Matter of: Telephonics Corp., Communication Systems Division File: B-250699.2 Date: March 3, 1993

B-250699.2: Mar 3, 1993

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PROCUREMENT Competitive Negotiation Offers Evaluation errors Evaluation criteria Application Protest that offeror should have been given credit in technical evaluation for proposing all desired or preferred features listed in the solicitation for intercom system. Is denied where the solicitation provided that proposed desired features would be evaluated in the context of the entire proposed system and in relation to the system's proposed use and the record does not show that the offered desired features were viewed by the agency as unusually advantageous. The VIS will allow communication between members of the crew and outside of the vehicle. Which is used by the commander of the vehicle.

Matter of: Telephonics Corp., Communication Systems Division File: B-250699.2 Date: March 3, 1993

PROCUREMENT Competitive Negotiation Offers Evaluation errors Evaluation criteria Application Protest that offeror should have been given credit in technical evaluation for proposing all desired or preferred features listed in the solicitation for intercom system, in addition to all mandatory requirements, is denied where the solicitation provided that proposed desired features would be evaluated in the context of the entire proposed system and in relation to the system's proposed use and the record does not show that the offered desired features were viewed by the agency as unusually advantageous. REDACTED VERSION[*]

Attorneys

DECISION Telephonics Corp., Communication Systems Division protests the award of a fixed-price contract to Grumman Aerospace Corporation under request for proposals (RFP) No. DAAB07-91-R-B031, issued by the United States Army Communications-Electronics Command (CECOM) for vehicular intercommunications systems (VIS), or intercoms, for installation in eight Army vehicles, spare/repair parts, support equipment and integrated logistics support. The VIS will allow communication between members of the crew and outside of the vehicle.

We deny the protest.[1]

BACKGROUND

The VIS, a replacement for the intercom system currently in use in Army vehicles, the AN/VIC-1, consists of a master control station (MCS), which is used by the commander of the vehicle, full function crew stations (FFCS), which have two-way communications capabilities, and monitor only stations (MOS), which allow crew members to hear each other. Also, included are headsets, a loudspeaker and power/interconnecting cables for the eight vehicles for which VIS are to be supplied. Each of the specified vehicles is different and different mixes of these and other components are required for the various vehicles.

The solicitation contemplated the award of a firm, fixed-price contract for 110 VIS and 800 headsets. The basic contract includes an option for 700 VIS and the solicitation also includes options for 28,910 VIS and 68,000 headsets over 4 option years.

The solicitation included a functional description document (FUDD), which defined the VIS components, features, functions, capabilities and performance. The FUDD identified each of the features, functions, etc., as either a mandatory requirement, or as desired/preferred. The solicitation also provided for a demonstration of the ability of proposed VIS to meet the mandatory and desired features and functions.

Under the solicitation, award was to be made "based on the best overall proposal, as verified by the system/equipment demonstration, that is determined to be most beneficial to the Government." The solicitation listed in descending order of importance: technical, performance risk, management, and price as evaluation factors. The technical factor included the following subfactors and elements with the subfactors listed in descending order of importance:

Subfactor A Operational Suitability (elements are of equal importance)

Element 1 Technical Performance and Associated Technical Data

Element 2 MANPRINT[2]

Element 3 Integrated Logistics Support (ILS)

Subfactor B Manpower and Material Readiness

Subfactor C Production Readiness

The solicitation also stated that under each of the evaluation factors and subfactors, the agency would evaluate the risk associated with an offeror's proposed approach in meeting the government's requirements and that the risk assessment would be integrated into the ratings assigned. Also, the solicitation stated that in order to receive consideration for award, a rating of at least "ACCEPTABLE" was required on each of the factors and subfactors.

CECOM received proposals from six firms: Group Technologies Corporation, Grumman, Racal Electrospace Systems, Inc., Telephonics, and Canadian Marconi Company. Based on the initial technical evaluation, all six were included in the competitive range and clarification requests were issued and responses received from all six firms. The agency then conducted discussions by issuing written questions and accepting responses to them from all offerors. After these discussions were completed, the Racal and Electrospace proposals were eliminated from the competitive range. Additional discussions were conducted with the remaining offerors and best and final offers (BAFO) were requested on August 28, and received on September 8, 1992. The evaluators then assigned adjectival ratings to the proposals.[3]

The evaluators first assigned ratings to a series of subelements under each of the three elements under the "Operational Suitability" technical subfactor and to the other technical subfactors and the management evaluation factor. The subelement ratings were then averaged or "rolled- up" into the subfactors and then into an overall technical rating. The evaluators also assigned risk ratings of High, Moderate or Low to the various subelements, elements, subfactors and factors and to the Performance Risk evaluation factor. Also, the agency reports that the results of the demonstration tests were incorporated into these ratings. The final evaluation results for Telephonics and Grumman were as follows:

Telephonics Grumman

TECHNICAL GOOD GOOD (risk) (Low) (Low)

Subfactor A Operational GOOD GOOD Suitability (risk) (Low) (low)

Subfactor B Manpower and Material GOOD GOOD Resources (risk) (Low) (Low)

Subfactor C Production GOOD GOOD Readiness (risk) (Low) (Low)

PERFORMANCE RISK Low Moderate

MANAGEMENT GOOD GOOD (risk) (Low) (Low)

PRICE $411,029,847 $220,152,447

CECOM awarded the contract to Grumman on September 25. The source selection authority stated that Grumman's technical and management proposal was rated the same as or higher than the other remaining proposals and, although Grumman's performance risk was rated higher than two of the remaining offerors, its other ratings, including its low risk rating under the technical factor, combined with its low price, more than $190 million lower than Telephonics' price, clearly demonstrated that Grumman offered the best overall value to the government.

PROTEST ALLEGATIONS

Telephonics argues that the Army failed to follow the evaluation scheme set forth in the solicitation since the evaluators did not give Telephonics credit for offering to provide numerous desired functions and features and did not give sufficient weight to the results of the demonstration tests in the selection. In addition, Telephonics argues that the agency gave too much weight to price since price was considered in the evaluation of the technical factors, in addition to being considered in the tradeoff between technical and price in the source selection decision. Finally, Telephonics argues that the agency failed to conduct meaningful discussions since, according to the protester, had CECOM indicated during discussions that it would not rate proposals higher for meeting and demonstrating all desired features and functions, it would have followed a different, less costly approach.

ANALYSIS

Telephonics principally argues that it did not receive credit in accordance with the RFP evaluation scheme for the desired features and functions which it proposed. Telephonics states that it followed a strategy of offering all of the desired functions and features set forth in the RFP in addition to meeting all mandatory requirements. According to the protester, it proposed and successfully demonstrated all 122 of the desired RFP functions and features.

The solicitation stated, under the "Technical Performance and Associated Technical Data" element under the "Operational Suitability" technical subfactor, that the evaluation would consider:

"The overall degree of mission accomplishment achievable by the offered system when used by the designated personnel in the context of the organization, doctrine, tactics, threat, and environment in the worldwide operational employment of the offered system will be evaluated to determine and establish its suitability for field use."

Also, the solicitation stated that "[t]he capabilities which were proposed . . . as `desired' capabilities will be assessed as to the degree they enhance system/equipment performance."

Before proposals were submitted, Telephonics asked the agency to "clarify how `desired' capabilities will be assessed (with regard to `weighing' or scoring values)" and "if all required capabilities are satisfied, does an offeror receive additional scoring if he provides one desired capability? What if he provides two desired capabilities or three, and so forth?" In a solicitation amendment, the Army responded:

"There is no predetermined weighing of the desired capabilities set forth in the RFP. Offerors in drafting their proposals must assess what the best approach for them is in meeting the Government's requirements. The addition of desired capabilities may enhance their overall technical rating; however, poorly defined or high risk approaches to add desired capabilities may lead to a poorer technical rating."

The solicitation permitted each offeror to choose its own proposal approach by allowing wide latitude to select the number and type of desired features and functions to be proposed. Telephonics' chosen strategy was to propose all of the listed desired functions and features. Contrary to Telephonics' contention, however, the fact that it, or any other offeror, proposed some, or even all, of the desired features and functions did not obligate the agency to assign it any particular evaluation rating. Rather, we think that it was clear from the solicitation that proposed desired features or functions would be evaluated in the context of the entire system configuration proposed and in relation to the suitability of that system for use in the field.[4] Thus, even if Telephonics proposed all of the desired capabilities and even if all of those capabilities had been successfully demonstrated, nothing in the solicitation required that the firm be given an "OUTSTANDING" rating on the technical evaluation factor, or on any particular subfactor, element or subelement, if, for example, the evaluators had some problems with the offeror's approach to either a required or desired feature or function or they simply believed the overall approach did not represent a significant advantage to the agency.

As for the actual evaluation, Telephonics states that the agency's technical evaluation reports recognize that the firm proposed numerous desired features and functions under each technical subfactor and subfactor element and that the record shows that these desired features and functions offered significant advantages. In addition, Telephonics states that the agency concedes that only 2 of the 122 desired features or functions proposed by Telephonics were considered by the evaluators to be "disadvantages" and that the evaluation documents state that Telephonics' approach to adding desired capabilities was well defined and represented low risk. Telephonics further argues that the evaluators were wrong in viewing those desired features as disadvantageous.[5]

We do not think that the record supports Telephonics' position. First, as stated above, there was no RFP requirement that the evaluators total the number of desired features and functions proposed by each offeror and base the evaluation ratings on a comparison of the totals; the agency evaluated the desired features and functions proposed by each offeror in the context of the entire proposed system and in relation to the system's proposed use. The ratings assigned to the Telephonics and Grumman proposals were based on this evaluation and not on the comparison of raw totals of features offered. While the protester asserts that the desired features it offered were advantageous, we see nothing in the record indicating that the evaluators considered Telephonics' desired features more advantageous than those proposed by other offerors, including Grumman. Moreover, the protester has not explained why any of the desired features (other than the two found to be disadvantages) should be viewed as unusually advantageous. Although Telephonics offered numerous desired features and functions, Grumman also offered a significant number, more than 100, of the desired features and functions. Thus, on this record, we have no basis to conclude that the protester should have received a higher rating than it received or a higher rating than Grumman's.[6]

Next, Telephonics argues that the agency did not properly conduct or consider in the evaluation the system/equipment demonstrations. In this regard, the protester states that it showed in the demonstration that its system was better than Grumman's and if this had been given proper evaluation consideration, its final rating would have been higher.

The solicitation stated:

"The System/Equipment Demonstration will be used to make an assessment of proposed system's capabilities and suitability for use. The demonstration will also serve to substantiate the offeror's written proposal. If the offeror does not demonstrate the equipment in accordance with the requirements of the solicitation then the equipment will be considered operationally unsuitable and the offer considered unacceptable."

Although Telephonics argues that it demonstrated that its system was superior to Grumman's and that it received "far better narrative ratings for its system/equipment demonstration than Grumman," we do not think that the record supports this. Telephonics has submitted a detailed list comparing the demonstration test results and, based on this list, we do not believe that Telephonics has shown that its system was demonstrated as clearly superior to Grumman's. In this respect, although Telephonics' list of more than 30 categories on which the offerors' systems were evaluated includes approximately [deleted] categories in which Telephonics' system was more successfully demonstrated than Grumman's, it also includes [deleted] categories in which the evaluation narrative for Telephonics and Grumman is virtually identical, and at least [deleted] categories in which Grumman's system was superior to Telephonics' system. Further, while the actual record of the demonstration tests shows that in some categories Telephonics' system tested more successfully than Grumman's, in other categories, the opposite is true. We therefore conclude that the demonstrations did not show that Telephonics' proposed equipment was significantly superior to that of Grumman and or that Telephonics merited a higher rating than it received.

The evaluation of technical proposals is primarily the responsibility of the contracting agency; the agency is responsible for defining its needs and the best method of accommodating them, and must bear the burden of any difficulties resulting from a defective evaluation. Thus, our Office will not make an independent determination of the merits of technical proposals; rather, we will examine the agency evaluation to ensure that it was reasonable and consistent with the stated evaluation criteria. Mere disagreement with the agency does not render the evaluation unreasonable particularly where, as here, the procurement concerns sophisticated technical hardware. Litton Sys., Inc., B-239123, Aug. 7, 1990, 90-2 CPD Para. 114. As discussed above, we have no basis for finding the evaluation to be unreasonable.

Moreover, even if there were some merit to the protester's arguments such that its proposal should have received a higher rating in some areas, we think it unlikely that the selection decision would have been different in light of the more than $190 million difference in price between Telephonics and Grumman.

Telephonics also argues that the contracting agency improperly allowed price considerations to affect the technical evaluation. In this respect, the protester notes that the agency report states that Telephonics proposed "a very high priced approach, the highest price of all offerors in the final competitive range . . . [Telephonics] ignored the fact that there would be cost/technical tradeoffs for those desired features. . . ." According to Telephonics, this statement demonstrates that price was improperly considered in the evaluation of its technical proposal and indicates that the agency elevated price from the least to the most important evaluation factor.

We disagree. While Telephonics' high price was certainly a factor in the price/technical tradeoff decision, we can find no evidence in the evaluation record, and the protester points out none, that shows that Telephonics' price influenced the evaluation of its technical proposal. The agency statement referred to above is from the agency's protest report, an after-the-fact explanation of the procurement. In any event, in our view, the statement referenced above is simply an assertion that, consistent with the solicitation, price played a role in the selection decision.

Finally, Telephonics argues that the Army failed to conduct meaningful discussions with it since the firm was not notified that the RFP evaluation criteria and requirements would be changed. According to Telephonics, had it been told during discussions that proposals would not be scored any higher for desired features and functions, it would have followed a different, less costly approach.

Based upon our conclusion that Telephonics' proposal was evaluated in accordance with the RFP terms, we do not agree with the protester that the agency changed either the RFP requirements or evaluation criteria. Therefore, there was no need for the agency to hold discussions in this regard. In any event, the agency told Telephonics during discussions that its price was high. Thus, Telephonics was reasonably on notice regarding the agency's concerns about the firm's proposed approach, which included a high price for offering all of the desired features and functions.

The protest is denied.

* The decision issued on March 3, 1993, contained proprietary information and was subject to a General Accounting Office protective order. This version of the decision has been redacted. Deletions in text are indicated by "[deleted]."

1. In previous decisions, we dismissed a protest by Electrospace Systems, Inc. and denied a protest by Group Technologies Corporation against the award to Grumman. Electrospace Sys., Inc., B-250699.5, Nov. 2, 1992; Group Technologies Corp.; Electrospace Sys., Inc., B-250699 et al., Feb. 17, 1993, 93-1 CPD Para. . In the latter decision, we addressed and denied allegations by Group Technologies, Telephonics and another offeror, Canadian Commercial Corporation/Canadian Marconi Company, that Grumman had an improper competitive advantage in the competition under RFP No. DAAB07- 91-R-B031 as a result of meetings with Army officials concerning a contract to supply VIS to the Diesel Division of General Motors of Canada Limited for installation in light-armored vehicles for the Saudi Arabian National Guard under the foreign military sale program. We therefore will not again address these issues in this decision. In a decision to be issued at a later date, we will address additional allegations by Canadian Commercial Corporation/Canadian Marconi Company concerning the evaluation of proposals and the selection of Grumman under RFP No. DAAB07-91-R-B031.

2. The solicitation explained that the agency's concern under the MANPRINT element is the extent to which the proposed VIS can be safely operated and maintained within the existing manpower structure and resources of the Army.

3. The agency reports that evaluators used the following rating system:

OUTSTANDING- Significant advantages while meeting the RFP requirements. GOOD- Proposal that meets the requirements of the RFP. ACCEPTABLE- Barely meets requirements and/or offers significant disadvantages. SUSCEPTIBLE- Does not clearly meet requirements and/or appears to be unacceptable. UNACCEPTABLE- Proposal has minimal or no chance of success or contains deficiencies which require a major rewrite.

4. We recognize that there is a substantial question whether the evaluation approach described by the agency in the amended solicitation provided meaningful guidance to offerors about the desired features and functions. This issue was not protested by Telephonics or any other offeror.

5. In its December 16 comments on the agency report, for the first time, Telephonics argued that Grumman's proposal did not meet the damage control requirement of the solicitation. Under our Bid Protest Regulations, a protest must be filed within 10 working days of when the basis of protest is known or should have been known, whichever is earlier. 4 C.F.R. Sec. 21.2(a)(2) (1992). Where, as here, a protester supplements a timely protest with new and independent grounds, the later raised arguments must independently satisfy the timeliness requirements. Golden Triangle Mgmt. Group, Inc., B-234790, July 10, 1989, 89-2 CPD Para. 26. Telephonics' argument that Grumman's proposal did not meet the damage control requirement is based on the evaluation documents and other information given to Telephonics on November 30. Telephonics did not raise the new contention until more than 10 working days later when it filed its comments on the agency report on December 16. Consequently, this issue is untimely and will not be considered.

6. It is also clear that Telephonics' overall rating would not have changed even if the two "disadvantages" had been viewed otherwise. The disputed disadvantages resulted in "ACCEPTABLE" ratings on 2 of the 18 subelements under the "Technical Performance and Associated Technical Data" element. If these subelement ratings were raised to "GOOD" or "OUTSTANDING," since the firm received ratings of "GOOD" under all of the other technical subfactors and elements, it appears that the protester's overall "GOOD" technical rating would not have changed.