TITLE: B-310436; B-310436.2, Recon Optical, Inc., December 27, 2007
BNUMBER: B-310436; B-310436.2
DATE: December 27, 2007
************************************************************
B-310436; B-310436.2, Recon Optical, 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: Recon Optical, Inc.
File: B-310436; B-310436.2
Date: December 27, 2007
David J. Taylor, Esq., and William J. Spriggs, Esq., Spriggs &
Hollingsworth, and Bradford E. Biegon, Esq., and Katherine A. Allen, Esq.,
for the protester.
Richard H. Streeter, Esq., and Scott E. Pickens, Esq., Barnes & Thornburg
LLP, for Kongsberg Defence & Aerospace AS, an intervenor.
Daniel Pantzer, Esq., and Frank DiNicola, Esq., Department of the Army,
for the agency.
Sharon L. Larkin, Esq., and James A. Spangenberg., Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency's decision not to select protester's proposal for award is
unobjectionable, where the proposal was reasonably assessed the lowest
possible ratings ("red" or "high risk") under the three most important
evaluation factors and was higher in price than the other proposals, which
were technically superior.
DECISION
Recon Optical, Inc. (ROI) protests the award of a contract to Kongsberg
Defence & Aerospace AS by the Department of the Army under request for
proposals (RFP) No. W15QKN-06-R-1409, for common remotely operated weapon
stations (CROWS). ROI challenges the evaluation of its and Kongsberg's
proposals under each of the evaluation factors.
We deny the protest.
BACKGROUND
The CROWS is a multi-vehicle weapon mounting and control system that
attaches to the top of an armored vehicle and allows the gunner to remain
inside the vehicle while firing the weapon. This remote weapon station is
to be capable of mounting various small to medium caliber machine guns
(the MK19 grenade machine gun, M2 HB machine gun, M240B machine gun, or
M249 squad automatic weapon) and is to include, at a minimum, the weapon
mount above the roof with sensors, fire control processor, display and
controls, and other associated hardware. RFP, Executive Summary, at 7;
Statement of Work, at 29. The specific requirements and capabilities of
the proposed CROWS were contained in a detailed statement of work and
performance specifications that were included with the RFP. Among other
things, the CROWS was to provide remote day and night sighting, ballistic
control capability, remote weapon charging, and first burst engagement of
targets at the maximum effective range of the weapon. Agency Report (AR),
Tab 3, Award Decision Document, at 1.
The RFP provided for award of a fixed-price,
indefinite-delivery/indefinite-quantity (ID/IQ) contract (with
time-and-material line items for depot operations). The RFP contemplated
six "ordering periods": the first beginning on the date of contract award
and ending on December 31, 2007, followed by four 1-year ordering periods,
and concluding with a period running from January 1 to August 12, 2012.
RFP sect. B. Production deliveries were to start 6 months after the first
delivery order award at a rate of 30 CROWS per month, with a production
rate ramp up by December 2007 to a minimum capacity of 100 CROWS per
month. Id. sect. F. The solicitation stated that a minimum quantity of
1,000 CROWS and a maximum quantity of 6,500 CROWS would be ordered over
the life of the contract. Id. sect. B.
The RFP announced that the evaluation would be conducted in two phases,
each with its own evaluation factors. "Phase I" (not challenged here)
reviewed physical characteristics to determine eligibility for "Phase II,"
and Phase II (which is the subject of this protest) evaluated proposals
and bid sample testing for award. RFP sections M.1, M.7, M.8. The Phase II
evaluation criteria announced that award would be made on a best value
basis considering the following factors, listed in descending order of
importance: technical, schedule, management, logistic support, price,
government purpose license rights (GPLR), past performance, and small
disadvantaged business.[1] Id. sect. M.5. The technical, management, and
logistic support factors each contained a number of equally rated
subfactors. Id. sect. M.6. The RFP stated that proposals would be given
adjectival ratings (major strength, strength, weakness, major weakness)
for each of the subfactors, and color ratings (blue, green, amber, red)
for each of the factors, and included the rating definitions for each
factor and subfactor in the solicitation.[2] Id. sections M.9.1, M.11.
The RFP required each offeror to provide a "bid sample," which was to be
identical to the CROWS production system unit offered. The solicitation
stated that each sample would be tested to "determine if the proposed
design meets the minimum standards as specified in the solicitation and
then competitively evaluated against the evaluation plan."[3] Id.,
Executive Summary, at 7. After each "test event," any "unexpected
incidents, potential failures or unexplained events"[4] that occurred
during testing were to be reported to the offerors in a "Test Incident
Report" (TIR), and each offeror was to be given an opportunity to diagnose
the failure and make repairs before the next test event. Id. sect. M.8.1.
Bid sample testing was to be conducted concurrently with proposal
evaluation.
As is relevant here, ROI and Kongsberg based their proposals and bid
samples on existing CROWS systems that each firm had provided under prior
contracts, with modifications or proposed modifications to meet the RFP
requirements. ROI's proposed CROWS was based on a system it provided under
predecessor contracts[5] (which had similar, but not identical,
requirements to those here), and ROI asserts that it has fielded over 250
systems in Iraq since it was awarded the initial contract in 2000. ROI's
Comments at 58. Since February 2007, however, no units have been fielded;
the agency has issued ROI a show cause letter and termination for default
cure notice due to performance problems. Kongsberg's Comments, attach. 2,
Army's Stay Override, at 3. Kongsberg's proposed CROWS was based on its
"M151 Protector," which has been in full scale production since 2001; more
than 1,500 systems have been delivered to the Army through the Stryker
program, and over 1,000 have been fielded in Iraq since 2003. Kongsberg's
Comments, attach. 3, Declaration of Kongsberg's Vice President, paras.
2-3.
Three offerors, including ROI and Kongsberg, were invited to participate
in Phase II of the competition after submitting proposals and bid samples
for evaluation.[6] Proposals and bid sample testing were evaluated by a
source selection evaluation board (SSEB), which consisted of separate
technical, schedule, management, logistics, price, GPLR, past performance,
and small disadvantaged business teams.[7] After initial evaluations,
offerors were provided the technical evaluation reports of their proposals
and were invited to participate in discussions. Offerors were issued
written "items for negotiation" (IFN) that identified weaknesses and major
weaknesses in their proposals under each of the evaluation factors and
subfactors; some of these addressed failures or concerns identified during
bid sample testing as reported in TIRs. Each offeror responded to the IFNs
and discussion issues in their final proposal revisions (FPR). The SSEB
evaluated FPRs against the stated evaluation criteria and reported its
findings to a source selection advisory committee (SSAC) and the source
selection authority (SSA).[8] The SSAC performed a comparative analysis of
proposals and provided its analysis to the SSA. The SSA adopted the
findings of the SSEB and SSAC and rated proposals as follows:
+------------------------------------------------------------------------+
| | Kongsberg | ROI |
|------------------------------------+-----------------+-----------------|
|Technical | Blue | Red |
|------------------------------------+-----------------+-----------------|
| |Vehicle Interfaces | Strength | Major Weakness |
| |---------------------------------+-----------------+-----------------|
| |Weapon Installation & Operation | Major Strength | Strength |
| |---------------------------------+-----------------+-----------------|
| |Target Acquisition | Strength | Strength |
| |---------------------------------+-----------------+-----------------|
| |Accuracy & Boresight Retention | Major Strength | Strength |
| |---------------------------------+-----------------+-----------------|
| |Stabilization | Strength | Weakness |
| |---------------------------------+-----------------+-----------------|
| |Temperature | Major Strength | Major Weakness |
| |---------------------------------+-----------------+-----------------|
| |Safety | Major Strength | Weakness |
| |---------------------------------+-----------------+-----------------|
| |Reliability | Major Strength | Major Weakness |
|------------------------------------+-----------------+-----------------|
|Schedule | Low Risk | High Risk |
|------------------------------------+-----------------+-----------------|
|Management | Blue | Red |
|------------------------------------+-----------------+-----------------|
| |Program Management Plan | Major Strength | Weakness |
| |---------------------------------+-----------------+-----------------|
| |Subcontractor Management Plan | Major Strength | Major Weakness |
| |---------------------------------+-----------------+-----------------|
| |Software Management Plan | Weakness | Major Weakness |
| |---------------------------------+-----------------+-----------------|
| |Quality Management Plan | Major Strength | Major Weakness |
|------------------------------------+-----------------+-----------------|
|Logistic Support | Blue | Green |
|------------------------------------+-----------------+-----------------|
| |Depot Level Operations | Major Strength | Strength |
| |---------------------------------+-----------------+-----------------|
| |Fielding & Operational Support | Strength | Strength |
|------------------------------------+-----------------+-----------------|
|GPLR | Blue | Amber |
|------------------------------------+-----------------+-----------------|
|Past Performance | Low Risk | Moderate Risk |
|------------------------------------+-----------------+-----------------|
|Small Disadvantaged Business | Green | Blue |
|------------------------------------+-----------------+-----------------|
|Evaluated Price | $513,270,432.40 | $539,446,515.80 |
+------------------------------------------------------------------------+
AR, Tab 3, Award Decision Document, at 8.[9] The SSA discussed in detail
the merits of each offeror's proposal under each of the evaluation
factors, then determined not to award the contract to ROI because ROI
received either a "red" or "high risk" rating under the three most
important factors. According to the SSA,
This represents a strong lack of confidence in the ability of the Recon
Optical system to meet the Government requirements. It also raises
uncertainties regarding their ability to meet schedule, resulting in
delayed fielding of the Urgent Material Release (UMR) item with
attendant increase in expenditure of [government] resources. Recon
Optical was also the highest evaluated price among all the offerors.
Based on this analysis[,] I have determined not to award to Recon
Optical.
Id. at 20. The SSA performed a best value tradeoff between the proposals
of Kongsberg and the other competing offeror (which received the second
highest technical rating and was the lowest in price) and selected
Kongsberg for award.
This protest followed.
DISCUSSION
ROI protests the ratings assigned to its proposal under each of the
evaluation factors, as well as each of the "weakness" and "major weakness"
ratings assessed under the subfactors, and contends that its proposal was
evaluated disparately to Kongsberg's. In reviewing protests of an agency's
evaluation, our Office does not reevaluate proposals, but instead examines
the record to determine whether the agency's judgment was reasonable and
in accord with the RFP criteria. Abt Assocs., Inc., B-237060.2, Feb. 26,
1990, 90-1 CPD para. 223 at 4. Offerors have the burden of submitting an
adequately written proposal, and it runs the risk that its proposal will
be evaluated unfavorably when it fails to do so. Beck's Spray Serv., Inc.,
B-299599, June 18, 2007, 2007 CPD para. 113 at 3. Mere disagreement with
the agency's conclusions does not render the agency's judgment
unreasonable. UNICCO Gov't Servs., Inc., B-277658, Nov. 7, 1997, 97-2 CPD
para. 134 at 7.
In response to the protests, the agency has provided a detailed and
voluminous record illustrating that the agency performed a comprehensive
evaluation and assessed ratings in a fair and equitable manner that was
consistent with the RFP's stated evaluation criteria. The extensive record
shows that ROI's proposal and the results of bid sample testing raised
serious doubts that ROI's proposed CROWS would be able to meet the
requirements of the solicitation in accordance with the required schedule,
and ROI did not satisfactorily address the agency's concerns during
discussions. In contrast, Kongsberg provided a technically superior
proposal at a lower price, and thus its proposal was reasonably selected
for award. We have considered each of the protester's numerous arguments
and find them to be without merit, although we discuss here only the three
most heavily weighted factors.[10] As we explain, ROI's proposal was
reasonably given the lowest possible ratings ("red" or "high risk") under
the three most important factors, which provided a reasonable basis for
the agency not to select the proposal for award.
Technical Factor
ROI complains that its proposal should not have received a "red" rating
under the technical factor, or "weakness" or "major weakness" ratings
under the technical subfactors.
For example, under the vehicle interfaces subfactor, ROI's proposal was
assessed a "major weakness" rating because
Recon Optical's bid sample did not operate successfully at 20 VDC [volts
direct current] during bid sample testing and a critical message
instructing the user to shut down the system was displayed. Recon
Optical stated in its [FPR] that it has initiated corrective actions to
address bid sample voltage input test failures as evidenced in [TIRs].
No root cause analysis[[11]] was provided to support these corrective
actions . . . Also Recon Optical had ECP [Engineering Change Proposal]
changes required which raised the issue that weight may be over 400
[pounds] when included. Weight reduction ECPs were not documented.
AR, Tab 3, Award Decision Document, at 9. ROI complains that the "major
weakness" rating was not warranted because its proposed CROWS, in fact,
weighed less than 400 pounds, and the inability to operate at 20 VDC was
an intentional "safety feature" of the proposed CROWS that could easily be
modified with a design change. ROI's Comments at 14, 17.
The RFP defined a "major weakness" rating for this subfactor as:
System weight for the external components above the roof is more than
400 [pounds] not including the weapon and ammunition and the Offeror has
not provided a plan with sufficient detail and analysis on how the
weight will be reduced to less than 400 [pounds] without any negative
impacts to overall performance. OR [t]he bid sample System did not
operate effectively and/or safely between the ranges of 20-30 Volts DC
and sufficient evidence has not been provided to demonstrate with high
confidence that the system will be capable of meeting this requirement
prior to delivery.
RFP sect. M.11.1.a. Thus, a major weakness rating would be reasonable if
the agency identified either a weight or a voltage issue described above.
Here, ROI admits that its system did not operate at 20 VDC, and its FPR
response to an IFN on this issue explains only that "[c]orrective actions
have been initiated" through design changes that are being tested. ROI's
Response to IFN 212 at 1-14. ROI's proposal did not explain that the
failure was an intentional safety feature, as ROI now alleges in its
protest, or provide any "root cause analysis" of this problem, and the
proposal did not contain explanation or evidence to "demonstrate with high
confidence" that the system would be capable of meeting this requirement
prior to delivery. Thus, we find that the record supports the agency's
assessment of a "major weakness" rating under the vehicle interface
subfactor on this issue alone.
We find the agency's conclusions with regard to weight under this
subfactor also to be reasonable. Again, our review of the record confirms
that although ROI asserted in its FPR that the weight of the proposed
CROWS would be less than 400 pounds after implementation of all "existing
and planned design modifications" as a result of numerous ECPs, ROI's
Response to IFN 174 at 1-425, the offeror did not provide sufficient
detail regarding the effects of the ECPs on performance, or testing
analysis to support its assertion the ECPs would in fact reduce the weight
as asserted. Thus, the agency could reasonably conclude that there "may"
be an issue with whether the proposed CROWS would be too heavy.
ROI also protests its "weakness" rating under the stabilization subfactor.
The definition of a "weakness" rating under this subfactor was:
Offeror has provided documentation, analyses, and test data on the
proposed stabilization system design but lacks sufficient detail and
clarity to substantiate that the subsystems are fully integrated. There
is some doubt that the offeror will be able to meet the stabilization
performance requirements prior to production delivery.
Id. sect. M.11.1.e.
The record shows that the SSA credited ROI's proposal for offering a fully
integrated system, but assessed a "weakness" rating because there was
"some doubt that that offeror will be able to meet the stabilization
performance requirements prior to production delivery." The SSA noted that
the agency was unable to "extrapolate . . . the true weapon stabilization
performance" of ROI's proposed CROWS from the data and information that
ROI provided. AR, Tab 3, Award Decision Document, at 11. As explained in
the SSEB report, the agency was unable to evaluate stabilization
performance because ROI's stabilization tests did not account for weapon
movement in the cradle, and ROI's stabilization system did not account for
linear disturbances. The SSEB noted that although ROI "provided
conclusions from the stabilization test and test procedures[, ROI] did not
provide data reduction methodology to support the results." These concerns
led the agency to conclude that there was "some doubt" that ROI's CROWS
would achieve the required level of stabilization performance prior to
production delivery. AR, Tab 1, SSEB Final Report, at 78-79.
ROI does not dispute the agency's findings regarding linear disturbances
or deny that it failed to provide data reduction methodology, and ROI
admits that its in-house measurement technique did not take into account
weapon movement in the cradle. ROI's FPR, vol. 1, 1-570. However, ROI
asserts that its proposal deserved a higher subfactor rating because it
provided some test data and explained that weapons movement in the cradle
did not impact stabilization. Although ROI's FPR does address these issues
and did provide test data, id. at 1-559 to 1-570, the agency considered
all of the information provided by ROI and still had doubt as to
stabilization performance based on the lack of data reduction methodology
to support ROI's claimed performance and ROI's failure to address linear
disturbance issues. AR, Tab 1, SSEB Final Report, at 78-79. Although ROI
disagrees with this assessment, it has not shown it to be unreasonable.
ROI next challenges the assessment of a "major weakness" rating under the
temperature subfactor. The definition of a "major weakness" rating under
this subfactor was:
Bid sample testing did not demonstrate an ability to reliably and/or
safely operate the system at -20 degrees [Fahrenheit] and 140 [degrees
Fahrenheit] or the Offeror has not provided an acceptable plan with
supporting data that the production systems will be capable of operating
reliably and safely with high confidence at temperatures as low as -50
degrees [Fahrenheit] for external components and -20 degrees
[Fahrenheit] for internal components and up to 140 [degrees Fahrenheit]
for both internal and external components prior to production delivery.
Id. sect. M.11.1.f. ROI's proposal was assessed a "major weakness" rating
under this subfactor because the SSA had "doubt that ROI will be capable
of providing a production system capable of operating reliably and safely
down to -50 [degrees Fahrenheit] prior to production delivery." AR, Tab 3,
Award Decision Document, at 12.
ROI's initial proposal, ROI's internal testing, and the agency's bid
sample testing revealed that ROI's production system did not meet rotation
or elevation speeds at -50 degrees Fahrenheit. In response to discussion
questions on this issue, ROI provided a root cause analysis explaining
that the "problem is caused by the increased viscosity of the grease at
low temperatures." ROI's Response to IFN 201 at 1-795; see also ROI's
Response to IFN 212 at 1-15. ROI identified three possible "design
solutions" to address this problem: (1) replacing the grease with one that
will function at the required temperatures, (2) increasing power to the
motors, or (3) adding heaters to the motors to warm the grease. Id. ROI
stated that it did "not know which is the best approach or combination of
approaches" to solve the problem; the potential solutions were in early
stages of testing. ROI's Response to IFN 212 at 1-15. ROI's schedule
contemplated that system level testing of these solutions would not begin
until 3 months after award. Id., attach. 212-11. Given these
uncertainties, we find reasonable the SSA's determination that there was
"doubt" that ROI's production system would be capable of operating
reliably and safely at low temperatures prior to delivery.[12] AR, Tab 3,
Award Decision Document, at 12.
ROI complains that its proposal was evaluated more severely under this
subfactor than Kongsberg's, who, according to ROI, identified a similar
"grease issue" causing a failure of Kongsberg's azimuth release mechanism
at low temperatures. However, the record shows that the two issues were
not similar. With ROI, the agency reasonably noted that the offeror was
investigating changing the type of grease as one of three possible
solutions to correct an identified problem with performance of the bid
sample, and ROI had not demonstrated that any of these possible solutions
would in fact work. With Kongsberg, the issue related to simple
maintenance (poor lubrication) on a Stryker program unit, not the bid
sample, and was not related to a design defect.[13] Agency Supplemental
Report at 18; Kongsberg's Response to IFN 84 at 2. As the agency
convincingly explains, an isolated issue of unperformed maintenance (not
lubricating the parts) not related to system design is far different from,
and is of a less serious nature than, the performance failures associated
with ROI's proposed system design.[14]
ROI contends that a failure of Kongsberg's visible imaging module (VIM) at
cold temperatures was also evaluated less harshly than similar failures
identified in ROI's bid sample under the stabilization subfactor. Again,
the VIM issue arose in connection with the predecessor Stryker unit
performance and not with the bid sample. Agency Supplemental Report at
4-5; see also Kongsberg's Response to IFN 84 at 2 (denying "any failure or
functional deviation of the VIM in connection with tests performed on the
[Kongsberg] bid sample."). The SSEB, in consultation with subject matter
experts, later determined that the problem was caused by the government's
failure to perform maintenance on the VIM and was not the result of a
design flaw. Thus, the agency reasonably concluded that the incident did
"not negatively affect the [system's] capability to operate reliably and
safely" at low temperatures. AR, Tab 1, SSEB Final Report, at 19; Agency
Supplemental Report at 4-5. In contrast, ROI's stabilization issues
(movement in the weapons cradle and linear disturbances) were in fact
design related. Furthermore, both government and Kongsberg testing
confirmed satisfactory performance of Kongsberg's CROWS at the required
temperatures, whereas ROI provided insufficient testing data for the
agency to conclude that ROI's CROWS could meet the stabilization
requirements at delivery. AR, Tab 1, SSEB Final Report, at 19-20, 78-79.
Based on our review, we find that proposals were not evaluated unequally
under this subfactor.
Next, ROI challenges the evaluation of its proposal under the safety
subfactor of the technical factor where the SSA assessed a "weakness"
rating. The RFP defined a "weakness" rating under this subfactor as:
The Offeror has not demonstrated a pro-active approach to addressing
hazards and safety risks. Limited testing is available and/or the system
is not mature. The system may require design changes to meet the
requirement.
RFP sect. M.11.1.g. Consistent with this definition, the SSA found that
Recon Optical did not demonstrate a proactive approach to address
hazards, safety risks and known field issues.[[15]] Recon Optical
admits, in the FPR, the need to further analyze its system once/if the
contract is awarded. Some level of hazard analysis has been conducted to
identify potential safety risks. The mention of unspecified post award
ECPs creates concern that the system may require further design changes
the effects of which are unknown. These ECPs have no documentation and
limited test data to address their impact on software and system safety
of the proposed system.
AR, Tab 3, Award Decision Document, at 13.
ROI complains that the SSA "failed to give ROI credit for safety
improvements identified in [ECPs[16]]," Protest at 14, and ignored "more
than 700 pages of safety information" in ROI's proposal. ROI's Comments at
47. However, based on our review, the agency reasonably determined that
none of the safety information provided by ROI adequately addressed the
agency's concerns over the impact of ECPs and whether the system may
require further design changes, and thus we find no basis to question the
SSA's rating assessment for this subfactor.[17]
ROI challenges the "major weakness" rating assessed to its proposal under
the reliability subfactor of the technical factor. A "major weakness"
rating under this subfactor was defined as:
The Offeror has an immature system or does not have any demonstrated or
documented system reliability that provides confidence that at a minimum
an inherent reliability of 1000 hours mean time between system aborts
[MTBSA] is achievable prior to production delivery. Significant doubt
exists that an inherent reliability of 1000 [MTBSA] will be met prior to
production delivery.
RFP sect. M.11.1.h. Recon Optical was assessed a "major weakness" rating
because
Recon Optical provided insufficient data to support[ ]its claim that the
system will meet the threshold requirement for [MTBSA] prior to
production. In the FPR, ROI did not address the impact to reliability as
a result of implementing individual ECPs, nor did it state at what level
the proposed ECPs will affect the system reliability. This lack of
information raises concerns of the actual reliability of the proposed
system. ROI has not provided sufficient evidence to show that its
burn-in process and the submitted/proposed ECPs will improve the MTBSA
of [REDACTED] to 1000 [hours] prior to delivery.
AR, Tab 3, Award Decision Document, at 13.[18]
ROI complains that the agency should not have considered MTBSA failures
that occurred over a year ago during "burn-in" testing in the field,
because burn-in is now done in the factory before fielding. According to
ROI, MTBSA should only measure "aborts on the battlefield" after factory
burn-in. ROI's Comments at 49. However, the RFP language makes no such
distinction, and since ROI proposed reliability data based on the fielded
units, we find the agency's consideration of the MTBSA failures associated
with these units unobjectionable.
In sum, we find that the assessment of subfactor ratings supports the
overall "red" rating that ROI's proposal received under the technical
factor.
Schedule Factor
ROI protests the assessment of a "high risk" rating to its proposal under
the schedule factor. A "high risk" rating was defined as:
Offeror does not have an active production line or has not demonstrated
an ability to meet the CROWS production delivery as described in this
solicitation to include a spares kit delivery schedule that supports the
systems delivered based on the reliability documented and supported. The
bid sample performance and written proposal[] provide significant doubt
that the Offeror can meet these schedules without start-up delays.
RFP sect. M.12. The SSA assessed ROI's proposal a "high risk" rating
because
The Recon Optical design does not appear to be stable and mature.
Numerous requirements are identified by Recon Optical that are in
development, under validation or have root cause issues identified with
multiple design approaches that are still under evaluation as of the
submittal of the [FPR]. Recon Optical lists 24 design changes to its
current bid sample design. Limited information is available to assess
the level of confidence regarding the feasibility of these changes and
the impact to schedule with regard to performance, reliability and
safety compliance. System level testing is not planned to be completed
until three months after contract award. Recon Optical rationalizes that
the "final official production configuration" is identified after FAT
[first article test] and PVT [product verification test] rather than
prior to delivery to the Government. It is not clear that Recon Optical
understands the requirement that the FAT and PVT tests are to be
conducted on systems that are "final official production configuration"
representative. These factors raise significant doubt that Recon Optical
will meet production delivery schedules with fully compliant weapon
stations.
AR, Tab 3, Award Decision Document, at 14. The SSEB further explains that
ROI provided limited evidence that supported their claim that they had a
current production capacity of 60 systems per month; the protester's
production process is highly dependent on the success of its
subcontractors because ROI maintains minimal stock; ROI provided only
limited information regarding one of its major subcontractors (which is
responsible for building approximately half of the CROWS systems), and the
information provided raised additional concerns related to the major
subcontractor's efforts to outsource components and its ability to meet
and maintain the manufacturing schedule; ROI did not appear to understand
environmental screening requirements; ROI made distinctions between major
and minor characteristics, even though all verifications were classified
as major requirements; ROI's design did not seem to be stable or mature
due to numerous design changes, and limited information was available to
assess the feasibility and schedule impact of these changes; safety
analysis and documentation was not finalized and available prior to
delivery; software safety analysis would not be conducted until government
testing was complete; and it was not clear that ROI understood that FAT
and PVT testing were to be conducted on systems that are representative of
the final official production configuration. AR, Tab 1, SSEB Final Report
at 81-84; Agency Report at 35-36. All of these issues created "significant
doubt" whether ROI would meet the production delivery schedules with fully
compliant CROWS. Although ROI disagrees with several of the individual
concerns expressed by the SSEB and the overall rating of its proposal as
providing "high risk" under the schedule factor, ROI has not shown the
agency's judgment to be unreasonable or inconsistent with the record.
For example, ROI contends that the agency misread or ignored portions of
ROI's proposal that addressed scheduling concerns, and evaluated ROI's
proposal using a "higher evaluation standard than [for] other offerors."
Protest at 15-17; Supplemental Protest at 10-12; ROI's Comments at 51-68.
ROI contends that its proposal should have been rated higher than
Kongsberg's under the schedule factor largely because "as the incumbent
contractor, ROI is the only offeror which has produced stabilized CROWS
units," and therefore, ROI contends, it is more likely to meet the
delivery schedule than the other offerors. ROI's Comments at 58-59.
However, the record shows that ROI had difficulty meeting schedule and
performance requirements under the incumbent contract,[19] and its
proposed system here likewise encountered numerous problems during bid
sample testing. ROI's promises that it could provide compliant CROWS by
the scheduled due dates were not supported, and the information that ROI
did provide in its proposal raised additional concerns about schedule
risk. In contrast, Kongsberg has fielded over a 1,000 stabilized systems
and, unlike ROI, provided detailed information demonstrating to the agency
that it would, and could, meet the schedule requirements with fully
compliant CROWS. Thus, we find no merit to ROI's arguments that its
proposal was evaluated unfairly or unequally as compared to Kongsberg's.
Management Factor
ROI protests the assessment of a "red" rating to its proposal under the
management factor, challenging the "weakness" and "major weakness" ratings
of each of the four subfactors under this factor.
Under the program management plan subfactor, ROI's proposal was assessed a
"weakness" rating, which was defined as:
The Offeror appears to understand the requirements of the RFP. The
Offeror is lacking in some knowledge or experience in managing a project
with the demands and ability to adapt to changes required for fielding a
system of a complexity such as CROWS.
RFP sect. M.13.1.a.
In evaluating ROI's proposal, the SSEB favorably recognized that ROI had
shown "general traceability" to the RFP's requirements and that several of
its program managers were certified. However, the SSEB also noted a number
of "negative observations" that precluded a higher rating, including
discrepancies in the proposal regarding the number of project leads and
their roles and responsibilities; proposal statements that ROI was
planning on changing its tools for enterprise resource and material
planning because the tools it currently uses are "not well suited for a
program of this caliber"; concern with potential problems with ROI's cost
management system requiring the Defense Contract Management Agency to
audit ROI's systems bimonthly; and proposal responses providing only
"generic answers" to issues relating to program risk and "generic high
level information" on proposed program management processes. AR, Tab 1,
SSEB Final Report, at 85-86. The SSEB considered ROI's repeated reference
to delivery under its incumbent contract as proof of its overall
management system's "effectiveness, efficiency, and capability," but did
not find that this warranted a strength because ROI had not "actually
delivered any systems on the identified contract that have met the
performance specifications." Id. at 86. The SSA agreed with the SSEB that
ROI's proposal warranted a "weakness" rating under this subfactor,
concluding that ROI "is lacking in some knowledge or experience in
managing a project with the demands and ability to adapt to changes
required for fielding a system of a complexity such as CROWS." AR, Tab 3,
Award Decision Document, at 15.
ROI disagrees with this assessment, essentially complaining that some of
the SSEB's conclusions are "factually incorrect" because the agency either
misread or ignored ROI's proposal, which ROI asserts addressed the SSEB's
criticisms. Protest at 17-18; ROI's Comments at 68-72. However, our review
of the record confirms that the agency's evaluation was reasonable. For
example, although ROI asserts that it did not admit its enterprise
resource and material planning tools were "not well suited" for the CROWS
program, its FPR does in fact state that ROI "has formed a committee to
evaluate replacements for [the tool]" and that "[other tools] perhaps more
suited to a company like Recon Optical . . . will be evaluated for planned
implementation." ROI's Response to IFN 103 at 1-466. Similarly, although
ROI complains that the agency misread discrepancies in the number of
project leads, we note that its proposal does vary the numbers in at least
three places. Compare ROI FPR, vol. II, table 2, at 1-326 to 1-328
(identifying 13 "key personnel") with id., fig. 95-3 (identifying 9
project leads); id. at 1-329 (referring to 14 project leads). It is the
offeror's burden to submit an adequately written proposal, and based on
our review of the record, ROI has not met its burden here. See Beck's
Spray Serv., Inc., supra, at 3.
ROI makes similar challenges to the assessment of "major weakness" ratings
to its proposal under the subcontractor management plan, software
management plan, and quality management plan subfactors. That is, ROI
contends that the agency misread or ignored aspects of its proposal
addressing several of the cited concerns. Again, we find no error in the
agency's evaluation. For example, under the three subfactors, the agency
found several instances of proposal inconsistencies, insufficient
documentation to support ROI's promises, or "generic" responses to
proposal weaknesses, AR, Tab 1, SSEB Final Report, at 87-92, and our
review of the record confirms the reasonableness of the agency's concerns.
The RFP warned offerors that "[u]nexplained inconsistencies . . . may be
grounds for rejection of the proposal," cautioned that "unsupported
promises to comply with the contractual requirements will not be
sufficient," and required that proposals "provide convincing documentary
evidence in support of a conclusionary statement." RFP sect. M.2.1. In
light of the RFP's clear directives, we are unpersuaded by ROI's
arguments, which amount to mere disagreement with the agency's judgments
and are insufficient to render those judgments unreasonable.[20] UNICCO
Gov't Servs., Inc., supra, at 7.
In sum, the record shows that ROI's proposal was reasonably rated "red" or
"high risk" under the three most important factors, and was lower
technically rated and higher priced than the two other competing
offers.[21] As a result, we find the SSA's decision not to select ROI's
proposal for award to be reasonable and consistent with the RFP.[22]
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Combined, all non-price factors were more important than price. RFP
sect. M.5.1.
[2] At the factor level, color ratings were defined as follows:
+------------------------------------------------------------------------+
|Blue |[T]he Offeror demonstrates an excellent understanding of the |
| |requirements and provides exceptional strengths that will |
| |significantly benefit the Government. The relative value of the |
| |sub-factors rated as Major Strengths and Strengths significantly |
| |outweigh the relative value of the sub-factors rated as |
| |Weaknesses. There are no Major Weaknesses. |
|-----+------------------------------------------------------------------|
|Green|[T]he Offeror demonstrates a good understanding of the |
| |requirements and provides strengths that will benefit the |
| |Government. The relative value of the sub-factors rated as Major |
| |Strengths or Strengths outweigh the relative value of the |
| |sub-factors rated as Weaknesses and Major Weaknesses. |
|-----+------------------------------------------------------------------|
|Amber|[T]he Offeror demonstrates an acceptable understanding of the |
| |requirements. The relative value of the sub-factors rated as Major|
| |Strengths and Strengths are outweighed by Weaknesses and Major |
| |Weaknesses. The relative value of sub-factors rated as Weaknesses |
| |outweigh the relative value of sub-factors rated as Major |
| |Weaknesses. |
|-----+------------------------------------------------------------------|
|Red |[T]he Offeror does not demonstrate an acceptable understanding of |
| |the requirements or [has] not sufficiently supported claims. The |
| |relative value of the sub-factors rated as Major Weaknesses and |
| |Weaknesses significantly outweigh the relative value of the |
| |sub-factors rated as Strengths and Major Strengths. |
+------------------------------------------------------------------------+
RFP sect. M.9.1.
[3] Details about the testing requirements were included in the
solicitation. RFP sections L.7, M.8.1.
[4] A failure was defined as "something that prevents the system from
operating as intended or creates an unsafe condition." RFP sect. M.8.1.
[5] The first contract was competitively awarded in 2000; the subsequent
contracts were "Urgent Material Requirement" contracts awarded on a
sole-source basis.
[6] A fourth offeror responded to the RFP but did not provide a bid
sample, so was excluded from the competition.
[7] The SSEB also obtained assistance from "subject matter experts" during
the course of the evaluation.
[8] Briefings to the SSAC and SSA occurred after both the initial and
final evaluations.
[9] The third competing offeror's proposal was rated "green" under the
technical, management, logistics support, and small disadvantaged business
factors; "amber" under the GPLR factor, "medium risk" under the schedule
factor, and had an evaluated price of $488,482,668.37. AR, Tab 3, Award
Decision Document, at 8.
[10] Although we do not specifically address all of the numerous
contentions raised by ROI with regard to these three factors (some of
which were untimely raised), we have taken them into account and
determined that there is no basis to find the agency's evaluation of these
factors unreasonable or inconsistent with the RFP.
[11] A "root cause analysis" is the process of identifying the cause of an
incident or problem.
[12] Testing of ROI's bid sample within the temperature range also
revealed problems with the display (the "monitor was distorted and several
vertical lines appeared on the screen" and lasted for "approximately three
minutes") and with "uncommanded movement in the form of a continuous side
to side tremble of the mounted weapon." AR, Tab 30, TIR 73-1, Screen
Overlay; id., Aberdeen Test Center (ATC) Test Record No. AD-F-55-07, at 4.
ROI attempts to minimize the severity of these issues, but the agency has
persuasively explained that these operational problems could significantly
impact safety and reliability of the CROWS in combat situations, thus
putting the operator at serious risk. Agency Supplemental Report at 10-13.
With regard to the display problem, ROI complains of unequal treatment
because Kongsberg's proposal was rated a "major strength" under the
temperature subfactor even though its CROWS display showed an "error
message" during testing. See AR, Tab 31, ATC Test Record No. AD-F-56-07,
at 4. However, it is not clear from the record that the display issues of
the two bid samples were in fact the same, as ROI asserts. In any event,
the display was not the basis for Kongsberg's "major strength" rating, and
although the SSEB mentions ROI's display problem as a concern in its
report, the SSA did not identify this issue as a basis for ROI's rating
under the temperature subfactor. Thus, even if ROI were correct that bid
samples were evaluated unequally, it was not prejudiced as a result.
[13] ROI cannot reasonably complain that the agency should have given
greater weight to Stryker unit performance, when it asserts that any
consideration of information outside of the proposal and the bid sample
was "inconsistent with the Solicitation's evaluation scheme." ROI's
Supplemental Comments at 10-11.
[14] ROI disputes that the "failure" of Kongsberg's azimuth release
mechanism occurred only with the Stryker units or that the root cause and
a solution were identified. It quotes from Kongsberg's response to IFN 84,
discussing this issue, where Kongsberg states:
The root cause of the [azimuth release mechanism] failure experienced as
part of [t]he [Kongsberg] Bid sample testing at low temperature may be
poor lubrication of the mechanical parts; [Kongsberg] will investigate
this problem on the [Kongsberg] Bid sample when it is returned to
[Kongsberg].
Kongsberg's Response to IFN 84 at 2. However, as the agency explains,
Kongsberg was responding to a mistaken belief that the agency had found a
bid sample failure; in fact, no testing failures of the azimuth release
mechanism occurred at low temperatures with Kongsberg's bid sample. See
AR, Tab 31, TIR 73-1, Phase II Cold Temperature Testing ("no faults were
observed"); id., Test Record No. AD-F-56-07 (no failure identified).
Kongsberg's confusion may have occurred because the agency did not fully
explain that the IFN was discussing a failure previously identified in
units from the Stryker program (of which the SSEB members were aware) and
not the bid sample. Agency Supplemental Report at 18. The agency's
explanation seems correct given that, as the protester notes, bid sample
testing under the temperature subfactor occurred after the IFN was issued
to Kongsberg, so the IFN could not have been asking about bid sample
failures. In any event, these issues were later determined not to be
design related. AR, Tab 1, SSEB Final Report at 19-20. The protester has
not pointed to any evidence in the record that shows a failure of the
azimuth release mechanism in Kongsberg's bid sample at low temperatures,
other than Kongsberg's statement in this IFN.
[15] ROI complains that the SSA's findings are inconsistent with those of
the SSEB, which found that ROI had a "proactive system safety program in
place to address hazards and safety risks." AR, Tab 1, SSEB Final Report,
at 80. However, it is well settled that an SSA is not bound by the
recommendation of lower level evaluators. Hubbell Elec. Heater Co.,
B-289098, Dec. 27, 2001, 2002 CPD para. 15 at 6.
[16] ROI asserts that the agency has "deliberately withheld approval of
ECPs," ROI's Comments at 45, but provides no evidence to support this
assertion.
[17] ROI complains that Kongsberg's proposal was assessed a "strength" for
implementing design changes, which evidences disparate treatment in the
evaluation because ROI's proposal was assessed a "weakness" for design
changes. ROI's arguments ignore the fact that its "weakness" rating was
due to its plan to implement numerous future design changes, the impact of
which was unknown, and ROI's failure to provide sufficient information for
the agency to evaluate the impact of those changes on safety and
performance. In contrast, Kongsberg's proposal "display[ed] the ability to
initiate and implement design changes to mitigate or eliminate risks," and
Kongsberg provided sufficient supporting data to prove its claims. AR,
Tab 1, SSEB Final Report, at 20, 80.
[18] ROI complains that the agency's demand (during discussions) for
additional documentation supporting the reliability of ECPs was
unreasonable and was not required by the RFP. However, the RFP expressly
provides for the consideration of "demonstrated or documented system
reliability." RFP sect. M.11.1.h.
[19] As stated above, ROI was issued a show cause notice and termination
for default cure notice.
[20] ROI alleges disparate treatment in the evaluation of its and
Kongsberg's proposal under the program management plan and subcontractor
management plan subfactors. It asserts it deserved higher ratings since
its plans were greater in page count than Kongsberg's. However, ROI
ignores the fact that much of its proposal was reasonably found to contain
inconsistencies, was generic, and despite the length lacked sufficient
detail, whereas Kongsberg provided "detailed interrelated and coherent
documentation" of its plans and responded fully to agency concerns in its
FPR and responses to IFNs. AR, Tab 1, SSEB Final Report, at 24-25. Other
assertions of unequal treatment are similarly without merit.
[21] ROI also challenges the evaluation of its proposal under the logistic
support, GPLR, past performance, and price factors, and asserts that the
"blue" rating it received under the small disadvantaged business factor
should have been given more weight in the evaluation. Although we do not
discuss these aspects of the evaluation, we have reviewed the protest
issues raised and find them to be without merit.
[22] ROI also challenges the evaluation of Kongsberg's proposal, but ROI
is not an interested party to raise these protest grounds. An "interested
party" is an actual or prospective offeror whose direct economic interest
is affected by the award, or failure to award, a contract. 4 C.F.R. sect.
21.0(a)(1) (2007). An offeror who is not next in line for award is not an
interested party to protest the evaluation of the awardee. Ridoc Enter.,
Inc., B-292962.4, July 6, 2004, 2004 CPD para. 169 at 9. As discussed
above, ROI's proposal was reasonably rated the lowest of three offerors
and was the highest in price, and therefore it is not next in line for
award even if its protest of Kongsberg's proposal were sustained. Since
ROI did not challenge the evaluation of the intervening offeror's
proposal, ROI is not an interested party to challenge the evaluation of
Kongsberg's proposal in this case. Id.