TITLE: B-298838, B-298838.2, Smiths Detection, Inc., December 22, 2006
BNUMBER: B-298838, B-298838.2
DATE: December 22, 2006
***************************************************************
B-298838, B-298838.2, Smiths Detection, Inc., December 22, 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: Smiths Detection, Inc.

   File: B-298838, B-298838.2

   Date: December 22, 2006

   John S. Pachter, Esq., Jonathan D. Shaffer, Esq., Richard C. Johnson,
   Esq., Tamara F. Dunlap, Esq., Stephanie D. Capps, Esq., and Mary Pat
   Gregory, Esq., Smith Pachter McWhorter PLC, for the protester.

   Thomas P. Barletta, Esq., Daniel C. Sauls, Esq., Paul R. Hurst, Esq., Paul
   I. Lieberman, Esq., Michael C. Drew, Esq., and Ana Holmes Voss, Esq.,
   Steptoe & Johnson LLP, for Science Applications International Corporation,
   an intervenor.

   Robert J. Sherry, Esq., Sheila A. Armstrong, Esq., Laura Patterson
   Hoffman, Esq., and Matthew G. Ball, Esq., Kirkpatrick & Lockhart Nicholson
   Graham LLP, for American Science & Engineering, Inc., an intervenor.

   Catherine Anderson, Esq., and Marion Cordova, Esq., Department of Homeland
   Security, for the agency.

   Linda C. Glass, Esq., and Glenn G. Wolcott, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest that agency's evaluation and source selection decision (SSD)
   were flawed is denied where the record shows that the agency's evaluation
   and SSD were reasonable and consistent with the solicitation's evaluation
   factors.

   2. Source selection authority (SSA) performed a reasonable cost/technical
   tradeoff in determining that the awardees' proposals represented the best
   value, where the SSA's judgment, based upon the results of a reasonable,
   documented technical evaluation, demonstrates the SSA's understanding of
   the evaluated strengths and weaknesses of the respective proposals, and
   shows a reasonable weighing of the offerors' respective technical and cost
   advantages consistent with the solicitation's evaluation criteria.

   3. Discussions were meaningful where the discussions led the protester
   into the areas of its proposal that required improvement or further
   clarification.

   4. Agency's cost evaluation was reasonable even though agency did not
   verify each and every item of an offeror's proposed costs in conducting
   its cost realism analysis since the cost evaluation was the result of the
   agency's exercise of informed judgment.

   DECISION

   Smiths Detection, Inc. protests the award of contracts to Science
   Applications International Corporation (SAIC), American Science &
   Engineering, Inc. (AS&E), and L3 Communications Security & Detection
   Systems, Inc. (L3) under request for proposals No. HSHQDC-05-R-00007,
   issued by the Department of Homeland Security (DHS), Domestic Nuclear
   Detection Office (DNDO), for the research and development, developmental
   test and evaluation, spiral development, pilot deployment, production, and
   operational deployment of the Cargo Advanced Automated Radiography System
   (CAARS ) Program.[1] Smiths objects to the agency's evaluation of
   proposals, and maintains that the agency failed to conduct meaningful
   discussions, conducted a flawed cost realism analysis, and failed to make
   a proper best value determination.

   We deny the protest.

   BACKGROUND

   The solicitation was issued on February 17, 2006, and as amended, provided
   for the award of up to three indefinite-delivery/indefinite-quantity
   (ID/IQ) contracts for a period of 7 years. Simultaneously with, or
   immediately following, the award of the basic ID/IQ contract, the agency
   plans to issue Task Order No. 1, covering concept and technology
   development and developmental test and evaluation, to each ID/IQ
   contractor on a cost plus award fee basis. This effort will culminate with
   the delivery of one prototype CAARS to DNDO for test and evaluation.

   The RFP provided that the award would be made based on the best overall
   proposals that are determined to be most beneficial to the government with
   appropriate consideration given to the following evaluation factors listed
   in descending order of importance: technical, management, past performance
   and cost. RFP sect. M.1. The RFP provided that when combined, the
   technical, management, and past performance factors were significantly
   more important than cost.

   The RFP also provided that technical and management proposals would be
   evaluated qualitatively and rated as exceptional, acceptable, marginal, or
   unacceptable.[2] Under the past performance evaluation factor, the
   evaluation would be based on a confidence assessment of high confidence,
   significant confidence, satisfactory confidence, unknown confidence,
   little confidence or no confidence. Offerors' proposed costs were not to
   be rated or scored, but were to be evaluated for realism.

   The agency received eight proposals by the closing date. The technical
   evaluation board (TEB) evaluated the initial technical proposals and a
   cost evaluation board (CEB) evaluated the initial cost proposals. As a
   result of the initial evaluations, five offerors were included in the
   competitive range. On July 25, to begin discussions, all competitive range
   offerors were provided a set of clarification/discussion questions. In
   addition, offerors were provided a copy of the results of the TEB's
   Initial Consensus Report for its individual proposal. AR, Tab 25, Initial
   TEB Report. The TEB Report included initial ratings and the agency's
   narrative evaluation for each subfactor, as well as a bullet summary of
   each strength, weakness and deficiency. DNDO also held oral discussions
   with each competitive range offeror. Following discussions, final proposal
   revisions (FPR) were received from all five offerors.

   The FPRs were evaluated by the TEB and a consensus rating for each offeror
   was assigned. The CEB reviewed the costs proposed by each of the five
   offerors and determined the cost in each cost proposal to be reasonable,
   realistic and complete for the level of effort proposed by each offeror.
   AR, Tab 25, Post Negotiation Memo, at 9. The final evaluation results with
   regard to the proposals of Smiths and the three awardees were as
   follow:[3]

   +------------------------------------------------------------------------+
   |Offeror|Technical  |Management |Past Performance |Overall    |Total     |
   |       |Rating     |Rating     |Confidence       |Rating     |Evaluated |
   |       |           |           |Assessment       |           |Cost + Fee|
   |       |           |           |                 |           |$         |
   |-------+-----------+-----------+-----------------+-----------+----------|
   |AS&E   |Exceptional|Acceptable |Satisfactory     |Exceptional|28,830,288|
   |-------+-----------+-----------+-----------------+-----------+----------|
   |L3     |Exceptional|Exceptional|Significant      |Exceptional|7,491,713 |
   |-------+-----------+-----------+-----------------+-----------+----------|
   |SAIC   |Exceptional|Acceptable |Significant      |Exceptional|13,490,390|
   |-------+-----------+-----------+-----------------+-----------+----------|
   |Smiths |Acceptable |Acceptable |Satisfactory     |Acceptable |[DELETED] |
   +------------------------------------------------------------------------+

   The source selection authority (SSA) reviewed the evaluation results and
   compared the proposals, giving consideration to each of the evaluation
   factors set forth in the RFP and their relative weighting. AR, Tab 4, SSD
   at 24. The SSA determined that award should be made to L3, SAIC and AS&E
   whose proposals represented the best value to the government, noting that
   there was a clear demarcation between the proposals of L3, SAIC and AS&E
   and that of Smiths.

   Specifically, the SSA noted that L3 and SAIC submitted proposals that were
   rated higher than Smiths' proposal with regard to the non-cost evaluation
   factors, and offered lower evaluated costs than Smiths' proposal. With
   regard to AS&E, the SSA noted that AS&E's proposal received an overall
   rating of exceptional for the non-cost evaluation factors, but offered a
   much higher cost. The SSA concluded that AS&E's proposal was of
   significantly superior technical quality to warrant paying a cost/price
   premium of approximately [DELETED] million over the cost/price offered by
   Smiths' proposal. The SSA specifically noted that AS&E was the only
   offeror to propose a technological solution that was not based on
   [DELETED] and that AS&E's unique software design had the capability to
   display and examine container cargo in [DELETED] in [DELETED] ranges of
   materials which exceeded the performance requirement of two ranges and
   increased the ability to discriminate against innocent alarms. The SSA
   concluded that AS&E's approach had the potential to provide performance
   far beyond the [DELETED industry standard proposed by the other offerors.
   The SSA further concluded that, in comparison, AS&E's technology with its
   ability to portray high Z detections [DELETED] has the potential to
   significantly improve the accuracy and speed of detection and alarm
   against threat materials, with an exceptionally low false alarm rate. The
   SSA recognized that there was a risk associated with the development of
   AS&E's technology, but determined that the potential payoff of such a
   technology outweighed the risks especially when the technology has already
   been demonstrated in a laboratory environment.

   Based on the evaluation discussed above, the SSA subsequently concluded
   that, when comparing Smiths' lower-rated proposal to AS&E's superior
   proposal, that Smiths' proposal to execute the program relying on staff
   located in both [DELETED] without a sufficiently detailed explanation
   regarding this staffing approach, introduced risk to the program that
   offset the potential savings associated with Smiths' lower evaluated cost.
   Accordingly, the SSA determined, based on an integrated assessment of all
   proposals, that L3, SAIC and AS&E represented the best overall value to
   the government. Contract awards were made to L3, SAIC and AS&E on
   September 8, 2006. After receiving a debriefing, Smiths filed an initial
   protest with our Office on September 19, 2006, and a supplemental protest
   on October 30, 2006.

   DISCUSSION

   Smiths maintains that the agency failed to evaluate offerors on a
   consistent and equitable basis. More specifically, Smiths contends that
   the agency improperly evaluated all offerors' proposals under the
   technical factor, the management factor and the past performance factor,
   that the agency performed an improper cost evaluation of L3's proposal,
   that the agency failed to conduct meaningful discussions with Smiths, and
   that the agency failed to perform a proper best value determination.[4]

   Our Office reviews challenges to an agency's evaluation of proposals only
   to determine whether the agency acted reasonably and in accord with the
   solicitation's evaluation criteria and applicable procurement statutes and
   regulations. Marine Animal Prods. Int'l, Inc., B-247150.2, July 13, 1992,
   92-2 CPD para. 16 at 5. A protester's mere disagreement with the agency's
   judgment is not sufficient to establish that an agency acted unreasonably.
   Entz Aerodyne, Inc., B-293531, Mar. 9, 2004, 2004 CPD para. 70 at 3.

   Technical Factors

   The technical evaluation factor consisted of the following subfactors:
   software design, hardware design, system performance, open architecture
   design and production capabilities. Software design and hardware design
   subfactors were equally important, and when combined, were more important
   than the other three subfactors. RFP sect. M.1. As shown above, Smiths
   received an overall rating of acceptable under the technical evaluation
   factor, while L3, SAIC and AS&E all were rated exceptional. The four
   offerors were all rated exceptional under the software design subfactor
   and acceptable under the hardware design subfactor. Smiths basic challenge
   to the evaluation under these factors is that the proposals were
   improperly and arbitrarily given equal adjectival ratings when the
   proposals had differing numbers of strengths, weaknesses and deficiencies.
   For example, Smiths maintains that SAIC should have not been rated
   exceptional under the software design subfactor because SAIC had only
   three strengths, while Smiths had six strengths.

   In our view, the protester's arguments are misplaced. The number of
   strengths, deficiencies, or weaknesses noted in an offeror's proposal does
   not dictate what overall adjectival rating a proposal receives. The record
   shows that the evaluators examined the totality of the approach of each
   offeror for each of the evaluation factors. Moreover, adjectival ratings,
   like scores, are useful guides to intelligent decision-making; they are
   not binding on the SSA, who has discretion to determine the weight to
   accord them in making an award decision. Porter/Novelli, B-258831, Feb.
   21, 1995, 95-1 CPD para. 101 at 5. Of concern to our Office is whether the
   record as a whole supports the reasonableness of the evaluation results
   and the source selection decision. Orbital Techs. Corp., B-281453 et al.,
   99-1 CPD para. 59 at 9. Here, the record reflects that along with the
   adjectival ratings, the TEB provided a narrative description of the
   evaluation of each proposal for each evaluation factor. The SSA was
   provided with, and considered, the TEB's report on its evaluation of the
   revised proposals; this report summarized the TEB's views of the proposals
   in the context of the adjectival ratings assigned to the proposals under
   each evaluation factor.

   Based on our review of the record, it is clear that Smiths' protest merely
   expresses disagreement with the agency's judgment as to the value of the
   offerors' various technical approaches. For example, under the software
   design factor, the agency concluded that all four offerors' software
   designs exceeded the RFP requirements and were, therefore, rated
   exceptional. While the protester disagrees with the agency's determination
   with respect to the SAIC proposal, on the basis that SAIC had fewer
   identified strengths, Smiths' protest does not demonstrate that the
   agency's evaluation was unreasonable.

   Smiths also argues that the evaluation of its proposal under the hardware
   design subfactor was improper because the agency assigned a weakness for
   Smiths' failure to demonstrate a solution to [DELETED] related to the
   [DELETED].[5] Smiths complains that SAIC was not assigned a similar
   weakness under the hardware design subfactor even though SAIC's proposal,
   in Smiths' view, presented even more risk with regard to [DELETED].
   Overall, Smiths maintains that all awardees should have received reduced
   ratings under the hardware design subfactor.

   The record shows that all four offerors received acceptable ratings for
   hardware design. While the agency noted strengths in each offeror's
   approach, the perceived risks in each approach resulted in ratings of only
   acceptable. For example, the agency noted that AS&E proposed several
   solutions that exceeded the requirements, but AS&E was only rated
   acceptable because the agency recognized a risk associated with the
   engineering of AS&E's [DELETED]. Likewise, the L3 design exceeded several
   RFP requirements, but was rated only acceptable because of risks in the
   area of [DELETED]. SAIC's weakness centered on its design approach which
   relied on the successful design development of an [DELETED] that would not
   [DELETED]. AR, Tab 7, TEB Report. Overall, the record clearly shows that
   the evaluators understood the hardware design of each offeror, recognized
   each design's strengths, risks, and limitations, and reasonably concluded
   that each offeror's design was properly rated as acceptable based on the
   risks associated with its hardware design.

   The protester argues that during discussions, it demonstrated both its
   understanding of, and a proposed solution for, [DELETED] but that the
   agency, by requiring Smiths to demonstrate its proposed solution,
   improperly held Smiths to a standard not required by the solicitation. The
   agency responds that [DELETED] and intensity variation are problems that
   cause processing noise which leads to missed detections and/or high false
   alarms, elaborating that it did not expect Smiths to demonstrate its
   solution, but rather to demonstrate that it understood the problem by
   addressing basic issues involved in its plan--such as defining the sources
   of [DELETED] and identifying mitigation strategies associated with the
   sources. AR, Tab 4, SSD, at 20; Supplemental Contracting Officer's
   Statement at 6. The agency concluded that Smiths did not adequately
   address these issues.[6] In any event, Smiths continues to argue that an
   exceptional rating under the hardware design evaluation factor may have
   resulted in an overall rating of exceptional for Smiths' proposal.
   However, from our review of the record, we do not find the agency's
   evaluation unreasonable.[7]

   Management Factor

   The management evaluation factor consisted of the following subfactors:
   program management approach, management control processes, and utilization
   of small disadvantaged business concerns. The program management approach
   and management control processes subfactors were of equal importance and
   were significantly more important than the utilization of small
   disadvantaged business concerns subfactor.

   For the management evaluation factor, Smiths' proposal received an overall
   rating of acceptable. Smiths proposed to execute this program by relying
   on staff located both in the [DELETED]. For the program management
   approach subfactor, Smiths' proposal was rated unacceptable because the
   evaluators concluded that Smiths failed to adequately explain how it
   planned to execute the program utilizing the expertise and experience of
   its personnel [DELETED] who lacked security clearances--with the less
   experienced, but security-cleared, personnel at its facility in
   [DELETED].[8] AR, Tab 4, SSD, at 21. The agency noted that although
   Smiths' staff in [DELETED] has experience with x-ray development efforts,
   this is the first such effort for the staff in [DELETED] the agency
   described Smiths' plan as a "leader-follower" arrangement in which some of
   the personnel at Smiths' [DELETED] facility would observe initial
   development in [DELETED], and then development would move to [DELETED].
   The agency determined that Smiths' proposal inadequately described the
   division of labor, responsibility and accountability that would be
   required to implement its management approach, particularly in light of
   the security issues. Additionally, the agency concluded that three of
   Smiths' key personnel, who recently joined Smiths, lacked experience and
   expertise with Smiths' processes and technology, which created additional
   risk in Smiths' proposal. Finally, the agency concluded that the software
   integrated product team leader had no apparent experience in high Z
   detection software development relevant to this effort.

   Smiths argues that its proposal did not use the term "leader-follower,"
   and that it was improper for the agency to downgrade Smith's proposal for
   this approach based on the agency's concerns regarding Smiths' compliance
   with the solicitation's security clearance requirements.[9] Smiths
   maintains that it explained during oral discussions how it intended to
   minimize the risk created by reliance on staff located in [DELETED].

   Smith's explanations notwithstanding, the agency concluded that, as a
   result of the oral discussions, it became even more apparent that there
   was no clear delineation of roles and responsibilities between the staff
   at the [DELETED] facility and the staff at [DELETED]. Specifically, the
   agency found that Smiths never adequately explained how it would
   accomplish the development of the critical inspection and detection
   software and algorithms by relying on [DELETED] employees with no security
   clearances, and [DELETED] employees with security clearances--but no
   experience with Smiths' processes or technologies and limited experience
   in developing radiography or high Z detection software.

   Although Smiths complains about the agency's use of the term
   "leader-follower" to describe Smiths' proposed approach, based on our
   review of the record it is clear the agency fully understood the approach
   that Smiths proposed to employ, and believed that the proposed approach
   created unacceptable risk to the program, particularly in light of the
   security requirements. In pursuing this protest, Smiths has failed to
   demonstrate that the agency's concerns are unreasonable.[10]

   Next, Smiths objects to the agency's conclusions that its key personnel
   who were recently hired (program manager, chief engineer and lead software
   programmer) lacked experience and expertise with Smiths' processes and
   technologies. Smiths points out that while these personnel were recent
   hires, Smiths' program management and system engineering processes are not
   unusual or unique. Moreover, Smiths states that the program manager, chief
   engineer and software lead, will not be operating alone, but will be
   assisted by and collaborate with highly qualified integrated product team
   members who possess extensive experience. The record shows that the agency
   understood and recognized the experience of Smiths' key personnel, but
   nonetheless concluded that their lack of experience and expertise with
   Smiths' processes and technology, coupled with the "leader-follower"
   approach, as identified by the agency, posed an unacceptable risk. While
   Smiths may disagree with the agency's conclusion, its disagreement does
   not make the evaluation unreasonable.

   Finally, with respect to the utilization of SDB concerns evaluation
   factor, while Smiths' proposal was rated excellent, Smiths maintains that
   the agency improperly rated AS&E, a small business, and L3 acceptable
   under this evaluation factor, maintaining that these two offerors failed
   to the meet the solicitation's minimum requirements, including
   identification of specific SDB goals. However, while the RFP listed
   several criteria to be evaluated under the utilization of SDB concerns
   evaluation factor, including consideration of the extent to which SDB
   concerns are specifically identified, the RFP did not indicate that the
   failure to provide specific SDB contracting goals would result in an
   offeror being rated unacceptable, rather, the RFP gave offerors the
   opportunity to explain any reasons for the lack of SDB participation. RFP
   sect. M.3.2. In fact, L3 proposed [DELETED] to participate in performing
   the contract and indicated that it anticipated utilizing SDBs in the areas
   of [DELETED]. Similarly, AS&E provided information concerning its proposed
   goal for SDB participation and identified [DELETED].[11] Based on our
   review of the solicitation and the offerors' proposals, the agency
   reasonably determined that AS&E and L3 met the solicitation requirements
   regarding utilizations of SDB concerns. [12]

   Cost Evaluation

   Smiths protests that the agency failed to properly evaluate L3's cost
   proposal. According to Smiths, L3's cost proposal failed to include all
   required costs and was based on differing, inconsistent estimates of hours
   for software development.

   In performing cost evaluations, an agency is not required to verify the
   cost for each and every item proposed. Rather, the evaluation of competing
   cost proposals requires the exercise of informed judgment by the
   contracting agency; since such an analysis is a judgment matter on the
   part of the contracting agency, our review is limited to a determination
   of whether an agency's cost evaluation was reasonably based. Fairchild
   Weston Sys., Inc., B-229568.2, Apr. 22, 1988, 88-1 CPD para. 394 at 4. As
   discussed below, our review of the record leads us to conclude that the
   agency's cost evaluation was reasonable and consistent with the terms of
   the solicitation.

   The RFP provided that, in performing the cost evaluation, the agency would
   examine the offeror's proposed labor hours, labor rates, materials costs,
   burden rates, and other costs in light of information available to the
   contracting officer, including the relationship of such proposed labor
   hours and costs to the effort described in the offeror's overall proposal
   and government estimates, and any other costs likely to be incurred by the
   offeror in performance of the requirement. RFP sect. M.3.4. The record
   shows that here, the agency reviewed and evaluated specific elements of
   each offeror's cost proposal, the corresponding elements of the respective
   technical proposal, and determined that the estimated proposed cost
   elements were realistic, given the technical solution and approach being
   proposed. AR, Tab 5, Post Negotiation Memorandum, at 19. The protester
   argues that L3's proposed costs, which were the lowest, should have been
   increased because L3 allegedly did not include costs for certain elements
   that Smiths maintains should have been included. The agency responds that
   each offeror, including L3, proposed its own technology for development
   design, based on their particular approach to contract performance. Based
   on the agency's understanding of each offerors' proposed approach, no
   adjustments to the individual cost proposals were made. Id. attach. 2a, at
   4. Based on our review of the record, the agency's cost evaluation was
   reasonable and consistent with the terms of the solicitation.

   Moreover, the record shows that even if the agency had made all of the
   cost adjustments that Smiths maintains should have been made, L3's
   proposal would still have been significantly less expensive, and higher
   rated technically, than Smiths' proposal. Consequently, Smiths has not
   shown that it has been prejudiced in this regard. See Wyle Labs., Inc.,
   B-288892, B-288892.2, Dec. 19, 2001, 2002 CPD para. 12 at 17-18.

   Meaningful Discussions

   Smiths protests that the agency did not conduct meaningful discussions
   with Smiths with respect to the agency's concerns regarding the [DELETED]
   issue and the program management issue. Specifically Smiths contends that
   the agency never informed Smiths that it had to "demonstrate" a solution
   resolving the agency's concerns regarding [DELETED] or that its management
   approach was unacceptable because of Smiths' failure to provide
   information regarding division of labor, responsibility and
   accountability.

   Contracting agencies have considerable discretion in determining the
   nature and scope of discussions. PRB Assocs., Inc., B-277994, B-277994.2,
   Dec. 18, 1997, 98-1 CPD para. 13 at 6. Although discussions must be
   "meaningful," that is, sufficiently detailed so as to lead an offeror into
   areas of its proposal requiring amplification or revision, an agency is
   not required to "spoon feed" an offeror as to each and every item that
   must be revised to improve their proposal or to achieve the maximum score,
   Uniband, Inc., B-289305, Feb. 8, 2002, 2002 CPD para. 51 at 11; nor is an
   agency required to hold successive rounds of discussions until all
   proposal defects have been corrected. Metro Mach. Corp., B-295744,
   B-295744.2, Apr. 21, 2005, 2005 CPD para. 112 at 19.

   Here, the record shows that the protester was given several opportunities
   to respond to the agency's concerns regarding both the [DELETED] issue and
   Smiths' management approach; Smiths simply failed to adequately respond to
   the agency's questions. Specifically, the agency provided all competitive
   range offerors with a set of clarification/discussion questions, a copy of
   the results of the initial evaluation of each respective proposal, and the
   TEB's Initial Consensus Report, prior to conducting oral discussions with
   each offeror. With respect to the [DELETED] issue, the TEB report
   indicated that there was a risk associated with [DELETED]. Further, the
   agency's written discussion question specifically asked Smiths to describe
   how issues associated with [DELETED] would be minimized. Finally, the
   record shows that the issue was raised again by the agency during oral
   discussions.

   Here, with regard to the agency's concerns regarding [DELETED] the record
   clearly establishes that the agency repeatedly brought these concerns to
   Smiths' attention during discussions; Smiths simply did not provide
   information that eliminated those concerns. Instead, Smiths acknowledges
   in its protest submissions that there was additional information that it
   could have provided, but did not. Based on the agency's repeated
   expressions of concern regarding this matter, it was incumbent on Smiths
   to provide all available information regarding its ability to address
   those concerns. In this regard, an offeror is responsible for
   affirmatively demonstrating the merits of its proposal. See generally
   Will-Burt Co., B-250626.2, Jan. 25, 1993, 93-1 CPD para. 61 at 4. We deny
   this aspect of Smiths' protest.

   With respect to the adequacy of the agency's discussions regarding Smiths'
   management approach, the record shows that Smiths was provided a copy of
   the TEB report --which expressly stated that Smiths' management approach
   was considered unacceptable due to the risks the agency associated with
   Smiths' reliance on staff located in both [DELETED]. Further, Smiths was
   specifically asked to describe how the facilities, equipment, quality
   system, and personnel that manufactured the system in [DELETED] would be
   duplicated in [DELETED]. AR, Tab 10, Smiths Clarification/Discussions, at
   2. Finally, during oral discussions this issue was raised yet again. It
   was incumbent upon Smiths to provide a detailed explanation that
   demonstrated the soundness of its management approach. The agency
   reasonably concluded that Smiths failed to adequately respond to its
   concerns and, in fact, that Smiths' responses increased the agency's
   concerns regarding risk to the program.[13] Based on our review of the
   record, we find the discussions were meaningful.

   Source Selection Decisions

   Finally, Smiths challenges the reasonableness of the SSA's selection
   decisions. Here, as discussed above, we have concluded that the agency's
   evaluation was reasonable and consistent with the evaluation criteria. As
   explained above, the SSA selected L3 and SAIC for award because their
   proposals' technical ratings were superior to the technical ratings of
   Smiths' proposal, and offered lower evaluated costs. Accordingly, no
   cost/technical tradeoffs were required for the awards to L3 and SAIC. With
   regard to AS&E's proposal, the SSA performed a tradeoff analysis between
   AS&E's higher technical rated, but higher-cost, proposal and Smiths' lower
   rated, lower cost proposal. In performing this tradeoff, the SSA
   recognized that the AS&E approach presented a risk, but concluded that
   AS&E's unique technical approach was worth the additional cost. The SSA
   also concluded that Smiths' management approach introduced an unacceptable
   risk to the program that offset any potential savings associated with
   Smiths' proposal.

   Based on our review of the record, we conclude that the agency's
   evaluation, and source selection decision were reasonable and in
   accordance with the terms of the solicitation.

   The protest is denied.

   Gary L. Kepplinger

   General Counsel

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

   [1] The DNDO is chartered to develop, acquire, and support the deployment
   and improvement of a domestic system to detect attempts to import,
   assemble, or transport a nuclear explosive device, fissile material, or
   radiological material intended for illicit use. RFP attach. 1, Statement
   of Work at 1. The objective of CAARS is to provide the capability to
   automatically detect materials with a high atomic number (high Z). Agency
   Report (AR) Tab 4, SSD at 1. The implemented technology will be able to
   distinguish between low density materials such as aluminum and steel, and
   higher density materials such as lead, uranium, or plutonium.

   [2] The RFP defined an exceptional rating as "exceeds specified minimum
   performance or capability requirements in a way beneficial to the
   DHS/DNDO." RFP sect. M.2.1.

   [3] The agency's evaluation of other offerors' proposals is not relevant
   to Smiths' protest; accordingly, other offerors' proposals are not further
   discussed.

   [4] In its comments to the agency's supplemental report, Smiths withdrew
   various protest issues, including: the agency's alleged reliance on
   information contained in SAIC's proposal to evaluate Smiths' proposal; the
   agency's alleged failure to assign a weakness to SAIC's and L3's proposals
   for shielding capabilities; and the agency's alleged overrating of L3's
   management control process.

   [5] The protester also argues that had the agency not arbitrarily shifted
   the [DELETED] weakness to the more heavily weighted hardware design
   subfactor instead of the system performance subfactor, Smiths would have
   been the only offeror with no weaknesses under the first two technical
   subfactors and, on this basis, asserts that its proposal would have
   received an overall rating of exceptional. As stated above, Smiths places
   too much emphasis on the adjectival ratings rather than the narrative
   evaluation regarding the value of its technical approach.

   [6] In contrast, the record shows that SAIC specifically identified three
   primary sources of [DELETED] as well as specific mitigation measures
   related to each source. Id.

   [7] Similar to the arguments discussed above, Smiths challenges the
   agency's evaluation with regard to the specific adjectival ratings
   assigned under the system performance and open architecture design
   subfactors, arguing that the awardees' proposals should have been
   downgraded for various risks related to their various approaches. For
   example, the protester maintains that AS&E should not have been rated
   acceptable under the open architecture design subfactor because the agency
   would not be obtaining sufficient data from AS&E under AS&E's approach,
   and that AS&E's proposal was rated exceptional based only on a proposed
   concept. Smiths also contends that L3 failed to provide sufficient
   information regarding radiation shielding. However, our review of the
   record shows that the evaluators reasonably considered all these risks
   when rating the respective proposals and that the SSA took them into
   account when making the selection decision. AR, Tab 4, SSD.

   [8] Prior to the closing date for submission of initial proposals, the
   solicitation was amended to require security clearances for key personnel.
   The record indicates that Smiths' proposed approach to rely on staff in
   both the [DELETED] was in response to this solicitation amendment.

   [9] Smiths maintains that the agency's late issuance of a mandatory
   security requirement for key personnel improperly resulted in Smiths
   receiving an unacceptable rating for program management. To the extent
   Smiths protest is challenging the provisions of the RFP requiring security
   clearances for key personnel, the protest is untimely. Our Bid Protest
   Regulations require that protests based upon alleged improprieties which
   do not exist in the initial solicitation but which are subsequently
   incorporated into the solicitation must be protested not later than the
   next closing time for receipt of proposals following the incorporation.
   4 C.F.R. sect. 21.2(a)(1) (2006)

   [10] Additionally, Smiths argues that its unacceptable rating for program
   management approach is inconsistent with its rating of acceptable for
   production capabilities/facilities. We do not see any inconsistency here.
   The evaluators found that Smiths provided a sound plan to accomplish
   production that provided high confidence that Smiths could accomplish the
   required production rate. However, the agency, nevertheless, remained
   legitimately concerned about Smiths' plan for transitioning its production
   expertise from [DELETED]. Based on Smiths' proposed management approach,
   the agency lacked confidence that Smiths' proposed personnel had the
   requisite knowledge to successfully execute its production program. Based
   on the record, it was not unreasonable for the agency to conclude that
   Smiths had the production capability, but that the proposed management
   approach created unacceptable risk.

   [11] AS&E, a small business, is not required to maintain small business
   subcontracting plans.

   [12] Smiths also asserts that the ratings for L3's and SAIC's proposals
   should have been lower in various other non-cost evaluation areas
   including past performance. We have reviewed all of Smiths arguments in
   this regard and conclude that they constitute disagreement with the
   agency's judgments. As such, Smiths' arguments provide no basis for
   sustaining the protest.

   [13] With respect to any weaknesses introduced in Smiths' final proposal
   revision after discussions were concluded, the agency had no obligation to
   reopen discussions to address these matters. See Ouachita Mowing, Inc.,
   B-276075, B-276075.2, May 8, 1997, 97-1 CPD para. 167 at 4.