B-239113.3, Jan 15, 1992

B-239113.3, Jan 15, 1992

DIGEST: 1. The record does not support allegations of bias in award to a lower- priced, lower-rated domestic firm where the agency's concerns regarding award to the higher-priced, higher-rated foreign firm on the basis of initial proposals without discussions were based upon the agency's determination that the exclusion from the competitive range of significantly lower-priced offerors was not reasonable and where the ultimate award to the domestic firm was supported by a comprehensive and rational cost/technical trade-off. 2. The record does not establish that the protester was prejudiced by the change in the awardee's technical scores for four critical subfactors of one technical factor where the awardee's overall technical score for that evaluation factor was unchanged and the source selection authority, in making his selection decision, was aware of and concurred in the change in subfactor evaluation scores. 3. There is no legal requirement that the change in a written competitive range determination from excluding several offerors to including all offerors be in writing, since the purpose of the competitive range determination is to determine with which offerors discussions will be conducted and discussions were conducted with all offerors.

Attorneys

Latecoere International, Inc.-- Advisory Opinion:

The United States District Court for the Southern District of Florida has requested an advisory opinion of the General Accounting Office with respect to the motion of Latecoere International, Inc. /1/ for a preliminary injunction of the award of a fixed-price contract to Environmental Tectonics Corporation (ETC) under request for proposals (RFP) No. N61339-89-R-0004, issued by the Naval Training Systems Center (NTSC), Department of the Navy, for the design, construction, and support of a G-Tolerance Improvement Program (G-TIP) device and facility.

In Wyle Laboratories, Inc.; Latecoere Int'l, Inc., 69 Comp.Gen. 648 (1990), 90-2 CPD Para. 107, we denied Latecoere's protest of NTSC's award of a contract to ETC under the RFP. /2/ The RFP was a negotiated "best value" procurement in which technical evaluation considerations were stated to be more important than cost. Latecoere protested that award to the lower-rated, lower-priced ETC was not in accordance with the stated evaluation scheme and was the result of bias against Latecoere. We found, among other things, that NTSC's source selection authority (SSA) reasonably determined that Latecoere's higher technical ratings did not reflect such significant technical superiority as to outweigh ETC's price advantage, given the awardee's acceptable level of technical competence available at the lower cost. We also found no evidence in the record of bias against Latecoere.

The court has requested our opinion concerning Latecoere's contentions that there are numerous facts, which Latecoere first learned during the court-ordered discovery and which were not available to it or the General Accounting Office as a part of the protest record, and that, if these facts had been disclosed to our Office during our consideration of the protest, we would have found that the award to ETC was not in accordance with procurement laws and regulations. These newly discovered facts primarily relate to Latecoere's allegations that the award was the result of bias and to NTSC's allegedly improper evaluation.

In accordance with the court's request for an advisory opinion, we requested that the parties provide us with the documents (including deposition transcripts (Dep. Tr.) and pleadings) comprising the record in the court proceedings. The parties were also permitted to submit argument to us concerning the significance of the record. This record shows numerous facts and documents that were not made available to us during our consideration of Latecoere's protest. Nevertheless, from our review of this fuller record, we do not find that our protest decision was in error or that the award to ETC was not in accordance with procurement laws and regulations, or was the result of bias against Latecoere or for ETC.

BACKGROUND

The G-TIP training system contemplated by the RFP is intended to provide pilots of high performance jet aircraft with the experience necessary to avoid the loss of consciousness due to high gravitational forces encountered in sudden acceleration. The system consists of a centrifuge trainer (device), housed in a facility, also containing instructional, medical, maintenance, and administrative support facilities. The G-TIP device is in essence a gondola, in which the pilot sits, attached to an arm which propels the gondola in a circular fashion.

The RFP listed detailed performance and function specifications as well as detailed technical proposal requirements, which informed offerors of the information that was required for each evaluation factor. The solicitation listed the following evaluation factors in descending order of importance:

1. Technical Design-- Device

2. Technical Design-- Facility

3. Management Plan

4. Past Performance

5. Integrated Logistics Support

6. Cost

The solicitation also provided subfactors for each evaluation factor and identified some of the subfactors as "critical elements." A "critical element" was defined as an area of prime concern to the government; the RFP warned that a proposal that was found technically unacceptable for one or more critical elements might be judged technically unacceptable overall.

The RFP stated that award would be made on a "best value" basis "to that offeror submitting an acceptable technical proposal with appropriate consideration given to cost and other factors." The solicitation also provided that cost was not expected to be the controlling factor in source selection but that the importance of cost could become greater depending upon the equality of the other factors evaluated; where competing proposals were determined to be substantially equal, cost would become the controlling factor. The government reserved the right to make award on the basis of initial proposals without discussions.

The source selection evaluation board (SSEB) evaluated proposals using an adjectival rating and risk assessment scheme: "exceptional," which was defined as exceeding the specified performance with high probability of success and no significant weaknesses; "acceptable," which was defined as meeting specified performance standards with good probability of success and no significant weaknesses; "marginal," which was defined as either failing to meet the performance standards but with deficiencies that were correctable without a major rewrite or failing to provide sufficient information to determine acceptability] and "unacceptable," which was defined as where a proposal failed to meet specified performance standards or where the correction of the deficiency would require a major rewrite. Risk assessments were defined according to the potential risk of disruption of schedule, increase in cost, or degradation of performance. "High" risk was defined as being likely to cause significant serious risk. "Moderate" risk was defined as potentially causing some risk. "Low" risk was defined as having little potential for causing risk.

NTSC received five proposals, including offers from Latecoere and ETC. The SSEB evaluated the proposals and determined that the offers of Latecoere and another offeror were acceptable while the other offers, including ETC's, were unacceptable. The SSEB's ratings were provided to the source selection advisory council (SSAC), which recommended award to Latecoere, without discussions, as the best value to the government inasmuch as the other acceptable offeror proposed a significantly higher price. The SSA adopted the SSAC's recommendation and sought the requisite business clearance for award to Latecoere from the office of the Assistant Secretary of the Navy for Shipbuilding and Logistics (ASN(S L)). /3/

NTSC's business clearance memorandum included the contracting officer's determination that only Latecoere and the other acceptable offeror were in the competitive range and that the other unacceptable offerors, including ETC, could not correct their respective proposal deficiencies without extensively rewriting the proposals. The ASN(S L) conditionally approved the business clearance memorandum, contingent upon NTSC conducting discussions with all five offerors. /4/ In the view of the ASN(S&L), NTSC had not shown that the three unacceptable offers were not susceptible of being made acceptable through discussions. /5/ (Ford Dep. Tr. at 60-68).

Discussions were conducted with all of the offerors, and revised proposals were received. /6/ Upon evaluation of revised technical proposals, all five offerors were found to be technically acceptable. The SSEB's final technical evaluation results for Latecoere and ETC were as follows:

Latecoere Rating/Risk /7/ ETC Rating/Risk

Device DesignA/L A/L

Facility Design E/L A/L

Management Plan A/M A/M

Past Performance E/L M/M

Logistics Support E/L A/M

Cost A/L A/M

OVERALL E/L A/M

Latecoere's and ETC's best and final price offers and the government's independent cost estimate (ICE) were as follows:

ICE $10,064,206

ETC $10,351,541

Latecoere $11,158,665

The SSAC in its final proposal analysis report (PAR) recommended that only the offers of Latecoere and ETC, as the two lowest priced acceptable offerors, be considered for award because, although the other three offerors met the minimum requirements of the RFP, their proposals were substantially higher in price ($14,396,202; $18,201,695] and $18,609,915). The SSAC then recommended that award be made to Latecoere as representing the best value to the government. In this regard, the SSAC found that Latecoere's exceptional design approach offered the lowest overall risk to the government and that this outweighed the more than $800,000 cost savings offered by ETC's low, acceptable proposal.

The SSA was briefed by the SSAC as to its recommendations and reviewed proposal evaluation and analysis documentation. While the SSAC in its final PAR unanimously recommended award to Latecoere, NTSC's director of contracts who was a member of the SSAC, orally dissented from the SSAC's recommendation and instead recommended that award be made to ETC as representing the best value to the government. In the view of NTSC's director of contracts, the evaluation documentation did not support award to Latecoere as the best value to the government because it did not show that Latecoere's evaluated technical superiority was worth the associated cost premium. (Kalapos Dep. Tr. at 192-196).

The SSA concluded that ETC had submitted a fully acceptable proposal that demonstrated ETC's clear understanding of the technical requirements at the lowest price and that its offer represented the best value to the government./8/ Accordingly, the SSA determined, contrary to the SSAC's recommendation, that award should be made to ETC. The SSA's selection decision was documented in a detailed decision paper discussing each of the technical areas of ETC's and Latecoere's proposals and how each factor related to the respective prices. Award was made to ETC on March 22, 1990.

DISCUSSION

The crux of Latecoere's arguments concerning the newly discovered evidence is that award to lower-rated, lower-priced ETC was not was not the result of a reasoned cost/technical tradeoff-- as we found in our initial protest decision-- but was motivated by the agency's bias against Latecoere as a foreign firm. Specifically, Latecoere notes (1) that the ASN(S&L), in reviewing NTSC's business clearance request for award to Latecoere, was concerned about the political implications of awarding a contract to a foreign firm without discussions (Ford Dep. Tr. at 128; Exhibit 3 to McDonald Dep.); (2) that the new SSA, prior to selecting ETC for award, called the ASN(S&L) to ascertain the verity of a rumor at NTSC that the ASN(S&L) did not want an award to a French firm (Urban Dep. Tr. at 130); (3) that the contracting officer expressed the opinion to the SSA that Latecoere would not protest if ETC were awarded the contract but that ETC would protest if Latecoere were selected (Hall Dep. Tr. at 100-102); and (4) that the SSA's award selection document was not written by the SSA but by others, allegedly without direction from the SSA as to the reasons for his selection decision. (Haasis Preliminary Injunction Hearing Testimony at 282 283). Latecoere contends that this demonstrates that the selection of ETC was the result of bias against Latecoere rather than as the result of a reasoned, fair cost/technical tradeoff.

The ASN(S&L)'s concerns regarding award to Latecoere without discussions with other lower-priced offerors-- whose price proposals were as much as $2 million lower than Latecoere's proposed price, which was 25 percent higher than the government estimate-- was based upon the ASN(S&L)'s view that NTSC had not demonstrated that these lower-priced offerors were not susceptible to being made acceptable through discussions. (Kalapos Dep. Tr. at 89-90). In the ASN(S&L)'s view, it was in the government's best interest to obtain further competition by conducting discussions and obtaining revised proposals. /9/ In this regard, the record shows that the ASN(S&L) was concerned that it could be criticized if it allowed award on the basis of initial proposals without discussions based upon what it believed to be an inadequate record. (Ford Dep. Tr. at 128-130). This, in our view, is a legitimate concern and does not show bias either for or against award to a foreign firm. /10/

Latecoere argues that the ASN(S&L)'s concerns regarding an award without discussions to Latecoere were perceived at NTSC as a direction not to award to a foreign firm. In this regard, Latecoere notes that the SSA, prior to making his selection decision, called the ASN(S&L) concerning a rumor at NTSC that the ASN(S&L) did not want an award to a foreign firm.

It is true that the SSA called the ASN(S&L) to obtain that office's views. /11/ (Urban Dep. Tr. at 127-128). The ASN(S&L), however, emphatically and unequivocally informed the SSA that the ASN(S&L) had no bias against award to a French firm and that the fact that Latecoere was a French company should not, at all, enter into the SSA's best value determination, and the SSA so informed the SSAC. (Urban Dep. Tr. at 135, 137). The ASN(S&L) did not tell the SSA what his selection decision should be. (Urban Dep. Tr. at 130). Moreover, the record shows that this "rumor" did not affect the evaluation of Latecoere's revised proposal, inasmuch as Latecoere continued to be evaluated as the technically superior offeror after the conduct of discussions, and the SSA agreed that Latecoere was the technically superior offeror, albeit not the representing the best value to the government. (Urban Dep. Tr. at 107). Latecoere contends, citing to testimony of the contracting officer and a member of the SSEB, (Hall Dep. Tr. at 100 102; Linton Dep. Tr. at 112- 113), that the SSA was motivated by a belief that Latecoere as a foreign firm would not protest if award were made to a domestic company. Latecoere's assertion that this protest fear drove the selection is not supported by the depositions of other SSEB and SSAC members and advisors; indeed, the SSA has unequivocally denied that the status of Latecoere as a French firm had any part in his selection decision. (Urban Protest Affidavit).

Rather than a bias against a foreign offeror, the record actually shows that there was a substantial disagreement within NTSC regarding which offeror represented the best value to the government. Many of the technical evaluators and members of the SSAC were of the view that Latecoere's technical superiority was worth the cost premium. (Husak Dep. Tr. at 49-50; Greear Dep. Tr. at 274). On the other hand, NTSC's director of contracts and, ultimately, the SSA did not believe that the evaluation documentation supported the view that Latecoere's technical superiority was worth the cost premium. /12/ (Kalapos Dep. Tr. at 194, 220-221; Urban Dep. Tr. at 87). In this regard, the SSA and the director of contracts requested additional information from the SSAC quantifying Latecoere's technical superiority. (Kalapos Dep. Tr. at 221; Urban Dep. Tr. at 87). NTSC's technical evaluators were unable to provide additional information that convinced the SSA that Latecoere should receive award as the offeror representing the best value to the government. (Urban Dep. Tr. at 87; Glenn Dep. Tr. at 110). /13/

Latecoere also objects that the SSA did not draft his own award selection document and allegedly did not provide any of his own reasoning to the drafter of the document. Latecoere contends that this also shows that the SSA was simply seeking to ensure an award to a domestic firm instead of making selection of the "best value." Here again, as discussed below, we do not find from this record that the SSA's failure to draft the source selection document is indicative of bias.

First, there is no legal requirement that an SSA personally write the document that reflects the award selection decision. /14/ Here, the record shows that the SSA weighed the evaluation results for Latecoere and ETC and made an independent determination that ETC's offer represented the best value to the government. This decision was necessarily transmitted to the drafter of the selection decision document. Second, contrary to Latecoere's contentions, the record establishes that the drafter of the document, while not provided with specific direction as to the contents of the selection document, was aware of the SSA's reasons for selecting ETC. (Haasis Preliminary Injunction Hearing Tr. at 322, 328-330). In this regard, NTSC's director of contracts-- who concurred with the SSA's selection decision - aided in the drafting of the decision. (Kalapos Dep. Tr. at 199). Also, the SSA and the decision document drafter met to discuss drafts of the document, and changes were made to the drafts to reflect the SSA's concerns. (Urban Dep. Tr. at 152-153; Haasis Dep. Tr. at 99 103).

Balancing the entire record, we find that the SSA's selection of ETC was not the result of bias. /15/ Rather, as noted in our prior protest decision, ETC's selection was supported by a comprehensive and rational source selection document detailing why ETC's offer represented the best value to the government. The record shows in this regard that members of the SSAC, while disagreeing with the SSA's ultimate award choice, believed nonetheless that the SSA properly weighed the technical and cost considerations in determining that ETC's offer represented the best value to the government. (Glenn Dep. Tr. at 111, 126, 139-143; Haasis Dep. Tr. at 111-112; Husak Dep. Tr. at 58, 64 65).

Latecoere also argues that NTSC's evaluation of ETC's proposal was unreasonable and improper. Specifically, Latecoere objects that NTSC, in its final evaluation of revised proposals after discussions, manipulated ETC's technical scores by arbitrarily raising marginal technical ratings to acceptable ratings for "critical element" subfactors under the most important device design technical evaluation factor.

In reviewing protests against allegedly improper evaluations, we examine the record to determine whether the agency's judgment was reasonable and in accordance with the stated evaluation scheme. Abt Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD Para. 223. Here, the record shows that ETC, after evaluation of revised proposals, had marginal ratings for 4 of the 12 critical subfactors under the device design evaluation factor and that NTSC raised these ratings to acceptable without the benefit of discussions or reevaluation. /16/ While this is indicative that the evaluation of these subfactors was unreasonable, the record also shows that ETC's overall technical rating for the device design factor was acceptable with low risk, even with the four critical subfactor marginal ratings. /17/ Latecoere does not contend that ETC's overall acceptable rating for the device design factor was unreasonable. Since the SSA was aware of the marginal ratings for these subfactors and concurred with the SSAC's determination to change them to acceptable, it follows that he weighed them in making his selection decision. Under the circumstances, we are not persuaded that Latecoere was prejudiced by this change in the scoring of ETC's subfactors, inasmuch as it apparently had no effect upon ETC's unchallenged overall technical rating of acceptability with low risk for the device design evaluation factor. /18/ See Textron Marine Sys., B-243693, Aug. 19, 1991, 91-2 CPD Para. 162.

Latecoere also argues that the RFP's evaluation scheme "conditioned the technical and cost trade-off upon a finding of substantial equality." disagree. As noted in our prior protest decision, the RFP, read as a whole, clearly provided that where technical proposals are not technically equal, cost alone is not determinative, but nevertheless must be weighed against the other factors to determine the best value to the government. Wyle Laboratories, Inc.; Latecoere Int'l, Inc., supra. To read the solicitation as suggested by Latecoere would require selection of the highest technically rated proposal regardless of cost. Such a result is inconsistent not only with the RFP but with the requirement that the government consider cost or price in all its selection decisions. See 10 U.S.C. Sec. 2305(b) (1988).

Latecoere also argues that NTSC's discussions with ETC and other offerors were improper because these offerors were found to be outside the competitive range. In Latecoere's view, since only Latecoere and one other offeror were identified in the contracting officer's original competitive range determination as being within the competitive range, ETC and the other offerors could only be found to be in the competitive range if the agency issued a new, written determination so stating. disagree.

There is no requirement in the FAR that a competitive range determination be in writing, and the record here shows that after the ASN(S&L)'s conditional approval of NTSC's business clearance request the competitive range was amended to include all of the offerors, including ETC. Since the purpose of the competitive range determination is to determine with which offerors the agency will conduct discussions, /19/ we find no basis to object to the NTSC's conduct of discussions with all offerors, simply because it did not prepare another written determination. See also CACI Field Servs., Inc. v. United States, 13 Cl.Ct. 718 (1987).

CONCLUSION

We have reviewed all of the record presented to us by the parties and considered the parties' arguments concerning this record. Both Latecoere and the agency have made reasonable arguments concerning which offeror represented the best value to the government. We will not overturn an agency's judgment concerning which offer represented the best value, even where we disagree with the wisdom of choice, unless the agency's judgment is not supported by a reasonable justification. Heimann Sys. Co., B-238882, June 1, 1990, 90-1 CPD Para. 520. Here, Latecoere has not shown, and we do not find, that the Navy's judgment was unreasonable. From our review of the record, we do not find that our protest decision was in error or that award to ETC was not in accordance with procurement laws and regulations or was the result of bias against Latecoere or for ETC.

/1/ Latecoere is a French firm.

/2/ Latecoere's complaint for injunctive relief was filed after our decision on its protest.

/3/ The Navy's acquisition regulations provide that award of a contract cannot be made prior to obtaining the approval of a business clearance memorandum by the appropriate authority, in this case, the ASN(S&L). Navy Acquisition Procedures Supplement Sec. 1.690-1 (1988). Such clearance is required pursuant to the authority derived from the Secretary of the Navy and Federal Acquisition Regulation (FAR) Sec. 1.601, and is used by the Navy as a means of monitoring its procurement operations. See Oklahoma Aerotronics, Inc.-- Recon., B-237705.2, Mar. 28, 1990, 90-1 CPD Para. 337.

/4/ The ASN(S&L) had the authority to approve, disapprove, or conditionally approve the business clearance memorandum. (Ford Dep. Tr. at 29).

/5/ Prior to conditionally approving the business clearance memorandum, the ASN(S&L) met with NTSC's procurement officials to discuss NTSC's decision to award without discussions. As a part of this meeting, the RFP and proposals of some of the offerors were reviewed. (Ford Dep. Tr. at 52 -57).

/6/ Prior to the SSA's decision to attempt award to Latecoere, without discussions, the SSEB had prepared extensive discussion questions for each of the offerors. The number of discussion questions asked of each offeror was significantly reduced, because of NTSC's concern's regarding the possible loss of appropriated funding for the procurement and the desire to make an expeditious award. Only those questions that were believed to be crucial to determining acceptability were asked.

/7/ The letters under technical rating represent the following: "E" for exceptional; "A" for acceptable; and "M" for marginal. Under risk assessment, the letters represent the following: "M" for moderate and "L" for low.

/8/ The original SSA retired prior to the SSAC's revised award recommendation after discussions. Thus, the SSA who determined that award should be made to ETC is not the same person who earlier determined that award should be made to Latecoere based on initial proposals without discussions.

/9/ Procuring agencies may conduct written or oral discussions with all offerors in the competitive range to advise them of deficiencies and resolve any uncertainties in their proposals. FAR Secs. 15.609, 15.610.

/10/ Latecoere also contends that ASN(S&L) exceeded its authority to review business clearance requests when it conditioned approval of NTSC's request upon the conduct of discussions with the offerors. We disagree. The authority to review the procurement functions of lower level agency officials inherently includes the authority to approve, disapprove or conditionally approve a business clearance request upon the performance of some further actions, such as the conduct of discussions. Oklahoma Aerotronics, Inc.-- Recon., supra] Scheduled Airlines Traffic Offs., Inc., B-229883, Mar. 29, 1988, 88-1 CPD Para. 317.

/11/ The SSA, who had known the ASN(S&L) official for years and considered him to be an expert in the field of contracts, also called to solicit that official's philosophical advice concerning the weighing of competing proposals to determine which offer represented the best value to the government. (Urban Dep. Tr. at 128, 137; Ford Dep. Tr. at 105-106).

/12/ Source selection officials are not bound by the recommendations of lower-level evaluators, even though the working level evaluators may normally be expected to have the technical expertise required for such evaluations. Grey Advertising, Inc., 55 Comp.Gen. 1111 (1976), 76-1 CPD Para. 325.

/13/ The record shows that there was a dispute between NTSC's technical and contracts personnel concerning the need to quantify Latecoere's superiority-- that is, equate Latecoere's technical superiority to its cost premium-- and the level of documentation necessary to substantiate this quantification. (Kalapos Dep. Tr. at 222-223; Glenn Dep. Tr. at 106, 108-109; Greear Dep. Tr. at 289).

/14/ It is not unusual for higher-level government officials not to write their own decisions. In this regard, the SSA stated that he does "very little writing of documents anymore." (Urban Dep. Tr. at 152). /15/ There are numerous other facts that Latecoere has raised as supporting its argument that award to ETC was the result of bias against Latecoere, e.g., the SSA ordered the removal of data from the PAR that appeared to support award to Latecoere; that the SSAC, prior to the receipt of best and final offers, explored the possibility of changing the evaluation scheme from "best value" to low-cost, technical acceptability; and that, several years prior to the issuance of the RFP, the Navy explored the possibility of awarding a sole-source award to ETC for the G-TIP system. We have considered these other facts, as well as Latecoere's comprehensive arguments regarding them, and find no evidence of bias for ETC or against Latecoere.

/16/ The SSAC in its review of the final technical evaluation results found that some offerors, including ETC but not Latecoere, had marginal ratings for some of the subfactors that were identified as critical elements and that the offerors had not received discussions regarding these subfactors. The SSAC, in the PAR, recommended to the SSA that offerors' marginal ratings for critical subfactors, where the offeror had not received discussions, be changed to acceptable ratings. The SSA adopted this recommendation, and a new "final" PAR was issued, reflecting acceptable ratings for these critical subfactors. /17/ The record, upon which we were asked to provide this opinion, did not address the evaluation of all the subfactors. We do have evaluation documentation for two of the subfactors, and this documentation indicates that ETC's marginal ratings reflected its failure to provide sufficient information indicating that they would meet performance standards and not an affirmative failure or exception to the required performance standards. Informational deficiencies of this sort are generally correctable through discussions.

/18/ Prejudice is an essential element of a viable protest and where there is no prejudice, a protester may not prevail. See Merrick Eng'g, Inc., B-238706.3, Aug. 16, 1990, 90-2 CPD Para. 130.

/19/ See FAR Sec. 15.609(a).