Matter of: Simmonds Precision Products, Inc. File: B-244559.3 Date: June 23, 1993

Matter of: Simmonds Precision Products, Inc. File: B-244559.3 Date: June 23, 1993

PROCUREMENT Competitive Negotiation Discussion Offers Clarification Propriety Where the procuring agency, after receipt of offers in a negotiated procurement, determines that an alternate approach not reasonably contemplated by the solicitation is acceptable, the agency properly apprised other offerors through discussions that the solicitation authorized alternate proposals, without suggesting a particular design approach or disclosing another offeror's proposal information. PROCUREMENT Competitive Negotiation Discussion Bias Protest that the procuring agency engaged in unequal discussions is denied, although the agency questioned the awardee, but not the protester, as to its consideration of alternate proposals under a clause that required offerors to notify the procuring activity of deviations from the solicitation specifications, since the protester had already invoked this clause in its initial proposal to submit an alternate proposal. PROCUREMENT Competitive Negotiation Alternate offers Acceptance Propriety Awardee's alternate proposal submitted during discussions and at the request of the procuring agency is not barred by the solicitation's late proposal provision. PROCUREMENT Competitive Negotiation Offers Evaluation errors Non- prejudicial allegation In a negotiated procurement that provided for award to the lowest-priced, technically acceptable proposal, protest that the awardee's alternate technical proposal exceeded the solicitation's page limits is denied, where the protester's proposal was found to be technically acceptable within the confines of these page limits, but was not selected for award because of its higher price and therefore the protester was not prejudiced even accepting the protester's interpretation of the solicitation page limitation provision. PROCUREMENT Competitive Negotiation Offers Cost realism Evaluation Administrative discretion The procuring agency reasonably did not conduct a cost realism analysis in a negotiated procurement for a fixed price contract, where the solicitation, although informing offerors that low "cost" would be considered in the technical evaluation, did not provide for the submission of any cost data that would permit a cost realism analysis and only solicited offerors' proposed prices.

Attorneys

DECISION Simmonds Precision Products, Inc. protests the award of a contract to Lear Astronics, Inc. under request for proposals (RFP) No. F34601-91-R-29321, issued by the Department of the Air Force, for the fuel savings advisory system (FSAS) used on the KC-135 tanker aircraft. Simmonds alleges that the procurement was tainted by unequal discussions; technical transfusion and leveling; disregard of the RFP's page limi- tations and late proposal provisions in the evaluation of the awardee's alternate proposal; and the failure to evaluate cost realism.

We deny the protest.[1]

The RFP contemplated the award of a firm, fixed-price contract for the FSAS, which consists of three components: the fuel management advisory computer (FMC), the integrated fuel management panel (IFMP) and the fuel savings advisory computer (FSAC). Engineering drawings and performance and design specifications for each component were provided in two technical exhibits. The IFMP and FMC function together as an integrated fuel management/center of gravity system to compute and display the data necessary for direct control of the aircraft's fuel system and center of gravity. The FSAC is a computer that processes continuous in-flight advisory data for the purpose of minimizing fuel consumption. The technical exhibits provided for the form, fit and function replacement of existing FSAS components and required the contractor to manufacture the three components in accordance with precise case dimensions, as set forth in outline drawings, so that the components could be installed in existing equipment locations without the need for aircraft modification. The KC- 135 was configured to accept the IFMP in the cockpit between the pilot and co-pilot seats, the FMC on a mounting tray in the belly of the aircraft, and the FSAC on a bulkhead behind the cockpit.

Prefacing the technical exhibits was a clause at paragraph Sec. 1.3 entitled "Deviations," which provided:

"Any projected configuration for this application which will result in improved system performance, reduced life cycle cost, or reduced development cost through deviation from this specification shall be brought to the attention of the procuring activity."

The RFP requested fixed prices for six first articles per component and for various production quantities for each component. The RFP provided for award to the technically acceptable proposal with the lowest evaluated price, and listed the offeror's understanding of the problem, the soundness of the approach, and the proposal's compliance with the RFP requirements, as the technical evaluation criteria to be evaluated on a pass/fail basis. Offerors were also informed that:

"A proposal unrealistic in terms of technical commitments, or unrealistically low in cost, will be deemed a reflection of an inherent lack of technical competence or indicative of a failure to comprehend the complexity and risks of the contract requirements and may be penalized during the evaluation to the extent of rejection."

The proposal preparation instructions in the RFP sought price, technical, and support equipment proposals in three separate volumes. Page limitations were stated for the submission of technical proposals, allowing 300 pages for the FMC and IFMP, together, and 300 pages for the FSAC. Offerors were required to discuss how they proposed to comply with each RFP requirement by reference to specific paragraph numbers in the specifications and the statement of work.

A preproposal conference for this procurement was conducted on January 15, 1991, and both the protester and the awardee attended. Questions and answers from this preproposal conference were incorporated into the RFP by amendment. One conference question was whether the functions of the three components "could be consolidated as long as envelope mounting remains approximately the same," to which the agency responded:

"The mounting must stay exactly the same. Since this is a form, fit, function type replacement, the function of the new FSAC must do the same function as the old. The FMC/IFMP are intended to be replaced as a set. The new FMC/IFMP combination must perform same functions as old FMC/IFMP combination."

Three offerors, including Lear and Simmonds, submitted initial proposals by the June 21, 1991, proposal receipt date. In its initial proposal, Simmonds included two technical solutions to the replacement of the FSAS components. Simmonds's primary approach required the direct replacement of each component, the IFMP, the FSAC and the FMC, i.e., the replacement of all "3-boxes" with three new boxes. Simmonds's alternate approach directly replaced the IFMP, but combined the FSAC and the FMC into one replacement unit, i.e., the replacement of three boxes with "2-boxes."

In the cover letter to its proposal, Simmonds stated that it considered its alternate 2-box proposal to be fully compliant to the RFP requirements, but that its "concern that the Air Force might disagree with [its] interpretation . . . prevented [it] from offering this approach as [its] only solution." Simmonds, in introducing its alternate proposal, further stated:

"We believe that the elimination of the FSAC [line replacement unit] and the incorporation of its functions into the FMC with no loss of [FSAS] performance is in accordance with the intent of the requirement of paragraph 1.3, `Deviations.' . . . This paragraph requires respondents to this solicitation to bring to the attention of [the agency] any alternate configuration that, among other things, reduces life cycle costs."

The elimination of one line replacement unit gave Simmonds's 2-box approach a significant price advantage over its 3-box approach.

Lear offered only a 3-box approach in its initial proposal. At the hearing conducted on this matter,[2] Lear provided testimony that it had considered whether to offer a 2-box approach in response to the RFP. Hearing Transcript (Tr.) at 14, 20, 37. Lear stated that it had integrated box functions on other avionics contracts, that this is the trend in microprocessor-based avionics systems, but that it did not think that the RFP authorized the submission of alternate proposals because "the [specification] was a form, fit, function replacement of the existing [three] boxes and [Lear] felt that it was going to be viewed noncompliant to go to a 2-box approach." Tr. at 5, 20, 23. Lear stated that it interpreted the RFP deviations clause as a requirement to identify any exceptions taken to the specifications in a compliant 3-box approach. Tr. at 31-32. Consequently, Lear noted no deviations in its initial 3-box approach proposal, per the RFP deviations clause.

Discussions were conducted with all three offerors on November 7, through a series of written questions tailored to the individual proposals. Each offeror was instructed to submit change pages to their technical volumes, if their technical proposals changed in response to the questions. In addition to seeking clarification of Lear's initial proposal, the Air Force directed the firm's attention to the RFP deviations clause and asked "[w]hat alternate approaches were considered based on the above?" The contracting officer testified that this question was included to clarify for Lear that the Air Force intended to consider alternate proposals pursuant to the solicitation's deviations clause. Tr. at 71-72, 83-84, 161. The agency did not direct a similar question to Simmonds, since its proposal already included an alternate approach.[3] Tr. at 79-80.

On December 2, Lear responded to the agency's questions and stated that its responses did not require any change pages to its original proposal. In response to the question regarding Lear's consideration of alternate approaches under the deviations clause, Lear listed two "deviations that were evaluated, but not submitted, that could yield reductions in costs or improvements in system performance."[4] One of these "deviations" was a 2- box approach that involved the integration of the FSAC and FMC into a single box.[5] Lear stated in its response that it did not submit an alternate proposal because of the "emphasis of the RFP on form/fit/ function compatibility with the existing system."

After reviewing Lear's responses to the discussion questions, the contracting officer asked Lear, on December 4, whether the firm had already prepared a 2-box proposal. On December 6, the agency wrote the firm, asking whether it was interested in submitting a 2-box proposal, and how much preparation time it would require. After receiving this letter, Lear called the contracting officer for instructions on the alternate proposal's format, and was informed that the contracting officer envisioned a detailed technical proposal with no pricing data. Tr. at 8. There was no discussion of page limits applicable to the submission of an alternate proposal. Tr. at 18.

Lear notified the Air Force in a December 11 letter that it could submit an alternate proposal by January 10, 1992, which was acceptable to the agency. On the designated date, Lear submitted its 2-box proposal, which was approximately 220 pages in length. In accordance with the contracting officer's instructions, the alternate proposal did not contain any pricing data.

On March 9, the Air Force concluded its initial technical review and found the proposals of Simmonds and Lear to be technically acceptable, both as to their proposed 2-box and 3-box configurations.[6] Further, the agency concluded that the offerors' 2-box configurations were technically preferable to the RFP's 3-box configuration.[7] Consequently, the Air Force requested best and final offers (BAFO) from Simmonds and Lear on March 17 based only upon their 2-box approaches. Both offerors responded by the May 22 closing date with BAFO price proposals based upon their respective 2-box approaches, as revised during discussions. After evaluating BAFOs, the agency determined Lear to be the technically acceptable offeror with the lowest evaluated price, some 13 percent lower than Simmonds's evaluated price.[8] The Air Force awarded the contract to Lear on August 21, 1992, based upon its 2-box design, and this protest followed.

TECHNICAL TRANSFUSION AND LEVELING

The protester argues that the Air Force engaged in technical transfusion and leveling within the meaning of the Federal Acquisition Regulations (FAR), by asking Lear whether it had considered any alternate approaches under the deviations clause. Technical transfusion is the "government disclosure of technical information pertaining to a proposal that results in improvement of a competing proposal," while technical leveling involves "helping an offeror to bring its proposal up to the level of other proposals through successive rounds of discussion, such as by pointing out weaknesses resulting from the offeror's lack of diligence, competence, or inventiveness in preparing the proposal." FAR Secs. 15.610(d), (e)(1).

Although the protester recognizes that the Air Force's question to Lear regarding its consideration of alternate approaches was neutral on its face, the protester nonetheless argues that the question identified Simmonds's use of a 2-box approach, because the consolidation of components was the most common method of upgrading microprocessor-based avionics systems such as this one. Simmonds bases this argument on testimony received at the hearing held on this matter, which showed that a reduction in the number of components was a "fairly logical extrapolation of the [RFP] requirements," and that the Air Force was upgrading other avionics systems in this way. Tr. at 183-184, 201-202. Indeed, Simmonds notes that the agency's lead technical evaluator for this procurement had designed a 2-box system specifically for the KC-135 aircraft several years earlier, although he decided not to pursue a revision in the 3-box specifications. Tr. at 136-137. Since the 2-box approach was such an obvious technical solution, Simmonds claims that any question aimed at Lear's consideration of alternate approaches under the deviations clause could have meant nothing other than a solicitation for a 2-box proposal.[9] Simmonds thus views the Air Force's question as sufficient to constitute technical transfusion or technical leveling, either standing alone or when coupled with the agency's subsequent communications with Lear to schedule the submission of its proposed 2-box approach.

Simmonds's argument regarding the obviousness of the 2-box approach, far from establishing the occurrence of either technical transfusion or leveling, actually militates against such a conclusion. Technical transfusion connotes the disclosure to other offerors in a negotiated procurement of one offeror's unique or ingenious solution to a problem. Hattal & Assocs., 70 Comp.Gen. 632 (1991), 91-2 CPD Para. 90; SRI Int'l, 66 Comp.Gen. 35 (1986), 86-2 CPD Para. 404; Lockheed Propulsion Co.; Thiokol Corp., 53 Comp.Gen. 977 (1974), 74-1 CPD Para. 339. Simmonds admits, and the record supports, that its 2-box proposal was not an innovative technical approach, but the product of a "natural design evolution" within the industry to simplify microprocessor-based avionics systems. See Lockheed Propulsion Co.; Thiokol Corp., supra. Lear was familiar with this trend, having integrated box functions on similar avionics contracts, and would have offered a 2-box initial proposal for this RFP had it believed the RFP allowed such an approach. Tr. at 14, 20, and 37. The Air Force's question to Lear merely clarified that the agency was prepared to consider alternate approaches under the RFP, without suggesting a particular design approach or disclosing another offeror's proposal information.[10] See Hattal & Assocs., supra; Development Alternatives, Inc., B-235663, Sept. 29, 1989, 89-2 CPD Para. 296.

In sum, there is no evidence that Lear needed or received any transfusion of Simmonds's proposal information or other coaching to develop its own 2- box approach. See Lockheed Propulsion Co.; Thiokol Corp., supra; Tr. at 21, 26, 103, 111-112, 116, 187, 189, 200-210, 214, 217-218, 238-239, 246, 267. As noted above, Lear's integration of the FSAC and FMC in its 2-box proposal significantly differs from Simmonds's technical approach. Tr. at 180. This basic design difference between the two offerors further demonstrates the absence of any technical transfusion. See Quadrex HPS, Inc., B-223943, Nov. 10, 1986, 86-2 CPD Para. 545.

The agency's subsequent communications to schedule Lear's submission of a 2-box approach were not improper, since the awardee had already identified the 2-box approach without any Air Force assistance. See Rix Indus., Inc., B-241498, Feb. 13, 1991, 91-1 CPD Para. 165. While Simmonds argues that the Air Force's attempts to schedule Lear's submission of its 2-box approach constituted "successive rounds of discussion," during which Lear brought its proposal up to the technical level of Simmonds's, these communications were merely administrative in nature and did not identify any proposal deficiencies. Lear received only one discussion question regarding its consideration of alternate proposals and only one opportunity to correct its proposal as a result of this discussions question, i.e., the submission of its January 10, 1992, alternate proposal. Since successive rounds of discussions did not occur, the concept of technical leveling is inapplicable. See Impact Instrumentation, Inc., B-250968.2, Mar. 17, 1993, 93-1 CPD Para. 241.

To the extent that the Air Force's question to Lear merely provided the firm an opportunity to submit an alternate approach, the question was not only proper, but may have been obligatory under the circumstances of this case. This is so because the RFP can be reasonably read as precluding the consideration of alternate proposals, notwithstanding the language of the deviations clause. In our view, the RFP, including the deviations clause, is ambiguous and susceptible to two reasonable interpretations: Simmonds's interpretation that an upgraded noncompliant configuration would be acceptable as a "deviation from this specification" and Lear's interpretation that offerors had to identify exceptions taken to a 3-box approach, and such could not be accepted without modification to the specifications.[11]

As support for Lear's interpretation, we observe that the deviations clause appeared in the context of an RFP that specified the form, fit, and functional replacement of three FSAS components, built according to detailed engineering drawings and design specifications that gave precise case dimensions for all three components and required their installation into existing equipment locations, i.e., the IFMP in the cockpit of the aircraft, the FMC in the belly of the aircraft, and the FSAC on a bulkhead behind the cockpit. Also, the RFP provided for award selection based upon a technical and price evaluation of each of the three FSAS components, with the technical evaluation specifically measuring each component's compliance with the specifications on a pass/fail basis.[12] Toward this end, the proposal preparation instructions required offerors to explain their proposed compliance with each RFP requirement by reference to specific paragraph numbers in the specifications and the statement of work. Given the RFP's form, fit, and functional requirements, as defined through detailed engineering drawings for three separate FSAS components, the RFP appeared to contemplate only a 3-box design and reasonably suggested that any approach which eliminated one of the components would not be considered.

The agency's remarks at the preproposal conference also indicated that the specifications contemplated only a 3-box design. In responding to whether box functions could be consolidated, the agency underscored that "this is a form, fit, function type replacement," and that "the mounting must stay exactly the same" for the replacement units. Although Simmonds observes that the agency went on to state that "the FMC/IFMP are intended to be replaced as a set," the agency made clear that the prototype for the "new FMC/IFMP combination" was the "old FMC/IFMP combination," which consisted of two separate boxes.[13] Thus, the agency's remarks do not reasonably suggest that the RFP contemplated the elimination of one of the three line replacement units.[14]

These limitations in the RFP undercut Simmonds's view of the deviations clause as a license to offer an approach departing from the technical configuration contemplated by the specifications. Rather, it supports a view that the deviations clause was a safeguard to assure that specific deviations were "brought to the attention of the procuring agency" to determine if the deviations were within the form, fit, and function parameters of the RFP.[15] See Tr. at 43-44, 105, 226; American Chain & Cable Co., B-188749, Aug. 19, 1977, 77-2 CPD Para. 129 (language in RFP, which invited alternate proposals and, at the same time, specified the exact number of devices to be used in detection system, was ambiguous and did not afford offerors same opportunity to submit alternate proposals on an equal basis).

Since the RFP was ambiguous regarding the acceptability of alternate proposals, we think it was incumbent upon the agency to clarify for Lear its intent to use the deviations clause as an alternate proposal provision. Where an agency, after the receipt of proposals, determines that an alternate approach not provided for by the RFP is as acceptable or more desirable than the approach called for under the RFP, the agency must either amend the solicitation or engage in appropriate discussions to allow all competitive range firms an opportunity to compete on a common basis. Labat-Anderson Inc., B-246071; B-246071.2; Feb. 18, 1992, 92-1 CPD Para. 193; Rix Indus., Inc., supra; Loral Terracom; Marconi Italiana, B-224908; B-244908.2, Feb. 18, 1987, 87-1 CPD Para. 182, aff'd, The Aydin Corp.; Dept. of the Army--Recon., B-224908.3; B-244908.4, May 19, 1987, 87-1 CPD Para. 527; Union Carbide Corp., 55 Comp.Gen. 802 (1976), 76-1 CPD Para. 134; Connelly Containers, Inc., B-183193, June 16, 1975, 75-1 CPD Para. 367. Such action on the part of the agency does not constitute technical transfusion or technical leveling within the meaning of the FAR so long as the agency does not disclose information regarding the particular nature of the alternate approach, but only permits offerors to submit alternate approaches. Labat-Anderson Inc., supra; Rix Indus., Inc., supra. The agency here properly discharged this duty by asking Lear whether it had considered any alternate approaches under the deviations clause. The question was appropriately neutral, avoiding the proscription against technical transfusion or leveling.

UNEQUAL DISCUSSIONS

The protester argues that it did not receive equal treatment during discussions, since the Air Force failed to ask Simmonds, as it did with Lear, whether it had considered any alternate approaches under the RFP deviations clause. Simmonds contends that the Air Force's actions in this regard caused it to suffer competitive prejudice and require the cancellation of Lear's award.

In response, the Air Force and Lear claim that there was no duty to question Simmonds as to the RFP deviations clause, since the protester, having already submitted an alternate proposal under the auspices of this clause, understood the clause to permit the consideration of alternate proposals. On the other hand, Lear did not interpret the deviations clause to permit the consideration of alternate proposals, since it understood the clause as requesting whether the offeror was deviating from the specification requirements. The agency argues that since it interpreted the deviations clause to permit alternate proposals, it properly viewed Lear's perceived misunderstanding of this clause as a proposal weakness that Simmonds did not share. In the agency's view, this distinction justified the agency's decision to ask Lear, but not Simmonds, whether it had considered any alternate approaches under the deviations clause.

Simmonds replies that its 2-box proposal fully complied with the specifications and was not offered as a deviation under the RFP deviations clause. In arguing for the compliance of its 2-box approach, Simmonds relies upon the colloquy at the preproposal conference concerning whether "box functions could be consolidated as long as envelope mounting remains approximately the same?" The agency responded to this question, in part, by stating that, "the FMC/IFMP are intended to be replaced as a set. The new FMC/IFMP combination must perform same functions as [the] old FMC/IFMP combination." The protester interprets this remark to mean that the specifications contemplated a proposal like the one it submitted, which "combined" the FSAC and FMC into one replacement unit. Since its 2-box approach allegedly complied with the specifications, the protester argues that it, too, was entitled to an opportunity to discuss whether it had considered any alternate approaches that deviated from the specifications.

We do not find that the Air Force conducted prejudicially unequal discussions with Simmonds and Lear. Contrary to the protester's allegations, Simmonds recognized its 2-box proposal arguably deviated from the specifications and invoked the deviations clause to justify the proposal's submission. In the introduction to its alternate proposal, Simmonds expressly offered its 2-box approach as an "alternate con- figuration" within the "intent of the requirement of paragraph 1.3, `Deviations.'" Likewise, Simmonds stated in its proposal cover letter that, while it considered its alternate 2-box proposal as fully compliant with the RFP requirements, its "concern that the Air Force might disagree with our interpretation . . . prevented us from offering this approach as our only solution." As these proposal representations make clear, the protester knew that its 2-box proposal potentially deviated from the RFP requirements and interpreted the RFP deviations clause to permit the submission of a noncompliant proposal. Consequently, Simmonds knew, as the Air Force argues, that it could offer other specification deviations if it so chose.

On the other hand, as the Air Force reasonably found, Lear did not interpret the deviations clause as permitting alternate proposals. Lear's interpretation justified explicit discussions to assure that the Air Force conveyed its intention to use the clause as an alternate proposal provision. See Logistic Sys. Inc., 57 Comp.Gen. 548 (1980), 80-1 CPD Para. 442. This is particularly true since the RFP did not indicate to offerors that the government might consider a "noncompliant" alternate proposal for award selection purposes.[16] See Akal Sec., Inc., B-243940.2, Sept. 30, 1991, 91-2 CPD Para. 308.

We find the fact that Lear (and the third offeror) received discussion questions regarding the use of the deviation clause to submit alternate proposals, while Simmonds did not, does not equate to unequal treatment of offerors. As noted above, Simmonds already knew that it could submit an alternate proposal under the deviations clause, while Lear did not. This obvious difference in the offerors' interpretations of the clause justified the different discussions received by the offerors. See Marine Animal Prods. Int'l, Inc., B-247150.2, July 13, 1992, 92-2 CPD Para. 16; Pan Am World Servs., Inc. et al., B-231840 et al., Nov. 7, 1988, 88-2 CPD Para. 446; TRS Design & Consulting Servs., B-214011, May 29, 1984, 84-1 CPD Para. 578. In any case, Simmonds has not shown that it was prejudiced by the allegedly unequal discussions. While Simmonds argues that it could have submitted "several areas of cost reduction potential" or "different configurations," had it been given the opportunity to offer deviations, Simmonds has never identified what these alternate technical approaches might be. See MetaMetrics, Inc., B-248603.2, Oct. 30, 1992, 92-2 CPD Para. 306.

LATE PROPOSAL

Simmonds next contends that the agency was barred by the RFP provision governing late proposals, FAR Sec. 52.215-10, from considering Lear's 2- box alternate proposal. This provision provides that late proposals and modifications to proposals will not be considered, except in situations not relevant here. In defining modifications, the FAR exempts "normal revisions of offers made during the conduct of negotiations by offerors selected for discussion." FAR Sec. 15.412(a). Simmonds argues that Lear's alternate proposal is not a normal revision because it does not, in fact, "revise" Lear's initial 3-box proposal, but supplements this 3-box proposal with a stand-alone, independent proposal.

In general, the existence of a late proposal clause in an RFP establishes a cut-off date for the receipt of initial proposals, defining the field of competitors who may participate further in the procurement. Control Data Corp. and KET, Inc., B-196722, June 26, 1981, 81-1 CPD Para. 531, aff'd, B-196722.3, June 7, 1982, 82-1 CPD Para. 537. Once an offeror submits a timely initial proposal that the agency includes in the competitive range, subsequent modifications to that proposal are "normal revisions" made during the conduct of negotiations and are not subject to the late proposal rule. Raytheon Ocean Sys. Co., B-218620.2, Feb. 6, 1986, 86-1 CPD Para. 134; RAM Enters., Inc., B-209455, June 13, 1983, 83-1 CPD Para. 647; Control Data Corp. and KET, Inc., supra.[17] Revised proposals submitted pursuant to a request by the procuring agency constitute "normal revisions" during discussions. See B-169148, Oct. 6, 1970; B-164581, Apr. 29, 1969; cf. B-158136, Mar. 27, 1966; Computer Sys. & Resources, Inc., GSBCA No. 10817-P, Nov. 16, 1990, 91-1 BCA Para. 23,476, 1990 BPD Para. 389.

Here, Lear's initial 3-box proposal responded to the minimum RFP requirements and was considered by the Air Force to be within the competitive range. Having survived the initial round, Lear was free, in our view, to submit an alternate proposal in response to the agency's request during the course of discussions. See Control Data Corp. and KET, Inc., supra. Although Lear's alternate proposal was in addition to, rather than in lieu of, its initial 3-box proposal, we see no meaningful basis to distinguish between these two situations. Regardless of the extent of Lear's proposal modification, it submitted that modification at the behest of the procuring agency and within the scope of discussions. See B-169148, Oct. 6, 1970; B-164581, Apr. 29, 1969. We think this satisfies the definition of a "normal revision," and there is nothing in the regulation to suggest otherwise. In interpreting the late proposal rules, we will not "impos[e] constraints on the revision process that are not required by specific regulation but which would prevent an agency from considering beneficial changes that it is able to evaluate." Control Data Corp. and KET, Inc.--Recon., B-196722.3, June 7, 1982, 82-1 CPD Para. 537, at 4.

PAGE LIMITS

Simmonds also contends that the agency could not consider Lear's alternate proposal, because it allegedly exceeded the RFP's page limits applicable to initial proposals. As noted above, the RFP established a 300 -page limit on the FMC/IFMP technical proposal and a separate 300-page limit on the FSAC technical proposal, which Lear basically consumed in its initial 3-box technical proposal. Simmonds, which submitted both a 2-box and 3-box initial proposal within an overall 600-page limit, believes that the agency should have held Lear's initial 3-box proposal and its subsequent 2-box proposal to the same 600-page requirement. If the page limits are applied in the manner suggested by the protester, the agency could not have considered the bulk of Lear's 220-page alternate proposal.

At the outset, the protester's claim that Lear's alternate proposal violated an overall 600-page limit misstates the RFP requirements, which imposed a 300-page limit for the FMC/IFMP and a separate 300-page limit for the FSAC.[18] These restrictions reflect the 3-box approach contemplated by the specifications, where the FMC/IFMP were to function together as a fuel management/center of gravity system and the FSAC was to function separately as a fuel consumption system. Because the specifications did not anticipate anything other than this 3-box approach, the RFP's page limitations do not reasonably relate to either Simmonds's or Lear's alternate proposals. Indeed, Simmonds is unable to state which of the RFP's page limits--the FSAC limit or the FMC/IFMP limit--applies to Lear's alternate proposal, which addresses the FMC/FSAC together and the IFMP alone.

In any event, even assuming that the agency should have applied the page limits as the protester suggests and that Simmonds's 2-box and 3-box proposals remained within the 600-page limit, while Lear's did not, Simmonds has failed to demonstrate any prejudice arising from this allegedly unequal application of the RFP's page limits. Although the protester states that it would have offered additional detail on its 2-box proposal had it known that the agency was willing to relax the RFP's page limits, the RFP did not provide for a relative qualitative evaluation of the offerors' technical approaches and Simmonds was able to demonstrate the technical acceptability of both its 2-box and 3-box configurations within the confines of these page limits. As a result, Simmonds's proposal, although technically acceptable, was not selected for award because of its higher price, in accordance with the RFP's evaluation criteria. Simmonds could not have enhanced its competitive position by expanding an already acceptable technical proposal, since price was determinative of award. Consequently, there was no prejudice. See Trident Sys. Inc., B-243101, June 25, 1991, 91-1 CPD Para. 604; cf. E. H. Pechan & Assocs., Inc., B-221058, Mar. 20, 1986, 86-1 CPD Para. 278, in which the unequal application of the RFP's page limits to technical proposals that were qualitatively evaluated created the possibility of prejudice in a best value procurement.

COST REALISM

Finally, Simmonds protests that the agency did not evaluate Lear's proposal for cost realism, as required by the RFP, which provided that a proposal unrealistically low in cost "may be penalized during the evaluation to the extent of rejection."

"Cost realism" is ordinarily not considered in the evaluation of proposals for the award of fixed-price contracts because these contracts place the risk and responsibility of loss upon the contractor.[19] PHP Healthcare Corp., B-251933, May 13, 1993, 93-1 CPD Para. ; Culver Health Corp., B-242902, June 10, 1991, 91-1 CPD Para. 556. However, an agency may, in its discretion, provide for the use of a cost realism analysis in a solicitation for the award of a fixed-price contract for the limited purpose of measuring an offeror's understanding of the solicitation's technical requirements or to assess the risk inherent in an offeror's approach. See Kollsman, a Div. of Sequa Corp., B-251244.4, Apr. 2, 1993, 93-1 CPD Para. ; Birch & Davis Assocs., Inc.-- Protest and Recon., B-246120.3; B-246120.4, Apr. 20, 1992, 92-1 CPD Para. 372.

Contrary to Simmonds's argument, the RFP does not provide for a cost realism evaluation. While it is true that the solicitation informed offerors that proposals unrealistically low in cost could be rejected, the RFP did not provide for the submission of cost data that would permit a cost realism analysis. Rather, only offerors' proposed prices were solicited. The only reasonable interpretation of the solicitation, when read as a whole, is that only a price analysis, as required by FAR Sec. 15.805-2, was contemplated. Here, the Air Force found Lear's price to be fair and reasonable, and Simmonds does not protest that this price analysis was flawed.

The protest is denied.[20]

1. Portions of the protest record are subject to a General Accounting Office protective order, to which counsel for Simmonds and Lear have been admitted. Our decision is based upon protected information and is necessarily general.

2. Our Office conducted a hearing pursuant to 4 C.F.R. Sec. 21.5 (1993) to receive testimony regarding the protester's allegation that the agency engaged in technical transfusion during discussions with the awardee.

3. On December 6, the third offeror, whose proposal did not cite the deviations clause, was also asked whether it had considered any alternate approaches under that clause.

4. Lear states that it first realized, as a result of these discussions, that the Air Force considered the deviations clause an alternate proposal provision. Tr. at 32.

5. Lear's other alternate approach retained all three components, but would have enlarged the case dimensions of one component. The Air Force did not pursue further discussions on this approach, because the agency considered the approach "impossible" to implement. Tr. at 173.

6. The proposal of the third offeror was rejected as technically unacceptable for numerous technical reasons unrelated to the issue of a 2- box or 3-box approach.

7. While both offerors proposed an alternate 2-box configuration, the manner in which they integrated the box functions was significantly different.

8. Lear's 2-box proposal, like Simmonds's, enjoyed a significant price advantage over its 3-box proposal.

9. Ironically, Simmonds stressed the uniqueness of the 2-box approach in its initial protest.

10. In fact, Lear identified both an alternate 2-box and 3-box configuration in its response to the discussion question.

11. We note that the Air Force, while it shared Simmonds's broad interpretation of the deviations clause, agreed that the language of the clause was imperfect. For example, the lead technical evaluator testified variously that the RFP generally discouraged offerors from submitting "deviations" to the specifications, but that the deviations clause would allow the submission of innovative technical approaches. Tr. at 130, 148, 181-182. Likewise, the contracting officer testified that "[w]e could never draft a decent clause" to encourage inventive alternate approaches. Tr. at 109-110.

12. The RFP's pricing schedule included separate contract line items corresponding to each of the three components.

13. In addition, the agency referred only to an "FMC/IFMP combination," not an FMC/FSAC combination, the configuration used in Simmonds's alternate proposal.

14. The hearing record further supports that the agency did not draft the RFP specifications for a 2-box approach. For example, the lead technical evaluator testified that he once considered, but rejected, seeking a revision to the specifications to reflect a 2-box, rather than the 3-box, approach. Tr. at 136-137. He also testified that a 3-box approach was the "expected" result based upon these specifications and that the specifications "would have been written differently if we were really trying to [solicit alternate proposals]." Tr. at 183. Likewise, the contracting officer testified "[w]e didn't anticipate anything other than a 3-box approach." Tr. at 108.

15. This interpretation of the deviations clause would also be consistent with the RFP's treatment of design changes in section H of the solicitation, "Special Contract Requirements." The RFP provides that:

"All government-approved production design changes in parts, subassemblies or complete articles, on which the contractor is the design control activity . . . shall be deemed to relate to and affect the corresponding spare items (parts, subassemblies or complete articles) as may be ordered under this contract, provided that such change does not affect the form, fit or function of the item hereunder." [Emphasis added.]

16. As previously noted, the RFP provided for a technical evaluation of all three FSAS components on a pass/fail basis for award selection purposes.

17. In contrast, where an offeror submits an unacceptable initial proposal and is not included in the competitive range, any subsequent revision to that proposal is made outside the conduct of negotiations and is treated as a late proposal modification, not a "normal revision." See Los Angeles Community C. Dist., B-207096.2, Aug. 8, 1983, 83-2 CPD Para. 175; RMS Indus., Dec. 9, 1991, B-245539, 91-2 CPD Para. 528. Here, however, Lear submitted an acceptable initial proposal and was selected for discussion.

18. Furthermore, the agency made clear at the preproposal conference that the 300-page limit for the FMC/IFMP was independent from the 300-page limit for the FSAC, and that offerors could not combine these figures into an aggregate 600-page limit to satisfy the proposal preparation requirements.

19."Cost analysis" involves the examination and evaluation of an offeror's separate cost elements and proposed profit, as compared to a "price analysis," which involves examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit. FAR Sec. 15.801.

20. Simmonds's original protest also included a contention that the Air Force should not have evaluated offerors' option prices for their reliability improvement warranties, if it did not intend to exercise those options. The Air Force responded that the RFP provided for an evaluation of these option prices. Since Simmonds did not respond to this argument in its comments to the agency report, we consider it to have abandoned the issue. See Precision Echo, Inc., B-232532, Jan. 10, 1989, 89-1 CPD Para. 22.