B-171921, MAY 28, 1971

B-171921: May 28, 1971

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BECAUSE SUCCESSFUL BIDDER'S APPROACH WAS CONSIDERED TO BE OF A BREAKTHROUGH NATURE. ANALYTIC WAS PROPERLY AWARDED THE COST- REIMBURSEMENT TYPE CONTRACT IN ACCORDANCE WITH GUIDELINES ESTABLISHED BY ASPR 3-805.2. INC.: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 5. THIS PROCUREMENT WAS INITIATED BY PURCHASE REQUEST LR&D 357-70. ALTHOUGH THE ULTIMATE OBJECTIVES AND SCOPE OF THE PROJECT WERE SUSCEPTIBLE TO CHARACTERIZATION IN A GENERALIZED MANNER. IT WAS IMPOSSIBLE TO DESCRIBE IN PRECISE DETAIL. PROCUREMENT BY NEGOTIATION WAS AUTHORIZED ON JULY 1. THE SUBJECT RFQ WAS PREPARED AND RELEASED ON AUGUST 10. 23 QUOTATIONS WERE RECEIVED. WERE FORWARDED FOR TECHNICAL EVALUATION ON SEPTEMBER 11.

B-171921, MAY 28, 1971

BID PROTEST - COST-REIMBURSEMENT TYPE CONTRACT DECISION DENYING PROTEST BY SECOND LOW BIDDER AGAINST AWARD OF A NEGOTIATED CONTRACT TO ANALYTICAL SYSTEMS CORPORATION, THIRD LOW BIDDER, UNDER AN RFQ ISSUED BY ABERDEEN PROVING GROUNDS TO EXTEND THE CAPABILITY OF THE DEFENSE LAND FALLOUT INTERPRETIVE CODE-TRANSIT EXPOSURE SYSTEM. PURSUANT TO A NEGOTIATED PROCUREMENT UNDER 10 U.S.C. 2304(A)(11) AND ASPR 3.211.3, TECHNICAL EVALUATIONS AND FINAL COST QUOTATIONS, SECOND LOW BIDDER RECEIVED A TECHNICAL RATING OF 95.65 AND SUCCESSFUL (THIRD LOW) BIDDER A TECHNICAL RATING OF 97.47. BECAUSE SUCCESSFUL BIDDER'S APPROACH WAS CONSIDERED TO BE OF A BREAKTHROUGH NATURE, RESULTING IN POTENTIAL SAVINGS IN COMPUTER TIME AND COST, ANALYTIC WAS PROPERLY AWARDED THE COST- REIMBURSEMENT TYPE CONTRACT IN ACCORDANCE WITH GUIDELINES ESTABLISHED BY ASPR 3-805.2.

TO META SYSTEMS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 5, 1971, TO THE SMALL BUSINESS ADMINISTRATION PROTESTING THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUEST FOR QUOTATIONS DAAD05-70-Q-1704, ISSUED BY THE ABERDEEN PROVING GROUND, ABERDEEN, MARYLAND.

THIS PROCUREMENT WAS INITIATED BY PURCHASE REQUEST LR&D 357-70, WHICH REQUESTED A RESEARCH AND DEVELOPMENT CONTRACT, AT AN ESTIMATED COST OF $32,000, TO EXTEND THE CAPABILITY OF THE DEFENSE LAND FALLOUT INTERPRETIVE CODE - TRANSIT EXPOSURE SYSTEM (DELFIC-TES) TO INCLUDE CALCULATION PROCEDURES AND ROUTINES FOR DETERMINING THE RADIATION EXPOSURE FROM AIRBORNE ACTIVITY TO TARGETS MOVING THROUGH THE ATMOSPHERE ON A SPECIFIED PATH.

ALTHOUGH THE ULTIMATE OBJECTIVES AND SCOPE OF THE PROJECT WERE SUSCEPTIBLE TO CHARACTERIZATION IN A GENERALIZED MANNER, IT WAS IMPOSSIBLE TO DESCRIBE IN PRECISE DETAIL, OR BY DEFINITIVE DRAWINGS AND SPECIFICATIONS, THE NATURE OF THE WORK TO BE PERFORMED. ACCORDINGLY, PROCUREMENT BY NEGOTIATION WAS AUTHORIZED ON JULY 1, 1970, PURSUANT TO 10 U.S.C. 2304(A)(11) AND IMPLEMENTING ARMED SERVICES PROCUREMENT REGULATION 3-211.3.

THE SUBJECT RFQ WAS PREPARED AND RELEASED ON AUGUST 10, 1970, TO 18 FIRMS, WITH 32 ADDITIONAL FIRMS REQUESTING AND RECEIVING COPIES SUBSEQUENT TO PUBLICATION OF THE SYNOPSIS IN THE COMMERCE BUSINESS DAILY.

IN RESPONSE TO THE SOLICITATION, 23 QUOTATIONS WERE RECEIVED, RANGING IN ESTIMATED COST FROM $27,839 TO $54,995 WITH META SYSTEMS INC. (META), ESTIMATING $30,543 AND ANALYTICAL SYSTEMS CORPORATION (ANALYTICAL), ESTIMATING $32,653.

COPIES OF THE QUOTATIONS, WITH COST INFORMATION DELETED, WERE FORWARDED FOR TECHNICAL EVALUATION ON SEPTEMBER 11, 1970.

THE RFQ HAD ESTABLISHED FOUR EVALUATION FACTORS AND THEIR RESPECTIVE WEIGHTS ACCORDINGLY:

CALIBER OF PERSONNEL 4

BACKGROUND EXPERIENCE 4

TECHNICAL APPROACH 3

FACILITIES 1 A TECHNICAL EVALUATION, DATED OCTOBER 16, 1970, REVEALED ANALYTICAL RANKING HIGHEST ON THE POINT SCALE OF CUMULATIVE WEIGHTED AVERAGES WITH 97.47 FOLLOWED BY META AT 95.65.

IN ORDER TO SELECT QUOTATIONS FOR FURTHER CONSIDERATION AND NEGOTIATIONS, A COMPETITIVE RANGE WAS ESTABLISHED, EMBRACING THE SIX LOWEST COST QUOTATIONS AND THE TWO HIGHEST TECHNICALLY EVALUATED QUOTATIONS: NAMELY, ANALYTICAL AND META.

AFTER COST QUOTATIONS WERE FURNISHED, THEY WERE EVALUATED IN THEIR QUALITATIVE AND QUANTITATIVE ASPECTS, AND A COST AND PRICE ANALYSIS WAS PERFORMED ON THESE SIX COST QUOTATIONS.

NEGOTIATIONS WERE CONDUCTED BY TELEPHONE ON DECEMBER 15-16, 1970, WITH THE SIX FIRMS WITHIN THE COMPETITIVE RANGE. BEST AND FINAL COST QUOTATIONS WERE TO BE SUBMITTED NO LATER THAN THE CLOSE OF BUSINESS, JANUARY 5, 1971.

FINAL OFFERS WERE RECEIVED AS LISTED BELOW:

FIRM PRICE TECH. RATING

IIT RESEARCH INSTITUTE $25,760 89.77

META 29,464 95.65

ANALYTICAL 31,614 97.47

MAGI 31,996 89.28

PROBE 37,898 88.64

STANFORD RESEARCH INSTITUTE 41,896 92.14

THESE FINAL OFFERS WERE EVALUATED FOR TECHNICAL MERIT, AND BASED UPON THE RESULTS OF THIS EVALUATION AS WELL AS THE EARLIER EVALUATION OF THE INITIAL APPROACH WAS CONSIDERED TO BE OF A BREAKTHROUGH NATURE, WOULD RESULT IN POTENTIAL SAVINGS IN COMPUTER TIME AND COST, AND ITS METHODOLOGY ENJOYED THE SUPERIOR RESEARCH AND PROFESSIONAL EXPERIENCE OF THE PROPOSED PRINCIPAL PROPOSALS, AWARD TO ANALYTICAL SYSTEMS WAS RECOMMENDED BECAUSE THEIR INVESTIGATOR. CONSEQUENTLY, THIS APPROACH WAS CONSIDERED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT, COST AND OTHER FACTORS CONSIDERED.

IN VIEW THEREOF, AWARD WAS EFFECTED TO ANALYTICAL ON JANUARY 28, 1971, WITH NOTIFICATION THEREOF TO YOUR FIRM BY LETTER OF FEBRUARY 1, 1971.

IN YOUR LETTER TO THE SMALL BUSINESS ADMINISTRATION, YOU CONCEDE THAT THE PROPOSAL EVALUATION WAS EXECUTED IN A FAIR AND IMPARTIAL MANNER BUT CONTEND THAT SINCE YOUR PROPOSAL WAS TECHNICALLY ACCEPTABLE TO THE GOVERNMENT YOUR FIRM SHOULD HAVE BEEN AWARDED THE PROCUREMENT IN VIEW OF THE FACT THAT META'S FINAL COST QUOTATION WAS $2,150 LOWER THAN THAT OF ANALYTICAL.

WITH REGARD TO YOUR STATEMENT THAT THE "GOVERNMENT SHOULD BE OBLIGED TO DECIDE IN FAVOR OF THE LOWEST QUALIFIED BIDDER. *** ", THE STATUTORY POLICY WITH RESPECT TO ADVERTISED PROCUREMENTS IS THAT THE AWARD IS TO BE MADE TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER.

OF PARAMOUNT IMPORTANCE, HOWEVER, IS THE CHARACTERIZATION OF THIS PROCUREMENT AS A NEGOTIATED COST-PLUS-FIXED-FEE CONTRACT, THEREBY FALLING UNDER THE GENERIC CLASSIFICATION OF "COST-REIMBURSEMENT TYPE CONTRACTS." AS SUCH, THE ARMED SERVICES PROCUREMENT REGULATION HAS DELINEATED A DISTINCT SET OF CRITERIA PERTAINING TO THE EVALUATION OF PROPOSALS:

"3-805.2 COST-REIMBURSEMENT TYPE CONTRACTS. IN SELECTING THE CONTRACTOR FOR A COST-REIMBURSEMENT TYPE CONTRACT, ESTIMATED COSTS OF CONTRACT PERFORMANCE AND PROPOSED FEES SHOULD NOT BE CONSIDERED AS CONTROLLING, SINCE IN THIS TYPE OF CONTRACT ADVANCE ESTIMATES OF COST MAY NOT PROVIDE VALID INDICATORS OF FINAL ACTUAL COSTS. THERE IS NO REQUIREMENT THAT COST -REIMBURSEMENT TYPE CONTRACTS BE AWARDED ON THE BASIS OF EITHER (1) THE LOWEST PROPOSED COST, (2) THE LOWEST PROPOSED FEE, OR (3) THE LOWEST TOTAL ESTIMATED COST PLUS PROPOSED FEE. THE AWARD OF COST-REIMBURSEMENT TYPE CONTRACTS PRIMARILY ON THE BASIS OF ESTIMATED COSTS MAY ENCOURAGE THE SUBMISSION OF UNREALISTICALLY LOW ESTIMATES AND INCREASE THE LIKELIHOOD OF COST OVERRUNS. THE COST ESTIMATE IS IMPORTANT TO DETERMINE THE PROSPECTIVE CONTRACTOR'S UNDERSTANDING OF THE PROJECT AND ABILITY TO ORGANIZE AND PERFORM THE CONTRACT. THE AGREED FEE MUST BE WITHIN THE LIMITS PRESCRIBED BY LAW AND APPROPRIATE TO THE WORK TO BE PERFORMED (SEE 3-808). BEYOND THIS, HOWEVER, THE PRIMARY CONSIDERATION IN DETERMINING TO WHOM THE AWARD SHALL BE MADE IS: WHICH CONTRACTOR CAN PERFORM THE CONTRACT IN A MANNER MOST ADVANTAGEOUS TO THE GOVERNMENT."

THE DECISIONS OF OUR OFFICE HAVE CONSISTENTLY DEFERRED TO THE GUIDELINES ESTABLISHED BY THIS REGULATION, AND PARTICULARLY TO THE DISCRETION ACCORDED THE EVALUATING ACTIVITY IN DETERMINING WHICH PROPOSAL REPRESENTS THE CONTRACT MOST ADVANTAGEOUS TO THE GOVERNMENT, NOTWITHSTANDING THE FACT THAT A PROTESTING BIDDER'S COST ESTIMATE MAY BE LOWER THAN THAT OF THE BIDDER WITH WHOM THE CONTRACT MAY ULTIMATELY BE CONSUMMATED. SEE B- 169928, AUGUST 18, 1970; B-164552(2), FEBRUARY 24, 1969.

WITH REGARD TO THE INFINITESIMAL POINT SCALE DISPARITY, WE ARE COGNIZANT OF THE INHERENT DIFFICULTIES WHICH ACCRUE TO ANY PROCESS THAT ATTEMPTS TO REDUCE VALUE JUDGMENTS, ESSENTIALLY QUALITATIVE IN NATURE, TO QUANTITATIVE EXPRESSIONS OF MATHEMATICAL CERTAINTY. ANY SUCH SYSTEM IS LIKELY TO BE IMPERFECT AT BEST, AND THE EXPRESSION OF THE QUALITATIVE DETERMINATIONS OF GOVERNMENT EVALUATING TEAMS IN TERMS OF POINT SCALE RATINGS IS NO EXCEPTION TO THIS DILEMMA.

NEVERTHELESS, AN EXAMINATION OF THE COMPARATIVE RATINGS OF META FAILS TO REVEAL THAT META WAS SUPERIOR TO ANALYTICAL ON ANY INDIVIDUAL EVALUATION FACTOR.

GRANTED THE DISCRETION PERMITTED BY ASPR 3-805.2 TO RELEGATE THE CONSIDERATION OF COST ESTIMATES IN COST-REIMBURSEMENT CONTRACTS TO A SUBSIDIARY POSITION IN RELATION TO TECHNICAL CONSIDERATIONS, WE ARE UNABLE TO CONCLUDE THAT THE AWARD TO ANALYTICAL WAS ILLEGAL OR THAT IT DID NOT REPRESENT THE CONTRACT MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.