Matter of: Loral Aeronutronic

Matter of: Loral Aeronutronic BNUMBER: B-259857.2; B-259858.2 DATE: July 5, 1995 TITLE: Matter of: Loral Aeronutronic ********************************************************************** REDACTED VERSION[*] Matter of: Loral Aeronutronic File: B-259857.2; B-259858.2 Date: July 5, 1995 Francis J. O'Toole, Esq., Robert J. Conlan, Jr., Esq., and Joseph C. Port, Jr., Esq., Sidley & Austin, for the protester. Thomas J. Madden, Esq., John J. Pavlick, Jr., Esq., Fernand A. Lavallee, Esq., and Carla D. Craft, Esq., Venable, Baetjer, Howard & Civiletti, for Raytheon Company; and Donald J. Kinlin, Esq., Thompson, Hine and Flory, for Hughes Missile Systems Company, interested parties. James I. Menapace, Esq., Department of the Navy, for the agency. Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protester's contention that agency selection officials could not upgrade the evaluation assessments given by lower level evaluators without a reevaluation of all proposals is denied where the record shows that the selection officials reasonably disagreed with the evaluators about the weight to be accorded certain elements and subfactors in assigning an overall assessment and made their adjustment in a manner consistent with the evaluation scheme in the solicitation. 2. Challenge to adequacy of the cost realism adjustments made to the awardee's proposal to reflect its high risk is denied where the record shows that the agency made a significant upward adjustment to address the high risk nature of the proposal, and none of the protester's assertions raises issues the agency did not consider, or shows that the agency's approach to making these adjustments was unreasonable. 3. Cost/technical tradeoff decision in demonstration and validation procurement where agency makes two awards and selects as the second awardee an offeror with a high cost, high risk proposal that, if shown to be feasible, promises significant advances in the weapon system's technology is not objectionable as record shows it is reasonable and consistent with evaluation criteria. DECISION Loral Aeronutronic protests the award of contracts to Raytheon Company and Hughes Missile Systems Company by the Department of the Navy, Naval Air Systems Command, pursuant to request for proposals (RFP) No. N00019-93-R-0017, issued for the AIM-9X Sidewinder Missile Demonstration/Validation program. Loral argues that the Navy's selection of Raytheon for one of two awards under this RFP was unreasonable because source selection officials upgraded the evaluation of Raytheon's technical proposal without a reevaluation of the proposals, failed to upwardly adjust Raytheon's proposed costs to reflect the high degree of risk associated with that proposal, and performed an irrational cost/technical tradeoff. We deny the protest. BACKGROUND This procurement is for the demonstration and validation (D&V) phase for the Sidewinder AIM-9X short-range air-to-air missile. The AIM-9X will be a major upgrade to the current AIM-9M missile (in service since 1982) with the most significant improvements in the seeker component--i.e., the device which tracks the intended target. The Navy[1] plans to incorporate an imaging midwave infrared seeker in the AIM-9X version of the missile. During the D&V phase at issue in this procurement, the Navy anticipates award of up to two contracts to develop competing prototype seekers for the purpose of defining the critical design characteristics and expected capabilities of the next generation of Sidewinder missiles. Upon completion of this contract, the Navy anticipates selecting one of the two offerors' designs for award of an engineering and manufacturing development contract, followed by a production contract, with a possibility of developing a second production source if appropriate. On May 11, 1993, the Navy released the RFP anticipating award of a cost-plus-incentive-fee contract. Section M-2 of the RFP advised that the award(s) would be made to the offeror(s) whose proposals provide the best value to the government. Section M-2 also identified the following evaluation criteria, in descending order of importance: technical; cost; management; and integrated logistics support (ILS). In addition, offerors were advised that the Navy would assess the risk associated with the technical, management, and ILS evaluation factors; and the realism of proposed costs. Under the evaluation factors of technical, cost, and ILS, the RFP set forth two subfactors each.