TITLE: B-310661.3; B-310661.4, Karrar Systems Corporation, March 3, 2008
BNUMBER: B-310661.3; B-310661.4
DATE: March 3, 2008
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B-310661.3; B-310661.4, Karrar Systems Corporation, March 3, 2008

   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: Karrar Systems Corporation

   File: B-310661.3; B-310661.4

   Date: March 3, 2008

   Kevin P. Connelly, Esq., Seyfarth, Shaw, LLP, for the protester.

   Ross Aboff, Esq., Archer & Greiner, for BANC3, Inc., an intervenor.

   Daniel Pantzer, Esq., Denise M. Marrama, Esq., and James F. Ford, Esq.,
   Department of the Army, for the agency.

   Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1.      Protest that agency unreasonably rated awardee's technical
   proposal acceptable despite eight weaknesses and only three strengths is
   denied where determination of acceptability was not based solely on number
   of strengths versus weaknesses and protester does not argue that awardee's
   proposal did not satisfy any of the criteria agency applied.

   2.      Assertion that protester's proposal should have been rated good
   rather than acceptable under one management subfactor is denied where
   record demonstrates that evaluators reasonably assigned acceptable rating
   and, in any case, conclusion that awardee's proposal was superior under
   management factor was based, not solely on adjectival ratings under
   subfactors, but on source selection official's consideration of underlying
   strengths and weaknesses of protester's and awardee's proposals.

   3.      Protest that "best value" determination was unreasonable is denied
   where, in determining that protester's technically superior proposal was
   not worth a 30 percent price premium, source selection official
   specifically considered proposals' ratings under each factor and
   subfactor, weight accorded each factor, and proposals' underlying
   strengths and weaknesses.

   4.      Protest that awardee's proposal to recruit spouses of transferred
   government personnel created improper conflict of interest due to
   potential for unduly favorable consideration from evaluators is denied
   where proposal was general in nature and did not identify individuals that
   could be affected, and there is no other evidence or reason to believe
   that evaluators were unduly influenced.

   DECISION

   Karrar Systems Corporation protests the award of a contract to BANC3, Inc.
   under request for proposals (RFP) No. W15P7T-07-R-A226, issued by the
   Department of the Army for program and administrative services for its R2
   program (which is designed to provide an efficient means of acquiring
   critical, near obsolete items necessary to sustain crucial weapon
   systems). Karrar asserts that the Army misevaluated its and BANC3's
   proposals and performed an improper "best value" analysis.

   We deny the protest.

   The solicitation contemplated a best value award of a 5-year
   indefinite-delivery/ indefinite-quantity contract based on four evaluation
   factors (in descending order of importance): technical (with subfactors
   for three sample task orders--pre-award, post award, and budget),
   management (with subfactors for transition plan to Aberdeen ( the R2
   program is being moved from Fort Monmouth, New Jersey to Aberdeen Proving
   Ground, Maryland), transition plan, and management plan), performance
   risk, and price. RFP at 59.

   Four offerors responded to the RFP. A source selection evaluation board
   (SSEB) assigned the proposals adjectival ratings under the technical and
   management factors and subfactors considering evaluated strengths and
   weaknesses, whether a proposal met the requirements of the RFP, the amount
   of detail provided, and the feasibility of the proposed approach.[1]
   Agency Report (AR) at 3. Following the initial evaluation, a competitive
   range determination, discussions, and the submission and evaluation of
   final proposal revisions, Karrar's proposal was rated good under the
   technical factor, with subfactor ratings of good for the pre- and
   post-award sample task orders, and acceptable for the budget sample task
   order, Final Source Selection at 21; acceptable under the management
   factor, with subfactor ratings of acceptable for transition to Aberdeen,
   good for transition plan, and acceptable for management plan, id. at 37;
   and low for performance risk. BANC3's proposal was rated acceptable under
   the technical factor, with acceptable ratings for each subfactor, id. at
   13; good under the management factor, with ratings of good for each
   subfactor, id. at 29; and low for performance risk. Karrar's proposed
   price was $25,119,864, and BANC3's was $17,251,531.92. Id. at 44. Based on
   these evaluation results, the agency selected BANC3's proposal as offering
   the best value to the government. Karrar protests the award decision.

   In considering a protest of an agency's proposal evaluation, our review is
   confined to determining whether the evaluation was reasonable and
   consistent with the terms of the solicitation and applicable statutes and
   regulations. United Def., LP, B-286925.3 et al., Apr. 9, 2001, 2001 CPD
   para. 75 at 10-11. Here, as discussed below, we find that the agency's
   evaluation of BANC3's and Karrar's proposals and the resulting best value
   analysis were reasonable.

   TECHNICAL FACTOR

   Karrar complains that BANC3's proposal should have been rated unacceptable
   under the technical factor, since it was assigned three times as many
   weaknesses (eight) as strengths (three). This argument is without merit.
   First, there was nothing in the RFP providing that a certain mix of
   strengths and weaknesses was necessary in order for a proposal to obtain a
   rating of acceptable. Further, as indicated, the overall factor ratings
   were based on a review of the adjectival ratings assigned under each of
   the subfactors--BANC3's proposal was acceptable under all three
   subfactors--as well as on whether the proposal met the solicitation
   requirements, contained at least minimum detail and was at least minimally
   feasible. A proposal was rated unacceptable only if it contained major
   errors, proposed an approach that could not be expected to meet
   requirements, or involved very high risk and could not be corrected
   without a major rewrite. AR at 2, 3. This methodology was in no way
   inconsistent with the RFP's evaluation scheme, and Karrar has not
   specifically argued that BANC3's proposal failed to satisfy any of the
   criteria the agency applied. We conclude, on the record here, that the
   agency reasonably rated BANC3's proposal acceptable under the technical
   factor.

   MANAGEMENT FACTOR

   Karrar argues that its proposal should have been rated good, rather than
   acceptable, under the transition to Aberdeen subfactor, given that its
   proposal was assigned one significant strength plus one strength under
   that subfactor. Karrar notes that, in comparison, BANC3's proposal was
   rated good under the subfactor with three strengths. Karrar asserts that a
   good rating under this subfactor would have raised its rating under the
   management factor to good, which likely would have moved Karrar into line
   for the award.

   The Army explains in response that in evaluating the proposals the SSEB
   assigned a good rating only where a proposal offered "some significant
   strengths or numerous strengths which are not offset by weaknesses."
   Source Selection Evaluation Plan (SSEP) at 17. The SSEB did not consider
   one significant strength plus one strength to meet the "some significant
   strengths or numerous strengths" standard for a good rating. In contrast,
   the agency found that BANC3's three strengths did satisfy the "numerous
   strengths" standard. Our review of the record confirms that the SSEB was
   consistent in this regard; at least two significant strengths or three
   strengths were required in order for a proposal to receive a good
   rating.[2] While Karrar maintains that one significant strength plus one
   strength also should have warranted a good rating, given that the approach
   was applied consistently, we find it unobjectionable.

   In any case, Karrar's focus on the adjectival rating for the transition to
   Aberdeen subfactor is misplaced; ratings are not binding on the SSO but,
   rather, serve only as a guide to intelligent decision making. Chapman Law
   Firm, LPA, B-293105.6 et al., Nov. 15, 2004, 2004 CPD para. 233 at 5.
   Here, the SSO determined that BANC3's proposal was "better" than Karrar's
   under the management factor based not simply on a comparison of the
   adjectival ratings under the subfactors, but on the evaluated strengths
   and weaknesses that were assigned both proposals under all of the
   subfactors. SSD 4-5. In this regard, Karrar's proposal received a total of
   one significant strength, eight strengths, and no weaknesses, while
   BANC3's received three significant strengths, nine strengths and no
   weaknesses. Id. Based on this information, we think the SSO reasonably
   could determine that BANC3's proposal was "better" than Karrar's under the
   management factor. It follows that there is no reason to believe that a
   change in one of Karrar's proposal's subfactor ratings would have affected
   the award determination.

   Karrar asserts that the agency unreasonably assigned both its and BANC3's
   proposals a strength under the transition plan subfactor for their
   incumbent staff transition plans. [3] Karrar's proposal was assigned a
   strength based on its having the incumbent workforce in place, Final
   Evaluation at 2, but Karrar claims that this feature of its proposal
   warranted a significant strength. However, there was nothing in the RFP
   that called for automatically assigning a significant strength on this
   basis. Thus, Karrar's argument amounts to a disagreement as to the degree
   of benefit that this feature provided the agency as compared to the
   benefit provided by BANC3's transition plan. Such disagreement is not
   sufficient to establish that an evaluation conclusion was unreasonable.
   See Advanced Tech. Sys., Inc., B-296493.5, Sept. 26, 2006, 2006 CPD para.
   147 at 7, 17 (mere disagreement with agency evaluation does not
   demonstrate that it was unreasonable).

   CONFLICT OF INTEREST

   As indicated above, the work being performed by the R2 office that the
   contractor will support is being moved from Fort Monmouth to Aberdeen
   Proving Ground. The solicitation required offerors to provide a detailed
   plan outlining how the internal support required under the statement of
   work would be provided to the R2 office during and after the relocation.
   In its proposal, BANC3 included a risk assessment and mitigation plan that
   listed the potential risks inherent in the transition, and its mitigation
   strategies to deal with those risks. Among the risks identified was a
   highly competitive labor market in the Aberdeen Proving Ground area. BANC3
   proposed to mitigate this risk by, among other things, recruiting the
   spouses of the relocating C4ISR (R2 is an office within C4ISR) employees
   to fill support staff positions. BANC3 Proposal at 3. Karrar argues that
   this plan creates at least the appearance of an improper conflict of
   interest, because it could unduly influence the evaluators to favorably
   consider BANC3's proposal.[4] Karrar asserts that, based on the plan,
   BANC3 should have been excluded from the competition.

   While an agency properly may exclude an offeror from a competition in
   order to protect the integrity of the procurement system, even if no
   actual impropriety can be shown, such a determination must be based on
   facts and not mere innuendo or suspicion. Greenwich Air Serv., Inc.,
   B-277656, Nov. 5, 1997, 97-2 CPD para. 159 at 4. In this regard, we
   consider the appropriateness of such action based on the specific facts
   presented. Id. We find no improper conflict here. There is no evidence
   that BANC3 was even aware of the identity of the members of the SSEB, and
   its proposal stated only a general plan as 1 of 15 risk mitigation
   strategies, without identifying any individual spouse that it might
   recruit. Further, Karrar has cited no instance of BANC3's identifying a
   specific spouse that it intended or attempted to recruit. There thus is
   nothing to indicate that BANC3 may have promised employment to the spouse
   of a member of the SSEB. We therefore conclude that Karrar has presented
   no evidence of an improper conflict that could warrant eliminating BANC3
   from the competition.[5]

   BEST VALUE DETERMINATION

   Karrar argues that the agency performed an unreasonable best value
   determination. According to Karrar, its proposal was substantially
   superior to BANC3's under the most important technical factor, while
   BANC3's proposal was only slightly superior to Karrar's under the less
   important management factor. Karrar concludes that, in selecting BANC3 for
   award, the agency improperly gave more weight to the management factor
   than to the more important technical factor.

   SSOs have broad discretion in determining the manner and extent to which
   they will make use of the technical and price evaluation results; their
   judgments are governed only by the tests of rationality and consistency
   with the stated evaluation criteria. Chemical Demilitarization Assocs.,
   B-277700, Nov. 13, 1997, 98-1 CPD para. 171 at 6. The propriety of a
   tradeoff depends not on the mere difference in technical scores or
   ratings, but on the reasonableness of the SSO's judgment concerning the
   significance of the difference. Digital Sys. Group, Inc., B-286931,
   B-286931.2, Mar. 7, 2001, 2001 CPD para. 50 at 7.

   Here, while the SSO noted that the Aberdeen Proving Ground management
   subfactor was the most important subfactor, and that BANC3's proposal was
   rated good under this subfactor, SSD at 6, there is no basis to conclude
   that she gave the management factor greater weight than the technical
   factor. Rather, as discussed above, the SSO reviewed the relative weights
   of the evaluation factors, the adjectival ratings for each subfactor, and
   the underlying strengths and weaknesses on which those ratings were based.
   The SSO's resulting conclusion that Karrar's proposal was slightly
   superior to BANC3's under the technical factor, but that BANC3's proposal
   was superior to Karrar's under the management factor, formed the non-price
   side of the tradeoff equation. Balanced against those considerations was
   Karrar's $7.9 million (31 percent) higher price. In weighing the two, the
   SSO concluded that any relative benefit offered by Karrar's proposal was
   not sufficient to offset its significantly higher price. Id. There was
   nothing unreasonable in the agency's methodology or conclusion.

   The protest is denied.

   Gary L. Kepplinger
   General Counsel

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

   [1] Under the technical and management factors and subfactors, proposals
   were rated outstanding, good, acceptable or unacceptable. Under the
   management factor and subfactors, proposals also could be rated as
   susceptible to being made acceptable.

   [2] Similarly, a proposal could be assigned a rating of outstanding only
   if it were assigned "numerous" significant strengths. SSEP at 17. The
   Army's consistent approach in applying the term "numerous" resulted in a
   proposal with two significant strengths and four strengths under a
   subfactor being rated good. Source Selection Briefing at 32.

   [3] Karrar also argues that its and BANC3's proposal were evaluated
   disparately in various areas of the management evaluation. However, the
   agency responded to these arguments in its report, and Karrar did not
   substantively address the agency's response in its comments on the report.
   Under these circumstances, we consider these arguments abandoned. Israel
   Aircraft Indus., Ltd.--TAMAM Div., B-297691, Mar. 13, 2006, 2006 CPD para.
   62 at 6.

   [4] Karrar argues that the plan likely violates criminal statutes. Our
   Office has no jurisdiction over alleged violations of criminal laws.
   Corbin Superior Composites, Inc., B-236777.2, Jan. 2, 1990, 90-1 CPD para.
   2 at 6.

   [5] For the same reason, we find no merit to Karrar's argument that the
   spouse recruiting plan should have precluded BANC3's proposal from being
   assigned a strength for its risk mitigation plan.