B-180831, OCT 8, 1974

B-180831, OCT 8, 1974

1. UNDER REQUEST FOR PROPOSALS FOR DESIGN, DEVELOPMENT, AND QUALIFICATION OF A ROCKET MOTOR, ADMINISTRATIVE DETERMINATION THAT A PROPOSAL IS UNACCEPTABLE AND NOT WITHIN COMPETITIVE RANGE WILL NOT BE DISTURBED ABSENT A SHOWING THAT ADMINISTRATIVE JUDGMENT IS ARBITRARY OR UNREASONABLE. 2. NO BASIS FOUND IN RECORD TO DISAGREE WITH PROCURING ACTIVITY'S DETERMINATION THAT PROTESTER'S PROPOSAL WAS SO TECHNICALLY DEFICIENT AS TO REQUIRE MAJOR REVISION AND CONSEQUENTLY WAS NOT WITHIN COMPETITIVE RANGE. THEREFORE, THERE WAS NO OBLIGATION UNDER APPLICABLE LAW AND REGULATION TO HOLD DISCUSSIONS TO IMPROVE PROPOSAL. 3. WHILE RFP AS AMENDED WAS DEFICIENT FOR FAILING TO INDICATE RELATIVE IMPORTANCE OF DESIGN TO COST GOAL, PROPOSAL WHICH DEVIATED SUBSTANTIALLY FROM GOAL COULD PROPERLY BE CONSIDERED OUTSIDE THE COMPETITIVE RANGE. HOWEVER, COGNIZANT PROCUREMENT PERSONNEL WILL BE APPRISED OF DEFICIENCY.

HERCULES INCORPORATED:

THIS PROTEST CONCERNS THE PROPRIETY OF THE NAVY'S DETERMINATION TO INITIALLY REJECT THE HERCULES INCORPORATED (HERCULES) PROPOSAL AS OUTSIDE THE COMPETITIVE RANGE. REQUEST FOR PROPOSALS (RFP) N00123-74-R 0475 WAS ISSUED ON OCTOBER 4, 1973, BY THE NAVAL REGIONAL PROCUREMENT OFFICE, LONG BEACH, CALIFORNIA, FOR THE DESIGN, DEVELOPMENT, AND QUALIFICATION OF A ROCKET MOTOR FOR THE NAVY'S XAGM-88A GUIDED MISSILE (HIGH VELOCITY ANTI- RADIATION MISSILE REFERRED TO AS "HARM"). THE RFP CONTEMPLATED THE AWARD OF TWO CONTRACTS FOR PARALLEL DEVELOPMENT EFFORTS BY SEPARATE FIRMS.

SEVEN PROSPECTIVE OFFERORS WERE SOLICITED FOR TECHNICAL AND COST PROPOSALS AND THE FOLLOWING FIVE FIRMS RESPONDED: HERCULES; ROCKWELL INTERNATIONAL (ROCKETDYNE DIVISION); AEROJET-GENERAL; LOCKHEED AIRCRAFT CORPORATION AND THIOKOL CHEMICAL CORPORATION (WASATCH DIVISION). UPON REVIEW OF THE INITIAL PROPOSALS, THREE FIRMS, ROCKETDYNE, THIOKOL AND AEROJET WERE DETERMINED TO BE WITHIN THE COMPETITIVE RANGE. NEGOTIATIONS WERE CONDUCTED WITH THE THREE FIRMS AND THEY WERE REQUESTED BY LETTER DATED FEBRUARY 6, 1974, TO SUBMIT "BEST AND FINAL OFFERS" BY FEBRUARY 13, 1974. UPON COMPLETION OF EVALUATION OF THE BEST AND FINAL OFFERS, IT WAS DETERMINED TO MAKE AWARDS TO ROCKWELL INTERNATIONAL AND THIOKOL AND THESE FIRMS WERE SO NOTIFIED ON FEBRUARY 19, 1974. UNSUCCESSFUL OFFERORS WERE ADVISED OF THE AWARDS BY LETTER DATED FEBRUARY 20, 1974.

A TECHNICAL DEBRIEFING CONFERENCE WAS HELD ON MARCH 21, 1974, AT WHICH TIME HERCULES WAS NOTIFIED OF EIGHT AREAS OF DEFICIENCY WHICH RESULTED IN A TECHNICAL SCORE OF 58.72 OF A POSSIBLE 100 POINTS. IN VIEW OF THIS LOW TECHNICAL SCORE, HERCULES WAS ADVISED THAT ITS PROPOSAL WAS CONSIDERED OUTSIDE THE COMPETITIVE RANGE SINCE IT COULD NOT BE MADE ACCEPTABLE WITHOUT A COMPLETE REVISION. HERCULES CONTENDS THAT ITS PROPOSAL WAS JUDGED TO BE OUTSIDE THE COMPETITIVE RANGE AS A RESULT OF IMPROPER APPLICATION OF THE EVALUATION CRITERIA WOULD BRING ITS PROPOSAL WITHIN THE COMPETITIVE RANGE.

THE EVALUATION CRITERIA WERE SET FORTH AT PAGE 13 OF THE RFP, SECTION D - EVALUATION AND AWARD FACTORS AS FOLLOWS:

"SECTION D - EVALUATION & AWARD FACTORS

"D-1 PROPOSALS WILL BE EVALUATED USING THE FOLLOWING CRITERIA, LISTED IN RELATIVE ORDER OF IMPORTANCE TO THE GOVERNMENT:

"D-1.1 TECHNICAL/SAMPLE

TECHNICAL - - CONSIDERATION OF TECHNICAL PRESENTATION INDICATING OFFERORS UNDERSTANDING OF THE TECHNICAL PROBLEMS, AND POSSIBLE SOLUTIONS, INVOLVED IN THE DESIGN AND DEVELOPMENT OF THE SUBSYSTEMS/COMPONENTS, AND INTEGRATION OF THE SUBSYSTEMS INTO A SYSTEM TO MEET OR EXCEED THE SPECIFICATION PERFORMANCE REQUIREMENTS.

SAMPLES - - SAMPLES DESCRIBED IN SECTION C ARE MANDATORY FOR FURTHER CONSIDERATION OF AN OFFEROR'S PROPOSAL. SAMPLES WILL BE EVALUATED RELATIVE TO THE FOLLOWING:

A. PROPELLANT

1. CHEMICAL

(A) HEAT OF EXPLOSION

(B) BURNING RATE 2. PHYSICAL

(A) TENSILE STRENGTH

(B) ELONGATION

(C) MODULUS

(D) DENSITY 3. SMOKE AND COMBUSTION CHARACTERISTICS

B. LINER AND INSULATOR - POTENTIAL CONTRIBUTION TO SMOKE IN ROCKET MOTOR EXHAUST.

"D-1.2 COMPANY EXPERIENCE - PROVEN ABILITY IN ENGINEERING DESIGN, DEVELOPMENT AND TEST OF ANALOGOUS ROCKET MOTORS.

"D-1.3 PROJECT TEAM - AVAILABILITY AND CAPABILITIES OF THE PROPOSED PROJECT TEAM TO INCLUDE THE COMPOSITION THEREOF.

"D-1.4 ESTIMATED COST - NOTWITHSTANDING THE GOVERNMENT'S REQUIREMENT FOR SUBMISSION OF ESTIMATED COST AND FEE, THE EVALUATION OF THIS FACTOR WILL INCLUDE CONSIDERATION OF THE DESIGN TO COST DATA REQUIRED AS FOLLOWS:

"DESIGN TO COST - IT IS THE OBJECTIVE OF THE NAVY TO PROCURE THE HARM ROCKET MOTOR AT A PRICE OF $3,000.00 FOR THE CUMULATIVE AVERAGE UNIT COST FOR THE FIRST 5000 VOLUME PRODUCTION UNITS. OFFERORS, IN THEIR PROPOSALS, MUST DETAIL THEIR APPROACH ANTICIPATED TO MEET THE NAVY'S OBJECTIVE, AND SUPPORT SAME BY COST ANALYSIS USING 1973 DOLLARS.

"NOTE: IT IS THE INTENT OF THE NAVY TO AWARD TWO (2) CONTRACTS FOR PARALLEL DEVELOPMENT EFFORTS BY SEPARATE FIRMS."

AMENDMENT NO. 1 TO THE RFP INCORPORATED THE FOLLOWING QUESTION AND ANSWER:

"4. Q. IS THE ABOVE COST ESTIMATE TO APPEAR IN THE TECHNICAL VOLUME OF THE PROPOSAL?

A. YES. SINCE HARM IS A 'DESIGN TO COST' PROGRAM, EFFECTIVENESS IN MEETING THE DESIGN TO COST OBJECTIVES IS CONSIDERED A TECHNICAL OBJECTIVE. THE COST VOLUNE OF THE PROPOSAL SHOULD ADDRESS THE ESTIMATED COST INCURRED IN MEETING THE REQUIREMENTS OF THE RFP AND SUPPLYING THE REQUESTED DATA THEREIN."

THE NUMERICAL WEIGHTS EMPLOYED IN THE EVALUATION OF PROPOSALS WERE PROPERLY NOT DISCLOSED IN THE RFP IN ACCORDANCE WITH THE PROHIBITION CONTAINED IN ASPR 3-501, SECTION DI) WHICH STATES: "*** NUMERICAL WEIGHTS, WHICH MAY BE EMPLOYED IN THE EVALUATION OF PROPOSALS, SHALL NOT BE DISCLOSED IN SOLICITATIONS." THE WEIGHTS ESTABLISHED FOR USE IN EVALUATION WERE AS FOLLOWS:

WEIGHT

CATEGORY (IN POINTS)

TECHNICAL/SAMPLE 45

COMPANY EXPERIENCE 25

PROJECT TEAM 10

ESTIMATED COST 5

DESIGN TO COST 15

HERCULES STATED IN ITS PROPOSAL THAT $7,756 PER UNIT IS THE MINIMUM AVERAGE UNIT COST THAT CAN BE ACHIEVED OVER THE PRODUCTION QUANTITY WITHOUT RELAXING THE SPECIFICATIONS. IT ALSO INDICATED THAT THE NAVY OBJECTIVE OF $3,000 PER MOTOR, AND EVEN A GOAL OF $4,000 PER UNIT, COULD NOT BE MET UNLESS CERTAIN OF THE GOVERNMENT REQUIREMENTS WERE RELAXED.

HERCULES WAS GIVEN NO POINTS FOR DESIGN TO COST AND ITS INABILITY TO MEET THE NAVY OBJECTIVE OF $3,000 PER MOTOR PRICE OR EVEN A GOAL OF $4,000 PER UNIT WAS REGARDED AS SUFFICIENT REASON TO CONSIDER ITS PROPOSAL OUTSIDE THE COMPETITIVE RANGE.

THE RELATIVE STANDINGS OF THE OFFERORS WERE AS FOLLOWS:

PROPOSED R & D DESIGN TO

CONTRACTOR TECH. SCORE COST COST ESTIMATE

ROCKETDYNE 78.44 $ 949,069 $2,866

THIOKOL 74.86735,633 3,060

AEROJET 72.22 865,381 2,807

LOCKHEED 58.82 1,183,000 3,472

HERCULES 58.72 743,017 7,756

IT IS CLEAR FROM SECTION D OF THE RFP AND AMENDMENT NO. 1 THAT DESIGN TO COST WAS TO BE GIVEN A DUAL CONSIDERATION IN EVALUATION: AS A FACTOR UNDER ESTIMATED COST AND AS PART OF THE TECHNICAL PROPOSAL. THE RFP AS AMENDED APPEARS TO BE DEFICIENT IN NOT HAVING GIVEN SOME INDICATION OF THE RELATIVE VALUE OF DESIGN TO COST AS A TECHNICAL CONSIDERATION. NEVERTHELESS, WE THINK IT IS CLEAR FROM ALL OF THE CIRCUMSTANCES THAT A PROPOSAL WHICH DID NOT AT LEAST APPROXIMATE THE DESIGN TO COST OBJECTIVES WOULD NOT BE ACCEPTABLE. IT FOLLOWS, THEREFORE, THAT A PROPOSAL, WHICH BY THE OFFEROR'S OWN ADMISSION WAS SO SUBSTANTIALLY AT VARIANCE WITH THE STATED GOAL, COULD REASONABLY BE CONSIDERED, IN LIGHT OF THE OTHER PROPOSALS RECEIVED, AS OUTSIDE THE COMPETITIVE RANGE SINCE IT WAS SUSCEPTIBLE TO BEING MADE ACCEPTABLE ONLY BY A COMPLETE REVISION. COMP. GEN. 198, 208 (1972); 51 ID. 431 (1972); B-174125, MARCH 28, 1972. IT IS CLEAR THAT ACCEPTABILITY MUST BE DETERMINED IN CONSIDERATION OF THE OTHER PROPOSALS SINCE THE PURPOSE OF THE ENTIRE PROCEDURE IS TO SELECT THE PROPOSAL MOST ADVANTAGEOUS TO THE GOVERNMENT.

ACCORDINGLY, WE CONCLUDE THAT IT WAS PROPERLY WITHIN THE CONTRACTING OFFICER'S DISCRETION TO FIND THE HERCULES PROPOSAL OUTSIDE THE COMPETITIVE RANGE. 52 COMP. GEN. 382, 385 (1972). THEREFORE, WE FIND NO PURPOSE IN DISCUSSING THE OTHER SHORTCOMINGS FOUND IN THE PROPOSAL. HOWEVER, COGNIZANT PROCUREMENT PERSONNEL WILL BE APPRISED OF THE DEFICIENCY NOTED.