Matter of:Litton Systems, Inc., Amecom Division

B-275807.2 Apr 16, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protester's arguments that the cost realism adjustments made to its proposed costs were improper are denied where the record shows that the agency had a reasonable basis for its conclusions. Higher-probable cost proposal offered the best value to the government is denied where the record shows that the agency evaluation was reasonable and in accordance with the stated evaluation criteria. Protest challenging contracting officer's conclusion that there was no basis to discriminate between proposals in the area of performance risk is denied where the record shows that the contracting officer reasonably discounted the differences between the two performance risk assessments using her discretion in accordance with the stated weight of this factor in the evaluation scheme. View Decision Matter of: Litton Systems, Inc., Amecom Division File: B-275807.2 Date: April 16, 1997 * Redacted Decision DIGEST Attorneys DECISION Litton Systems, Inc., Amecom Division protests the award of a contract to Lockheed Martin Librascope under request for proposals (RFP) No. DAAM01- 96-R-0028, issued by the Department of the Army for engineering and manufacturing development of a Joint Biological Point Detection System (JBPDS) for the military services. Litton contends that the selection of Lockheed's more costly proposal was based on an unreasonable cost realism analysis, and an irrational best value determination. In addition, Litton argues that the Army failed to hold meaningful discussions. We deny the protest. BACKGROUND The RFP, issued on May 22, 1996, anticipated award of a 33-month cost reimbursement contract for study, design, fabrication, integration, installation, test and documentation for the JBPDS. The JBPDS will be comprised of modular devices that can be configured for use on various Army, Air Force, Marine Corps, and Navy platforms, e.g., wheeled vehicles, ships, and man-portable units. These devices will permit users to detect and identify airborne biological warfare agents. The statement of work required fabrication of two sets of prototype JBPDS components for engineering design testing, followed by fabrication of 28 separate JBPDS units for the various military services. Potential offerors were requested to submit technical and management proposals, along with a cost proposal identifying estimated costs for labor, materials, subcontracts, and other costs organized by work breakdown structure (WBS) elements. The evaluation scheme advised that the Army would select the proposal offering the best value, to be determined after assessment of the proposals under five evaluation factors: (1) technical; (2) management; (3) probable costs; (4) performance risk; and (5) socio-economic commitment. Section M.8 of the RFP advised that the assessment of the technical and management factors would be combined into a merit rating, which would be significantly more important than the remaining three evaluation factors. The merit rating was to be calculated on a 100-point scale, with up to 10 bonus points available for proposals offering advantages to the government. The remaining three factors--probable costs, performance risk, and socio-economic commitment--were not to be scored but were to receive a narrative evaluation. The provision also explained that probable costs would be slightly more important than performance risk, which would be more important than the socio-economic commitment factor. As with any cost reimbursement contract, offerors were advised that their cost proposals would be evaluated for realism and reasonableness to determine the most probable cost to the government. RFP Sec. M.2.1.4. By the initial closing date, the Army received proposals from Litton and Lockheed Martin. Both proposals were evaluated and found to be within the competitive range, and written and oral discussions were held with both offerors regarding weaknesses in their proposals. Both offerors were asked to submit best and final offers (BAFO) and both did so by the October 28 due date. Upon review of the BAFOs, Litton's proposal received a merit score of 92.5 with probable costs of $30 million, compared with Lockheed's proposal's score of 105.3 with probable costs of $32.2 million. The Army next performed a "value analysis" to compare and quantify--in calculations separate and distinct from the cost realism review--certain differences in the proposed technical approaches. The total result of these calculations was a $3.9 million perceived savings associated with award to Lockheed, which was apportioned approximately as a $1.7 million increase in Litton's most probable costs, and a $2.2 million decrease in Lockheed's most probable costs. Agency Report, Tab D-7.