TITLE: B-310803.2, Domain Name Alliance Registry, August 18, 2008
BNUMBER: B-310803.2
DATE: August 18, 2008
**********************************************************
B-310803.2, Domain Name Alliance Registry, August 18, 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: Domain Name Alliance Registry

   File: B-310803.2

   Date: August 18, 2008

   Roger D. Waldron, Esq., Marcia G. Madsen, Esq., Mary Streett, Esq., and
   Melissa Baker, Esq., Mayer Brown LLP, for the protester.

   Richard J. Vacura, Esq., and Keric B. Chin, Esq., Morrison & Foerster LLP,
   for NeuStar, Inc., an intervenor.
   Mark Langstein, Esq., and Richard Brown, Esq., Department of Commerce, for
   the agency.
   Jonathan L. Kang, Esq., and Ralph O. White, Esq., Office of the General
   Counsel, GAO, participated in the preparation of the decision.

   DIGEST

   1. Protest arguing that the agency could not properly complete a
   reevaluation, pursuant to an earlier corrective action, without holding
   discussions with the protester, and allowing it to submit a revised
   proposal, is dismissed as untimely where the protester waited until the
   second award decision to challenge the lack of opportunity for
   discussions, despite the fact that the agency's actions--from the time it
   initiated the corrective action until the second award decision--clearly
   indicated that the agency did not contemplate holding discussions.

   2. Protester challenging agency's evaluation of offerors' quotes is denied
   where the record supports the reasonableness of the evaluations.

   DECISION

   Domain Name Alliance Registry (DNAR) protests the award of a contract to
   NeuStar, Inc. by the Department of Commerce (DOC), National
   Telecommunications and Information Administration (NTIA), under request
   for quotations (RFQ) No. NTIA9110-7-12841, for internet domain name
   services. The protester contends that DOC's award determination was flawed
   because the agency never held discussions with DNAR, despite holding
   discussions with the awardee prior to an earlier selection decision for
   these services, and because the agency's evaluation of the offerors'
   quotes was unreasonable.

   We dismiss in part and deny in part the protest.

   BACKGROUND

   The RFQ was issued on July 10, 2007, and sought quotes to provide
   centralized management and coordination services for registry, registrar,
   database, and information services for the .us top-level internet domain
   (usTLD).[1] NTIA is responsible for administration of the usTLD, which is
   a component of approximately 17,000 domain names for state and local
   government entities. RFQ at 35. NeuStar was awarded a contract on October
   26, 2001 to manage the usTLD, and is currently the incumbent contractor
   providing these services.

   The RFP anticipated award of a contract with a 3-year base period, and two
   1-year option periods. The contract will be on a no-cost basis whereby the
   contractor will not receive payment from the government, but is instead
   permitted to collect revenue from registration fees charged to entities to
   register and maintain domain names. The contractor here will be
   responsible for all services required to register new domains using the
   usTLD, and maintaining and managing existing usTLD domains. The RFQ was
   issued under the streamlined procedures for acquisition of commercial
   items under Federal Acquisition Regulation (FAR) part 12.[2]

   The RFQ stated that offerors would be evaluated on the basis of the
   following four evaluation factors: (1) technical excellence and
   comprehensiveness of the offered service, (2) past performance, (3)
   financial fitness, and (4) reasonableness of prices or fees to be charged
   to .us registrants and registrars. RFQ at 33. The solicitation stated
   that, for purposes of the selection decision, "[t]echnical excellence and
   comprehensiveness of the overall service for usTLD operation, [p]ast
   performance, and [f]inancial [f]itness together are significantly more
   important than proposed price(s) to .us registrants."[3] Id. at 32.

   As relevant here, the technical excellence evaluation factor instructed
   offerors to describe in their quotes how they would satisfy the
   requirements of the statement of work (SOW). The financial fitness
   evaluation factor required offerors to demonstrate that they will be able
   to perform the requirements of the contract without funding from the
   government, as follows:

     Describe, in detail, how the Contractor will fund the requirements of
     this acquisition at no cost to the United States Government.
     Project/estimate and explain annual Contractor costs for this
     acquisition in such a way to permit the Government to match those costs
     to specific SOW Contractor Requirements. Include detailed proposed
     financial plans, including, if appropriate, the manner in which fees
     levied for services rendered by the Contractor would be derived,
     considering cost plus a fair and reasonable profit. All proposals shall
     include a copy of the Quoter's last three unaudited financial statements
     AND the most recent audited financial statement.

   Id. at 31.

   Initial Evaluation and Protest

   DOC received quotes from DNAR and NeuStar by the closing date of July 30,
   2007. The protester's quote explained that DNAR is a joint venture between
   GoDaddy.com, Inc. ("GoDaddy.com") and Afilias USA, Inc., an Afilias
   Limited company ("Afilias"). AR, Tab 2, DNAR Quote, at 4. DNAR stated that
   "Go Daddy is the [deleted] of [DNAR], while Afilias is the [deleted]." Id.

   DOC determined that DNAR's quote was unacceptable under the financial
   fitness evaluation factor, and excluded the company's quotation from the
   competitive range.[4] In this regard, the agency determined that DNAR's
   quote omitted the required 2005-2006 financial statements for Afilias, and
   that the financial fitness of the offeror could therefore not be
   determined. AR, Tab 4, Initial Source Selection Decision (SSD), at 12-13.

   After excluding DNAR's quotation from the competitive range, DOC conducted
   discussions with NeuStar. Specifically, the agency requested that NeuStar
   elaborate on its marketing plan for promoting the usTLD--an area of the
   company's quote that was identified as a major weakness.[5] Id. at 5. On
   October 16, NeuStar submitted a letter outlining the following additional
   steps the company would take to address the agency's concerns regarding
   marketing:

     NeuStar is adding a new full-time marketing position that will be
     responsible for expansion of registrar channel development, advertising,
     and marketing. . . . NeuStar will put an emphasis on building the usTLD
     and kids.us brand to make them more visible, increase usage and the
     number of web sites, and accelerate registration volumes.

   Letter from NeuStar to DOC, Oct. 16, 2007, at 1.

   On October 18, DOC awarded the contract to NeuStar. The agency
   subsequently issued modification 0001 to the contract on November 2, which
   incorporated both NeuStar's quote and the October 16 letter into the
   contract. The contract, contract modification, and a redacted version of
   NeuStar's quote were posted on the NTIA website, with certain redactions.
   Supp. AR at 2. On November 7, DOC provided a debriefing to the protester,
   which disclosed detailed information concerning DNAR's quote, including
   strengths and weakness and overall evaluation ratings.

   On November 13, DNAR filed a protest of the award to NeuStar with our
   Office, arguing that DOC had improperly excluded the company's quotation
   from the competitive range without conducting discussions, despite the
   fact that the agency conducted discussions with NeuStar. DNAR also argued
   that the agency improperly evaluated its quote under the technical
   excellence and past performance evaluation factors. On December 7, the
   agency advised our Office that it would take corrective action in response
   to DNAR's protest by reevaluating the offeror's quotes. Because the
   agency's corrective action rendered the protest academic, we dismissed the
   protest on December 11.

   Reevaluation and the Second Award Decision

   Following the agency's notice of corrective action, a new contracting
   officer (CO) and source selection official were appointed. CO Statement at
   2. DOC's reevaluation of the offerors' quotes was conducted by a new
   technical evaluation panel (TEP) and financial evaluation panel (FEP). Two
   of the three TEP members, and one of the three FEP members were
   newly-assigned, and had not worked on the prior evaluations. CO Statement
   at 3. The agency states that the change in panel members was due to the
   unavailability of certain personnel involved in the earlier review. CO
   Statement at 2-3, 10.

   On February 6, 2008, DOC, in implementing its corrective action, requested
   that DNAR provide "the Afilias 2005-2006 Financial Statements . . . [and]
   a copy of your entire proposal dated July 30, 2007." AR, Tab 13, Request
   for Information. On February 14, DNAR submitted the requested information.

   The evaluation teams were provided with the following information to
   review in the new evaluations: DNAR's July 2007 quote, the financial
   statements for Afilias that were initially omitted from DNAR's quote and
   submitted in February 2008, NeuStar's July 2007 quote, and updated past
   performance information and Dun and Bradstreet (D&B) reports for each
   offeror.[6] DOC states, however, that it did not provide to the
   evaluators, or otherwise consider, the information submitted by NeuStar
   during discussions in October 2007. CO Statement at 2-3. The agency states
   that the evaluation excluded consideration of the discussions with NeuStar
   because of concerns arising from the posting of the company's quote on the
   NTIA website after award in October 2007. AR at 6. In this regard, the
   agency concluded that discussions with DNAR would be prejudicial to
   NeuStar because DNAR had been able to see NeuStar's quote. Id. In order to
   neutralize the benefit that NeuStar received as a result of those
   discussions, the agency determined that the reevaluation would exclude
   consideration of the discussions. Id.

   DOC's reevaluation identified different strengths and weakness for each
   offeror as compared to the initial evaluation, and resulted in the
   following changes to the offerors' ratings: NeuStar's rating for the
   technical excellence was raised from good to outstanding, and DNAR's
   rating for the financial fitness factor was raised from unacceptable to
   marginal. The final evaluation for the offerors' quotes was as follows:

   +------------------------------------------------------------------------+
   |                         |         DNAR         |        NeuStar        |
   |-------------------------+----------------------+-----------------------|
   |Technical Excellence     |    Good/Low Risk     | Outstanding/Low Risk  |
   |-------------------------+----------------------+-----------------------|
   |Past Performance         |    Good/Low Risk     |     Good/Low Risk     |
   |-------------------------+----------------------+-----------------------|
   |Financial Fitness        |  Marginal/High Risk  | Outstanding/Low Risk  |
   |-------------------------+----------------------+-----------------------|
   |Reasonableness of Fees   | Fair and reasonable  |  Fair and reasonable  |
   +------------------------------------------------------------------------+

   AR, Tab 22, Reevaluation SSD, at 3.

   DOC selected NeuStar's quote for award, concluding that "NeuStar is deemed
   the best value because in every element . . . NeuStar's rating exceeds, or
   is equal to, DNAR's." Id. at 11. The agency noted that NeuStar's quote was
   evaluated as having more "major strengths" and "significant strengths"
   than DNAR's quote, and having fewer "minor weaknesses," "major
   weaknesses," and "significant weaknesses" than DNAR. Id. at 12.

   During the agency's reevaluation of offerors' quotes, and prior to the
   second award decision, DNAR and its outside counsel corresponded with DOC
   concerning the status of the corrective action and reevaluation. On April
   14-16, counsel for DNAR and counsel for DOC exchanged emails during which
   the protester was advised that the agency intended to "award near the end
   of the month." Email from DOC Counsel to DNAR Counsel, Apr. 14, 2008. On
   April 18, a DNAR Director wrote to the CO, expressing concern that a DOC
   attorney had indicated that award would be made without further
   discussions, as follows:

     In light of the DOC attorney's comment that the agency is moving towards
     award by the end of the month, could the agency provide a clear
     statement as to how the process will work moving forward. Agency
     counsel's representation implies that the DOC is contemplating award
     without discussions. However, in leading to the original award, there
     were pre-award communications/negotiations between the agency and the
     awardee that [led] to a revision of the awardee's offer. Given that
     fact, we do not understand how the agency could proceed to award without
     discussions.

   AR, Tab 24, Email from DNAR to DOC, Apr. 18, 2008.

   On April 25, the DNAR Director again wrote the CO, expressing concern that
   the agency apparently intended to make award by the end of the month:

     Given the deliberate pace of the reevaluation process, it was a shock to
     hear for the first time on April 14th, that award was contemplated for
     the end of this month. . . . The possibility that award could now be
     made by the end of the month without further discussions with the
     offerors is troubling.

   AR, Tab 24, Letter from DNAR to DOC, Apr. 25, 2008, at 1.

   On April 30, DOC advised DNAR that its quote had not been selected for
   award. DNAR received a debriefing from the agency on May 21, and then
   filed this protest on May 27.

   DISCUSSION

   DNAR raises two general challenges to the award to NeuStar. First, the
   protester argues that the agency's decision to evaluate offerors' initial
   quotes was improper. In this regard, the protester argues that the agency
   should have provided discussions to DNAR as part of the corrective action
   and reevaluation of quotes, and that the agency could not properly ignore
   the fact that it conducted discussions with NeuStar in October 2007.
   Second, DNAR contends that DOC's evaluation of the offerors' quotes was
   unreasonable under the financial fitness and technical excellence
   evaluation factors. As discussed below, we find that the protester's
   arguments concerning discussions are untimely, and that the remaining
   arguments lack merit.

   Award Without Discussions Based on Initial Quotes

   DNAR argues that the agency could not properly reaward this contract
   without holding discussions with DNAR--as it did with NeuStar prior to the
   initial award decision--and without allowing DNAR to submit a revised
   proposal addressing certain weaknesses identified by the agency during the
   debriefing DNAR received after the initial award decision. Alternatively,
   DNAR argues that the agency could not properly ignore the discussions that
   took place with NeuStar during the initial competition. Both the agency
   and the intervenor argue that these contentions are untimely at this
   juncture because DNAR has long been on notice that the agency was not
   planning to hold discussions. We agree.

   In general, a protest based upon alleged improprieties in a solicitation
   that are apparent prior to the closing time for receipt of initial quotes
   or proposals must be filed before that time. Bid Protest Regulations, 4
   C.F.R. sect. 21.2(a)(1) (2008); see also Continental Staffing, Inc., B-
   299054, January 29, 2007, 2007 CPD para. 18 at 4-5. We think this protest
   issue, which challenges the way in which the agency will conduct its
   corrective action and recompetition, is analogous to a challenge to the
   terms of a solicitation.

   As described above, the February 6 letter from the agency to DNAR
   expressly identified the information the protester should submit for
   agency review during the reevaluation. Specifically, the letter explained
   that: "Pursuant to [the] corrective action [DOC] is undertaking in the
   referenced solicitation, I request that you provide the Afilias 2005-2006
   Financial Statements . . . Also, please send a copy of your entire
   proposal dated July 30, 2007." AR, Tab 13, Letter from DOC to DNAR, Feb.
   6, 2008. The letter nowhere mentions the possibility that the agency will
   open discussions, or seek additional submissions.

   DNAR received this letter already knowing certain facts about the initial
   round of this procurement. For example, DNAR knew that the agency had
   engaged in discussions with NeuStar during the initial competition; in
   fact, DNAR raised this issue in its initial protest to our office.
   Protest, Nov. 13, 2007, at 8 ("[A]t the same time NTIA was eliminating
   DNAR from the competitive range . . . NTIA allowed NeuStar to revise its
   proposal to correct its marketing approach."). DNAR also knew from its
   November 7, 2007, debriefing that the agency had identified certain
   weaknesses in its quote--and it could reasonably deduce that these
   weaknesses were not likely to be addressed by the resubmission of its
   original quote. In addition, the February 6 letter invited DNAR to submit
   the financial statements it had omitted previously, but did not invite
   further revisions to its quote. These things together strongly suggest
   DNAR knew, or certainly should have known, that the agency would complete
   its reevaluation without holding discussions--thus, providing the basis
   for protest prior to award.

   While the protester argues that the February 6 letter was insufficient to
   put DNAR on notice that the agency's corrective action would not include
   an opportunity for discussions, we need not reach this issue because the
   exchange between DNAR and the agency on April 14 should have removed all
   doubt. Specifically, DOC advised counsel for DNAR that the agency intended
   to "award by the end of the month." See Email from DOC to DNAR Counsel,
   Apr. 14, 2008. In response, DNAR expressed its concerns about this issue
   in emails dated April 18 and April 25. These emails, quoted above,
   expressly argued that the agency should be holding discussions with DNAR
   (and hence giving it an opportunity to revise its proposal), before making
   a new selection decision. Nothing the agency said in response, including
   its eventual silence, can be construed as accepting DNAR's view on this
   matter.

   On this record, we think DNAR knew or should have known that the agency
   did not intend to hold discussions with DNAR, and, under the circumstances
   here, we think that DNAR could not reasonably await the agency's second
   award decision without raising any challenge. Consequently, we conclude
   that the protester's allegations regarding the agency's decision not to
   hold discussions with DNAR, and to proceed with award to NeuStar without
   remedying the fact that agency held discussions with NeuStar during the
   earlier round of this procurement, are untimely.[7]

   To the extent the protester also argues that the agency could not
   disregard the discussions that were conducted with NeuStar in the earlier
   round of this procurement, we disagree. Contracting officials in
   negotiated procurements have broad discretion to take corrective action
   where the agency determines that such action is necessary to ensure fair
   and impartial competition. Patriot Contract Servs. LLC et al., B-278276.11
   et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4. An agency's discretion in
   the area of corrective action extends to deciding the scope of proposal or
   quote revisions, and there are circumstances where an agency may
   reasonably decide to limit the revisions offerors may make to their
   proposals or quotes. See, e.g., Computer Assocs. Int'l, B-292077.2, Sept.
   4, 2003, 2003 CPD para. 157 at 5. Here, we think the agency's actions
   reasonably addressed the advantage provided to NeuStar as a result of the
   earlier discussions.

   Evaluation of the Financial Fitness Evaluation Factor

   Next, DNAR argues that DOC's evaluation of its quote was unreasonable
   under the financial fitness evaluation factor. We find no merit to the
   protester's arguments.

   As discussed above, DNAR is a joint venture between GoDaddy.com, and
   Afilias. DNAR's quote provided financial statements covering fiscal years
   2004-06 for Afilias and The Go Daddy Group, Inc. (GDGI), the parent of
   GoDaddy.com. During the evaluation, DOC rated DNAR's quote under the
   financial fitness evaluation factor as marginal, with high risk. The
   agency's evaluation of DNAR's quote for the financial fitness factor
   identified one significant, and four minor strengths. AR, Tab 22,
   Reevaluation SSD, at 7. The agency also, however, identified numerous
   weakness in DNAR's quote, and concluded that "the financial soundness of
   the joint-venturers is questionable." Id. at 12.

   The agency cited two significant concerns regarding DNAR's financial
   fitness: (1) GDGI had reported losses of $[deleted] for the fiscal years
   [deleted]; and (2) as of [deleted], GDGI reported a negative shareholder
   equity of $[deleted]. Id. at 7.

   Next, the agency cited three major weaknesses: (1) GDGI's balance sheet as
   of December 31, 2006 reflected a current ratio of [deleted];[8] (2) D&B
   did not assign a rating to GoDaddy.com due to "insufficient information
   available"; and (3) DNAR's pro forma financials projected positive net
   income, and an ever growing net income to sales percentage, despite the
   fact that GoDaddy.com [deleted] and Afilias has not achieved the ratio of
   net income to revenue that is projected for the future. Id. at 6-7.

   Finally, the agency cited two minor weaknesses: (1) Afilias USA, Inc. had
   a current ratio of [deleted] for FY 2005 and [deleted] for FY 2006, which
   is within the normal range of 1.0 to 2.0 but short of the desired range of
   2.0 or higher; and (2) DNAR's financial plan forecast a growth rate in fee
   revenue of [deleted] percent, which the agency viewed as a concern because
   such a growth rate exceeds that of the U.S. economy overall, and because
   [deleted]. Id. at 7.

   DNAR does not dispute that the financial statements for GDGI reflect the
   concerns cited by the agency, e.g., that the company posted net losses for
   [deleted] of the reported years, that the company [deleted] negative
   shareholder equity, and that the statements show a current ratio
   [deleted]. Instead, the protester argues that the agency should have taken
   a more favorable overall view of the company's financial fitness because
   the observance of generally accepted accounting principles (GAAP) does not
   give an accurate picture of the company's finances. DNAR also argues that
   its quote included information that should have addressed the agency's
   concerns about company's finances.

   In this regard, DNAR points to the notes to the financial statements for
   GDGI which explain the company's revenue recognition polices as follows:

     The Company records revenue when all four of the following criteria are
     met: [deleted].

   AR, Tab 2, DNAR Quote, app. III, at 10.

   In its comments on the agency report, DNAR explains that "[w]hile all
   domain name registrars are required by GAAP to defer the revenue and the
   cost of domain name registrations over the term of the contract, the
   actual expense associated with the ongoing management of a domain name is
   basically zero." Protester's Comments at 13. Therefore, the protester
   argues, there is an inherent mismatch in the domain name registration
   business between the initial expense of registration, which is recognized
   immediately, and the ongoing revenues, which are recognized over the life
   of the registration period. Id. The protester also argues that the agency
   should have considered certain alternate approaches to reviewing its
   current ratio, which would have downplayed the effect of these inherent
   limitations, and provided a chart to this effect in its comments.
   Protester's Comments at 14. DNAR thus argues that the agency should have
   understood that GDGI's financial fitness was better than indicated in its
   financial statements.

   We disagree with the protester's arguments here for two reasons. First, we
   note that DNAR's quote did not provide the information described above. In
   fact, we see little information in the quote explaining why the company's
   financial statements should have been more favorably evaluated. The notes
   to GDGI's financial statements merely explained the rules under which
   revenue is recognized; DNAR's quote did not provide the more detailed
   arguments regarding the "true economics" of domain name registrar
   companies, which DNAR cites in its comments on the agency report.

   We do not think DNAR could reasonably expect the agency to make
   alternative calculations for GDGI's current ratio to paint the company's
   finances in a more favorable light. In this regard, it is an offeror's
   responsibility to submit a well-written quote, with adequately detailed
   information, that clearly demonstrates compliance with the solicitation
   requirements and allows a meaningful review by the procuring agency.
   General Atomics Aeronautical Sys., Inc., B-311004, B-311004.2, Mar. 28,
   2008, 2008 CPD para. 105 at 12.

   Second, we note that DNAR concedes that GAAP requires companies such as
   GDGI to defer recognition of revenue, and acknowledges that its financial
   statements reflect the results of those accounting requirements. See
   Protester's Comments at 13. The protester thus argues, in essence, that
   notwithstanding the GAAP rules under which the audit of GDGI's finances
   was conducted, DOC should have analyzed the company's financial fitness in
   a way that ignored GAAP. We do not think that the protester's arguments
   here show that the agency's review of its financial records was
   unreasonable. In sum, we find no merit to the protester's challenges to
   the evaluation of its quote under the financial fitness evaluation factor.

   Evaluation of the Technical Excellence Evaluation Factor

   DNAR argues that DOC's evaluation of the offerors' quotes was unreasonable
   under the technical excellence factor. The protester contends that during
   the reevaluation, the agency unreasonably revised NeuStar's rating under
   this evaluation factor from good to outstanding, and unreasonably
   identified a new major weakness in DNAR's quote that prevented it from
   being rated outstanding. Again, we find no merit to the protester's
   arguments.

   The evaluation of an offeror's proposal or quote, including experience, is
   a matter within the agency's discretion. IPlus, Inc., B-298020,
   B-298020.2, June 5, 2006, 2006 CPD para. 90 at 7, 13. In reviewing a
   protest of an agency's evaluation of proposals or quotes, including
   technical evaluations, our Office 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 Shumaker Trucking & Excavating Contractors, Inc.,
   B-290732, Sept. 25, 2002, 2002 CPD para. 169 at 3. A protester's mere
   disagreement with the agency's judgment in its determination of the
   relative merit of competing proposals or quotes does not establish that
   the evaluation was unreasonable. C. Lawrence Constr. Co., Inc., B-287066,
   Mar. 30, 2001, 2001 CPD para. 70 at 4.

   As a preliminary matter, DNAR argues that the technical ratings were
   unreasonable because the agency did not explain why the evaluations
   differed between the initial evaluation and the reevaluation undertaken
   during the corrective action. As a general matter, agencies may conduct a
   new evaluation of proposals or quotes where the record shows that the
   agency made the decision to reevaluate in good faith, that is, without the
   specific intent of changing a particular offeror's technical rating or
   avoiding an award to a particular offeror. See PRC, Inc., B-233561.8,
   B-233561.9, Sept. 29, 1992, 92-2 CPD para. 215 at 3. Furthermore, our
   Office has consistently held that while individual evaluators may not
   agree on all aspects of an evaluation, an expression of disagreement with
   some aspects of an evaluation does not mean that the evaluator failed to
   follow the evaluation scheme outlined in the solicitation. Oceaneering
   Int'l, Inc., B-278126, B-278126.2, Dec. 31, 1997, 98-1 CPD para. 133 at
   10. The overriding concern is not whether the final ratings are consistent
   with earlier, individual ratings, but whether they reasonably reflect the
   relative merits of the proposals or quotes. General Injectables &
   Vaccines, Inc., B-298590 et al., Nov. 15, 2006, 2006 CPD para. 173 at 6.
   We think these principles apply to the facts here, as the agency assigned
   new evaluators to conduct a new evaluation of offerors quotes during
   corrective action.

   With regard to the protester's specific challenges, DNAR contends that DOC
   unreasonably revised NeuStar's quote from good, under the initial
   evaluation, to outstanding, under the reevaluation. The protester argues
   that this revision to the rating was unreasonable because, during the
   initial evaluation, the agency had assessed a major weakness in NeuStar's
   quote based on a perceived weakness in the company's marketing approach
   for the usTLD. The RFQ required offerors to "[p]romote awareness and
   increase registrations in the usTLD . . . and maintain a website with
   up-to-date policy and registration information for the usTLD." RFQ at 39.
   It was this perceived weakness that prompted the agency to engage in
   discussions with NeuStar to address this issue; as discussed above,
   NeuStar's response, which included commitments to increase its marketing
   activities, was subsequently incorporated into the contract. In the
   reevaluation, however, the evaluators were not provided with NeuStar's
   response to the discussions.

   We recognize that the upgrade in NeuStar's evaluation takes place in the
   very area where NeuStar was provided an opportunity--during the
   discussions held prior to the initial award decision--to improve its
   proposal. This result deserves particular scrutiny, given the agency's
   claims that it did not consider, in the reevaluation, any of the
   information NeuStar provided during the earlier discussions.

   As discussed above, the TEP convened for the reevaluation consisted of two
   new evaluators, and one evaluator who had been on the TEP for the prior
   round of evaluations.[9] The record shows that the evaluator who had
   participated in the initial evaluation assigned a major weakness to
   NeuStar's quote during the reevaluation because he concluded the quote
   "offers only a few novel ideas" on marketing the usTLD. AR, Tab 22, TEP
   Evaluator Comments for NeuStar, at 2. The other two evaluators, however,
   did not view NeuStar's quote as having a weakness based on its marketing
   approach. In the consensus evaluation, the TEP concluded that NeuStar's
   quote should be assigned a minor weakness for its marketing approach.[10]
   AR, Tab 22, TEP Consensus Evaluation for NeuStar, at 2. This evaluation
   was incorporated into the new selection decision. AR, Tab 22, Reevaluation
   SSD, at 9.

   We find nothing unreasonable about the fact that the consensus evaluation
   of the TEP convened for the reevaluation differed from the initial
   consensus evaluation of the TEP. Furthermore, neither the protester's
   disagreement with the agency's decision to rate the concerns regarding
   NeuStar's marketing approach as a minor, as opposed to a major concern,
   nor the protester's disagreement with the agency's decision to rate
   NeuStar's quote as outstanding for the technical excellence factor,
   provides a basis to sustain the protest.

   Next, DNAR contends that DOC unreasonably determined that its quote had a
   major weakness with regard to the delegated managers (DM) requirement of
   the statement of work (SOW). As discussed above, the technical excellence
   evaluation factor required offerors to address how they would satisfy the
   requirements of the SOW. As the RFQ explained, DMs are entities to whom a
   domain name is registered, and "the identity of many delegated managers
   and the contact information for the .us domains they serve remains
   unknown." RFQ at 35. As relevant here, offerors were instructed to address
   the following requirement: "The Contractor shall seek to identify all
   delegated managers and locality registrants that are currently unknown."
   RFQ at 42.

   DOC's initial evaluation of the protester's quote did not identify DNAR's
   approach to this requirement as a weakness. See AR, Tab 4, Initial SSD, at
   4-5. During the reevaluation, however, one of the two new evaluators
   assigned to the TEP identified a major weakness based on DNAR's approach
   to identifying unknown DMs. In the consensus evaluation, the TEP concluded
   that DNAR's quote merited a major weakness because the company's "plan to
   identify all of the DMs, complete the DM contact information database, and
   obtain the DM agreements is not well described." AR, Tab 22, TEP Consensus
   Report, at 2. The agency also noted that DNAR's quote expressed doubt that
   the all DM's could be identified, and that the protester stated that it
   would focus its efforts on serving already-identified DMs. Id. In this
   regard, DNAR's quote stated as follows:

     According to the "usTLD Locality Compliance Report" published by the
     current usTLD contractor, less than 25% of Delegated Managers responded
     to their attempts to make contact. As such, it is reasonable to assume
     that making contact with the remaining delegees will continue to be
     problematic. [DNAR] will continue to attempt collecting contact data for
     the usTLD Delegated Managers but will [deleted].

   AR, Tab 2, DNAR Quote, Part III, at 116.

   As a result, DNAR's quote received an overall rating of good for the
   technical excellence evaluation factor--the same rating it received under
   the initial evaluation.[11] AR, Tab 22, Reevaluation SSD, at 4-5.

   The protester argues that the agency did not explain in its reevaluation
   why the evaluators assessed the new major weakness in DNAR's quote,
   despite the fact that the protester's quote had not been revised. As
   discussed above, however, agency evaluators may reasonably reach differing
   conclusions in the evaluation of offerors, and our Office's concern in
   reviewing protests is whether the evaluation supporting the challenged
   award is reasonable. Here, we think that DOC's evaluation of DNAR's quote
   was reasonable. The agency determined that DNAR's quote provided limited
   detail as to how the company will seek to identify unknown DMs, and
   indicates that the company will place a greater emphasis on serving
   existing customers, rather than satisfying the requirement to seek to
   identify all DMs. AR, Tab 22, Initial SSD, at 5. The protester's
   disagreement with the agency's judgment here does not provide a basis to
   sustain the protest.

   In sum, we find no merit to the protester's challenges to the evaluation
   of the offerors' quotes under the technical excellence evaluation factor.

   The protest is denied.[12]

   Gary L. Kepplinger
   General Counsel

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

   [1] A top level domain is a component of the standard internet domain
   name. For example, for the internet address "www.gao.gov," "gao" is the
   secondary-level domain, and ".gov" is the top-level domain.

   [2] The solicitation and the evaluation record use words associated with
   RFQs, e.g., "quoter" and "quotes," as well as words associated with
   negotiated procurements, e.g., "propose" and "proposals." Because the
   solicitation was issued as an RFQ, we use the terminology pertaining to
   quotes in this decision.

   [3] The solicitation provided contradictory guidance regarding the basis
   for award. As quoted above, the RFQ advised that the first three factors
   were significantly more important than the fourth factor. The RFQ
   elsewhere states that all four of the factors were of equal importance.
   RFQ at 32-33. The record shows that the agency applied the former basis
   for the selection decision, and the protester does not challenge the
   agency's actions in this regard.

   [4] For the technical excellence, past performance, and financial fitness
   evaluation factors, the agency used an evaluation scheme of outstanding,
   good, marginal, and unacceptable. These three factors were also evaluated
   for performance risk.

   [5] In its evaluation of offerors' quotes, the agency assessed strengths
   and weaknesses based on the following qualifiers, in decreasing order of
   importance: significant, major, and minor.

   [6] D&B is an independent reporting service that makes its reports
   available to the public for evaluating the financial positions of
   companies.

   [7] DNAR contends that it was not required to file a "defensive protest"
   prior to award to raise this issue. In our view, DNAR's challenge to the
   agency's decision not to hold discussions during the reevaluation of these
   quotes would not have been a defensive protest because it pertains to the
   ground rules of the competition.

   [8] A current ratio, also known as a liquidity ratio, reflects a company's
   ability to meet short-term liabilities. The ratio measures a company's
   current assets divided by its current liabilities: a ratio of greater than
   1.0 means that a company has more assets than debts, whereas a ratio of
   less than 1.0 means that the company has more debts than assets. DOC
   considered a ratio of between 1.0 and 2.0 to be an acceptable range, with
   2.0 or greater being an ideal ratio.

   [9] Additionally, both the CO and the source selection official were new
   to the procurement.

   [10] The three evaluators submitted declarations in response to the
   protest. All three evaluators agree that the two new evaluators did not
   perceive NeuStar's quote as having a major weakness in the manner
   identified by the evaluator who had participated in the initial
   evaluation. However, all three evaluators agree that the consensus of the
   TEP was that a minor weakness was appropriate for NeuStar's quote under
   this evaluation factor. See Supp. AR, attachs. 1-3, Decls. of TEP
   Evaluators.

   [11] In the initial evaluation of DNAR's quote for the technical
   excellence factor, the agency identified one significant, three major, and
   one minor strengths, and one major and four minor weaknesses. AR, Tab 4,
   Initial SSD, at 4. In the reevaluation, the agency identified one
   significant, two major, and two minor strengths, and one major and three
   minor weaknesses. AR, Tab 22, Reevaluation SSD, at 3.

   [12] In pursuing this protest, DNAR raises several collateral issues. We
   have reviewed all of the protester's arguments, and conclude that none
   provides a basis for sustaining the protest.