Martin Marietta Defense Systems

B-270117 Feb 09, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Protest against determination that proposed significant reduction in historical level of effort (for production of part of guidance system for strategic nuclear deterrent missile system) was unrealistic is denied where proposed reduction was based on protester's undocumented and unsupported summation of a hypothetical build of three equivalent units. Which is the United States' sea-based strategic nuclear deterrent. For purposes of which offerors were to furnish a detailed cost proposal. Both proposals were included in the competitive range. Were significantly lower than Kearfott's target (and evaluated) price [deleted]. The Navy determined that MMDS's pricing was based on an unrealistically low level of effort that represented a significant reduction in the historical level of effort (when calculated on a per IMU basis) and was insufficient to assure delivery of a quality. View Decision Matter of: Martin Marietta Defense Systems File: B-270117 Date: February 9, 1996 Protest against determination that proposed significant reduction in historical level of effort (for production of part of guidance system for strategic nuclear deterrent missile system) was unrealistic is denied where proposed reduction was based on protester's undocumented and unsupported summation of a hypothetical build of three equivalent units, and the agency instead reasonably used as a baseline (against which to evaluate proposed labor-saving initiatives) the reported data on labor hours required to complete actual units over the course of the most recent contract year. Attorneys DECISION Martin Marietta Defense Systems (MMDS) protests the award of a contract to Kearfott Guidance & Navigation Corporation under request for proposals (RFP) No. N00030-95-R-0047, issued by the Department of the Navy, Strategic Systems Program, for MK-6 Inertial Measurement Units (IMU) for the Trident II missile. MMDS challenges the evaluation of technical and cost/price proposals. We deny the protest. The IMU provides acceleration, attitude and stellar sensor data to the guidance system for the Trident II missile, which is the United States' sea-based strategic nuclear deterrent. In the past, the Navy's requirement for Trident II IMUs has been equally divided between MMDS and Kearfott, each producing new IMUs at a minimum rate of 3 per month. A decrease in its requirement for new IMUs, however, resulted in the agency's issuing this solicitation, which provided for selection of a single source and, after an additional year of full production, transition to a lower rate of production. The solicitation contemplated award of a fixed-price-incentive contract (cost-based, with a target price and an ultimate ceiling price) for 5 years for: (1) IMU production, (2) IMU failure verification, repair and recertification, and (3) IMU integrated production capability maintenance hardware. The solicitation generally provided for award to be made to the offeror whose proposal represented the best value to the government, with technical merit to be given more weight than evaluated cost. The RFP listed, in descending order of importance, three technical merit evaluation factors: (1) technical approach, (2) resources, and (3) past performance. The solicitation provided for the agency to perform a cost realism evaluation, for purposes of which offerors were to furnish a detailed cost proposal, including: (1) prior actual costs for production and repair in fiscal years 1991, 1992, and 1993, broken down into direct labor hours and major cost elements for each of the tasks listed in the solicitation's work breakdown structure (WBS); and (2) a detailed breakdown of the proposed labor hours and major cost elements by WBS task. The solicitation generally required offerors to provide a basis of estimate to support each WBS task; it specifically stated that the proposal must "[i]dentify and explain any significant differences between the historical WBS hours/cost and those offered, in sufficient detail to allow the Contracting Officer to make a judgment as to the reasonableness of the proposed increases/decreases." The Navy received proposals from MMDS and Kearfott. Both proposals were included in the competitive range. At the conclusion of discussions, the Navy requested best and final offers (BAFO). While MMDS's BAFO target price [deleted], as well as its ceiling (and evaluated) price [deleted], were significantly lower than Kearfott's target (and evaluated) price [deleted], the Navy determined that MMDS's pricing was based on an unrealistically low level of effort that represented a significant reduction in the historical level of effort (when calculated on a per IMU basis) and was insufficient to assure delivery of a quality, reliable product.