TITLE: B-299864; B-299864.2; B-299864.3, Harris Corporation, September 14, 2007
BNUMBER: B-299864; B-299864.2; B-299864.3
DATE: September 14, 2007
***********************************************************************
B-299864; B-299864.2; B-299864.3, Harris Corporation, September 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: Harris Corporation
File: B-299864; B-299864.2; B-299864.3
Date: September 14, 2007
Thomas P. Humphrey, Esq., John E. McCarthy, Jr., Esq., Michael D. Newman,
Esq., Rogelyn D. McLean, Esq., Dane Swanson, Esq., Derek A. Hahn, Esq.,
Crowell & Moring, and Ronald S. Blum, III, Esq., for the protester.
Mark D. Colley, Esq., Drew A. Harker, Esq., Paul E. Pompeo, Esq.,
Patricia L. Stasco, Esq., and Antonella Karlin, Esq., Arnold & Porter, and
Charles D. Coleman, Esq., for the Raytheon Company, the intervenor.
Sandra Cain, Esq., Marian Ciborski, Esq., Robert Schlesinger, Esq., and
Cheryl Parker, Esq., for the agency.
David A. Ashen, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest of award of contract under downselect competition for naval
satellite communications terminal is denied where agency reasonably
determined that testing of awardee's prototype demonstrated that it met
nearly all of the hardware and software specification requirements, while
protester's prototype failed to satisfy many specification requirements,
such that a significant amount of work that had been scheduled for
completion in initial development phase had not been accomplished by
protester, resulting in a medium to high risk in event of award to
protester.
DECISION
Harris Corporation protests the Space and Naval Warfare Systems Command's
(SPAWAR) award of contract No. N00039-07-C-0012 to the Raytheon Company,
pursuant to a downselect competition under contract No. N00039-04-C-0011,
for the Navy Advanced Extremely High Frequency (AEHF) Multiband Terminal
(NMT). Harris challenges the evaluation of proposals and resulting source
selection.
We deny the protest.
The AEHF NMT is a multiband-capable satellite communications terminal that
will be installed on ship, shore, and submarine platforms to provide the
capability to communicate with satellite systems (such as Milstar) using
various frequency bands, communications protocols and data rates. The
surface ship NMT comprises a below decks Communications Group and a
topside Antenna Group that includes two antennas and two radomes. The
submarine NMT includes a Communications Group and modifications, as
necessary, to the submarine mast antenna and periscope antenna/high power
amplifier (HPA) interfaces, provided as government furnished property
(GFP). The shore NMT consists of a Communications Group capable of
interfacing to the GFP shore Antenna Group, including modifications to the
GFP shore Antenna Group, as necessary.
On October 28, 2003, SPAWAR awarded Raytheon and Harris cost-plus-award
fee contracts for system design and development of the NMT, with
fixed-price, not-to-exceed options for production. Under the initial phase
of these contracts, each contractor developed and fabricated four
prototypes (two for surface ships, one for submarines and one for shore),
which were to undergo a prototype test (PT1) to demonstrate that the
prototypes were capable of meeting the requirements in the specifications
(including SPAWAR-T-895, Navy Advanced Extremely High Frequency (AEHF)
Multiband Terminal (NMT) Specification). The specific subset of
requirements to be verified in the PT1 testing, referred to as REQIDs,
numbered 388 as listed in Appendix E, Test Matrix, of SPAWAR-T-895. NMT
Statement of Work (SOW) sect. 3.4; Agency Report (AR) at 15. As discussed
below, the results of the PT1 testing were crucial to the resulting
downselect decision.
On June 22, 2006, SPAWAR issued a downselect contract change package (CCP)
that provided for selection on a "best value" basis of a single contractor
to continue development, and then undertake production and logistic
support, of the NMT terminal. The downselect decision was to be based on
four evaluation factors: (1) technical approach (including
equally-weighted subfactors for system performance and design; terminal
systems engineering; and software development, engineering and technical
data/computer software rights); (2) current and past performance
(including a subfactor for NMT test results and analysis, and a
significantly less important subfactor for current and recent past
performance); (3) management approach (including equally weighted
subfactors for system effectiveness engineering; production plan;
integration and test plan: and risk management plan); and (4) cost/price.
Regarding the PT1 testing, the CCP provided that "[t]he Government will
evaluate the extent to which the contractor's NMT PT1 test results satisfy
or exceed the requirements in accordance with SPAWAR-T-895, Appendix E PT1
test requirements and as stated in Section H-20(b)." CCP sect. H.20(c)(5)
at H-62. Technical approach and current and past performance were of equal
importance and, when combined, were significantly more important than
management approach and cost/price, which were of equal importance. All
evaluation factors other than cost/price, combined, were significantly
more important than cost/price. In addition, the CCP provided that the
"evaluation of risk will be an integral part of the evaluation of each
applicable factor and subfactor through the Government's identification of
strengths, weaknesses, deficiencies, omissions, and risks in the
contractor's proposal." CCP para. H-20(c)(5) at H-51.
SPAWAR evaluated the proposals as follows:
+------------------------------------------------------------------------+
| |Raytheon |Harris |
|-------------------------------------+-----------------+----------------|
|Technical Approach |Good |Good |
|-------------------------------------+-----------------+----------------|
|System Performance/Design | Good | Good |
|-------------------------------------+-----------------+----------------|
|Terminal Systems Engineering | Good | Satisfactory |
|-------------------------------------+-----------------+----------------|
|Software Development | Good | Good |
|-------------------------------------+-----------------+----------------|
|Current/Recent Past Performance |Good |Marginal |
|-------------------------------------+-----------------+----------------|
|NMT Test Results | Good | Marginal |
|-------------------------------------+-----------------+----------------|
|Current/Recent Past Performance | Good | Good |
|-------------------------------------+-----------------+----------------|
|Management Approach |Good |Good |
|-------------------------------------+-----------------+----------------|
|System Effectiveness Engineering | Good | Satisfactory |
|-------------------------------------+-----------------+----------------|
|Production Plan | Good | Good |
|-------------------------------------+-----------------+----------------|
|Integration and Test Plan | Good | Satisfactory |
|-------------------------------------+-----------------+----------------|
|Risk Management Plan | Good | Good |
|-------------------------------------+-----------------+----------------|
|Evaluated Cost/Price | $955,383,722 | $779,400,693 |
+------------------------------------------------------------------------+
Notwithstanding the overall factor ratings, the agency's Downselect
Evaluation Committee (DSEC) reported to the source selection authority
(SSA) that Raytheon's proposal was superior under each of the
non-cost/price evaluation factors. The DSEC determined Raytheon's proposal
to be technically superior under the technical approach factor based in
part on the fact that: (1) Raytheon [REDACTED] had demonstrated that it
had a fully developed Prime Power Interface (PPI) and Power Distribution
Unit (PDU), with its power subsystem exceeding the government's
expectations for correcting for power fluctuations and handling momentary
power interruptions as a result of power bus transfers on submarine and
ship power systems, and (2) Harris was proposing [REDACTED].
The DSEC determined Raytheon's proposal to be "dominantly" technically
superior under the current/recent past performance factor based upon
Raytheon's superior test results in the PT1 tests of the NMT prototypes.
While Raytheon was evaluated as verifying in the government-observed PT1
testing that its terminals satisfied 348 of the 361 REQIDs it attempted,
or 90 percent of the overall 388 REQIDs specified in SPAWAR-T-895,
Appendix E, Harris was evaluated as verifying only 177 of the 238 REQIDs
it attempted, or only 46 percent of the overall 388 REQIDs.
More specifically, PT1 testing was intended to verify the terminal's
ability to acquire (establish communications with the satellite), track
and communicate with a satellite under a specified set of conditions,
including acquisition of a specified satellite beam in a specified mode,
acquisition in spite of specified time and space uncertainty with respect
to the location of the satellite at a particular time, and acquisition in
spite of specified levels of dynamic ship motion (pitch, roll and
heading). AR at 15. While Raytheon's prototype terminals were evaluated as
consistently acquiring the satellite faster than required without a failed
acquisition attempt for all cases from nominal to worst case, Harris's
terminals did not attempt satellite acquisition in all of the required
modes and were evaluated in many attempted instances as not meeting the
specified acquisition timelines. Raytheon's terminals likewise were
evaluated as significantly outperforming Harris's with respect to antenna
handover, a critical function for shipboard satellite communications in
that, due to antenna locations and ship movement, the terminals must
handover uplink and downlink data transfers from one shipboard antenna to
another without errors even at extremely high data rates. While Raytheon's
terminals were evaluated as surpassing the handover requirements even when
using the least robust uplink and downlink communication modes available,
Harris's terminals were evaluated as failing to satisfy the handover
requirements despite using more robust uplink and downlink communication
modes. As for the third fundamental functionality tested, the quality of
data communications achieved using digital signal processing, Raytheon's
terminals were evaluated as achieving error free communications at lower
signal-to-noise ratios than required while using less robust
communications modes and without running additional tests. In contrast,
Harris's terminals were evaluated as failing to satisfy key requirements
with respect to timing and control and the ability to operate with
cryptographic communications security equipment, and then satisfying other
requirements only on the basis of extended testing rather than at the
outset of the testing.
In summary, the agency determined that, while the PT1 testing of
Raytheon's terminals "demonstrated that nearly all Phase IA hardware and
software objectives were met," the testing of Harris's terminals "show[ed]
a significant body of work that was scheduled for completion in Phase IA
was not accomplished," resulting in a medium to high risk with respect to
Harris's ability to successfully execute the next phase in the program.
DSEC Report at 13.
Finally, the DSEC determined Raytheon's proposal to be "slightly"
technically superior to Harris's under the less important management
approach factor, in part on the basis that, in contrast to the outlook for
Raytheon, Harris's inability to meet their PT1 test objectives resulted in
high risk that they would be unable to successfully execute the next phase
in the program.
In summary, the DSEC determined that Raytheon's proposal offered a
technically superior NMT approach with the lowest risk to program
performance and schedule, and that this superiority under the more
important non-cost/price factors warranted paying the evaluated 22 percent
cost/price premium associated with Raytheon's proposal. The SSA
subsequently concurred with the DSEC's determination that Raytheon's
proposal represented the "best value" and made award to Raytheon. Upon
learning of the resulting award, and after being debriefed by the agency,
Harris filed this protest with our Office.
Harris challenges the evaluation on numerous grounds. In reviewing
protests against allegedly improper evaluations, it is not our role to
reevaluate proposals. Rather, our Office examines the record to determine
whether the agency's judgment was reasonable and in accord with the RFP
criteria and applicable procurement statutes and regulations. See Rolf
Jensen & Assocs., Inc., B-289475.2, B-289475.3, July 1, 2002, 2002 CPD
para. 110 at 5.
We have considered all of Harris's arguments, and we find that none
furnishes a basis to question the award to Raytheon. We discuss the most
important challenges below.
UNMET REQIDS
Harris challenges the marginal rating assigned its proposal under the PT1
testing subfactor of the current/recent past performance factor. Again,
while Raytheon verified in the government-observed PT1 testing that its
terminals satisfied 348 of the 361 REQIDs it attempted, or 90 percent of
the overall 388 REQIDs specified in SPAWAR-T-895, Appendix E, Harris was
evaluated as verifying only 177 of the 238 REQIDs it attempted, or only 46
percent of the overall 388 REQIDs.
Test Plan Approval
As an initial matter, Harris asserts that, since the government approved
its test plan, it should not be penalized for not satisfying those REQIDs
for which it did not plan to demonstrate compliance. In this regard, the
CCP established three requirements for entry into formal TP1 testing: (1)
"approved Test Plans . . . and Test Procedures"; (2) "[t]he contractor
shall conduct a Test Readiness Review (TRR) in accordance with the SOW
Section 3.1.2.3.7 (CDRL [Contract Data Requirements List] A023) no later
than 31 December 2006"; and (3) "[h]ardware and software baselines are
placed under configuration control and remain fixed throughout the
duration of test." CCP sect. H.20(b) at H-28 to H-29. In addition, the CCP
provided that formal PT1 testing "will start March 1, 2007 and shall
conclude on March 31, 2007," although the contractor could request an
earlier start. Id.
Harris's reliance upon the government's approval of its test plan is
inconsistent with both the terms of the CCP and the agency's position
during the procurement. In this regard, NMT SOW sect. 3.4 established the
requirements to be verified in the PT1 testing (that is, the 388 REQIDs
listed in Appendix E, Test Matrix, of SPAWAR-T-895), while the CCP
provided for the agency to "evaluate the extent to which the contractor's
NMT PT1test results satisfy or exceed the requirements in accordance with
SPAWAR-T-895, Appendix E PT1 test requirements and as stated in Section
H-20(b)." CCP sect. H.20(c)(5) at H-62. Thus, the agency was required by
the terms of the competition to consider in the evaluation, the extent to
which an offeror failed to verify during PT1 testing one or more REQIDs.
Furthermore, the agency's approval of the test plan and procedures made it
clear that this did not guarantee that the agency would favorably evaluate
the test results, precluding the agency from downgrading Harris for
capabilities it did not include in its test plan. Specifically, the
agency's December 2006 approval cautioned that:
This approval asserts the contractual requirements to deliver the
document have been satisfied. However, our approval does not assert or
imply that the documents contents will result in a successful Prototype
Test (PT1). The performance of, and associated results of PT1, is solely
the responsibility of the contractor.
Letter from Contracting Officer Representative to Harris, Dec. 19, 2006.
In addition, the record indicates that the caution in the approval letter
that the approval did not guarantee that the contractor's approach would
receive a favorable evaluation was reiterated by agency officials during
the contract meetings. See Declaration of SPAWAR NMT Assistant Program
Manager. We conclude that the evaluation in this area was reasonable.
Test Readiness Review (TRR)
Harris asserts that the offerors were treated unequally with respect to
the PT1 testing. In this regard, as noted above, the CCP provided that the
"[h]ardware and software baselines are placed under configuration control
and remain fixed throughout the duration of test." CCP sect. H.20(b) at
H-29. The record indicates that, pursuant to this provision, the offerors
were advised by the agency that while they could revise the hardware
and/or software baseline for the terminal and rerun the test, PT1 testing
would have to be rerun in its entirety if the hardware and/or software
baseline were changed. Declarations of SPAWAR NMT Assistant Program
Manager, NMT Deputy Assistant Program Manager, NMT Technical Director, and
NMT Vendor Test Lead. (Offerors could also rerun a particular test event
without changing the baseline and without rerunning the entire test. First
Declaration of NMT Assistant Program Manager.)
Harris claims that, in addition to the above warning that baseline changes
would necessitate retesting in its entirety, Raytheon also was advised
that a new TRR would not be required in the event of such retesting after
a change in baseline.[1] Harris claims that it was not provided with this
same additional information. According to Harris, its plans to revise its
software baseline were hindered by the fact that, unlike Raytheon, it was
not made aware that a new TRR would not be required prior to testing a new
terminal baseline.
There is no basis for finding that Harris was deprived of a meaningful
opportunity to improve its test results. The record is in dispute as to
whether the information regarding a new TRR was provided to Harris.
SPAWAR's NMT Deputy Assistant Program Manager states that he advised
Harris (as well as Raytheon) during the course of the ongoing meetings
under the existing contract that a new, contractual TRR would not be
required in the event that testing were rerun after changing the baseline,
First and Second Declarations of NMT Deputy Assistant Program Manager, but
Harris's Program Manager and Deputy Program Manager state that they were
not told this. This dispute notwithstanding, we consider it determinative
of this issue that nothing on the face of the CCP indicated that a new,
formal contractual TRR would be required in the event that a contractor
changed its baseline after the contractual TRR. The CCP not only referred
to a single "Test Readiness Review (TRR)," but also specified that this
TRR was to occur "no later than 31 December 2006." CCP sect. H.20(b) at
H-28 to H-29. As noted by SPAWAR, since the testing was scheduled to run
between March 1 and March 31, 2007, the December 31, 2006 deadline for
conducting the formal, contractual TRR is wholly inconsistent with any
interpretation that a new formal, contractual TRR would be required in the
event that the testing was rerun after modification of the terminal
baseline.
Further, the record suggests that Harris understood that a new TRR would
not be required. In this regard, in June 2006, when Harris requested
"SPAWAR's confirmation of our interpretation of the recently issued
contract modification . . . which revised Section H-20 of the contract,"
its description of its intended testing approach included the
clarification that "[a]dditional TRRs are not required if we decide to
re-start PT1 testing with a more mature build." Harris Letter to SPAWAR,
June 27, 2006. When SPAWAR then asked Harris to redact the proprietary
information about its intended testing approach from this request, so that
the agency could issue the request and response to both contractors,
Harris withdrew the request. We think it is reasonable to assume that, had
Harris been in serious doubt in this regard, it would have redacted its
request for release to both contractors in order to obtain agency
confirmation of its understanding of the CCP. Harris's understanding also
appears to be confirmed by the fact that, in its presentation at its
subsequent October 2006 Program Management Review (PMR) and December 2006
TRR, Harris anticipated a modification of the software baseline in
January-February 2007 without giving any indication that a new formal,
contractual TRR would be necessary. PMR at 20-21, 108; TRR at Test
Overview and Approach 7.
Moreover, we agree with the agency that it is not apparent why the limited
effort involved in a new, revised TRR would have affected Harris's
decision whether to modify its baseline. The agency notes in this regard
that Harris, which like Raytheon had elected to undertake early testing of
its antenna, conducted an antenna TRR in September 2006 which lasted only
30 minutes and was conducted by telephone, while its broader December 2006
TRR consisted of only 66 slides presented over 4 hours. Agency
Supplemental Report, Aug. 20, 2007, at 7 n.8. The limited effort likely to
be required for a revised TRR appears especially significant in light of
the fact that Harris completed its PT1 testing 11 days prior to the
deadline, which would have allowed more than sufficient time to conduct a
new TRR. AR at 16. Finally, our view is supported by Harris's account, in
its August 9, 2007 comments, of how it came to determine its testing
plans. According to the protester, prior to the agency's amending the
contracts to impose a freeze in the baseline during testing, "Harris's
planning for PT1 contemplated substantial ongoing software development"
and "several new software builds." Harris Comments, Aug. 9, 2007, at 15.
"As a result of the freeze," however, "Harris had to change these plans
dramatically and was limited to only one earlier software build." Id.
Harris's account clearly indicates that it was the requirement to freeze
the baseline--and the resulting need to rerun the entire testing in the
event that the baseline was modified--and not any perceived need to
undertake a new TRR, on which Harris's decision not to modify its baseline
was founded. We conclude that Harris was not unfairly deprived of a
meaningful opportunity to improve its test results.
Substantial Completion
Harris asserts that the marginal rating assigned its proposal under the
TP1 testing subfactor is not consistent with the following facts
(according to Harris): its terminals in a number of instances during
testing substantially (if not entirely) met the performance requirements;
in a number of instances it was the failure of GFP or in the entry of the
test parameters, rather than the failure of Harris's terminals, that
resulted in the failure of its terminals to fully satisfy the test
requirements; in some instances, the agency's interpretation of the test
requirements under Appendix E, Test Matrix, of SPAWAR-T-895 was
unreasonably demanding; in at least one instance, Harris was held to a
stricter standard than was Raytheon; and in some cases where Harris did
not demonstrate a capability, the agency should otherwise have been aware
(from various contract meetings for example), that Harris nevertheless had
developed some or all of the required capability. In summary, Harris
maintains that it has developed approximately "90% of the Required
Prototype Phase Capability," Harris Comments, July 30, 2007, at 24, such
that the marginal rating and the agency's concerns with the risk
associated with Harris's development and testing program were not
warranted.
We find no basis to question the agency's overall evaluation under the PT1
testing subfactor. As an initial matter, we note that Harris's focus on
capabilities it allegedly possesses, but did not clearly demonstrate
during PT1 testing, reflects a fundamental misunderstanding of the
evaluation scheme set forth in the CCP (and perhaps of Harris's
contractual obligations as well). While the CCP generally provided for the
contractor to verify performance through several methods, "(e.g., test,
demonstration, analysis, inspection, etc.)," CCP sect. H-20(b) at H-28,
the contractor was required in the PT1 testing to "verify a subset of the
core terminal requirements as stated in the ELEX-S-488G and SPAWAR-T-895,"
SOW sect. 3.4.1, and the agency was required to "evaluate the extent to
which the contractor's NMT PT1 test results satisfy or exceed the
requirements in accordance with SPAWAR-T-895, Appendix E PT1 test
requirements and as stated in Section H-20(b)." CCP sect. H.20(c)(5) at
H-62. This being the case, and given the agency's need to assure that the
NMT terminal will reliably and satisfactorily perform even under worst
case conditions, we think the agency reasonably focused in its evaluation
on those instances where Harris's terminal failed to demonstrate a
capability required to be verified under Appendix E, Test Matrix, of
SPAWAR-T-895; failed to satisfactorily perform under the totality of worst
case conditions specified by Appendix E; or needed repeated tests of the
final baseline in order to demonstrate at least one occurrence of
performance in full compliance with SPAWAR-T-895 requirements.
Further, given Harris's determination not even to attempt to demonstrate
150 of the 388 REQIDs in Appendix E, Harris's attempt to show that some of
the 61 REQIDs it attempted to demonstrate but was evaluated as not fully
satisfying either were not its fault or were substantially satisfied, in
no way calls into question the reasonableness of the agency's
determination of resulting risk if award were made to Harris. Moreover,
given Raytheon's "dominantly" superior performance in the PT1 testing,
with its terminal having been found to successfully perform 348 of the 388
REQIDs, there is no basis to question the agency's view that the relative
maturity of Raytheon's prototypes was a major discriminator favoring
Raytheon. We conclude that the evaluation in this area was reasonable.
INTERNATIONAL PARTNER VARIANT
Harris asserts that Raytheon's proposed schedule with respect to the
International Partner Variant (IPV) Engineering Design Models (EDM) to be
furnished under the contemplated contract failed to meet the required
delivery schedule set forth in the CCP. SPAWAR denies that Raytheon's
schedule is noncompliant. We find the agency's position to be reasonable.
An IPV EDM is a modified NMT terminal that will be provided to other
"International Partner" nations. Of the 37 EDMs to be delivered under the
contract, 13 are IPV EDMs. Under contract line item number (CLIN) 0105 in
section F of the CCP, the initial 2 EDMs are to be delivered 26 months
after exercise of option, with 2 more to be delivered every month
thereafter, until the final IPV EDM is delivered 32 months after option
exercise.
In a July 2 supplemental protest, Harris asserts that Raytheon failed to
comply with the above schedule for the delivery of the IPV EDMs
themselves. Harris bases its assertion on references in Raytheon's
Integrated Master Schedule (IMS) which, when viewed in the context of a
June 1, 2007 award (option exercise) date, Harris claims indicate delivery
of the first IPV EDM would occur approximately 30 months after option
exercise and the last IPV EDM a little more than 37 months after option
exercise. However, Raytheon's IMS in fact indicated that it was based upon
an assumed December 1, 2007 award date, that is, a date 6 months later
than Harris's argument assumes. Harris's calculations thus show that
Raytheon would deliver the first IPV EDMs not later than 26 months after
option exercise and the last to be delivered not later than 32 months
after option exercise, in accordance with the CCP schedule. Harris
Supplemental Protest, July 2, 2007, at 5-6; Raytheon IMS, lines 3555,
3557, 4048, 4341, 4369.[2]
Harris further asserts in its July 2 supplemental protest that, because
Raytheon proposed to perform design and verification testing (DVT) of the
IPV EDMs well after their delivery, with DVT not scheduled by Raytheon to
be completed until (by Harris's calculation) 43 months after option
exercise, Raytheon's schedule was noncompliant with the requirement for
delivery to be completed not later than 32 months after option exercise.
Harris Supplemental Protest, July 2, 2007, at 5-6; see CCP sect. F, CLIN
0105. (In DVT, the contractor conducts environmental qualification of the
EDMs, validating any new functionality while ensuring that earlier
features perform as expected. By the completion of DVT, the hardware and
software under test have been modified, as required, to correct design
deficiencies and retested such that the terminal is ready for production
at the end of DVT. AR at 91 n.54; SOW sect. 3.4.2.)
SPAWAR responds, and we agree, that the CCP does not clearly require DVT
to be completed before delivery. In this regard, CCP Clause E-5,
Inspection and Acceptance--Origin, provides that "[t]he Government will
inspect and accept Items . . . 0105 . . . after successful completion of
SPAWAR-T-895 Quality Conformance Inspection (QCI) Group A testing in
accordance with SPAWAR-T-895." As noted by the agency, the only testing
this clause requires with respect to CLIN 0105--the CLIN requiring
delivery of the IPV EDMs within 32 months--is QCI testing. SPAWAR-T-895
treats DVT separately from QCI testing; it defines the latter as
examination and testing to prove the workmanship and reveal the omissions
and errors of the fabrication process, such as functional and performance
tests at a limited number of points, tests which detect deviations from
design, tests of adjustment, and tests that detect hidden defects in
material. SPAWAR-T-895 sections 4.1.2, 4.1.3.[3] Whatever the rationale
for not requiring DVT before delivery of the IPV EDMs, this appears to be
consistent with the overall approach to DVT under the CCP. In this regard,
we note that Harris does not dispute the agency's position that DVT was
not required under the CCP to be conducted before delivery of domestic,
non-IPV EDMs, and that in fact Harris itself proposed post-delivery DVT
for domestic, non-IPV EDMs. We conclude that the agency reasonably
determined Raytheon's schedule regarding the IPV EDMs to be compliant with
the CCP.
SOURCE SELECTION
On May 29, 2007, 26 days after he signed the source selection decision
(and 2 days prior to the award to Raytheon), the SSA sent an e-mail to the
Assistant Secretary of the Navy, Research, Development and Acquisition, in
which the SSA briefed the Assistant Secretary on the decision to award to
Raytheon. The SSA generally explained that "award to Raytheon is based on
the assessment that Raytheon's proposal is technically superior, though
higher cost, to Harris's proposal and provides the best value to the
Government to complete the remaining contract phases within the program
schedule." Email from SSA to Assistant Secretary, May 29, 2009. The SSA
specifically cited "three areas of concern" that demonstrated why
Raytheon's proposal was the best value, including that: (1) Harris, unlike
Raytheon, was proposing a new antenna technology that had not been fully
demonstrated during PT1 testing, with the concern focusing on the fact
that, if design changes were required, "it would have a significant impact
to EDM cost and schedule as well as production pricing"; (2) while
Raytheon's PT1 test results indicated that its system has a "very mature
hardware and software design," with all critical hardware components
developed and tested, Harris's PT1 test results demonstrated an "immature
hardware and software design," with a large body of the work scheduled to
have been already completed instead postponed to the forthcoming EDM
phase; and (3) Harris's contract documentation did not always demonstrate
a clear understanding of the anomalies that had been encountered, and
indeed, indicated that in many cases the cause of the problems experienced
had not even been identified. Id. The SSA further explained that, given
Harris's inadequate understanding of the anomalies and problems
encountered, and the significant body of work scheduled for completion in
the EDM phase, "Harris's ability to meet EDM cost and schedule is
adversely impacted. Any required design changes ([engineering change
proposals]) would have an impact to production pricing." Id.
Harris asserts that the SSA's consideration of potential production
pricing increases was improper because Harris (and Raytheon) proposed
fixed pricing for the production phase.
The SSA's actions were unobjectionable. As is evident from the e-mail
itself, and as was further explained in a subsequent declaration executed
by the SSA during these proceedings, the SSA was of the view that, given
the demonstrated immaturity of Harris's design, it was highly likely that
changes to the Harris design (upon which Harris's production pricing was
based) would be necessary. The SSA was concerned that, since the design
changes could affect Harris's production costs, there was some risk of
requests for equitable adjustment and other claims from Harris.
Declaration of SSA. The SSA's concern as to the potential consequences of
Harris's demonstrably immature design was both reasonable and consistent
with the terms of the CCP, which generally provided for the agency to
consider in the evaluation the potential risk--probability of negative
consequences--associated with each offeror's proposed approach. CCP sect.
H-20(c)(3) at H-51.
The protest is denied.
Gary L. Kepplinger
General Counsel
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[1] The purpose of a TRR is to coordinate the logistics of the test event
and ensure that the test is being conducted with an appropriate system
maturity. Agency Second Supplemental Report at 3. The contractor provides
an overview of the test conduct, test procedures, and expected test
results. In addition, the contractor reviews the results of prior tests
and known system deficiencies, and presents a proposed approach to resolve
outstanding deficiencies. SOW sect. 3.1.2.3.7.
[2] SPAWAR calculates that Raytheon proposed to deliver the First IPV EDM
23 months after option exercise and the last IPV EDM 30 months after
option exercise. AR at 91. See also Raytheon Proposal, Management
Approach, at III-3-6, which supports SPAWAR's interpretation that the last
Raytheon IPV EDM was scheduled for delivery not later than 30 months after
award.
[3] Harris asserts that DVT was separately required under CLIN 0106. This
argument is untimely, since it was raised more than 10 days after Harris
received a copy of Raytheon's downselect proposal. 4 C.F.R
sect. 21.2(a)(2). Moreover, the relevant provisions do not support
Harris's assertion that CLIN 0106 establishes a requirement for DVT prior
to delivery of the IPV EDMs.