B-174367, APR 26, 1972, 51 COMP GEN 678

B-174367, APR 26, 1972, 51 COMP GEN 678

CONTRACTS - SUBCONTRACTS - ADMINISTRATIVE APPROVAL THE REEVALUATION OF SUBCONTRACT OFFERS BY THE PRIME CONTRACTOR UNDER A COST-PLUS-A-FIXED-FEE RESEARCH AND DEVELOPMENT CONTRACT FOR OCEANOGRAPHIC SENSORS REQUIRED BY THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION'S (NOAA) NATIONAL DATA BUOY CENTER (NDBC), LOCATED AT A NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) FACILITY, AND AN AWARD TO OTHER THAN THE SUBCONTRACTOR FIRST SELECTED ON THE BASIS OF TECHNICAL SUPERIORITY WAS PROPER, EVEN THOUGH THE REEVALUATION AT THE RECOMMENDATION OF THE GOVERNMENT DEVIATED FROM THE INITIAL COST WEIGHT CRITERIA, SINCE THE RELATIVE IMPORTANCE OF THE CRITERIA WAS NOT DESTROYED, AND THE DIRECT AND SUBSTANTIAL INVOLVEMENT OF NASA, NOAA, AND NDBC IN THE SUBCONTRACT AWARD PROCESS WAS WARRANTED IN ORDER TO PROTECT THE GOVERNMENT'S INTEREST, WHICH WAS MORE THAN PRO FORMA AS IT WILL BEAR THE ULTIMATE COST OF THE SUBCONTRACT.

TO PAUL & GORDON, APRIL 26, 1972:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 15, 1972, AND PRIOR CORRESPONDENCE, REGARDING THE PROTEST OF THE BISSETT-BERMAN CORPORATION (BBC), NOW KNOWN AS PLESSEY MEMORIES, INC., AGAINST THE PROPOSED AWARD OF A SUBCONTRACT TO EG&G INTERNATIONAL, INC. (EG&G), BY THE WESTINGHOUSE ELECTRIC CORPORATION (WESTINGHOUSE), PRIME CONTRACTOR UNDER CONTRACT NO. DOT-CG-10,237-A, AWARDED BY THE UNITED STATES COAST GUARD, DEPARTMENT OF TRANSPORTATION, AND SUBSEQUENTLY ASSIGNED FOR THE PURPOSES OF CONTRACT MANAGEMENT AND ADMINISTRATION TO THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), MISSISSIPPI TEST FACILITY (MTF).

FOR THE REASONS HEREINAFTER STATED, THE PROTEST OF BBC IS DENIED.

THE WESTINGHOUSE PRIME CONTRACT, A COST-PLUS-FIXED-FEE (CPFF) RESEARCH AND DEVELOPMENT CONTRACT, COVERED THE DESIGN, CONSTRUCTION, TEST AND PERFORMANCE REQUIREMENTS OF AN IMPROVED STATE-OF-THE-ART OCEANOGRAPHIC AND METEOROLOGICAL SENSOR SYSTEM, FOR THE ENGINEERING EXPERIMENTAL PHASE (EEP) OF THE NATIONAL DATA BUOY DEVELOPMENT PROJECT. THE PROJECT, ORIGINALLY STARTED BY THE UNITED STATES COAST GUARD, WAS TRANSFERRED TO THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION (NOAA), DEPARTMENT OF COMMERCE, TO BE PRINCIPALLY HANDLED BY NOAA'S NATIONAL DATA BUOY CENTER (NDBC), LOCATED AT NASA'S MTF. BY AGREEMENT BETWEEN NASA AND NOAA, MTF PERFORMS PROCUREMENT AND CONTRACT ADMINISTRATION SERVICES FOR NDBC.

SECTION B.3.0 OF THE PRIME CONTRACT'S STATEMENT OF WORK RELATES THAT THE INTENT OF THE PROJECT REQUIRES THE DEVELOPMENT OF A DUAL SOURCE CAPABILITY FOR OCEANOGRAPHIC SENSORS FOR THE EEP AND ITS SUBSEQUENT PHASES. TO THIS END, WESTINGHOUSE WAS TO ISSUE SECOND-SOURCE SUBCONTRACTS TO ONE OR MORE QUALIFIED SUBCONTRACTORS FOR THE DESIGN, DEVELOPMENT, FABRICATION, TEST AND DELIVERY OF APPROXIMATELY ONE-HALF OF THE OCEANOGRAPHIC SENSORS TO BE USED WHILE WESTINGHOUSE WAS TO DESIGN AND MANUFACTURE THE OTHER HALF. ADDITION, THE SUBCONTRACT PROCUREMENTS) AND QUANTITIES OF EACH PROCUREMENT WERE MADE SUBJECT TO APPROVAL BY THE GOVERNMENT. SIMILARLY, ARTICLE XIV OF THE WESTINGHOUSE CONTRACT REQUIRES THAT THE SECOND-SOURCE SUBCONTRACT BE APPROVED BY THE CONTRACTING OFFICER, WHILE ARTICLE XVI INCORPORATES BY REFERENCE INTO THE CONTRACT THE CLAUSE SET OUT AT PARAGRAPH 7-402.8(A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), ENTITLED "SUBCONTRACTS (1967 AUG)." THIS CLAUSE REQUIRES THE APPROVAL AND CONSENT OF THE GOVERNMENT PRIOR TO THE AWARD OF ANY SUBCONTRACT OF THE TYPE AND DOLLAR AMOUNT INVOLVED HERE.

PURSUANT TO THE ABOVE REQUIRMENT IN ITS PRIME CONTRACT, ON JUNE 8, 1971, WESTINGHOUSE ISSUED A REQUEST FOR PROPOSALS (RFP) TO SECURE A SECOND SOURCE FOR THE OCEANOGRAPHIC SENSORS, BBS, EG&G AND BENDIX CORPORATION SUBMITTED PROPOSALS BY THE JULY 9 CLOSING DATE. WESTINGHOUSE THEN CONDUCTED AN INITIAL EVALUATION AND CONCLUDED THAT NONE OF THE THREE PROPOSALS RECEIVED WERE TECHNICALLY ACCEPTABLE. WHEREUPON, BY LETTERS DATED AUGUST 6, WESTINGHOUSE CONDUCTED WRITTEN DISCUSSIONS WITH ALL OFFERORS, HIGHLIGHTING THE CONSIDERED DEFICIENCIES IN THE THREE TECHNICAL PROPOSALS. ALL OFFERORS SUBMITTED TIMELY REVISIONS. THEN, WESTINGHOUSE, AFTER COMPLETING ITS INITIAL EVALUATION PROCESS, EXPLORED WITH EACH OFFEROR THE TYPE OF CONTRACT THAT WOULD BE ACCEPTABLE, REQUISITE TERMS AND CONDITIONS, AND PROBABLE COSTS. UPON RECEIPT OF INFORMATION NECESSARY TO ITS COST ANALYSIS ON AUGUST 30, WESTINGHOUSE CONDUCTED A FINAL PHASE EVALUATION PROCESS. WHILE WESTINGHOUSE WAS CONDUCTING ITS FINAL EVALUATION, NDBC, ASSISTED BY THE OVERALL SYSTEMS ENGINEERING CONTRACTOR (SPERRY RAND) FOR THE PROJECT, WAS PERFORMING A CONCURRENT EVALUATION OF THE THREE PROPOSALS RECEIVED.

ON SEPTEMBER 10, WESTINGHOUSE RECOMMENDED BBC AS THE SECOND SOURCE AND REQUESTED APPROVAL FROM THE MTF CONTRACTING OFFICER OF ITS PROPOSED SELECTION. THE CONTRACTING OFFICER REFERRED THE RECOMMENDATION TO NDBC, WHICH CONSULTED WITH NOAA ON THE MATTER. HOWEVER, BY TELEGRAM OF OCTOBER 14, THE CONTRACTING OFFICER NOTIFIED WESTINGHOUSE THAT EG&G OFFERED THE BEST VALUE TO THE GOVERNMENT AND RECOMMENDED THAT ITS POSITION BE CONSIDERED PRIOR TO SELECTION OF THE SUBCONTRACTOR. THE RECORD INDICATES THAT BENDIX HAS BEEN ELIMINATED FROM CONSIDERATION AS A POTENTIAL SUBCONTRACTOR.

WESTINGHOUSE, AFTER CONSIDERING THE GOVERNMENT'S POSITION, CONDUCTED NEGOTIATIONS WITH EG&G FROM OCTOBER 25 THROUGH DECEMBER 15, RESULTING IN AN AGREEMENT TO SUBCONTRACT ON A CPFF BASIS IN THE ESTIMATED AMOUNT OF $1,611,210. WESTINGHOUSE REQUESTED THE MTF CONTRACTING OFFICER'S CONSENT, IN ACCORDANCE WITH THE ABOVE-CITED SUBCONTRACTS CLAUSE, TO PLACE THE SUBCONTRACT WITH EG&G. BY TELEGRAM DATED APRIL 14, 1972, THE NASA DIRECTOR OF PROCUREMENT ADVISED OUR OFFICE THAT WESTINGHOUSE WAS BEING AUTHORIZED AND INSTRUCTED BY THE MTF CONTRACTING OFFICER TO AWARD THE SUBCONTRACT TO EG&G ON APRIL 18, 1972. PRIOR TO THE INTENDED AWARD, BBC FILED SUIT ON APRIL 17 IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA (PLESSEY MEMORIES, INC., A CALIFORNIA CORPORATION (FORMERLY KNOWN AS BISSETT-BERMAN CORPORATION) V. PETER G. PETERSON, SECRETARY OF THE DEPARTMENT OF COMMERCE, ET AL., CIVIL ACTION NO. 72-836 WMB), FOR A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION AGAINST THE AWARD OF THE SUBCONTRACT TO EG&G "UNTIL THE COMPTROLLER GENERAL OF THE UNITED STATES HAS MADE A DECISION ON PLAINTIFF'S PROTEST FILED IN COMPTROLLER GENERAL CASE NO. B 174367." THE COURT GRANTED A TEMPORARY RESTRAINING ORDER ON THE SAME DATE.

SINCE THE PRINCIPAL BASES OF BBC'S PROTEST DEAL WITH THE WESTINGHOUSE EVALUATION OF PROPOSALS, THE GOVERNMENT'S PARTIAL REJECTION OF THAT EVALUATION, AND THE ULTIMATE RECOMMENDATION TO SELECT EG&G FOR THE SUBCONTRACT, IT IS APPROPRIATE TO GIVE A MORE DETAILED NARRATIVE ON THE EVALUATIONS CONDUCTED BY THE GOVERNMENT AND WESTINGHOUSE. THE WESTINGHOUSE RFP STATED AN INTENTION TO AWARD A FIRM FIXED-PRICE (FFP) CONTRACT, BUT PERMITTED THE SUBMISSION OF CPFF PROPOSALS.

THE INSTRUCTIONS SECTION OF THE RFP INFORMED OFFERORS OF THE FOLLOWING EVALUATION SCHEME:

EVALUATION CATEGORIES

PROPOSALS WILL BE EVALUATED AGAINST CRITERIA ESTABLISHED UNDER THE FOLLOWING CATEGORIES, WITH EACH CATEGORY GIVEN THE RELATIVE WEIGHT INDICATED:

PERCENT

A. TECHNICAL 50

B. MANAGEMENT 25

C. FACILITIES 10

D. PERSONNEL AND EXPERIENCE 50

HAVING ACCOMPLISHED THE INITIAL EVALUATION ON THE ABOVE BASIS THE OFFEROR'S COST PROPOSAL WILL BE EVALUATED IN TERMS OF ITS CREDIBILITY AND RELATIONSHIP TO THE TECHNICAL APPROACH PROPOSED. THE INTENT IS TO ACHIEVE THE MOST BENEFICIAL MIX OF TECHNICAL EXCELLENCE AND COST EFFECTIVENESS.

THE INITIAL EVALUATION CONDUCTED BY WESTINGHOUSE SCORED THE PROPOSALS ACCORDING TO MAJOR AND MINOR SUBCRITERIA IDENTIFIED IN THE RFP AS FOLLOWS:

MAXIMUM BISSETT-

POINTS BERMAN E.G. & G.

A. TECHNICAL:

1. PERFORMANCE CHARACTERISTICS 15 10.2 10.6

2. PHYSICAL CHARACTERISTICS 4 1.8 3.1

3. RELIABILITY 3 1.4 2.6

4. APPLICABLE EXISTING DESIGNS 8 5.4 4.4

5. GROWTH POTENTIAL 3 1.1 1.8

6. QUALITY ASSURANCE AND INSPECTION 3 2.8 2.2

7. TEST PROGRAM 5 2.4 4.6

8. FIELD USE EXPERIENCE 6 3.7 4.5

9. LOGISTIC SUPPORT 3 1.6 2.1

SUBTOTAL 50 30.4 35.9

B. MANAGEMENT:

1. PROGRAM PLAN 5 3.0 2.9

2. SCHEDULE AND DOLLAR CONTROL 10 5.9 5.5

3. CONFIGURATION CONTROL 3 1.5 1.0

4. MAKE/BUY-SUBCONTRACT PLAN 2 .8 .7

5. ORGANIZATION 5 3.3 3.4

SUBTOTAL 25 14.5 13.5

C. FACILITIES:

1. MANUFACTURING 5 2.9 2.4

2. TEST AND CALIBRATION 5 3.5 5.0

SUBTOTAL 10 6.4 7.4

D. PERSONNEL AND EXPERIENCE:

1. PERFORMANCE CHARACTERISTICS 8 6.8 7.2

2. RELIABILITY 1.5 .5 1.2

3. QUALITY ASSURANCE AND INSPECTION 1.5 1.0 1.3

4. TEST PROGRAM 2.5 1.9 2.1

5. LOGISTIC SUPPORT 1.5 .8 1.0

SUBTOTAL 15.0 11.0 12.8

TOTAL 100 62.3 69.6

THERE FOLLOWS THE WESTINGHOUSE DESCRIPTION OF THAT PORTION OF ITS EVALUATION FOLLOWING THE INITIAL EVALUATION BASED ON THE CRITERIA ESTABLISHED IN THE RFP AND THE RESULTANT POINT SCORES:

*** EACH OF THE MAJOR CATEGORIES IS BROKEN DOWN INTO A NUMBER OF SUBCATEGORIES. A MAXIMUM POINT VALUE WAS ASSIGNED TO EACH SUBCATEGORY AND ONE OR MORE PERSONS, FAMILIAR WITH THE REQUIREMENTS FOR THAT FUNCTION, WERE ASSIGNED TO EVALUATE ALL PROPOSALS FOR THAT SUBCATEGORY. THESE INPUTS WERE THEN SUMMED TO GIVE AN INDICATION OF THE OVERALL PERFORMANCE.

EACH OF THE SUBCATEGORIES *** REFLECT EITHER AN OFFER TO DELIVER OR REFLECT ON THE PROPOSER'S ABILITY TO DELIVER AND MANAGE THE SUBCONTRACT. ALL OF THE SUBCATEGORIES IN THE TECHNICAL EVALUATION EXCEPT A.4, A.6, A.7 AND A.8 REPRESENT WHAT WILL BE DELIVERED OR THE OFFERED PERFORMANCE. THE FOUR EXCEPTIONS PLUS ALL OF THE SUBCATEGORIES IN THE MANAGEMENT, FACILITIES, AND PERSONNEL AND EXPERIENCE CATEGORIES REFLECT ON THE PROPOSER'S ABILITY TO PRODUCE WHAT IS PROMISED AND TO CONTROL THE SUBCONTRACT WITH RESPECT TO COST AND SCHEDULE, I.E. THE CREDIBILITY THAT THE PERFORMANCE OFFERED WILL BE DELIVERED, THAT THE DELIVERIES WILL BE ON SCHEDULE AND THAT THE COST WILL BE WITHIN THAT CONTRACTED.

THE INITIAL EVALUATIONS WERE CONVERTED TO RELATIVE SCORES BY GIVING THE HIGHEST SCORE 100 AND THE OTHERS THE PERCENTAGE OF 100 REPRESENTED BY THEIR SCORE AND THE HIGHEST SCORE. THE PERFORMANCE AND CREDIBILITY RELATIVE SCORES WERE ALL ESTABLISHED IN THE SAME MANNER. A WEIGHTING FACTOR WAS ESTABLISHED TO REFLECT THE RELATIVE IMPORTANCE OF THE SUBCATEGORIES AND TO NORMALIZE THE SCORES TO A TOTAL OF 100. THESE WEIGHTING FACTORS WERE ESTABLISHED BY WESTINGHOUSE.

*** THE OFFERED PERFORMANCE EVALUATION (SECOND EVALUATION SET FORTH BELOW) WAS OBTAINED BY USING THE INITIAL EVALUATION SCORES A.1, A.2, A.3, A.5 AND A.9 *** . THE CREDIBILITY THAT PERFORMANCE COULD OR WOULD BE ATTAINED WAS OBTAINED BY USING THE INITIAL EVALUATION SCORES OF A.4, A.8, D.1, D.2, D.3, D.4, D.5 AND B.3 *** . THE SCHEDULE EVALUATION WAS OBTAINED BY ASSIGNING RELATIVE VALUES TO THE LATENESS OF THE START AND COMPLETION OF DELIVERIES OVER WHAT WAS REQUESTED IN THE RFP. THE CREDIBILITY THAT THEY WOULD MEET THE PROPOSED SCHEDULE WAS OBTAINED BY USING THE INITIAL EVALUATION SCORES OF B.1, B.2, B.4, B.5, C.1 AND C.2. THE COST EVALUATION ASSIGNED RELATIVE VALUES TO THE PROPOSED SUBCONTRACT COST TO NOAA. THE CREDIBILITY OF THE COST WAS ESTABLISHED USING THE INITIAL EVALUATIONS FOR B.1, B.2, B.4, B.5, C.1, AND C.2 PLUS A FACTOR FOR THE TYPE OF CONTRACT WHERE AN FFP CONTRACT LENT MORE CREDIBILITY TO COST THAN A CPFF TYPE.

THE SCORE FOR EACH MAJOR CATEGORY OF COST, SCHEDULE AND PERFORMANCE WAS OBTAINED BY MULTIPLYING THE RELATIVE SCORE BY THE CREDIBILITY SCORE AS A PERCENTAGE.

PERFORMANCE EVALUATION

E.G. & G. BISSETT-BERMAN

PERCENT RELATIVE SUB RELATIVE SUB

WEIGHT SCORE SCORE SCORE SCORE

OFFERED:

PERFORMANCE CHARACTERISTICS 40 100 40.0 96 38.4

PHYSICAL CHARACTERISTICS 5 100 5.0 58 2.9

RELIABILITY 40 100 40.0 54 21.6

GROWTH POTENTIAL 10 100 10.0 61 6.1

LOGISTIC SUPPORT 5 75 3.8 58 2.9

TOTAL 100 98.8 71.9

CREDIBILITY:

PERSONNEL AND EXPERIENCE 25 100 25.0 95 23.8

RELIABILITY PROGRAM 20 100 20.0 42 8.4

Q.A. PROGRAM 10 100 10.0 77 7.7

TEST PROGRAM 15 100 16.0 91 13.7 LOGISTIC SUPPORT 5 77 3.8 62 3.1

CONFIGURATION CONTROL 5 46 2.3 68 3.4

EXISTING DESIGNS 20 81 16.2 100 20.0

TOTAL 100 92.3 80.1

THE ADJUSTED SCORES, MULTIPLIED BY ASSIGNED WEIGHTS TO COMPUTE A FINAL WEIGHTED SCORE, WERE THE BASIS FOR THE WESTINGHOUSE RECOMMENDATION OF BBC TO NASA AS FOLLOWS:

CREDIBILITY ADJUSTED ASSIGNED WEIGHTED

CRITERION SCORE PERCENTAGE SCORE WEIGHT SCORE E.G. &. G:

PERFORMANCE 98.8 92.3 91.2 0.5 45.6

SCHEDULE 44.4 84.2 37.4 .75 28.0

COST 72.0 79.6 57.3 1.0 57.3

TOTAL 185.9 130.9

BISSETT-BERMAN:

PERFORMANCE 71.9 80.1 57.6 .5 28.8

SCHEDULE 31.8 85.2 27.1 .75 20.3

COST 98.0 92.6 90.7 1.0 90.7

TOTAL 175.4 139.8

THE OCTOBER 14 TELEGRAM OF THE CONTRACTING OFFICER, REFERRED TO ABOVE AND QUOTED BELOW, WEIGHED HEAVILY IN THE WESTINGHOUSE DECISION TO NEGOTIATE WITH EG&G AS THE SUCCESSFUL PROPOSER:

THE TECHNICAL SCHEDULE AND COST EVALUATIONS OF SECOND SOURCE PROPOSALS SUBMITTED IN YOUR TWX OF 14 SEPTEMBER ARE APPROVED. THESE EVALUATIONS ARE EXTREMELY SENSITIVE TO THE RELATIVE WEIGHTS ASSIGNED TO COST SCHEDULE AND TECHNICAL PERFORMANCE. YOUR RECOMMENDATION OF BISSETT BERMAN IS BASED ON THE ASSUMPTION THAT COSTS ARE TWICE AS IMPORTANT TO THE GOVERNMENT AS PERFORMANCE ON THIS PARTICULAR SUBCONTRACT. THE NDBC DOES NOT AGREE WITH THIS ASSUMPTION AND DESIRES THAT PERFORMANCE BE WEIGHTED AT LEAST EQUAL TO COSTS AS A CRITERIA FOR SELECTION. THIS IS IN CONSONANCE WITH PUBLISHED OBJECTIVES FOR THE EEP PROGRAM. BASED ON THE REVISED WEIGHTING FACTORS THE NDBC CONSIDERS THAT EG AND G OFFERS THE BEST VALUE TO THE GOVERNMENT. ACCORDINGLY IT IS RECOMMENDED THAT THIS POSITION BE CONSIDERED IN YOUR SELECTION NEGOTIATIONS AND AWARD OF THE SECOND SOURCE OCEANOGRAPHIC SENSOR SUBCONTRACTOR.

IN FURTHER EXPLANATION OF THIS TELEGRAM AND THE CONCURRENT EVALUATION PERFORMED BY THE GOVERNMENT, WE QUOTE FROM A MEMORANDUM PREPARED BY THE DIRECTOR, NDBC, RECOMMENDING EG&G FOR THE AWARD OF THE SUBCONTRACT:

*** WHILE I CONCUR IN THE TECHNICAL AND BASIC COST EVALUATION PERFORMED BY WESTINGHOUSE, I DO NOT AGREE WITH THE WEIGHTING FACTORS USED IN VIEW OF THE EEP OBJECTIVES. ACCORDINGLY, I INTEND TO ADVISE WESTINGHOUSE TO USE A COST/PERFORMANCE WEIGHTING RATIO OF 1:1 AND TO NEGOTIATE WITH EG&G FOR THE "SECOND SOURCE" SENSORS.

UPON RECEIPT OF SUBCONTRACTOR PROPOSALS BY WESTINGHOUSE, AN EVALUATION BOARD WAS ESTABLISHED THERE FOR SELECTION. CONCURRENTLY AND INDEPENDENTLY THE PROPOSALS WERE EVALUATED BY A TEAM FROM NDBC, WITH ASSISTANCE FROM SPERRY SYSTEMS MANAGEMENT DIVISION (SSMD) PERSONNEL. THIS EVALUATION WAS DIRECTED TO GAIN FAMILIARITY WITH THE PROPOSALS AND TO OBTAIN SUFFICIENT INFORMATION TO INSURE THAT WESTINGHOUSE EVALUATION WAS FAIR AND OBJECTIVE (AND) IT CONCURS CLOSELY WITH THE WESTINGHOUSE EVALUATION, WHICH FOUND EG&G CONSIDERABLY SUPERIOR TECHNICALLY.

IT IS EVIDENT THAT IF THE CHOICE WERE MADE ON TECHNICAL EXCELLANCE ALONE, EG&G WOULD BE A CLEAR WINNER, BECAUSE EVERY TECHNICAL EVALUATION MADE OF THE TWO APPROACHES HAS THEM CLEARLY AHEAD. IF THE CHOICE WERE MADE ON COSTS ALONE, BISSET-BERMAN WOULD BE A CLEAR WINNER, BECAUSE THEY OFFER A LOWER COST AND A FIXED PRICE CONTRACT - AS COMPARED TO EG&G'S HIGHER COST PLUS FIXED FEE (CPFF) CONTRACT. WITH THE WEIGHTS ASSIGNED TO COST AND PERFORMANCE BY WESTINGHOUSE, WESTINGHOUSE RECOMMENDED BISSET-BERMAN FOR SELECTION.

BASED ON THE FOREGOING, I RECOMMEND SELECTION OF EG&G FOR THE FOLLOWING REASONS:

1. EG&G OFFERS A CLEARLY SUPERIOR PRODUCT, MORE CLOSELY IN TUNE WITH EEP OBJECTIVES.

2. ALTHOUGH EG&G DEVELOPMENT COSTS ARE GREATER, THE SUPERIOR TECHNICAL PRODUCT JUSTIFIES THE COSTS WHEN A 1:1 COST/PERFORMANCE WEIGHTENING RATIO IS USED.

3. EG&G SHOWS A GREATER POTENTIAL ADVANCE TOWARDS ULTIMATE "DESIGN GOALS" THAN BISSETT-BERMAN.

4. FOR FOLLOW-ON PROCUREMENTS, EG&G WILL OFFER A PRODUCT COMPETITIVE TO WESTINGHOUSE IN BOTH COST AND PERFORMANCE, WHEREAS BISSETT-BERMAN WILL BE COMPETITIVE ONLY IN COST.

IN GENERAL, BBC CONTENDS THAT IF THE EVALUATION CRITERIA SET FORTH IN THE RFP HAD BEEN FOLLOWED, BBC WOULD HAVE RECEIVED THE HIGHEST SCORE. SUPPORT THEREOF, BBC CITES THE 7.3 POINT DIFFERENCE IN THE RAW PERFORMANCE EVALUATION (INITIAL) FAVORING EG&G, THEN ADDS ITS COST SCORE ADJUSTED FOR CREDIBILITY AS THE RFP REQUIRES, AND CLAIMS THAT SUCH EVALUATION WOULD HAVE MADE BBC THE CLEAR WINNER. COROLLARY THERETO, BBC ARGUES THAT IS WAS IMPROPER FOR WESTINGHOUSE TO DEVIATE FROM THE EVALUATION CRITERIA OF THE RFP BY CONDUCTING A SECOND EVALUATION INVOLVING A TOTAL REWEIGHTENING IN UTTER DISREGARD FOR THE EVALUATION FACTORS AS SET FORTH IN THE RFP UPON WHICH BBC PREMISED ITS PROPOSAL. FURTHERMORE, BBC CONCLUDES THAT THE CONDUCT OF WESTINGHOUSE IN ITS EVALUATIVE PROCESS, AS SUBSTANTIALLY RATIFIED BY THE GOVERNMENT, WAS VIOLATIVE OF THE FEDERAL NORM WHICH IT TO BE APPLIED TO THE AWARD OF SUBCONTRACTS.

OUR DECISION IN 49 COMP. GEN. 668 (1970) DEFINED THE SCOPE OF REVIEW WHERE, AS HERE, A DETERMINATION TO CONSENT AND APPROVE OF THE PROPOSED AWARD OF A SUBCONTRACT BY A COST-REIMBURSEMENT PRIME CONTRACTOR OF THE GOVERNMENT IS QUESTIONED. IN CONSIDERATION OF A CONTRACT INCLUDING A CLAUSE, AS DID THE WESTINGHOUSE CONTRACT, CALLING FOR GOVERNMENT APPROVAL PRIOR TO SUBCONTRACT AWARD, WE EXPRESSED THE VIEW THAT APPROVAL SHOULD NOT BE GRANTED IF THE AWARD WOULD BE PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES, PARTICULARLY SINCE THE COST OF THE PROCUREMENT ULTIMATELY WILL BE BORNE BY THE GOVERNMENT. WE HELD AT PAGE 670, AS FOLLOWS:

THE QUESTION OF WHETHER SUBCONTRACT APPROVAL WOULD BE PREJUDICIAL TO THE INTERESTS OF THE UNITED STATES IS ONE THAT MUST BE RESOLVED BY THE RESPONSIBLE CONTRACTING OFFICIALS OF THE GOVERNMENT AFTER A THOROUGH CONSIDERATION OF THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH PROCUREMENT. 46 COMP. GEN. 142 (1966). GENERALLY, WE BELIEVE THAT THE FRAME OF REFERENCE GUIDING SUCH DETERMINATION SHOULD BE THE FEDERAL NORM THAT IS EMBODIED IN THE PROCUREMENT STATUTES AND IMPLEMENTING REGULATIONS. CF. ASPR 23-202. ***

BBC HAS REFERRED TO DECISIONS OF OUR OFFICE WHICH EXPRESS THE VIEW THAT SOUND PROCUREMENT POLICY DICTATES THAT OFFERORS BE INFORMED OF ALL EVALUATION FACTORS AND OF THE RELATIVE IMPORTANCE OR WEIGHT OF EACH FACTOR. SEE 49 COMP. GEN. 229 (1969). IMPLICIT IN THE PROCUREMENT OF GOODS AND SERVICES IS THE NECESSITY FOR FURNISHING ADEQUATE INFORMATION TO PROSPECTIVE OFFERORS OF THE GOVERNMENT'S NEEDS AND REQUIREMENTS AND HOW OFFERORS ARE TO RESPOND TO THOSE NEEDS AND REQUIREMENTS. SEE 50 COMP. GEN. 246, 252 (1970).

THE WESTINGHOUSE RFP CLEARLY APPRISED OFFERORS OF FOUR GENERALIZED CRITERIA ALONG WITH THE RELATIVE WEIGHTS OF EACH. IN ADDITION, THE RFP, PARTICULARLY IN THE TECHNICAL AREA, WEIGHTED AT 50 PERCENT, INFORMED OFFERORS OF THE VARIOUS SUBCRITERIA TO BE UTILIZED IN THE EVALUATION. BUT THE RFP DID NOT REFLECT THE RELATIVE IMPORTANCE TO BE ACCORDED THOSE SUBCRITERIA IN THE EVALUATION. AFTER THE INITIAL EVALUATION, THE RFP CALLED FOR AN EVALUATION OF COST PROPOSALS IN TERMS OF CREDIBILITY AND RELATIONSHIP TO THE TECHNICAL APPROACH PROPOSED. AND, THE RFP EXPRESSED AN INTENT TO ACHIEVE THE MOST BENEFICIAL MIX OF TECHNICAL EXCELLENCE AND COST EFFECTIVENESS.

WESTINGHOUSE EXPLAINED TO NASA THE RATIONALES BEHIND THE SECOND PERFORMANCE EVALUATION AND THE CREDIBILITY EVALUATIONS, AS FOLLOWS:

THE "INITIAL EVALUATION" ADDRESSED ITSELF PRIMARILY TO THE PERFORMANCE ASPECTS OF WHAT WOULD BE DELIVERED, E.G. WHAT THE OFFERED DESIGN WAS PLANNED TO ACCOMPLISH, HOW IT WAS TO BE IMPLEMENTED, HOW COSTS AND SCHEDULES WOULD BE CONTROLLED, AND THOSE FACTORS WHICH WOULD REFLECT CONFIDENCE IN THEIR ABILITY TO PERFORM AS THEY INDICATED. THESE FACTORS WERE ADDRESSED IN THE TECHNICAL, MANAGEMENT, FACILITIES, AND PERSONNEL AND EXPERIENCE CATEGORIES INDICATED. THE OTHER TWO REQUESTS WHICH THE RFP MADE, WHEN WILL THE DELIVERY BE MADE AND HOW MUCH WILL IT COST WERE NOT ADDRESSED IN THE INITIAL EVALUATION.

THE STATEMENT IS INTENDED TO INDICATE THAT AFTER THE INITIAL EVALUATION DETERMINED THE CLAIM OF THE OFFERORS AGAINST THE SPECIFICATIONS REQUIRED, THE EVALUATION WOULD FOCUS ON WHETHER WHAT WAS CLAIMED APPEARED CREDIBLE IN LIGHT OF THE RESOURCE AND KNOWLEDGE DISPLAYED, WHETHER ANY DIFFERENTIAL IN COSTS PROPOSED WAS COMMENSURATE WITH THE DIFFERENTIAL PERFORMANCE OFFERED, AND WHETHER THE COSTS PROPOSED SEEMED REASONABLE IN LIGHT OF THE TECHNICAL APPROACH PLANNED.

BBC ARGUES THAT THE SELECTING OUT OF 5 OF THE 9 TECHNICAL SUBCRITERIA (REPRESENTING A TOTAL OF 28 POINTS OUT OF THE 50 POINTS ASSIGNED TO THE TECHNICAL PORTION OF THE INITIAL EVALUATION) FOR A FURTHER EVALUATION WITH DIFFERENT WEIGHTS (SEE CHART ABOVE) COMPLETELY RESTRUCTURED THE RELATIVE WEIGHTS ORIGINALLY ASSIGNED BY WESTINGHOUSE. BY SO DOING, IT IS URGED THAT WESTINGHOUSE IN EFFECT ELIMINATED THE THREE OTHER RFP CRITERIA OF MANAGEMENT, FACILITIES, AND PERSONNEL AND EXPERIENCE, WHICH COMPRISE 50 PERCENT OF THE ORIGINAL (RFP) EVALUATION SCHEME. ALSO, IT IS MAINTAINED THAT EVEN THOUGH SUBCRITERIA FROM THE SO-CALLED ELIMINATED CRITERIA WERE UTILIZED AS CREDIBILITY MULTIPLIERS IN THE SECOND EVALUATION ON PERFORMANCE AND IN THE COST AND SCHEDULE CREDIBILITY EVALUATIONS, THE USE OF SUCH SUBCRITERIA WAS NOT AS PRESCRIBED IN THE RFP. FURTHER, IT IS ARGUED THAT CREDIBILITY, IN ACCORDANCE WITH THE RFP, SHOULD HAVE BEEN APPLIED ONLY TO THE COST PROPOSALS.

WE AGREE THAT THE WESTINGHOUSE SECOND PERFORMANCE EVALUATION DEVIATED IN PART FROM THE CRITERIA AND RELATIVE IMPORTANCE THEREOF STATED IN THE RFP. BUT WE DO NOT CHARACTERIZE THE EVALUATION AS SO RADICAL A DEVIATION FROM THE REQUIREMENTS OF THE RFP AS TO HAVE DESTROYED THE RELATIVE IMPORTANCE OF THE STATED CRITERIA. TO ASSURE THE BASIC OBJECTIVES OF THE EEP PROGRAM AS REPRESENTED IN THE RFP, WESTINGHOUSE SELECTED OUT WHAT IT FELT TO BE THE MOST IMPORTANT TECHNICAL SUBCRITERIA TO ARRIVE AT A MORE ACCURATE EVALUATION OF THE PROPOSALS SUBMITTED ON A PERFORMANCE BASIS. HAVING THUS SELECTED THESE SUBCRITERIA, WESTINGHOUSE APPLIED GREAT WEIGHT TO THE PERFORMANCE CHARACTERISTICS AND RELIABILITY TO COMPLETE ITS PERFORMANCE EVALUATION. OUR OFFICE HAS EXPRESSED A FAVORABLE VIEW WITH RESPECT TO DIRECT FEDERAL NEGOTIATED PROCUREMENTS THAT, WHERE CONTRACTING OFFICIALS DEPART FROM ESTABLISHED EVALUATION CRITERIA AND WEIGHTINGS, WE WILL NOT OBJECT SO LONG AS THERE IS A SUFFICIENT RELATIONSHIP OR CORRELATION BETWEEN THE DETAILED EVALUATION FACTORS AND WEIGHTS USED AND THE GENERALIZED CRITERIA AND WEIGHTS SHOWN IN THE RFP. SEE 50 COMP. GEN. 390 (1970). THE PROPRIETY OF THE EMPHASIS PLACED BY WESTINGHOUSE ON PERFORMANCE AND RELIABILITY CANNOT BE QUESTIONED IN VIEW OF THE SIGNIFICANCE AND IMPORTANCE ATTACHED TO THOSE CRITERIA IN THE RFP AND THE COAST GUARD LITERATURE ON THE EEP PHASE OF THE PROJECT.

WE AGREE WITH BBC THAT THE RFP DID NOT SPECIFICALLY CALL FOR A CREDIBILITY FACTOR TO BE APPLIED AGAINST THE TECHNICAL PROPOSALS. BUT, THE WESTINGHOUSE EXPLANATION, QUOTED ABOVE, WE BELIEVE, AMPLY SUPPORTS THE PROPRIETY OF SUCH CREDIBILITY APPLICATION AS AN IMPORTANT ADJUNCT TO ITS EVALUATION. SINCE THE AWARD OF THE PRIME CONTRACT WAS BASED IN PART ON A CREDIBILITY EVALUATION OF PERFORMANCE, SCHEDULE AND COST, WESTINGHOUSE MIGHT WELL HAVE BEEN DRAWING ON THE GOVERNMENT FOR EVALUATION GUIDANCE. WE HAVE NOT QUESTIONED METHODS WHEREBY CONTRACTING OFFICIALS INTRODUCE FACTORS NOT SPECIFICALLY LISTED IN NEGOTIATED SOLICITATIONS AS A MEANS TO INTRODUCE A MEASURE OF INDEPENDENT JUDGMENT INTO THE EVALUATION PROCESS. SEE 50 COMP. GEN. 390, SUPRA, AT PAGE 413. SURELY, BBC COULD NOT REASONABLY HAVE EXPECTED WESTINGHOUSE TO NOT USE ITS JUDGMENT IN ASSESSING, BY THE APPLICATION OF A CREDIBILITY FACTOR, THE TRUE PERFORMANCE VALUE OF THE PROPOSALS SUBMITTED.

WE FEEL THAT IT IS RELEVANT TO INQUIRE INTO WHAT PREJUDICE OR COMPETITIVE DISADVANTAGE BBC MAY HAVE SUFFERED FROM THE WESTINGHOUSE TECHNICAL OR PERFORMANCE EVALUATION. WHILE WE AGREE THAT SOME DEVIATION FROM RELATIVE IMPORTANCE DID OCCUR WITH RESPECT TO THE THREE MAJOR CRITERIA OTHER THAN TECHNICAL, WESTINGHOUSE DID UTILIZE ALL OF THE PERSONNEL AND EXPERIENCE SUBCRITERIA AND ONE OF THE MANAGEMENT SUBCRITERIA AS CREDIBILITY MULTIPLIERS AGAINST THE SECOND EVALUATION. AND, WESTINGHOUSE UTILIZED FOUR OF THE MANAGEMENT SUBCRITERIA AND THE TWO FACILITIES SUBCRITERIA AS CREDIBILITY MULTIPLIERS AGAINST THE COST EVALUATION. FURTHERMORE, WE NOTE THAT TWO OF THE FOUR TECHNICAL SUBCRITERIA ELIMINATED FROM THE SECOND PERFORMANCE EVALUATION WERE UTILIZED AS CREDIBILITY FACTORS. ALSO, HAD WESTINGHOUSE CARRIED OVER THOSE FOUR TECHNICAL FACTORS INTO THE SECOND PERFORMANCE EVALUATION, EG&G'S TECHNICAL ADVANTAGE OVER BBC WOULD HAVE INCREASED. MOREOVER, THE ALLEGED COMPLETE ELIMINATION AND DISTORTION OF THE CRITERIA OF MANAGEMENT, FACILITIES, AND PERSONNEL AND EXPERIENCE DID NOT DETRACT FROM BBC'S SCORE. IN THIS VEIN, WE NOTE THAT EG&G, TAKING INTO ACCOUNT THE POINT SCORES OF THOSE CRITERIA IN THE INITIAL EVALUATION, HAD A NET SCORE ADVANTAGE OVER BBC. RETURNING TO THE EMPHASIS ON RELIABILITY AND PERFORMANCE IN THE SECOND PERFORMANCE EVALUATION, WE CAN SEE NO PREJUDICE TO BBC IN THIS REGARD. BBC WAS FULLY APPRISED OF THE IMPORTANCE OF THESE SUBCRITERIA IN THE RFP'S STATEMENT OF WORK, THE SPECIFICATIONS, AND PROJECT LITERATURE. MOREOVER, BBC ADDRESSED ITSELF TO THESE MATTERS EXTENSIVELY IN ITS INITIAL PROPOSAL. OF PARTICULAR SIGNIFICANCE IS THE FACT THAT SUBSEQUENT TO THE RECEIPT OF ITS INITIAL PROPOSAL, WESTINGHOUSE, VIA WRITTEN DISCUSSIONS, PINPOINTED VARIOUS AREAS IN THE PERFORMANCE CHARACTERISTIC AND RELIABILITY SUBCRITERIA WHERE THE BBC INITIAL PROPOSAL WAS CONSIDERED TO BE DEFICIENT OR AS LACKING INFORMATION. BBC'S REVISED PROPOSAL RESPONDED TO THOSE DEFICIENCIES AND FURNISHED REQUESTED INFORMATION. WITH RESPECT TO RELIABILITY, BBC CONTENDS, AS DISCUSSED ABOVE, THAT EG&G BENEFITED FROM MAKING BROAD PERFORMANCE RELIABILITY ASSUMPTIONS WHILE BBC TOOK A MORE CONSERVATIVE OR "WORST CASE" APPROACH. IN FACT, WESTINGHOUSE EVALUATORS SURMISED THAT BBC'S RELIABILITY GOALS MIGHT BE UNDERSTATED. ALSO, WESTINGHOUSE TOOK NOTICE OF TECHNICAL DESIGN IMPROVEMENTS PROPOSED BY EG&G IN ITS INSTANT PROPOSAL OVER A PROPOSAL SUBMITTED ABOUT A YEAR AGO WHICH FACTOR, IT WAS FELT, SUPPORTED EG&G'S RELIABILITY PROJECTIONS. MOREOVER, RELIABILITY ALONE DID NOT GIVE EG&G A CONSISTENT TECHNICAL EDGE ON BBC IN ALL EVALUATIONS PERFORMED. BUT, ADMITTEDLY, RELIABILITY OF PERFORMANCE DID REPRESENT A SIGNIFICANT 40 PERCENT WEIGHT ON THE SECOND PERFORMANCE EVALUATION.

BBC STATES THAT THE GOVERNMENT IS ATTEMPTING TO CREATE THE IMPRESSION THAT THE PROCUREMENT IS FOR SENSORS THAT ARE TO BE AN ADVANCEMENT OF THE STATE-OF-THE-ART. BBC DISAGREES AND ASSERTS THAT THE EEP PHASE OF THE PROJECT REQUIRES ONLY THAT STATE-OF-THE-ART SENSORS BE PROCURED WITH SOME REDESIGN TO CORRECT THE MOST PREVALENT CAUSE OF IN-SERVICE FAILURE. BOTH WESTINGHOUSE AND THE GOVERNMENT EVALUATIONS REWARDED EG&G WITH HIGHER TECHNICAL SCORES BASED ON ITS PROPOSALS TO INCREASE THE STATE-OF-THE-ART. THEREFORE, BBC ASSERTS THAT PREJUDICE INURED TO IT SINCE IT DID NOT GO BEYOND THE OBJECTIVES OF THE PROGRAM IN ITS PROPOSAL AND, THEREFORE, IT SHOULD NOT HAVE BEEN PENALIZED IN THE TECHNICAL EVALUATION.

WE HAVE REVIEWED THE LONG RANGE DEVELOPMENT PLAN DATED JANUARY 1970 AND BRIEFING TO INDUSTRY DATED APRIL 15, 1970, ON THE PROJECT AND STATEMENTS OF WORK AND TECHNICAL SPECIFICATIONS RELATED TO THE EEP PORTION OF THE PROJECT. WE BELIEVE, BASED ON OUR REVIEW OF THE RECORD, THAT THE EEP PHASE DID INVOLVE RESEARCH AND DEVELOPMENTAL ASPECTS, SUCH AS TO JUSTIFY THE IMPORTANCE GIVEN BY BOTH WESTINGHOUSE AND THE GOVERNMENT TO THE TECHNICAL SUPERIORITY OF EG&G. WE DO NOT SUBSCRIBE TO THE ARGUMENT THAT BBC COULD HAVE REASONABLY BELIEVED THAT TECHNICAL EXCELLENCE AND IMPROVEMENT OF THE STATE-OF-THE-ART WOULD NOT BE ACCORDED GREAT WEIGHT. WE BELIEVE THAT THE DIRECTOR, NDBC, THE AGENCY RESPONSIBLE FOR OVERALL MANAGEMENT OF THE PROJECT, SUPPORTS OUR VIEW, WHEN HE STATES:

ENCLOSURE (5) CLEARLY SHOWS THAT THE WESTINGHOUSE SENSOR IS NEARER TO THE "ACCEPTABLE" LEVEL THAN TO THE "DESIGN GOAL" LEVEL FOR EEP OCEANOGRAPHIC SENSORS. ALTHOUGH THIS SENSOR PROMISES TO BE VASTLY SUPERIOR TO THOSE CURRENTLY AVAILABLE, IT IS CLEAR THAT DESIGN GOALS FOR OCEANOGRAPHIC SENSORS REQUIRED FOR SUCCESS OF THE NDBS HAVE NOT BEEN REACHED.

IT IS FIRMLY BELIEVED THAT RESOURCES SHOULD BE UTILIZED TO DEVELOP APPROACHES WHICH POTENTIALLY ADVANCE TECHNOLOGY TOWARD "DESIGN GOALS." THIS AREA, EG&G IS CLEARLY SUPERIOR BECAUSE THEY HAVE PROPOSED TECHNIQUES WHICH ARE VIABLE FOR THE ULTIMATE SENSOR. BISSETT-BERMAN, IN CONTRAST, PROPOSED A SYSTEM WITH INHERENT DEFICIENCIES WHICH WOULD REQUIRE CORRECTION IN THE ULTIMATE SENSOR FOR NDBS.

SEE, ALSO, PAGE A-3 OF THE WESTINGHOUSE RFP, WHEREIN IT IS STATED:

IT IS EXPECTED THAT THE OFFEROR'S TECHNICAL PROPOSAL, IN RESPONSE TO THIS PROCUREMENT REQUEST, WILL DEFINE IN CONSIDERABLE DETAIL THE SPECIFIC HARDWARE PROPOSED TO IMPLEMENT THE OVERALL PERFORMANCE REQUIREMENTS. IS ANTICIPATED THAT THE RESULTANT CONTRACT WITH THE SUCCESSFUL BIDDER WILL INVOKE NOT ONLY THE PERFORMANCE REQUIREMENTS SPECIFIED IN THE PROCUREMENT (BID) PACKAGE BUT MAY ALSO INVOKE THE SPECIFIC HARDWARE CONFIGURATION AND PERFORMANCE CHARACTERISTICS DEFINED IN THE OFFEROR'S PROPOSAL.

THE LEVEL OF RELEVANT TECHNICAL DETAIL TO WHICH BIDDERS SPECIFY THEIR PROPOSED IMPLEMENTATION OF THE SELECTED APPROACH WILL BEAR HEAVILY IN THE PROPOSAL EVALUATION AS EVIDENCE OF THE BIDDERS BACKGROUND AND CAPABILITIES IN THE OCEANOGRAPHIC SENSOR FIELD AND OF THE DEVELOPMENT STATUS OF THE PROPOSED APPROACH.

AS MENTIONED ABOVE, BBC HAD AN OPPORTUNITY TO ADDRESS ITSELF TO THE RELIABILITY FACTOR IN ITS INITIAL AND REVISED PROPOSAL. HOWEVER, OF PARTICULAR SIGNIFICANCE, BBC HAD TO HAVE BEEN AWARE THAT NOT ONLY WAS RELIABILITY IMPORTANT, BUT, AS THE RECORD ESTABLISHES, RELIABILITY OF THE SENSORS WAS THE OVERRIDING TECHNICAL CONSIDERATION FOR THE EEP PHASE OF THE PROJECT. WHILE IT IS DIFFICULT TO UNDERSTAND WHY WESTINGHOUSE ASSIGNED INITIALLY ONLY THREE OUT OF FIFTY TECHNICAL POINTS TO RELIABILITY, BBC COULD NOT HAVE BEEN MISLED SINCE THE RFP DID NOT GIVE THE SUBCRITERIA WEIGHTS.

CONCLUDING OUR REVIEW OF THE WESTINGHOUSE EVALUATION, WE OBSERVE THAT ALL OFFERORS WERE PROVIDED WITH AND RECEIVED THE SAME EVALUATION INFORMATION AND EACH PROPOSAL WAS EVALUATED ACCORDING TO THE SAME CRITERIA. WE FOUND NO INDICATIONS OF UNFAIRNESS OR UNREASONABLENESS ATTRIBUTABLE TO WESTINGHOUSE IN ITS EVALUATION NOR WAS BBC PREJUDICED BY THE EVALUATION. SEE 51 COMP. GEN. 397 (1972) WHERE WE FOUND NO PREJUDICE EVEN THOUGH TECHNICAL EVALUATORS EMPLOYED SUPPLEMENTAL CONSIDERATIONS NOT EASILY CATEGORIZED UNDER GENERALIZED CRITERIA SET FORTH IN AN RFP. ALSO, SEE 51 COMP. GEN. 272 (1971), CITED BY YOU, WHERE WE DENIED A PREAWARD PROTEST EVEN THOUGH SPECIAL CONSIDERATION GIVEN A FACTOR BY THE SOURCE SELECTION OFFICIAL WAS NOT COMMUNICATED TO OFFERORS; AND 50 COMP. GEN. 565 (1971), AND CASES CITED THEREIN. THE DECISIONS OF OUR OFFICE WHICH BBC CITES FOR THE PRINCIPLE THAT THE DEVIATION FROM THE RFP'S EVALUATION SCHEME SHOULD CALL FOR CORRECTIVE ACTION ARE CLEARLY DISTINGUISHABLE. IN THOSE CASES, CONTRACTING AGENCY ACTIONS DEPRIVED OFFERORS OF ANY REASONABLE OPPORTUNITY TO INTELLIGENTLY AND FULLY CONSIDER AND RESPOND TO EVALUATION FACTORS CONSIDERED VITAL TO THE SELECTION OF THE CONTRACTOR. SEE 51 COMP. GEN. 272, SUPRA; 50 ID. 16 (1970); AND 50 ID. 637 (1971).

THE GOVERNMENT'S CONCURRENT EVALUATION CLOSELY PARALLELED THE WESTINGHOUSE EVALUATION WITH RESPECT TO THE CONCLUSION THAT EG&G OFFERED A CLEARLY SUPERIOR PRODUCT FROM A PERFORMANCE OR TECHNICAL STANDPOINT. THIS REGARD, WESTINGHOUSE ADVISES THAT, BUT FOR BBC'S LOWER COST AND PRICE PROPOSALS, THE FIRM WOULD HAVE BEEN ELIMINATED FROM FURTHER CONSIDERATION AND -

THE BISSETT-BERMAN PROPOSAL, EVEN AS AMENDED IN RESPONSE TO WESTINGHOUSE'S LETTER OF AUGUST 6, 1971, DISPLAYED A LACK OF KNOWLEDGE OF RELIABILITY PROGRAM REQUIREMENTS, PARTS SELECTION AND USE OF UPDATED RELIABILITY DATA FOR DETERMINATION OF FAILURE RATES. INDEED BISSETT BERMAN STATED THAT THEY DID NOT HAVE IN THEIR CURRENT EMPLOY PERSONNEL WITH SUFFICIENT EXPERIENCE AND KNOWLEDGE TO IMPLEMENT THE REQUIRED RELIABILITY EFFORT. THOUGH PERSONNEL COULD BE HIRED FOR THIS FUNCTION IT IS OF FUNDAMENTAL IMPORTANCE THAT RELIABILITY BE BUILT INTO A SYSTEM FROM ITS INCEPTION AND THAT A NEW EMPLOYEE WOULD HAVE REDUCED INFLUENCE ON INCORPORATING SUCH RELIABILITY INTO A DESIGN PROCESS THAT MUST BE COMPLETED IN SHORT PERIOD TO MEET SCHEDULE REQUIREMENTS.

NOAA AND NDBC REJECTED WESTINGHOUSE'S WEIGHTING OF COST TO TWICE THAT ASSIGNED TO PERFORMANCE. THE NOAA ENDORSEMENT OF THE ORIGINAL NDBC REJECTION STATES:

A 2:1 WEIGHTING RATIO OF COST OVER PERFORMANCE ON A DEVELOPMENTAL CONTRACT IS NOT REALISTIC. A 1:1 RATIO IS OK, BUT ON SOME KINDS OF DEVELOPMENTS EVEN 1:2 IS JUSTIFIED.

WESTINGHOUSE SHOULD BE INFORMED OF YOUR DECISION AND INSTRUCTED TO MAKE THE AWARD TO EG&G.

IN ADDITION, SINCE SCHEDULE WAS NOT ONE OF THE LISTED EVALUATION FACTORS, NOAA AND NDBC DISREGARDED SCHEDULE IN ITS EVALUATION. IT IS INTERESTING TO NOTE THAT BBC DID NOT SUFFER PREJUDICE THEREBY BECAUSE EG&G SCORED HIGHER IN THE SCHEDULE AREA.

WE AGREE WITH NOAA AND NDBC THAT FOR A RESEARCH AND DEVELOPMENTAL EFFORT, A 2-1 COST-PERFORMANCE RATIO IS UNREALISTIC. THE DECISIONS OF OUR OFFICE HAVE AFFIRMED DETERMINATIONS OF CONTRACTING AGENCIES TO AWARD RESEARCH AND DEVELOPMENT CONTRACTS TO TECHNICALLY SUPERIOR, BUT HIGHER PRICED OR COST OFFERORS. AND, CONTRACTING OFFICIALS HAVE BROAD DISCRETION IN THE AWARD OF RESEARCH AND DEVELOPMENT CONTRACTS. SEE B 172395, JULY 7, 1971; 46 COMP. GEN. 885 (1967). IN FACT, THE PROPOSED COST TO PERFORMANCE RATIO EMPLOYED BY WESTINGHOUSE APPEARS CONTRARY TO THE GENERAL CONCEPT THAT WHERE OFFERORS ARE NOT SUBSTANTIALLY EQUAL ON A TECHNICAL BASIS AND PRICE OR COST IS NOT THE SOLE EVALUATION FACTOR, COST OR PRICE SHOULD NOT BE THE CONTROLLING FACTOR IN THE AWARD OF RESEARCH AND DEVELOPMENT CONTRACTS. SEE ASPR 4-106.5 (A). FINALLY, WE BELIEVE THAT THE BASES UPON WHICH THE PROPOSED AWARD IS TO BE MADE PRESERVE THE BALANCE OF TECHNICAL EXCELLENCE AND COST EFFECTIVENESS SPECIFICALLY SPELLED OUT IN THE RFP AND BEAR A REALISTIC RELATIONSHIP TO THE OBJECTIVES OF THE RFP. SEE 50 COMP. GEN. 565, SUPRA, AT PAGE 574; AND ID. 390, SUPRA, AT PAGES 412-413.

WE DO NOT AGREE THAT, AS BBC ASSERTS, HAD WESTINGHOUSE FOLLOWED STRICTLY THE CRITERIA SET FORTH IN THE RFP, AND ACCORDED COST AND PERFORMANCE EQUAL WEIGHT, BBC WOULD BE THE CLEAR WINNER. BBC'S INFLEXIBLE ADDITION OF RAW PERFORMANCE SCORE, NOT ADJUSTED FOR CREDIBILITY, AND COST SCORES ADJUSTED FOR CREDIBILITY FAILS TO RECOGNIZE THE FACT THAT COST WAS NOT SPECIFICALLY WEIGHTED IN THE RFP AND A BLEND OF THE TWO FACTORS, CONSISTENT WITH PROJECT OBJECTIVES, WAS TO BE THE ACTUAL BASIS FOR AWARD. IT IS PARTICULARLY IMPORTANT TO NOTE HERE THAT WESTINGHOUSE, AFTER CONSIDERATION OF THE GOVERNMENT'S ACTUAL PRIORITIES, NEGOTIATED WITH AND RECOMMENDED EG&G FOR THE AWARD OF THE SUBCONTRACT.

WE FEEL IT PERTINENT TO DISCUSS BBC'S CONTENTION THAT NASA, NOAA AND NDBC "TOTALLY MISCONSTRUED THE FUNCTION OF THE SUBCONTRACT APPROVAL CLAUSE. THE GOVERNMENT'S VIEW OF THAT CLAUSE *** IS THAT IT PERMITS THE GOVERNMENT'S 'DIRECTING THE SELECTION OF THE SUBCONTRACTOR OR ... ISSUING A RECOMMENDATION SUCH AS TO ACHIEVE THE SAME RESULT.'" CITING THE STATUTORY AUTHORITY OF 10 U.S.C. 2306(E), WHICH THE ASPR SUBCONTRACT APPROVAL CLAUSES IMPLEMENT, BBC ARGUES THAT THE GOVERNMENT'S ACTIONS IN CAUSING WESTINGHOUSE TO ALTER ITS ORIGINAL SELECTION OF BBC VIOLATED THE STATUTORY PURPOSE TO PREVENT FRAUD AND COLLUSION IN THE AWARD OF SUBCONTRACTS.

WE SEE NO IMPROPRIETY IN THE CORRECTION OF THE UNREALISTIC WEIGHT GIVEN COST BY WESTINGHOUSE SINCE THE GOVERNMENT'S INTEREST IN THE AWARD OF THIS SUBCONTRACT PROPERLY INVOLVES MORE THAN MERELY A PERFUNCTORY APPROVAL. THIS PROPOSED SUBCONTRACT REPRESENTS A VALUABLE AND NECESSARY IMPLEMENTATION OF THE SENSOR SYSTEM PORTION OF THE EEP PHASE OF THE PROJECT. THE DIRECTOR OF NDBC EXPLAINS THE VALUE OF THE SECOND SOURCE FOR OCEANOGRAPHIC SENSORS AND THE REASON WHY THE GOVERNMENT DID NOT AWARD TWO SEPARATE PRIME CONTRACTS, AS FOLLOWS:

THE CONCEPT OF A DUAL SOURCE FOR OCEANOGRAPHIC SENSORS GREW FROM THE DESIRE TO INSURE COMPETITION FOR FUTURE PROCUREMENTS, TO PROVIDE AN ALTERNATE SOURCE TO MINIMIZE RISK OF FAILURE AND TO PROVIDE A VEHICLE FOR TESTING ALTERNATE CONCEPTS THAT SHOW NEARLY EQUAL PROMISE FOR SUCCESS. CONSIDERATION WAS GIVEN TO SELECTING TWO CONTRACTORS AND AWARDING SEPARATE PRIME CONTRACTS. HOWEVER, THIS WOULD HAVE REQUIRED AN INTOLERABLE BURDEN ON THE CENTER TO PROVIDE RESOURCES TO MANAGE BOTH CONTRACTS AND TO LOOK AFTER THE COMPLEX INTERFACE THAT WOULD HAVE RESULTED. CONSEQUENTLY, IT WAS DETERMINED THAT SELECTING A PRIME AND HAVING HIM SUBCONTRACT FOR ALL, OR AT LEAST HALF, THE OCEANOGRAPHIC SENSORS OFFERED THE BEST COMPROMISE SOLUTION. ABILITY TO SELECT AND MANAGE A SECOND SOURCE WAS A REQUIREMENT CONSIDERED IN SELECTING A PRIME CONTRACTOR.

FURTHERMORE, SINCE THE GOVERNMENT WILL BEAR THE ULTIMATE COST OF THIS SUBCONTRACT PROCUREMENT BY REASON OF ITS COST-REIMBURSEMENT-TYPE PRIME CONTRACT WITH WESTINGHOUSE, ITS APPROVAL OF THE SUBCONTRACT AWARD SHOULD NOT BE PRO FORMA BUT BASED ON A CAREFUL CONSIDERATION OF THE WHOLE RECORD. SEE 49 COMP. GEN., SUPRA, QUOTED ABOVE; 46 ID. 142, 145 (1966); AND ASPR 23-202, REFERENCED IN THE PRIME CONTRACT, ENTITLED "CONSENT TO SUBCONTRACTS," WHICH ADVISES CONTRACTING OFFICERS TO CONDUCT THOROUGH AND CAREFUL EVALUATIONS PRIOR TO GRANTING THE REQUISITE CONSENT, INCLUDING "THE BASIS FOR SELECTING THE PROPOSED SUBCONTRACTOR."

FINALLY, WE BELIEVE THE GOVERNMENT'S ACTIONS IN A REVIEW PRIOR TO GRANTING APPROVAL OF OR CONSENT TO THE AWARD OF A SUBCONTRACT TO DEVELOP A SECOND SOURCE, AS HERE, SHOULD EXHIBIT A HIGH DEGREE OF THOROUGHNESS AND CARE. FOR THE AFORE GOING REASONS, WE CONCLUDE THAT THE DIRECT AND SUBSTANTIAL INVOLVEMENT OF NASA, NOAA AND NDBC IN THE SUBCONTRACT AWARD PROCESS WAS WARRANTED TO PROTECT THE GOVERNMENT'S INTEREST.

UPON OUR REVIEW OF THE ENTIRE RECORD, WE FIND NO BASIS UPON WHICH TO INTERPOSE AN OBJECTION TO THE APPROVAL AND CONSENT GIVEN BY NASA TO WESTINGHOUSE TO PLACE THE SECOND-SOURCE SUBCONTRACT WITH EG&G. SEE 49 COMP. GEN., SUPRA; AND B-173188, JANUARY 13, 1972.