TITLE: B-299227; B-299227.2, L-3 Communications Corporation, BT Fuze Products Division, March 14, 2007
BNUMBER: B-299227; B-299227.2
DATE: March 14, 2007
***********************************************************************************************
B-299227; B-299227.2, L-3 Communications Corporation, BT Fuze Products Division, March 14, 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, BT Fuze Products Division

   File: B-299227; B-299227.2

   Date: March 14, 2007

   Louis D. Victorino, Esq., Anne B. Perry, Esq., Marko W. Kipa, Esq., and
   Jessie J. Williams, Esq., Sheppard Mullin Richter & Hampton LLP, for the
   protester.

   Alison L. Doyle, Esq., and Jennifer M. Morrison, Esq., McKenna Long &
   Aldridge LLP, and Randall W. Sweeney for Canadian Commercial
   Corporation/SNC Technologies, Inc., the intervenor.

   Maj. Walter R. Dukes, and John D. Gates, Esq., Department of the Army, 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 which provides for award on the basis of a
   cost/technical tradeoff, a protest challenging the agency's evaluation and
   source selection decision is denied, where the record establishes the
   reasonableness of the the agency's judgment that the awardee's superior
   approach, understanding, and level of expertise outweighed the protester's
   price advantage.

   DECISION

   L-3 Communications Corporation, BT Fuze Products Division, protests the
   award of a contract to SNC Technologies, Inc., via Canadian Commerical
   Corporation, under request for proposals (RFP) No. W52P1J-05-R-0137,
   issued by the Department of the Army for M314A3 illuminating
   cartridges.[1] L-3 challenges the agency's evaluation of proposals,
   conduct of discussions, and source selection decision.

   We deny the protests.

   The M314A3 cartridge is a 105-millimeter (mm), visible light, battlefield
   illumination cartridge intended for signaling or illuminating a designated
   area.

     The M314A3 projectile is [a] hollow steel forging with a streamlined
     ogive,[2] a gilding metal rotating band, and a pinned base plug. The
     unfuzed projectile (C541) is assembled with a closing plug screwed into
     the nose for shipping and storage. The projectile cavity contains an
     expelling charge, illuminating canister, and parachute assembly. The
     complete projectile assembly is free fitted to a cartridge case. The
     cartridge case contains a percussion primer assembly and seven
     individually bagged and numbered propelling charge increments.

   Agency Report (AR), Tab 3, Source Selection Evaluation Plan, at 1. The
   solicitation was restricted to domestic and Canadian sources within the
   national technology and industrial base.[3]

   The RFP provided for the award of a fixed-price contract for M314A3
   cartridges for a base and 4 option years. The base-year requirement was
   for a two-phased, pre-production optimization effort; under phase one, the
   contractor would address manufacturing process definition, procedures, and
   control, and under phase two would provide 890 first article test (FAT)
   cartridges. RFP sect. B, at 5; Statement of Work at 17. For each of the
   option years, offerors were required to provide fixed-unit-prices for a
   range of cartridges up to a maximum quantity of 31,216 cartridges per
   option year. RFP amend. 3, at 3.

   The RFP provided for award on the basis of a cost/technical tradeoff and
   identified the following evaluation factors and subfactors:

     1.      Technical/management factor[4]

       a.      Process optimization/FAT
       b.      Essential processes, procedures, skills (EPPS)
       c.      Integrated master plan/delivery schedule
       d.      System integration/program management
       e.      Quality

     2.      Past performance factor

       a.      On-time delivery
       b.      Quality

     3.      Financial capability factor

     4.      Price factor

     5.      Small business utilization factor

   The technical/management factor was stated to be more important than the
   past performance factor or the financial capability factor, and the past
   performance and financial capability factors were stated to be equally
   important and to be each slightly more important than the price factor.
   The price factor was stated to be significantly more important than the
   small business utilization factor. Offerors were informed that all
   non-price factors, when combined, were significantly more important than
   the price factor. RFP sect. M, at 68-70.

   The RFP provided for both written proposals and oral presentations, and
   included detailed proposal preparation instructions. Offerors were
   informed that they would address the technical/management factor only
   through the oral presentation, for which offerors were allowed to provide
   charts and slides.[5] As part of the oral presentation for the process
   optimization/FAT subfactor, offerors were to describe, among other things,
   their assessment of the processes that they considered high risk and to
   describe a plan which optimizes these processes through mitigation, design
   of experiments (DOE), and analysis. RFP sect. L, at 64. In this regard,
   the RFP informed offerors that their understanding of how these critical
   processes could affect ballistic performance would be evaluated under this
   subfactor. RFP sect. M, at 68. For the EPPS subfactor, offerors were to
   address in the oral presentation

     the essential processes (including key manufacturing processes), skills,
     knowledge, and availability of the offeror[']s, subcontractor[']s, or
     partner[']s, if applicable, facilities and labor force to include, but
     not limited to, management, quality engineering, and production.

   RFP sect. L, at 64. Offerors were informed that under the EPPS subfactor
   the agency would evaluate the offeror's "essential skills and knowledge."
   RFP sect. M, at 69. With respect to the integrated master plan/delivery
   schedule subfactor, the RFP required that offerors demonstrate their
   ability to meet the required delivery schedule.

   The Army received three proposals in response to the RFP, including those
   of L-3 and SNC (the incumbent contractor). Following oral presentations,
   the agency included the proposals of L-3 and SNC in the competitive range
   and conducted written discussions with those two firms.[6] Revised
   proposals were evaluated as follows:

   +------------------------------------------------------------------------+
   |                          |         L-3          |         SNC          |
   |--------------------------+----------------------+----------------------|
   |Technical/management      |         Fair         |      Excellent       |
   |--------------------------+----------------------+----------------------|
   |Past performance          |Adequate/Moderate Risk|Adequate/Moderate Risk|
   |--------------------------+----------------------+----------------------|
   |Financial capability      |       Low Risk       |       Low Risk       |
   |--------------------------+----------------------+----------------------|
   |Small business utilization|      Excellent       |      Excellent       |
   |--------------------------+----------------------+----------------------|
   |Price                     |      $[Deleted]      |     $69,999,085      |
   +------------------------------------------------------------------------+

   Contracting Officer's Statement at 4.

   L-3's "fair" evaluation rating under the technical/management factor
   primarily reflected the agency's judgment that, although L-3's proposal
   presented a number of strengths, it included several significant
   weaknesses that posed schedule and performance risks.[7] In particular,
   the agency found that L-3's discussion of the likely causes of
   illuminating cartridge or "candle" failure,[8] and plan to use push-out
   testing to assess consolidation quality demonstrated a lack of knowledge
   and understanding, and reflected significant dependence upon a major
   subcontractor--Crane Army Ammunition Activity[9]--for expertise. In this
   regard, the agency noted that x-ray testing, and not push-out testing, was
   the appropriate testing methodology to inspect consolidation quality for
   cracks and voids. The Army also found that, although the use of "crush
   testing"[10] was incorporated in the SOW as a method of assuring
   composition quality, this method was not addressed in L-3's proposal. In
   addition, the agency found that L-3's proposed introduction of an o-ring
   and discussion of the fiberboard-lined configuration for the candle also
   indicated L-3's lack of knowledge and understanding, and the firm's
   significant reliance upon its candle subcontractor. In short, the agency
   was concerned that L-3 lacked its own core competency and understanding,
   and was overly dependent upon Crane for expertise. AR, Tab 10, Source
   Selection Decision Document (SSDD), at 7-10.

   The agency was also concerned that L-3 had not demonstrated that it could
   satisfy the contract's base year delivery schedule for FAT cartridges
   because L-3 had indicated that the contract schedule could only be
   satisfied by completing the optimization of candle illumination and
   procurement of specialized equipment prior to contract award, and L-3 had
   not provided sufficient details that indicated that these pre-award steps
   would be completed prior to award. In addition, L-3 did not address the
   schedule of the subcontractor that L-3 proposed for the forged projectile
   bodies. Id. at 10-11.

   L-3's "adequate/moderate risk" rating for the past performance factor
   reflected the agency's conclusion that, although L-3 had not previously
   produced any of the components of the M314A3 cartridge, it had experience
   as a systems integrator overseeing the ordering, delivery and quality of
   similar items. The agency found, however, that L-3 and some of its
   proposed subcontractors "have some history of untimely deliveries due to
   contractor fault" that caused some doubt that L-3 could timely perform the
   contract. In addition, the agency noted that the Army had experienced
   quality problems with L-3's proposed candle subcontractor (Crane) under
   the prior contract. Id. at 15-17.

   SNC's "excellent" evaluation rating under the technical/management factor
   reflected the agency's judgment that SNC's proposal contained a number of
   strengths and no deficiencies or weaknesses. In particular, the agency
   found that SNC had demonstrated the firm's expertise and capability to
   meet the government's requirements. In addition, the agency found that SNC
   had presented a detailed and realistic schedule to satisfy the key program
   milestones. Id. at 3-5.

   SNC's "adequate/moderate risk" rating for the past performance factor
   reflected the agency's judgment that, although SNC had generally
   demonstrated a history of quality products delivered on-time or ahead of
   schedule, SNC had quality and delivery issues on the prior contract for
   the M314A3 cartridge. Id. at 14. These quality and delivery problems
   concerned the candle produced by its subcontractor, Crane. The agency
   disagreed with SNC's contention that the firm's problems with the candle
   were the result of a defective government technical data package (TDP).
   Id. at 17. In this regard, the agency states that, although the TDP was
   not "perfect, it is adequate." Agency's Post-Hearing Comments at 7.

   The source selection authority (SSA) concluded from his review that SNC's
   higher-rated proposal offered the best value to the government despite
   L-3's $[Deleted] price advantage. In this regard, the SSA stated that SNC
   had demonstrated its capability to successfully perform the contract and
   that L-3 had not. Specifically, the SSA noted that L-3 had failed to
   demonstrate the technical competence and planning necessary to
   successfully perform and to demonstrate that the firm would "have the
   essential equipment, processes and procedures in place in such a time so
   as to be able to perform in accordance with the contract requirements."
   AR, Tab 10, SSDD, at 23. Award was made to SNC, and, after a debriefing,
   these protests followed.

   L-3 complains that the Army misevaluated L-3's proposal under all of the
   evaluation factors. In reviewing protests of alleged improper evaluations
   and source selection decisions, it is not our role to reevaluate
   proposals. Rather, we will examine the record to determine whether the
   agency's judgment was reasonable and in accord with the stated evaluation
   criteria and applicable procurement laws and regulations. See Abt Assocs.,
   Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 4. A protester's
   mere disagreement with the agency's judgment does not establish that an
   evaluation was unreasonable. UNICCO Gov't Servs., Inc., B-277658, Nov. 7,
   1997, 97-2 CPD para. 134 at 7.

   L-3 argues that the agency improperly downgraded the firm's proposal under
   the technical/management factor for failing to discuss x-ray testing of
   the candle, even though such testing was not required by the RFP and SNC
   also did not discuss the use of x-ray testing.

   The Army agrees that the RFP did not require offerors to discuss x-ray
   testing, and that, in fact, SNC did not discuss x-ray testing of the
   candle and was not downgraded for failing to do so. See Tr. at 39-40. The
   Army states, however, that it was not L-3's failure to discuss x-ray
   testing that resulted in the assessment of a deficiency in L-3's proposal
   under the process optimization/FAT subfactor. Rather, the agency's
   evaluation concern was that during discussions L-3 stated that it would
   evaluate the consolidation quality of the candle and search for cracks and
   voids in the illuminant through the use of a push-out test, but the
   push-out test was not the appropriate test for inspecting for cracks and
   voids.[11] The agency notes in this regard that, to examine the interior
   of the illuminant for cracks and voids, as suggested by L-3, x-ray testing
   would be necessary, and that L-3's discussion of push-out testing for this
   purpose demonstrated the firm's lack of understanding and expertise. See
   Tr. at 38 ("[t]o my knowledge, [x-ray testing is] the only way that you
   would be able to see a crack or void.")

   L-3 responds that it did not propose the use of push-out testing to assess
   cracks and voids in the illuminant, but only proposed this test to assess
   adherence of the fiberboard liner to the canister.[12] See Protester's
   Post-Hearing Comments at 16. In addition, L-3 argues, citing its response
   in discussions, that it discussed other methods for ensuring proper
   consolidation that demonstrated its experience and understanding. Id. at
   16-17, citing AR, Tab 7.1, L-3's Discussion Response, at 3-4.

   We find from our review of the record that it was reasonable for the Army
   to conclude that L-3 had proposed the use of push-out testing to assess
   cracks and voids in the illuminant and that this indicated a lack of
   expertise and understanding on L-3's part.[13] Specifically, in its
   discussion questions, the Army informed L-3 that it had not addressed
   critical parameters and process inspections; that L-3 had provided no
   detail concerning how particle size distribution, mixing techniques,
   material preparation and cure time would be evaluated; and that L-3 had
   not described the difficulties involved in controlling the manufacturing
   process for the candle.[14] In response, L-3 stated

     [Crane] has found that particle size distribution (magnesium and NaO3
     [sodium trioxide]) and mixing technique are critical for a consistent
     illuminating candle. Consolidation (pressing) method and parameters are
     also critical to candle performance. Repeatable consolidation forces of
     hydraulic press, ram speed and dwell time (5 seconds) are . . .
     controlled. Consolidation punch surface finishes, clearance with
     canister and geometry of pressing services have been developed and are
     controlled to ensure superior candle performance. Control of these
     consolidation parameters ensures uniform density, free of crack and
     voids and no surface discontinuities between pressed increments and
     canister. Push out force testing is used to evaluate adherence to
     canister, which is an indicator of candle consolidation quality.

   AR, Tab 7.1, L-3's Discussion Response, at 3.

   We think that the Army could reasonably conclude from the foregoing that
   L-3 had proposed to use push-out testing in part to assess candle
   consolidation quality, which, as L-3 indicated in its quote above, would
   include assuring an illuminant "free of cracks and voids." At best,
   viewing L-3's response in the light most favorable to the protester, L-3's
   response was ambiguous with respect to whether L-3 believed that the
   push-out test would assess whether the illuminant was free of cracks and
   voids. It is an offeror's obligation to submit an adequately written
   proposal, see United Defense LP, B-286925.3 et al., Apr. 9, 2001, 2001 CPD
   para. 75 at 19, and where, as here, an offeror introduces an ambiguity in
   its proposal after discussions, we will not object to the agency's
   reasonable interpretation of the proposal. See Marylou's Transp. Serv.,
   B-261695, Sept. 28, 1995, 95-2 CPD para. 154 at 3.

   With respect to L-3's argument that other parts of its response during
   discussions indicated the firm's understanding and expertise with respect
   to ensuring consolidation quality, we agree that L-3 provided additional
   information concerning controlling particle size, mixing technique, and
   material preparation processes. This, however, does not demonstrate that
   the Army was unreasonably concerned with L-3's apparent inappropriate use
   of push-out testing to assess cracks and voids in the illuminant,
   particularly where the agency found that other aspects of L-3's proposal
   indicated a lack of understanding and expertise.[15] To the extent that
   L-3 is arguing that this additional information overcomes the agency's
   concerns with the firm's understanding and expertise, this is nothing more
   than mere disagreement with the agency's judgment that does not establish
   that the evaluation was unreasonable. See UNICCO Gov't Servs., Inc.,
   supra.

   We also do not find that the Army treated L-3 and SNC disparately,
   although SNC's proposal was not downgraded where SNC also did not discuss
   x-ray testing and had proposed push-out testing. As discussed above, the
   record supports the agency's explanation that L-3 was not downgraded for
   failing to propose the use of x-ray testing, see Tr. at 39, 42
   (solicitation did not require the use or discussion of x-ray testing, and
   the evaluators did not anticipate that offerors would discuss x-ray
   testing), but for proposing the apparent use of an inappropriate test
   (push-out testing) to inspect for cracks and voids where the appropriate
   test to perform such an inspection was x-ray testing, which to the agency
   evidenced a lack of expertise and understanding. SNC's proposal, on the
   other hand, did not propose the use of push-out testing to inspect for
   cracks and voids, but only for verifying "base plate crimping
   resistance"--an apparently appropriate object of this test.[16] See SNC's
   Technical/Management Slides at 89. In short, SNC's proposal did not
   exhibit the same deficiency that was associated with L-3's discussion of
   push-out testing, and therefore the agency's evaluation in this regard did
   not reflect disparate treatment.

   L-3 also objects to the Army's assessment of a deficiency in the firm's
   proposal under the technical/management factor with respect to L-3's
   "proposal" to introduce an o-ring at the base of the projectile body to
   reduce candle break-up and malfunction. L-3 argues that it only "proposed
   investigating the addition of an o-ring as a means of achieving better
   performance." Protest at 5 (emphasis in original).

   The Army explains that, in its initial proposal, L-3 discussed providing a
   base plug seal (which the agency states is an o-ring) as a redundant
   safety measure to assure that excess gasses would not get into the
   projectile; this was viewed as neither a strength nor a weakness because
   it addressed a "problem" that the agency had never experienced with this
   cartridge. Agency's Post-Hearing Comments, Supplemental Legal Memorandum,
   at 5, citing Tr. at 69-70. However, in response to discussions, wherein
   L-3 was informed that "[p]otential failure modes such as candle drop out,
   streamers, non-ignition were not addressed," AR, Tab 6, Discussion Letter
   to L-3, at 1, L-3 stated that it would "consider o-ring seal at base
   plug/body interface" to address "excessive pressurization of canister
   exterior surface," which L-3 identified as a "speculative" cause of early
   candle burnout. AR, Tab 7.1, L-3's Discussion Response, at 6. In this
   regard, L-3 stated that it "believes a redundant gas seal . . . to
   restrict inbore propellant gases from entering the projectile body is
   beneficial in optimizing candle performance." Id. at 4. The agency's
   technical evaluators did not believe inserting an o-ring into the
   cartridge design would have any impact on candle burn time, but viewed
   L-3's assertions regarding the o-ring as indicating a lack of
   understanding and technical competency with respect to the functioning of
   the cartridge. See Contracting Officer's Statement at 9-10; Tr. at 70-72.

   L-3 has not shown that the agency's conclusion that L-3's suggestion or
   proposal to investigate the possibility of introducing the o-ring at the
   base of the projectile to control pressure on the exterior of the surface
   of the candle demonstrated a lack of understanding on L-3's part, was
   unreasonable.[17] For purposes of assessing L-3's understanding, we do not
   find any meaningful difference in whether L-3 proposed the addition of the
   o-ring or only proposed investigating the addition of the o-ring.

   L-3 also complains that the Army unreasonably downgraded the firm's
   proposal to have its candle subcontractor, Crane, provide a
   fiberboard-lined candle configuration, where SNC also proposed to use
   Crane and to similarly provide a fiberboard-lined candle.

   The Army responds that neither L-3's nor SNC's proposal was downgraded for
   proposing a fiberboard-lined candle. Rather, the agency states that the
   deficiency assessed in L-3's proposal with respect to the fiberboard liner
   reflected the agency's concern that L-3's discussion response indicated
   the firm's lack of understanding and an undue dependence upon Crane, its
   candle subcontractor.[18] Agency's Supplemental Legal Memorandum at 4.

   L-3 initially proposed to investigate both fiberboard-lined and
   epoxy-lined candle configurations.[19] Because L-3's proposed candle
   subcontractor did not have the equipment or facilities necessary to
   provide epoxy-lined candles, the Army asked L-3 to address its proposed
   liner configuration and identify required equipment and facilities.[20] In
   response, L-3 informed the Army that

     [Crane] strongly recommends the fiberboard liner design . . . over the
     3-part epoxy liner design. This design has not only proven successful in
     numerous other illuminating rounds (60, 81 & 120mm mortar rounds, 155mm
     artillery round & Navy 5" round) but it also requires less equipment,
     less ingredients, and is much less operator dependent.

   AR, Tab 7.1, L-3's Discussion Response, at 33.

   This response, the Army found, demonstrated that L-3 did not have any core
   competency with respect to producing the fiberboard-lined candle, and that
   L-3 completely relied upon its candle subcontractor's expertise. In this
   regard, the Army noted that L-3's response failed to recognize that the
   munitions identified in L-3's discussion response, with the exception of
   the 155mm artillery round, were dissimilar to the M314A3 cartridge, having
   "different operating parameters tha[n] the fiberboard liner [we'll] see in
   gun launch and functioning of [the M314A3] cartridge"; nor did L-3
   indicate that it was aware that, at the time of the firm's discussion
   response, the fiberboard-lined configuration for the 155mm projectile had
   not been qualified. Tr. at 34-35; see Tr. at 118 (As compared to the
   cartridge being procured here, "the mortar rounds see a much different
   ballistic environment, the velocity is not as extreme in the mortar
   rounds, the spin is not as extreme in the mortar rounds. Thus, when the
   parachute deploys, the yanking, whatever, it is not as violent.") In sum,
   L-3's discussion responses simply failed to demonstrate to the Army that,
   apart from the expertise provided by its candle subcontractor, L-3 had any
   level of expertise or core competency that would allow it to manage its
   candle subcontractor's performance.[21]

   L-3 argues, however, that it was reasonable for the firm, as the prime
   contractor, to rely upon the expertise of its candle subcontractor, and
   that SNC similarly relied upon the expertise of Crane in providing the
   fiberboard-lined candle. In this regard, L-3 cites SNC's response in
   discussions, which attached a memorandum from Crane explaining that Crane
   had tested the use of a epoxy liner in the 81mm and 120mm mortar munitions
   and in the preliminary testing of the 155mm artillery munition, and found
   that these munitions failed ballistic testing; based upon these tests,
   Crane "offered and SNC accepted [the fiberboard-lined] design for the
   105mm program." See AR, Tab 7.2, SNC Discussion Response, attach., Crane
   Memorandum, Sept. 12, 2006, at 1.

   Although we agree with L-3 that it is not unreasonable, per se, for a
   prime contractor to rely upon the expertise of its subcontractor, we also
   do not find that it was unreasonable for the Army to be concerned,
   consistent with the RFP evaluation criteria, with whether a prospective
   prime contractor had a sufficient core competency to allow that contractor
   to manage its subcontractor's performance. In this regard, the RFP
   provided that the agency would evaluate the offeror's "essential skills
   and knowledge" under the EPPS subfactor. RFP sect. M, at 69. Moreover, we
   agree that the hearing testimony supports the Army's view that each
   offeror's "process controls would require [Crane] to tailor its use of
   fiberboard liners to the specific prime contractor." See Agency's
   Post-Hearing Comments, Supplemental Legal Memorandum, at 6. Specifically,
   one of the agency's technical evaluators (a mechanical engineer from the
   Army's Picatinny Arsenal in New Jersey, who was the agency's project
   officer for the M314A3 cartridge) testified that the fiberboard liner is a
   critical component of the cartridge, and that it was the prime
   contractor's responsibility to inform the candle subcontractor of the
   critical dimensions for the fiberboard liner and to decide on necessary
   inspections and testing for the fiberboard liner. Tr. at 32-33. He also
   testified that, because the TDP for this cartridge was "marginal" and had
   a fairly large "tolerance band" for satisfying TDP requirements, it was
   essential that the prime contractor have an understanding of the processes
   involved in producing the candle, so that the prime contractor could
   control proposed design changes and resolve any performance issues. Tr. at
   72-73.

   Unlike L-3's proposal, the Army found that SNC's proposal demonstrated the
   firm's complete and comprehensive understanding of the M314A3 cartridge.
   Compare AR, Tab 9, Initial Technical/Management Evaluation of SNC's
   Initial Proposal, at 1 ("SNC has identified all necessary resources along
   with a detailed approach to performing the effort" and "SNC's approach is
   realistic, achievable and supportable."), with Tab 8.11,
   Technical/Management Evaluation of L-3's Initial Proposal, at 1 ("L-3's
   approach[,] although minimally adequate, does not provide a comprehensive
   technical understanding of the issues involved" and L-3 did not
   "demonstrate a level of understanding of the candle's critical
   processes/parameters and how they must be controlled to assure optimum
   performance.") Thus, while both firms proposed to use Crane to provide
   fiberboard-lined candles, the record shows that the Army reasonably found
   that SNC provided a more detailed discussion of the candle in its
   technical proposal that demonstrated the firm's own expertise and
   competency, and ability to manage its candle subcontractor's performance.
   See SNC's Technical/Management Oral Presentation Slides at 18-32. L-3's
   discussion of the candle and Crane was more general. See L-3's
   Technical/Management Oral Presentation Slides at 61-65.

   In sum, we find no basis in this record to conclude that the Army
   unreasonably concluded that L-3 had failed to demonstrate its own
   expertise and core competency for this RFP work, but that SNC had
   demonstrated its own capabilities to manage the work.

   L-3 also complains that the agency treated L-3 and SNC disparately under
   the integrated master plan/delivery schedule subfactor of the
   technical/management factor where the agency evaluated L-3's proposal as
   "fair" because L-3 had not updated its proposed schedule to reflect a
   later award date, whereas SNC's proposal was evaluated as excellent under
   this subfactor, even though it did not update its proposed schedule. See
   Protester's Supplemental Comments at 11.

   We do not agree with L-3 that the difference in the firms' ratings under
   the integrated master plan/delivery schedule subfactor was based upon the
   agency's assessment that L-3 had not updated its proposed schedule to
   reflect a later award date. Rather, the evaluation record and source
   selection decision show that L-3's "fair" rating for this subfactor
   reflected the evaluators' and SSA's judgment that L-3 had failed to
   provide quotes or other information from its propellants or cartridge case
   subcontractors or address the schedule of its forged projectile body
   subcontractor to demonstrate that these subcontractor could meet L-3's
   proposed schedule. In addition, L-3's rating reflected the evaluators' and
   SSA's concern that L-3's master schedule was premised upon completing
   optimization of the candle and procurement of specialized load, assembly
   and packing (LAP) equipment prior to award, and that L-3 had provided no
   information "as to the progress of the illuminating candle optimization or
   what steps in the LAP equipment procurement effort were completed." AR,
   Tab 10, SSDD, at 10-11. Based on this record, we find that the agency
   reasonably concluded that L-3 presented a "high" risk that it could not
   accomplish the process optimization effort within 12 months. See id.;
   Tab 8, Final L-3 Technical/Management Evaluation, at 3-4; Tr. at 89-91,
   119-20.

   On the other hand, SNC's "excellent" rating under the integrated master
   plan/delivery schedule subfactor reflected the evaluators' and SSA's
   judgment that SNC had provided a complete and comprehensive proposal that
   demonstrated a realistic and detailed schedule, supported by all necessary
   subcontractors, facilities and equipment. In addition, the agency found
   that SNC had [Deleted] with ballistic test facilities, test laboratories,
   and key suppliers and that this provided schedule risk mitigation. See AR,
   Tab 9.4, SNC's Integrated Master Plan/Delivery Schedule Evaluation; Tab
   10, SSDD, at 4-5. In this regard, the SSA testified that, unlike L-3's
   proposed schedule, SNC's schedule was based upon tasks and milestones that
   began at the time of award and appeared technically reasonable. Tr. at
   120.

   In short, we find reasonable the agency's evaluation of L-3's and SNC's
   proposals under the integrated master plan/delivery schedule subfactor.

   L-3 also contends that the agency unreasonably did not consider under the
   technical/management evaluation factor that SNC had an approximately
   [Deleted] percent failure rate under the prior contract and that SNC
   attributed its performance problems to the government-provided TDP, a
   contention which the agency rejected in its evaluation.[22] The Army
   responds that SNC's performance problems under the prior contract and the
   contention that these problems were due to the TDP were addressed in the
   agency's past performance evaluation and ultimately considered by the SSA
   in his selection decision, and did not have to be considered in the
   technical/management proposal evaluation.

   We agree with the Army that SNC's past performance problems and contention
   that these problems were due to the TDP were properly considered by the
   agency in the evaluation and source selection decision. Specifically,
   SNC's performance problems under the prior contract were considered under
   both past performance subfactors--on-time delivery and quality--and
   resulted in SNC's proposal being evaluated as "adequate" with "moderate
   risk." See AR, Tab 9.7, SNC's Past Performance Evaluation. In this regard,
   the agency noted under the quality subfactor that

     SNC thoroughly detailed the extensive investigations taken during the
     previous contract. A number of variables were addressed and many
     reasonable actions were taken by SNC, additionally extensive efforts by
     the Government Technical Community were extended to resolve these
     issues. Not relieving SNC of any of the end item accountability as a
     System's Contractor, but this evaluation indicates during this previous
     contract a large amount [of] resources were expended by SNC to implement
     corrective actions. There does seem to be increased risk associated with
     the production of M314A3 Illumination Candle. The knowledge SNC and the
     Government has gained during the last contract should be seen as a
     mitigating factor, but SNC's previous failures have indicated an
     uncomfortable level of risk.

   AR, Tab 9.10, SNC's Past Performance Quality Subfactor Evaluation, at 1.
   In making his selection decision, the SSA was specifically aware of both
   SNC's prior performance problems and contention that these problems were
   due to the TDP, and decided that SNC presented some delivery and
   performance risk. See AR, Tab 10, Source Selection Decision, at 13-14, 17.

   We do not agree with L-3 that the agency was also required to downgrade
   SNC's proposal under the technical/management factor for these prior
   failures and its contentions regarding the TDP, particularly where the
   agency itself was of the view that the TDP was in fact "marginal" and
   provided contractors with a certain amount of discretion with respect to
   producing the candle. See Tr. at 49-51. Thus, given SNC's otherwise
   excellent technical/management proposal and the SSA's knowledge and
   consideration of SNC's position regarding the TDP, the agency's decision
   to not specifically consider SNC's TDP position in the evaluation of the
   firm's technical/management proposal was unobjectionable.

   L-3 also complains that while the agency downplayed SNC's past performance
   problems under the prior contract, it unduly and incorrectly emphasized
   L-3's past performance issues. With respect to L-3's past performance
   evaluation, the agency noted, among other things, late delivery
   performance problems with L-3's proposed parachute assembly subcontractor
   and projectile metal parts subcontractor and quality concerns with its
   candle subcontractor and parachute assembly subcontractor. L-3 does not
   contend that its subcontractors did not have these evaluated performance
   problems, but only argues that the Army did not provide enough credit for
   the fact that its proposed parachute assembly subcontractor and projectile
   metal parts subcontractor had corrected their late delivery problems.
   However, the record shows that the Army did credit L-3's proposed
   parachute assembly subcontractor with correcting its delivery problems;
   there is no evidence in the record, however, that L-3's proposed
   projectile metal parts subcontractor had corrected its delivery problems.
   See AR, Tab 8.8, L-3's Past Performance Evaluation, at 1-2; see also Tab
   10, SSDD, at 15-17.

   With respect to L-3's argument that SNC's past performance should have
   been more severely downgraded than L-3's due to SNC's and Crane's
   performance problems under the prior contract, the SSA ultimately
   concluded with respect to SNC's and L-3's past performance that, although
   each firm had "encountered problems in the past, whether it is
   attributable to their performance or that of a subcontractor, there is no
   evidence that they did not take adequate action to quickly correct the
   problem."[23] AR, Tab 10, SSDD, at 22. L-3's arguments disputing this
   conclusion represent nothing more than mere disagreement with the agency's
   evaluation judgment.

   L-3 also complains that the Army, as part of its technical/management
   evaluation of SNC's proposal, failed to assess any risk associated with
   SNC's proposal to provide a [Deleted], given the issues that arose
   concerning the [Deleted] under the prior contract.[24] The Army assessed
   SNC's proposed [Deleted] as a strength in the agency's
   technical/management evaluation of SNC's proposal. AR, Tab 9, SNC
   Technical/Management Evaluation, at 2. L-3 objects, however, on the basis
   that one of the agency's past performance evaluators found that SNC was
   contending that the [Deleted] was the root cause of candle short burn time
   failure on the cartridges under the prior contract.[25] According to this
   evaluator:

     [Short burn time], [SNC] now claim[s], was due to [Deleted]. This was
     caused by the [Deleted]. SNC Mitigation now to eliminate [short burn
     time] is to [Deleted]. . [.] Amazing!!!

     Bottom line: My [past performance] evaluation [of adequate/moderate
     risk] remains the same as before. SNC's late deliveries were attributed
     exclusively to LAT [lot acceptance testing] failures. It is obvious to
     me that SNC is dedicated to resolving the [short burn time] failure
     mode. But, it is also obvious that passed FMEA [failure mode and effects
     analysis], DOE's, and RCA [root cause analysis] in correcting the LAT
     failure were not successful. The jury remains out if the [Deleted] [now
     proposed by SNC] will be any more successful than their prior
     revelations.

   AR, Tab 9.14, Past Performance Evaluator's Memorandum to the SSA.

   We find no basis from our review of the record to conclude that the Army's
   evaluation of SNC's proposed [Deleted] was unreasonable. As is documented
   by the past performance evaluator's memorandum to the SSA, the agency
   appropriately considered SNC's performance problems associated with the
   [Deleted] that the firm redesigned in the prior contract. The strength
   that was assessed in SNC's technical/management proposal was not for the
   [Deleted] used in the prior contract, but was for a proposed "unique"
   [Deleted] to resolve the primary issue of short burn times:

     [Deleted].

   AR, Tab 9, SNC Technical/Management Evaluation, at 2. At best, the past
   performance evaluator's memorandum could be read as questioning the
   likelihood that SNC's [Deleted] will perform better than the one that the
   firm had previously provided;[26] this, however, does not demonstrate that
   the technical evaluators unreasonably determined that SNC's proposal of a
   "unique" process optimization approach, which included a [Deleted], was a
   strength.

   L-3 raises a number of other challenges to the agency's evaluation of
   L-3's and SNC's proposals, arguing that the Army treated the firms
   disparately under the technical/management, financial capability, and
   small business utilization factors, and "double counted" strengths in
   SNC's proposal and weaknesses in L-3's proposal. Although not all of L-3's
   numerous arguments are discussed in this decision, we have considered all
   of the parties' arguments and find from our review of the record that
   L-3's additional arguments provide no basis to object to the agency's
   evaluation and source selection.

   For example, L-3 complains that the Army assessed as a strength in SNC's
   proposal, under the process optimization/FAT subfactor, the firm's
   brainstorming with its candle subcontractor, where L-3 also reported in
   its proposal that it brainstormed with a subcontractor but this was not
   assessed as a proposal strength. See Protester's Supplemental Comments at
   12. However, the agency reasonably explains that SNC's brainstorming was
   done with its candle subcontractor[27] and was part of an elaborate DOE
   with a "comprehensive analysis of the different variables," while L-3's
   brainstorming was not done with its candle subcontractor and was part of a
   "limited and elementary" DOE.[28] See Tr. at 88-89.

   As another example, L-3 complains that the Army failed to evaluate the
   sale of SNC to a third-party in its evaluation of the firm's proposal
   under the technical/management and financial capability factors. With
   respect to the technical/management factor, L-3 speculates that the sale
   of SNC may impact the retention of SNC management and key personnel. With
   respect to the financial capability factor, both L-3's and SNC's proposals
   were evaluated as being "low risk," but L-3 argues that the proposed sale
   of SNC should have resulted in a higher risk rating. As reported by SNC's
   proposal, the sale of SNC stock to a third-party, although approved by
   SNC's parent corporation at the time of proposal submission, was not final
   at the time of the agency's evaluation and source selection. SNC Financial
   Capability Proposal, annex A, SNC-Lavalin Annual Report, at 25. Under the
   circumstances, we do not think the agency was required to assess the
   technical impact of a proposed sale of the SNC corporate entity where the
   sale had not yet been approved and completed. Further, with respect to the
   financial capability factor, we note that the Canadian government
   guarantees all commitments, obligations and covenants of the Canadian
   Commercial Corporation. See DFARS sect. 225.870-1(a).

   L-3 finally protests that the Army failed to conduct meaningful
   discussions with it concerning the firm's failure to discuss x-ray testing
   or crush-testing, the proposal of an o-ring, and the firm's schedule.[29]

   In negotiated procurements, whenever discussions are conducted by an
   agency, the discussions are required to be meaningful, equitable, and not
   misleading. The Communities Group, B-283147, Oct. 12, 1999, 99-2 CPD para.
   101 at 4. To satisfy the requirement for meaningful discussions, the
   agency need only lead an offeror into the areas of its proposal requiring
   amplification or revision; all-encompassing discussions are not required,
   nor is the agency obligated to "spoon-feed" an offeror as to each and
   every item that could be revised to improve its proposal. See Arctic Slope
   World Servs., Inc., B-284481, B-284481.2, Apr. 27, 2000, 2000 CPD para. 75
   at 8-9; The Communities Group, supra. This is particularly true where, as
   here, one aspect of the evaluation is to test the offeror's technical
   understanding. See TRI-COR Indus., B-259034.2, Mar. 14, 1995, 95-1 CPD
   para. 143 at 5-6.

   We find that the Army conducted meaningful discussions with L-3 concerning
   its proposal. With respect to the agency's concerns that L-3 did not
   discuss crush-testing and that L-3 had not proposed a realistic schedule
   that would satisfy the contract requirements, the Army's discussion
   questions should have reasonably led L-3 into those areas of its proposal.
   Specifically, the Army informed L-3 that its "DOE was limited in scope"
   and that "[c]ritical parameters and critical process inspections were not
   addressed." With respect to its proposed schedule, L-3 was informed that
   its "[p]roposed schedule for Phase I Optimization exceeds the required 12
   months." See AR, Tab 6, Army Discussion Questions to L-3, at 1-2.

   With respect to the Army's evaluated concerns with L-3's offer to
   investigate providing an o-ring and its failure to identify x-ray testing
   as the appropriate test to assess cracks and voids in the illuminant,
   these were deficiencies that arose from L-3's response to the agency's
   discussion questions. An agency is not obligated to re-open discussions
   where an offeror introduces something in response to discussions that the
   agency views as a deficiency or weakness. See Cube-All Star Servs. Joint
   Venture, B-291903, Apr. 30, 2003, 2003 CPD para. 145 at 10-11.

   In conclusion, we find reasonable the Army's documented judgment that
   SNC's proposal offered a superior approach and demonstrated the firm's
   technical understanding and expertise, while L-3's proposal had not
   demonstrated a similar level of expertise and understanding, which posed
   schedule and performance issues, and that the selection of SNC's
   higher-priced, higher-rated proposal was reasonable and consistent with
   the solicitation's evaluation scheme.

   We deny the protests.

   Gary L. Kepplinger
   General Counsel

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

   [1] SNC is a Canadian firm. Awards to Canadian firms are generally made
   through the Canadian Commercial Corporation. See Department of Defense
   Federal Acquisition Regulation Supplement (DFARS) sect. 225.870-1(c).

   [2] In this context, an "ogive" refers to the tapered top of the
   projectile, to which the fuze is fitted. Hearing Transcript (Tr.) at
   15-16.

   [3] The components of the M314A3 are not commercially available because of
   the unique technology and specialized skills required for manufacturing,
   inspecting and testing the items. AR, Tab 3, Source Selection Evaluation
   Plan, at 1.

   [4] The first two subfactors of the technical/management factor were of
   equal importance and each were said to be more important than the third
   factor, which in turn was slightly more important than the fourth
   subfactor, which was slightly more important than the fifth subfactor.

   [5] The RFP also informed offerors that the oral presentation would not
   constitute discussions and that therefore the agency would not inform
   offerors of strengths, deficiencies or weaknesses in their proposals
   during the oral presentation. RFP sect. L, at 63.

   [6] The proposal of the third firm was rejected as technically
   unacceptable.

   [7] A "fair" rating under the technical/management factor was defined by
   the RFP as meeting "the minimal expectations for manufacture of a complex
   ballistic munition, such as the M314A3" and that the offeror's approach
   "does not provide a comprehensive understanding," such that "[s]ome doubt
   exists that the offeror will be successful on this contract." RFP sect. M,
   at 71.

   [8] The illuminating cartridge is a pyrotechnic device, which is also
   referred to as the "candle." Tr. at 17-19. With respect to production of
   the candle, "consolidation" refers to the process of mixing the illuminant
   and pressing and binding the illuminant together. Tr. at 36-37.

   [9] Both SNC and L-3 proposed Crane as their candle subcontractor.

   [10] "Crush testing" is used to evaluate the strength of the illuminant
   composition. Tr. at 41.

   [11] The RFP does not require offerors to address cracks and voids in the
   illuminant. Tr. at 66.

   [12] The Army apparently agrees that push-out testing is appropriate to
   assess fiberboard adherence to the canister.

   [13] L-3 has not rebutted, and apparently agrees with, the Army's view
   that the push-out test is not an appropriate test to inspect for cracks
   and voids in the illuminant.

   [14] L-3 also complains that the agency assessed a weakness in its
   proposal for failing to discuss particle size, distribution, mixing
   techniques, material preparation, and cure time, where L-3 had addressed
   this in response to discussions. The record shows, however, that this was
   only assessed as a weakness in the agency's evaluation of L-3's initial
   technical proposal. The Army found that L-3 adequately addressed this
   particular concern during discussions, and this was not identified as a
   weakness or deficiency in the agency's final evaluation or source
   selection. See Agency's Supplemental Legal Memorandum at 10; Tr. at 29.

   [15] L-3 does not address the Army's concern that the use of crush testing
   was incorporated in the statement of work as a method of ensuring
   consistent strength of the illuminating and first fire compositions, but
   that L-3 did not discuss crush testing in its discussion response. See AR,
   Tab 8, Final L-3 Technical/Management Evaluation, at 1; Tab 10, SSDD, at
   8. SNC, on the other hand, provided significant information in its
   proposal concerning the crush test. See SNC's Technical/Management Slides
   at 29-32.

   [16] L-3 also objects that SNC did not discuss inspecting for cracks and
   voids in the candle. However, as noted above, the solicitation did not
   require offerors to address inspecting for cracks and voids in the
   illuminant. The agency does not view cracks and voids in the illuminant as
   a problem because the required minimum burn time for the candle could be
   achieved even where there were cracks and voids. See Tr. at 66-67 (there
   is "no evidence that [cracks and voids] affected any performance in the
   past.")

   [17] In its post-hearing comments, L-3, for the first time, questioned the
   agency's determination that L-3 had proposed the o-ring as a solution to
   addressing short burn times. This late argument not only appears to be
   inconsistent with L-3's proposal, see AR, Tab 7.1, L-3 Discussion
   Response, at 6, but was untimely raised under our Bid Protest Regulations,
   4 C.F.R. sect. 21.2(a)(2) (2006), given that L-3 was informed of the
   agency's determination in this regard in its debriefing, but did not raise
   this argument in its initial protest. See Protest, exh. 1, L-3 Debriefing,
   at 10^th unmarked page.

   [18] L-3 disputes the Army's statement that the firm's proposal was not
   downgraded for offering a fiberboard-lined candle configuration, and
   contends that the Army's arguments and the hearing testimony are
   inconsistent with the contemporaneous record. Contrary to L-3's arguments,
   however, we find that the contemporaneous record supports the Army's
   contention that L-3's proposal was downgraded because the firm's
   discussion demonstrated a lack of understanding and undue reliance upon
   its candle subcontractor, and was not downgraded merely because the firm
   proposed a fiberboard-lined candle. In this regard, the SSA found:

     As the System Contractor, [L-3 is] allowing their subcontractor [Crane]
     to make a decision on the design configuration without any contribution
     from or recommendations of their own. Their apparent significant level
     of dependence on [Crane] coupled with the fact that there was no
     indication that they contributed any technical input to their response
     demonstrates a lack of core competency in the manufacturing of
     illuminating candles and raises concern whether L-3 can provide the
     proper oversight of their subcontractor.

   AR, Tab 10, SSDD, at 10.

   L-3 also asserts that at least one evaluator accepted L-3's discussion
   response concerning the proposal of epoxy-lined and fiberboard-lined
   configurations, and assessed no weakness or deficiency in his final
   evaluation of L-3's proposal in this respect. Protester's Supplemental
   Comments at 18-19. We find no merit to this argument, given that the final
   evaluation reflected the consensus judgment of the evaluators and was
   accepted by the SSA. See Tr. at 25, 106-08.

   [19] The fiberboard or epoxy liner discussed here sits inside the steel
   canister housing the candle, and is between the wall of the candle
   canister and the illuminant composition. Tr. at 21.

   [20] L-3's initial proposal to investigate both fiberboard-lined and
   epoxy-lined configurations for the candle was assessed by the agency as a
   proposal strength under the process optimization/FAT subfactor. See AR,
   Tab 10, SSDD, at 7. The agency noted, however, that L-3 apparently did not
   understand that its proposed candle subcontractor currently lacked the
   equipment and facilities necessary to produce the epoxy-lined candle
   configuration; this was assessed as weakness/deficiency under the EPPS
   subfactor. See AR, Tab 8.13, Initial Evaluation of L-3 Proposal under EPPS
   Subfactor; Tab 10, SSDD, at 9.

   [21] L-3 also argues that it proposed the use of a third firm to conduct
   DOEs with respect to understanding "candle cause and effect," and that
   this indicates that L-3 was not unduly relying upon Crane's expertise.
   Protester's Comments at 19, citing L-3 Technical/Management Slides, pt.1,
   at 9. This, however, does not demonstrate that the Army was unreasonably
   concerned that L-3 lacked its own expertise and knowledge to manage its
   candle subcontractor.

   [22] SNC's oral presentation slides indicate that SNC produced 82,743
   cartridges in 17 lots under the prior contracts, but that [Deleted] lots
   failed ballistic lot acceptance testing, but were accepted by the agency
   after granting waivers. Most of the deficiencies were associated with
   short candle burn times. SNC's Technical/Management Oral Presentation
   Slides at 15; see also AR, Tab 9.10, SNC's Past Performance Quality
   Subfactor Evaluation, at 1.

   [23] As noted above, both L-3 and SNC proposed Crane as their candle
   subcontractor.

   [24] [Deleted].

   [25] The cartridge was required to provide "effective illumination for 55
   seconds." RFP sect. E, at 25.

   [26] The agency's states, without rebuttal, that the past performance
   evaluator's area of expertise was not technical. See Agency's Post-Hearing
   Comments at 2.

   [27] The candle is the source of most of the performance problems with the
   M314A3 cartridge. Tr. at 89.

   [28] The agency also states that L-3 failed to share the brainstorming
   information it obtained regarding candle performance with its candle
   subcontractor.

   [29] In its comments on the agency report, L-3 argued that the agency
   failed to provide the firm with meaningful discussions with respect to
   agency's negative past performance evaluation of some of L-3's
   subcontractors. This protest allegation is untimely, given that L-3
   learned the basis of this allegation in its debriefing and did not raise
   this ground of protest in its initial protest. 4 C.F.R. sect. 21.2(a)(2).