TITLE:   AmClyde Engineered Products Company, Inc., B-282271; B-282271.2, June 21, 1999
BNUMBER:  B-282271; B-282271.2
DATE:  June 21, 1999
AmClyde Engineered Products Company, Inc., B-282271; B-282271.2, June 21,

Matter of: AmClyde Engineered Products Company, Inc.

File: B-282271; B-282271.2

Date: June 21, 1999

Leonard Egan, Esq., Marcus B. Slater, Esq., and Jennifer J. Zeien, Esq.,
Slater & Zeien, for the protester.

Richard G. Welsh, Esq., Naval Facilities Engineering Command, for the

Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.


1. Agency reasonably evaluated the protester's proposal as acceptable,
rather than outstanding, under the capability/relevant past performance
subfactor, where the protester's proposal demonstrated extensive relevant
experience but the agency received negative past performance information.

2. Protester is not an interested party to protest the evaluation of the
awardee's proposal where the protester's proposal was properly rated and
there is an offeror whose proposal is higher rated and lower priced than the
protester's, because the protester would not be in line for award even if
its protest were sustained.

3. Agency did not misuse the pre-award survey process in ascertaining that
the awardee's proposal may not comply with a material term of the contract
and subsequently conducting discussions to resolve this problem with all
competitive range offerors, including the protester.

4. Agency's clarification of the awardee's technically acceptable
subcontracting plan after source selection and prior to contract award did
not constitute discussions, since the ultimate approval of a subcontracting
plan involves a question of responsibility.

  5. Agency's best value decision properly did not consider certain factors
     not contemplated by the solicitation's stated evaluation scheme.


AmClyde Engineered Products Company, Inc. protests the award of a contract
to Samsung Heavy Industries Company, LTD, under request for proposals (RFP)
No. N62472-97-R-1643, issued by the Department of the Navy, Naval Facilities
Engineering Command, Navy Crane Center, Lester, Pennsylvania, for the design
and manufacture of portal cranes. AmClyde asserts that the proposals were
misevaluated and the award selection was improper.

We deny the protest.

The Navy issued the RFP on May 15, 1998, to acquire one 151-ton portal crane
for Norfolk Naval Shipyard and up to 20 60-ton portal cranes for various
specified shipyards in the United States under a requirements contract. RFP
amend. 9, at 2. The contract was for a 5-year base period with three 1-year
option periods. Id. The design of the 151-ton crane was to be ordered at the
time of award, and the remaining requirements were to be accomplished at a
rate of no more than four cranes per year. [1] Id. The specifications
required the cranes to meet detailed design requirements, including the
ability to handle nuclear loads. RFP parts N, P. Also, the RFP incorporated
the clause at Defense Federal Acquisition Regulation Supplement sect.
252.247-7023, Transportation of Supplies by Sea, which essentially requires
any supplies to be furnished under the contract transported by sea to be
transported on United States-flag vessels. RFP sect. I, at I-3.

The RFP provided for award on a best value basis, price and other factors
considered. RFP sect. M-4. The evaluation factors were price and technical,
which were said to be of equal weight. Under technical, the RFP identified
three equally weighted subfactors: technical approach, management plan, and
offeror's capability/relevant past performance. RFP sect. M-4.C.B.

The management plan subfactor required, among other things, for offerors to
provide a proposed schedule, staffing, and management plan for successfully
completing the work within the required timeframes, the identification of
major subcontractors, and a description of the quality assurance
organization. RFP sect. M-4.C.B.2. Under this subfactor, an acceptable
subcontracting plan for subcontracting with small business, small
disadvantaged business and women-owned small business concerns was also
required to be submitted and approved. RFP sect. M-4.C.B.2.f.

The offeror's capability/relevant past performance subfactor required
offerors to "[l]ist at least three (3) previous projects that were worked on
within the past five (5) years that demonstrate [the offeror's] ability to
design, manufacture, install and test portal cranes of a similar capacity
and complexity." RFP sect. M-4.C.B.3(a). For this purpose, the subfactor stated
that the offeror could "[i]dentify past and current contracts (including
Federal, State, local government and private) for efforts similar to the
Government requirement." RFP sect. M-4.C.B.3(c). The subfactor further stated
that the references should demonstrate the offeror's record and capabilities
in such areas as conforming to specifications, standards of good
workmanship, adherence to contract schedules, capability to take corrective
action when problems are encountered, and reasonableness of change order
pricing. RFP sect. M-4.C.B.3(b).

Nine offerors submitted proposals in response to the RFP. Five were
determined to be unacceptable and rejected, and four, including AmClyde's,
Samsung's and [DELETED], which were determined to be unacceptable but
susceptible of being made acceptable, were included in the competitive
range. [2] Agency Report at 1. Written discussions were conducted with each
of the competitive range offerors. Following discussions, the Navy received
revised proposals. One proposal was then eliminated from the competitive
range, but the proposals of AmClyde, Samsung, and [DELETED] were determined
to be acceptable. Id. Although the technical proposals of the competitive
range offerors all received acceptable ratings, including acceptable ratings
under each evaluation factor, the Navy ranked [DELETED] technical proposal
first, AmClyde's second, and Samsung's third. Agency Report, Tab 10,
Technical Evaluation Team Report--Revised Proposals, at 27-28.

The Navy then requested final proposals. Samsung submitted the lowest priced
proposal at an evaluated price of [DELETED] submitted the next lowest at an
evaluated price of [DELETED], and AmClyde submitted the highest at an
evaluated price of [DELETED]. Agency Report at 3 and Tab 14, Price
Evaluation Team Report--Final Proposals, at 2. The Navy determined that
Samsung's proposal represented the best value, but decided to conduct a
pre-award survey before making award since it had never seen Samsung's
facility or contracted for a crane from that firm. Agency Report at 3.

While conducting the pre-award survey of Samsung's facilities, the Navy
verified that Samsung had the requisite capabilities to successfully perform
the contract, but discovered that Samsung's proposal, which proposed to
manufacture the cranes at its facility in the Republic of Korea, apparently
did not intend to comply with the U.S.-flag vessel requirement. Agency
Report, Tab 15, Pre-Award Visit Memorandum, Jan. 27, 1999. Samsung had
intended to utilize a Dutch company to transport the cranes based upon the
assumption that it could obtain a waiver of the requirement. Agency Report
at 3-4. Since the Navy knew that such waivers are not readily obtainable, it
decided to conduct another round of discussions with the competitive range
offerors to ensure that they were aware of the U.S.-flag vessel requirement
and that offerors had not otherwise based their prices on the mistaken
assumption that the Navy would waive this requirement after award. Id. at 4
and Tab 16, Memorandum for File, Feb. 4, 1999.

Following discussions, Samsung again submitted the lowest-priced proposal at
an evaluated price of $115,247,800, [DELETED] was second at an evaluated
price of [DELETED], and AmClyde's was third at an evaluated price of
[DELETED]. [3] Agency Report at 4 and Tab 19, Price Evaluation Team
Report--Second Final Proposals, at 2.

The Navy again found that Samsung's proposal represented the best value.
Agency Report, Tab 20, SSA Determination--Second Final Proposals, Feb. 10,
1999. In doing so, the SSA concluded that there was very little difference
between the proposals, although he ranked [DELETED] technical proposal
first, AmClyde's second, and Samsung's third. Id. at 1st-2nd unnumbered
pages. The SSA noted that Samsung had no experience in building portal
cranes for the Navy, but it had significant experience in the design and
fabrication of container cranes, and all past performance references were
complimentary. Id. at 2nd unnumbered page. The Navy further noted that the
pre-award visit confirmed that Samsung had significant experience designing
and manufacturing portal cranes, and that it had the facilities, manpower,
and demonstrated capabilities to successfully perform this work. With
respect to AmClyde the Navy specifically noted that AmClyde had direct
experience in the design of portal cranes for the Navy but that "[t]heir
past performance history has been weak in customer satisfaction because of
failure to meet milestone schedules, reliability problems, documentation
inaccuracies and claims." Id. at 2nd unnumbered page. Thus, after
considering the merits of each proposal, the Navy found that the significant
price advantage associated with Samsung's proposal was not offset by the
technical advantages in the other proposals and that Samsung's proposal
represented the best value. Id. at 3rd unnumbered page.

AmClyde protests that the Navy's equal ratings of Samsung and AmClyde under
the offeror's capability/relevant past performance could not be reasonable.
Protest at 4. AmClyde argues that it should have received an outstanding
rating because of the considerable relevant experience manufacturing cranes
for the Navy presented in its proposal, and that Samsung should have been
rated lower since Samsung's proposal did not reflect any direct experience
manufacturing nuclear rated cranes to stringent military specifications.
Protest at 4-5; Protester's Comments at 2-4.

The determination of the relative merits of proposals is primarily a matter
of agency discretion, which we will not disturb unless it is shown to be
unreasonable or inconsistent with the stated evaluation criteria. Ricards
Int'l, Inc. T-A INFOTEQ, B-277808, B-277808.2, Nov. 21, 1997, 98-1 CPD para. 2
at 3. An agency may consider its own experience with an offeror's
performance where the solicitation contains past performance as an
evaluation factor. The protester's mere disagreement with the agency's
judgment does not establish that an evaluation was unreasonable. BFI Waste
Sys. of Nebraska, Inc., B-278223, Jan. 8, 1998, 98-1 CPD para. 8 at 2.

First, we find that the agency reasonably evaluated AmClyde's proposal. The
record establishes that despite AmClyde's extensive relevant Navy crane
experience, the Navy rated AmClyde's proposal acceptable under the offeror's
capability/relevant past performance subfactor because of several negative
comments it received regarding AmClyde's performance on its contracts and
because of a general absence of laudatory comments. Agency Report, Tab 5,
Technical Evaluation Team Report--Original Proposals, at 56; Agency's
Post-Hearing Comments at 6. For example, the Navy explains that certain
references that it contacted regarding Navy contracts commented that
problems were found with electrical wiring on its cranes; that some of the
crane's system components were not well matched causing accelerated
degradation; that maintenance manuals for the cranes were inconsistent; that
drawing errors were found on the cranes' diesel safety circuit; that AmClyde
had problems meeting production milestones and delivery dates; that AmClyde
did not respond to warranty work in a timely manner; that AmClyde had
problems controlling subcontractors; and that AmClyde charges customers for
very small changes and often becomes entangled in legal battles. Agency
Report at 7 and Tab 5, Technical Evaluation Team Report--Original Proposals,
at 56.

AmClyde has not refuted the specific comments made concerning its past
performance, but instead generally argues that the Navy's criticism
regarding the reliability of its cranes is suspect because Navy cranes are
built based upon the Navy's own specifications and standards. Protester's
Comments at 5. Further, AmClyde argues that on one of the complained of
contracts AmClyde was one of two principal subcontractors and that many
areas, such as the manufacture of additional components, the assembly,
erection, testing delivery, and warranty obligations were the responsibility
of the prime and the other subcontractor. Id.; Post-Hearing Comments at 5.
On that basis, AmClyde maintains that it is likely that the negative
comments relate to problems created by the prime and other subcontractor.
Id. AmClyde concedes late delivery of some cranes, but argues that the
majority of cranes were delivered early and any late delivery can be
attributed to the Navy's own actions. Protester's Comments, at 5.

Notwithstanding AmClyde's general disagreement with the negative comments
concerning its past performance, we cannot conclude on this record that the
Navy acted unreasonably in assigning AmClyde's proposal an acceptable,
rather than an outstanding, rating, in the absence of a specific refutation
of these comments by the protester. [4] In this regard, we note that at the
hearing the Navy representative testified that one reference reported that
it was unwilling to do business with AmClyde again because of its poor past
performance. Tr. at 28.

AmClyde argues that the Navy should not have downgraded its proposal for
making claims, since this is a mechanism that a contractor is entitled to
pursue whenever there is a dispute on the contract and many of AmClyde's
claims were meritorious. Supplemental Protest at 2. AmClyde also argues that
it was improper for the Navy to cite claims history as justification for a
lower rating because the Navy did not provide AmClyde the opportunity to
address this concern during discussions. Id. While it is true that the Navy
did not mention any concerns regarding AmClyde's claims history with that
firm during discussions, we find no basis to conclude that AmClyde would
have been entitled to a materially better or an outstanding rating, even if
it had been able to eliminate claims history as an area of concern, since
the other aforementioned past performance problems still remain. Therefore,
we find no basis to object to the agency's evaluation of AmClyde's proposal.

Since we find that AmClyde's proposal was reasonably evaluated, we conclude,
for the reasons discussed below, that AmClyde is not an interested party
eligible to maintain its protests of the evaluation of Samsung's proposal
and experience, the alleged inadequacy of the cost realism analysis of
Samsung's proposal, or the entitlement of Samsung's proposal to an exemption
from the Buy American Act with respect to the design services. Under the bid
protest provisions of the Competition in Contracting Act of 1984, 31 U.S.C.
sect.sect. 3551-56 (1994), only an "interested party" may protest a federal
procurement. That is, a protester must be an actual or prospective offeror
whose direct economic interest would be affected by the award of a contract
or the failure to award a contract. 4 C.F.R. sect. 21.0(a). Here, the record
shows that [DELETED] technical proposal received ratings on all subfactors,
including past performance, identical to AmClyde's and was ranked higher
than AmClyde by the agency, and that [DELETED] proposed a lower evaluated
price than AmClyde. Agency Report, Tab 20, SSA Determination, at 1st-3rd
unnumbered pages. We have found that AmClyde's proposal was properly rated
and AmClyde does not contend that the agency misevaluated [DELETED] proposal
in any way. This being the case, even if AmClyde were to prevail in these
additional arguments, [DELETED], not AmClyde, would be in line for the
award. AmClyde therefore lacks the direct economic interest necessary to
protest the evaluation of Samsung's proposal and we will not consider these
protest grounds further. See OMV Med., Inc.; Saratoga Med. Ctr., Inc.,
B-281388 et al., Feb. 3, 1999, 99-1 CPD para. 53.

AmClyde also protests that the Navy misused the pre-award survey process in
order to provide Samsung with the opportunity to modify its nonconforming
proposal. It argues that it was improper for the agency to discuss the
U.S.-flag vessel deficiency contained in Samsung's proposal with that
offeror, since this goes beyond the scope of the pre-award survey process.
Supplemental Protest at 3-4.

The record does not support AmClyde's contentions that the agency misused
the pre-award survey process. To the contrary, the record shows that the
agency properly sought clarification of an aspect of Samsung's proposal that
the agency believed did not meet the contract requirements. The Navy then
reopened discussions with all offerors in the competitive range while
providing Samsung an opportunity to revise its otherwise unacceptable
proposal. Since the agency conducted discussions with all offerors providing
each an opportunity to revise its proposal, we have no basis to question the
agency's actions. An agency, especially following the selection of a
contractor for the award as here, may not simply ignore information which
suggests that an offeror may perform or intends to perform in a manner
different from that reflected in a technically acceptable proposal, since to
do so would be improper. See AAA Eng'g & Drafting, Inc., B-250323, Jan. 26,
1993, 93-1 CPD para. 287 at 6-7. Thus, the agency properly reopened discussions
based on the pre-award survey. [6]

AmClyde next contends that the Navy engaged in improper post-final proposal
discussions only with Samsung regarding Samsung's subcontracting plan, and
the agency was therefore required to have discussions with all competitive
range offerors. Supplemental Protest of Apr. 19, 1999 at 4-5; Protester's
Comments at 15-18. We disagree. Our review confirms that Samsung timely
submitted a subcontracting plan and that the agency reasonably rated it
acceptable prior to award selection. Agency Report, Tab 10, Technical
Evaluation Report--Revised Proposals, at 17-18. While the agency had further
communications with Samsung regarding its subcontracting plan after the
award selection but prior to contract award, these exchanges were merely
clarifications to Samsung's otherwise technically acceptable plan. Agency
Report, Tab 26, Samsung Subcontracting Plan, at 7 and attached letters. In
any event, the ultimate approval of a subcontracting plan relates to an
offeror's responsibility, even where the solicitation requests the offeror
submit the plan with its proposal. Thus, we cannot conclude that the Navy's
actions of ensuring that Samsung proposed an optimum subcontracting plan
constituted improper discussions or required that revised proposals be
solicited from all offerors. See Kahn Instruments, Inc., B-277973, Dec. 15,
1997, 98-1 CPD para. 11 at 10-11.

Finally, AmClyde protests that the agency's best value decision was improper
because the Navy did not consider other factors, besides the technical
ratings and Samsung's lower evaluated price, that affect the relative
benefit to the government of awarding the contract to AmClyde rather than
Samsung. Protest at 5-8. For example, AmClyde asserts that the Navy failed
to consider the additional costs to the government of administering a
contract performed in Korea; the limited participation of small and small
disadvantaged businesses in a Korean-performed contract; the schedule risk
associated with performing the contract in Korea; delays inherent in
shipping cranes from Korea; and the loss of tax revenues to the United
States economy. Id. While agencies may generally include such factors in
their evaluations and best-value decisions, this is so only if offerors have
been informed of that in the solicitation. The RFP here did not inform
offerors that the factors that AmClyde raises would be evaluated or
considered in making the best value decision. Thus, we find that the

best-value decision may not be legitimately challenged on these grounds. See
San Diego Beverage & Kup, Inc., B-278881, Mar. 24, 1998, 98-2 CPD para. 127 at

The protest is denied.

Comptroller General
of the United States


1. The schedule separated the work into separate line items, which required
offerors to propose individual pricing for each line item. RFP amend. 9, sect.

2. The proposals were evaluated under an adjectival rating scale under which
the rating categories were outstanding, acceptable, unacceptable/susceptible
of being made acceptable, and unacceptable. Agency Report, Tab 4, Source
Selection Plan, at 15-16.

3. For reasons not explained in the record, AmClyde's evaluated price is
denoted in the source selection document as [DELETED]. Agency Report, Tab
20, Source Selection Authority (SSA) Determination--Second Final Proposals
Feb. 10, 1999 at 1st unnumbered page.

4. At the hearing conducted by our Office in connection with this protest,
the Navy's representative testified that AmClyde's revised proposal
following discussions did not adequately address the weaknesses in its past
performance noted in the initial evaluation. Hearing Transcript (Tr.) at
68-71. While the protester now argues that it was unable to adequately
address the Navy's concerns with its past performance because the Navy did
not point to the weaknesses in its past performance with sufficient
specificity, Post-Hearing Comments at 5, the protester should have been
aware of this argument upon receipt of the agency report and therefore was
required to raise this argument within 10 days of that date. See 4 C.F.R. sect.
21.2(a)(2) (1999). However, except for its specific contention that the
concerns about its claims history were not mentioned during discussions, see
Supplemental Protest at 1-2, AmClyde did not protest the adequacy of its
discussions until its post-hearing comments. Therefore, this protest
contention is dismissed as untimely and will not be considered.

5. While the claims apparently had no impact here, we agree with the
protester that, absent some evidence of abuse of the process, agencies
should not lower a firm's past performance evaluation based solely on its
having filed claims. Contract claims, like bid protests, constitute remedies
established by statute and regulation, and firms should not be prejudiced in
competing for other contracts because of their reasonable pursuit of such
remedies in the past.

6. AmClyde also argues that the Navy improperly gained information involving
Samsung's ability to manufacture cranes during the site visit. However, it
was not improper for the agency to consider such information since the
agency had already determined Samsung's proposal was acceptable and should
receive the award, and Samsung did not change its proposal at the site
survey. See UNICCO Gov't Servs., Inc., B-277658, Nov. 7, 1997, 97-2 CPD para.
134 at 10-11; Continental Maritime of San Diego, Inc., B-249858.2,
B-249858.3, Feb. 11, 1993, 93-1 CPD para. 230 at 7-8.