B-230980, Aug 4, 1988, 88-2 CPD 113

B-230980: Aug 4, 1988

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Protest that agency failed to conduct meaningful discussions is denied where protester was reasonably advised through discussions of the general areas of deficiencies found in its proposal and was given an opportunity to cure those deficiencies. Award to technically superior higher priced offeror is legally unobjectionable where record shows that source selection decision was rationally based and made in accordance with the stated evaluation criteria. The General Accounting Office will not question award to offeror on the basis of an alleged conflict of interest where record does not demonstrate: (1) that the contracting agency was unreasonable in finding the offeror's employment of a former government employee was consistent with post-employment restrictions.

B-230980, Aug 4, 1988, 88-2 CPD 113

PROCUREMENT - Competitive Negotiation - Discussion - Adequacy - Criteria DIGEST: 1. Protest that agency failed to conduct meaningful discussions is denied where protester was reasonably advised through discussions of the general areas of deficiencies found in its proposal and was given an opportunity to cure those deficiencies. PROCUREMENT - Competitive Negotiation - Contract awards - Administrative discretion - Cost/technical tradeoffs - Technical superiority 2. Award to technically superior higher priced offeror is legally unobjectionable where record shows that source selection decision was rationally based and made in accordance with the stated evaluation criteria. PROCUREMENT - Competitive Negotiation - Competitive advantage - Conflicts of interest - Post-employment restrictions - GAO review 3. The General Accounting Office will not question award to offeror on the basis of an alleged conflict of interest where record does not demonstrate: (1) that the contracting agency was unreasonable in finding the offeror's employment of a former government employee was consistent with post-employment restrictions, or (2) that any action of the former government employee resulted in prejudice for or on behalf of the offeror.

The Earth Technology Corporation:

The Earth Technology Corporation (TETC) protests the award of a contract to URS Consultants, Inc. under request for proposals (RFP) NO. SDI084-88-R -0004, issued by the Strategic Defense Initiative Organization, Department of Defense (SDIO). The contract is for scientific, engineering and technical support concerning environmental issues raised by SDIO actions, environmental analysis and preparation of environmental impact statements. TETC argues that SDIO failed to conduct meaningful discussions with it, that its offer was improperly evaluated, that award to URS at a higher price than that offered by TETC was not justified, and that URS' proposal was prepared and presented by a former DOD official in violation of statutory and regulatory conflict of interest provisions. deny the protest.

The RFP, issued on December 9, 1987, contemplated the award of a cost- plus-award-fee (CPAF) contract and contained three primary evaluation areas-- technical, management and cost-- in descending order of importance. The technical evaluation area was further subdivided into four items: environmental impact and analysis process, environmental critical issues, risk assessment and records management. Each of the items was of equal importance. The management area was further subdivided into five items: management structure and organization, staffing and technical management, award fee plan, cost schedule management, and facilities. Those items were listed in descending order of importance. Finally, the cost area was evaluated for realism, reasonableness, completeness, and continuity.

The RFP also contained detailed narrative statements describing each of the various evaluation items. In addition, the evaluation scheme employed an adjectival rating system whereby offerors were to be rated either exceptional, acceptable, marginal or unacceptable for each of the various evaluation items and factors. Finally, the solicitation contemplated contract performance, as required, for a base period of 3 years plus two 1 year options.

In response to the solicitation, three firms-- URS, TETC and ICF Technology, Inc.-- submitted initial offers. After evaluation, the contracting officer issued clarification requests to each of the offerors. The contracting officer then concluded that all three offerors were in the competitive range and conducted written discussions. After written discussions, each offeror was provided an opportunity to make an oral presentation. Thereafter, best and final offers (BAFOs) were solicited and, after evaluation, award was made to URS as the firm submitting the proposal deemed most advantageous to the government.

In awarding to URS at a cost 43 percent higher than TETC, the source selection official (SSO) found URS' offer superior technically because it provided a detailed systematic approach to the execution of the SDI environmental impact analysis process, and the URS proposal recognized the critical need to "plan and strategize" the purpose for each environmental document prior to document preparation. The SSO further found that URS' proposal showed an extensive technical understanding of environmental laws and regulations. He also found that the TETC and ICF proposals lacked a systematic interdisciplinary approach which would address SDI as a "system of systems." He noted that, from a technical standpoint, TETC had been rated marginal in risk assessment and ICF marginal in environment critical issues. Thus, he believed these proposals posed unacceptable risks to the program, and awarded the contract to URS.

TETC first argues that SDIO failed to conduct meaningful discussions with it in violation of Federal Acquisition Regulation (FAR) Sec. 15.610(c) (FAC 84-16), which requires contracting agencies to advise an offeror of deficiencies contained in its proposal so that the firm is given an opportunity to satisfy the government's requirements. According to TETC, the deficiencies found in its proposal which were outlined by SDIO at TETC's debriefing were never adequately addressed during discussions.

The agency responds that the clarification requests and discussion questions which were submitted to TETC adequately served to lead TETC into the deficient areas of its proposal and that, therefore, SDIO's obligation to conduct meaningful discussions was fulfilled.

The governing provision of the Competition in Contracting Act of 1984, 10 U.S.C. Sec. 2305(b)(4)(B) (Supp. IV 1986), as reflected in FAR, Sec. 15.610(b) (FAC 84-16), requires that written or oral discussions be held with all responsible sources whose proposals are within the competitive range. Price Waterhouse, 65 Comp.Gen. 205 (1986), 86-1 CPD Para. 54, aff'd on reconsideration, B-220049.2, Apr. 7, 1986, 86-1 CPD Para. 333. Although agencies are not obligated to afford offerors all-encompassing discussions, Training and Management Resources, Inc., B-220965, Mar. 12, 1986, 86-1 CPD Para. 244, or to discuss every element of a technically acceptable competitive range proposal that has received less than the maximum possible score, Bauer of America Corp. & Raymond International Builders, Inc., A Joint Venture, B-219343.3, Oct. 4, 1985, 85-2 CPD Para. 380, they still generally must lead offerors into the areas of their proposals which require amplification. Furuno U.S.C., Inc., B-221814, supra; Technical Services Corp., B-216408.2, June 5, 1985, 85-1 CPD Para. 640.

We conclude that SDIO satisfied its obligation to conduct meaningful discussions with the protester. First, we point out that the protester was not rated "unacceptable" in any aspect of its proposal. As noted above, agencies are not obliged to discuss every element of a technically acceptable proposal which has not received the maximum possible rating, and we think that for SDIO to have gone further in its discussions with TETC reasonably could have resulted in technical transfusion-- disclosure of URS' "system of systems" approach to TETC. Second, we believe that the discussion questions which were submitted to TETC served to adequately lead the firm into the general areas of its proposal which were deemed weak by SDIO. By way of example, we note that in the area of risk assessment (the technical factor for which TETC received a marginal rating), the following question was submitted to TETC: "Summarize the rationale for the risks identified in your proposal. What is your overall strategy to resolve them." After TETC submitted a response to this discussion question, however, the evaluation team concluded that the firm's risk assessment analysis did not demonstrate the capability to address and resolve the risk areas identified.

Moreover, our review indicates that all of the weaknesses identified by the evaluation team in TETC's proposal have similarly corresponding discussion questions which, in our opinion, served to adequately apprise TETC of the weaknesses found in its proposal. We therefore conclude that the discussions conducted between TETC and SDIO were adequate.

TETC next argues that SDIO improperly evaluated its proposal. Specifically, TETC stated that its proposal contains ample information regarding its strategy to assess the cumulative environmental effects of the SDI program and adequately demonstrates its conceptual understanding of the strategic defense system as a "system of systems." Accordingly, TETC argues that SDIO improperly found that its proposal contained weaknesses in these areas.

The agency responds that TETC's proposal simply fails to demonstrate the firm's capability in terms of a strategic approach to assessing the unique environmental impact of the strategic defense system, and does not demonstrate an appreciation of the "system of systems" nature of the program. Moreover, the agency points out that TETC's proposal, in many instances, merely quotes Council on Environmental Quality regulations and does not discuss how the firm proposes to implement those regulations.

Our Office has consistently held that the evaluation of technical proposals is inherently a subjective process and that in reviewing allegations of an agency's improper evaluation of a proposal we will not substitute our judgment for that of the agency's evaluators. See e.g., Data Resources, B-228494, Feb. 1, 1988, 88-1 CPD Para. 94. Our review is limited to determining whether the evaluators' judgments were reasonable and in accordance with the stated evaluation criteria and whether there were any violations of procurement statutes or regulations in the conduct of the evaluation. Id. In this regard, the protester bears the burden of proving that the agency's evaluation was unreasonable, and this burden is not met by the protester's disagreement with the evaluation or its good faith belief that its proposal should have received a higher score. Pacord, Inc., B-224520.2, Mar. 6, 1987, 87-1 CPD Para. 255.

On the basis of the record before us, we cannot say that SDIO's evaluation of the protester's proposal was clearly unreasonable or inconsistent with the stated evaluation criteria.

The record shows that the evaluators found that TETC's proposal focused on specific regulations but failed to demonstrate the application of the regulations to the statement of work and sample task problem. The evaluators also criticized TETC's approach to the environmental impact analysis process as showing only limited capability for development of an overall environmental documentation strategy. The evaluation summary also noted TETC's failure to address and resolve risk areas identified in the process, and questioned its record management system. Of critical concern to SDIO, was the failure of TETC to demonstrate how the environmental regulations it referenced would be applied to SDIO's multifaceted program. Based on these evaluation findings, TETC received a marginal rating in risk assessment. While TETC disagrees with SDIO's evaluation of its proposal and argues, by reference to specific portions of its proposal, that its proposed approach did address comprehensively the areas of the environmental impact analysis process and risk, we have no basis to conclude that the agency's evaluation in these areas was unreasonable. Based on our review, the proposal language relied upon by TETC appears generic in approach and fails to show any specific consideration of how its approach applies to SDIO's program. (This program involves weapons development by several different agencies at numerous locations and test ranges coordinated by SDIO).

Moreover, we note that the evaluation team's initial assessment of TETC's proposal identifies the weaknesses ultimately noted in the final evaluation, and that discussion questions were directed at those weaknesses. Nonetheless, there appears to have been no appreciable improvement in TETC's rating under the final evaluation. The obvious conclusion is that TETC's proposal contained what the evaluators viewed as fundamental weaknesses in terms of approach which were not cured during discussions. These fundamental weaknesses appear to have derived from TETC's inability to articulate a strategic approach to the implementation of the basic demands of federal environmental law, and we cannot reasonably say that this requirement was not stated in the RFP. Consequently, we find that SDIO did not improperly or erroneously evaluate TETC's proposal.

TETC next argues that SDIO improperly made award to URS because it failed to make award in accordance with the stated evaluation criteria and because it failed to justify the award at a cost which was approximately 43 percent higher than the cost proposed by TETC. In particular, TETC argues that all offerors were found to be technically acceptable and that SDIO has not offered the explicit justification necessary to rationalize its source selection decision. TETC also argues that the source selection decision shows that the source selection official took into consideration factors which were not stated in the solicitation for award purposes. Specifically, TETC argues that the source selection official's reliance upon the possible costs of litigation in the event of unacceptable contract performance is impermissible because no such criterion was contained in the solicitation.

The agency responds that it properly made a cost/technical tradeoff in its determination to award to URS and that the source selection decision was reasonable and made in accordance with the solicitation's stated evaluation criteria.

In a negotiated procurement, the government is not required to make award to the firm offering the lowest cost unless the RFP specifies that cost will be the determinative factor. University of Dayton Research Institute, B-227115, Aug. 19, 1987, 87-2 CPD Para. 178. Our Office has upheld awards to technically superior, higher priced offerors where the record shows that such an offeror's cost premium was justified in light of its technical superiority. Id. Indeed, we have even upheld such an award where other offerors have been found to be technically acceptable and lower in cost. ARES, Inc., B-224623.2, Dec. 8, 1986, 86-2 CPD Para. 655. Our review is limited to considering whether the source selection decision is rationally based and consistent with the stated evaluation criteria. BDM Management Services Co., B-228827, Feb. 1, 1988, 88-1 CPD Para. 93. We find that the decision to award to URS notwithstanding that firm's higher cost was rationally based and consistent with the evaluation criteria. The evaluators rated URS significantly superior in two of the four technical areas, and acceptable in the other two area. particular, the SSO found that the URS proposal demonstrated a technical superiority "by a wide margin" over the other offerors' proposals in that it showed the firm's understanding of the requirements of applying environmental law and regulations to the specific demands of the SDS program: "the URS proposal presented in detail not only a familiarity with the established environmental laws and regulations but also an extensive understanding of the technical aspects required in accomplishing each element of the statement of work." The SSO also found that URS demonstrated a clear superiority in terms of early resolution of environmental issues, concluding that this superiority would result in critical cost savings. Finally, although the SSO recognized that URS had been rated marginal under certain of the management criteria, he viewed those weaknesses as "readily correctable." With regard to TETC, its proposal was rated marginal in risk assessment, and the SSO found that the TETC proposal lacked the comprehensive approach to environmental analysis necessary to support SDIO's work. He concluded that award to TETC "would present unacceptable risks to the program." We further note that the SSO considered the possible costs of litigation resulting from poor performance in reaching his award decision. The SSO found that "the risk posed by less than exemplary contractor performance could result in costs to the government far in excess of any cost proposal" differential."

The selection of a contractor which can best perform a contract necessarily involves a choice between methods of operation and approach and the acceptance of a certain level of risk. We have held that an agency may differentiate between proposals based on the degree of risk involved since the element of risk is clearly related to the evaluation of capability and approach. Radiation System, Inc., B-222585.7, Feb. 6, 1987, 87-1 CPD Para. 129.

The record clearly shows that URS was considered technically superior by a wide margin in areas which demonstrated the least risk of performance. Clearly, in this case, technical risk was reasonably considered to be a paramount basis to differentiate between proposals, since the agency reasonably concluded that less than exemplary contract performance could lead to delays in implementing the SDIO program, and result in costs which would exceed the difference between proposals. Further, we note that risk assessment was an RFP factor and was also specifically a matter of discussions and evaluation. Therefore, based on this record, which shows that URS was reasonably found superior in its technical approach while TETC's technical approach was merely either acceptable or marginal, we conclude that the award to the higher cost, technically superior offeror was reasonable.

Finally, the protester argues that a member of URS' proposal preparation team is in violation of statutory and regulatory conflict of interest provisions. Specifically, TETC argues that URS' project manager and "group leader" for purposes of preparing the firm's proposal is in violation of 18 U.S.C. Sec. 207 (1982) and its implementing regulations 5 C.F.R. part 737 (1988). The employee in question had retired from the United States Air Force on June 1, 1987, and entered the employ of URS shortly thereafter. Prior to his retirement, the Air Force had detailed URS' employee to SDIO for purposes of his providing advice to it in the areas of environmental policy. In this connection, the record shows that the employee had specific knowledge of at least two prior contracts emanating from SDIO. Additionally, he had participated in a number of informal discussions between himself, Department of Justice officials and a then current contractor to SDIO regarding the appropriate timing and scope of a programmatic environmental impact statement, the subject of the RFP here in question. However, this individual did not participate in any way with the preparation of the solicitation.

Both sides to this protest have submitted affidavits from various officials (both within SDIO and within the three offeror organizations under this solicitation) which, it is argued, depending on the party, either tend to show or fail to show that the employee in question had "specific knowledge" of the subject RFP within the meaning of 18 U.S.C. Sec. 207 and its implementing regulations. The record also contains correspondence between the employee in question and SDIO's ethics counselor with regard to the subject RFP as well as with other potential post-employment conflict of interest issues.

We have consistently held that the interpretation and enforcement of the post-employment conflict of interest restrictions are primarily matters for the Department of Justice and not this Office. See Regional Environmental Consultants, B-223555, Oct. 27, 1986, 66 Comp.Gen. ***, 86-2 CPD Para. 476, aff'd on reconsideration, B-223555.2, Apr. 21, 1987, 66 Comp.Gen.***, 87-1 CPD Para. 428. Our interest, within the confines of a bid protest, is to determine whether any action on the part of the former government employee may have resulted in prejudice for, or on behalf of, the awardee. Id. Moreover, we will not question an agency's interpretation of conflict of interest provisions vis-a-vis a former employee unless it is shown to be unreasonable. Id.

We conclude that the record in this case shows that the employee has not violated the cited conflict of interest provisions or that the agency's interpretation to that effect is unreasonable. In particular, 5 C.F.R. Sec. 735.5, requires the individual in question to have participated in a "particular matter" before properly being excluded from representing a private concern before the government and specifically excludes from the concept of "particular matter" the formulation of general policy. See 5 C.F.R. Sec. 737.5(c). We find that the record shows that the employee in question did not help prepare the RFP and did not do more than formulate general policy with respect to the RFP and therefore conclude that his actions did not amount to actions which would result in prejudice for, or on behalf of, URS.

The protest is denied.