TITLE: B-310825; B-310825.2, DRSC3 Systems, LLC, February 26, 2008
BNUMBER: B-310825; B-310825.2
DATE: February 26, 2008
***********************************************************
B-310825; B-310825.2, DRSC3 Systems, LLC, February 26, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: DRSC3 Systems, LLC
File: B-310825; B-310825.2
Date: February 26, 2008
David Z. Bodenheimer, Esq., Puja Satiani, Esq., and James G. Peyster,
Esq., Crowell & Moring, LLP, for the protester.
W. Jay DeVecchio, Esq., Edward Jackson, Esq., Damien C. Specht, Esq., and
Kevin C. Dwyer, Esq., Jenner & Block LLP, for General Dynamics Advanced
Information Systems, an intervenor.
Andrew C. Saunders, Esq., and Alex F. Marin, Esq., Naval Sea Systems
Command, for the agency.
Louis A. Chiarella, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest alleging that firm had developed governmentwide standard
applicable to the item being procured, thereby having an unfair
informational advantage over other competitors, is denied where record
establishes that firm did not have a role in developing the relevant
governmentwide standard.
2. A competitive advantage that derives from an offeror's previous
performance under a government contract is not an unfair competitive
advantage that agency is required to neutralize.
3. Contracting agency engaged in meaningful discussions where agency
advised protester of specific weaknesses regarding lack of a selected
software architecture approach; agency was not required to also afford the
protester an opportunity to cure proposal defects first introduced either
in response to discussions or in a post-discussion proposal revision.
4. Protest challenging the evaluation of technical proposals is denied
where the record establishes that the agency's evaluation was reasonable
and consistent with the evaluation criteria.
5. Protest that past performance evaluation was unreasonable is sustained
where record shows that: the findings in the agency evaluation report were
not consistent with the information upon which the findings were based;
the agency evaluators could not remember whether they evaluated and gave
proper consideration to adverse past performance information regarding the
awardee; and the agency did not properly assess the relevance of the
offeror's prior contracts.
DECISION
DRS C3 Systems, LLC protests the award of a contract to General Dynamics
Advanced Information Systems (GD) under request for proposals (RFP) No.
N00024-06-R-5103, issued by the Naval Sea Systems Command (NAVSEA),
Department of the Navy, for common enterprise display system (CEDS)
display consoles. DRS argues that the agency's evaluation of offerors'
proposals and subsequent source selection decision were improper. DRS also
contends that the agency's discussions with the protester regarding its
proposal were not meaningful, and that GD had an impermissible
organizational conflict of interest.
We sustain the protest in part regarding the agency's evaluation of GD's
past performance and deny the remainder of the protester's allegations.
BACKGROUND
On April 17, 2006, the agency issued the RFP for the CEDS display
consoles.[1] The CEDS display console is a workstation configuration
comprised of display screens, furniture (e.g., console mounting brackets,
chair), human/machine interface devices (e.g., keyboard, mouse, joystick),
and a common electronics module (CEM), including both a network interface
and graphics processor. In general terms, the RFP's statement of work
(SOW) required the contractor to design, develop, produce, and support an
enterprise family of display systems to be implemented across platform
systems on Navy surface and subsurface ships. Agency Report (AR), Tab 1,
CEDS Source Selection Plan, at 5.
The RFP also informed offerors that the CEDS display console procurement
would occur in two phases. In Phase I, the Navy intended to award multiple
fixed-price contracts for the preliminary design of the display consoles.
In Phase II, in which Phase I awardees were to submit detailed business
and technical proposals for the actual execution of the CEDS display
console project, the Navy intended to select the offeror proposing the
best value to the agency.[2] Id. at 5-6. On December 13, the agency
awarded Phase I preliminary design contracts to both GD and DRS. It is the
Navy's subsequent evaluation of offerors' Phase II proposals and source
selection decision that is the subject of DRS's protest here.
The Phase II RFP contemplated the award of an
indefinite-delivery/indefinite- quantity (ID/IQ) contract including both
fixed-price and cost-reimbursement-type contract line item numbers (CLIN)
for a CEDS display console first article unit, up to 601 production units,
as well as associated spares, logistics, and various program, technical,
engineering, and training services over a 4-year performance period.
RFP sect. B; amend. 3, at 2. In addition to price, the RFP identified (in
descending order of importance) technical approach, management approach
and capabilities, and past performance as the nonprice evaluation factors,
along with numerous subfactors, of equal importance within each factor.
Id., amend. 1, Instructions to Offerors, at 61-65. The solicitation also
established that the nonprice factors, when combined, were significantly
more important than price.[3] Id. at 61. Award was to be made to the
responsible offeror whose proposal was determined to represent the "best
value" to the government, all factors considered. Id. at 58.
Both GD and DRS submitted proposals by the April 12, 2007 closing date. A
Navy source selection evaluation board (SSEB) evaluated offerors'
proposals as to the nonprice factors and subfactors using an adjectival
rating system that was set forth in the RFP: outstanding; very good;
satisfactory; marginal; unsatisfactory; and with regard to the past
performance factor, neutral. Id., amend. 2, at 5-6. An agency cost
evaluation team separately reviewed offerors' price and cost submissions.
After completing its initial evaluation, the agency decided that
discussions with offerors were necessary, and established a competitive
range consisting of the GD and DRS proposals. The Navy conducted written
discussions with both offerors, followed by the offerors' submission of
final proposal revisions (FPR) by August 16. The Navy's final evaluation
ratings of the GD and DRS proposals were as follows:
+------------------------------------------------------------------------+
| | GD | DRS |
|---------------------------------------+-----------------+--------------|
|Technical Approach | Outstanding[4] | Very Good |
|---------------------------------------+-----------------+--------------|
|Management Approach and Capabilities | Outstanding[5] | Very Good |
|---------------------------------------+-----------------+--------------|
|Past Performance | Outstanding | Outstanding |
|---------------------------------------+-----------------+--------------|
|Evaluated Cost/Price | $64,809,680 | $80,884,381 |
+------------------------------------------------------------------------+
AR, Tab 20, Final SSEB Report, at 1-51; Tab 21, Final Cost Evaluation
Report, at 1-40.
Importantly, the Navy's evaluation was as much about determining the
number of strengths and weaknesses within the offerors' proposals as it
was the assigned adjectival ratings. The SSEB found that GD's proposal had
42 strengths (31 major, 11 minor) and no weaknesses under the technical
approach factor, 35 strengths (17 major, 18 minor) and no weaknesses under
the management approach and capabilities factor, and 16 strengths
(13 major, 3 minor) and no weaknesses under the past performance factor.
By contrast, the SSEB determined that DRS's proposal had 38 strengths (17
major, 21 minor) and 3 weaknesses (1 major, 2 minor) under the technical
approach factor, 29 strengths (17 major, 12 minor) and 2 weaknesses
(1 major, 1 minor) under the management approach and capabilities factor,
and 19 strengths (13 major, 6 minor) and no weaknesses under the past
performance factor. Id., Tab 20, Final SSEB Report, encl. 1, SSEB Briefing
Slides, at 13, 16.
On September 7, the SSEB and cost evaluation teams briefed the agency
source selection advisory council (SSAC) as to their respective ratings
and findings of the offerors' proposals. The SSAC adopted the evaluation
findings and ratings without exception and subsequently recommended that
contract award be made to GD. Id., Tab 22, SSAC Report, at 1-6. On October
10, after having reviewed the evaluation reports, findings, and
recommendations, the source selection authority determined that GD's
higher technically rated, lower-priced proposal represented the best value
to the government. Id., Tab 23, Source Selection Decision. This protest
followed.
DISCUSSION
DRS's protest raises numerous challenges to the Navy's evaluation of
offerors' proposals. First, the protester alleges that GD had an
impermissible organizational conflict of interest that the Navy failed to
recognize and take into account in its evaluation of proposals. Second,
DRS alleges that the agency failed to engage in meaningful discussions
with the firm regarding its technical proposal. Third, the protester
contends that the Navy's evaluation of offerors' proposals under the
technical and management factors was in various ways improper. Fourth, DRS
contends that the Navy performed a flawed cost evaluation of GD's
proposal. Lastly, DRS argues that the agency's evaluation of GD's past
performance was improper.[6] As detailed below, we find that the Navy's
evaluation of GD's proposal under the past performance factor was
improper. Although we do not here specifically address all of DRS's
remaining arguments, we have fully considered all of them and find that
they are without merit.
Organizational Conflict of Interest
DRS first protests that GD had an organizational conflict of interest
(OCI) which the Navy overlooked. Specifically, the protester contends
that, with respect to a key CEDS requirement relating to "separation
kernels," GD gained inside knowledge and helped to shape this same
requirement as the prime contractor for the National Security Agency (NSA)
high assurance platform (HAP) program. Despite this allegedly unfair
competitive advantage on GD's part, the protester argues, the Navy failed
to consider or to mitigate this OCI. Protest, Nov. 19, 2007, at 11-12.
The RFP included both the SOW, which established the contract
requirements, and SRD, which established the performance, design,
development, and test requirements for the CEDS display console itself.
The SRD was developed entirely by the Navy, with no support from GD or any
other contractor. AR, Dec. 19, 2007, at 5; Tr. at 22-24. One of the most
significant SRD requirements was that regarding the separation kernel. RFP
amend. 1, SRD sect. 3.6.2.3. A separation kernel is essentially a piece of
software that creates independent and isolated software program execution
environments (i.e., "partitions") so as to keep separate, but process
simultaneously, information from different security classifications (e.g.,
"secret," "top secret") under the same operating system. Id.; Tr. at
31-32. The partitions within a separation kernel do not know that other
partitions exist, and the information within any one partition cannot be
transferred or shared across partitions. Relevant to the protest here, the
SRD separation kernel requirement stated that "the candidate operating
system shall meet the requirements of the `U.S. Government Protection
Profile for Separation Kernels in Environments Requiring High
Robustness.'" RFP amend. 1, SRD sect. 3.6.2.3.
The U.S. Government Protection Profile for Separation Kernels in
Environments Requiring High Robustness, also referred to as the separation
kernel protection profile (SKPP), is the governmentwide standard for
separation kernel operating environments. The record reflects that,
beginning in December 2002, the SKPP standard was developed by NSA in
support of the F-22 Raptor and Joint Strike Fighter military aircraft
programs. AR, Tab 27, NSA Declarations, at 1. The NSA working group that
created the SKPP standard consisted of government employees with
assistance from MITRE (a federally-funded research and development center)
and the Naval Post Graduate School. Additionally, external input to the
SKPP standard has been limited to those parties that responded to draft
versions of the document that were released for public comment, and did
not include GD. Id.
In July 2006, prior to the Navy's award of Phase I preliminary design
contracts for the CEDS program, GD was awarded a separate contract by NSA
for the HAP program. GD Comments, Dec. 31, 2007, exh. 2, HAP contract,
exh. 3, HAP Statement of Work. In general terms, the HAP program involved
the development of a next-generation secure computing workstation and
architecture for the military's Special Operations Command in which
information from different security levels could be processed
simultaneously. GD's work on the HAP program required it to deliver to NSA
various computing architecture documents, software, running systems, and
related program documents. Importantly, none of GD's work on the HAP
program involved the development or the delivery of NSA's SKPP standard.
AR, Tab 27, NSA Declarations, at 2. Further, NSA has not used, nor does it
intend to use, any of GD's work on the HAP program for the development of
the SKPP standard. Id.
The record shows that while both CEDS and the HAP program involve
processing information from multiple security levels simultaneously, the
two programs apply different separation technologies and approaches; the
requirements in the two programs here are also qualitatively different.
CEDS requires, at a minimum, the ability to simultaneously and separately
process information from six different security classifications under the
same operating system, while the HAP program involves separating
information in two adjacent levels of security classification. CEDS
involves a real-time operating system (i.e., the results of one process
are available in time for the next computing process which requires the
previous result) and the HAP program does not. Further, while CEDS
utilizes separation kernel technology that is to be certified by NSA
against the most rigorous security assurance requirements, the HAP program
does not involve the use or adaptation of a separation kernel, or mandate
compliance with the same security assurance requirements. RFP amend. 1,
SRD sect. 3.6.2.3; GD Comments, Dec. 31, 2007, exh. 3, HAP Statement of
Work, attach. A, Declaration of Bill Ross, at 4-8. In sum, from the record
before us, it appears that to the extent that GD was familiar with
separation kernel technology, it was not as a result of its work on the
NSA HAP program.[7]
Contracting officers are required to identify and evaluate potential OCIs
as early in the acquisition process as possible. Federal Acquisition
Regulation (FAR) sect. 9.504(a)(1). The FAR provides that an OCI exists
when, because of other activities or relationships with other persons or
organizations, a person or organization is unable or potentially unable to
render impartial assistance or advice to the government, or the person's
objectivity in performing the contract work is or might be otherwise
impaired, or the person has an unfair competitive advantage. See FAR sect.
2.101. Situations in which OCIs arise, as addressed in FAR subpart 9.5 and
the decisions of our Office, are generally associated with a firm's
performance of a government contract and can be broadly categorized into
three groups: (1) unequal access to information cases, where the primary
concern is that a government contractor has access to nonpublic
information that would give it an unfair competitive advantage in a
competition for another contract; (2) biased ground rules cases, where the
primary concern is that a government contractor could have an opportunity
to skew a competition for a government contract in favor of itself; and
(3) impaired objectivity cases, where the primary concern is that a
government contractor would be in the position of evaluating itself or a
related entity (either through an assessment of performance under a
contract or an evaluation of proposals in a competition), which would cast
doubt on the contractor's ability to render impartial advice to the
government. Mechanical Equip. Co., Inc. et al., B-292789.2 et al.,
Dec. 15, 2003, 2004 CPD para. 192 at 18; Aetna Gov't Health Plans, Inc.;
Foundation Health Fed. Servs., Inc., B-254397.15 et al., July 27, 1995,
95-2 CPD para. 129 at 12-13. DRS's allegation concerning GD here is
primarily that it had an unfair competitive advantage as a result of its
work under the HAP contract.
We find DRS's central assertion--that as the HAP contractor GD improperly
gained inside knowledge and helped to shape the separation kernel
standards applicable to the CEDS procurement--to be unfounded. As a
preliminary matter, there is no evidence (and DRS does not assert
otherwise) that GD had a role in the development of the actual CEDS
separation kernel requirements. Further, GD's work on the HAP program did
not result in the offeror having a role in the development of NSA's SKPP
standard. As set forth above, the record clearly reflects that the HAP
program did not involve the use of separation kernel technology, none of
GD's work on the HAP program involved the development or the delivery of
NSA's SKPP standard, and none of GD's work product from the HAP program
was used by NSA for the development of the SKPP standard.[8] Further, GD's
work on the HAP program was not directly applicable to the much more
difficult technology and security assurance requirements set forth in the
CEDS SRD: at most, GD's work on the HAP contract taught the offeror what
would not work for the CEDS procurement. There is simply no merit to DRS's
allegation that GD helped to shape the NSA separation kernel standards
that applied to the CEDS procurement, and any exposure that GD had to
separation kernel technologies and the corresponding NSA standard was a
competitive advantage that the Navy had no duty to neutralize. Gonzales
Consulting Servs., Inc., B-291642.2, July 16, 2003, 2003 CPD para. 128 at
7; Government Bus. Servs. Group, B-287052 et al., Mar. 27, 2001, 2001 CPD
para. 58 at 10.
DRS also argues that GD's own technical proposal indicates that the
offeror had gained inside information and would be able to influence the
NSA SKPP standard. Specifically, the protester points to the following
excerpt from the GD proposal:
[Deleted]
* * * * *
[Deleted]
AR, Tab 6, GD Proposal, vol. II, Technical Proposal, at II-4.12.
As a preliminary matter, we note that the protester selectively quotes
from GD's proposal here and does not set forth the full, page-length
discussion. Further, DRS's reliance on this portion of GD's proposal is
misplaced. As discussed above, neither the HAP program nor the CEDS
procurement has any role in shaping the NSA SKPP standards and
corresponding certification process. We fail to see how the portion of
GD's proposal to which the protester cites here suggests otherwise.
DRS also asserts that it was denied a briefing by NSA regarding separation
kernel technology, but that such a briefing occurred between NSA and GD,
thereby providing GD with an unfair competitive advantage. DRS Comments,
Dec. 31, 2007, at 10-11.
GD's proposal, as part of its separation kernel trade studies analysis,
included a statement that [deleted].[9] AR, Tab 6, GD Proposal, vol. II,
Technical Proposal, at II-1.358. By contrast, during the CEDS solicitation
process, NSA denied a DRS request for a meeting involving the parties'
technical representatives. DRS Protest, Dec, 31, 2007, exh. 8, Email from
NSA to DRS.
The record does thus indicate that NSA denied DRS's request for a meeting
(presumably regarding separation kernel standards and certification),
while GD, as the HAP program contractor, was able to brief NSA on its
efforts in developing software separation kernel technology. DRS fails to
explain, however, how GD's briefing of NSA (rather than the other way
around) provided GD with access to any information that it did not already
possess. Further, GD's statement in its proposal to the Navy that NSA had
expressed support for its software separation kernel technology and would
begin planning to fold it into the HAP program in no way establishes
unequal access to information or an unfair competitive advantage on GD's
part.
Lack of Meaningful Discussions
DRS protests that the agency failed to hold meaningful discussions with
it. Specifically, the protester alleges that the Navy's technical
evaluation found only one major weakness in DRS's final proposal--that its
proposed separation kernel architecture would violate the SRD requirements
for a POSIX-compliant operating system.[10] DRS contends that the Navy
never raised this purported weakness with it during discussions. The
protester argues that as its proposal explicitly identified its separation
kernel architecture, the Navy had a duty to raise any concerns associated
with DRS's choice of separation kernel architecture in order for the
discussions to be meaningful. Protest, Nov. 19, 2007, at 17-19.
The SRD stated, with regard to the CEDS CEM processing subsystem:
The Display Console hardware shall be capable of loading and supporting
any conventional POSIX compliant operating system, which complies with
the operating system requirements called out in the [Open Architecture
Computing Environment] Technologies and Standards, Sections 4.5 and 5.5.
[. . . , and]
* * * * *
The [operating environment] OE shall be POSIX compliant. The OE shall be
designed to maintain compatibility and interoperability between previous
and current configurations of equipment.
RFP amend. 1, SRD sections 3.6.2.1(b)(2)(a), (b)(3)(c).
DRS submitted its technical proposal as part of its initial submission on
April 12. DRS's initial proposal did not identify a specific separation
kernel vendor or architecture; rather, the proposal identified three
possible separation kernel vendors, [deleted], that it was
considering.[11] AR, Tab 5, DRS's Proposal, vol. II, Technical Proposal,
at C-II-221 thru 226. The SSEB evaluated DRS's initial proposal as very
good under the management approach and capabilities factor, and as
satisfactory under the technical approach factor, and identified various
strengths and weaknesses supporting its rating determinations. AR, Tab 11,
Initial SSEB Report, at 28-40. The SSEB considered DRS's lack of a
definitive separation kernel architecture approach to be a major weakness
under both of these evaluation factors.[12] Specifically, the SSEB stated:
"The lack of a separation kernel approach will impact the schedule thereby
adding risk to the program to meet schedule milestone (i.e., [Critical
Design Review], [Test Readiness Review], [Production Readiness Review]),"
and "Without the selection [of a] separation kernel vendor [DRS's]
architecture approach may not be achievable within schedule requirements."
Id. at 32, 39.
After making its competitive range determination, the Navy conducted
discussions with each offeror, including DRS. Among the list of discussion
issues regarding DRS's technical and management proposal, the agency
stated:
The lack of a selected Separation Kernel approach will impact the
schedule thereby adding risk to the program to meet schedule milestone
(i.e., Critical Design Review, Test Readiness Review, and Production
Readiness Review. This was determined to be a weakness. [. . . , and]
* * * * *
Without the selection of a Separation Kernel vendor, the architecture
approach may not be achievable within the schedule requirements and was
determined to be a weakness.
Id., Tab 14, Agency Discussions with DRS, Encl. 1, List of Discussion
Issues, at 1.
In its response to the Navy's discussion questions, DRS addressed the
issue of a lack of a selected separation kernel architecture as follows:
Based on our detailed analysis to date, we now have a more specific
viewpoint of the [deleted] products. As a result, we firmly believe that
it is in our best interest to advance a specific [separation kernel]
solution. The specific [deleted] product that we are selecting is the
[deleted] solution.
Id., Tab 15, DRS Letter to Navy, encl. 1, Responses to Discussion Items,
at 2.
The SSEB considered DRS's discussion responses and subsequent FPR as part
of its final evaluation of offerors' proposals. The evaluators determined
that DRS's response here generally alleviated the agency's original
concern of schedule risk associated with the offeror's lack of a selected
separation kernel approach. Id., Tab 20, SSEB Final Report, at 37, 45.
However, the SSEB found that DRS's choice of separation kernel [deleted]
also caused a new concern, namely that the proposed use of [deleted] as
the separation kernel architecture would violate the SRD requirements
requiring a POSIX-compliant operating system. The agency considered this
to be a major weakness in DRS's final proposal, affecting the offeror's
evaluation ratings under various subfactors and both the technical and
management prime factors.
Although discussions must address deficiencies and significant weaknesses
identified in proposals, the precise content of discussions is largely a
matter of the contracting officer's judgment. See FAR sect. 15.306(d)(3);
American States Utils. Servs., Inc., B-291307.3, June 30, 2004, 2004 CPD
para. 150 at 6. We review the adequacy of discussions to ensure that
agencies point out weaknesses that, unless corrected, would prevent an
offeror from having a reasonable chance for award. Northrop Grumman Info.
Tech., Inc., B-290080 et al., June 10, 2002, 2002 CPD para. 136 at 6. When
an agency engages in discussions with an offeror, the discussions must be
"meaningful," that is, sufficiently detailed so as to lead an offeror into
the areas of its proposal requiring amplification or revision. Hanford
Envtl. Health Found.,
B-292858.2, B-292858.5, Apr. 7, 2004, 2004 CPD para. 164 at 8. Where
proposal defects are first introduced either in a response to discussions
or in a post-discussion proposal revision, an agency has no duty to reopen
discussions or conduct additional rounds of discussions. L-3 Commc'ns
Corp., BT Fuze Prods. Div., B-299227,
B-299227.2, Mar. 14, 2007, 2007 CPD para. 83 at 19; Cube-All Star Servs.
Joint Venture,
B-291903, Apr. 30, 2003, 2003 CPD para. 145 at 10-11.
We conclude that the Navy's discussions with DRS were meaningful. As set
forth above, the discussions expressly informed DRS of the specific
weaknesses that the SSEB had identified in its initial proposal. Further,
the record clearly reflects that the specific significant weakness which
DRS claims that the Navy failed to mention in discussions was first
introduced in DRS's discussion responses and was not part of its initial
proposal. As a result, the Navy had no obligation to conduct additional
rounds of discussions in order to permit the offeror to address this
matter. See L-3 Commc'ns Corp., BT Fuze Prods. Div., supra.
DRS does not dispute that its original proposal did not identify its
selection of a specific separation kernel architecture, nor does it argue
that the Navy's discussions failed to accurately convey the proposal
weaknesses originally identified by the SSEB. Nevertheless, DRS alleges
that the Navy's discussions were not meaningful insofar as the agency knew
that [deleted] was DRS's design choice before discussions with offerors
had "closed."[13] Thus, DRS argues, the Navy did not need to "reopen"
discussions here in order to advise DRS that the agency viewed its design
choice as a weakness or deficiency. DRS Comments, Dec. 31, 2007, at 17-19.
As a preliminary matter, we see no basis to conclude that discussions
closed on any date other than the date on which offerors' responses were
due (August 6); the fact that, a week later, the agency confirmed the due
date for FPRs has no bearing on this issue. Further, we recognize that
there may be certain situations where, given the manner in which the
discussions are held, the agency may not remain silent when an offeror
introduces a matter during discussions which the agency regards as a
proposal defect. E.g., Voith Hydro, Inc., B-277051, Aug. 22, 1997, 97-2
CPD para. 68 at 3 (where, in written response to an area of weakness
identified by agency, protester introduced a new weakness, and agency and
protester thereafter engaged in oral discussions, agency was required to
advise offeror that it regarded the new matter as a weakness). This case
does not involve such a situation. The record here reflects that the
Navy's discussions with offerors were conducted in writing, and did not at
any point involve back-and-forth exchanges of information. Further, the
SSEB did not complete its evaluation of DRS's discussions responses, and
first identify DRS's selection of [deleted] as a proposal defect, until
September 13, well after discussions had ended and FPRs had been
submitted. In sum, under the circumstances here, the agency was not
required to conduct additional discussions regarding this defect.
Operational Res. Consultants, Inc., B-299131, B-299131.2, Feb. 16, 2007,
2007 CPD para. 38 at 12; MD Helicopters, Inc.; AgustaWestland, Inc.,
B-298502 et al., Oct. 23, 2006, 2006 CPD para. 164 at 48 n.47.
Evaluation of GD's Technical Proposal
DRS protests that the Navy's evaluation of GD's technical proposal was
improper. The protester argues that the agency should have rejected GD's
proposal as technically unacceptable because it failed to comply with all
SRD requirements. DRS cites to two specific CEDS display screen
requirements--those involving the display of acoustic "waterfall" (i.e.,
flicker-free) data[14] and color resolution--that GD's proposal allegedly
failed to meet.[15] Based on these specific instances of noncompliance,
the protester maintains, the Navy should have found GD's proposal
technically unacceptable overall and ineligible for award. DRS Protest,
Nov. 19, 2007, at 19-22.
In reviewing an agency's evaluation, we will not reevaluate technical
proposals; instead, we will examine the agency's evaluation to ensure that
it was reasonable and consistent with the solicitation's stated evaluation
criteria and procurement statutes and regulations. Urban-Meridian Joint
Venture, B-287168, B-287168.2, May 7, 2001, 2001 CPD para. 91 at 2. An
offeror's mere disagreement with the agency's evaluation is not sufficient
to render the evaluation unreasonable. Ben-Mar Enters., Inc., B-295781,
Apr. 7, 2005, 2005 CPD para. 68 at 7. Our review of the record here shows
the agency's evaluation of GD's proposal to be unobjectionable.
The solicitation informed offerors that proposals were to be sufficiently
detailed so as to enable the agency to make a thorough evaluation and to
arrive at a sound determination as to whether or not the prospective
offeror would be able to perform in accordance with the stated
requirements. RFP amend. 1, Instructions to Offerors, at 42. The RFP also
stated that "[i]f one (1) or more of the evaluation Factors or Subfactors
are determined to be Unsatisfactory, the entire proposal may be rendered
technically unacceptable and ineligible for award."[16] Id. at 74
(emphasis omitted).
The SRD contained hundreds, if not thousands, of requirements for the CEDS
system. SRD section 3 established the actual CEDS system requirements
while SRD section 4 established the test standards by which the Navy would
verify the successful offeror's compliance with the section 3
requirements. Tr. at 176, 183-84. Relevant to the protest here, the SRD
included the following requirements regarding the CEDS display screens:
Acoustic Data. The screens shall be suitable for displaying acoustic
"waterfall" data.
1.The screen shall be capable of displaying dense high-contrast shifting
images (such as a sonogram "waterfall" output) without causing eyestrain
to an operator as defined by MIL-STD-1472 and ASTM F1166. [. . . , and]
* * * * *
ECDIS-N. The display console shall be Electronic Chart Display and
Information System -- Navy (ECDIS-N) certifiable. Graphics capabilities
shall be compatible with and meet the requirements to display navigation
applications [in accordance with Operational Navy Instruction] 9420.2
(ECDIS-N performance requirements).
RFP amend. 1, SRD sections3.6.1.1(d)(1), 3.6.2.1(e)(7). The SRD's display
screen requirements were not new or developmental in nature; the Navy had
used similar standards for its predecessor display console system, the
Q70, which the contractor there had been able to successfully achieve. Tr.
at 173.
GD's technical approach proposal, consisting of more than 500 pages,
included sections which addressed both the "waterfall" data display and
color resolution requirements. Specifically, the proposal described GD's
[deleted], as well as the various functional and performance properties of
its display consoles in relation to the SRD requirements. AR, Tab 6, GD's
Proposal, vol. II, Technical Proposal, at II.1.106 thru 112, 296 thru 302.
GD's proposal also expressly represented that its display screens would be
suitable for displaying acoustic waterfall data in accordance with SRD
sect. 3.6.1.1(d), and provided information as to how GD would achieve the
requirement.[17] Id. at II.1.112. Further, GD's proposal represented that
its display screens would comply with the color requirements of ECDIS-N
and applicable Navy instruction. Id., app. B, Requirements Verification
Test Matrix, at 23; Tab 32, GD Prime Item Development Specification, at
86.
The record shows that, when evaluating offerors' proposals, the SSEB
clearly considered certain SRD requirements to be more challenging than
others. The evaluators believed the separation kernel requirements to be
very demanding insofar as the work here was almost developmental in nature
and had not been achieved before. Tr. at 32-33. By contrast, the SSEB did
not consider the CEDS display screen requirements to be as difficult to
meet. Tr. at 179-80. The evaluators were aware that the display screen
requirements here were similar to those successfully achieved on the
Navy's prior Q70 display system, that GD had previously produced display
systems which displayed acoustic waterfall data for Navy attack
submarines, and that several other commercial companies produced display
systems that met SRD requirements. Tr. at 173-75. In light of this
information, as well as the market surveys that the Navy had performed
prior to release of the RFP here, the evaluators were not significantly
concerned about the ability of offerors to meet the SRD display screen
requirements. See Tr. at 179-81, 189.
The SSEB determined that GD's proposal met or exceeded all solicitation
requirements. AR, Tab 20, Final SSEB Report, at 11-25. Relevant to the
protest here, the evaluators found that GD's proposal met (but did not
exceed) the SRD display screen requirements regarding both acoustic
waterfall display and color resolution. Tr. at 171. The SSEB concluded
that, given the perceived degree of difficulty of the display screen
requirements here as well as the information provided by GD in its
proposal, the offeror both understood and expressly agreed to comply with
the SRD requirements. Tr. at 233-34.
We conclude that the agency's evaluation of GD's technical proposal was
reasonable and consistent with the stated evaluation criteria. As a
preliminary matter, DRS confuses the actual SRD requirements with the
standards by which the Navy would later test the successful offeror's CEDS
system for compliance. It was only SRD section 3 that established the
actual requirements which offerors' proposals were to address, and there
was simply no requirement that proposals also address the SRD test
verification standards. Additionally, while the RFP required proposals to
provide sufficient detail to determine whether the offeror would be able
to perform in accordance with the stated requirements, the RFP did not
require offerors to demonstrate that they had already achieved the SRD
requirements in order to be found technically acceptable. The record
reflects that GD's proposal addressed both of the SRD requirements that
DRS claims were lacking.[18]
DRS argues that GD's proposal should have been found to be technically
unacceptable because it did little more than recite, or "parrot back," the
SRD requirements in these two specific areas. The protester maintains that
an offeror's ability to quote a specification verbatim does not establish
technical compliance. DRS Comments, Jan. 18, 2008, at 30.
A proposal with significant informational deficiencies may be found
technically unacceptable, and an offeror's extensive parroting of an RFP's
requirements may be considered as evidence of the offeror's failure to
demonstrate a clear understanding of those requirements. See Government
Telecomms., Inc., B-299542.2, June 21, 2007, 2007 CPD para. 136 at 5;
Wahkontah Servs.. Inc., B-292768, Nov. 18, 2003, 2003 CPD para. 214 at 7.
Here, however, the record reflects that GD's proposal was extremely
detailed in nature, fully demonstrating that the offeror understood and
would meet the CEDS requirements. While GD's proposal may not have been as
detailed in these two specific areas as it was in other parts, we have no
basis to conclude that the agency's determination that GD's proposal was
technically acceptable was unreasonable.[19] We find DRS's challenge to
the Navy's evaluation amounts to mere disagreement with the agency's
judgment and, thus, does not establish that the evaluation was
unreasonable. JAVIS Automation & Eng'g, Inc., B-293235.6, Apr. 29, 2004,
2004 CPD para. 95 at 5.
Evaluation of DRS's Technical Proposal
DRS protests that the Navy's evaluation of its technical proposal was
improper in various ways. The protester primarily argues that DRS was
treated unequally in the evaluation process.[20] DRS maintains that in
many instances, under both the technical and management factors, the Navy
failed to recognize various aspects of DRS's proposal as strengths even
though DRS's proposal was identical to that of GD and the agency
determined that GD's proposal warranted strengths in these same areas.
Although we do not address all of the protester's arguments regarding the
agency's evaluation of its proposal, including all the alleged
"unrecognized DRS strengths," we have fully considered them all and find
no basis upon which to sustain the protest.
It is a fundamental principle of federal procurement law that a
contracting agency must treat all offerors equally and evaluate their
proposals evenhandedly against the solicitation's requirements and
evaluation criteria. Rockwell Elec. Commerce Corp., B-286201 et al., Dec.
14, 2000, 2001 CPD para. 65 at 5; CRAssociates, Inc., B-282075.2,
B-282075.3, Mar. 15, 2000, 2000 CPD para. 63 at 5. Our review of the
record confirms that the Navy evaluated offerors' proposals equally under
the technical and management factors, and that the difference in
evaluation ratings here was not the result of unequal treatment by the
agency but instead stemmed from the agency's recognition of differences in
the offerors' proposals.
For example, DRS argues that because the Navy found GD's proposal to have
several major strengths for its separation kernel solution [deleted], the
agency should have likewise found similar strengths in DRS's proposal.
Protest, Dec. 31, 2007, at 31-33. The SSEB determined that GD's proposal
warranted strengths in this area because the offeror had established
[deleted] in which the GD [deleted] the separation kernel software
architecture needed for the CEDS system. AR, Tab 6, GD Proposal, vol. II,
Technical Proposal, at II.1-358; Tab 19, GD FPR, at 1; Tab 20, Final SSEB
Report, at 15, 23-24; Tr. at 52-66. The evaluators believed that GD's
[deleted] would result in [deleted] solution, thereby reducing the risk
associated with providing and certifying the separation kernel
architecture. AR, Tab 20, Final SSEB Report, at 15, 23-24; Tr. at 56. By
contrast, the SSEB determined that although DRS's FPR included [deleted].
AR, Tab 18, DRS FPR, at II.C-234f, l; Tr. at 57-62. Additionally, as DRS's
proposal did not reflect an [deleted], the fact that the offeror planned
to [deleted] did not alleviate the SSEB's concerns that the [deleted]
development of hardware and software could increase performance risk. Tr.
at 61-62.
In our view, the agency's evaluation of DRS's proposal here was reasonable
and consistent with the stated evaluation criteria. First, the SSEB
reasonably judged GD's [deleted] to be of value to the agency, thereby
warranting strengths in this regard. Further, the SSEB reasonably
determined that DRS's proposal did not evidence the same [deleted] as
existed in GD's proposal. The agency reasonably determined that the
proposals of GD and DRS were different in this regard and in light
thereof, rated the proposals differently.
Cost/Price Evaluation
DRS protests that the Navy failed to perform a proper evaluation of GD's
cost and price proposal. Specifically, the protester alleges that the
agency's cost analysis failed to adequately consider whether the awardee's
proposed costs were realistic to perform the work required by the RFP. In
conjunction with its assertion that GD's proposed display glass fails to
meet all SRD requirements, DRS alleges that the cost of SRD-compliant
glass is [deleted] greater than that proposed by GD and that this accounts
for approximately [deleted] of the cost difference between the offerors'
proposals.[21] The protester also maintains that GD's technical
noncompliance would result in cost increases to the Navy during contract
performance, and the agency's failure to reasonably determine GD's
realistic costs adversely affected the resulting source selection
decision.[22] DRS Protest, Nov. 19, 2007, at 27-28.
The reasonableness of an agency's cost or price evaluation is directly
related to the financial risk that the government bears because of the
contract type it has chosen. When an agency evaluates proposals for the
award of a cost-reimbursement contract (or cost-reimbursement portion of a
contract), an offeror's proposed costs of contract performance are not
considered controlling because, regardless of the costs proposed by an
offeror, the government is bound to pay the contractor its actual and
allowable costs. FAR sect. 16.301-1; Metro Mach. Corp., B-295744,
B-295744.2, Apr. 21, 2005, 2005 CPD para. 112 at 9. Consequently, an
agency must perform a cost realism analysis to determine the extent to
which an offeror's proposed costs represent what the contract performance
should cost, assuming reasonable economy and efficiency. FAR
sections 15.305(a)(1), 15.404-1(d)(1), (2); Magellan Health Servs.,
B-298912, Jan. 5, 2007, 2007 CPD para. 81 at 13; The Futures Group Int'l,
B-281274.2, Mar. 3, 1999, 2000 CPD para. 147 at 3. By contrast, when an
agency evaluates proposals for the award of a fixed-price contract (or
fixed-price portion of a contract), in which the government's liability is
fixed and the contractor bears the risk and responsibility for the actual
costs of performance, see FAR sect.16.202-1, the analysis of an offeror's
price need only determine that the price offered is fair and reasonable to
the government (i.e., price reasonableness), and focuses primarily on
whether the offered price is higher--as opposed to lower--than
warranted.[23] See CSE Constr., B-291268.2, Dec. 16, 2002, 2002 CPD para.
207 at 4; WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD para. 68
at 4 n.2.
As set forth above, the RFP contemplated the award of an ID/IQ contract
including both fixed-price and cost-reimbursement CLINs, as follows:[24]
+------------------------------------------------------------------------+
|CLIN | Supply or Service | Contract Type |
|-----+----------------------------------------+-------------------------|
|0003 |First Article Unit |Cost Plus Award Fee |
|-----+----------------------------------------+-------------------------|
|0005 |Production Units - Year 1 |Fixed Price Incentive[25]|
|-----+----------------------------------------+-------------------------|
|0006 |Production Units -- Years 2 thru 4 |Firm Fixed Price |
|-----+----------------------------------------+-------------------------|
|0007 |Spares & Installation Checkout Hardware |Firm Fixed Price |
|-----+----------------------------------------+-------------------------|
|0008 |Performance Based Logistics |Firm Fixed Price |
|-----+----------------------------------------+-------------------------|
|0010 |Program Services |Cost Plus Award Fee |
|-----+----------------------------------------+-------------------------|
|0011 |Technical & Engineering Services |Cost Plus Award Fee |
|-----+----------------------------------------+-------------------------|
|0013 |Training Services |Time and Materials |
+------------------------------------------------------------------------+
RFP sect. B, at 1-7. The RFP also informed offerors how the agency would
perform its cost/price evaluation and specified the unit quantities to be
considered for each CLIN (e.g., CLINs 0005 and 0006 involved a total of
601 CEDS display consoles and 127 CEMS). RFP amend. 3, at 3.
The Navy's cost/price evaluation of the GD and DRS FPRs, as corrected, was
as follows:[26]
+------------------------------------------------------------------------+
| CLIN | GD Proposed | GD Evaluated | DRS Proposed | DRS Evaluated |
|------------+-------------+--------------+--------------+---------------|
| 0003 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| 0005/0006 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| 0007/0008 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| 0010 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| 0011 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| 0013 | [deleted] | [deleted] | [deleted] | [deleted] |
|------------+-------------+--------------+--------------+---------------|
| Total | $67,960,422 | $67,958,161 | $84,335,367 | $84,313,512 |
+------------------------------------------------------------------------+
AR, Dec. 19, 2007, at 38; AR, Tab 21, Final Cost Evaluation Report, at
33-40.
As shown above, the offerors' evaluated costs/prices were essentially the
same as those the offerors proposed. In fact, the only instance where the
agency took exception to the costs and prices as proposed and made certain
minor adjustments was with regard to cost-reimbursement CLIN 0003, the
first article unit. AR, Tab 21, Final Cost Evaluation Report, at 8-11.
DRS maintains that the Navy's cost realism evaluation of GD's proposal was
unreasonable, not because GD's proposed costs are unrealistic in
comparison to the particular methods of performance and materials
described in the offeror's technical proposal, but rather because GD's
proposed costs are unrealistic in comparison to the work to be performed
(specifically, the SRD display glass requirements). The protester alleges
that because GD's proposed display glass was noncompliant and would
thereby result in cost increases to the government for the entire duration
of the CEDS program, the Navy failed in its duty to perform a proper cost
realism evaluation. We disagree.
As a preliminary matter, we note that most of the CLINs here either did
not involve display glass or were fixed-price in nature. Specifically,
CLINs 0010, 0011, and 0013 do not involve display glass. Further, the
majority of CLINs which involve display glass (0005 thru 0008) are
fixed-price, thereby establishing contractual limits on the Navy's cost
liability. In fact, the only CLIN that both involves display glass and is
cost-reimbursement in nature is CLIN 003, the First Article Unit. By
contrast, DRS's assertion that approximately [deleted] of the cost
difference between the offerors' proposal is attributable to GD's
noncompliant display glass is based on consideration of the fixed-price
production units. Quite simply, the cost-reimbursement portion of the CEDS
procurement involving display glass, for which DRS alleges the Navy failed
in its duty to perform a proper cost realism analysis, was limited to the
first article unit. Moreover, as DRS's assertion that the Navy failed to
perform a proper cost realism analysis of GD's proposal is factually
premised on the claim that the awardee's technical proposal was
noncompliant, as we have determined that the Navy's technical evaluation
of GD's proposal was reasonable, we also find no merit in the protester's
indirect challenge here to the agency's technical evaluation of proposals.
Past Performance Evaluation
DRS challenges the agency's evaluation of GD's past performance. The
protester maintains that the Navy failed to properly consider various
adverse past performance information regarding GD when conducting its
evaluation. DRS also argues that various strengths which the SSEB
identified in its evaluation of GD's past performance are inconsistent
with the underlying past performance information regarding the awardee.
DRS argues that, in light thereof, the agency's decision to rate GD's past
performance as "outstanding," and equivalent to that of the protester, was
inconsistent with the RFP's stated evaluation criteria. The protester also
contends that it was prejudiced as a result of the Navy's flawed past
performance evaluation here.
As a general matter, the evaluation of an offeror's past performance is a
matter within the discretion of the contracting agency, and we will not
substitute our judgment for reasonably based past performance ratings.
However, we will question an agency's evaluation conclusions where they
are unreasonable or undocumented. Clean Harbors Envtl. Servs., Inc.,
B-296176.2, Dec. 9, 2005, 2005 CPD para. 222 at 3; OSI Collection Servs.,
Inc., B-286597, B-286597.2, Jan. 17, 2001, 2001 CPD para. 18 at 6. The
critical question is whether the evaluation was conducted fairly,
reasonably, and in accordance with the solicitation's evaluation scheme,
and whether it was based on relevant information sufficient to make a
reasonable determination of the offerors' past performance. Clean Harbors
Envtl. Servs., Inc., supra. As detailed below, the agency's past
performance evaluation here did not meet this standard.
The RFP instructed offerors, with regard to past performance, to
demonstrate "how the proposed team's past experience and quality
performance on programs of similar complexity make it qualified to execute
the CEDS program (describe relevant and pertinent past performance for
prime and major subcontractors)." RFP amend. 1, Instructions to Offerors,
at 58. Offerors were also required to submit relevant experience--that is,
contracts on-going or completed in the previous 5 years that involved work
similar to the CEDS procurement in terms of technology, type of effort
(development, production, and maintenance), contract scope, schedule and
risk--for evaluation.[27] Id. at 60. Additionally, as part of its
evaluation of offerors' past performance, the agency reserved the right to
obtain information from sources other than those provided by the offerors.
Id. at 58.
The NAVSEA contracting officer gathered and provided to the SSEB the
offerors' past performance information. The past performance information
regarding GD consisted of both contractor performance assessment reports
(CPAR) and past performance questionnaires for the offeror itself and its
proposed subcontractors.[28] AR, Tab 6, GD Past Performance Information.
Relevant to the protest here, the GD past performance information also
included a CPAR for General Dynamics [deleted] regarding its performance
of the Navy's multifunctional cryptographic systems (MCS) contract.[29]
The MCS CPAR was very negative in its assessment of the contractor's
performance. Specifically, GD [deleted] received ratings of
"unsatisfactory" for the areas of technical (quality of product),
schedule, and cost control, and "marginal" for management. Id., MCS CPAR,
at 2. The CPAR found the reliability of the delivered MCS product to be of
concern: "Given the number of software defects and performance issues with
the baseline, the government began to question the viability of the
product in terms of long-term performance and reliability for the Fleet."
Id. at 3. The CPAR also found program schedule growth to be of concern:
numerous software problems and extensive regression testing periods caused
repeated delays resulting in the government questioning "the viability of
the product and the loss of confidence in the program that it would
achieve the planned capability performance for MCS." Id. The CPAR also
found cost control to be a significant concern: "The government's concern
with the contractor's cost projections was based on the contractor's
inability to adequately estimate the remaining efforts; this has been an
on-going issue throughout the life of the program." Id. Additionally,
notwithstanding the contractor's view that the problems experienced here
resulted from Navy- furnished information and equipment, the CPAR reflects
that the agency reviewing official agreed with the agency assessing
official's evaluation here. Id. at 4-5.
The SSEB rated GD's past performance as "outstanding" overall and
determined that the awardee's proposal had 16 strengths (13 major,
3 minor) and no weaknesses under this evaluation factor. Among the various
strengths the SSEB found relating to GD's past performance were:
Majority (three out of four) CPARs reviewed for the Contractor, rated
[deleted] as exceptional or very good in technical, product performance,
systems engineering, logistics support/ sustainment, schedule, cost
control and management (Major).
Contractor provided 8 non-[contract data requirements list] deliverables
which provided advanced insights into the Contractor's management plans
and processes (i.e., QA Plan, Program Management Plan and Risk Plan)
(Major).
GD[] met schedule for Phase I deliverables, and provided drafts of
8 deliverables not required yet for Phase I (e.g., [quality assurance]
plan, SEMP, T&E Plan), thus reducing risk of on-time delivery of awarded
contractor for Phase II (Major).
AR, Tab 20, Final SSEB Report, at 30. Importantly, the SSEB's report did
not mention the adverse CPAR ratings regarding the MCS contract. The
agency evaluation report also did not indicate to what extent, if at all,
the agency considered the relevance of the past performance information
received regarding GD. Id.
In its protest, DRS argued that the Navy had improperly disregarded
adverse past performance information regarding GD. The protester
maintained that the agency evaluation report failed to recognize and take
into account the MCS CPAR, even though it was relevant to every past
performance subfactor. DRS argued that the Navy's failure to take this
adverse past performance information regarding the awardee into account
constituted a departure from the stated evaluation criteria that was
prejudicial to DRS. Protest, Dec. 31, 2007, at 53-58.
In its report to our Office, the Navy originally argued that the SSEB had
reasonably disregarded the MCS CPAR as part of its evaluation of GD's past
performance. The agency contended that only two specific divisions of
General Dynamics--[deleted]--would be involved in performing the CEDS work
here, while the MCS CPAR involved another GD division--[deleted]. Because
the past performance information involved a General Dynamics division that
would not be performing work on the CEDS project, the agency argued, it
was reasonable not to consider this information as relevant in the
evaluation of the awardee's past performance.[30] AR, Jan. 11, 2008, at
34.
In its comments to the agency report, DRS provided information to
demonstrate that GD [deleted] was in fact [deleted]. Specifically, GD
[deleted] had been merged by the parent company into [deleted] "with the
integrated unit continuing to operate as [deleted]." DRS Comments, Jan.
18, 2008, at 20. Quite simply, DRS argued, the specific General Dynamics
division mentioned in the adverse MCS CPAR was one of the two General
Dynamics divisions that the agency acknowledged would be performing the
CEDS work here. Thus, the protester maintained, the Navy's stated factual
basis for not considering the MCS CPAR was completely inaccurate. Id. at
19-20.
At the hearing conducted by our Office, the SSEB chairman originally
testified that the agency evaluators did not see and did not consider the
MCS CPAR as part of their evaluation of GD's past performance. Tr. at
203-05. The Navy, however, subsequently introduced evidence that the MCS
CPAR had in fact been considered by the SSEB in its evaluation of GD's
past performance insofar as the evaluation report included specific
findings that could only be attributable to the MCS CPAR.[31] Id. at
366-70. The SSEB chairman stated, however, that he still had no
recollection of ever having considered the MCS CPAR as part of the
agency's evaluation of GD's past performance. Id. at 361, 368-69, 376. For
example, the following exchange took place with the SSEB chairman:
Q: [C]orrect me if I'm wrong. You stated you don't remember considering
the GD CPARs on MCS, correct?
A: I believe I stated I don't recall seeing it.
Q: Do you recall evaluating it?
A: If I didn't see it, how can I actually evaluate it?
Q: You mentioned that you had a conversation with the deputy on the
SSEB, is that correct?
A: Yes.
* * * * *
Q: And your recollection of that discussion with the deputy was that he
also did not remember this CPARs?
A: That's what he told me.
Q: If you don't remember seeing it and the deputy doesn't remember
seeing it, how do you know that you gave it proper consideration in the
agency's past performance evaluation of GD?
A: I don't know.
Id. at 407-08.
At the hearing conducted by our Office, the SSEB chairman also discussed
how the evaluators considered the relevance of offerors' past performance
information. At one point the lead evaluator indicated that the
determination of whether an offeror's past performance was similar to the
work to be performed was based on whether it involved the delivery of
equipment: "We would look at the CPARs. We looked at the work. If it was
similar in terms of they were producing a piece of equipment, we would
count that as being similar." Id. at 214. At another point, the following
exchange occurred with the SSEB chairman:
Q: Did you give some references or some CPARs more weight than others
because they were -- they were the same or similar, they were more
relevant to the work here?
A: I believe we evaluated and gave credit for every CPARs we received.
* * * * *
Q: I've looked at the SSEB report. . . . I did not see in here the
agency's --the agency saying that some of the references were more
relevant than others. Am I missing anything?
A: No. We treat[ed] them all equally.
Q: Regardless of relevance? And what if it was really good past
performance, but it has nothing to do with the technology of CEDS. How
much weight do you give that? Do you think that that should be weighed
equally to something that is highly relevant and high quality?
A: No.
Id. at 211-13.
The SSEB chairman also indicated that at least one of the strengths
identified in the agency's report regarding GD's past performance was
inaccurate. As set forth above, the SSEB report considered as a major
strength the fact that a majority (i.e., three out of four) of the CPARs
for proposed subcontractor [deleted] rated its performance as either
exceptional or very good. The SSEB chairman acknowledged that this
finding was inaccurate, and that instead two of the four CPARs for
[deleted] had rated its performance as either outstanding or very good.
Id. at 404.
We conclude that the agency's evaluation of GD's past performance was
not reasonable or consistent with the stated evaluation criteria. Of
foremost concern, the record indicates that the Navy failed to give
meaningful consideration to all the relevant past performance
information that it possessed regarding GD. The evaluation report
reflects that the SSEB was aware of, and apparently considered to some
degree, the CPAR regarding the MCS contract. The agency cannot provide
an explanation, however, as to why the contractor's self-serving
rebuttal (which the Navy reviewing official for the MCS CPAR did not
accept) merited two major strengths, while the extremely adverse
information and ratings regarding the contractor's performance in the
areas of technical, schedule, cost control, and management were
completely ignored. Tr. at 378. Additionally, the SSEB chairman admits
having no recollection that he ever saw or considered the MCS CPAR and,
as a result, we cannot say that the Navy gave proper consideration to
this adverse past performance information in its evaluation.[32] We fail
to see how the agency can properly evaluate an offeror's past
performance when its evaluators admittedly do not remember if all the
past performance information was in fact considered.
The record also reflects that the Navy failed to adequately consider the
relevance of GD's past performance information as part of the
evaluation. An agency is required to consider the similarity or
relevance of an offeror's past performance information as part of its
evaluation of past performance. See FAR sect. 15.305(a)(2) (the
relevance of past performance information shall be considered); United
Paradyne Corp., B-297758, Mar. 10, 2006, 2006 CPD para. 47 at 5-6; Clean
Harbors Envtl. Servs., Inc., supra.
The RFP here instructed offerors to provide past performance information
that was "relevant and pertinent," and later defined "relevant" as
similar to the CEDS procurement in terms of technology, type of effort,
contract scope, schedule, and risk. RFP amend. 1, Instructions to
Offerors, at 60, 62. The record does not reflect that the agency
adequately considered whether GD's past performance information was in
fact similar to the CEDS procurement in accordance with the RFP.
The CPARs and questionnaires upon which the SSEB based their evaluation
of GD's past performance furnished adjectival ratings and narratives
regarding the quality of an offeror's performance in various areas. The
contemporaneous evaluation report does not indicate that the agency went
beyond considerations of quality and also considered the relevance of
the offerors' past performance references. The SSEB's evaluation
findings regarding GD concern the quality of the offeror's prior
performance and indicate equal consideration of the offeror's past
performance references without regard to relevance. Further, at the
hearing conducted by our Office, the SSEB chairman's statements were, at
best, ambiguous as to the agency's consideration of relevance.
Specifically, the lead evaluator indicated that the SSEB gave equal
consideration to all the offeror's past performance references,
irrespective of relevance, and that the determination of what past
performance was deemed "similar" was based simply on whether the prior
work involved producing a piece of equipment. As the RFP required the
agency to determine whether an offeror's past performance was similar to
the CEDS procurement in terms of technology, type of effort, contract
scope, schedule, and risk, we conclude that the agency did not properly
consider the relevance of GD's past performance in its evaluation.
The record also reflects various inaccuracies in the SSEB report
regarding GD's past performance. As detailed above, the SSEB chairman
admits that one of the strengths given to GD--that a majority of the
CPARs for [deleted] rated it as exceptional or very good--was factually
inaccurate. Moreover, the two strengths given to GD related to its MCS
CPAR are redundant, as well as based entirely on assertions by the
contractor with which the Navy reviewing official there did not agree.
In addition, GD received a major strength for certain CEDS document
deliverables that provided insight into the contractor's management
plans and processes--a fact that has nothing to do with past
performance. In sum, several of the SSEB's specific findings regarding
GD's past performance are without factual justification.
The Navy argues that notwithstanding any deficiencies in its evaluation
of GD's past performance, the protest here should not be sustained
because DRS was not prejudiced. Specifically, the agency maintains that
given GD's significant advantage over DRS in the technical approach
factor,[33] and the relative importance of the technical approach and
past performance evaluation factors, it is impossible for DRS to be
found technically superior to GD overall, thereby requiring a
price/technical tradeoff which the agency did not originally have to
make. In support thereof, the agency points to the fact that it was GD's
undisputed technical advantages (i.e., strengths that existed only in
GD's proposal) upon which the SSAC exclusively relied for its
determination that GD's proposal was technically superior to that of
DRS. Accordingly, the Navy argues, none of the alleged deficiencies
regarding the agency's evaluation of GD's past performance can possibly
change the conclusion that GD's proposal was technically superior
overall to that of DRS. AR, Feb. 14, 2008, at 2-11, 22-24.
Competitive prejudice is an essential element of a viable protest;
where the protester fails to demonstrate that, but for the agency's
actions, it would have had a substantial chance of receiving the award,
there is no basis for finding prejudice, and our Office will not sustain
the protest. Joint Mgmt. & Tech. Servs., B-294229, B-294229.2, Sept. 22,
2004, 2004 CPD para. 208 at 7; see Statistica, Inc. v. Christopher,
102 F.3d 1577 (Fed. Cir. 1996).
We recognize that GD's proposal was found to have technical strengths
that DRS's did not, and that the RFP established that the technical
approach factor was more important than the management approach and
capabilities factor, which in turn was more important than the past
performance factor. However, as detailed above, the record shows that
the Navy's evaluation of GD's past performance was fundamentally flawed:
it failed to adequately consider all relevant information; it failed to
adequately consider the relevance of the offeror's past performance
information; and several of the identified strengths are factually
inaccurate and/or redundant. In light of these significant deficiencies
in the agency's evaluation of GD's past performance, we simply cannot
reasonably determine what GD's rating--or its strengths and
weaknesses--should have properly been here. By contrast, in light of the
errors which the Navy concedes occurred in other aspects of its
evaluation of GD's proposal, it appears that the GD and DRS proposals
have equivalent overall ratings of "very good" under both the technical
approach and management approach and capabilities factors, and DRS
received an "outstanding" rating for its past performance. Consequently,
as we cannot determine that GD's proposal would remain technically
superior overall, we conclude that the agency's actions here were
prejudicial to the protester.
RECOMMENDATION
We recommend that the agency reevaluate offerors' past performance,
giving due consideration to all relevant information as well as the
relevance of the offerors' prior and current contracts and, based on
that reevaluation, make a new source selection determination. If, upon
reevaluation of proposals, DRS is determined to offer the best value to
the government, the Navy should terminate GD's contract for the
convenience of the government and make award to DRS. We also recommend
that DRS be reimbursed the costs of filing and pursuing the protest,
including reasonable attorneys' fees, limited to the costs relating to
the ground on which we sustain the protest. 4 C.F.R. sect. 21.8(d)(1)
(2007). DRS should submit its certified claim for costs, detailing the
time expended and costs incurred, directly to the contracting agency
within 60 days after receipt of this decision. 4 C.F.R. sect.
21.8(f)(1).
The protest is sustained in part and denied in part.
Gary L. Kepplinger
General Counsel
------------------------
[1] The RFP established two categories of CEDS display systems--display
consoles and remote displays--for which the Navy made separate award
determinations. DRS's protest here concerns only the Navy's CEDS display
consoles procurement.
[2] The awarded Phase I contracts also served as the solicitation for
Phase II proposals: they each included a SOW, a CEDS system requirements
document (SRD), instructions to offerors regarding the submission of
proposals, and evaluation factors for award. AR, Dec. 19, 2007, at 4. For
purposes of this decision, further references to the RFP and/or
solicitation refer to the Phase II procurement. Additionally, so as to
avoid confusion, the citations within this decision will refer to the
"RFP" for CEDS Phase II rather than to the Phase I contracts in which the
relevant solicitation provisions are located.
[3] We note that another section of the RFP stated that overall technical
merit was more important (as opposed to significantly more important) than
total evaluated price. Id. at 67.
[4] As explained in detail below in footnote 20, during the course of the
protest the Navy conceded certain evaluation errors. In light thereof,
GD's proposal under the technical approach factor appears to merit a "very
good" rather than an "outstanding" rating.
[5] As with GD's rating under the technical approach factor, given the
errors which the Navy concedes occurred, GD's proposal under the
management approach and capabilities factor also appears to merit a "very
good" rather than an "outstanding" rating.
[6] In its original protest DRS also argued that the Navy had made a
cardinal change to GD's contract by substantially changing the quantity of
CEDS display consoles. DRS Protest, Nov. 19, 2007, at 29-30. At a hearing
conducted by our Office as part of our review of the protest, DRS
acknowledged that it had abandoned this issue. Hearing Transcript (Tr.) at
257.
[7] During the course of the protest, GD provided statements demonstrating
that its expertise in separation kernel technology was the result of its
long-time involvement in the design of information assurance systems such
as encryption equipment. In 1999, as a result of an independent research
and development (IR&D) project, GD employees filed a patent application
for a mathematically analyzed separation kernel. [Deleted] GD Comments,
Dec. 31, 2007, attach. A, Declaration of Bill Ross, at 4-5.
[8] We acknowledge that our findings here are based largely on statements
provided by the government and GD employees. However, we see no basis (nor
does DRS provide one) to question the accuracy of the statements.
[9] This briefing appears to have occurred in the context of GD being the
current HAP program contractor.
[10] POSIX, or portable operating system interface for Unix, refers here
to the Navy's open software architecture initiative of ensuring that the
CEDS system does not adversely affect any host application software with
which it would interface. Tr. at 48-49.
[11] DRS's initial proposal also did not identify the specific [deleted]
separation kernel product in which it was most interested; instead, DRS
listed [deleted] as potential options here. AR, Tab 5, DRS's Proposal,
vol. II, Technical Proposal, at II-C-221.
[12] The record indicates that the Navy's use here of the term "major
weakness" was synonymous with "significant weakness," that is, a flaw in
an offeror's proposal that appreciably increases the risk of unsuccessful
contract performance. See FAR sect. 15.001.
[13] The record reflects that the Navy conducted discussions in writing by
sending each offeror a letter containing discussion questions on July 20;
the agency also requested that offerors submit their discussion responses
in writing by August 6. AR, Tab 14, Navy Discussions with DRS; Tab 16,
Navy Discussions with GD. DRS submitted its discussion responses on August
6, id., Tab 15, DRS Discussions Responses, and on August 13 the Navy
confirmed an earlier notice to the offerors that FPRs were due by August
16. DRS Protest, Dec. 31, 2007, exh. 9, Navy Email to Offerors. DRS argues
that the agency's discussions with offerors did not close until the day on
which the Navy confirmed the FPR closing date (August 13), rather than the
date upon which discussion responses were due (August 6).
[14] Acoustic waterfall display refers to the graphical representation of
noise data (i.e., sonar) with respect to time. As time progresses, data is
added to the top of the display screen and the existing data moves down.
An improper display screen can flicker or flash over time, thereby causing
eyestrain and/or headaches to the operator who is monitoring the acoustic
waterfall display. Tr. at 170-73.
[15] DRS originally alleged that GD's proposal also was noncompliant with
the CEDS SRD requirement for hard-mounting. DRS Protest, Nov. 19, 2007, at
22. The protester subsequently withdrew this aspect of its challenge to
the agency's evaluation of GD's technical proposal. DRS Protest, Dec. 31,
2007, at 20.
[16] The RFP defined "unsatisfactory" as follows: the proposed approach
indicates a lack of understanding of the program goals and the methods,
resources, schedules and other aspects essential to performance of the
program; numerous weaknesses and deficiencies exist; and the risk of
unsuccessful contract performance is high. Id. at 74.
[17] Additionally, the requirements verification test matrix portion of
GD's proposal also represented that its display screens would comply with
the SRD requirements regarding acoustic waterfall data. Id., app. B,
Requirements Verification Test Matrix, at 5.
[18] DRS also argues that GD's proposed approach to meeting the display
screen acoustic waterfall data requirements will not work "as a matter of
science." DRS Comments, Jan. 18, 2008, at 29-30. Even if we assume that
GD's proposed approach here will ultimately not meet all display screen
requirements without modifications, however, that does not mean that the
agency misevaluated the offeror's proposal.
[19] The record also reflects that the Navy's evaluation of proposals was
even-handed in this regard: in those instances where DRS's proposal also
agreed to comply with the SRD requirements without providing details as to
how, the SSEB likewise did not find this to be a deficiency or weakness.
Tr. at 143.
[20] DRS's protest also raised other issues regarding the evaluation of
its technical proposal, many of which were resolved by the agency's
acknowledgment of error. In its report to our Office, the Navy conceded
that because GD [deleted], the awardee's proposal should have received
similar major weaknesses under the technical and management factors for
failing to comply with the SRD requirement for a POSIX-compliant operating
system. AR, Dec. 19, 2007, at 28. The Navy also acknowledges that, with
regard to the System Test and Qualification subfactor, DRS's proposal
should have received a rating of "outstanding" rather than "very good."
Id. at 32. Lastly, the Navy admits that DRS's proposal should have
received two additional major strengths--equivalent to those given to
GD--for data rights and open architecture assessment tool. Id. at 35; Tr.
at 261-62. In sum, the Navy acknowledges that DRS's proposal merited two
additional major strengths and that GD's proposal should have received two
major weaknesses. In accordance with the RFP's stated evaluation scheme,
the acknowledged errors would appear to result in the GD and DRS proposals
having equivalent overall ratings of "very good" under both the technical
approach and management approach and capabilities factors.
[21] DRS bases its figure here on the alleged higher cost of SRD-compliant
display glass, the fact that three pieces of glass were required for each
CEDS display console, and the requirement of 601 CEDS production units.
DRS Protest, Nov. 19, 2007, at 28 n.4. The protester provides no further
support for its computation.
[22] DRS also originally asserted that the Navy's cost evaluation was
flawed because GD had offered "cheap versions of major cost drivers"
(e.g., trackball, keyboard, joystick) and that GD's labor rates for
program services appeared understated. DRS Protest, Nov. 19, 2007, at 27.
The agency addressed all aspects of its evaluation of GD's cost/price
proposal in its report to our Office. AR, Dec. 19, 2007, at 35-39. As
DRS's comments did not again raise these aspects of the Navy's cost
evaluation of GD's proposal, see DRS Comments, Dec. 31, 2007, at 62-63, we
regard these issues as abandoned. Remington Arms Co., Inc., B-297374,
B-297374.2, Jan. 12, 2006, 2006 CPD para. 32 at 4 n.4.
[23] Likewise, a realism analysis is not ordinarily part of an agency's
price evaluation because of the allocation of risk associated with a
fixed-price contract. AST Envtl., Inc., B-291567, Dec. 31, 2002, 2002 CPD
para. 225 at 2. To the extent an agency elects to perform a realism
analysis in the competition for a fixed-price or fixed-price incentive
contract, its purpose is not to evaluate an offeror's price but to assess
risk or to measure an offeror's understanding of the solicitation's
requirements; the offered prices may not be adjusted as a result of the
analysis. FAR sect. 15.404-1(d)(3); Puglia Eng'g of California, Inc.,
B-297413 et al., Jan. 20, 2006, 2006 CPD para. 33 at 6.
[24] The RFP's other CLINs were either not separately priced, or expressly
not part of the agency's cost and price evaluation. RFP sect. B at 1-7.
[25] As contemplated here, a fixed-price incentive (firm target) contract
specifies a target cost, a target profit, a price ceiling (but not a
profit ceiling or floor), and a profit adjustment formula. See FAR sect.
16.403-1.
[26] In its report to our Office, the Navy acknowledged certain
computational errors in its final cost evaluation report. AR, Dec. 19,
2007, at 38. DRS's protest does not challenge the propriety of these
adjustments.
[27] The RFP also established that, with regard to the past performance
evaluation factor, the agency would assign a rating of "neutral" where the
offeror was found not to have relevant past performance. Id. at 74.
[28] The GD past performance information consisted of: one CPAR for GD
business unit [deleted]; three CPARs for proposed subcontractor [deleted];
two CPARs for proposed subcontractor [deleted]; one CPAR for proposed
subcontractor [deleted]; and two past performance questionnaires each for
GD, [deleted]. AR, Tab 6, GD Past Performance Information.
[29] The MCS contract involved the design, development, fabrication,
testing and fielding of a programmable, multi-channel, multiple
independent levels of security (MILS) cryptographic device for the Navy's
Virginia- and Seawolf-class submarines.
[30] The agency also furnished a declaration from the SSEB chairman
stating that the evaluators had considered only past performance
information for the divisions of General Dynamics that would actually
perform work under the CEDS contract, namely [deleted], as well as
proposed subcontractors. AR, Tab 31, Declaration of SSEB Chairman, at 1.
[31] In response to questioning from the agency, the SSEB chairman
concluded that two of the strengths identified in the evaluation report
regarding GD's past performance (i.e., "[t]he Contractor developed,
produced and certified a MILS system on a submarine without benefit of
required [government-furnished equipment/government-furnished information]
GFE/GFI (Major)," and "[t]he contractor managed to certify a MILS system
installed on a submarine without benefit of the required GFE/GFI which is
perceived as a risk reducer to meeting the separation kernel requirement
(Major)") derived from the contractor's rebuttal in the MCS CPAR. Tr. at
366-69; AR, Tab 20, Final SSEB Report, at 30.
[32] Further, the record reflects that this is more than just the faulty
memory of a single individual: the SSEB chairman stated that his deputy
also had no recollection of having seen or considered the MCS CPAR as part
of the Navy's evaluation.
[33] The Navy also contends that, with regard to the management approach
factor, the offerors' proposals are substantially equal, although GD
maintains a comparative advantage based on one additional minor weakness
in DRS's proposal. AR, Feb. 14, 2008, at 2.