Matter of: Axion Corporation File: B-252812 Date: July 16, 1993

Matter of: Axion Corporation File: B-252812 Date: July 16, 1993

PROCUREMENT Competitive Negotiation Contract awards Administrative discretion Cost/technical tradeoffs Technical superiority Where request for proposals provided for award to the offeror whose proposal represented the best overall value to the government, giving equal weight to quality, past performance, and price, the agency was not required to award to the lowest priced, technically acceptable offeror. PROCUREMENT Competitive Negotiation Offers Evaluation Samples Agency reasonably assigned the protester's proposal a rating of acceptable rather than excellent under evaluation factor concerning quality where agency records showed that the protester's first articles had been rejected under one recent contract and that its quality verification samples had been rejected under another.

Attorneys

DECISION Axion Corporation protests the award of a contract to Advanced Defense Technologies (ADT) under request for proposals (RFP) No. DAAH01-92 -R-A358, issued by the U.S. Army Missile Command for circuit card assemblies. Axion contends that as the lowest priced offeror, it was entitled to award.

We deny the protest.

The RFP contemplated the award of a requirements contract for two types of circuit card assemblies: National Stock Number (NSN) 5998-01-198-9236, in support of the TARGETS missile system, and NSN 1430-01-114-0815, in support of the HAWK missile system. The solicitation advised offerors that three factors of approximately equal weight--quality, past performance, and price--would be considered in the evaluation of proposals and that award might be made to other than the lowest priced offeror if its proposal represented the best overall value to the government. The RFP further advised that in assessing quality, the evaluators would consider three subfactors of equal weight: any quality deficiency reports that the offeror had received on government spare parts contracts during the past 3 years; the results of any first article, quality verification sample, or product reliability verification testing conducted over the past 3 years; and any value engineering change proposals or requests for deviation/waiver submitted and accepted within the past 3 years.

Six offerors responded to the RFP. After discussions and submission of best and final offers, the evaluators assigned Axion's proposal ratings of acceptable for both quality and past performance and evaluated its price (including a first article testing cost of $19,700) as $151,434.98. ADT's proposal, with an evaluated price of $163,115, received a rating of excellent for past performance and a rating of acceptable for quality. The contracting officer determined that the technical superiority of ADT's proposal over Axion's justified its slightly (i.e., 7 percent) higher price and selected ADT for award.[1]

Axion argues that because its proposal was determined to be acceptable and its price was low, it should have received the award.

The solicitation at issue here did not provide for award to the lowest priced, technically acceptable offeror; rather, it provided for award to the offeror whose proposal represented the best overall value to the government, giving equal weight to quality, past performance, and price. Thus, it was consistent with the RFP's evaluation plan for the contracting officer to award to a higher rated, higher priced offeror where he determined that the combination of technical merit and price represented the best overall value to the government.

The protester also takes issue with the agency's evaluation of its proposal under the quality factor. Axion maintains that the agency unfairly rated its proposal as acceptable rather than excellent under this factor because its first articles had been rejected under one recent contract and its quality verification samples had been rejected under another.[2] The protester contends that in both instances the government was in fact responsible for the discrepancies in the samples.

In reviewing protests against the propriety of an agency evaluation of proposals, it is not the function of our Office to independently evaluate those proposals. Rather, the determination of the relative desirability and technical adequacy of the proposals is primarily a matter of agency discretion which we will not disturb unless it is shown to be without a reasonable basis or inconsistent with the evaluation criteria listed in the RFP. Ebasco Constructors, Inc. et al., B-244406 et al., Oct. 16, 1991, 91-2 CPD Para. 341.

With regard to the contract under which the protester failed first article testing, DAAH01-89-D-0148, the protester contends that the discrepancies in its samples resulted from the incomplete technical data supplied by the government. The protester maintains that although the government cited as discrepancies its failure to "conformally" coat the circuit boards and its use of Phillips head screws instead of rivets to fasten the keys, the solicitation drawings did not in fact require that the boards be coated and permitted the use of screws and nuts as an alternative for rivets. The protester further insists that, in any event, both discrepancies were minor and that it was able successfully to correct both in its production quantities.

The protester has furnished us with documentation which seems to support its argument that the drawings permitted the use of screws and nuts in place of the rivets. It has offered no documentation in support of its argument concerning the coating, however. According to the Army's letter of August 2, 1991, to Axion rejecting its first article under this contract, note 2 of the solicitation's top drawing specified that the circuit boards were to be fabricated in accordance with drawing 12265506, which in note 2E specified conformal coating of a specific type and grade. Thus, although, as the protester contends, there was no note on the top drawing itself requiring conformal coating, offerors who referred to drawing 12265506, as the top drawing directed, would have noted the coating requirement. Further, with regard to Axion's argument that the discrepancies were minor, the agency, which is responsible for the testing and approval of first articles, viewed them as sufficiently significant to warrant rejection; other than its general disagreement, Axion has offered no evidence to warrant challenging that conclusion.

With regard to the contract under which the agency rejected Axion's quality verification samples, DAAH01-89-P-4122, the protester contends that the discrepancies noted by the agency were the result of Army attempts to test the boards separately (rather than on the system), which necessitated soldering and resoldering of a number of the capacitators. The protester notes that in a letter to the Army dated April 26, 1992, it explained the adjustments that would need to be made to test the boards successfully.

The record shows that the Army rejected Axion's quality verification samples under this contract twice and that, in the first instance at least, the discrepancies related to more than just the resoldering of capacitators. For example, the Army found that one sample was missing a mounting pad; another had mounting holes of the wrong diameter; and in two samples, the circuit boards were longer than the maximum dimension specified in the drawings. Thus, we do not think that the record supports the protester's argument that agency attempts to test the boards in an inappropriate fashion resulted in the discrepancies that led to rejection of the samples.

Finally, the protester argues that the agency should have waived first article testing in evaluating its price because it is a past producer of the items to be procured.

The agency sought to purchase two different types of circuit card assemblies under this contract, but requested the submission of first articles for only one of the two, NSN 5998-01-198-9236. The agency reports that Axion is a previous producer of only the other type of card. Since Axion has not previously produced the item for which first articles are required, the agency reasonably determined not to waive first article testing in evaluating the price of its proposal.

In conclusion, we find that the Army reasonably considered the rejection of Axion's first articles under contract No. DAAH01-89-D-0148 and the rejection of its quality verification samples under contract No. DAAH01-89 -P-4122 in assigning it a rating of acceptable rather than excellent under the quality factor. Further, we think that the agency properly declined to waive first article testing costs in evaluating Axion's price. Finally, we conclude that the agency reasonably determined that ADT's proposal, which received a rating of excellent for past performance and a rating of acceptable for quality and which was only slightly higher in price than Axion's, represented the best overall value to the government.

The protest is denied.

1. Of the remaining four proposals, three were determined to be less advantageous than Axion's because they received technical ratings either comparable to or inferior to Axion's and had higher evaluated prices. The remaining proposal received the highest technical score (ratings of excellent for both quality and past performance) at an evaluated price approximately 17 percent higher than ADT's; the contracting officer determined that the technical superiority of this proposal did not justify its higher price.

2. The agency's quality evaluation worksheet shows that Axion received a score of excellent under the subfactor relating to quality deficiency reports and scores of acceptable on the other two subfactors; thus, the record lends support to the protester's argument that it might have received an overall score of excellent for quality had its score on the second subfactor not been lowered due to the rejection of its first article/quality verification samples under the contracts in question.