B-310825; B-310825.2, DRS C3 Systems, LLC, February 26, 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.
1. Protest alleging that firm had developed governmentwide standard applicable to the item being procured, thereby having an unfair informational advantage over other competitors, is denied where record establishes that firm did not have a role in developing the relevant governmentwide standard.
2. A competitive advantage that derives from an offeror’s previous performance under a government contract is not an unfair competitive advantage that agency is required to neutralize.
3. Contracting agency engaged in meaningful discussions where agency advised protester of specific weaknesses regarding lack of a selected software architecture approach; agency was not required to also afford the protester an opportunity to cure proposal defects first introduced either in response to discussions or in a post-discussion proposal revision.
4. Protest challenging the evaluation of technical proposals is denied where the record establishes that the agency’s evaluation was reasonable and consistent with the evaluation criteria.
5. Protest that past performance evaluation was unreasonable is sustained where record shows that: the findings in the agency evaluation report were not consistent with the information upon which the findings were based; the agency evaluators could not remember whether they evaluated and gave proper consideration to adverse past performance information regarding the awardee; and the agency did not properly assess the relevance of the offeror’s prior contracts.
The RFP also informed offerors that the CEDS display
console procurement would occur in two phases.
In Phase I, the Navy intended to award multiple fixed-price contracts
for the preliminary design of the display consoles. In Phase II, in which Phase I awardees were
to submit detailed business and technical proposals for the actual execution of
the CEDS display console project, the Navy intended to select the offeror
proposing the best value to the agency.
The Phase II RFP contemplated the award of an
indefinite-delivery/indefinite- quantity (ID/IQ) contract including both
fixed-price and cost-reimbursement-type contract line item numbers (CLIN) for a
CEDS display console first article unit, up to 601 production units, as well as
associated spares, logistics, and various program, technical, engineering, and
training services over a 4-year performance period. RFP sect. B; amend. 3, at 2. In addition to price, the RFP identified (in
descending order of importance) technical approach, management approach and
capabilities, and past performance as the nonprice evaluation factors, along
with numerous subfactors, of equal importance within each factor.
Both GD and
After completing its initial evaluation, the agency
decided that discussions with offerors were necessary, and established a
competitive range consisting of the GD and
Management Approach and Capabilities
AR, Tab 20, Final SSEB Report, at 1-51; Tab 21, Final Cost Evaluation Report, at 1-40.
Importantly, the Navy’s evaluation was as much about determining
the number of strengths and weaknesses within the offerors’ proposals as it was
the assigned adjectival ratings. The
SSEB found that GD’s proposal had 42 strengths (31 major, 11 minor) and no
weaknesses under the technical approach factor, 35 strengths (17 major,
18 minor) and no weaknesses under the management approach and capabilities
factor, and 16 strengths (13 major, 3 minor) and no weaknesses under the
past performance factor. By contrast,
the SSEB determined that
On September 7, the SSEB and cost evaluation teams briefed
the agency source selection advisory council (SSAC) as to their respective ratings
and findings of the offerors’ proposals.
The SSAC adopted the evaluation findings and ratings without exception
and subsequently recommended that contract award be made to GD.
Organizational Conflict of Interest
The RFP included
both the SOW, which established the contract requirements, and SRD, which
established the performance, design, development, and test requirements for the
CEDS display console itself. The SRD was
developed entirely by the Navy, with no support from GD or any other
Government Protection Profile for Separation Kernels in Environments Requiring
High Robustness, also referred to as the separation kernel protection profile
(SKPP), is the governmentwide standard for separation kernel operating
environments. The record reflects that, beginning in December 2002, the SKPP standard
was developed by NSA in support of the F-22 Raptor and Joint Strike Fighter
military aircraft programs. AR,
Tab 27, NSA Declarations, at 1. The NSA working group that created the SKPP
standard consisted of government employees with assistance from MITRE (a
federally-funded research and development center) and the
In July 2006,
prior to the Navy’s award of Phase I preliminary design contracts for the CEDS
program, GD was awarded a separate contract by NSA for the HAP program. GD Comments,
The record shows that while both CEDS and the HAP program
involve processing information from multiple security levels simultaneously, the
two programs apply different separation technologies and approaches; the
requirements in the two programs here are also qualitatively different. CEDS requires, at a minimum, the ability to
simultaneously and separately process information from six different security
classifications under the same operating system, while the HAP program involves
separating information in two adjacent levels of security classification. CEDS involves a real-time operating system (i.e.,
the results of one process are available in time for the next computing process
which requires the previous result) and the HAP program does not. Further, while CEDS utilizes separation
kernel technology that is to be certified by NSA against the most rigorous
security assurance requirements, the HAP program does not involve the use or
adaptation of a separation kernel, or mandate compliance with the same security
assurance requirements. RFP amend. 1, SRD sect. 220.127.116.11; GD Comments,
Contracting officers are required to identify and evaluate
potential OCIs as early in the acquisition process as possible. Federal Acquisition Regulation (FAR) sect. 9.504(a)(1). The FAR provides that an OCI exists when,
because of other activities or relationships with other persons or
organizations, a person or organization is unable or potentially unable to
render impartial assistance or advice to the government, or the person’s
objectivity in performing the contract work is or might be otherwise impaired,
or the person has an unfair competitive advantage. See FAR sect. 2.101. Situations in which OCIs arise, as addressed
in FAR subpart 9.5 and the decisions of our Office, are generally associated
with a firm’s performance of a government contract and can be broadly
categorized into three groups: (1) unequal
access to information cases, where the primary concern is that a government
contractor has access to nonpublic information that would give it an unfair
competitive advantage in a competition for another contract; (2) biased ground
rules cases, where the primary concern is that a government contractor could
have an opportunity to skew a competition for a government contract in favor of
itself; and (3) impaired objectivity cases, where the primary concern is that a
government contractor would be in the position of evaluating itself or a
related entity (either through an assessment of performance under a contract or
an evaluation of proposals in a competition), which would cast doubt on the
contractor’s ability to render impartial advice to the government. Mechanical Equip. Co., Inc. et al.,
B-292789.2 et al., Dec. 15, 2003, 2004 CPD para. 192 at 18; Aetna
Gov’t Health Plans, Inc.; Foundation Health Fed. Servs., Inc., B-254397.15 et
* * * * *
AR, Tab 6, GD Proposal, vol. II, Technical Proposal, at II-4.12.
As a preliminary
matter, we note that the protester selectively quotes from GD’s proposal here
and does not set forth the full, page-length discussion. Further,
GD’s proposal, as
part of its separation kernel trade studies analysis, included a statement that
[deleted]. AR, Tab 6, GD Proposal, vol. II, Technical
Proposal, at II-1.358. By contrast,
during the CEDS solicitation process, NSA denied a
The record does
thus indicate that NSA denied
Lack of Meaningful Discussions
The SRD stated, with regard to the CEDS
The Display Console hardware shall be capable of loading and supporting any conventional POSIX compliant operating system, which complies with the operating system requirements called out in the [Open Architecture Computing Environment] Technologies and Standards, Sections 4.5 and 5.5. [. . . , and]
* * * * *
The [operating environment] OE shall be POSIX compliant. The OE shall be designed to maintain compatibility and interoperability between previous and current configurations of equipment.
RFP amend. 1, SRD sections 18.104.22.168(b)(2)(a), (b)(3)(c).
After making its competitive range determination, the Navy
conducted discussions with each offeror, including
The lack of a selected Separation Kernel approach will impact the schedule thereby adding risk to the program to meet schedule milestone (i.e., Critical Design Review, Test Readiness Review, and Production Readiness Review. This was determined to be a weakness. [. . . , and]
* * * * *
Without the selection of a Separation Kernel vendor, the architecture approach may not be achievable within the schedule requirements and was determined to be a weakness.
In its response to the Navy’s discussion questions,
Based on our detailed analysis to date, we now have a more specific viewpoint of the [deleted] products. As a result, we firmly believe that it is in our best interest to advance a specific [separation kernel] solution. The specific [deleted] product that we are selecting is the [deleted] solution.
The SSEB considered
Although discussions must address
deficiencies and significant weaknesses identified in proposals, the precise
content of discussions is largely a matter of the contracting officer’s
judgment. See FAR sect. 15.306(d)(3);
American States Utils. Servs., Inc., B-291307.3,
We conclude that the Navy’s discussions with
As a preliminary matter, we see no basis to conclude that
discussions closed on any date other than the date on which offerors’ responses
were due (August 6); the fact that, a week later, the agency confirmed the due
date for FPRs has no bearing on this issue.
Further, we recognize that there may be certain situations where, given
the manner in which the discussions are held, the agency may not remain silent
when an offeror introduces a matter during discussions which the agency regards
as a proposal defect. E.g., Voith
Hydro, Inc., B-277051, Aug. 22, 1997, 97-2 CPD para. 68 at 3 (where, in written
response to an area of weakness identified by agency, protester introduced a
new weakness, and agency and protester thereafter engaged in oral discussions,
agency was required to advise offeror that it regarded the new matter as a
weakness). This case does not involve
such a situation. The record here
reflects that the Navy’s discussions with offerors were conducted in writing,
and did not at any point involve back-and-forth exchanges of information. Further, the SSEB did not complete its
Evaluation of GD’s Technical Proposal
In reviewing an agency’s evaluation, we will not reevaluate
technical proposals; instead, we will examine the agency’s evaluation to ensure
that it was reasonable and consistent with the solicitation’s stated evaluation
criteria and procurement statutes and regulations. Urban-Meridian Joint Venture, B-287168,
The solicitation informed offerors that proposals were to
be sufficiently detailed so as to enable the agency to make a thorough
evaluation and to arrive at a sound determination as to whether or not the
prospective offeror would be able to perform in accordance with the stated
requirements. RFP amend. 1, Instructions
to Offerors, at 42. The RFP also stated
that “[i]f one (1) or more of the evaluation Factors or Subfactors are
determined to be Unsatisfactory, the entire proposal may be rendered
technically unacceptable and ineligible for award.”
The SRD contained hundreds, if not thousands, of requirements for the CEDS system. SRD section 3 established the actual CEDS system requirements while SRD section 4 established the test standards by which the Navy would verify the successful offeror’s compliance with the section 3 requirements. Tr. at 176, 183-84. Relevant to the protest here, the SRD included the following requirements regarding the CEDS display screens:
Acoustic Data. The screens shall be suitable for displaying acoustic “waterfall” data.
1.The screen shall be capable of displaying dense high-contrast shifting images (such as a sonogram “waterfall” output) without causing eyestrain to an operator as defined by MIL-STD-1472 and ASTM F1166. [. . . , and]
* * * * *
ECDIS-N. The display console shall be Electronic Chart Display and Information System -- Navy (ECDIS-N) certifiable. Graphics capabilities shall be compatible with and meet the requirements to display navigation applications [in accordance with Operational Navy Instruction] 9420.2 (ECDIS-N performance requirements).
RFP amend. 1, SRD sections22.214.171.124(d)(1), 126.96.36.199(e)(7). The SRD’s display screen requirements were not new or developmental in nature; the Navy had used similar standards for its predecessor display console system, the Q70, which the contractor there had been able to successfully achieve. Tr. at 173.
GD’s technical approach proposal, consisting of more than
500 pages, included sections which addressed both the “waterfall” data display
and color resolution requirements.
Specifically, the proposal described GD’s [deleted], as well as the
various functional and performance properties of its display consoles in
relation to the SRD requirements. AR,
Tab 6, GD’s Proposal, vol. II, Technical Proposal, at II.1.106 thru 112, 296
thru 302. GD’s proposal also expressly
represented that its display screens would be suitable for displaying acoustic
waterfall data in accordance with SRD sect. 188.8.131.52(d), and provided
information as to how GD would achieve the requirement.
The record shows that, when evaluating offerors’ proposals, the SSEB clearly considered certain SRD requirements to be more challenging than others. The evaluators believed the separation kernel requirements to be very demanding insofar as the work here was almost developmental in nature and had not been achieved before. Tr. at 32-33. By contrast, the SSEB did not consider the CEDS display screen requirements to be as difficult to meet. Tr. at 179-80. The evaluators were aware that the display screen requirements here were similar to those successfully achieved on the Navy’s prior Q70 display system, that GD had previously produced display systems which displayed acoustic waterfall data for Navy attack submarines, and that several other commercial companies produced display systems that met SRD requirements. Tr. at 173-75. In light of this information, as well as the market surveys that the Navy had performed prior to release of the RFP here, the evaluators were not significantly concerned about the ability of offerors to meet the SRD display screen requirements. See Tr. at 179-81, 189.
The SSEB determined that GD’s proposal met or exceeded all solicitation requirements. AR, Tab 20, Final SSEB Report, at 11-25. Relevant to the protest here, the evaluators found that GD’s proposal met (but did not exceed) the SRD display screen requirements regarding both acoustic waterfall display and color resolution. Tr. at 171. The SSEB concluded that, given the perceived degree of difficulty of the display screen requirements here as well as the information provided by GD in its proposal, the offeror both understood and expressly agreed to comply with the SRD requirements. Tr. at 233-34.
We conclude that the agency’s evaluation of GD’s technical
proposal was reasonable and consistent with the stated evaluation
criteria. As a preliminary matter,
DRS argues that GD’s proposal should have been found to be
technically unacceptable because it did little more than recite, or “parrot
back,” the SRD requirements in these two specific areas. The protester maintains that an offeror’s
ability to quote a specification verbatim does not establish technical
compliance. DRS Comments,
A proposal with
significant informational deficiencies may be found technically unacceptable,
and an offeror’s extensive parroting of an RFP’s requirements may be considered
as evidence of the offeror’s failure to demonstrate a clear understanding of
those requirements. See Government
Telecomms., Inc., B-299542.2,
Evaluation of DRS’s Technical Proposal
It is a fundamental principle of federal procurement law that a contracting agency must treat all offerors equally and evaluate their proposals evenhandedly against the solicitation’s requirements and evaluation criteria. Rockwell Elec. Commerce Corp., B-286201 et al., Dec. 14, 2000, 2001 CPD para. 65 at 5; CRAssociates, Inc., B-282075.2, B-282075.3, Mar. 15, 2000, 2000 CPD para. 63 at 5. Our review of the record confirms that the Navy evaluated offerors’ proposals equally under the technical and management factors, and that the difference in evaluation ratings here was not the result of unequal treatment by the agency but instead stemmed from the agency’s recognition of differences in the offerors’ proposals.
For example, DRS argues that because the Navy found GD’s
proposal to have several major strengths for its separation kernel solution
[deleted], the agency should have likewise found similar strengths in DRS’s proposal. Protest,
In our view, the agency’s evaluation of DRS’s proposal
here was reasonable and consistent with the stated evaluation criteria. First, the SSEB reasonably judged GD’s
[deleted] to be of value to the agency, thereby warranting strengths in this
regard. Further, the SSEB reasonably
determined that DRS’s proposal did not evidence the same [deleted] as existed
in GD’s proposal. The agency reasonably
determined that the proposals of GD and
The reasonableness of an agency’s cost or price evaluation is directly related
to the financial risk that the government bears because of the contract type it
has chosen. When an agency evaluates proposals for the award of a cost-reimbursement
contract (or cost-reimbursement portion of a contract), an offeror’s proposed
costs of contract performance are not considered controlling because,
regardless of the costs proposed by an offeror, the government is bound to pay
the contractor its actual and allowable costs.
FAR sect. 16.301-1; Metro Mach. Corp., B-295744, B-295744.2,
As set forth above, the RFP contemplated the award of an ID/IQ contract including both fixed-price and cost-reimbursement CLINs, as follows:
Supply or Service
First Article Unit
Cost Plus Award Fee
Production Units - Year 1
Fixed Price Incentive
Production Units -- Years 2 thru 4
Firm Fixed Price
Spares & Installation Checkout Hardware
Firm Fixed Price
Performance Based Logistics
Firm Fixed Price
Cost Plus Award Fee
Technical & Engineering Services
Cost Plus Award Fee
Time and Materials
RFP sect. B, at 1-7. The RFP also informed offerors how the agency would perform its cost/price evaluation and specified the unit quantities to be considered for each CLIN (e.g., CLINs 0005 and 0006 involved a total of 601 CEDS display consoles and 127 CEMS). RFP amend. 3, at 3.
The Navy’s cost/price evaluation of the GD and DRS FPRs, as corrected, was as follows:
As shown above, the offerors’ evaluated costs/prices were essentially the same as those the offerors proposed. In fact, the only instance where the agency took exception to the costs and prices as proposed and made certain minor adjustments was with regard to cost-reimbursement CLIN 0003, the first article unit. AR, Tab 21, Final Cost Evaluation Report, at 8-11.
As a preliminary matter, we note that most of the CLINs here either did not involve display glass or were fixed-price in nature. Specifically, CLINs 0010, 0011, and 0013 do not involve display glass. Further, the majority of CLINs which involve display glass (0005 thru 0008) are fixed-price, thereby establishing contractual limits on the Navy’s cost liability. In fact, the only CLIN that both involves display glass and is cost-reimbursement in nature is CLIN 003, the First Article Unit. By contrast, DRS’s assertion that approximately [deleted] of the cost difference between the offerors’ proposal is attributable to GD’s noncompliant display glass is based on consideration of the fixed-price production units. Quite simply, the cost-reimbursement portion of the CEDS procurement involving display glass, for which DRS alleges the Navy failed in its duty to perform a proper cost realism analysis, was limited to the first article unit. Moreover, as DRS’s assertion that the Navy failed to perform a proper cost realism analysis of GD’s proposal is factually premised on the claim that the awardee’s technical proposal was noncompliant, as we have determined that the Navy’s technical evaluation of GD’s proposal was reasonable, we also find no merit in the protester’s indirect challenge here to the agency’s technical evaluation of proposals.
Past Performance Evaluation
As a general matter, the evaluation of an offeror’s past
performance is a matter within the discretion of the contracting agency, and we
will not substitute our judgment for reasonably based past performance ratings.
However, we will question an agency’s
evaluation conclusions where they are unreasonable or undocumented. Clean Harbors Envtl. Servs., Inc.,
The RFP instructed offerors, with regard to past
performance, to demonstrate “how the proposed team’s past experience and
quality performance on programs of similar complexity make it qualified to
execute the CEDS program (describe relevant and pertinent past performance for prime
and major subcontractors).” RFP amend.
1, Instructions to Offerors, at 58.
Offerors were also required to submit relevant experience--that is,
contracts on-going or completed in the previous 5 years that involved work
similar to the CEDS procurement in terms of technology, type of effort
(development, production, and maintenance), contract scope, schedule and
The NAVSEA contracting officer gathered and provided to the SSEB the offerors’ past performance information. The past performance information regarding GD consisted of both contractor performance assessment reports (CPAR) and past performance questionnaires for the offeror itself and its proposed subcontractors. AR, Tab 6, GD Past Performance Information. Relevant to the protest here, the GD past performance information also included a CPAR for General Dynamics [deleted] regarding its performance of the Navy’s multifunctional cryptographic systems (MCS) contract.
The SSEB rated GD’s past performance as “outstanding” overall and determined that the awardee’s proposal had 16 strengths (13 major, 3 minor) and no weaknesses under this evaluation factor. Among the various strengths the SSEB found relating to GD’s past performance were:
Majority (three out of four) CPARs reviewed for the Contractor, rated [deleted] as exceptional or very good in technical, product performance, systems engineering, logistics support/ sustainment, schedule, cost control and management (Major).
Contractor provided 8 non-[contract data requirements list] deliverables which provided advanced insights into the Contractor’s management plans and processes (i.e., QA Plan, Program Management Plan and Risk Plan) (Major).
GD met schedule for Phase I deliverables, and provided drafts of 8 deliverables not required yet for Phase I (e.g., [quality assurance] plan, SEMP, T&E Plan), thus reducing risk of on-time delivery of awarded contractor for Phase II (Major).
AR, Tab 20, Final SSEB Report, at 30. Importantly, the SSEB’s report did not
mention the adverse CPAR ratings regarding the
In its protest,
In its report to our Office, the Navy originally argued
that the SSEB had reasonably disregarded the MCS CPAR as part of its evaluation
of GD’s past performance. The agency
contended that only two specific divisions of General Dynamics--[deleted]--would be involved in
performing the CEDS work here, while the MCS CPAR involved another GD division--[deleted]. Because the past performance information
involved a General Dynamics division that would not be performing work on the
CEDS project, the agency argued, it was reasonable not to consider this
information as relevant in the evaluation of the awardee’s past performance. AR,
In its comments to the agency report, DRS provided
information to demonstrate that GD [deleted]
was in fact [deleted]. Specifically, GD [deleted] had been merged by the parent company into [deleted] “with the integrated unit
continuing to operate as [deleted].” DRS Comments,
At the hearing conducted by our Office, the SSEB chairman
originally testified that the agency evaluators did not see and did not
consider the MCS CPAR as part of their evaluation of GD’s past
performance. Tr. at 203-05. The Navy, however, subsequently introduced
evidence that the MCS CPAR had in fact been considered by the SSEB in its
evaluation of GD’s past performance insofar as the evaluation report included
specific findings that could only be attributable to the MCS CPAR.
Q: [C]orrect me if I’m wrong. You stated you don’t remember considering the GD CPARs on MCS, correct?
A: I believe I stated I don’t recall seeing it.
Q: Do you recall evaluating it?
A: If I didn’t see it, how can I actually evaluate it?
Q: You mentioned that you had a conversation with the deputy on the SSEB, is that correct?
* * * * *
Q: And your recollection of that discussion with the deputy was that he also did not remember this CPARs?
A: That’s what he told me.
Q: If you don’t remember seeing it and the deputy doesn’t remember seeing it, how do you know that you gave it proper consideration in the agency’s past performance evaluation of GD?
A: I don’t know.
At the hearing conducted by our Office, the SSEB chairman
also discussed how the evaluators considered the relevance of offerors’ past
performance information. At one point
the lead evaluator indicated that the determination of whether an offeror’s
past performance was similar to the work to be performed was based on whether
it involved the delivery of equipment:
“We would look at the CPARs. We
looked at the work. If it was similar in
terms of they were producing a piece of equipment, we would count that as being
Q: Did you give some references or some CPARs more weight than others because they were -- they were the same or similar, they were more relevant to the work here?
A: I believe we evaluated and gave credit for every CPARs we received.
* * * * *
Q: I’ve looked at the SSEB report. . . . I did not see in here the agency’s --the agency saying that some of the references were more relevant than others. Am I missing anything?
A: No. We treat[ed] them all equally.
Q: Regardless of relevance? And what if it was really good past performance, but it has nothing to do with the technology of CEDS. How much weight do you give that? Do you think that that should be weighed equally to something that is highly relevant and high quality?
The SSEB chairman also indicated that at least one of the
strengths identified in the agency’s report regarding GD’s past performance was
inaccurate. As set forth above, the SSEB
report considered as a major strength the fact that a majority (i.e.,
three out of four) of the CPARs for proposed subcontractor [deleted] rated its performance as
either exceptional or very good. The
SSEB chairman acknowledged that this finding was inaccurate, and that instead
two of the four CPARs for [deleted]
had rated its performance as either outstanding or very good.
We conclude that the agency’s evaluation of GD’s past
performance was not reasonable or consistent with the stated evaluation
criteria. Of foremost concern, the
record indicates that the Navy failed to give meaningful consideration to all
the relevant past performance information that it possessed regarding GD. The evaluation report reflects that the SSEB was
aware of, and apparently considered to some degree, the CPAR regarding the
The record also reflects that the Navy failed to adequately consider the relevance of GD’s past performance information as part of the evaluation. An agency is required to consider the
similarity or relevance of an offeror’s past performance information as part of
its evaluation of past performance. See
FAR sect. 15.305(a)(2) (the relevance of past performance information shall be
considered); United Paradyne Corp., B-297758,
The RFP here instructed offerors to provide past performance information that was “relevant and pertinent,” and later defined “relevant” as similar to the CEDS procurement in terms of technology, type of effort, contract scope, schedule, and risk. RFP amend. 1, Instructions to Offerors, at 60, 62. The record does not reflect that the agency adequately considered whether GD’s past performance information was in fact similar to the CEDS procurement in accordance with the RFP.
The CPARs and questionnaires upon which the SSEB based their evaluation of GD’s past performance furnished adjectival ratings and narratives regarding the quality of an offeror’s performance in various areas. The contemporaneous evaluation report does not indicate that the agency went beyond considerations of quality and also considered the relevance of the offerors’ past performance references. The SSEB’s evaluation findings regarding GD concern the quality of the offeror’s prior performance and indicate equal consideration of the offeror’s past performance references without regard to relevance. Further, at the hearing conducted by our Office, the SSEB chairman’s statements were, at best, ambiguous as to the agency’s consideration of relevance. Specifically, the lead evaluator indicated that the SSEB gave equal consideration to all the offeror’s past performance references, irrespective of relevance, and that the determination of what past performance was deemed “similar” was based simply on whether the prior work involved producing a piece of equipment. As the RFP required the agency to determine whether an offeror’s past performance was similar to the CEDS procurement in terms of technology, type of effort, contract scope, schedule, and risk, we conclude that the agency did not properly consider the relevance of GD’s past performance in its evaluation.
The record also reflects various inaccuracies in the SSEB report regarding GD’s past performance. As detailed above, the SSEB chairman admits that one of the strengths given to GD--that a majority of the CPARs for [deleted] rated it as exceptional or very good--was factually inaccurate. Moreover, the two strengths given to GD related to its MCS CPAR are redundant, as well as based entirely on assertions by the contractor with which the Navy reviewing official there did not agree. In addition, GD received a major strength for certain CEDS document deliverables that provided insight into the contractor’s management plans and processes--a fact that has nothing to do with past performance. In sum, several of the SSEB’s specific findings regarding GD’s past performance are without factual justification.
The Navy argues that notwithstanding any deficiencies in
its evaluation of GD’s past performance, the protest here should not be
is an essential element of
a viable protest; where the protester fails to demonstrate that, but for the
agency’s actions, it would have had a substantial chance of receiving the
award, there is no basis for finding prejudice, and our Office will
not sustain the protest. Joint Mgmt.
& Tech. Servs., B-294229, B-294229.2,
We recognize that GD’s proposal was found to have technical strengths that DRS’s did not, and that the RFP established that the technical approach factor was more important than the management approach and capabilities factor, which in turn was more important than the past performance factor. However, as detailed above, the record shows that the Navy’s evaluation of GD’s past performance was fundamentally flawed: it failed to adequately consider all relevant information; it failed to adequately consider the relevance of the offeror’s past performance information; and several of the identified strengths are factually inaccurate and/or redundant. In light of these significant deficiencies in the agency’s evaluation of GD’s past performance, we simply cannot reasonably determine what GD’s rating--or its strengths and weaknesses--should have properly been here. By contrast, in light of the errors which the Navy concedes occurred in other aspects of its evaluation of GD’s proposal, it appears that the GD and DRS proposals have equivalent overall ratings of “very good” under both the technical approach and management approach and capabilities factors, and DRS received an “outstanding” rating for its past performance. Consequently, as we cannot determine that GD’s proposal would remain technically superior overall, we conclude that the agency’s actions here were prejudicial to the protester.
We recommend that the agency reevaluate offerors’ past performance, giving due consideration to all relevant information as well as the relevance of the offerors’ prior and current contracts and, based on that reevaluation, make a new source selection determination. If, upon reevaluation of proposals, DRS is determined to offer the best value to the government, the Navy should terminate GD’s contract for the convenience of the government and make award to DRS. We also recommend that DRS be reimbursed the costs of filing and pursuing the protest, including reasonable attorneys’ fees, limited to the costs relating to the ground on which we sustain the protest. 4 C.F.R. sect. 21.8(d)(1) (2007). DRS should submit its certified claim for costs, detailing the time expended and costs incurred, directly to the contracting agency within 60 days after receipt of this decision. 4 C.F.R. sect. 21.8(f)(1).
The protest is sustained in part and denied in part.
Gary L. Kepplinger
 The RFP established two categories of CEDS display systems--display consoles and remote displays--for which the Navy made separate award determinations. DRS’s protest here concerns only the Navy’s CEDS display consoles procurement.
The awarded Phase I contracts also served as the solicitation for Phase II
proposals: they each included a SOW, a
CEDS system requirements document (SRD), instructions to offerors regarding the
submission of proposals, and evaluation factors for award. AR,
We note that another section of the RFP
stated that overall technical merit was more important (as opposed to
significantly more important) than total evaluated price.
 As explained in detail below in footnote 20, during the course of the protest the Navy conceded certain evaluation errors. In light thereof, GD’s proposal under the technical approach factor appears to merit a “very good” rather than an “outstanding” rating.
 As with GD’s rating under the technical approach factor, given the errors which the Navy concedes occurred, GD’s proposal under the management approach and capabilities factor also appears to merit a “very good” rather than an “outstanding” rating.
In its original protest
During the course of the protest, GD provided statements demonstrating that its
expertise in separation kernel technology was the result of its long-time
involvement in the design of information assurance systems such as encryption
equipment. In 1999, as a result of an
independent research and development (IR&D) project, GD employees filed a patent
application for a mathematically analyzed separation kernel. [Deleted]
We acknowledge that our findings here are based largely on statements provided
by the government and GD employees.
However, we see no basis (nor does
 This briefing appears to have occurred in the context of GD being the current HAP program contractor.
 POSIX, or portable operating system interface for Unix, refers here to the Navy’s open software architecture initiative of ensuring that the CEDS system does not adversely affect any host application software with which it would interface. Tr. at 48-49.
DRS’s initial proposal also did not identify the specific [deleted] separation
kernel product in which it was most interested; instead,
 The record indicates that the Navy’s use here of the term “major weakness” was synonymous with “significant weakness,” that is, a flaw in an offeror’s proposal that appreciably increases the risk of unsuccessful contract performance. See FAR sect. 15.001.
The record reflects that the Navy conducted discussions in writing by sending
each offeror a letter containing discussion questions on July 20; the agency
also requested that offerors submit their discussion responses in writing by
August 6. AR, Tab 14, Navy Discussions
 Acoustic waterfall display refers to the graphical representation of noise data (i.e., sonar) with respect to time. As time progresses, data is added to the top of the display screen and the existing data moves down. An improper display screen can flicker or flash over time, thereby causing eyestrain and/or headaches to the operator who is monitoring the acoustic waterfall display. Tr. at 170-73.
The RFP defined “unsatisfactory” as follows: the proposed approach indicates a lack of
understanding of the program goals and the methods, resources, schedules and
other aspects essential to performance of the program; numerous weaknesses and
deficiencies exist; and the risk of unsuccessful contract performance is high.
Additionally, the requirements verification test matrix portion of GD’s
proposal also represented that its display screens would comply with the SRD
requirements regarding acoustic waterfall data.
 The record also reflects that the Navy’s evaluation of proposals was even-handed in this regard: in those instances where DRS’s proposal also agreed to comply with the SRD requirements without providing details as to how, the SSEB likewise did not find this to be a deficiency or weakness. Tr. at 143.
DRS’s protest also raised other issues regarding the evaluation of its
technical proposal, many of which were resolved by the agency’s acknowledgment
of error. In its report to our Office,
the Navy conceded that because GD [deleted], the awardee’s proposal should have
received similar major weaknesses under the technical and management factors for
failing to comply with the SRD requirement for a POSIX-compliant operating
DRS also originally asserted that the Navy’s cost evaluation was flawed because
GD had offered “cheap versions of major cost drivers” (e.g., trackball,
keyboard, joystick) and that GD’s labor rates for program services appeared
understated. DRS Protest,
Likewise, a realism analysis is not ordinarily part of an agency’s price
evaluation because of the allocation of risk associated with a fixed-price
contract. AST Envtl., Inc., B-291567,
Dec. 31, 2002, 2002 CPD para. 225 at 2. To
the extent an agency elects to perform a realism analysis in the competition
for a fixed-price or fixed-price incentive contract, its purpose is not to
evaluate an offeror’s price but to assess risk or to measure an offeror’s
understanding of the solicitation’s requirements; the offered prices may not be
adjusted as a result of the analysis.
FAR sect. 15.404-1(d)(3); Puglia Eng’g of California, Inc., B-297413 et
 The RFP’s other CLINs were either not separately priced, or expressly not part of the agency’s cost and price evaluation. RFP sect. B at 1-7.
 As contemplated here, a fixed-price incentive (firm target) contract specifies a target cost, a target profit, a price ceiling (but not a profit ceiling or floor), and a profit adjustment formula. See FAR sect. 16.403-1.
In its report to our Office, the Navy acknowledged certain computational errors
in its final cost evaluation report. AR,
The RFP also established that, with regard to the past performance evaluation
factor, the agency would assign a rating of “neutral” where the offeror was
found not to have relevant past performance.
 The GD past performance information consisted of: one CPAR for GD business unit [deleted]; three CPARs for proposed subcontractor [deleted]; two CPARs for proposed subcontractor [deleted]; one CPAR for proposed subcontractor [deleted]; and two past performance questionnaires each for GD, [deleted]. AR, Tab 6, GD Past Performance Information.
 The MCS contract involved the design, development, fabrication, testing and fielding of a programmable, multi-channel, multiple independent levels of security (MILS) cryptographic device for the Navy’s Virginia- and Seawolf-class submarines.
 The agency also furnished a declaration from the SSEB chairman stating that the evaluators had considered only past performance information for the divisions of General Dynamics that would actually perform work under the CEDS contract, namely [deleted], as well as proposed subcontractors. AR, Tab 31, Declaration of SSEB Chairman, at 1.
 In response to questioning from the agency, the SSEB chairman concluded that two of the strengths identified in the evaluation report regarding GD’s past performance (i.e., “[t]he Contractor developed, produced and certified a MILS system on a submarine without benefit of required [government-furnished equipment/government-furnished information] GFE/GFI (Major),” and “[t]he contractor managed to certify a MILS system installed on a submarine without benefit of the required GFE/GFI which is perceived as a risk reducer to meeting the separation kernel requirement (Major)”) derived from the contractor’s rebuttal in the MCS CPAR. Tr. at 366-69; AR, Tab 20, Final SSEB Report, at 30.
 Further, the record reflects that this is more than just the faulty memory of a single individual: the SSEB chairman stated that his deputy also had no recollection of having seen or considered the MCS CPAR as part of the Navy’s evaluation.
The Navy also contends that, with regard to the management approach factor, the
offerors’ proposals are substantially equal, although GD maintains a
comparative advantage based on one additional minor weakness in DRS’s