TITLE: B-299014; B-299014.2, L-3 Communications Corporation, January 16, 2007
BNUMBER: B-299014; B-299014.2
DATE: January 16, 2007
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B-299014; B-299014.2, L-3 Communications Corporation, January 16, 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: L-3 Communications Corporation

   File: B-299014; B-299014.2

   Date: January 16, 2007

   Michael A. Hordell, Esq., Charles H. Carpenter, Esq., Sean P. Bamford,
   Esq., and Heather Kilgore Weiner, Esq., Pepper Hamilton LLP, for the
   protester.

   Michael F. Mason, Esq., Thomas L. McGovern, III, Esq., and Michael D.
   McGill, Esq., Hogan & Hartson LLP, for the intervenor.

   Sherry Kinland Kaswell, Esq., Department of Interior, for the agency.

   Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   In a negotiated procurement that provides for award on the basis of a
   cost/technical tradeoff, protest that an agency unreasonably downgraded
   the protester's offer to exceed the technical requirements is denied,
   where, in accordance with the stated evaluation scheme, the agency
   credited the protester's offer to exceed the requirements but concluded
   that the risks associated with the protester's offer did not outweigh its
   slight price advantage.

   DECISION

   L-3 Communications Corporation protests the award of a contract to
   Lockheed Martin Services, Inc. under request for proposals (RFP) No.
   1406-04-06-RP-60246, issued by GovWorks, a Department of Interior federal
   acquisition center, for Joint Terminal Attack Controller (JTAC) Training
   and Rehearsal System (TRS) engineering design and support for the
   Department of the Air Force.[1] L-3 challenges the agency's evaluation of
   its proposal and source selection decision.

   We deny the protest.

   The RFP, issued December 12, 2005, sought proposals for an "exemplar Joint
   Terminal Attack Controller Virtual Trainer (JTAC VT) Dome, as well as a
   prototype and/or enhanced interim training capability for a JTAC TRS
   Deployable/Garrison System, 2^nd Generation JTAC training and rehearsal
   simulation environment." RFP, Statement of Work (SOW), at 1. This training
   system is intended to "emulate a tactical combat environment" for
   ground-based joint terminal attack controllers.[2] Agency Report (AR), Tab
   2, Acquisition Plan, at 1. The dome provides the JTAC immersive
   environment, in which visual images are projected. RFP, SOW, at 1. The Air
   Force currently has a JTAC VT dome located at the agency's Mesa Research
   Site; this trainer was provided by L-3 under an earlier contract.[3]
   Protest at 5.

   Only Lockheed Martin and L-3 submitted proposals; both firms offered
   replicas of the JTAC VT, having the same configuration as the Air Force's
   current system located at the Mesa Research Site. Protest at 5. Award was
   made to Lockheed Martin on March 22, 2005, and L-3 filed an agency-level
   protest, which was denied. L-3 then filed a bid protest with the United
   States Court of Federal Claims. In response to that protest, the agency
   terminated Lockheed Martin's contract for the convenience of the
   government, revised the RFP, and requested revised proposals.

   As revised, the RFP requested fixed-price, labor hour, and cost
   reimbursement proposals under a number of contract line items (CLIN) for a
   1-year contract. CLIN 1, which was identified as the basic requirement,
   was for the provision, on a fixed-price basis, of an "AGOS [Air Ground
   Operations School] Dome with the hardware and software capability that
   will meet or exceed the hardware and software capabilities of [the] Mesa
   Research Site's (MRS) JTAC TRS," and for the installation of this dome at
   Nellis Air Force Base (AFB), Nevada.[4] AR, Tab 9, Amended SOW, June 13,
   2006, at 1-2. CLINs 2 through 4, which were identified as option
   requirements, provided for the performance of various tasks under
   fixed-labor-rate proposals. CLIN 2 was for "a proof of concept Interim
   JTAC TRS capability at a deployed or garrison location." As part of this
   effort, the contractor would provide

     integrated software, hardware, and systems engineering expertise to
     design technologies for scaling down and integrating current JTAC TRS
     software to be transitioned to an interim training system for JTACs at a
     deployed or garrison location.

   Id. at 3. CLINs 5 and 6 were identified as cost reimbursement items with
   identified cost ceilings for travel and materials. Id. at 8.

   The RFP provided for award on a "best-value" basis, and identified the
   following five evaluation factors: (1) management approach and technical
   capabilities, (2) personnel qualifications, (3) organizational experience,
   (4) past performance, and (5) price.[5] The firms were informed that
   factors (1) through (3) were of equal importance and together were more
   important than the past performance and price factors. The past
   performance factor was stated to be more important than the price factor.
   AR, Tab 9, Request for Revised Proposals, at 4.

   Detailed proposal preparation instructions were provided. Among other
   things, the firms were required to discuss their approach to accomplishing
   the SOW, identify any anticipated major difficulties and problem areas,
   and discuss recommended approaches for resolution of difficulties and
   problem areas. Offerors were also to provide a complete list of equipment
   provided under CLIN 1 and to provide resumes and letters of commitment for
   key personnel. Id. at 2.

   Revised proposals were received from L-3 and Lockheed Martin. While
   Lockheed Martin again offered to provide an exact replica of the current
   JTAC VT dome, L-3's revised proposal no longer did so, but instead offered
   a JTAC VT dome with characteristics that exceeded the SOW requirements.

   The revised proposals were evaluated as follows:[6]

   +------------------------------------------------------------------------+
   |                                          |     L-3     |Lockheed Martin|
   |------------------------------------------+-------------+---------------|
   |Management approach/technical capabilities|Satisfactory |   Very Good   |
   |------------------------------------------+-------------+---------------|
   |Personnel qualifications                  |  Very Good  |   Very Good   |
   |------------------------------------------+-------------+---------------|
   |Organizational experience                 |Satisfactory |   Excellent   |
   |------------------------------------------+-------------+---------------|
   |Past performance                          |  Excellent  |   Excellent   |
   |------------------------------------------+-------------+---------------|
   |TOTAL NON-PRICE RATING                    |SATISFACTORY |   VERY GOOD   |
   |------------------------------------------+-------------+---------------|
   |Price                                     | $[Deleted]  |  $3,143,462   |
   +------------------------------------------------------------------------+

   AR, Tab 13, Technical Evaluation Consensus Report, at 5; Tab 16, Selection
   Decision, at 10.

   The evaluators recognized and credited L-3's revised proposal's offer of
   enhancements to the existing JTAC dome that would exceed the SOW
   requirements.[7] AR, Tab 13, Technical Evaluation Consensus Report, at 6.
   L-3's overall "satisfactory" rating reflected the evaluators' consensus
   judgment that, although L-3 had submitted a technical approach that had
   several items that were "considered innovative and commendable" and had an
   "excellent" past performance record that demonstrated the firm's ability
   to perform the requested work, L-3's revised proposal contained a
   significant deficiency and a number of weaknesses. Id. at 5-6. The
   deficiency found by the evaluators was that L-3's proposal to [Deleted]
   used by the agency's current JTAC dome with [Deleted] posed serious design
   and integration risks that L-3 did not adequately address in its
   proposal.[8] In this regard, the evaluators noted that L-3's "proposal did
   not adequately address the technical risks, the cost-to-benefit trade-offs
   in terms of system and human performance, or the long-term implications
   regarding [Deleted]." Id. at 6-7. Among the weaknesses identified by the
   evaluators was L-3's failure to identify all of the "critical/major
   hardware that are part of the current dome" and its failure to identify
   its program manager and systems engineers as key personnel and provide
   resumes and letters of intent for these individuals. Id. at 6-8.

   Lockheed Martin's overall "very good" rating reflected the evaluators'
   judgment that the firm had submitted a sound technical proposal,
   demonstrating an understanding of the SOW, logistics, and schedule. In
   this regard, Lockheed Martin offered to provide an exact replica of the
   current JTAC VT dome, which the evaluators viewed as "reduc[ing] risk as
   much as possible" and suggested [Deleted]. The evaluators also noted
   Lockheed Martin's "excellent" past peformance, which included one
   evaluated strength and no weaknesses. Id. at 8; see Tab 16, Selection
   Decision, at 9.

   Based upon its evaluation of the firms' revised proposals, the technical
   evaluation team recommended award to Lockheed Martin, finding that
   Lockheed Martin's higher-priced, higher-rated "proposal provides the
   lowest risk and the best overall value." AR, Tab 13, Technical Evaluation
   Consensus Report, at 10. The GovWorks contracting officer reviewed the
   proposals and evaluation report, and accepted the evaluators' consensus
   technical evaluation judgment. In this regard, the contracting officer
   noted that L-3's "approach varied from the SOW and L[-]3 did not provide a
   thorough analysis how the new approach would benefit [the Air Force]
   greater than the current requirement described in the SOW." AR, Tab 16,
   Selection Decision, at 9. While recognizing L-3's $[Deleted] price
   advantage over Lockheed Martin's proposed price, the contracting officer
   concluded that Lockheed Martin's evaluated technical superiority
   outweighed L-3's price advantage. Specifically, the contracting officer
   found that

     L-3[']s . . . proposal presents a slightly greater risk to the
     Government and is lower in costs. Although L-3 offered the Government an
     immediate cost savings, a life cycle cost versus performance (i.e.
     system hardware, human performance, etc.) trade-off analysis has not
     been conducted to identify the impact such a critical change would have
     on the entire program. This analysis would cost the Government delay and
     unanticipated costs.

   Id. at 14. Although the contracting officer's selection decision could
   have been clearer, the life cycle cost analysis, to which the contracting
   officer referred, relates to the technical evaluation team's evaluated
   deficiency in L-3's proposal with respect to [Deleted] and the evaluation
   team's concern that L-3 had not addressed the life cycle cost impact of
   its proposed approach. See AR, Tab 13, Technical Evaluation Consensus
   Report, at 6-7. Award was made to Lockheed Martin. Following a written
   debriefing, L-3 filed this protest.

   L-3 challenges the agency's assessment of the evaluated deficiency
   relating to L-3's offer to [Deleted]. L-3 complains that, although the
   RFP, as amended, requested that offerors provide a dome with hardware and
   software capability that "met or exceeded" the hardware and software
   capabilities of the Air Force's existing dome, the agency's evaluation in
   fact favored the offer of a replica dome. Protest at 16-18. L-3 argues
   that assigning a deficiency to L-3's offer of [Deleted] either constitutes
   the application of an unstated evaluation factor or indicates that the RFP
   was ambiguous with regard to whether a system that exceeded existing
   capabilities was really desired. Protester's Reply to Agency's Response at
   6-7.

   We do not agree that the agency applied an unstated evaluation factor in
   assessing a deficiency with respect to L-3's offer to [Deleted] or that
   the revised RFP was ambiguous as to whether a replica dome was desired by
   the agency. The record simply does not support L-3's view that the agency
   actually sought only a replica dome. The RFP informed offerors that they
   could choose to offer a dome that either met or exceeded the stated
   requirements. In this regard, the solicitation instructed offerors to
   explain their approaches and identify any possible problems and solutions
   to those problems. See AR, Tab 9, Request for Revised Proposals, at 2. The
   record establishes that, in accordance with the solicitation's "best
   value" scheme, the evaluators and selection official noted a number of
   strengths and credited L-3 for its offer to provide a dome that exceeded
   the technical requirements. See AR, Tab 13, Technical Evaluation Consensus
   Report, at 6; Tab 16, Selection Decision, at 6. That the technical
   strengths associated with L-3's offer to [Deleted], which exceeded the
   technical requirements, were offset by an evaluated deficiency, concerning
   the failure of L-3 to satisfactorily address the design and technical
   risks associated with [Deleted], does not show, as L-3 believes, that the
   agency actually sought only a replica of the hardware and software
   currently used in the agency's existing dome.

   L-3 also challenges the reasonableness of the agency's assessed deficiency
   based on its offer to [Deleted]. As noted above, the evaluated deficiency
   reflected the evaluators' concerns with a number of risks associated with
   implementing L-3's proposed solution. Those concerns included the need to
   [Deleted], possible conflicts with an on-going research and development
   contract, and possible impact on the delivery schedule of the dome. In
   addition, the evaluators noted that L-3's "proposal also states that the
   [Deleted]." The evaluators also noted the L-3 did not address performing a
   life cycle cost versus performance tradeoff analysis for this approach.
   See AR, Tab 13, Technical Evaluation Consensus Report, at 6-7. L-3 argues,
   citing pages 21 through 30 of its proposal, that it addressed the risks
   associated with its proposed solution and that these risks were mitigated
   using approaches described in its proposal. Protester's Comments at 13.

   Based on our review, we agree with the agency and intervenor that L-3's
   proposal does no more than cursorily address the risks associated with
   L-3's technical approach. The proposal pages identified by L-3 primarily
   identify the features and enhancements offered by its proposed [Deleted].
   Although it is true that L-3 stated in its proposal that the proposed
   [Deleted] was a "proven product" that was being used on a number of
   training systems, see AR, Tab 12, L-3 Technical Proposal, at 22-23, this
   does not address the evaluators' concerns that [Deleted] posed serious
   implementation risks that could impact the delivery schedule, or address
   their concerns with L-3's proposal of [Deleted].[9] In this regard, L-3
   recognized in its proposal that use of the [Deleted] would require
   modification of the [Deleted], and that there would be development costs
   and schedule impact associated with this modification. See, AR, Tab 12,
   L-3 Technical Proposal, at 28-30.

   To rebut the agency's evaluation concerns, L-3 submitted with its comments
   the declaration of an L-3 employee, who provides additional information
   concerning the firm's proposed [Deleted] that L-3 argues establishes that
   its offer to provide [Deleted] was not risky.[10] See Protester's
   Comments, exh. 1, Declaration of Proposed Project Lead Engineer. This
   additional information, however, was not provided to the agency during the
   competition so that it could be evaluated. See Williamson  County
   Ambulance Serv., Inc., B-293811.5 et al., Dec. 15, 2004, 2005 CPD para. 5
   at 5-6. In any event, we find that the additional information provided in
   the declaration and in L-3's arguments do not establish that the agency's
   concerns were unreasonable.

   L-3 nevertheless argues that, as "the architect of the JTAC system," the
   protester was obviously aware of what is required for L-3 to [Deleted] and
   that therefore the agency's assignment of a deficiency for this approach
   was unreasonable. See Protest at 21. It is an offeror's obligation,
   however, to submit an adequately written proposal for the agency to
   evaluate. See United Defense LP, B-286925.3 et al., Apr. 9, 2001, 2001 CPD
   para. 75 at 19. An agency is not required to base its technical evaluation
   on a company's reputation and accept unsupported statements of capability,
   especially where an RFP requires the offeror to explain and support its
   proposed approach.

   L-3 also challenges each of the agency's evaluated weaknesses in the
   firm's technical proposal. However, we find, based on our review of the
   contracting officer's selection decision, the weaknesses evaluated in
   L-3's proposal were not material to her "best value" selection of Lockheed
   Martin's proposal. Rather, the contracting officer focused and relied upon
   the evaluated deficiency in L-3's proposal in concluding Lockheed Martin's
   less risky proposal outweighed L-3's slight price advantage. See AR, Tab
   16, Selection Decision, at 6, 9, and 14-15; see also Contracting Officer's
   Response to Protester's Comments at 5 (L-3's proposal to [Deleted] was a
   "key discriminator" between the two firms' proposal.) Therefore, even were
   we to accept the protester's arguments that the weaknesses identified by
   the agency lack a reasonable basis, the record does not establish that L-3
   was prejudiced by the agency's evaluation in this regard.[11]

   L-3 also complains that the agency's cost analysis was unreasonable
   because the agency conducted a life-cycle cost evaluation of L-3's
   fixed-price proposal to provide the JTAC dome. This argument has no
   factual basis. The record establishes, as the agency repeatedly notes,
   that a life-cycle cost analysis was not performed. The references in the
   record to a life-cycle cost analysis, to which L-3 directs our attention,
   actually relate to the technical evaluators' finding that L-3 had proposed
   to provide [Deleted] for the JTAC dome and that L-3 had performed no
   life-cycle cost analysis of the impact of this change. See AR, Tab 13,
   Technical Evaluation Consensus Report, at 7.

   Based on our review of the record, the agency acted reasonably and in
   accordance with the revised RFP in determining that Lockheed Martin's
   higher-rated proposal was the best value as compared to L-3's lower-priced
   proposal that contained a significant deficiency.[12]

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] GovWorks, a franchise fund within Interior, provides contracting
   services in support of other federal agencies on a fee-for-service basis.

   [2] A "joint terminal attack controller" is defined within the Department
   of Defense to be someone "who, from a forward position, directs the action
   of combat aircraft engaged in close air support and other offensive air
   operations." See
   http://www.dtic.mil/doctrine/jel/doddict/data/j/02965.html.

   [3] L-3 and Lockheed Martin were the primary developers of the original
   dome. Intervenor's Comments at 3; see AR, Tab 16, Selection Decision, at
   14 ("Both offerors were intimately involved in the design and development
   of the original JTAC VT dome.")

   [4] The original SOW required the contractor to "[p]roduce replica current
   configuration of the prototype JTAC Virtual Trainer (JTAC VT) Dome,
   located at AFRL/HEA Mesa, AZ." RFP, SOW, at 2.

   [5] A number of subfactors were also identified for factors (1) through
   (4).

   [6] The evaluators assigned ratings of "excellent" (the proposal contains
   no proposal deficiencies or weaknesses, and demonstrates exceptional
   understanding of services required to meet or exceed most contract
   requirements); "very good" (the proposal contains no proposal deficiencies
   and only a few minor weaknesses, and demonstrates a high quality of
   understanding of the services required to meet or exceed some contract
   requirements); "satisfactory" (the proposal contains no proposal
   deficiencies and some weaknesses, and demonstrates understanding of the
   services to meet contract requirements); "poor" (the proposal contains
   deficiencies and significant weaknesses); and "unacceptable" (the proposal
   has many deficiencies and/or gross omissions). AR, Tab 13, Technical
   Evaluation Consensus Report, at 4.

   [7] The technical evaluation team was comprised of technical experts from
   the Air Force Research Laboratory. AR, Tab 16, Selection Decision, at 4.

   [8] Because of this deficiency, L-3 proposal was evaluated as "poor" under
   the "understanding of the work" subfactor to the management
   approach/technical capabilities factor. AR, Tab 13, Technical Evaluation
   Consensus Report, at 2.

   [9] In addition, the contracting officer states that all of the
   simulators, identified by L-3 as using its [Deleted], are "air
   simulations" (that is, aircraft flight trainers), which the agency states
   are significantly different from the ground simulation provided by the
   JTAC dome. See Contracting Officer's Response to Protester's Comments at
   5. "There is a difference in requirements or visual needs between air and
   ground simulators and the viability of using L-3's proposed [Deleted] is
   an unknown." Declaration of Evaluator, Dec. 15, 2006, para. 7. L-3 has
   offered no rebuttal to these statements.

   [10] L-3 also argues that its proposed [Deleted] approach was successfully
   used in its performance of the [Deleted] Program for the Air Force and
   that therefore this information "was too close at hand" to be ignored in
   the evaluation of its proposal. Protester's Comments at 8. The agency
   responds that its technical evaluators did not have any involvement with
   this program that could validate L-3's proposed approach. See Declaration
   of Evaluator, Dec. 15, 2006, para. 4. We find no basis in the record here
   to apply the "close at hand" principle, given that there is no evidence
   that the evaluators were aware or should have been aware of the [Deleted]
   Program. See The MIL Corp., B-297508, B-297508.2, Jan. 26, 2006, 2006 CPD
   para. 34 at 11-12.

   [11] Prejudice is an essential element of every viable protest. Lithos
   Restoration, Ltd., B-247003.2, Apr. 22, 1992, 92-1 CPD para. 379 at 5.

   [12] L-3 makes a number of other allegations, which we have reviewed and
   find are without merit or were untimely filed with our Office.