Government Cost Estimate." RFP at 30. The RFP also specified that
   non-price factors were of equal importance individually, and when
   combined, were significantly more important than price. RFP at 27.

   The Army received timely proposals from GSN, AC, and a third firm, and
   convened a source selection evaluation board (SSEB) to evaluate the
   proposals.[2] After evaluating initial proposals, the Army opened
   discussions with the offerors, and requested final proposal revisions
   (FPR). CO Statement at 4.

   Between the submission of its initial proposal and its FPR, GSN's contract
   manager left his position. During discussions, the Army asked GSN to
   address this development. Although the contract manager position was
   designated in the RFP as one of the key personnel for whom a resume was
   required, GSN, the incumbent contractor here, stated in its FPR that it
   did not expect to be able to recruit a high-quality replacement until
   after the award of the new contract. AR, Tab 36, GSN FPR, at 7.

   In addressing another question raised in discussions, GSN provided a table
   with the heading "GSN's Total Staffing Plan (in Hours per Year)." As
   relevant to the protest, one of the lines in the table was labeled
   "Contract Manager/CSR [customer service representative]/Risk
   Management-Replacement for [name of former contract manager]." Additional
   tables showed the staffing levels under another contract, and showed that
   GSN proposed to utilize some of the same staff (including the "contract
   manager/CSR/risk management" replacement employee) on both contracts by
   dividing time between the contracts. Id. at 7-9.

   The Army evaluators raised concerns about the departure of GSN's contract
   manager and about GSN's failure to identify an alternate contract manager.
   AR, Tab 38, SSEB Technical Evaluation Report Addendum, at 2. Specifically,
   the evaluators revised GSN's rating downward to "good" (from its original
   rating of "exceptional") in their assessment of GSN's personnel.
   Subsequently, when the CO reviewed the evaluation, she disagreed with the
   SSEB's concern over the alternate contract manager, but she also discussed
   some additional concerns that her review had identified. Among those, the
   CO observed that GSN's FPR indicated that the functions of contract
   manager, customer service representative, and risk manager would all be
   performed by one person. Taken together, the CO agreed that GSN's FPR
   offered a less favorable staffing approach than its initial proposal.
   Therefore, she confirmed the SSEB decision to revise GSN's rating under
   the personnel approach factor to "good." AR, Tab 40, Source Selection
   Decision Document, at 5-6.

   With respect to the evaluation of AC, the evaluators identified several
   weaknesses in their initial assessment which resulted in AC being rated
   "good" under the technical approach factor. AR, Tab 19, SSEB Evaluation,
   at 8. During discussions, the Army asked AC to address each of these
   weaknesses. In its FPR, AC provided responses to each of the discussions
   issues, with one exception--AC did not specifically respond to the
   question asking whether it had addressed each of the performance
   objectives and thresholds. AR, Tab 35, AC FPR, at 29. AC also stated that
   it had decided to reduce its staffing levels in the option years, and
   explained that the remaining staff had the qualifications to enable them
   to perform all requirements, even while the business volume was expected
   to increase. Id. at 33.

   In assessing AC's FPR, the evaluators concluded that AC had largely
   addressed all but one of the weaknesses and deficiencies identified in
   discussions, and found the proposal to be acceptable. The evaluators
   identified one area of concern: "[AC] did not address the most significant
   deficiency, . . . which was to identify the performance threshholds for
   performance objectives." The evaluators therefore left AC's rating of
   "good" under the technical approach factor unchanged. AR, Tab 38, SSEB
   Technical Evaluation Report Addendum, at 2.

   When the CO reviewed AC's evaluation, she concluded that AC had "provided
   details outlining how it will accomplish the requirements of the PWS
   [performance work statement.]" Based on her own review, the CO explained
   that AC's FPR had satisfactorily addressed the missing performance
   objectives when responding to the other discussions questions. Therefore
   she concluded that the "significant weakness relating to [the] . . .
   failure to address the performance threshold requirements in Technical
   Exhibit 1 [] is in my opinion a minor weakness." AR, Tab 40, Source
   Selection Decision Document, May 21, 2007, at 6. Accordingly, the CO
   revised AC's rating under the technical approach factor to "very good."
   AR, Tab 39, SSA Technical Evaluation, May 17, 2007, at 3.

   As noted above, the RFP limited key personnel resumes to 2 pages. AC's FPR
   included two new resumes for key personnel. The first was a new contract
   manager whose resume was 4 pages, with significant information included on
   the third and fourth pages. AR, Tab 35, AC FPR, at 17-20. The second was a
   quality assurance analyst whose resume was 3 pages, with the third page
   listing 12 awards that he had received. Id. at 22-24. The Army evaluated
   both resumes without regard to their length, and found the qualifications
   were "of similar breadth of quality and experience as those they
   replaced," and therefore did not downgrade AC under the personnel factor.
   AR, Tab 38, SSEB Technical Evaluation Report Addendum, at 2.

   As required by the RFP, AC's proposal also identified references to whom
   AC had provided the past performance questionnaire form, including
   information about the contract scope and value involved.[3] However, it
   appears that none of those references returned the questionnaires.

   The initial evaluations of AC's past performance assessed a moderate risk,
   and since there were no responses to the questionnaires at that time, this
   assessment appears to have been based on AC's own descriptions of its
   experience and other information submitted with AC's initial proposal,
   rather than information from past performance references.[4] After
   reviewing the FPR, the CO instructed a contracting specialist to contact
   several of AC's past performance references directly, and to solicit their
   responses to the past performance questionnaire. Supp. CO Statement at 2;
   Supp. AR at 6. As a result, the Army ultimately received five past
   performance references for AC's team members. With the exception of a
   small number of questions that were answered "N/A" and one "good" rating,
   the references otherwise provided ratings of excellent. In an addendum to
   the source selection decision, the CO explains that the references
   provided sufficiently current and relevant past performance information to
   merit consideration of their input, and describes her reasoning for
   assigning AC moderate risk under the past performance factor. AR, Tab 59,
   Source Selection Decision Document Addendum, at 3-4.

   Ultimately, the agency reached the following conclusions:

+------------------------------------------------------------------------------+
|                               |         GSN         |           AC           |
|-------------------------------+---------------------+------------------------|
|Technical Approach             |      Very Good      |       Very Good        |
|-------------------------------+---------------------+------------------------|
|Personnel                      |        Good         |       Very Good        |
|-------------------------------+---------------------+------------------------|
|Past Performance               |      Low Risk       |     Moderate Risk      |
|-------------------------------+---------------------+------------------------|
|Total Price                    |     $8,142,006      |       $6,611,936       |
+------------------------------------------------------------------------------+

   CO Statement at 4; Protest at 10.[5]

   In her final source selection decision, the CO first confirmed that the
   proposals from both offerors were acceptable. Then she acknowledged the
   advantage of AC under the personnel factor, and of GSN under the past
   performance factor. After discussing the reasons for the different ratings
   once again, the CO explained that, in her judgment, she could not justify
   the price premium associated with GSN's proposal. AR, Tab 40, Source
   Selection Decision Document, at 6; AR, Tab 59, Source Selection Decision
   Document Addendum, at 3-4.

   On January 24, 2008, the Army informed GSN that the agency had selected AC
   for award and provided a written debriefing to GSN. GSN then filed a
   timely agency-level protest. On March 5, the Army denied the agency-level
   protest, and GSN then filed this protest with our Office, which it
   supplemented after receiving the agency report.[6]

   DISCUSSION

   In its protest, GSN challenges the evaluations of both itself and AC, and
   argues that AC's price was unreasonably low. GSN also argues that the
   award decision was based only on AC's low price.

   In considering GSN's challenges to the evaluations, we note that the
   evaluation of proposals is primarily a matter within the contracting
   agency's discretion which we will not question unless we find the
   evaluation to be unreasonable or inconsistent with the RFP's evaluation
   factors. Centro Mgmt., Inc., B-249411.2, Dec. 2, 1992, 92-2 CPD para. 387
   at 5. The protester's disagreement with the agency's conclusions does not
   render the evaluation unreasonable. Tate-Griffin Joint Venture,
   B-241377.2, Jan. 7, 1992, 92-1 CPD para. 29 at 8.

   Evaluation of GSN

   GSN objects that the Army misinterpreted GSN's FPR as identifying a single
   individual to perform the duties of both the key "contract manager" and
   "risk manager" positions, and indicated that this person would perform
   additional duties under another contract. GSN states that its initial
   proposal identified a different employee in the risk manager position "and
   that aspect of the proposal never changed." Protest at 10. Thus, GSN
   argues, the FPR only showed one person performing the key duties of the
   contract manager, who would also "spend part of his time assisting with
   risk management," and who would perform additional duties under the other
   contract. Id. Since the proposed risk manager therefore was never removed,
   GSN argues that the Army misinterpreted GSN's FPR as assigning both the
   contract manager and risk manager key positions to a single person.

   The Army responds that GSN's FPR did not detail the approach that the firm
   now claims it intended, but instead provided a table with the heading
   "Total Staffing Plan." The Army saw that the table labeled a single person
   as "Contract Manager/CSR [customer service representative]/Risk
   Management-Replacement for [name of former contract manager]." The table
   does not otherwise mention a risk manager. In view of this, the Army
   argues that the CO had good reason to believe that GSN was revising its
   initial proposal to have a single person to perform both the "contract
   manager" and "risk manager" key positions, plus additional duties. The
   Army argues that it was reasonable for the CO to conclude that GSN's new
   approach was acceptable, but that it also presented additional risk of
   performance problems. AR, Tab 39, SSA Technical Evaluation, May 17, 2007,
   at 8. Thus, the Army argues, the CO reached a reasonable conclusion, based
   on the tables in GSN's FPR, which justified rating GSN as "good" under the
   personnel factor. CO Statement at 10-12.

   We conclude that the CO's interpretation of GSN's FPR was reasonable. GSN
   responded to a discussions question about how the firm would divide its
   staff between two contracts with a set of tables, and they can be
   reasonably interpreted as a revision to the initial proposal assigning the
   duties of two key positions to a single employee. Moreover, an agency is
   not required to reopen discussions after the submission of FPRs to afford
   an offeror an opportunity to demonstrate compliance with the
   solicitation's requirements; instead, an offeror is obligated, when
   introducing changes in its FPR, to demonstrate how the revised offer will
   satisfy those requirements. Dynamic Sys. Tech., Inc., B-253957, Sept. 13,
   1993, 93-2 CPD para. 158 at 5; recon. denied, Dynamic Sys. Tech.,
   Inc.--Recon., B-253957.2, Feb. 10, 1994, 94-1 CPD para. 96 at 3.
   Accordingly, we deny this ground of protest.

   Evaluation of AC

   As indicated above, GSN takes issue with the ratings for AC under each
   evaluation factor--technical approach, personnel, and past
   performance--and raises other issues as well. These other issues include
   an allegation that the agency improperly allowed AC to exceed the page
   limit for key personnel resumes, and improperly considered AC past
   performance information that was received after the solicitation deadline.
   We have reviewed, and discuss below, each of these allegations, and
   conclude that GSN's arguments either lack merit, or that GSN was not
   prejudiced by the agency's actions.

   With respect to the technical approach factor, GSN argues that AC should
   have been downgraded because it failed to respond specifically to the
   discussions question about the five performance objectives and five
   performance thresholds in "Technical Exhibit 1." GSN argues that the CO
   ignored this unresolved deficiency in changing AC's rating to "very good"
   under the technical approach factor.[7]

   The Army responds that neither the RFP nor the questions posed to AC
   during discussions required AC to address Technical Exhibit 1.
   Additionally, the Army now identifies the elements of AC's initial
   proposal and FPR that addressed the performance objectives. Supp. AR at
   20. The Army argues that it was therefore reasonable for the CO to
   consider AC to have adequately addressed the substance of the evaluators'
   concerns, even though AC did not respond directly to the discussion
   question. The Army contends that the CO's decision to change AC's rating
   from "good" to "very good" under the technical approach factor was
   therefore reasonable.

   In our view, the record supports the CO's conclusion that AC adequately
   addressed the performance objectives so that the initial deficiency
   identified by the evaluators was properly considered a weakness after
   discussions. We also think that the CO's explanation of this issue
   adequately supports her decision to change AC's rating from "good" to
   "very good" under the technical approach factor.

   With respect to personnel, GSN argues that AC's reduction in staffing by
   one position in the option years should have resulted in a lower rating
   under the technical approach and personnel factors. Specifically, GSN
   argues that AC will not have sufficient staff to perform acceptably,
   particularly as the workload grows in the option years.

   On this point, the Army responds that its evaluators consistently
   concluded that AC proposed adequate staffing levels for its technical
   approach, in spite of GSN's arguments to the contrary, and that GSN simply
   disagrees with the evaluators' conclusions about the evaluation of AC. We
   agree with the Army.

   In our view, GSN has failed to show either that AC will be unable to
   perform at an acceptable level, or that the Army should have rated AC
   lower under the technical approach or personnel factors. A protester's
   mere disagreement with the agency's judgment does not establish that an
   evaluation was improper. Tate-Griffin Joint Venture, supra.

   With respect to past performance, GSN argues that AC should not have been
   rated as "moderate risk" because the firm lacked relevant past
   performance, as opposed to the past performance of AC's subcontractors.
   GSN also argues that it was improper for the Army to consider past
   performance information received after the due date in the RFP. In GSN's
   view, the Army should have instead assessed AC a neutral rating (or
   "unknown risk") under the past performance factor.

   The Army responds that the CO was within her discretion to consider the
   experience of AC's team members because their performance was relevant to
   the acquisition (see Federal Acquisition Regulation (FAR)
   sect. 15.305(a)(2)(iii)), that her rating of moderate risk was reasonable,
   and that her reasoning for the assigned rating is adequately set forth in
   the source selection decision and addendum.[8] The Army also argues that
   GSN could not have improved its evaluation under the past performance
   factor beyond its "low risk" rating, and asserts that in any event, the CO
   took into account GSN's advantage of excellent past performance in her
   source selection decision. Additionally, the Army argues that even if the
   CO is considered to have waived the due date for past performance
   information, and even if AC should have been assigned a neutral rating (or
   "unknown risk") under the past performance factor, GSN was not
   competitively prejudiced because the assessment of AC as "moderate risk"
   reflected some doubt about its ability to perform successfully, while a
   neutral rating conveys neither favorable nor unfavorable connotations. AR
   at 15; see FAR sect. 15.305(a)(2)(iv).

   The record here contains significant documentation of the CO's
   consideration of the past performance of AC and its team members. The CO
   appropriately expressed some doubt about AC's ability to perform this
   requirement, and this doubt is in contrast to GSN's established
   performance as an incumbent, which contributed to GSN's "low risk" rating.
   Based on this record, in our view, GSN has not shown that it has been
   competitively prejudiced by any of the errors it alleges in the assessment
   of AC's past performance. Our Office will not sustain a protest unless the
   protester demonstrates a reasonable possibility that it was prejudiced by
   the agency's actions; that is, unless the protester demonstrates that, but
   for the agency's actions, it would have had a substantial chance of
   receiving the award. McDonald Bradley, B-270126, Feb. 8, 1996, 96 1 CPD
   para. 54 at 3; see Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581
   (Fed. Cir. 1996).

   Turning next to GSN's argument that the Army unfairly relaxed the
   requirements of the RFP, GSN contends that both of AC's new resumes
   exceeded the page limit. In particular, GSN argues that it was not
   possible to determine the qualifications of AC's new contract manager
   without considering the third and fourth pages of her resume. Supp.
   Comments at 5.

   With respect to the new quality assurance analyst resume provided in AC's
   FPR, the Army responds that the third page of the resume contained no
   relevant information. Since that page was merely a list of awards that
   this employee had received, and since these were not related to his
   qualifications as a quality assurance analyst, the Army contends that its
   evaluation was not affected by the extra page. We agree based on our
   review of the record, which confirms that the additional page contained no
   information needed for evaluating the qualifications of this individual.

   With respect to the additional pages for AC's contract manager, the Army
   concedes that it did consider the additional pages, but argues that GSN
   was not competitively prejudiced by the relaxation of the page limit for
   AC's contract manager's resume, especially given GSN's inability to
   proffer a replacement for its own contract manager.

   There is no dispute in this record that the Army waived the resume page
   limit in the RFP when AC proposed a replacement contract manager well into
   the course of this long-running procurement. Nevertheless, our Office will
   only sustain a protest that an agency has waived or relaxed its
   requirements for the awardee where the protester establishes a reasonable
   possibility that it was prejudiced by the agency's actions; that is, had
   the protester known of the changed requirements, it would have altered its
   proposal to its competitive advantage. Team BOS/Naples--Gemmo S.p.A./
   DelJen, B-298865.3, Dec. 28, 2007, 2008 CPD para. 11 at 10-11. In our
   view, GSN has not shown that a similar waiver of the page limit for its
   contract manager would have allowed it to improve its proposal. As GSN
   candidly acknowledged in its FPR, it had no contract manager to propose at
   that time. Under these circumstances, we conclude that GSN was not
   competitively prejudiced by the waiver of the page limitation.

   Evaluation of Price

   GSN argues that AC's price is so low as to be unreasonable, and that AC's
   low price will effectively prevent it from performing at the required
   levels--while developing additional business--as required by the terms of
   the RFP. GSN argues that AC's low prices should have placed the Army on
   notice that AC lacked understanding of the requirement, and faced a
   significant risk of unsuccessful performance.

   The Army responds that it appropriately evaluated AC's price as reasonable
   after comparing AC's price to the government estimate, to GSN's proposed
   price, and to the price offered by the third offeror.[9] While
   acknowledging that AC's price is lower than the government estimate, the
   Army argues that the government estimate was based significantly on GSN's
   incumbent staffing approach. Therefore, the Army argues that neither the
   government estimate, nor GSN's proposed prices, could be treated as a
   definitive standard of price reasonableness. The Army emphasizes that the
   third offeror's price was only slightly higher than AC's price, and argues
   that it was reasonable to use that comparison to find AC's price to be
   reasonable. AR at 17-18.

   Where, as here, a solicitation provides for award of a fixed-price
   contract--under which the government's liability is fixed and the
   contractor bears the risk and responsibility for the actual costs of
   performance--the agency is only required to evaluate an offeror's price
   for fairness and reasonableness. FAR sections 15.402(a), 15.404-1(a); SAMS
   El Segundo, LLC, B-291620.3, Feb. 25, 2003, 2003 CPD para. 48 at 8. It is
   well-established that price reasonableness in a fixed-price setting
   relates to whether a firm's prices are too high, not too low. Medical
   Matrix, LP, B-299526, B-299526.2, June 12, 2007, 2007 CPD para. 123 at 9
   n.6. Here, GSN has provided no basis to question the Army's conclusion
   that AC's price was reasonable simply because it was lower than the
   government estimate or GSN's price. Even though GSN argues that AC will
   not be able to perform adequately at its price, the Army has shown that
   its evaluation of the completeness and reasonableness of AC's price was
   appropriate for this fixed-price contract.

   Finally, although GSN also argues that the award decision was based on
   price, and thus was contrary to the RFP emphasis on non-price factors, we
   disagree. A source selection official has broad discretion in determining
   the manner and extent to which she will make use of the technical and
   price evaluation results; her judgments are governed only by the tests of
   rationality and consistency with the stated evaluation criteria. Chemical
   Demilitarization Assocs., B-277700, Nov. 13, 1997, 98-1 CPD para. 171 at
   6. The propriety of a tradeoff depends not on the mere difference in
   technical scores or ratings, but on the reasonableness of the source
   selection official's judgment concerning the significance of the
   difference. Digital Sys. Group, Inc., B-286931, B-286931.2, Mar. 7, 2001,
   2001 CPD para. 50 at 11. Even where price is the least important
   evaluation criterion, an agency may properly award to a lower-rated,
   lower-priced offeror if the agency reasonably determines that the premium
   involved in awarding to a higher-rated, higher-priced offeror is not
   justified. Tracor Applied Sci., Inc., B-253732, Oct. 19, 1993, 93-2 CPD
   para. 238 at 9. The record here confirms that the CO had a thorough
   understanding of the differences between the offerors, and set forth a
   reasonable basis for her determination that the lower risk associated with
   GSN's past performance in comparison to the risk assessed for AC (given
   its less established past performance), did not justify paying GSN's
   higher price.

   The protest is denied.[10]

   Gary L. Kepplinger
   General Counsel

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

   [1] The RFP provided for the reimbursement of other direct costs
   (described as including "supplies not otherwise provided"), and travel
   (described as covering "long distance travel for approved business
   meetings, conference support, and marketing calls"), up to specified
   annual ceiling amounts. RFP at 5-6.

   [2] There have been multiple rounds of protests and corrective action in
   this procurement, which resulted in additional documentation of specific
   aspects of the evaluation. Except where more detail is required for
   clarity, we will discuss only the relevant aspects of the evaluation upon
   which the ultimate source selection decision depended, without fully
   detailing the chronology of events.

   [3] The copy of AC's proposal in the record contained copies of five
   completed past performance questionnaires for AC's team members. AR,
   Tab 16, AC Proposal, at 47-70 (pages numbered by GAO). Although located in
   the record under the tab for AC's initial proposal, the Army explains that
   these questionnaires were not submitted by AC. As explained below, these
   were received after submission of FPRs.

   [4] No additional past performance information had been received when AC
   filed its FPR.

   [5] At an earlier point, a third firm had been included in the
   competition. However, after being selected for award at a price of
   $6,660,539, that firm was determined to be ineligible for award under the
   set-aside. AR at 17, AR, Tab 18, Third Offeror's Price Proposal Excerpt,
   at 4.

   [6] GSN also pursued protests at the Small Business Administration (SBA),
   alleging that AC is affiliated with one or more of its subcontractors, and
   arguing that those firms are ineligible under the HUBZone set-aside. As a
   result, GSN argues that the alleged affiliation makes AC ineligible for
   award. The record indicates that the SBA dismissed or denied those
   protests, and that GSN has appealed those rulings.

   [7] GSN also argues that AC's price was so unreasonably low that the Army
   should have considered it as evidence of a lack of understanding, and
   therefore should have lowered AC's evaluation under the technical approach
   and personnel factors. As explained below with respect to AC's challenges
   to the price reasonableness determination, we disagree.

   [8] While the addendum also describes a Dunn and Bradstreet past
   performance report (which reportedly awarded AC 95 of 100 available
   points), and positive letters of recommendation for AC's key personnel,
   these were not included in the agency report. Despite their omission, we
   conclude that the past performance assessment of moderate risk was
   reasonable, even when limited to consideration of the past performance
   questionnaires.

   [9] This third firm had been selected for award at one point, but was
   later determined to be ineligible for award under the set-aside.

   [10] Although GSN raises additional issues with respect to the evaluation
   and AC's eligibility for award, and we have reviewed each of them, we
   conclude that none has merit.