ITT Industries, Inc.

B-294389; B-294389.2; B-294389.3; B-294389.4, ITT Industries, Inc., October 20, 2004

Decision

Matter of: ITT Industries, Inc.

File: B-294389; B-294389.2; B-294389.3; B-294389.4

Date: October 20, 2004

Kevin P. Connelly, Esq., Joseph J. Dyer, Esq., Grace Bateman, Esq., Z. Taylor Shultz, Esq., and Amanda B. Weiner, Esq., Seyfarth Shaw LLP, and Thomas C. Wheeler, Esq., Kevin P. Mullen, Esq., Sheila C. Stark, Esq., and Eliza P. Nagle, Esq., Piper Rudnick, for the protester.

David A. Churchill, Esq., Kevin C. Dwyer, Esq., William R. Stoughton, Esq., Kathy C. Weinberg, Esq., Kristen G. Schulz, Esq., Cynthia J. Robertson, Esq., James A. Trilling, Esq., and David Fagundes, Esq., Jenner & Block, for General Dynamics Decision Systems, an intervenor.

Joshua Kranzberg, Esq., Walter Harbort, Jr., Esq., Mark A. Sagan, Esq., Paula K. Pennypacker, Esq., Denise M. Marrama, Esq., Frank V. Di Nicola, Esq., and MichaelA. Stephens, Esq., U.S. Army Materiel Command, for the agency.

Sharon L. Larkin, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest of technical and performance risk evaluation is denied, where record supports the agencys assessment of offerors proposed joint tactical radio systems and otherwise indicates that proposals were evaluated fairly and in accordance with stated evaluation criteria.

2. Cost realism analysis is unobjectionable, where record shows that the technical evaluators and Defense Contract Audit Agency evaluated proposed costs; this information was considered by the source selection authority in making his award decision; and the protester has not shown that additional costs were likely to be incurred during performance.

DECISION

ITT Industries, Inc. (ITT) protests the Department of the Armys award of a contract to General Dynamics Decision Systems (GDDS), under request for proposals (RFP) No. DAAB07-03-R-E808, for the development of joint tactical radio systems (JTRS). ITT challenges the evaluation of proposals and resulting source selection decision.

We deny the protest.

The JTRS, which are being developed through a series of acquisitions called clusters, are software-defined programmable radios that will replace all existing tactical radios for the Department of Defense warfighters. This procurement is the JTRS Cluster 5 acquisition, under which the awardee will develop three discrete form factors, or radio sets: handheld, manpack, and small form fit radios. [1] The handheld radio is held in the hand or worn on the uniform; the manpack radio is mounted in a vehicle or helicopter, or carried in a soldiers rucksack; and the small form fit radio will be integrated into other equipment.

The solicitation contemplated that the JTRS Cluster 5 requirements would be met using a spiral development acquisition approach. During Spiral 1, the contractor will design, develop, test, document, and deliver single-channel handheld radios, twomanpack radios, and ancillary items such as vehicle mounting bases, power adapters, battery chargers, charger base stations, and antennas. During Spiral2, the contractor will design, develop, test, document, and deliver handheld, manpack, and small form fit radios (and ancillary items) that expand on Spiral 1 capabilities. The radios are to comply with mandatory performance requirement specifications (PRS) and the statement of work. The RFP also included objective PRS, which are desired but are not mandatory.

The RFP contemplated award of a contract with a cost-plus-award-fee system development and demonstration phase effort; fixed-price options for limited production of Spiral 1 radios and ancillary items; fixed-price-incentive-with-successive-targets options for production of Spiral 2 radios and ancillary items; and the acquisition of support services on a time-and-materials basis. (The cost-plus-award-fee effort constitutes approximately 20 percent of the overall contract value, while the fixed-price options together constitute approximately 80percent of the contract value. Source Selection Authority (SSA) Final Briefing, Cost Factor Slide5). The period of performance is from July16,2004 through December 30, 2011.

The RFP provided that award would be made to the offeror whose proposal was determined to represent the best value, based upon three evaluation factors: technical, performance risk, and cost/price. The technical evaluation factor consisted of five subfactors, listed in descending order of importance: (1) risk mitigation, schedule, test and evaluation for Spiral 1 (hereafter referred to as the Spiral 1 subfactor); (2) system design; (3)systems engineering; (4) risk mitigation, schedule, test and evaluation for Spiral 2 (hereafter referred to as the Spiral 2 subfactor); and (5) small business participation plan. The technical factor was significantly more important than performance risk, which was significantly more important than price.

Both ITT and GDDS submitted proposals that were included in the competitive range. After conducting several rounds of discussions, the Army requested final proposal revisions. Based upon the detailed evaluation reports and briefings prepared by the Source Selection Evaluation Board (SSEB), the SSA rated the offerors final proposals as follows:

Source Selection Decision (SSD) at 4.

The SSA determined that GDDSs proposal represented the best value, based upon its evaluated superior design and better long-term solution that enhances operational capability and logistics supportability throughout the projected life of the program. SSD at 8. Specifically, the SSA noted several strengths offered by GDDSs proposal, including: (1) the GDDS teams higher level of software capability as certified using the Software Engineering Institute Capability Maturity Model; (2)the greater use of common core modules across all form factors, which maximizes reuse of circuit card assemblies for Spiral 2, thus reducing future acquisition costs, facilitating logistics support, and improving operational capability; (3) the ability to run all waveforms on each of the radio channels, rather than on only one of them; and (4) inclusion of a removable [REDACTED], thus enhancing maintainability by permitting repair or replacement of only the [REDACTED], rather than requiring repair of the entire radio. Although the SSA recognized that there was some schedule risk associated with GDDSs need to obtain certification of its cryptographic module from the National Security Agency (NSA), he found that this risk was offset by the superior design and technical strengths of GDDSs proposal. [2] Given the technical advantages and price superiority of GDDSs proposal, and the essentially equal ratings for performance risk, the SSA selected GDDS for award. Upon learning of the selection of GDDS, and after being debriefed, ITT filed this protest.

Where an evaluation is challenged, our Office will not reevaluate proposals, but instead will examine the record to determine whether the agencys judgment was reasonable and consistent with stated evaluation criteria and applicable statutes and regulations. U.S. Facilities, Inc. , B-293029, B-293029.2, Jan. 16, 2004, 2004 CPD 17 at 6. In this regard, it is an offerors obligation to submit an adequately written proposal for the agency to evaluate. United Defense LP , B-286925.3 et al. , Apr. 9, 2001, 2001 CPD 75 at 19.

Based upon our review of the record, we find no basis to question the Armys determination that GDDSs proposal was more advantageous than ITTs. We discuss ITTs principal arguments below.

TECHNICAL EVALUATION

External Coupler

ITT contends that GDDSs proposal did not comply with a mandatory PRS requirement that the Manpack [radio] Sets and antennas supplied for frequencies below 30 MHz [ i.e. , high frequencies] shall have a performance (range/radiation efficiency) equal to or greater than the legacy radios and antennas for that band of operation. PRS 3.22.c. Relying on a statement in GDDSs proposal that [REDACTED], ITT asserts that GDDSs manpack radio cannot operate at high frequencies without the aid of an external coupler, [REDACTED]. Thus, concludes ITT, GDDSs proposal was not compliant with PRS 3.22.c.

We find ITTs position unpersuasive. Specifically, we find reasonable the Armys interpretation that GDDSs reference to [REDACTED] indicated only that GDDS was proposing [REDACTED], and not that an external coupler was required for high frequency use. In this regard, the Army explains, and GDDS confirms, that the capability to operate with [REDACTED] facilitated the operation of GDDSs radios with [REDACTED], which was a separate objective, but not a mandatory requirement, of the PRS. Contracting Officers Statement (COS), Sept. 12, 2004, at 3; GDDS Comments, Sept.27, 2004, at 6; see PRS 3.22.e (It is an objective that the Manpack [radio] Sets operate with all legacy antennas for frequencies below 30 MHz.). Further, the Armys interpretation is consistent with the fact that GDDS specifically indicated compliance with the frequency requirements of PRS 3.22.c in its proposal, stating that each manpack radio set covers all JTR[S] specified-frequency ranges [REDACTED]. GDDS Technical Proposal, 3.2.6.2.4; see GDDS Technical Proposal, attach. 1 to Vol. 1, at388. [3] Given GDDSs express statement of compliance with the frequency requirements of the PRS, and ITTs failure to point to anything in GDDSs proposal that reasonably called into question GDDSs compliance, we find no basis to question the agencys determination that GDDSs proposed radios were in compliance with PRS 3.22.c. [4]

NSA Certification

ITT protests that, in evaluating GDDSs proposal, the evaluators ignored the risk relating to NSA certification (which is an information security requirement of the RFP, PRS 3.17.2.1.i), by failing to properly count the risk as weaknesses under the Spiral 1, Spiral 2, and systems engineering subfactors. Our review of the record, however, confirms that the agency did in fact consider the potential for information security risk when evaluating GDDSs proposal under the Spiral 1, Spiral 2, and systems engineering subfactors. Specifically, the SSEB, in its final evaluation, determined that GDDSs proposal presented some risk associated with timely obtaining required NSA certification, but found that the risk related only to the program schedule and not to systems engineering. That is, the agency found that certain design features, such as [REDACTED], although not a risk in terms of engineering design, nevertheless required additional NSA certification that might delay the program schedule. Because the risk was schedule-related only, the SSEB determined that weaknesses should be assessed only under Spiral 1 and Spiral2 factors, as these factors specifically refer to Risk Mitigation, Schedule, Test and Evaluation. SSEB Final Report, GDDS, Subfactors Spiral 1, Spiral2, and Systems Engineering. The SSA also took GDDSs proposal weakness into account in making his best value determination. SSD at 5, 6. Thus, our review of the record indicates that the Army fully considered the schedule-related risk relating to obtaining the required NSA certification. [5]

Small Business Participation

ITT contends that the agency should not have rated GDDSs proposal acceptable under the small business participation subfactor, because the proposal specified small business participation goals that were significantly below the small business goals established by the Department of Defense and incorporated in the RFP. We find ITTs argument to be without merit. In this regard, the Army found that although GDDSs proposal specified lower small business participation goals than desired, the proposal nonetheless was acceptable because these were goals rather than requirements, and GDDS had an outstanding track record of providing significant subcontracting opportunity to Small Business. SSD at 7. Although ITT contends that the agency should not have considered GDDSs history in evaluating this subfactor, section M specifically provided that, in evaluating proposals under the small business participation plan subfactor of the technical factor, the agency would consider the offerors record of utilizing small business concerns. RFP M, 4.1.2. In these circumstances, we conclude that the Army reasonably determined that GDDSs failure to specify small business participation goals at the desired levels, while a weakness, nevertheless did not render the proposal unacceptable. [6]

Software Certification

ITT asserts that the Army failed to treat offerors equally when evaluating the respective teams level of software capability as certified using the Software Engineering Institute (SEI) Capability Maturity Model (CMM). In this regard, the agency assigned GDDSs proposal a significant strength under the systems design subfactor because the majority of [GDDSs] software is being developed by team members that are certified at [SEI CMM] Level [REDACTED] which reduces risk in the system software design effort to a greater extent than does [ITT,] which has the majority of the software being developed by team members that are certified at SEI CMM Level[REDACTED]. SSD at 5. ITT contends that its proposal also was deserving of a significant strength for Level [REDACTED] certification because the majority of its software, according to ITT, is being developed by one of its subcontractors, who is Level [REDACTED] certified.

We agree with the agency, however, that ITTs proposal did not clearly show that the software capability of its team was equivalent to that of GDDSs team. Specifically, in discussing software certification, ITTs proposal stated that [REDACTED] firms developing software are Level [REDACTED] certified, whereas [REDACTED] of the remaining firms (including ITT) are Level [REDACTED] certified, and [REDACTED] firm is only Level [REDACTED] certified. ITT Technical Proposal at V2S2-29-30. In contrast, GDDSs proposal indicated that [REDACTED] firms developing software (including GDDS) are Level [REDACTED] certified, while another firm, although currently certified at Level [REDACTED], is planning to achieve Level [REDACTED] certification by May 2004, and [REDACTED] firm is currently undergoing Level [REDACTED] certification. GDDS Technical Proposal, 2.1.2.2. Although ITTs proposal did state that its Level[REDACTED] certified subcontractor will take the lead role in the software [Integrated Product Team], nothing in the proposal indicated that this firm would be developing the majority of the software, as ITT now claims. To the contrary, ITTs proposal reasonably indicated that a majority of the software processes would be performed only at Level [REDACTED]. ITT Technical Proposal, Fig.2.1.2.2-1, at V2S2-30. In these circumstances, the agency reasonably concluded that GDDSs proposal was more advantageous in this regard.

Core Module Manufacturing

ITT contends that the Army did not treat offerors equally in evaluating core module manufacturing capability. [7] In this regard, the agency assigned GDDSs proposal a significant strength under the Spiral 2 subfactor because, at the relevant time in performance, the formation of [REDACTED] team members to qualify for core module manufacturing and provides a better pool for follow-on competitive awards than does the strength in [ITTs] approach of qualifying [REDACTED] team members. SSD at 6. ITT contends that it will qualify more teams per form factor by the relevant time in performance than will GDDS. However, the record shows that only [REDACTED] of ITTs team members will perform [REDACTED] in the development of core modules. According to the agency, this will restrict the ability of the other firms to compete [REDACTED]. In contrast, since all four GDDS team members serve as [REDACTED], the firms are better able to compete [REDACTED] for follow-on contracts. Accordingly, we find the assessment of a significant strength to GDDSs proposal, but not to ITTs, to be reasonable.

Waveform Storage

ITT contends that proposals were unfairly evaluated with respect to the number of waveformsthat is, software-defined signalsthat could be stored in the radio sets. The RFP specified that the JTRS radio sets were to have sufficient storage capacity to store at least 2 waveforms for each small form fit radio, at least 6waveforms for each handheld radio, and at least 10 waveforms for each manpack radio. PRS 3.5(f)-(h). The agency assigned GDDSs proposal a significant strength and ITTs proposal a strength for exceeding these requirements.

Although ITT asserts that its proposal also was entitled to a significant strength in this regard, the record supports the Armys determination that GDDSs proposal exceeded the requirements to a greater extent than did ITTs. GDDS proposed to store [REDACTED] waveforms (rather than the required minimum of 2) in the small form fit radios, [REDACTED] waveforms (rather than the required minimum of 6) in the handheld radios, and [REDACTED] waveforms [REDACTED] (rather than the required minimum of 10 for the whole radio) in the manpack radio. GDDS Technical Proposal, Figs.119, 139 and 2.2.3.1.1.4.E. In contrast, ITT proposed to store [REDACTED] waveforms in the small form fit radios; [REDACTED] waveforms in the handheld radios; and [REDACTED] waveforms in the manpack radios. ITT Technical Proposal atV2S2-36. ITT stated later during an equipment demonstration that the number of waveforms stored in [REDACTED] exceeded [REDACTED], and received credit for this capability. ITT Equipment Demonstration, Waveform Storage, at 13; SSA Final Briefing, ITT Slide 19. Thus, while ITT at most only indicated that it would exceed the storage requirements for [REDACTED] (based on the equipment demonstration representation), GDDS proposed to exceed the requirements for [REDACTED]. Although ITT now contends that the memory capacity of its radio sets exceeds that of GDDSs, and thus that ITTs handheld and short form fit radios can store more waveforms, it was not clear from ITTs proposal that the available memory would result in these radio sets being able to store more wave forms than ITT specified in its proposal. Since the relevant PRS requirement was stated in terms of the number of waveforms that could be stored, and not in terms of the amount of memory capacity, and ITTs proposal expressly indicated the number of waveforms that could be stored, we find no basis to question the agencys resulting conclusion that, because the number of wave forms proposed to be stored by ITT was less than the number proposed by GDDS, GDDSs proposal was superior in this regard.

ITT also complains that only GDDSs proposal received a significant strength for its ability to run all waveforms on each channel of the dual-channel manpack radios, which was a PRS objective, PRS 3.2.1.e, despite the fact that ITTs radios assertedly have the same capacity. However, ITTs proposal provided only for the [REDACTED]; it did not indicate that each channel could support every identified waveform, [REDACTED]. [8] ITT Technical Proposal atV2S258-59. To the contrary, ITTs proposal indicated that ITTs channel 1 cannot support [REDACTED], and its channel 2 cannot support [REDACTED]. Id. As the agency explains, if one or the other of ITTs channels malfunctions, the remaining channel cannot run all waveforms and thus certain communications become impossible. COS, Sept.12,2004, at 5. In these circumstances, we find that the Army reasonably concluded that GDDSs proposal, but not ITTs, met the PRS objective for the ability to run all waveforms on all channels, and that as a result, only GDDSs proposal deserved a significant strength in this area.

Common Core Modules

ITT challenges the Armys evaluation of the offerors proposed approaches with respect to common core modules. Again, core modules are interchangeable assemblies, which are the building blocks of the different types of radio sets. The core modules here include Radio Frequency (RF) components, Baseband (digital signal processing) components, and Communications Security (COMSEC) for the various radio form factors required by the solicitation. ITT asserts that, although both ITT and GDDS proposed common core modules, the agency unfairly credited only GDDSs proposal with a significant strength, while it credited ITTs with only a strength.

The record, however, shows that GDDS proposed to use [REDACTED] common core modules to achieve required RF, Baseband, and COMSEC functionality for all form factors, while ITT proposed to use [REDACTED] modules to achieve the same functionality. The agency viewed GDDSs solution, with fewer modules necessary to achieve the same functionality, to be more advantageous because it maximizes the reuse of circuit card assemblies for Spiral 2, reducing future acquisition costs and the logistics footprint[,] and providing improved operational capability to the end user. SSD at 5. Based on our review, we find this conclusion reasonable. [9]

[REDACTED] HMI

ITT asserts that GDDSs proposal was unfairly credited with a strength for proposing [REDACTED] human-machine interface (HMI)that is, [REDACTED]--while assessing a weakness to ITTs proposal for proposing [REDACTED] HMIs. An HMI is where the radio operator and radio physically interact. In the case of the JTRS Cluster 5 radio, the HMI consists of the radio control knobs, onoff switch, keypad, buttons and display readouts. According to the Army, the use of [REDACTED] HMIs requires [REDACTED] training packages, which is considered a disadvantage. ITT contends that there are numerous references in its proposal to a [REDACTED] HMI, including words such as [REDACTED].

ITTs proposal, however, also included pictures of the proposed types of radios (handheld, manpack, and small form fit) in both single- and dual-channel layout, which clearly displayed [REDACTED] HMIs. E.g. , ITT Technical Proposal, Fig.2.03, at V2S2-5. As the pictures show, [REDACTED]. Although ITT contends that the pictures were not intended to illustrate what the actual radios would look like since the radios have not yet been developed, nothing in the proposal stated that the pictures were not representative of what ITT proposed. It was ITTs obligation to submit a clear and unambiguous proposal, United Defense LP , supra , at 19, and it must bear the consequences where its proposal does not reflect its intended approach. [10]

AC Power

ITT asserts that GDDSs proposal was unfairly credited with a strength for proposing the capability for its handheld radio to operate on AC power while the radios battery is simultaneously recharging, while ITTs proposal did not receive a strength for proposing the same process. The record confirms, however, that there were meaningful differences between the proposals in this regard. Whereas GDDS proposed to recharge its handheld unit using [REDACTED], GDDS Technical Proposal, 3.2.6.1.1, ITT proposed to use [REDACTED]. ITT Technical Proposal atV2S3-8, 28-29, 33. The agency found that ITTs design would be significantly more cumbersome in that a soldier could not [REDACTED], but instead would first have to [REDACTED]. [11] Agency Comments, Sept.24, 2004, at 1; ITT Individual Evaluator Report at 3. Based on our review, we find that the agency could reasonably view GDDSs approach to recharging the radio battery to be less cumbersome and more advantageous than ITTs.

COS, Aug. 30, 2004, at 25.) ITT has pointed to no comparable advantage offered by its removable [REDACTED].

SSA Final Briefing, Performance Risk Slides 23, 40.

ITTs overall moderate risk rating was largely attributable to the performance of its Subcontractor B, which had failed to meet the requirements, or was rated unsatisfactory, by multiple references on two of the three contracts evaluated. The most significant performance issues arose under the JTRS Cluster 1 contract, the predecessor contract to the effort here, where Subcontractor B acted as the prime contractor. According to the references, Subcontractor B incurred cost, schedule, and performance overruns, and was having difficulties with its subcontractors, which problems the agency attributed largely to the prime (ITTs Subcontractor B). However, Subcontractor B also received unsatisfactory ratings under another contract in multiple performance areas. In fact, Subcontractor B received exclusively satisfactory ratings under only one of its referenced contracts, which was evaluated by only one reference. ITT Performance Risk Assessments.

Within the GDDS team, GDDS received moderate risk ratings in three of the performance areas (cost control, contract schedules, and customer satisfaction), and high risk ratings in two areas (conforming to specifications and managing subcontractors). These ratings primarily were due to performance issues arising under a Digital Modular Radio (DMR) contract. Although the evaluation ratings reflected the performance problems on the DMR contract, the agency took into account that GDDS had inherited this contract through an acquisition after the performance problems had arisen, and also that GDDS received satisfactory ratings for two other relevant contracts. [14] The Army assigned moderate risk ratings under cost control to two of GDDSs subcontractors, based on their performance as subcontractors under the Cluster 1 contract (the same contract for which ITTs Subcontractor B was evaluated), but rated these firms low risk in other performance areas based on the agencys conclusion that the remaining performance issues were largely attributable to the prime contractor, and also because these firms received numerous favorable assessments under four other contracts (two contracts for each firm) in each of these performance areas. GDDS Performance Risk Assessments; COS, Sept.12, 2004, at20, 22, 28.

In sum, considering the strengths and weaknesses of each teams past performance, the agency found that both proposals warranted an overall moderate risk rating, meaning that there was some doubt that the offerors could perform the proposed effort.

ITT raises a number of arguments as to why the performance risk assessment was unreasonable. We have reviewed each of ITTs challenges and find that they furnish no basis for questioning the evaluation. We discuss the more significant arguments below.

ITT complains that the agency gave greater weight to the performance problems associated with its Subcontractor Bs Cluster 1 performance than it did to the performance problems of GDDSs Subcontractors B and C on this same effort. However, as noted above, the agency took into consideration that many of the performance issues cited were attributable more to ITTs Subcontractor Bs performance as a prime contractor than to the performance of the subcontractors (GDDSs Subcontractors B and C) performing under the contract. Also, the agency took into account that ITTs Subcontractor B did not perform satisfactorily under another of its contracts, whereas GDDSs subcontractors performed satisfactorily under all other contracts referenced. COS, Sept. 12, 2004, at 24-28. Although ITT disagrees with the agencys overall assessment of its Subcontractor Bs Cluster 1 performance relative to the other firms, it has not shown that the agencys conclusions were unreasonable.

ITT asserts that its Subcontractor Bs high risk rating for subcontractor management should not have been considered in the evaluation because only ITT, and not Subcontractor B, will be managing subcontractors under this effort. In this regard, ITT notes that the RFP stated that performance risk would be based on the relevancy and recency of . . . past performance . . . as it relates to the probability of successful accomplishment of the RFP requirements. RFP M, 4.2. This same RFP section, however, further provided that the agency would evaluate the record of the offeror, including its proposed major subcontractors and/or team members, in managing subcontractors. Id. In any case, we find that the agency could reasonably view the performance of ITTs Subcontractor B in managing subcontractors as relevant to its performance here. ITT proposed Subcontractor B as [REDACTED], with responsibilities including [REDACTED]. ITT Technical Proposal at V2S2-29-30. Given the proposed leadership role for Subcontractor B, we cannot find the agencys evaluation of the firms ability to manage subcontractors to be unreasonable.

ITT asserts that the agency should have given greater weight to GDDSs poor performance under the DMR contract, and that this performance should have resulted in an overall high risk rating for the team. However, as noted above, in rating the GDDS team, the agency took into account that GDDS had inherited the DMR contract after the initial performance problems had arisen; that GDDS had performed satisfactorily on two other relevant contracts; and that generally the other team members of the GDDS team had demonstrated successful contract performance. Given these considerations, the Army was unable to conclude that significant doubt existed as to the GDDS teams ability to perform, as would be required for an overall high risk rating, but only that some doubt existed as to performance. Accordingly, the agency assigned GDDS an overall moderate performance risk rating. Although ITT disagrees with this assessment, it has not shown it to be unreasonable.

Our review of an agencys cost realism analysis is limited to whether the analysis is reasonably based and is not arbitrary. Systems Integration & Research, Inc. , et al. , B279759.2 et al. , Feb. 16, 1999, 99-1 CPD 54 at 7-8. In this regard, an agency is not required to conduct an in-depth cost analysis or to verify each and every item in conducting a cost realism analysis; rather, the evaluation requires the exercise of informed judgment by the contracting agency, which is in the best position to make this cost realism determination. Id. The record here shows that an adequate cost realism analysis was performed.

As noted above, the contract here is primarily fixed-price. Only approximately 20percent of the effort is cost-plus-award-fee and thus requires that the agency perform a cost realism analysis. Although the contemporaneous record of the agencys cost realism analysis amounts to little more than briefing slides to the SSA, the agency has subsequently explained that, in conducting its analysis, the technical team reviewed the offerors price proposals--including the proposed labor category mix, labor hours, types and quantities of materials, and types and quantities of other direct costs--to determine whether these were overstated or understated in light of the offerors technical approaches. Declaration of Contract Price Analyst, Aug. 26, 2004, 2; COS, Aug. 30, 2004, at 12; Declaration of SSEB Chair, Sept. 9, 2004, 2. Inaddition, the Defense Contract Audit Agency audited both offerors and their team members, and performed a verification of all rates and factors used to develop the cost proposals and a review of the proposed direct material, subcontract and other direct costs for understatement. Declaration of Contract Price Analyst, Aug. 26, 2004, 4; COS, Aug. 30, 2004, at 12. The SSA was briefed on the results of the cost realism analysis and considered this in his source selection decision. SSA Final Briefing, Cost Factor Slides 1-10; SSD at 8; Declaration of SSA (Sept. 17, 2004) 3. No upward adjustment to GDDSs proposed costs was deemed necessary.

ITT argues that the agency explanation of its cost realism analysis, which was provided in the post-protest report to our Office, is little more than post-hoc rationalizations and must be accorded little or no weight, given the lack of contemporaneous documents to support it. See Boeing Sikorsky Aircraft Support , B277263.2, B-277263.3, Sept. 29, 1997, 97-2 CPD 91 at 15. However, while we accord greater weight to contemporaneous source selection materials, we will nonetheless consider the entire record, including statements and arguments made in response to a protest, in considering whether an agencys source selection decision is supportable. Id. Where post-protest explanations provide sufficient detail by which the rationality of an evaluation decision can be judged, it is possible to conclude that the agency had a reasonable basis for the decision. Jason Assocs. Corp. , B-278689 et al. , Mar. 2, 1998, 98-1 CPD 67 at 6. Post-protest explanations that provide a detailed rationale for contemporaneous conclusions may, as is the case here, simply fill in previously unrecorded details, and will generally be considered in our review of the rationality of the selection decision as long as those explanations are credible and consistent with the contemporaneous record. Id.

ITT has not furnished any basis upon which to call into question the agencys explanation of its cost realism analysis, nor has ITT shown that the evaluated cost of GDDSs proposal was significantly understated. Specifically, with regard to NSA certification, ITT essentially argues that the fact that the agency found schedule risk associated with GDDSs need to obtain the required NSA certification required the agency to upwardly adjust GDDSs proposed price. However, the mere fact that a proposal poses some risk does not necessarily require an agency to upwardly adjust the proposal costs to reflect what may or may not happen in different circumstances, where the agency believes that what is proposed is most likely to happen. Vinnell Corp. , B-270793, B-270793.2, Apr. 24, 1996, 96-1 CPD 271 at 6. Here, the agency did not find that additional costs were likely to be incurred, and we find no basis to question this conclusion. With regard to ITTs contention that costs must be added for an omitted external coupler, as noted above, we find no basis to conclude that an external coupler is required. In summary, we find that the agencys cost realism evaluation is unobjectionable.

Anthony H. Gamboa

General Counsel

[1] There are 12 variants of the small form fit form factor.

[2] In this regard, the PRS incorporated various NSA specifications, standards, and criteria. PRS 2.1.3.

[3] The provided [REDACTED]. GDDS Comments, Sept. 17, 2004, at 56; GDDS Comments, Sept.27, 2004, at 7; Declaration of GDDS Electrical System Engineer, Sept. 14, 2004, 13; Declaration of GDDS Electrical System Engineer, Sept. 27, 2004, 5; see GDDS Price Proposal at A2419. Although the antenna design is not described in detail in GDDSs proposal, the solicitation did not require a detailed description of the antenna design.

[4] In the alternative, ITT speculates that if GDDS now includes impedance-matching circuitry or an external coupler with its high frequency antenna, then GDDSs solution would exceed the weight, volume, and power requirements of the PRS. GDDSs speculation, however, supposes that GDDS must now add something to its proposal in order to render it compliant with PRS 3.22.c. As discussed above, there is no basis for concluding that additional equipment beyond that included in GDDSs proposed approach was necessary in order to meet the mandatory PRS frequency requirements.

[5] In any event, as of the time of evaluation, ITTs cryptographic module also had not been certified by NSA. Although it has subsequently been certified, it must undergo additional certification when embedded into the radio.

[6] We note that the SSAs apparent expectation that, based on its track record, GDDS would in fact provide significant subcontracting opportunities to small business concerns was consistent with GDDSs explanation in its proposal of this area. Specifically, GDDS explained in its proposal that the shortfalls were primarily due to difficulties in estimating procurement activities for products that are not fully developed at this time. . . . As the development activities mature, General Dynamics expects the small business participation percentages to increase. GDDS Price Proposal at A3-7.

[7] Core modules are interchangeable assemblies, which are the building blocks of the different types of radio sets. An example of a core module is a modem card, which can be installed in multiple computers. The core modules here comprise approximately 90 percent of the radio sets. COS, Aug. 30, 2004, at 17.

[8] Although ITT disputes whether GDDSs radios can run all waveforms on each channel without the aid of an external coupler to operate over high frequency waveforms, as discussed above, we find no basis for concluding that an external coupler is required, or that GDDSs radios cannot operate over all required waveforms as proposed.

[9] ITT argues for the first time in supplemental comments that the agency improperly limited its evaluation to only core modules for RF, Baseband, and COMSEC functionality, and did not consider other common aspects of offerors designs. This argument, filed more than 10 days after ITTs receipt of documents forming the basis for the protest ground, is untimely. 4 C.F.R. 21.2(a)(2) (2004). In any case, the record does not support ITTs contention that the agency focused only on the core modules for RF, Baseband, and COMSEC functionality. See , e.g. , SSA Final Briefing, GDDS Slide 10 ([REDACTED]).

[10] ITT asserts that the agency was obligated to hold discussions concerning the evaluated weaknesses associated with its proposed HMI. However, we note that the weaknesses assessed were not viewed by the agency as significant weaknesses or deficiencies, and thus they did not have to be raised during discussions. See Federal Acquisition Regulation 15.306(d)(3); MCR Fed., Inc. , B-280969, Dec. 14, 1998, 991CPD 8 at 11.

[11] We note that ITT also proposed [REDACTED] for its single-channel and dualchannel radios. ITT Technical Proposal at V2S3-33. It is not clear from theproposal whether [REDACTED] must also be purchased.

[12] The Army explains that the low risk ratings for ITTs Subcontractors C and D in the cost control area were erroneous. According to the agency, Subcontractors C and D did not have any past performance information in the cost control area and, thus, the ratings should have been neutral. COS, Aug. 30, 2004, at8.

[13] As noted above, this rating was in error.

[14] Only one reference gave GDDS an unsatisfactory rating (in one area) under these other contracts, and the agency considered that GDDS implemented a satisfactory corrective action plan to address the concern. COS, Sept.12, 2004, at 21.