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B-179875, SEPT 12, 1974

B-179875 Sep 12, 1974
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DISCLOSURE OF PRECISE NUMERICAL WEIGHTS ASSIGNED TO FACTORS USED IN EVALUATING PROPOSALS IS NOT REQUIRED SO LONG AS OFFERORS ARE OTHERWISE INFORMED OF RELATIVE IMPORTANCE OF EVALUATION CRITERIA. ONE FACTOR IS ASSIGNED A PREDOMINANT VALUE. RFP THAT STATED DETERMINATION OF SUCCESSFUL OFFER WOULD BE BASED PRIMARILY ON LEAST RISK TO GOVERNMENT IN OBTAINING ITEM ON SCHEDULE THAT CONFORMED TO SPECIFICATION REQUIREMENTS ADEQUATELY ADVISED OFFERORS THAT PRICE WOULD NOT PLAY PREDOMINANT ROLE AND IT WAS NOT NECESSARY TO ADVISE OFFERORS OF PRECISE NUMERICAL WEIGHT TO BE GIVEN PRICE. SINCE TERMS OF RFP SHOULD HAVE ALERTED PROTESTER TO RELATIVE ROLE OF PRICE PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS.

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B-179875, SEPT 12, 1974

1. DISCLOSURE OF PRECISE NUMERICAL WEIGHTS ASSIGNED TO FACTORS USED IN EVALUATING PROPOSALS IS NOT REQUIRED SO LONG AS OFFERORS ARE OTHERWISE INFORMED OF RELATIVE IMPORTANCE OF EVALUATION CRITERIA, SUCH AS LISTING EVALUATION FACTORS IN GENERALIZED TERMS IN DESCENDING ORDER OF IMPORTANCE. HOWEVER, WHERE, AS HERE, ONE FACTOR IS ASSIGNED A PREDOMINANT VALUE, THIS SHOULD BE SO STATED BY INDICATING ITS RELATIVE IMPORTANCE IN RELATION TO OTHER FACTORS BY APPROPRIATE LANGUAGE. B 180245(1), MAY 9, 1974. 2. RFP THAT STATED DETERMINATION OF SUCCESSFUL OFFER WOULD BE BASED PRIMARILY ON LEAST RISK TO GOVERNMENT IN OBTAINING ITEM ON SCHEDULE THAT CONFORMED TO SPECIFICATION REQUIREMENTS ADEQUATELY ADVISED OFFERORS THAT PRICE WOULD NOT PLAY PREDOMINANT ROLE AND IT WAS NOT NECESSARY TO ADVISE OFFERORS OF PRECISE NUMERICAL WEIGHT TO BE GIVEN PRICE. SINCE TERMS OF RFP SHOULD HAVE ALERTED PROTESTER TO RELATIVE ROLE OF PRICE PRIOR TO CLOSING DATE FOR RECEIPT OF PROPOSALS, PROTEST CONCERNING THIS ISSUE WHICH WAS NOT FILED UNTIL AFTER AWARD IS UNTIMELY AND WILL NOT BE CONSIDERED FURTHER. 4 C.F.R. 20.2(A). 3. RFP ADEQUATELY INFORMED OFFERORS THAT EVALUATION WOULD INCLUDE CONSIDERATION OF RISKS ASSOCIATED WITH EITHER NEW OR MODIFIED EXISTING EQUIPMENT TO MEET SPECIFICATION AND DELIVERY REQUIREMENTS; THEREFORE, RECORD DOES NOT SUPPORT PROTESTER'S CONTENTION THAT "UNANNOUNCED BASELINE" AND UNDISCLOSED CRITERIA WERE USED IN EVALUATION OF PROPOSALS. MOREOVER, RECORD SUPPORTS ADMINISTRATIVE DETERMINATION THAT RISKS ASSOCIATED WITH PROTESTER'S LOWER PRICED PROPOSAL JUSTIFIED AWARD TO OFFEROR SUBMITTING HIGHER PRICED, TECHNICALLY SUPERIOR PROPOSAL. 4. SINCE RECORD DOES NOT ESTABLISH THAT AWARD WAS ERRONEOUS, GAO DOES NOT HAVE BASIS FOR RECOMMENDING TERMINATION OF ALL OR PART OF CONTRACT AWARDED TO SUCCESSFUL OFFEROR. WHETHER PROTESTER SHOULD BE AWARDED CONTRACT TO PRODUCE SUBJECT ITEM TO ASSURE COMPETITION IN FUTURE PROCUREMENTS IS ADMINISTRATIVE DECISION WHICH IS OUTSIDE SCOPE OF GAO'S FUNCTION IN REVIEWING PROTESTS RELATIVE TO AWARD OF CONTRACTS.

THIS CONCERNS A PROTEST BY THE UNIVAC DIVISION OF SPERRY RAND CORPORATION (UNIVAC), RELATIVE TO THE AWARD OF A CONTRACT FOR SIGNAL DATA CONVERTERS (SDCS) TO RAYTHEON, INCORPORATED, UNDER REQUEST FOR PROPOSALS (RFP) NO. N00024-74-R-3095(S), ISSUED ON SEPTEMBER 7, 1973, BY THE NAVAL SHIP SYSTEMS COMMAND.

INITIALLY A DETERMINATION WAS MADE TO PURCHASE SDCS FOR THE PATROL FRIGATE (PF) SHIPBUILDING PROGRAM AND THE LIGHT AIRBORNE MULIT-PURPOSE SYSTEM (LAMPS) PROGRAM, SOLE-SOURCE FROM RAYTHEON ON THE BASIS THAT THE EQUIPMENT WAS URGENTLY REQUIRED TO MEET THE INTEGRATION AND TESTING SCHEDULES FOR THESE PROGRAMS. SEPARATE RFPS WERE ISSUED ON JUNE 7, 1973, FOR ONE SDC WITH AN OPTION FOR AN ADDITIONAL UNIT FOR THE PF PROGRAM, AND ON JUNE 27, 1973, FOR TWO SDCS FOR THE LAMPS PROGRAM. UNIVAC APPARENTLY BECAME AWARE OF THE REQUIREMENTS THROUGH A NOTICE PUBLISHED ON JUNE 18, 1973, IN THE COMMERCE BUSINESS DAILY, AND A COPY OF THE RFP ISSUED JUNE 7, 1973, WAS REQUESTED. ON JUNE 29, 1973, UNIVAC SUBMITTED AN UNSOLICITED PROPOSAL FOR THE PROCUREMENT.

THEREAFTER, THE NAVY COMBINED ITS REQUIREMENTS AND ON AUGUST 10, 1973, A CONSOLIDATED SOLICITATION WAS ISSUED FOR A FIRM REQUIREMENT FOR ONE SDC FOR THE PF PROGRAM, WITH AN OPTION FOR ONE ADDITIONAL UNIT, AND FOR ONE SDC FOR THE LAMPS PROGRAM. UNIVAC AND RAYTHEON SUBMITTED PROPOSALS IN RESPONSE TO THIS RFP. NEGOTIATIONS WERE CONDUCTED WITH BOTH OF THE OFFERORS AND BOTH RESPONDED WITH BEST AND FINAL OFFERS. SUBSEQUENTLY, ON SEPTEMBER 5, 1973, THE PROCURING ACTIVITY ADVISED RAYTHEON AND UNIVAC THAT THE RFP WAS BEING CANCELED BECAUSE OF THE NECESSITY OF INCORPORATING CERTAIN SCHEDULE CHANGES AND TO INCLUDE PROPER EVALUATION CRITERIA. THE NAVY STATES THAT THE CONSOLIDATED RFP CONTAINED NO EVALUATION CRITERIA, NOTWITHSTANDING THAT IN DETERMINING WHO SHOULD BE AWARDED A CONTRACT THE NAVY WAS CONCERNED PRIMARILY WITH FACTORS OTHER THAN PRICE. THE NAVY ADVISES THAT UNDER THE SPECIFICATIONS OF THE CONSOLIDATED RFP ALL UNITS WERE TO BE FULLY TESTED PRIOR TO DELIVERY BUT THAT THIS WAS PHYSICALLY IMPOSSIBLE WITH RESPECT TO THE FIRST UNIT. IT IS ALSO REPORTED THAT SINCE ONE PF-SDC UNDER THE CONSOLIDATED RFP WAS ONLY AN OPTION, THERE WAS NO FIRM CONTRACTUAL PROVISION FOR WHEN ENVIRONMENTAL TESTS WOULD BE PERFORMED. THE NAVY CONCLUDED THAT AN AWARD BASED ON BEST AND FINAL OFFERS IN RESPONSE TO THE CANCELED RFP WOULD HAVE REQUIRED THE CONTRACTOR TO MEET AN IMPOSSIBLE SPECIFICATION REQUIREMENT. FOR THESE REASONS NAVY MADE THE DETERMINATION THAT THE CONSOLIDATED RFP SHOULD BE CANCELED.

THE SUBJECT SOLICITATION, WHICH CALLED FOR TWO SDCS FOR THE PF PROGRAM (ITEM 0001), AND ONE SDC FOR THE LAMPS PROGRAM (ITEM 0007), WITH ASSOCIATED ON SEPTEMBER 4, 1973, TO 5 FIRMS AND RAYTHEON, UNIVAC AND OCEAN TECHNOLOGY, DATA, INSTALLATION AND CHECKOUT KITS, AND ENGINEERING SERVICES, WAS ISSUED INCORPORATED (OTI), SUBMITTED PROPOSALS. AFTER NEGOTIATIONS WITH THE 3 OFFERORS, AND SUBMISSION OF BEST AND FINAL OFFERS, AWARD WAS MADE TO RAYTHEON ON OCTOBER 3, 1973, IN THE AMOUNT OF $437,277, WHICH WAS $118,000 HIGHER THAN UNIVAC'S PRICE, AND $75,000 LESS THAN OTI'S.

SINCE MUCH OF UNIVAC'S PROTEST CONCERNS THE STATEMENT OF EVALUATION CRITERIA IN THE RFP AND THE APPLICATION OF SUCH CRITERIA IN THE EVALUATION OF PROPOSALS, WE BELIEVE IT WOULD BE USEFUL TO A DISCUSSION OF THE MERITS OF THE PROTEST TO FIRST QUOTE PERTINENT PROVISIONS OF THE RFP AND EXPLAIN THE EVALUATION PLAN AND FINDINGS. THE RFP SET FORTH PROPOSAL GUIDELINES, WHICH PROVIDED IN PART AS FOLLOWS:

"YOUR TECHNICAL PROPOSAL MUST CONTAIN A DETAILED DESCRIPTION OF THE UNITS WHICH ARE TO BE SUPPLIED TO MEET SPECIFICATION REQUIREMENTS AND SUFFICIENT SUPPORTING INFORMATION SHOULD BE SUPPLIED TO ALLOW FOR A COMPREHENSIVE EVALUATION OF YOUR PROPOSAL BY COGNIZANT NAVY PERSONNEL. IN THE EVENT YOUR PROPOSAL RELIES UPON THE MODIFICATION OF EXISTING SIMILAR EQUIPMENT, YOUR PROPOSAL SHOULD DESCRIBE THE EQUIPMENT, DESCRIBE THE MODIFICATIONS WHICH ARE REQUIRED AND DISCUSS THE MODIFICATIONS WITH RESPECT TO IMPACT ON THE EXISTING UNIT AND ABILITY OF THE MODIFIED UNIT TO COMPLY WITH SPECIFICATION REQUIREMENTS.

"YOUR PROPOSAL SHOULD ALSO CONTAIN A DISCUSSION OF THE TESTING REQUIREMENTS LISTED IN SECTION 4 OF THE SPECIFICATIONS WITH RESPECT TO YOUR APPROACH TOWARDS SUPPLYING A UNIT WHICH MEETS SUCH TESTING REQUIREMENTS. IN THIS REGARD YOUR ATTENTION IS DRAWN TO PAGE 26 WHICH WAIVES THE TESTING REQUIREMENTS OF SECTIONS 4.6.1, 4.6.2 AND 4.6.3 FOR AN OFFEROR WHOSE PRODUCT HAS SUCCESSFULLY MET SUCH TESTING REQUIREMENTS BEFORE. IF AN OFFEROR FEELS HIS OFFERED UNITS QUALIFY FOR SUCH WAIVER HE SHALL SUBMIT SUPPORTING INFORMATION SUBSTANTIATING SUCH A REQUEST. IN ANY EVENT, YOUR PROPOSAL SHALL CONTAIN A DISCUSSION OF YOUR APPROACH TOWARD DELIVERING A FULLY TESTED UNIT ASSUMING NO WAIVERS ARE GRANTED.

"TECHNICAL PROPOSALS SHOULD ALSO SHOW THE EXTENT OF EFFORT INVOLVED IN THE CONDUCT OF RELIABILITY AND MAINTAINABILITY DEMONSTRATION TESTS AND ENVIRONMENTAL TESTING AS REQUIRED BY SPECIFICATION, PARAGRAPH 4.

"ONE ADDITIONAL FACTOR TO BE ADDRESSED IN YOUR PROPOSAL IS THAT OF THE NEED FOR ITEM 0001 TO BE SERVICE APPROVED BY FEBRUARY 1975. WHILE IT IS RECOGNIZED THAT SERVICE APPROVAL IS THE GOVERNMENT'S RESPONSIBILITY, THE REQUIREMENT FOR PROVIDING THE PF PROGRAM WITH SERVICE APPROVED SIGNAL DATA CONVERTERS BY 1975 FEBRUARY MAKES IT INCUMBENT UPON THE NAVY TO EVALUATE PROPOSALS WITH RESPECT TO THE DEGREE OF RISK ASSOCIATED WITH OBTAINING SERVICE APPROVAL FOR THE SIGNAL DATA CONVERTER BY 1975 FEBRUARY. ACCORDINGLY, EACH OFFEROR IS TO PROVIDE WITH HIS PROPOSAL INFORMATION WITH RESPECT TO HIS PROPOSED UNIT RELATING TO WHETHER ANY STEPS AND/OR PROCEDURES ASSOCIATED WITH SERVICE APPROVAL HAVE BEEN COMPLIED WITH OR SHOULD BE WAIVED AS THE RESULT OF PREVIOUS TEST DATA GATHERED ON SIMILAR UNITS THAT EITHER HAVE UNDERGONE SERVICE APPROVAL OR WHICH ARE SCHEDULED TO UNDERGO SUCH SERVICE APPROVAL."

SECTION D ON PAGES 18 AND 19 OF THE RFP ENTITLED "EVALUATION AND AWARD FACTORS" PROVIDED AS FOLLOWS: "PROPOSAL EVALUATION

"(1) THE PRIMARY OBJECTIVE OF PROPOSAL EVALUATION IS TO ASSURE AN IMPARTIAL, EQUITABLE AND COMPREHENSIVE EVALUATION OF COMPETITIVE PROPOSALS TO ASSURE SELECTION OF THE OFFEROR WHOSE PROPOSAL OFFERS OPTIMUM SATISFACTION OF THE GOVERNMENT'S NEEDS, INCLUDING TECHNICAL, SCHEDULE AND PRICE CONSIDERATIONS. THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM AWARD SHALL BE MADE IS WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IN VIEW OF THE FACT THAT TWO OF THE CONVERTERS ARE BEING PURCHASED FOR THE PF PROGRAM (ITEM 0001) AND ONE IS BEING PURCHASED FOR THE LAMPS PROGRAM (ITEM 0007) BOTH OF WHICH HAVE CERTAIN ESSENTIAL SCHEDULES AND MILESTONES TO MEET, THE DETERMINATION WILL BE PRIMARILY BASED UPON WHICH OFFEROR CAN MEET THE TECHNICAL AND DELIVERY REQUIREMENTS OF THIS SOLICITATION AT THE LEAST RISK TO THE GOVERNMENT. YOUR PROPOSALS WILL THEREFORE BE EVALUATED AS IS SET FORTH IN PARAGRAPH 2 BELOW.

"(2) THE DELIVERY DATES SET FORTH IN SECTION H ARE FIRM. ACCORDINGLY, NO CONTRACT WILL BE AWARDED TO AN OFFEROR PROPOSING DELIVERY DATES LATER THAN THOSE LISTED IN SECTION H. ALL PROPOSALS WILL BE EVALUATED IN ACCORDANCE WITH THE FOLLOWING CRITERIA, WHICH CRITERIA HAVE BEEN PROMULGATED TO ALLOW FOR EVALUATION OF THE RELATIVE DEGREE OF RISK ATTACHING TO EACH PROPOSAL WITH RESPECT TO ABILITY TO MEET SPECIFICATION REQUIREMENTS WITHIN THE TIME CONSTRAINTS SET FORTH IN THE SCHEDULE. IN ADDITION, AN AREA WILL ALSO BE EVALUATED WITH RESPECT TO AN OFFEROR'S CAPABILITY TO DELIVER A UNIT WHICH CAN BE SERVICE APPROVED BY THE GOVERNMENT BY 1975 FEBRUARY. THE CRITERIA ARE LISTED IN THEIR RELATIVE ORDER OF IMPORTANCE.

"A. ABILITY TO PROVIDE A UNIT MEETING SPECIFICATIONS AND THE MAGNITUDE AND RELATIVE DIFFICULTY OF ENGINEERING EFFORT REQUIRED TO EITHER PRODUCE A NEW SIGNAL DATA CONVERTER OF TO MODIFY AN EXISTING UNIT TO MEET THE PARTICULAR REQUIREMENTS OF THE SPECIFICATION.

"B. RISK ASSOCIATED WITH PROVIDING A UNIT THAT HAS MET THE TESTING REQUIREMENTS SET FORTH IN SECTION 4 OF THE SPECIFICATIONS WITHIN THE TIME CONSTRAINTS AND OTHER REQUIREMENTS SET FORTH IN THE SCHEDULE.

"C. RISK TO THE NAVY IN OBTAINING SERVICE APPROVAL BY 1975 FEBRUARY FOR THE SIGNAL DATA CONVERTER PROVIDED BY THE CONTRACTOR."

SECTION 4 OF THE SPECIFICATIONS REFERRED TO IN CRITERIA B DESCRIBED CERTAIN TESTS SUCH AS SHOCK, VIBRATION AND ACCOUSTIC NOISE, RELIABILITY AND MAINTAINABILITY (R&M) AND DEMONSTRATION TESTS. A RETEST PROVISION WAS ALSO INCLUDED.

THE PLAN FOR EVALUATING PROPOSAL WAS DEVELOPED DURING THE PERIOD BETWEEN RECEIPT OF PROPOSALS UNDER THE CONSOLIDATED RFP, WHICH WAS CANCELED AND PRIOR TO THE CLOSING DATE FOR RECEIPT OF INITIAL PROPOSALS UNDER THE INSTANT RFP. A PROPOSAL EVALUATION PANEL (PEP) WAS ESTABLISHED TO SCORE PROPOSALS WITH RESPECT TO CRITERIA A AND B, AND PROVIDE COMMENTS TO THE CONTRACT REVIEW PANEL (CARP) WITH RESPECT TO THE SCORING OF PROPOSALS FOR CRITERIA C. THE EVALUATION MATERIAL FURNISHED THE EVALUATORS INCLUDED SCORING DEFINITIONS TO AID IN ASSIGNING NUMERICAL SCORES AND A LIST OF QUESTIONS PERTAINING TO EACH OF THE THREE CRITERIA TO BE ANSWERED BY EACH EVALUATOR IN SCORING THE PROPOSALS WITH REGARD TO THE RESPECTIVE CRITERIA. EACH OF THE THREE CRITERIA LISTED IN THE RFP HAD AN ASSIGNED TOTAL SCORE OF 100 POINTS; HOWEVER, THE SCORES WERE TO BE WEIGHTED .6 FOR FOR CRITERIA A; .22 FOR CRITERIA B AND .18 FOR CRITERIA C. IT WAS ALSO DETERMINED THAT THE TECHNICAL COMPOSITE SCORE DIFFERENCES WOULD BE CONSIDERED 2.5 TIMES THE WEIGHT OF THE PRICE DIFFERENCES AND THAT THE OFFEROR'S PROPOSAL REPRESENTING THE BEST PRICE AND TECHNICAL COMBINATION WOULD BE CONSIDERED THE MOST ADVANTAGEOUS TO THE GOVERNMENT.

THE SYNOPSIS OF THE OVERALL SCORING RATIONALE PROVIDES THE FOLLOWING NARRATIVE WITH RESPECT TO THE FACTORS THAT WERE CONSIDERED IN RANKING THE PROPOSALS SUBMITTED BY RAYTHEON AND UNIVAC.

CRITERIA A

"FIRST, THE RAYTHEON BASELINE EQUIPMENT HAS ALL OF THE REQUIRED FUNCTIONS, EXCEPT FOR THE NTDS SLOW COMPUTER INTERFACE. HOWEVER, THIS CAPABILITY EXISTS IN OTHER RAYTHEON EQUIPMENTS. THE UNIVAC BASELINE CONTAINS 5 OF THE 9 REQUIRED FUNCTIONS. THE BASELINE ALSO CONTAINS PARTS OF TWO OTHER FUNCTIONS. 3 OF THE 4 FUNCTIONS THAT ARE NOT IN THE BASELINE DO EXIST IN OTHER UNIVAC EQUIPMENT. THE FOURTH FUNCTION REQUIRES THE IMPLEMENTATION OF A NEW PRINTED CIRCUIT CARD. UNIVAC STATES THAT THIS CARD HAS BEEN DESIGNED AND TESTED BUT HAS NOT BEEN USED IN PRODUCTION EQUIPMENT. ***

"SECOND, THE RAYTHEON BASELINE HAS SUCCESSFULLY PASSED ALL OF THE REQUIRED ENVIRONMENTAL TESTS. THE UNIVAC BASELINE HAS NOT BEEN SUBJECTED TO ENVIRONMENTAL TESTS. ***

"THIRD, NONE OF THE BASELINE EQUIPMENTS PROPOSED BY THE CONTRACTORS HAS BEEN SUBJECTED TO RELIABILITY AND MAINTAINABILITY TESTS OR DEMONSTRATIONS.

"FOURTH, RAYTHEON REQUIRES NO NEW OR MODIFIED CABINET STRUCTURE. UNIVAC'S PROPOSED CABINET RESULTS IN A CHANGE TO THE SIZE OF THE BASELINE CABINET WITH NO CHANGE TO THE MECHANICAL DESIGN. THE ONLY CHANGES ARE TO THE WIDTH AND DEPTH DIMENSIONS. (THERE NEXT FOLLOWS NOTE #1).

"IN THE EVENT THAT UNIVAC SUBMITS AN ALTERNATE PROPOSAL TAKING EXCEPTION TO THE SIZE REQUIREMENTS OF PARAGRAPH 3.2.3 OF SHIP-C-5677 AND THE EXCEPTION IS GRANTED, THE AVERAGE SCORE UNDER CRITERIA A FOR UNIVAC SHOULD BE CHANGED FROM 71.25 TO 72.25.

"SIXTH, BOTH RAYTHEON AND UNIVAC HAVE DEMONSTRATED THEIR ABILITY TO PERFORM UNDER SIMILAR CONTRACTS.

CRITERIA B

"FIRST, THE MOST SINGNIFICANT DIFFERENCE IN THE PROPOSED SDC'S IS THAT THE ENVIRONMENTAL TESTS HAVE BEEN WAIVED FOR THE RAYTHEON UNIT WHEREAS *** UNIVAC MUST PERFORM THE ENVIRONMENTAL TESTS. THE FACT THAT RAYTHEON DOES NOT HAVE TO PERFORM THE ENVIRONMENTAL TESTS REDUCES THE ELEMENT OF RISK IN RECEIVING A QUALIFIED UNIT BY 30 SEPT 1974. UNIVAC'S SCHEDULED TEST AND RETEST TIME IS REALISTIC FOR ENVIRONMENTAL TESTING. ***

"SECOND, BASICALLY ALL BIDDERS UNDERSTOOD THE AMOUNT OF R&M TESTING REQUIRED FOR THIS PROCUREMENT. NONE OF THE BIDDERS SUBMITTED ANY DATA THAT WOULD SUBSTANTIATE AN AMOUNT OF CALENDAR TIME LESS THAN THE MAXIMUM AMOUNT REQUIRED BY THE SPECIFICATION.

"THIRD, NONE OF THE BIDDERS ALLOWED FOR RETEST TIME IN THEIR R&M TEST SCHEDULE. THE POTENTIAL RISK FOR EACH BIDDER WAS CONSIDERED AS FOLLOWS:

"1. RAYTHEON'S PREDICTED MTBF FOR THE PF SDC IS 1130 HOURS, HOWEVER SINCE THE ENVIRONMENTAL TESTS REQUIREMENT HAS BEEN WAIVED FOR RAYTHEON, THE TIME SCHEDULED FOR ENVIRONMENTAL TEST (9 WEEKS) WOULD BE AVAILABLE FOR ANY RETEST.

"2. UNIVAC'S BASELINE HAS A PREDICTED MTBF OF 2865 HOURS VS 1000 HOURS REQUIRED BY SPECIFICATION. THE DIFFERENCE BETWEEN THE UNIVAC BASELINE UNIT AND THE PF SDC SHOULD NOT SUBSTANTIALLY ALTER THE MTBF PREDICTION." WITH RESPECT TO CRITERIA C THE PEP FURNISHED THE FOLLOWING INFORMATION WHICH WAS USED BY THE CARP IN EVALUATING THIS FACTOR:

RAYTHEON

"THE UNIT THAT RAYTHEON PROPOSED FOR THE PF REQUIREMENT IS A DERIVATIVE OF THE BASELINE EQUIPMENT, THE CV-2953(P)/UYK. THE CV 2953(P)/UYK IS SERVICE APPROVED. SINCE THE BASELINE IS SERVICE APPROVED AND RAYTHEON IS USING IDENTICAL COMPONENTS FOR THE PF-SDC, IT IS PROJECTED THAT SERVICE APPROVAL WOULD BE A DERIVATIVE OF THE EXISTING SERVICE APPROVAL STATUS OF THE BASELINE AND THAT TESTING WOULD POSSIBLY BE WAIVED." UNIVAC

"THE PROPOSED SDC IS A DERIVATIVE OF THE OU-95/UY. THE OU-95/UY IS NOT SERVICE APPROVED. IT IS SCHEDULED TO UNDERGO OP-EVAL (OPERATIONAL EVALUATION) ON 5/1/74 AS PART OF JPTDS. IT HAS NOT UNDERGONE ANY ENVIRONMENTAL TESTING. THE BASELINE HAS SATISFACTORILY PASSED TECH EVAL (TECHNICAL EVALUATION) AND IF IT PASSES OPEVAL AND IF THE PF SDC PASSES ENVIRONMENTAL TESTING, SERVICE APPROVAL COULD BE REQUESTED FROM CNM."

THE NAVY'S REPORT STATES THAT THE TECHNICAL SCORES WERE ARRIVED AT IN THE FOLLOWING MANNER:

"*** AFTER A REVIEW OF THE PROPOSALS, DISCUSSIONS WERE HELD WITH ALL THREE OFFERORS 26 SEPTEMBER 1973, WITH BEST AND FINAL OFFERS SUBMITTED 28 SEPTEMBER 1973. RESULTS OF DISCUSSIONS WERE INCORPORATED INTO THE TECHNICAL EVALUATION. THE PEP REPORTED ITS RECOMMENDED SCORES TO THE CONTRACT AWARD REVIEW PANEL (CARP). THE CARP REVIEWED AND DISCUSSED THE PEP-RECOMMENDED FINDINGS, APPROVED THEM, AND THEN APPLIED THE PRE ESTABLISHED WEIGHTS TO THE FINDINGS. THE RANKING RESULTING FROM THE EVALUATION OF THE THREE CRITERIA WAS AS FOLLOWS:

1. RAYTHEON 91.58

2. UNIVAC 66.16

3. OTI 48.94

PRICES WERE THEN DISCLOSED; RAYTHEON'S PRICE OF $437,277 WAS $118,000 HIGHER THAN UNIVAC'S AND APPROXIMATELY $75,000 LESS THAN OTI'S."

THE CARP THEN APPLIED THE PREDETERMINED FORMULA FOR DETERMINING THE PERCENTAGE DIFFERENCES BETWEEN THE OFFERORS WITH THE FOLLOWING RESULTS:

PERCENTAGE PERCENTAGE

TECHNICAL DIFFERENCES WEIGHTED DIFFERENCES TOTAL OF

SCORE FROM BEST X2.5 DIFFERENCE PRICE FROM BEST DIFFERENCES

RAYTHEON 91.58 2-0- -0- 437,277 37% 37%

UNIVAC 66.1627.8% 69.5% 319,067 -0- 69.5%

OTI 48.94 46.6% 116.4% 511,256 62.2% 179.6%

THE CARP RECOMMENDED AWARD TO RAYTHEON AND TELEGRAPHIC AWARD WAS MADE TO THAT FIRM ON OCTOBER 3, 1973. THE NAVY HAS ADVISED THAT RAYTHEON DELIVERED THE FIRST PF-SDC ON SCHEDULE ON MARCH 31, 1974, IN ACCORDANCE WITH REQUIREMENTS AND THAT THE SECOND UNIT WHICH IS INTO PRODUCTION IS EXPECTED TO BE DELIVERED ON SCHEDULE ON SEPTEMBER 30, 1974. THE LAMPS SDC IS ALSO ON SCHEDULE AND DELIVERY OF THAT ITEM IS EXPECTED SOON.

UNIVAC'S BASIC CONTENTION IS THAT THE EVALUATION CRITERIA IN THE RFP DID NOT ADEQUATELY INFORM PROSPECTIVE OFFERORS OF THE FACTORS ACTUALLY CONTROLLING IN THE EVALUATION AND SELECTION OF THE SUCCESSFUL OFFEROR, AND FAILED TO INFORM PROSPECTIVE OFFERORS OF THE NUMERICAL RATINGS AND WEIGHTS ASSIGNED TO AND APPLIED IN THE EVALUATION OF THE RESPECTIVE CRITERIA, CONTRARY TO ARMED SERVICES PROCUREMENT REGULATION 3-501(A) AND DECISIONS OF OUR OFFICE, PARTICULARLY 49 COMP. GEN. 229 (1969).

WITH REGARD TO THE LATTER POINT, IT IS THE NAVY'S POSITION THAT WHILE THE RFP DID NOT SET FORTH THE ACTUAL NUMERICAL WEIGHTS TO BE USED IN THE EVALUATION OF PROPOSALS, THERE WAS ADEQUATE INFORMATION IN THE RFP TO ADVISE OFFERORS OF THE EVALUATION FACTORS AND THE RELATIVE WEIGHT OR IMPORTANCE TO BE ATTACHED TO EACH FACTOR IN RELATION TO THE OTHER FACTORS. THE NAVY ASSERTS THAT THERE IS NO REQUIREMENT TO LIST THE PRECISE NUMERICAL WEIGHTS AND THE FOLLOWING PROVISION FROM ASPR 3 501(D)(I) (AS REVISED BY DEFENSE PROCUREMENT CIRCULAR NO. 110, MAY 30, 1973), HAS BEEN CITED IN SUPPORT OF THIS VIEW:

"NUMERICAL WEIGHTS, WHICH MAY BE EMPLOYED IN EVALUATION OF PROPOSALS, SHALL NOT BE DISCLOSED IN SOLICITATIONS."

OUR DECISION B-180245(1), MAY 9, 1974, STATED THAT WE DID NOT OBJECT TO THE PROVISION OF ASPR 3-501(D) (I), WHICH PROHIBITS THE DISCLOSURE OF PRECISE NUMERICAL WEIGHTS IN AN RFP. IN THAT DECISION WE ALSO STATED THE GENERAL RULE THAT AN RFP SHOULD ADVISE OFFERORS OF "THE BROAD SCHEME OF SCORING TO BE EMPLOYED" AND SHOULD GIVE OFFERORS "REASONABLY DEFINITE INFORMATION TO BE ACCORDED TO PARTICULAR FACTORS IN RELATION TO EACH OTHER." WE FURTHER INDICATED THAT AN APPROPRIATE METHOD FOR DISCLOSING THE RELATIVE WEIGHTS OF THE EVALUATION CRITERIA IS TO LIST THE EVALUATION FACTORS IN DESCENDING ORDER OF IMPORTANCE OR PRIORITY BUT THAT WHERE ONE FACTOR IS TO HAVE PREDOMINANT CONSIDERATION OVER THE OTHER FACTORS, THIS SHOULD BE DISCLOSED TO THE OFFERORS.

IN ADDITION TO STATING THAT DETERMINATION FOR AWARD WOULD BE BASED UPON PRICE AND OTHER FACTORS, THE RFP PROVIDED THAT EVALUATION FACTORS A, B AND C WERE LISTED IN DESCENDING ORDER OF IMPORTANCE. THE WEIGHTS IN THE EVALUATION PLAN APPLIED TO THE SCORES FOR EACH OF THE FACTORS (A - .6, B - .22 AND C - .18) INDICATE IN OUR VIEW THAT CRITERION A WAS CONSIDERED PREDOMINANT. IN THESE CIRCUMSTANCES, ALTHOUGH A STATEMENT OF THE PRECISE NUMERICAL WEIGHTS FOR EACH OF THE EVALUATION CRITERIA WAS NOT REQUIRED, WE BELIEVE THE PREDOMINANT VALUE ASSIGNED TO CRITERION A SHOULD HAVE BEEN DISCLOSED BY A STATEMENT INDICATING ITS RELATIVE IMPORTANCE IN RELATION TO THE OTHER FACTORS. B-180245(1), SUPRA. HOWEVER, WE ARE UNABLE TO CONCLUDE THAT IN THE OVERALL SCORING THIS DEFECT HAD A SIGNIFICANT PREJUDICIAL EFFECT ON UNIVAC SINCE RAYTHEON WAS RANKED SIGNIFICANTLY HIGHER ON ALL THREE LISTED CRITERIA.

UNIVAC NEXT CONTENDS THAT THE RFP WAS DEFECTIVE SINCE IT DID NOT STATE THE PRECISE NUMERICAL WEIGHT TO BE ACCORDED PRICE (TECHNICAL WAS TO BE WEIGHTED 2.5 TIMES OVER PRICE). TO DEMONSTRATE THE PREJUDICE RESULTING FROM THIS ALLEGED DEFECT, UNIVAC ASSERTS THAT IF IT HAD BEEN AWARE OF THE THE EMPHASIS ON TECHNICAL CONSIDERATIONS ITS PROPOSAL MIGHT HAVE BEEN BASED ON ITS AN/UYA-13 SDC RATHER THAN ITS OU-95/UY SDC. UNIVAC CONTENDS THAT THE AN/UYA-13 AND ITS COMPONENTS INCORPORATE ALL OF THE FUNCTIONS REQUIRED FOR THE PF-SDC, BUT IT DID NOT PROPOSE THAT SDC SINCE IT OFFERED A LESS COST EFFECTIVE APPROACH.

THE NAVY HAS REPORTED THAT WHILE AN EVALUATION OF UNIVAC'S PROPOSAL BASED ON THE UYA-13 HAS NOT BEEN MADE, PERSONNEL FAMILIAR WITH THAT UNIT HAVE STATED THE OPINION THAT UNIVAC'S TECHNICAL SCORE WOULD NOT HAVE BEEN SIGNIFICANTLY HIGHER THAN THE SCORE OF UNIVAC'S PROPOSAL AS SUBMITTED AND THAT THE COST MAY VERY WELL HAVE BEEN SIGNIFICANTLY HIGHER THAN RAYTHEON'S. IN A SUPPLEMENTAL REPORT DATED JUNE 5, 1974, A COPY OF WHICH WAS FURNISHED UNIVAC, THE NAVY HAS INCLUDED AN ANALYSIS TO SUPPORT THIS VIEW.

WE HAVE STATED THAT PRICE MUST BE CONSIDERED IN A NEGOTIATED FIXED PRICE PROCUREMENT AND THAT THE RELATIVE WEIGHT TO BE ACCORDED PRICE IN THE EVALUATION PROCESS MUST BE STATED IN THE RFP. SEE B-178948(2), OCTOBER 26, 1973; 52 COMP. GEN. 161, 163-164 (1972); 49 COMP. GEN. 229 (1969). THIS CASE, WHILE THE RFP DID NOT STATE THE PRECISE WEIGHT FOR PRICE, IT ADVISED OFFERORS THAT AWARD WOULD BE MADE TO THAT OFFEROR WHICH COULD PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT,"PRICE AND OTHER FACTORS CONSIDERED", AND THAT THE DETERMINATION WILL BE PRIMARILY BASED ON WHICH OFFER CAN MEET THE TECHNICAL AND DELIVERY REQUIREMENTS OF THE SOLICITATION AT THE LEAST RISK TO THE GOVERNMENT, AND THEREAFTER SET FORTH CRITERIA A, B AND C BEARING ON THIS CONSIDERATION. WE BELIEVE THAT THESE STATEMENTS ADEQUATELY ADVISED OFFERORS THAT RELATIVE TO "OTHER FACTORS" PRICE WOULD NOT BE THE DOMINANT CONSIDERATION IN AWARDING A CONTRACT FOR THIS PROCUREMENT. IT IS THEREFORE OUR VIEW THAT UNIVAC REASONABLY SHOULD HAVE BEEN AWARE OF THE RELATIVE ROLE OF PRICE IN THE EVALUATION OF PROPOSALS PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS AND ANY QUESTIONS OR CONTENTIONS THAT UNIVAC MIGHT HAVE HAD CONCERNING THE RELATIVE WEIGHT OF PRICE AS AN EVALUATION FACTOR SHOULD HAVE BEEN RAISED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS. SINCE UNIVAC'S PROTEST CONCERNING THIS ISSUE WAS NOT FILED UNTIL AFTER AWARD WAS MADE, WE FIND THAT THIS ASPECT OF UNIVAC'S PROTEST IS UNTIMELY AND WILL NOT BE CONSIDERED FURTHER. SEE SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. 20.2(A); B- 180245(1), SUPRA.

OTHER CONTENTIONS MADE BY UNIVAC CONCERN THE RELATIONSHIP OF THE SUBCRITERIA IN THE EVALUATION PLAN TO THE EVALUATION CRITERIA SET FORTH IN THE RFP. UNIVAC ASSERTS THAT WHILE THE STATED EVALUATION CRITERIA PROVIDED FOR EVALUATION OF THE RISK INVOLVED IN A OFFEROR'S ABILITY TO MAKE OR MODIFY AN EXISTING SDC ON SCHEDULE," UNDISCLOSED AND IMPORPER "BASELINE" CRITERIA WERE THE CONTROLLING FACTORS IN THE TECHNICAL/DELIVERY SCORING. IT IS UNIVAC'S POSITION THAT CONTRARY TO THE STATED CRITERIA NEITHER A NEW NOR MODIFIED SDC WHICH HAD NOT BEEN ENVIRONMENTALLY TESTED AND SERVICE APPROVED COULD POSSIBLY WIN THE COMPETITION BECAUSE THE NAVY'S UNDISCLOSED "BASELINE CONCEPT" FOCUSED ON, EVALUATED, AND SCORED ONLY EXISTING "BASELINE" EQUIPMENT THAT HAD THE MOST FUNCTIONS AND HAD BEEN ENVIRONMENTALLY TESTED AND SERVICE APPROVED. IN THIS CONNECTION, UNIVAC ARGUES THAT CERTAIN OF THE EVALUATION QUESTIONS WERE GEARED TO THE UNDISCLOSED BASELINE CONCEPT RATHER THAN TO THE STATED CRITERIA, WERE LISTED UNDER THE WRONG CRITERIA, AND WERE DUPLICATED UNDER CRITERIA A AND B. IT IS CONTENDED THAT HAD UNIVAC KNOWN THAT THE NAVY WAS "TREATING THE BASIC UNIT WHICH WAS TO BE MODIFIED AS A 'BASELINE' WHICH WOULD THEN BE EVALUATED AND SCORED FOR FUNCTIONS, TESTING AND SERVICE APPROVAL" IT WOULD HAVE PROPOSED ITS MORE EXPENSIVE AND SUPERIOR UYA-13.

THE NAVY DENIES THAT THE EVALUATION WAS BASED ON AN UNANNOUNCED BASELINE, POINTING OUT THAT THE PROPOSAL GUIDELINES ADVISED OFFERORS THAT IN THE EVENT A PROPOSAL WAS BASED UPON FURNISHING MODIFIED EXISTING EQUIPMENT, THE OFFEROR WAS TO DESCRIBE THAT EQUIPMENT AND THE MODIFICATIONS REQUIRED. IT IS POINTED OUT THAT CRITERION A ALSO REFERRED TO MODIFYING AN "EXISTING UNIT TO MEET THE PARTICULAR REQUIREMENTS OF THE SPECIFICATION." THEREFORE, IT IS THE NAVY'S POSITION THAT THE RFP WAS CLEAR THAT TO THE EXTENT A PROPOSAL WAS BASED UPON FURNISHING AN EXISTING UNIT, THE EVALUATION WOULD BE BASED UPON THAT UNIT. IT IS REPORTED THAT SINCE UNIVAC, AS WELL AS THE OTHER OFFERORS, BASED ITS PROPOSAL UPON MODIFICATION OF AN EXISTING SDC, SUCH SDC WAS REFERRED TO AS UNIVAC'S BASELINE AND THE EVALUATION WAS BASED UPON THAT UNIT AND THE PROPOSED MODIFICATIONS. WITH REGARD TO UNIVAC'S CONTENTIONS CONCERNING THE RELEVANCY AND APPLICATION OF THE EVALUATION QUESTIONS TO THE CRITERIA STATED IN THE RFP, NAVY HAS RESPONDED AS FOLLOWS:

"1. THE QUESTIONS PROMULGATED BY THE TECHNICAL EVALUATION TEAM WITH RESPECT TO CRITERIA A WERE INTENDED TO DEFINE THE RISKS ASSOCIATED WITH THE TECHNICAL DESIGN AND/OR MODIFICATIONS TO THE EXISTING SDC. FOR EXAMPLE, QUESTION IV, WHICH ASKED WHETHER THE EXISTING SDC CONTAINED THE VARIOUS FUNCTIONS, WAS DESIGNED TO REVIEW THE FUNCTIONAL COMPLEXITY OF THE EXISTING SDC SUCH THAT AN EVALUATION COULD DETERMINE WHETHER OR NOT AN OFFEROR HAD TO INTEGRATE EITHER NEW OR EXISTING FUNCTIONS TO THE EXISTING UNIT. AN OFFEROR WHO HAD TO INTEGRATE MORE FUNCTIONS INTO AN EXISTING UNIT WOULD HAVE A MORE COMPLEX DESIGN EFFORT TO ACCOMPLISH AND ALSO WOULD ENCOUNTER INCREASED RISK IN DESIGN OF THE BOX. ***

"2. THE MATTER OF ENVIRONMENTAL TESTS WAS RAISED UNDER CRITERIA A (SEE QUESTION V OF THE EVALUATION) IN THAT THE ABILITY OF THE UNIT TO PASS ENVIRONMENTAL TESTS REQUIRES SERIOUS CONSIDERATION DURING THE DESIGN PROCESS. THIS QUESTION WAS ASKED FOR THE PURPOSE OF EVALUATING THE RISKS INVOLVED IN DESIGNING THE PROPOSED SDC SUCH THAT IT COULD COMPLY WITH THE ENVIRONMENTAL TEST CRITERIA. IF THE EXISTING SDC HAD NOT PREVIOUSLY PASSED THE ENVIRONMENTAL TEST REQUIREMENTS, THERE ARE RISKS ASSOCIATED WITH THE DESIGN OF SUCH BOX AND QUESTIONS ALSO ARISE AS TO WHETHER ANY FURTHER DESIGN WOULD BE NECESSARY TO INSURE THAT THE MODIFIED UNIT WOULD PASS ENVIRONMENTAL TESTS. ON THE OTHER HAND, IF AN EXISTING UNIT HAD ALREADY PASSED ENVIRONMENTAL TESTS AND REQUIRED NO MODIFICATION OR RELATIVELY MINOR CHANGES, THE DESIGN EFFORT FOR SUCH SDC WOULD BE ZERO OR MINIMAL IN ORDER TO SATISFY SPECIFICATION REQUIREMENTS. ***

"3. THE QUESTIONS WITH RESPECT TO RELIABILITY AND MAINTAINABILITY (R&M) (QUESTION VI) WERE ALSO CONCERNED WITH THE EFFORT INVOLVED IN DESIGNING AN SDC TO MEET THE R&M REQUIREMENTS AND RISK ASSOCIATED WITH SUCH DESIGN EFFORT. HERE AGAIN, AN EXISTING SDC THAT HAD ALREADY PASSED THE R&M REQUIREMENTS WOULD REQUIRE LESS DESIGN EFFORT AND ENGENDER LESS RISK THAN AN EXISTING SDC WHICH HAD NOT PASSED R&M REQUIREMENTS AND MIGHT REQUIRE A SOMEWHAT GREATER DESIGN EFFORT IN THIS AREA.

"4. THE QUESTIONS COVERED IN QUESTION VII DEAL WITH THE PRODUCTION RISKS ASSOCIATED WITH IMPLEMENTING NEW FUNCTIONS OR MODIFYING FUNCTIONS FOR THE NEW SDC. WHILE QUESTION IV ADDRESSES THE DESIGN OR MODIFICATION OF SDC FUNCTIONS, QUESTION VII DEALS WITH THE INTEGRATION AND INCORPORATION OF THE FUNCTIONS INTO THE NEW UNITS. THE TWO QUESTIONS ADDRESS SEPARATE ELEMENTS OF RISK, ONE WITH RESPECT TO DESIGN EFFORT, AND THE OTHER WITH RESPECT TO THE ACTUAL INTEGRATION OF FUNCTIONS INTO THE UNIT AND THE PERFORMANCE OF SUCH MODIFIED UNIT. IN ADDITION THE QUESTION WITH RESPECT TO THE CABINET STRUCTURE WAS ALSO DESIGNED TO EVALUATE THE RISK ASSOCIATED WITH HAVING TO DESIGN A NEW CABINET STRUCTURE OR HAVING TO MODIFY THE CABINET OF THE EXISTING SDC. IF THE CABINET IS AN UNTESTED AND UNPROVEN UNIT WITH RESPECT TO TESTS, AND THAT CABINET IS ALSO TO BE MODIFIED, CERTAIN ELEMENTS OF RISK WITH RESPECT TO THE CABINET STRUCTURE ARISE. "5. WHILE THE EVALUATION PURSUANT TO CRITERIA A DEALT WITH THE DESIGN EFFORT AND RISK ASSOCIATED WITH THE MODIFICATION OF THE EXISTING SDC TO MEET SPECIFICATION REQUIREMENTS, CRITERIA B WAS CONCERNED WITH THE TEST SCHEDULES AND RISK ASSOCIATED WITH THE PROPOSED UNIT'S ABILITY TO MEET THE TEST REQUIREMENTS WITHIN THE TIME CONSTRAINTS OF THE SCHEDULE. FOR EXAMPLE, IF THE PROPOSED SDC WAS BASED ON AN EXISTING SDC THAT CONTAINED ALL REQUIRED FUNCTIONS, THE DESIGN EFFORT TO INTEGRATE FUNCTIONS WOULD BE MINIMAL, IF ANYTHING. THE DESIGN EFFORT TO MAKE THE BOX MEET ALL TEST REQUIREMENTS MAY REQUIRE SOME EFFORT OR MAY NOT. HOWEVER, IF THE SDC HAD NEVER BEEN SUBJECTED TO THE ENVIRONMENTAL AND/OR R&M TEST REQUIREMENTS BEFORE, THERE IS A RISK AS TO WHETHER OR NOT SUCH A UNIT WOULD MEET SUCH TEST REQUIREMENTS AT ALL, LET ALONE WITHIN THE TIME CONSTRAINTS OF THE SCHEDULE. THE EVALUATION CONDUCTED UNDER CRITERIA B, WAS CONCERNED WITH THE TESTS THEMSELVES, LABOR HOURS AND CALENDAR TIME SCHEDULED, ETC. AND THE RISK ASSOCIATED WITH THE PROPOSED SDC BEING ABLE TO PASS THE TESTS IN ACCORDANCE WITH THE REQUIRED TIME FRAME. OFFERORS WERE FAIRLY INFORMED OF THIS METHOD OF EVALUATION IN THE RFP.

"6. THE RFP ADVISED OFFERORS OF THE NEED FOR THE PROPOSED UNIT TO BE SERVICE APPROVED BY EARLY 1975 AND THAT CRITERIA WOULD BE CONCERNED WITH THE RISK ASSOCIATED WITH BEING ABLE TO OBTAIN SERVICE APPROVAL FOR THE PROPOSED SDC. AGAIN HERE IT IS REASONABLE TO ASSUME THAT IF AN SDC IS BASED ON AN EXISTING SDC THAT HAS ALREADY BEEN SERVICE APPROVED, THEN THE CHANCES OF OBTAINING SERVICE APPROVAL FOR THE PROPOSED SDC IS VERY GOOD. NATURALLY, THE MORE THE EXISTING SDC IS CHANGED TO SUIT THE REQUIREMENTS, THE GREATER THE RISK IN OBTAINING SERVICE APPROVAL BASED ON THE EXISTING UNIT."

UNIVAC HAS ALSO TAKEN ISSUE WITH CERTAIN OF THE TECHNICAL CONCLUSIONS CONCERNING MODIFICATION OF ITS EQUIPMENT TO MEET THE SPECIFICATIONS. UNIVAC CONTENDS THAT SDC COMPONENTS, PARTICULARLY PRINTED CIRCUIT (PC) CARDS, ARE EXTENSIVELY INTERCHANGED AND REARRANGED WITH EASE; THAT THE NUMBER OF FUNCTIONS IN ANY ONE EXISTING SDC IS RELATIVELY UNIMPORTANT; AND THAT THE TASKS AND RISKS OF UNIVAC AND RAYTHEON IN SUPPLYING THE CONFORMING SDCS ON SCHEDULE WOULD BE ROUTINE AND ESSENTIALLY THE SAME. EXHIBIT A TO UNIVAC'S LETTER OF FEBRUARY 19, 1974, IS A TECHNICAL PRESENTATION WHICH ELABORATES ON THE ABOVE CONTENTIONS TO SHOW HOW UNIVAC'S SDC WOULD BE MODIFIED TO MEET THE REQUIREMENTS OF THE SOLICITATION. UNIVAC STATES THAT ITS INTENDED PURPOSE IN FURNISHING THIS TECHNICAL PRESENTATION IS NOT TO ASK OUR OFFICE TO SECOND GUESS NAVY BUT TO ILLUSTRATE THE SIMPLICITY IN MODIFYING AN EXISTING SDC WHICH DOES NOT HAVE ALL OF THE REQUIRED FUNCTIONS TO INCLUDE SUCH FUNCTIONS.

THE NAVY HAS ADVISED THAT UNIVAC'S PROPOSAL DESCRIBED THE MODIFICATIONS TO ITS OU-95/UY UNIT AND WAS EVALUATED IN ACCORDANCE WITH THE RISKS ASSOCIATED IN OBTAINING THIS PROPOSED UNIT IN ACCORDANCE WITH SPECIFICATION AND SCHEDULE REQUIREMENTS. THE NAVY POINTS TO THE LANGUAGE IN SECTION C OF THE RFP ADVISING OFFERORS THAT PROPOSALS SHOULD DESCRIBE MODIFICATIONS IN TERMS OF IMPACT ON THE EXISTING UNIT AND THE ABILITY OF THE EXISTING UNIT TO MEET SPECIFICATION REQUIREMENTS AND STATES THAT THE EVALUATION WAS IN ACCORDANCE WITH THIS ADVICE IN THE RFP. THE NAVY DISAGREES WITH UNIVAC'S VIEW THAT PC CARDS ARE INTERCHANGED AND REARRANGED WITH EASE. THE NAVY'S POSITION ON THIS POINT IS AS FOLLOWS:

"ALTHOUGH AN SDC IS NOT A MASSIVE PIECE OF EQUIPMENT, IT IS A COMPLEX AND SENSITIVE TECHNICAL INSTRUMENT WHICH CANNOT SIMPLY BE PIECED TOGETHER FROM VARIOUS OTHER EQUIPMENTS AND BE EXPECTED TO MEET ALL REQUIREMENTS IMMEDIATELY. FOR EXAMPLE, UNIVAC MUST AMONG OTHER THINGS, DESIGN AND LAY OUT THE TOP ADDITION TO THE PF SDC, MODIFY THE CABINET, PUT A POWER SUPPLY INTO A NEW BOX AND INCORPORATE FUNCTIONS INTO THE EXISTING SDC. THESE ARE NOT THE MOST DIFFICULT TECHNICAL JOBS, NOR, HOWEVER, ARE THEY THE SIMPLEST. ENGINEERING AND DESIGN EFFORT IS INVOLVED AND THERE IS SOME ELEMENT OF RISK INVOLVED WITH THE PERFORMANCE OF THE END PRODUCT. ACCORDINGLY, IN THE AREA OF THE INTEGRATION OF NEW FUNCTIONS, ONE ENCOUNTERS INCREASED RISK AND SUCH INTEGRATION REFLECTS UPON THE MAGNITUDE AND RELATIVE DIFFICULTY OF ENGINEERING EFFORT REQUIRED TO MODIFY THE EXISTING SDC TO MEET THE SPECIFICATION REQUIREMENTS."

WITH RESPECT TO THE CONTENTION THAT THE TASKS AND RISKS OF UNIVAC AND RAYTHEON IN SUPPLYING SDCS WOULD BE ESSENTIALLY THE SAME, NAVY HAS RESTATED ITS CONCLUSION THAT RAYTHEON'S PROPOSED SDC WAS BASED ON AN SDC MISSING ONE FUNCTION, THE SLOW COMPUTER INTERFACE FUNCTION, WHICH WAS NOT CONSIDERED TO BE CRITICAL, WHERAS UNIVAC'S PROPOSED UNIT WAS BASED ON AN SDC MISSING FOUR FUNCTIONS, ONE OF WHICH HAD NOT BEEN INCORPORATED IN A PREVIOUSLY DELIVERED SDC. IT WAS DETERMINED THAT THE INTEGRATION OF THE SLOW COMPUTER INTERFACE FUNCTION INTO RAYTHEON'S SDC WAS NOT CRITICAL SINCE THE CARDS COMPRISING THAT FUNCTION WERE DIRECTLY INTERCHANGEABLE WITH THE NTDS POST COMPUTER INTERFACE CARDS PRESENTLY INCLUDED IN THE EXISTING RAYTHEON SDC. ON THE OTHER HAND, UNIVAC'S PROPOSED SDC DID NOT INCLUDE DEMAND DIGITAL INTERRUPT, DIGITAL OUTPUT PANEL AND DUPLEXING CAPABILITY. THE NAVY'S REPORT STATES THAT WHILE UNIVAC MAY HAVE IMPLEMENTED THESE FUNCTIONS IN OTHER UNITS THAT HAVE MET VARIOUS TESTS, SUCH TESTS MAY HAVE BEEN DIFFERENT FROM THOSE REQUIRED FOR THE SDCS. THE FUNCTION THAT HAS NOT BEEN INCLUDED IN AN SDC DELIVERED BY UNIVAC IS THE DUAL SPEED DEMERGE FEATURE. THE NAVY REPORTS THE FOLLOWING WITH RESPECT TO THIS FUNCTION:

"NOTWITHSTANDING UNIVAC'S CAPABILITIES IN THE FIELD, THE INTEGRATION OF THE DUAL SPEED DEMERGE FEATURE REQUIRES CERTAIN ENGINEERING EFFORT AND CORRELATION WITH OTHER FEATURES, ALL OF WHICH ADDS SOME RISK TO SUCCESSFUL PERFORMANCE IN A TIMELY FASHION."

IN OUR VIEW THE EVALUATION OF PROPOSALS IN THIS CASE WAS NOT PURSUANT TO AN UNANNOUNCED "BASELINE", BUT WAS ON THE BASIS OF THE UNIT PROPOSED BY THE OFFERORS. FURTHERMORE, WE DO NOT AGREE THAT THE BASIC TEST OF THE CRITERIA STATED IN THE RFP, THAT IS, THE ABILITY TO DELIVER A UNIT MEETING THE SPECIFICATIONS ON SCHEDULE, WAS NOT APPLIED, AND UNDISCLOSED CRITERIA WERE APPLIED TO DETERMINE THE DEGREE TO WHICH EXISTING EQUIPMENT MET THE REQUIREMENTS. IN THIS CONNECTION, WE BELIEVE THE NAVY HAS PROVIDED A REASONABLE EXPLANATION OF THE RELEVANCY AND APPLICABILITY OF THE EVALUATION QUESTIONS TO THE STATED EVALUATION CRITERIA AND SPECIFICATION INSOFAR AS MODIFIED EQUIPMENT IS CONCERNED. WHILE A PROPOSED UNIT WHICH DID NOT INCORPORATE ALL OF THE REQUIRED FUNCTIONS WAS AT A DISADVANTAGE WHEN COMPARED WITH A UNIT THAT DID INCLUDE SUCH FUNCTIONS, WE BELIEVE THAT THIS WAS A FACTOR THAT COULD PROPERLY BE CONSIDERED IN EVALUATING A RISK TO THE AGENCY IN OBTAINING A UNIT THAT MET SPECIFICATION REQUIREMENTS WITHIN THE CONSTRAINTS OF THE DELIVERY SCHEDULE. IN THIS CONNECTION, WE HAVE HELD THAT IT IS NOT IMPROPER TO CONSIDER DEVELOPMENTAL RISK AS PART OF A TECHNICAL EVALUATION, PARTICULARLY WHERE THE PROCUREMENT IS CONSIDERED CRITICAL FOR PRIORITY REQUIREMENTS. SEE B-171349, NOVEMBER 17. 1971, AND CASES CITED THEREIN. BASED ON OUR REVIEW WE BELIEVE THAT THE RECORD SUPPORTS THE ADMINISTRATIVE DETERMINATIONS MADE DURING THE EVALUATION THAT THERE WAS LESS RISK ASSOCIATED WITH RAYTHEON'S UNIT IN THE AREA OF TESTING SINCE ENVIRONMENTAL TESTS FOR THE EQUIPMENT COULD BE WAIVED; THAT RAYTHEON'S UNIT COULD ACQUIRE SERVICE APPROVAL ON THE BASIS OF DERIVATIVE EQUIPMENT; AND THAT RAYTHEON'S UNIT INCORPORATED THE REQUIRED FUNCTIONS EXCEPT FOR ONE THAT WAS NOT CONSIDERED TO BE CRITICAL. IN OUR VIEW, THE RECORD ALSO REASONABLY SUPPORTS THE DETERMINATION THAT THE RISKS ASSOCIATED WITH UNIVAC'S EQUIPMENT IN THESE AREAS WOULD BE COMMENSURATELY GREATER. IN THESE CIRCUMSTANCES, WE FIND THAT IT WAS NOT AN ABUSE OF DISCRETION FOR THE PROCURING ACTIVITY TO SELECT RAYTHEON'S HIGHER PRICED PROPOSAL WITH THE HIGHER TECHNICAL SCORE OVER UNIVAC'S LOWER PRICED, TECHNICALLY INFERIOR PROPOSAL.

UNIVAC HAS REFERRED TO THE FACT THAT THE EVALUATION PLAN WAS ESTABLISHED AFTER CANCELLATION OF THE INITIAL SOLICITATION AFTER THE AGENCY WAS AWARE OF THE BASIC FEATURES OF BOTH THE RAYTHEON AND UNIVAC PROPOSALS. UNIVAC IMPLIES THAT THIS OPENS TO QUESTION THE IMPARTIALITY OF THE EVALUATION CRITERIA AND PROCEDURE. WE NOTE, HOWEVER, THAT ALL OFFERORS RECEIVED THE SAME EVALUATION INFORMATION AND THE SAME PRESELECTED WEIGHTS AND FACTORS WERE CONSIDERED IN EVALUATING THE PROPOSALS OF EACH OF THE OFFERORS. FURTHERMORE, NO EVIDENCE HAS BEEN PRESENTED TO INDICATE THAT THE EVALUATION CRITERIA WERE DESIGNED TO FAVOR RAYTHEON. THEREFORE, WE CANNOT SAY THAT THIS PROCUREMENT WAS NOT CONDUCTED IN A IMPARTIAL MANNER.

DURING THE COURSE OF OUR CONSIDERATION OF THIS PROTEST UNIVAC CONTRACTED THE NAVY ON A NUMBER OF OCCASIONS FOR THE PURPOSE OF RESOLVING THIS MATTER. THE SPECIFIC RELIEF REQUESTED BY UNIVAC FROM THE NAVY AND OUR OFFICE IS THAT IT BE AWARDED A CONTRACT FOR AT LEAST ONE SDC TO ASSURE COMPETITION FOR FOLLOW-ON PROCUREMENTS, REGARDLESS OF WHETHER WE DECIDE THE MERITS OF THIS PROTEST IN UNIVAC'S FAVOR. UNIVAC HAS ESTIMATED THAT THE TOTAL REQUIREMENTS FOR SDCS WILL BE ABOUT 200 UNITS. UNIVAC ALSO URGES THAT THE DATA REQUIREMENTS SHOULD BE CANCELED AND THAT COMPANIES SHOULD BE PERMITTED TO COMPETE FOR FUTURE PROCUREMENTS ON THE BASIS OF THEIR OWN DRAWINGS.

THE NAVY ADVISES THAT CURRENT PLANS CALL FOR AN EVENTUAL PROGRAM OF 50 SHIPS AND THAT ONE SDC WILL BE REQUIRED FOR EACH SHIP. UNDER THE NAVY'S PLANS FUTURE PROCUREMENTS WILL BE ON A NEGOTIATED BASIS AND OFFERORS WILL BE GIVEN AN OPPORTUNITY TO REVIEW DRAWINGS AND TO RECOMMEND SUCH CHANGES AS MIGHT BE OF SOME BENEFIT WITH RESPECT TO MANUFACTURING PROCESSES OR SYSTEMS. THE NAVY STATES THAT SUCH CHANGES WHICH DO NOT IMPAIR ESSENTIAL FEATURES WILL BE APPROVED. IT IS CONTEMPLATED THAT THE COMPETITION FOR THE SDCS WILL THEN BE STRUCTURED ON A PRICE BASIS WITH EACH OFFEROR SUBMITTING BEST AND FINAL OFFERS ON THE RAYTHEON DRAWINGS, CHANGED AS APPROVED BY THE GOVERNMENT, TO SUIT THE INDIVIDUAL OFFEROR'S REQUEST.

SINCE WE HAVE CONCLUDED THAT THE AWARD TO RAYTHEON WAS NOT ERRONEOUS, THIS IS NOT THE TYPE OF CASE WHERE OUR OFFICE WOULD RECOMMEND TERMINATION OF ALL OR PART OF THE CONTRACT AWARDED TO RAYTHEON. WHETHER UNIVAC SHOULD BE AWARDED A CONTRACT FOR THE PURPOSE OF ASSURING A SOURCE OF COMPETITION FOR FUTURE PROCUREMENTS IS AN ADMINISTRATIVE DECISION WHICH IS OUTSIDE THE SCOPE OF OUR FUNCTION IN REVIEWING PROTESTS RELATIVE TO THE AWARD OF CONTRACTS.

FINALLY, UNIVAC HAS REQUESTED CERTAIN NAVY DOCUMENTS, SUCH AS THE RAW TEST SCORES FOR THE EVALUATION OF PROPOSALS, AND UNIVAC HAS ALSO REQUESTED THAT IT BE FURNISHED THE PRICES OF THE PROPOSALS SUBMITTED IN RESPONSE TO THE CANCELED RFP. WE HAVE OBTAINED THESE DOCUMENTS AND THE INFORMATION THEREIN WAS CONSIDERED IN REACHING OUR DECISION ON UNIVAC'S PROTEST. IS OUR UNDERSTANDING THAT UNIVAC IS SATISFIED WITH THIS PROCEDURE.

ACCORDINGLY, THE PROTEST IS DENIED.

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