Skip to Highlights
Highlights

Protest that agency failed to conduct meaningful discussions is denied where the discussions led the protester into the areas of its proposal that required amplification and revision. 2. Was unobjectionable. The RFP advised that the EDC response was to demonstrate the technical configuration and design solution of the proposed network. Was required to be "comprehensive and complete in sufficient detail to demonstrate that the proposed solution complies with all the requirements of the SOW [statement of work]. The RFP cautioned that "[r]estating the requirement identified in the [SOW] and stating `will comply' or similar language. Is unacceptable.". The EDC response was required to be divided into three subsections entitled management.

View Decision

Matter of: ITT Federal Systems International Corporation File: B-285176.4; B-285176.5 Date: January 9, 2001

DIGEST

Attorneys

DECISION

ITT Federal Systems International Corporation protests the award of a contract to Sprint Communications Co., L.P. under request for proposals (RFP) No. DCA400-00-R-0003, issued by the Defense Information Systems Agency, Defense Information Technology Contracting Organization-Europe (DITCO), for telecommunication services. ITT challenges the conduct of discussions, and the evaluation of ITT's technical proposal and Sprint's price proposal.

We deny the protest.

The RFP, issued on November 18, 1999, sought to procure communications services, including equipment, voice and data for United States forces in Hungary, Bosnia-Herzogovina, and Croatia under a fixed-price, indefinite-delivery, requirements contract, for a 2-year base period with three 1-year option periods. RFP Secs. C.1.1, F.52.211-9200, L.52.216-1. By this RFP, DITCO plans to replace the existing communications network and equipment being operated and maintained by U.S. forces and Sprint (the incumbent contractor) with a single commercial contractor. /1/

The RFP instructions required proposals to be submitted in three volumes entitled engineering design concept (EDC), past performance, and price. The RFP advised that the EDC response was to demonstrate the technical configuration and design solution of the proposed network, was required to be "comprehensive and complete in sufficient detail to demonstrate that the proposed solution complies with all the requirements of the SOW [statement of work]," and "must provide a paragraph by paragraph discussion of the [SOW], illustrating how the proposal satisfies every [requirement]." The RFP cautioned that "[r]estating the requirement identified in the [SOW] and stating `will comply' or similar language, is unacceptable." Also, the RFP advised that the EDC response "must incorporate a minimum 25 percent growth factor to the user baseline provided in Section J of the solicitation; to accommodate anticipated increases in the subscriber base over the intervening 12 months from issuance of this solicitation to activation of service under the new contract." /2/ RFP Sec. L.52.215-9204B.

The EDC response was required to be divided into three subsections entitled management, technical, and cutover solution. In the management subsection, the RFP required the offeror to provide specific "organizational layouts" and to "provide a discussion of how increases to the monthly operation and maintenance rate will be computed should the network subscriber base exceed the baseline + 25% covered by the price proposal" and "how the reduction to the operation and maintenance rate will be computed should the network subscriber rate fall below the baseline covered by the price proposal." The technical subsection was to "detail" the "proposed engineering solution" and address each SOW paragraph "explaining how the Offeror will satisfy the requirements." In the cutover solution subsection, the RFP advised that the "cut-over plan must explain in detail how the Offeror plans to ensure continuity of service to the current network users as service is transitioned to the new network" and that the plan must reflect all activities inherent in the cutover process and provide a "risk analysis" of those activities which have a high likelihood of causing service outages. Id.

The RFP provided for award on a best-value basis considering the evaluation factors: technical/management, past performance, and price. Technical/management was said to be significantly more important than the other two factors with past performance and price being of approximately equal importance.

For technical/management, the RFP listed cutover approach, technical approach, and management approach, in descending order of importance, as subfactors, and stated:

a. The technical proposal will be evaluated for understanding of requirements, extent to which it meets/exceeds minimum requirements and feasibility of approach.

b. The Cutover subfactor evaluates the anticipated disruption of service, length of cutover process, contingency plans to restore command and control circuits in the event of an emergency, contractor's risk assessment risk steps in the process.

c. The Technical subfactor evaluates the overall efficiency of the proposed design, growth capacity of the proposed network solution, response to each paragraph of the SOW, adequacy of drawings and diagrams, comprehensiveness of the Bill of Materials, level of government site support required to assist contractor equipment installation.

d. The Management subfactor evaluates the efficiency of the offeror's proposed management of the contract, efficiency of organization, locations of key management personnel, scope of authority, ratio of managerial staff to workers, comprehensiveness of the proposed installation schedule, the responsiveness of the proposed procedures for pricing, processing and completing new work and additional service requests.

RFP Sec. M.52.215.9207E. The past performance factor had three subfactors listed in descending order of importance: business relations/customer satisfaction, timeliness and quality of service, and cost control. Id.

Under the price factor, the RFP stated that the "[e]valuation of proposed prices will include a review for reasonableness based on adequate competition, and completeness" as well as for unbalancing. Id. The RFP also advised that "[p]roposals which are . . . unrealistically high or low in price may be deemed reflective of an inherent lack of technical competence, or indicative of a failure to comprehend the complexity and risks of the proposed work, and may be grounds for rejection of the proposal." RFP Sec. M.52.215.9207D.

After several amendments, DITCO received technical proposals on January 31, 2000 and price proposals on February 11 from four offerors, including ITT and Sprint. Following the evaluation of proposals, DITCO conducted detailed discussions with each offeror and received revised technical proposals on March 3 and revised price proposals on March 8. DITCO determined that ITT's proposal constituted the best-value and made award to that firm on April 11. On April 18, Sprint filed a protest challenging the award on various grounds at this Office, followed by several supplemental protests (B-285176, B-285176.2, B-285176.3). Sprint and DITCO reached an agreement to resolve the protests on June 14 and we subsequently dismissed the protests. As part of the agreement, DITCO agreed to reopen the procurement, amend the RFP, hold further discussions with each offeror, give each offeror the opportunity to "revise all sections" of the proposals, and appoint a different source selection authority (SSA). Agency Report, Tab 18, Stipulation and Settlement. Detailed discussions were held with each offeror in late June. /3/ Agency Report, Tab 19, Discussion Issues.

On July 7, DITCO issued amendment No. 0008 to the RFP, which revised various sections of the RFP. Special Provision 1, entitled Government Authorized Outages, added by the amendment, stated that "[i]f an AO [authorized outage] is required by the contractor during the installation phase, the contractor will provide a detailed explanation, to include length of time and reason, in their proposal." On July 14, DITCO issued amendment No. 0009, stating "[t]he cut-over plan must detail the number and duration of any government [AOs] that the offeror anticipates will be necessary to implement the proposed network solution." This amendment also amended the cutover approach subfactor to provide for the evaluation of proposed AOs, deleted the RFP provision requiring the evaluation of "overall proposal risk," released the prices previously submitted by all offerors, and included responses to various offeror questions. This amendment was accompanied by an e-mail message that stated that "[a]ttached in Amendment 0009, Portions of Section J not in electronic format will be sent by fax. . . . Sample of reports required . . . [are] provided for information." Protester's Comments, Tab 3, e-mail. The documents faxed pursuant to this e-mail message included a sample report (entitled "numbers count report") denoting more current information than had been previously provided offerors via section J of the RFP related to the "number of active (wired) ports" and "active email accounts" at various bases. /4/ Protester's Comments, Tab 4, Number Count Report. Amendment No. 0010 also contained questions and answers concerning the revised RFP, which, among other things, indicated that this current user count should be used in preparing proposals. RFP amend. 0010, Q&A Nos. 0078, 0151. Final technical and price proposals were submitted in August.

A reconstituted six-member source selection evaluation board (SSEB) evaluated the final technical and price proposals. Based upon a revised source selection plan (SSP), the SSEB rated the proposals under the weighted evaluation factors utilizing a color-coded descriptive rating system: blue, green, yellow, orange and red. /5/ The SSP described the color ratings as follows:

Blue The proposal must demonstrate the capability for delivering a level of performance exceeding that normally expected from a very well qualified contractor. The proposal must significantly exceed the desired performance levels and the excess must be considered to be of real benefit to the technical objectives of the contract. Any weaknesses present must clearly be considered insignificant.

Green The proposal is considered to be capable of being implemented substantially as proposed. The offeror is well qualified and the proposal more than adequately demonstrates his ability to perform in a manner which meets substantially all Government requirements.

Yellow The proposal is adequate in its treatment of the specific factor/subfactor. Weaknesses or deficiencies are present; however, they are either individually or cumulatively relatively non-critical in nature and are easily correctable. Weaknesses are perhaps the result of a lack of overall proposal preparation experience.

Orange The proposal is barely acceptable. Significant weaknesses and/or deficiencies are present; however, they are considered correctable without a complete rewrite of the applicable aspect of the proposal.

Red The proposal contains weaknesses and/or deficiencies in such numbers or of such significance that a complete re-proposal would be necessary to make the proposal marginally acceptable.

Agency Report, Tab 26, Source Selection Plan, at 12. The SSEB rated proposals by having each member identify strengths, weaknesses and deficiencies and assign a color rating for each criterion of each technical/management subfactor and for past performance. The SSEB then developed consensus ratings based upon discussions among the members of the strengths and weaknesses of each proposal for every evaluation criterion and factor. Agency Report at 10.

Based on the evaluation, Sprint was ranked second of the proposals received with a yellow rating for the cutover approach technical/management subfactor and green ratings in management approach and technical approach subfactors, and with yellow ratings in the past performance customer satisfaction and timeliness subfactors and a green rating for the past performance cost control subfactor. ITT was ranked third with yellow ratings for all the technical/management subfactors and green ratings for all the past performance subfactors.

A price analysis was performed by the agency's "Rates and Tariff Analysis Branch," which calculated a discounted life cycle cost for each proposal. DITCO found that the "overall competitive environment was sufficient to ensure price reasonableness." Taking into account the discounted life cycle costs of the proposals, Sprint's proposal had the lowest evaluated price at $61,947,846 and ITT was third lowest at $75,352,396. These prices represented a 31-percent and 25-percent drop, respectively, in these offerors' previously submitted prices. /6/ In performing the price analysis, DITCO compared the offerors' prices. DITCO performed a "rough order of magnitude" analysis, based upon a comparison of the offered prices to current contract prices, which revealed that the offerors' prices were within a reasonable range (from 20-percent higher to 9-percent lower) of the current contract price.

After considering the reasonableness and accuracy of each offeror's price, the SSEB determined that prices were reasonable and realistic. Agency Report 12-15.

A source selection advisory council (SSAC), along with the SSEB, the contracting officer, and the SSA, after reviewing and discussing the evaluation results, concluded that Sprint's second best combined technical and past performance ranking and lowest price constituted the best value. DITCO awarded Sprint the contract on September 13. See Agency Report at 15-18(a); Agency Report, Tab 31, Business Clearance Memorandum, at 5. This protest from ITT followed.

ITT argues that DITCO failed to conduct meaningful discussions with ITT and/or misevaluated ITT's proposal in virtually every respect where a weakness or deficiency was found under the technical/management factor. One of the focuses of the protest concerns ITT's cutover approach, the most heavily weighted subfactor under the RFP, for which ITT received a yellow rating. ITT argues that DITCO failed to conduct meaningful discussions with regard to its cutover plan because during discussions DITCO did not expressly identify all of the weaknesses listed in the SSEB report to justify the yellow rating for ITT's cutover approach. Protest at 10-13; Protester's Comments at 10-32.

In negotiated procurements, whenever discussions are conducted by an agency, the discussions are required to be meaningful, equitable, and not misleading. The Communities Group, B-283147, Oct. 12, 1999, 99-2 CPD Para. 101 at 4. Federal Acquisition Regulation (FAR) Sec. 15.306(d)(3) requires the contracting officer to indicate or discuss significant weaknesses, deficiencies, and aspects of the proposal . . . that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal's potential for award." To satisfy the requirement for meaningful discussions, the agency need only lead an offeror into the areas of its proposal requiring amplification or revision; all-encompassing discussions are not required, nor is the agency obligated to "spoon-feed" an offeror as to each and every item that could be revised to improve its proposal. See Arctic Slope World Servs., Inc., B-284481, B-284481.2, Apr. 27, 2000, 2000 CPD Para. 75 at 8-9; The Communities Group, supra. This is particularly true where, as here, one aspect of the evaluation is to test the offeror's technical understanding. See TRI-COR Indus., B-259034.2, Mar. 14, 1995, 95-1 CPD Para. 143 at 5-6.

ITT complains that none of the various weaknesses the SSEB attributed to its proposal under the cutover approach subfactor were sufficiently identified during discussions. Some of the 18 ITT cutover plan weaknesses the SSEB listed for ITT's proposal included [DELETED] and [DELETED]. In addition, one deficiency, [DELETED] was found. Agency Report, Tab 27, SSEB Report, at 5-12. The 11 strengths, 18 weaknesses, and 1 deficiency in ITT's cutover approach resulted in ITT receiving a "yellow" rating, which under DITCO's evaluation scheme represented an "adequate," that is acceptable, proposal with easily correctable or non-critical weaknesses or deficiencies. /7/

During the second round of discussions, DITCO specifically informed ITT that its cutover approach "need[ed] greater detail on how major items are to be brought on line and put into service on network," that the agency "need[s] more detail to analyze" whether the cutover plan includes unreasonable performance expectations, that the cutover schedule was "aggressive" and that the cutover approach did not ask for AOs. Id., Tab 19, ITT Discussion Issues, at 2-3. We think that DITCO conducted meaningful discussions with ITT regarding its cutover approach, in that DITCO led ITT into the precise areas of ITT's cutover approach where the weaknesses (many of which concerned a lack of detail) were found. /8/ Although ITT argues that DITCO's questions were too broad to allow ITT to meaningfully address the precise weaknesses attributed to its proposal, as stated above, the requirement for meaningful discussions does not require the offeror the opportunity to learn each and every weakness associated with its proposal during discussions, particularly where as here one aspect of the evalution was to test the offerors' technical understanding. /9/

ITT protests in the alternative that DITCO unreasonably evaluated its cutover approach with regard to most of the weaknesses found. Protester's Comments at 21-24; Supplemental Protest at 3, 5.

An agency's method for evaluating the relative merits of competing proposals is a matter within the agency's discretion, since the agency is responsible for defining its needs, and the best method for accommodating them. When an evaluation is challenged, we will examine the record to determine whether the agency's judgment was reasonable and consistent with stated evaluation criteria and with procurement statutes and regulations. The protester's mere disagreement with an evaluation does not establish that an evaluation was unreasonable. Arctic Slope World Servs., Inc., supra, at 5.

As indicated, the SSEB assigned ITT's proposal a yellow rating under cutover approach and in many instances this occurred because ITT's proposal failed to provide a sufficient level of detail in its proposal to justify more than the yellow (albeit acceptable) rating, even after receiving meaningful discussions on this point. Other noted weaknesses included the agency's concerns about ITT's reliance on the [DELETED] for backup, and ITT's failure to adequately address AOs. The one deficiency related to ITT's miscalculation of the number of phone drops at two sites, so as to be below the 125-percent baseline required by the RFP.

Contrary to ITT's argument, the RFP clearly required a detailed cutover approach; thus, it was reasonable to find weaknesses in ITT's cutover approach where details were lacking. /10/ With regard to the other weaknesses, while ITT argues that the RFP permitted relying upon the [DELETED] as a backup, the agency could reasonably view this approach as less than optimum. See Supplemental Agency Report at 13-15. Further, while ITT argues that it understood an AO to involve the removal of a system, station or facility and that it did not anticipate the removal of a system, but "anticipated individual circuit and trunk disruption of short duration," Protester's Comments at 23, the SSEB did not agree that ITT's proposal showed that it could accomplish these tasks within a short time, particularly given the proposal's lack of detail. See Supplemental Agency Report at 15-18. With regard to the deficiency, ITT confirms that its proposal was not based upon the current user base information but upon outdated user information previously provided the offerors under section J of the RFP. /11/ See Protester Comments at 27-28. Thus, based on our review, we find ITT's cutover approach was reasonably evaluated.

ITT raises numerous other arguments challenging the evaluation of its proposal, attacking each and every weakness attributed to its proposal by the SSEB for each technical approach subfactor. We discuss only some for illustrative purposes, but we have examined each of the protester's arguments in detail, and find no basis to disturb the award. /12/

For example, ITT challenges the yellow rating the SSEB assigned to its proposal under the management approach subfactor. This subfactor had four separately evaluated criteria: (1) installation efficiency and schedule, (2) pricing new work and additional local service requests (LSR), (3) business environment, and (4) management of the contract. While ITT's proposal received green ratings for the first and third of these criteria, it received a yellow rating for the second criterion and an orange rating for the fourth criterion. The SSEB "rolled up" these ratings into an overall yellow rating for the management approach subfactor. ITT challenges the yellow and the orange ratings that caused its proposal to be rated only yellow, contending that its subfactor rating should have been green. Our review finds the agency's evaluation of this subfactor to be reasonable.

With regard to the pricing new work and additional LSRs criterion, while some strengths were noted, ITT's plan was found to have failed to address how many LSRs could be processed above the required minimum. Agency Report, Tab 27, SSEB Report, at 17-18. ITT argues that its proposal should not have been downgraded for this reason since it met the minimum RFP LSR requirements and that DITCO was improperly seeking a commitment to a specific number of additional LSRs over the minimum. Protester's Comments at 33-36. We disagree. There is no evidence that the agency sought a particular commitment beyond the LSR minimum and, as noted, ITT's proposal was not rated less than acceptable for failing to address this matter, but was assigned a yellow rating. While the RFP did not require an offeror commitment to a specific number of LSR's over the minimum, DITCO specifically informed offerors in amendment No. 0010 that their proposals "must address how quantities in excess of [the minimum] 50 will be handled." /13/ RFP amend. No. 0010, Q&A No. 104. Thus, the agency reasonably assigned ITT's proposal a yellow rating under this criterion. /14/

ITT also challenges its orange rating under the management approach subfactor criterion "management of the contract." The SSEB assigned this rating because no strengths, one weakness, and two deficiencies were noted. The deficiencies were that the proposal was "[n]ot clear on how O&M [operation and maintenance] rates will change to reflect user base changes. Definitization [of this matter] after award [was] unacceptable" and that "[n]o algorithm [was] provided." See Agency Report, Tab 27, SSEB Report, at 22. DITCO reports that ITT's proposal was downgraded because it discussed only some of the factors to be considered when increases or decreases to the O&M rates were negotiated after award and did not provide a computation or algorithm of such increases and decreases, as contemplated by the RFP. Supplemental Protest Agency Report at 28. ITT argues this evaluation was unjustified because the RFP allegedly did not require such an algorithm, but instead required, as appeared in ITT's proposal, a "discussion of the process by which the company would capture increased or decreased costs associated with volume changes and develop appropriate responses." Supplemental Protest at 6. This argument lacks merit. First, the RFP requires the management section of an offeror's proposal to "provide a discussion of how increases to the monthly operation and maintenance rate will be computed," RFP Sec. L.52.215-9204B.1.f(i), not simply a discussion of the process. Second, the record shows that DITCO put ITT on notice of how it planned to interpret the provision in both rounds of discussions, asking ITT to provide an algorithm or formula to be used in adjusting O&M rates and advising ITT that its proposal was noncompliant in this respect. See Agency Report, Tab 7, ITT Clarification Questions, at 5; Tab 19, ITT Discussion Issues, at 1. Thus, DITCO was justified in assigning ITT an orange rating for this criterion and the agency reasonably rated ITT yellow under the management approach subfactor.

Since we conclude the record shows that DITCO reasonably evaluated ITT's proposal under the cutover approach and management approach subfactors, we need not consider ITT's contentions concerning the evaluation of its proposal under the technical approach subfactor. Even if ITT's proposal should have been rated green under the techncial approach subfactor, as contended by ITT, it would not be found technically equal to Sprint's EDC proposal, given Sprint's unchallenged green ratings for the management approach and technical approach subfactors and yellow rating for the cutover approach subfactor. Given Sprint's significant price advantage and superiority under the most heavily weighted technical/mangement factor, the source selection would not be affected even if ITT's proposal were rated green under the technical approach subfactor. /15/

ITT finally protests that the price evaluation performed by DITCO was improper because the agency failed to perform an adequate reasonableness, realism or risk assessment of Sprint's low-priced proposal, even though Sprint's low-priced proposal decreased by approximately 31 percent from its previous proposal price.

The nature and extent of an agency's price analysis is largely a matter of agency discretion, dependent upon the facts of a particular procurement. The FAR provides a number of price analysis techniques that may be used to determine whether prices are fair and reasonable, including a comparison of prices received with each other and/or with a rough yardstick. FAR Secs. 15.404-1(b)(2)(i), (iii). Here, the record shows that the agency compared the low price of Sprint -- who was the incumbent contractor and who the agency had determined had an acceptable level of understanding during the technical evaluation -- with the other prices submitted (one of which was less than 5 percent higher than Sprint's), noted that three of the four offerors significantly lowered their prices in their revised proposals, and found that Sprint's price was within a reasonable range of the incumbent contract price. Under the circumstances, we see no reason to question the price evaluation. See Ventura Petroleum Servs., Inc., B-281278, Jan. 21, 1999, 99-1 CPD Para. 15 at 5.

The protest is denied.

Anthony H. Gamboa Acting General Counsel

1. The existing communications network and equipment include U.S. forces tactical communications equipment; commercial equipment and personnel; and local post, telephone and telegraph commercial services.

2. Section J of the RFP listed a variety of items concerning the requirements to be provided offerors in electronic format. Pursuant to this section, the offerors were provided the "Current User Base."

3. The agency reports that the detailed discussions held with ITT lasted between 3 and 4 hours, but no contemporaneous notes were maintained of the discussions, except for a matrix listing the agency's discussion items that was provided to ITT as a basis for the discussions. Supplemental Agency Report at 2.

4. This was information similar to that listed on the previously provided "Current User Base."

5. The prior evaluation was performed utilizing a 1,000-point scale that allocated 800 points to the technical proposal and 200 points to past performance.

6. One of the other offerors also lowered its price by 31 percent.

7. Sprint's cutover approach also received a yellow rating and weaknesses similar to those noted in ITT's cutover approach were recorded, for example, lack of details.

8. We only identify a few of the weaknesses associated with ITT's cutover plan for purposes of our discussion, but we have examined the discussions and the weaknesses attributed to ITT's proposal in detail and find that meaningful discussions were conducted. Also, the deficiency and some of the weaknesses were problems first introduced in ITT's final proposal revision after discussions were concluded, and there was no duty to reopen discussions to address these matters. See Ouachita Mowing, Inc., B-276075, B-276075.2, May 8, 1997, 97-1 CPD Para. 167 at 4.

9. ITT also argues that the discussions were misleading because DITCO informed ITT that some areas of its cutover approach complied with the requirements. We disagree. The finally noted weaknesses were not those specific items for which ITT was advised its cutover approach was compliant. In any case, the onus was on ITT to reexamine its cutover plan in light of the concerns regarding its cutover plan expressed by the agency and the RFP's requirement to provide a detailed plan. See The Communities Group, supra, at 4.

10. Our review discloses that another proposal (not Sprint's), which contained a much more detailed cutover approach, received a green rating for this subfactor.

11. While ITT argues that it did not have to consider the most recent user information in preparing its proposal because DITCO did not properly amend the RFP to incorporate that information, ITT admits that the information was provided in the "numbers count report" faxed with section J when amendment No. 0009 was distributed. Supplemental Protest at 6. Moreover, in amendment No. 0010, DITCO, in response to question No. 0078 specifically advised offerors that they "should use information in section J as most current user count," and in response to question No. 0151 noted that user counts have changed by as much as 25 percent. Thus, it was not reasonable for ITT to base its revised proposal on information that it knew was outdated.

12. This is also true for the alternative arguments that ITT raises regarding whether meaningful discussions were conducted in the area ITT alleges were evaluated unreasonably. As was the case for cutover approach, the record reflects that DITCO conducted meaningful discussions regarding these other factors by reasonably leading ITT into the areas of its proposal that needed amplification or revision. See Agency Report, Tabs 7 and 19, ITT Discussion Issues.

13. DITCO also specifically informed ITT of this concern during the first round of discussions. Agency Report, Tab 7, Response to Clarification Questions, at 4.

14. In part because it did provide a good description of its capability to handle LSRs over the minimum, Sprint's proposal received a green rating under this criterion. Also, the record evidences that ITT's yellow rating was partially based on the fact that it had fewer strengths than the proposals that received green ratings for this criterion. See Agency Report, Tab 27, SSEB Report, at 17-19.

15. ITT's slightly superior rating under the significantly less important past performance factor would obviously be offset by Sprint's superiority under the significantly more important technical management factor and significantly lower price.

GAO Contacts