TITLE: B-310372, Pemco Aeroplex, Inc., December 27, 2007
BNUMBER: B-310372
DATE: December 27, 2007
*************************************************
B-310372, Pemco Aeroplex, Inc., December 27, 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: Pemco Aeroplex, Inc.

   File: B-310372

   Date: December 27, 2007

   David R. Hazelton, Esq., Roger S. Goldman, Esq., Kyle R. Jefcoat, Esq.,
   Benjamin Wei, Esq., Brent W. Johnson, Esq., and Jennifer S. Crone, Esq.,
   Latham & Watkins LLP, for the protester.

   Rand L. Allen, Esq., Paul F. Khoury, Esq., Scott M. McCaleb, Esq., Kara M.
   Sacilotto, Esq., and Nicole P. Wishart, Esq., Wiley Rein, LLP, for The
   Boeing Company, an intervenor.

   Brent G. Curtis, Esq., Kenneth C. Kitzmiller, Esq., and Gerald L.
   Trepkowski, Esq., Department of the Air Force, for the agency.

   Glenn G. Wolcott, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest challenging the agency's past performance evaluation is denied
   where agency considered all reasonably available relevant past performance
   information and, based on consideration of that information, made
   confidence assessments that were not unreasonable.

   2. Protest that agency was required to assign a "Blue/Exceptional" rating
   for any mission capability subfactor in which protester's proposal
   contained an evaluated strength is denied where solicitation stated that
   proposals containing one or more evaluated strengths could properly
   receive either "Blue/Exceptional" or "Green/Acceptable" ratings.

   3. Where solicitation required that agency perform a price realism
   analysis and risk assessment, and identified the particular data that
   would be considered, including [deleted], protest is sustained given the
   absence of any agency documentation reflecting the required analysis of
   the awardee's final proposal revisions, which reflected [deleted] that
   appear to conflict with the agency's internal [deleted] projections.

   4. Protest based on alleged conflicts of interest and an alleged violation
   of procurement integrity provisions is denied where record does not
   support the protester's allegations.

   DECISION

   Pemco Aeroplex, Inc. protests the Department of the Air Force's award of a
   contract to Boeing Aerospace Operations, Inc. pursuant to request for
   proposals (RFP) No. FA8105-05-R-0014 to provide programmed depot
   maintenance (PDM) for KC-135 aircraft. Pemco maintains that the agency's
   evaluation of proposals was flawed with regard to past performance,
   mission capability, and cost/price, and that the agency failed to properly
   consider alleged organizational conflicts of interest (OCI) and an alleged
   violation of the procurement integrity provisions of the Office of Federal
   Procurement Policy Act, 41 U.S.C. sect. 423 (2000).

   As discussed below, we sustain the protest with regard to the agency's
   evaluation of cost/price, but we deny the challenges to the agency's
   evaluation of past performance and mission capability, as well as to
   alleged OCIs and the alleged violation of procurement integrity
   provisions.[1]

   BACKGROUND

   The solicitation was originally issued in August 2005, and proposals were
   first submitted in October of that year. At that time, Boeing and Pemco
   were jointly performing the maintenance for KC-135 aircraft in a prime
   contractor/subcontractor relationship pursuant to a predecessor contract
   with the Air Force. In October 2005, Boeing and Pemco submitted a joint
   proposal responding to the solicitation, proposing to maintain their
   relationship.

   In May 2006, the agency substantially reduced the quantities of KC-135
   aircraft for which maintenance was being sought under the solicitation.[2]
   Following that quantity reduction, Boeing terminated the prime
   contractor/subcontractor relationship between itself and Pemco.[3] In July
   2006, the agency amended the solicitation to reflect its revised
   requirements, and allow Pemco and Boeing to submit separate proposals
   competing for those requirements.

   The solicitation provided for award on a "best value" basis, stating that
   the agency intended to award to the offeror "who gives the Air Force the
   greatest confidence it will best meet our requirements affordably," and
   established the following evaluation factors: mission capability, proposal
   risk, past performance and cost/price.[4] RFP at 78-79. Under the mission
   capability evaluation factor, the solicitation established five
   subfactors: depot maintenance, supply chain management, transition,
   program management, and small business.[5] Id. at 79. With regard to
   evaluation of mission capability, the solicitation provided that color
   ratings would be assigned at the subfactor level.[6] With regard to
   evaluation of proposal risk, the solicitation provided that risk
   assessments of "low," "moderate," or "high" would be made for each of the
   mission capability subfactors, and stated:

     The Proposal Risk assessment focuses on the risks and weaknesses
     associated with an Offeror's proposed approach and includes an
     assessment of the potential for disruption of schedule, increased cost,
     degradation of performance, and the need for increased Government
     oversight, as well as the likelihood of unsuccessful contract
     performance.

   Id. at 82-83.

   With regard to evaluation of past performance, the solicitation provided
   that the agency would make "confidence assessments" regarding whether an
   offeror is likely to successfully perform the required effort.[7] Id. at
   84.

   Finally, with regard to cost/price, the solicitation contemplated award of
   a fixed-price contract. Nonetheless, the solicitation provided that the
   agency would perform a price realism analysis, required offerors to submit
   data regarding "labor, fringe benefits, overhead and G&A rates by year for
   all labor categories anticipated for use in the performance of this
   effort," and provided that "evaluation of [the required data] will be used
   to determine reasonableness and realism of the prices." Id. at 86.

   In September 2006, Pemco and Boeing submitted independent proposals
   competing for the revised solicitation requirements.[8] Thereafter,
   discussions were conducted and final proposal revisions (FPR) were
   requested; in February 2007, Pemco and Boeing each submitted an FPR. The
   FPRs were subsequently evaluated by the various teams within the source
   selection evaluation team (SSET),[9] and briefings were provided to the
   source selection advisory council (SSAC) and the SSA.

   In April 2007, as the agency was completing its final evaluation of the
   FPRs, [deleted][10].[11] The SSAC was briefed [deleted], and this
   information was thereafter provided to the agency's performance confidence
   assessment group (PCAG) for consideration in its evaluation of past
   performance. Proposal Analysis Report (PAR) at 2; Contracting Officer's
   Statement at 10. Because the agency considered [deleted] to be adverse
   past performance information, the agency reopened discussions on May 10 to
   provide Boeing an opportunity to respond, thereafter sending various
   evaluation notices (ENs) to the offerors, including ENs to Boeing
   regarding [deleted]. PAR at 2.

   On May 17, 2007, the Air Force [deleted].[12]

   Thereafter, the offerors responded to the various ENs. Boeing provided
   [deleted] responses to the agency's ENs.

   On June 18, the offerors submitted second FPRs, which were evaluated by
   the agency and resulted in the following final ratings.

   +------------------------------------------------------------------------+
   |                                  |       Boeing       |     Pemco      |
   |----------------------------------+--------------------+----------------|
   |Mission Capability Subfactors     |                    |                |
   |----------------------------------+--------------------+----------------|
   |Depot Maintenance                 |  Blue/Exceptional  |   [deleted]    |
   |                                  |                    |                |
   |Proposal Risk                     |      Low Risk      |                |
   |----------------------------------+--------------------+----------------|
   |Supply Chain Management           |  Blue/Exceptional  |   [deleted]    |
   |                                  |                    |                |
   |Proposal Risk                     |      Low Risk      |                |
   |----------------------------------+--------------------+----------------|
   |Transition                        |  Blue/Exceptional  |   [deleted]    |
   |                                  |                    |                |
   |Proposal Risk                     |      Low Risk      |                |
   |----------------------------------+--------------------+----------------|
   |Program Management                |  Green/Acceptable  |   [deleted]    |
   |                                  |                    |                |
   |Proposal Risk                     |      Low Risk      |                |
   |----------------------------------+--------------------+----------------|
   |Small Business                    |  Green/Acceptable  |   [deleted[    |
   |                                  |                    |                |
   |Proposal Risk                     |      Low Risk      |                |
   |----------------------------------+--------------------+----------------|
   |Past Performance                  |    Satisfactory    |  Satisfactory  |
   |----------------------------------+--------------------+----------------|
   |Total Evaluated Price             |   $1,165,138,187   |   [deleted]    |
   +------------------------------------------------------------------------+

   PAR at 78, 166; Contracting Officer's Statement at 4.

   The SSA subsequently concluded that: Boeing's proposal was superior with
   regard to mission capability; Pemco's proposal was superior with regard to
   past performance; proposal risk was not a significant discriminator; and
   Boeing offered the lowest total evaluated price (TEP). Agency Report (AR),
   Tab 5, Source Selection Decision Document (SSDD), at 22. In light of these
   assessments, the SSA concluded: "Pemco's better record of past performance
   is not sufficient to outweigh the benefits of Boeing's superior Mission
   Capability proposal and [deleted] lower TEP." Id. Thereafter, a contract
   was awarded to Boeing. This protest followed.

   DISCUSSION

   Past Performance Evaluation

   Pemco first challenges the agency's assignment of "satisfactory"
   confidence ratings to both Pemco's and Boeing's proposals under the past
   performance factor. In this regard, Pemco complains that the agency
   "unreasonably failed to rate Pemco higher than Boeing," and that the
   agency "was unreasonable in rating both Boeing and Pemco equally." Protest
   at 15, 17.

   As our Office has frequently stated, adjectival ratings are only guides to
   assist agencies in evaluating proposals; information regarding particular
   strengths and weaknesses of proposals is the type of information that
   source selection officials should consider, in addition to ratings and
   point scores, to enable them to determine whether and to what extent
   meaningful differences exist between proposals. See, e.g., TPL, Inc.,
   B-297136.10, B-297136.11, June 29, 2006, CPD para. 104 at 17. In this
   regard, proposals with the same adjectival ratings are not necessarily of
   equal quality, and an agency may properly consider specific advantages
   that make one proposal higher quality than another. See Pueblo Envtl.
   Solution, LLC, B-291487, B-291487.2, Dec. 16, 2002, 2003 CPD para. 14 at
   10; Oceaneering Int'l, Inc., B-287325, June 5, 2001, 2001 CPD para. 95
   at 13.

   Here, the record clearly establishes that the agency did not evaluate
   Boeing's and Pemco's proposals as being equal with regard to past
   performance; rather, Pemco's proposal was found superior to Boeing's.
   Specifically, although both proposals received overall ratings of
   "satisfactory" confidence, the agency's contemporaneous evaluation
   documents show that, after considering multiple strengths and weaknesses
   in both offerors' past performance record, Pemco's overall past
   performance rating was considered to be at "the high end of satisfactory"
   and Boeing's overall rating was considered to be [deleted]. PAR at 159;
   Email from SSA (Riechers) to SSAC Advisors, Aug. 5, 2007. Similarly, the
   SSA unambiguously stated in his source selection decision: "I consider
   Pemco to have a better past performance record than Boeing." SSDD at 22.
   Accordingly, there is no merit to Pemco's protest that the two proposals
   were evaluated "equally" with regard to past performance; to the contrary,
   the agency considered this aspect of Pemco's proposal to be better than
   Boeing's.

   Pemco also complains that, rather than a past performance rating of
   "satisfactory" confidence, Boeing's proposal should have received a rating
   of either "little" confidence or "no" confidence. Specifically, Pemco
   protests that the agency failed to consider negative past performance
   information associated with Boeing's performance related to [deleted].
   More specifically, Pemco's protest refers to various sources and
   authorities that have criticized Boeing's contract performance in
   connection with these programs, including: a Department of Defense
   Inspector General (DODIG) report issued in May 2006;[13] [deleted]; and
   the agency's decision not to exercise contract options under the
   predecessor KC-135 PDM contract. Pemco's protest further identifies
   particular matters contained or reflected in each of these various sources
   of negative information, and maintains that, in assessing Boeing's past
   performance, the agency failed to consider these particular matters.

   Where a protest challenges an agency's past performance evaluation, we
   will examine the record to ensure that the evaluation was reasonable and
   consistent with the solicitation's stated evaluation criteria and
   applicable statutes and regulations. Although an agency is not required to
   identify and consider each and every existing piece of past performance
   information, it must consider information that is reasonably available and
   relevant as contemplated by the terms of the solicitation. Johnson
   Controls Sec. Sys., LLC, B-296490.3 et al., Mar. 23, 2007, 2007 CPD
   para. 100 at 3-5; Dismas Charities, B-298390, Aug. 21, 2006, 2006 CPD
   para. 131 at 5. Where an agency has considered reasonably available and
   relevant past performance information, its judgments regarding the
   relative merits of competing offerors' past performance are primarily
   matters within the contracting agency's discretion, and a protester's mere
   disagreement with such judgments does not establish a basis for our Office
   to sustain a protest. The MIL Corp., B-297508, B-297508.2, Jan. 26, 2006,
   2006 CPD para. 34 at 10; Birdwell Bros. Painting & Refinishing, B-285035,
   July 5, 2000, 2000 CPD para. 129 at 5.

   Here, based on our review of the agency's extensive past performance
   evaluation record, along with testimony obtained during the hearing,[14]
   we conclude that the agency considered all relevant and reasonably
   available past performance information in its evaluation. See AR, Tab 33,
   Boeing Past Performance Worksheets, at 1-71; PAR exh. A, Boeing Past
   Performance Data, at 1-55. Specifically, with regard to Boeing's prior
   contract performance supporting the particular programs on which Pemco's
   protest relies, the record establishes that the PCAG considered the DODIG
   report in its entirety,[15] along with [deleted], and Boeing's responses
   to the agency's various requests for information. Hearing Transcript (Tr.)
   at 266-67, 279-81, 287, 304, 341, 352-53. Additionally, the contracting
   officer and the PCAG interviewed the contracting officers for the
   [deleted], seeking their separate feedback regarding Boeing's prior
   contract performance. Tr. at 101-02.

   Although Pemco disagrees with the agency's assessments and conclusions
   drawn from its consideration of Boeing's past performance information,
   Pemco has not identified any significant, relevant, and reasonably
   available information that the agency did not consider. Accordingly,
   Pemco's protest that the agency failed to consider Boeing's negative past
   performance information is denied.

   With regard to the reasonableness of the agency's ultimate determination
   to assign a "satisfactory" confidence rating to Boeing's proposals under
   the past performance factor,[16] we have reviewed the extensive record on
   which the agency relied, and take note of the fact that this record
   contains substantial amounts of both positive and negative information
   regarding Boeing's past performance. Based on our review, we cannot
   conclude that the agency's judgments and its overall assessment of
   Boeing's past performance were unreasonable--although we recognize that
   other assessments of that performance might also have been reasonable.
   Accordingly, Pemco's protest challenging the reasonableness of the
   agency's assessment of a "satisfactory" confidence rating for Boeing's
   proposal is denied.

   Pemco also protests that it was unreasonable for the agency to have
   assigned a "satisfactory" confidence rating to Pemco's proposal, [17]
   arguing that nothing less than a "significant" confidence rating could
   have been reasonably assigned. We have similarly reviewed the agency
   record regarding Pemco's past performance, again noting that this record
   contains substantial amounts of both positive and negative information
   regarding Pemco's past performance. Based on our review, we cannot
   conclude that the agency's judgments and its overall assessment of Pemco's
   past performance were unreasonable. Pemco's protest challenging the
   agency's past performance evaluation is denied.

   Mission Capability

   Pemco next challenges the agency's rating of Pemco's proposal under the
   mission capability evaluation factor, asserting that the agency's
   evaluation "violated the RFP's express terms and [the agency's] own
   findings." Protest at 22. In this regard, Pemco asserts that the agency
   was required to rate Pemco's proposal "Blue/Exceptional," rather than
   "Green/Acceptable," under [deleted], because Pemco's proposal was
   evaluated as having "strengths" in those areas. Pemco notes that, in
   defining the requirements for a "Blue/Exceptional" rating, the
   solicitation stated:

     Exceeds specified minimum performance or capability requirements, in a
     way beneficial to the government; proposal must have one or more
     strengths and no deficiencies to receive a blue.

   RFP at 80.

   Pemco maintains that because its evaluated "strengths" exceeded the
   solicitation's minimum requirements in a way beneficial to the government,
   Pemco was "clearly entitled" to "Blue/Exceptional" ratings for those
   subfactors. Protest at 23. Pemco is mistaken.

   In reviewing a protest challenging an agency's evaluation of technical
   factors, our Office will not reevaluate proposals, but will examine the
   record to determine whether the agency's judgment was reasonable and
   consistent with the stated evaluation criteria and applicable procurement
   statutes and regulations. See, e.g., Shumaker Trucking & Excavating
   Contractors, Inc., B-290732, Sept. 25, 2002, 2002 CPD para. 169 at 4. As
   with an agency's evaluation of past performance discussed above, the
   evaluation of technical proposals, including determinations regarding the
   magnitude and significance of evaluated strengths and weaknesses, is a
   matter largely within the agency's discretion, and a protester's mere
   disagreement with the agency's judgment does not establish a basis for our
   Office to sustain a protest. C. Lawrence Const. Co., Inc., B-287066, Mar.
   30, 2001, 2001 CPD para. 70 at 4.

   Here, although Pemco points to the solicitation's definition regarding the
   requirements for a "Blue/Exceptional" rating, it overlooks the similar
   definition regarding the requirements for a "Green/Acceptable" rating. In
   this regard, the solicitation stated: "A proposal rated green[/acceptable]
   must have no deficiencies, but may have one or more strengths." RFP at 80.
   Accordingly, the solicitation clearly provided that in situations where a
   proposal received one or more "strengths," either a "Blue/Exceptional" or
   "Green/Acceptable" rating could properly be assigned. On this record,
   there is no merit to Pemco's assertion that the agency's failure to assign
   a "Blue/Exceptional" rating under any subfactor for which Pemco's proposal
   contained evaluated strengths "violated the RFP's express terms."

   To the extent Pemco's protest otherwise challenges the reasonableness of
   the agency's subjective judgments in assigning Pemco "Green/Acceptable"
   ratings under those subfactors, we have reviewed the record, and find that
   Pemco's complaints constitute mere disagreement with those judgments; as
   such, they provide no basis for sustaining the protest.

   Cost/Price Evaluation

   Pemco next protests that the agency failed to reasonably evaluate the
   realism of changes Boeing made in its final proposal revisions with regard
   to [deleted].[18] Here, the solicitation specifically provided that the
   agency would assess the realism of [deleted]; yet, the agency's
   procurement record fails to reflect a reasonable analysis of [deleted] in
   Boeing's final proposal revisions.

   As discussed above, although the solicitation contemplated award of a
   fixed-price contract, offerors were required to provide certain cost data
   regarding "labor, fringe benefits, overhead and G&A rates by year for all
   labor categories anticipated for use in the performance of this effort."
   Further, the solicitation specifically provided that "evaluation of [this
   required data] will be used to determine reasonableness and realism of the
   prices." Id. at 86.

   In the September 2006 proposal Boeing submitted after severing its
   partnership with Pemco, Boeing stated that its proposal reflected
   implementation of [deleted].[19] AR, Tab 22, at V3-49.[20] Boeing's
   September 2006 proposal contained a relatively detailed explanation of
   this [deleted] and its application to performance of the solicitation
   requirements. Id. at V3-45 though V3-57. Based on [deleted], Boeing's
   September 2006 proposal reflected [deleted],[21] and also reflected
   [deleted]. Id. at V3-57.

   During discussions with Boeing, following submission of the September 2006
   proposal, the agency asked Boeing to further explain the basis for
   [deleted]."[22] Boeing responded, stating:

     [deleted].

   AR, Tab 23, EN No. B4-AMD-8, at 6.

   Nonetheless, in its subsequently-submitted FPR (February 2007) and second
   FPR (June 2007), Boeing [deleted]. Boeing's proposed price in those
   revisions reflected [deleted]. AR, Tab 27, FPR, at V3-57; Tab 30, SFPR, at
   V3-56. There is no dispute that the effect of this change reduced Boeing's
   proposed price by more than the [deleted] difference between Boeing's and
   Pemco's final total evaluated prices, on which the source selection
   decision was based.[23]

   Notwithstanding this [deleted] change in [deleted], Boeing's final
   proposal revisions reflected no explanation supporting that change, other
   than the following two sentences.

     [deleted].

   Id.

   That is, Boeing's final proposal revisions did not reflect changes to its
   technical approach or [deleted]. Indeed, in responding to Pemco's protest
   regarding this matter, Boeing expressly acknowledges that the [deleted]
   were not connected in any way to a technical change in its proposed
   approach to contract performance, stating: "Boeing decided for business
   reasons to assume the risk [associated with [deleted]]." Boeing
   Post-Hearing Comments at 40-41.

   Despite Boeing's own acknowledgment that its final proposal revisions
   created risk, and that this risk was created "for business reasons," the
   record contains no documentation of any agency evaluation that considers
   whether Boeing's revised [deleted] are realistic. The absence of agency
   documentation addressing this matter is striking in light of the fact that
   Boeing's revised assumptions not only depart, without explanation, from
   its initial approach--but they appear directly contrary to the agency's
   own view regarding [deleted] for the [deleted] KC-135 aircraft fleet.

   Specifically, the record contains a document titled "Talking Paper on
   C/KC-135 PDM Recompetition Source Selection," which was prepared in June
   2006 by the agency's SSET chair and the KC-135 System Program
   Director.[24] This "Talking Paper" states that the agency expects
   [deleted]. AR, Tab 46, "Final Version" of Talking Paper on C/KC 135 PDM
   Recompetition Source Selection, at 1. Moreover, this document states that
   such [deleted].[25] Id. Finally, this document states: [deleted]. Id.

   Thus, in contrast to the agency's projection of [deleted], Boeing's
   proposal assumes [deleted]. For example, although the agency has projected
   that [deleted], Boeing's final proposal revisions assume that [deleted].
   AR, Tab 30, at V3-57.

   As noted above, the solicitation expressly provided that the agency would
   evaluate the realism of the offerors' proposed prices, and that such
   analysis would include consideration of an offeror's [deleted]. RFP at 86.
   Further, the solicitation provided that the agency would also assess
   proposal risk, including an assessment of whether an offeror's proposed
   approach has potential for "disruption of schedule, increased cost,
   degradation of performance, and the need for increased Government
   oversight, as well as the likelihood of unsuccessful contract
   performance." Id. at 82.

   It appears beyond reasonable dispute that, even in the context of a
   fixed-price contract, an offeror's proposed approach that [deleted] could
   create risks of [deleted].

   In order for our Office to meaningfully review an agency's evaluation, the
   agency must have adequate documentation to support its various judgments.
   Where an agency fails to create or retain documentation regarding its
   evaluation assessments, it bears the risk that our Office will be unable
   to determine whether the agency's judgments were reasonable. Southwest
   Marine, Inc.; American Sys. Eng'g Corp., B-265865.3, B-265865.4, Jan. 23,
   1996, 96-1 CPD para. 56 at 10.

   Here, the agency's evaluation record includes no meaningful documentation
   addressing the unexplained changes in Boeing's assumptions between
   submission of its initial proposal and its subsequent proposal revisions.
   Specifically, the record contains no documentation regarding any agency
   consideration of the basis for Boeing's changed [deletion], how Boeing's
   revised [deleted] correspond to the reality of the [deleted], how the
   revised [deleted] correspond to the agency's own [deleted] projections, or
   whether Boeing's revised [deleted] are likely to create [deleted].
   Accordingly, on the record here, we are unable to determine whether the
   agency reasonably concluded that Boeing's proposed price is realistic, or
   whether the agency's assessment of "low risk" for Boeing's proposal, under
   each of the mission capability subfactors, is reasonable in light of
   Boeing's revised [deleted]. Since we are unable to determine whether the
   agency reasonably performed a price realism analysis, or properly
   considered the potential risk flowing from Boeing's revised [deleted], we
   sustain the protest on this basis.[26]

   Alleged Organizational Conflicts of Interest

   Next, Pemco protests that Boeing had a "disqualifying OCI" because "the
   RFP identified Boeing as a consultant to the Air Force on this
   procurement." Protest at 43-46; Pemco Comments on Agency Report, at 69-69.
   In this regard, section K of the solicitation contained the following
   provision under the heading "Use of Non-Government Advisors":

     (a) Offerors are advised that technical and cost/price data submitted to
     the Government in response to this solicitation may be released to
     non-Government advisors for review and analysis. The non-Government
     advisor support will be provided by:

                      *        *        *        *        * 

     Boeing Aerospace Operations, Inc.*

                      *        *        *        *        * 

     *NOTE: Boeing will only be used for technical questions which the Source
     Selection Team may not be able to answer and those individuals at Boeing
     who are responsible for answering the questions will sign Non-Disclosure
     Agreements.

   RFP at 51-52.

   Pemco did not object to the reach of this provision at any time prior to
   filing its post-award protest with our Office. Accordingly, to the extent
   its protest challenges the provision itself, the protest is untimely. 4
   C.F.R. sect. 21.2(a)(1) (2007).

   In any event, in responding to Pemco's protest, the agency specifically
   states that it did not use Boeing as a consultant and that no Boeing
   employee was ever consulted for technical or other information in
   connection with the agency's evaluation of proposals; this information was
   also provided to Pemco during its debriefing. Contracting Officer's
   Statement at 25. Pemco's protest expressly acknowledged that "the Air
   Force has indicated that it did not use Boeing as a consultant," Protest
   at 45, and Pemco did not challenge that agency representation either
   during its post-award debriefing, or in its initial protest to our Office.

   Despite not having raised an earlier challenge to the agency's
   representation, with its comments following receipt of the agency report,
   Pemco submitted a declaration from one of its employees essentially
   asserting, based on purported statements of a Boeing employee, that the
   agency's representations regarding use of Boeing as a consultant during
   the procurement are not truthful. Pemco's assertions in this regard fail
   to comply with our Office's timeliness requirements. 4 C.F.R. sect.
   21.2(a)(2). Nonetheless, to ensure that we had a complete record on this
   matter, we requested a response from the agency. The agency responded to
   our request by submitting declarations from the SSAC chair and the KC-135
   Program Manager that directly address Pemco's declaration, and
   categorically deny Pemco's accusations.

   Government officials are presumed to act with honesty and in good faith,
   and a protester's contention that contracting officials have acted
   dishonestly or in bad faith must be supported by convincing proof; we will
   not attribute dishonesty or prejudicial motives to procurement officials
   on the basis of inference or supposition. See, e.g., Worldwide Language
   Res., Inc., B-297210 et al., Nov. 28, 2005, 2005 CPD para. 211 at 4.

   Where as here, Pemco offers no evidence supporting its accusations, other
   than referencing statements purportedly made by Boeing personnel, we will
   not sustain the protest on the basis of these allegations. Further, we
   have considered all of Pemco's various other OCI allegations and conclude
   that they provide no basis for sustaining the protest.[27]

   Alleged Procurement Integrity Violation

   Finally, Pemco protests that the agency failed to investigate a matter
   that Pemco maintains is a potential violation of the procurement integrity
   provisions of the Office of Federal Procurement Policy Act, 41 U.S.C.
   sect. 423. In this regard, Pemco asserts that Boeing may have misused
   Pemco's proprietary information in preparing its proposal, that Pemco
   advised the agency of such potential misuse, and that the agency was
   obligated to investigate the matter, but did not.

   On September 6, 2007, the day before Boeing was selected for award,
   Pemco's president wrote a letter to the contracting officer expressing
   concern about Boeing's "access" to Pemco's proprietary information due to
   Boeing and Pemco's prior relationship as prime contractor/subcontractor.
   That letter referenced a June 2005 non-disclosure agreement (NDA) between
   Boeing and Pemco,[28] expressed concern that "Boeing personnel with
   knowledge of Pemco's proprietary pricing information assisted in the
   preparation of Boeing's proposal," [29] and that Boeing had not met its
   obligations under the NDA to adequately "safeguard" Pemco's proprietary
   information. Letter from Pemco to Contracting Officer (Sept. 6, 2007), at
   1-4. The letter also requested that the agency "conduct an inquiry" into
   Boeing's handling of Pemco information. Id.

   On September 7, following a conversation with the contracting officer,
   Pemco's president retracted the letter, stating in an email that: "Pemco
   is sorry for any confusion the attached letter may have caused you and
   hereby, officially retracts it." Email from Pemco to Contracting Officer
   (Sept. 7, 2007). The parties do not agree as to whether the contracting
   officer requested that Pemco withdraw the letter during the preceding
   conversation.

   Pemco maintains that, notwithstanding its retraction of the September 6
   letter, the contracting officer had an obligation to conduct an
   investigation, based on the contracting officer's knowledge of the
   information contained in the letter, [30] along with what Pemco describes
   as "the remarkable similarity" of the two proposals.[31] Protest at 39.
   For the reasons discussed below, Pemco's assertions regarding this matter
   do not provide a basis to sustain the protest.

   The procurement integrity provisions of the Office of Federal Procurement
   Policy Act contain two restrictions related to disclosing or obtaining bid
   or proposal information. [32] 41 U.S.C. sect. 423(a),(b). First, the Act
   prohibits a government official from "knowingly disclos[ing] contractor
   bid or proposal information . . . before the award of a Federal agency
   procurement contract to which the information relates." 41 U.S.C.
   sect. 423(a). Second, the Act provides that "a person shall not, other
   than as provided by law, knowingly obtain contractor bid or proposal
   information . . . before the award of a Federal agency procurement
   contract to which the information relates." 41 U.S.C. sect. 423(b). Under
   the heading "Savings provisions," the Act expressly provides: "This
   section does not . . . restrict a contractor from disclosing its own bid
   or proposal information or the recipient from receiving that information."
   41 U.S.C. sect. 423(h).

   Here, there was never any suggestion that any government official
   disclosed Pemco's proprietary information, nor that Boeing wrongfully
   obtained it. To the contrary, in pursuing this matter, Pemco specifically
   discusses agency efforts to assist Pemco in protecting Pemco's proprietary
   information during performance, as a Boeing subcontractor, of the
   predecessor contract. Accordingly, to the extent Boeing obtained Pemco's
   proprietary information, it appears clear that Pemco provided it
   voluntarily, pursuant to its prior relationship with Boeing, and that the
   facts here fall squarely within the Act's "Savings provision" which
   states: "This section does not . . . restrict a contractor from disclosing
   its own bid or proposal information or the recipient from receiving that
   information." Id. It is also clear that Pemco's only complaint is that
   Boeing failed to properly "safeguard" Pemco's information, as required by
   the terms of the NDA. To the extent Pemco believes that Boeing failed to
   comply with the terms of the parties' NDA, the matter constitutes a
   private dispute. On the record here, Pemco's allegations regarding this
   matter do not provide a basis for sustaining its protest.

   CONCLUSION

   In summary, we sustain the protest with regard to the agency's evaluation
   of cost/price. With the exception of alleged bias, as discussed above, we
   deny all of Pemco's other protest grounds, including those concerning the
   agency's evaluation of past performance and mission capability, alleged
   OCIs, and the alleged procurement integrity violation.

   RECOMMENDATION

   As discussed above, the agency's procurement record contains no
   documentation regarding a realism analysis of the [deleted] Boeing
   incorporated into its final proposal revisions--nor does the record
   contain any evidence that the agency considered the risk created by
   Boeing's revised [deleted]. Accordingly, we recommend that, as required by
   the RFP, the agency perform and document a realism assessment regarding
   Boeing's [deleted], along with a risk assessment regarding the potential
   for [deleted]. Following that realism and risk analysis, the agency should
   make a new source selection decision, and if the agency determines a
   proposal other than Boeing's represents the best value to the government,
   the agency should terminate Boeing's contract and make an award to that
   other offeror. We further recommend that the agency reimburse the
   protester the reasonable costs of filing and pursuing its protest,
   including reasonable attorneys' fees. The protester's certified claim for
   costs, detailing the time expended and the costs incurred, must be
   submitted to the agency within 60 days of receiving this decision. 4.
   C.F.R. sect. 21.8(f)(1).

   Gary L. Kepplinger
   General Counsel

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

   [1] Pemco's protest submissions also suggested potential bias on the part
   of Charles Riechers, who was appointed as the source selection authority
   (SSA) in May 2007, a few months prior to Boeing's selection for award. As
   the parties have been advised, our decision here does not express any
   opinion regarding this matter. By way of background, Pemco's protest was
   filed on September 19, 2007. On October 1, the Washington Post reported
   that, immediately prior to his employment with the Air Force, Mr. Riechers
   held what was described by the newspaper as a "no-work contract" with
   Commonwealth Research Institute, a subsidiary of Concurrent Technologies
   Corporation (CTC). Letter from Pemco to GAO (Oct. 11, 2007), attach. 1. On
   October 11, Pemco filed a protest submission with our Office that
   referenced the October 1 article, noted that CTC's Internet website listed
   a Boeing company as a CTC client, and suggested that, due to Mr. Riechers'
   recent arrangement with CTC's subsidiary, he may have been biased in favor
   of Boeing, a CTC client.

   On October 14, Mr. Riechers was found dead, an apparent suicide. It was
   subsequently reported that Air Force officials believed Mr. Riechers'
   apparent suicide was linked in some manner to the October 1 Washington
   Post article and Pemco's October 11 protest submission. Letter from Pemco
   to GAO (Oct. 24, 2007), attach. 2. On October 24, Pemco filed another
   protest submission, complaining that the Air Force was improperly
   "pressing forward with its defense of the Boeing award without first
   conducting a full and proper inquiry" into the circumstances leading to
   Mr. Riechers' death. On November 1, our Office requested that the Air
   Force advise us as to ongoing inquiries/investigations that would address
   the factors or motivations leading to Mr. Riechers' death, and requested
   production of documents relevant to that issue for GAO's in camera review.
   On November 6, the Air Force advised our Office that the Loudon County
   Sheriff's Office (LCSO), in conjunction with federal government
   investigative authorities, was conducting an ongoing investigation to
   determine the "root cause" of Mr. Riechers' death, and further provided an
   LCSO statement expressing the view that release of any evidence relating
   to that ongoing investigation was inappropriate.

   On November 7, we advised the parties that, in light of the ongoing
   investigation being conducted by both local and federal authorities, and
   consistent with our Office's past practice, see, e.g., JWK Int'l Corp.,
   B-296969.3, Jan. 5, 2006, 2006 CPD para. 17 at 3 n.4; Oceaneering Int'l,
   Inc., B-278126, Dec. 31, 1997, 98-1 CPD para. 133 at 1 n.1; Complere Inc.,
   B-257946, Nov. 23, 1994, 94-2 CPD para. 207 at 6 n.4, our bid protest
   decision would not address the allegation of bias on Mr. Riechers' part.

   [2] The agency states that "[p]ending KC-135E retirements and decisions
   made by the Air Force to increase the number of KC-135 aircraft to be
   input into the organic PDM facility at Tinker Air Force Base . . .
   resulted in a reduction to the BEQ [best estimated quantity] from 44 to 24
   and a reduction in the maximum quantity from 60 to 48." Agency Report, Tab
   6, Proposal Analysis Report (PAR) at 2.

   [3] In a subsequent letter to the Air Force, Boeing stated: "Boeing has
   severed our relationship with Pemco Aeroplex. The parties have determined
   that the program is no longer viable with two sources of repair." Boeing
   Letter to the Air Force (Sept. 8, 2006).

   [4] Offerors were advised that mission capability, proposal risk, and past
   performance were of equal importance and that, when combined, these
   factors were "significantly more important" than cost/price. RFP at 79.

   [5] The solicitation provided that depot maintenance, supply chain
   management, and transition were of equal importance and, individually,
   were more important than either program management or small business, and
   that small business was the least important subfactor. Id.

   [6] The solicitation provided for ratings of "Blue/Exceptional,"
   "Green/Acceptable," "Yellow/Marginal," and "Red/Unacceptable." Id. at 80.

   [7] The solicitation provided for assessments of "high confidence,"
   "significant confidence," "satisfactory confidence," "little confidence,"
   and "no confidence" based on the offeror's past performance record. Id. at
   84. The solicitation also provided for an "unknown confidence" rating
   where an offeror did not have a past performance record. Id.

   [8] A third proposal was submitted by another offeror; the agency's
   evaluation of that proposal is not relevant to this protest, and is not
   further discussed.

   [9] The SSET included the technical team, the cost/price team, and the
   performance confidence assessment group (PCAG). Agency Report (AR), Tab 6,
   Proposal Analysis Report (PAR), at 4.

   [10] [deleted]

   [11] [deleted]

   [12] [deleted]

   [13] Adjusting the Price and Restructuring the KC-135 Depot Maintenance
   Contract, DODIG Report No. D-2006-088 (May 18, 2006).

   [14] This Office conducted a protest hearing on November 8 and 9, 2007,
   during which testimony was provided by the agency's contracting officer,
   the PCAG chair, and a cost/price analyst.

   [15] Although Pemco disagrees with the agency's judgments as to whether
   certain aspects of the report reflect negative past performance
   attributable to Boeing, there can be no dispute that the agency considered
   the entire report in performing its past performance evaluation.

   [16] As noted above, the SSA considered Boeing's rating to be [deleted].

   [17] As noted above, Pemco's rating was considered to be at "the high end"
   of a "satisfactory" confidence rating.

   [18] The solicitation requirements are divided into three types of work:
   basic PDM work (work that is performed on all aircraft), intermittent
   tasks (IT) (tasks that are recurring, but not performed on all aircraft),
   and "over and above" (O&A) work (unanticipated repairs that exceed 200
   labor hours or $20,000 in material costs). Tr. at 10; Performance Work
   Statement (PWS) at 17. There is no dispute that basic PDM work constitutes
   a significant majority of the contract requirements.

   [19] Boeing's proposal described [deleted].

   [20] Boeing's October 2005 proposal, submitted jointly with Pemco, also
   reflected the [deleted].

   [21] Boeing [deleted].

   [22] The agency asked: [deleted]. AR, Tab 23, EN No. B-4-AMD-8, at 6.

   [23] Counsel for the parties and their various consultants disagree on the
   cost/price impact of Boeing's [deleted]. Boeing's representatives state
   that the impact is [deleted] or "approximately [deleted]"; Pemco's
   representatives assert that the impact is at least [deleted]. Email from
   Boeing Counsel to GAO (Dec. 13, 2007); Email from Pemco Counsel to GAO
   (Dec. 13, 2007). For purposes of this decision, we need not determine the
   precise cost/price impact, since the parties agree that the amount is
   greater than the [deleted] difference between the two offerors' total
   evaluated prices.

   [24] Under the heading "Purpose," this document states: "Ensure Air Force
   senior leadership is aware of important factors and considerations with
   respect to the current KC-135 PDM recompetition source selection."

   [25] The record also contains a slide from the "C/KC-135 Roadmap
   Conf[erence] Feb 06" which reflects [deleted]. Pemco Comments on Agency
   Report, Oct. 29, 2007, attach. V.

   [26] Pemco also protests that the agency's cost/price evaluation was
   unreasonable with regard to the realism of Boeing's [deleted] estimates
   and that the proposal was unbalanced [deleted]. Our review of the record
   regarding those issues does not provide a basis to sustain the protest.
   Nonetheless, in light of our recommendation that the agency evaluate the
   realism and risk associated with the [deleted] introduced in Boeing's
   final proposal revisions, the agency may wish to also reconsider the
   realism of other aspects of Boeing's final proposal revisions, including
   its [deleted] estimates and the potential risk associated with Boeing's
   pricing with regard to the [deleted] portions of the solicitation
   requirements.

   [27] Among other things, Pemco protests that an OCI was created in
   connection with a solicitation requirement regarding a licensing fee for
   use of Boeing's technical data. By way of background, Boeing owns
   technical data rights with regard to data necessary to perform some of the
   contract requirements. The solicitation provided that offerors, other than
   Boeing, would be required to pay $149,000 per aircraft for use of this
   data. Pemco complains that L-3 Communications, Inc., a Boeing
   subcontractor, was one of several commercial entities with which the
   agency consulted in establishing the fee and, therefore, that Boeing
   should have been disqualified on the basis of an OCI. The record shows
   that the agency approached several industry representatives, including
   Goodrich, American Airlines, and Northrop Grumman, along with L-3, and
   determined that licensing fees for use of the technical data at issue here
   generally ranged from 3% to 5% of the contract price. Here, the licensing
   fee represents less than 3% of Pemco's average price per aircraft. Pemco
   did not object to the solicitation's licensing fee provisions prior to
   submitting its proposal, nor has it argued that the fee is inconsistent
   with industry standards. On this record, Pemco's complaints regarding the
   agency's consideration of input from L-3 do not provide a basis for
   sustaining the protest.

   [28] The NDA was executed in conjunction with the parties' preparation of
   a joint proposal to perform the KC-135 PDM requirements pursuant to their
   prior prime contractor/subcontractor relationship; that joint proposal was
   submitted in October 2005. The NDA states that the purpose of the
   agreement is to "set forth the rights and obligations of the parties with
   respect to the use, handling, protection, and safeguarding of Proprietary
   Information which is disclosed by and between the parties relating to the
   KC-135." Pemco Hearing Documents, Tab 45, NDA para. 1.

   [29] Contrary to the implication in the letter, the NDA does not appear to
   preclude either Pemco or Boeing personnel from assisting in the
   preparation of their separate proposals. See NDA para.12 ("This
   restriction will not preclude a party's employees who have had access to
   the other party's Proprietary Information from participating in the
   subsequent independent contract, so long as appropriate safeguards are in
   place.")

   [30] Section 3.104-7 of the FAR provides: "A contracting officer who
   receives or obtains information of a violation or potential violation of
   [procurement integrity provisions] must determine if the reported
   violation or possible violation has any impact on the pending award or
   selection of the contractor."

   [31] Our review of the record does not support Pemco's assertion regarding
   "the remarkable similarity" of the two proposals. Indeed, other than
   [deleted], the two proposals differ markedly.

   [32] The Act also restricts other activities that are not related to
   disclosing or obtaining bid or proposal information. 41 U.S.C. sect.
   423(c),(d).