B-235502, Sep 18, 1989, 89-2 CPD 237

B-235502, Sep 18, 1989, 89-2 CPD 237

PROCUREMENT - Competitive Negotiation - Requests for proposals - Evaluation criteria - Cost/technical tradeoffs - Weighting DIGEST: 1. Where a solicitation does not expressly state the relative importance of price versus technical factors, price and technical factors are considered to be approximately equal in importance. PROCUREMENT - Competitive Negotiation - Requests for proposals - Evaluation criteria - Cost/technical tradeoffs - Weighting 2. In negotiated procurements, award need not be made to the firm offering the lowest price where the solicitation does not state that award will be made on that basis but instead provides that award will be made to the offeror whose proposal is most advantageous to the government, price and other factors considered. PROCUREMENT - Bid Protests - GAO procedures - Protest timeliness - Apparent solicitation improprieties 3. Where solicitation provides award may be made to other than low offeror, protest of award to higher priced offeror is untimely. PROCUREMENT - Bid Protests - GAO procedures - Protest timeliness - Apparent solicitation improprieties 4. Where protester contends that Buy American Act differential is nullified by evaluation scheme giving great weight to experience, which only foreign producer possessed, protest is untimely when filed after closing as the evaluation scheme was apparent in the solicitation. PROCUREMENT - Competitive Negotiation - Contract awards - Source selection boards - Administrative discretion 5. Source selection official has discretion to determine whether technical advantage of awardee is worth its higher price notwithstanding the fact that price is an evaluation factor equal to technical factors.

Babcock & Wilcox Company:

Babcock & Wilcox Company (B&W) protests the award of a subcontract under request for proposals (RFP) No. SURA-88-R-125, to Interatom GmbH, issued by Southeastern Universities Research Association (SURA), a prime contractor operating and managing the Department of Energy's (DOE) Continuous Electron Beam Accelerator Facility (CEBAF). The subcontract is for the production of 360 LE-5 superconducting accelerating cavities for CEBAF.

The protest is denied in part and dismissed in part.

Initially we note that all parties agree that the General Accounting Office (GAO) has jurisdiction to review this protest under 4 C.F.R. Sec. 21.3(m)(10) (1989), which provides for GAO's review of awards of subcontracts by government prime contractors where the awards are made "by or for" the government. We consider contractors that manage and operate DOE facilities to be acting "for" the government. Container Prods. Corp., B-234368, June 8, 1989, 89-1 CPD Para. 536.

B&W states that it submitted the lowest cost proposal once customs duties are added to the awardee's offer and the Buy American differential is applied. B&W states further that in view of the requirement that offerors need have built one or more acceptable prototype LE-5 superconducting accelerator cavities, this procurement was really a "build to print" solicitation from qualified sources and the elaborate technical evaluation scheme used should be ruled irrelevant. B&W concludes that since two or more offerors can meet the minimum requirements, the only relevant award factor is price and since B&W was low and its prototype met or exceeded CEBAF's minimum requirements, it should receive the award.

Section L. 10 of the solicitation entitled "SUBCONTRACT AWARD" notified offerors that:

"a. SURA will award a subcontract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to SURA, cost or price and other factors, specified elsewhere in this solicitation, considered.

"b. SURA may ... (2) accept other than the lowest offer."

Section M. 11 entitled "BASIS FOR AWARD" advised offerors that "Although price and price related factors may not be the controlling factor for award, they will be a substantial part of the evaluation and selection process."

Although the above provisions do not state what weight price will have, they clearly indicate price may not be the controlling factor in making an award. In fact, these provisions allow SURA to chose a higher rated technical proposal even though another offeror quoted a lower price. this connection, we have held that where, as here, an RFP indicates that cost will be considered, without explicitly indicating the relative weight to be given to cost versus technical factors, it must be presumed that cost and technical considerations will be accorded approximately equal weight and importance in the evaluation. Johns Hopkins Univ., B-233384, Mar. 6, 1989, 89-1 CPD Para. 240. In addition, we have consistently recognized that in a negotiated procurement, there is no requirement that award be made on the basis of lowest cost unless the RFP in fact specifies that price will be the determinative factor. McShade Gov't Contracting Servs., B-232977, Feb. 6, 1989,89-1 CPD Para. 118.

Under our Bid Protest Regulations, protests based upon alleged improprieties in a solicitation which are apparent prior to the closing date for receipt of initial proposals shall be filed prior to the closing date for receipt of initial proposals. 4 C.F.R. Sec. 21.2(a)(1). Here, it was evident from the solicitation that SURA may accept other than the low offeror if technical considerations warrant such a result. Since B&W did not protest this evaluation scheme prior to closing, its contention that the technical evaluation scheme should be considered irrelevant and low price should be the controlling factor is untimely raised.

B&W's second basis of protest is that the evaluation scheme circumvents the Buy American Act in that nearly one-third of the technical points favor prior experience in the production of accelerator cavities. B&W contends that it is well known that there are no existing domestic sources for accelerators and therefore domestic sources are greatly disadvantaged by the emphasis on prior experience.

The solicitation's section M.11, "BASIS FOR AWARD," listed the technical evaluation criteria in descending order of importance with the highest rated group of factors listed as "Qualification and Experience." The second and third rated group of factors involved resources and management, respectively. Under the qualification and experience factor, the highest rated subcriterion of seven subcriteria listed is "Evidence of number, type, and performance of superconducting cavities built." Two other technical criteria in this group were entitled "Evidence of related work done, which demonstrates the ability to build superconducting cavities" and "Useful contribution company or employed personnel has made in the past to cavity or related technologies."

All of these subcriterion and, most particularly, the highest weighted, relate directly to the experience of an offeror in the production of accelerator cavities. Accordingly, it should have been evident from the solicitation itself that prior experience would be heavily weighted in relation to other technical factors. Thus, B&W's protest against the evaluation of prior cavity experience is untimely as B&W was on notice of the evaluation factors and their relative weighting and it should have protested the alleged solicitation defect prior to closing. 4 C.F.R. Sec. 21.2(a)(1).

B&W also questions whether the algorithm (formula to normalize technical scores) used to evaluate proposals has any relation to the evaluation scheme set out in the solicitation. B&W contends that the algorithm, by converting technical scores to dollars, completely obscures the low price B&W offered. B&W offers alternatively its own algorithm and an explanation of how it would have improved its technical score had it known that low price would play no role in the source selection decision. B&W's analysis thus purportedly shows that it would have improved its technical score with a minimal impact on its price so that it would have won the competition.

We note that although B&W states in its rebuttal to DOE's reply to its post conference comments that its technical score should have been greater because of improper technical evaluation of its proposal, B&W had earlier informed us inits post conference comments that it was not placing the technical scoring of its proposal in issue in this protest. Accordingly, our analysis is limited to whether B&W's proposal was evaluated properly according to the solicitation's price/technical scoring scheme.

Here, the solicitation clearly stated that award would be made to the offeror providing the most advantageous proposal considering price and technical factors. The source selection official had the discretion to determine whether the technical advantage associated with Interatom's proposal was worth its higher price. This discretion exists notwithstanding the fact that price is to be given equal consideration as an evaluation factor. McShade Gov't Contracting Servs., B-232977, supra. Agency officials have broad discretion in determining the manner and extent to which they will make use of the technical and cost evaluation results and, therefore, cost/technical tradeoffs may be made subject only to the test of rationality and consistency with the established evaluation factors. Id.

DOE contends that even if B&W were correct that the algorithm is inconsistent with the solicitation, B&W's protest should be denied because it was not competitively prejudiced. As stated above, since the solicitation did not clearly specify the relative importance of price and technical factors, they are accorded approximately equal weight in the evaluation. DOE points out that B&W's evaluated cost was $10,584,405 to Interatom's $11,221,089 and B&W's technical score out of 100 possible points was 82.8 to Interatom's 96.2. Therefore, B&W's price is 6 percent lower than Interatom's while Interatom's technical score is 16 percent higher than B&W's, weighting price and technical equally. Therefore, Interatom's proposal provided a significant overall advantage over B&W's proposal.

We have recognized that where an agency finds during the course of a protest that a proposal has been misevaluated, it has the discretion to reevaluate proposals, and may reasonably find that the ultimate award selection has not been affected; our Office's review of the reevaluation is to determine whether the source selection decision is still reasonable. Hill's Capitol Sec., Inc., B-233411, Mar. 15, 1989, 89-1 CPD Para. 274. We find that the decision to award to Interatom is reasonable given the fact its high technical score outweighs B&W's smaller price advantage. In this regard, the evaluation showed that whereas SURA considered Interatom to have only one weakness, the logistic and administrative concerns associated with a foreign supplier, B&W presented 10 weaknesses with lack of experience, key personnel, quality control and prior production flaws among these weaknesses. In view of SURA's evaluation and the cost/technical tradeoff it made, we have no basis to find its decision was unreasonable.

Finally, with respect to B&W's contention in its post conference comments that the Buy American Act differential was improperly applied, we note that Interatom's evaluated price included the Buy American Act differential and this was compared to B&W's price to arrive at a 6 percent difference in price between B&W's and Interatom's offer.

The protest is denied in part and dismissed in part.