Matter of:Alliant Techsystems, Inc.

Matter of:Alliant Techsystems, Inc. BNUMBER: B-276162; B-276162.2; B-276162.3 DATE: May 2, 1997 TITLE: Matter of:Alliant Techsystems, Inc. ********************************************************************** DOCUMENT FOR PUBLIC RELEASE A protected decision was issued on the date below and was subject to a GAO Protective Order. This version has been redacted or approved by the parties involved for public release. Matter of:Alliant Techsystems, Inc. File: B-276162; B-276162.2; B-276162.3 Date:May 2, 1997 John S. Pachter, Esq., Jonathan D. Shaffer, Esq., Eun K. (Julie) Chung, Esq., and Dorothy E. Terrell, Esq., Smith, Pachter, McWhorter & D'Ambrosio, P.L.C., for the protester. Thomas J. Madden, Esq., Jerome S. Gabig, Jr., Esq., Fernand A. Lavallee, Esq., and John J. Pavlick, Jr., Esq., Venable, Baetjer, Howard & Civiletti, and Scott W. MacKay, Esq., in-house counsel, for Lockheed Martin Corporation, an intervenor. Gregory H. Petkoff, Esq., and John E. Lariccia, Esq., Department of the Air Force, for the agency. Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. In assessing proposals for multi-year production contract which contemplates technology inserts over course of performance, agency evaluation of awardee's proposed insert component which is not yet developed, including review of proposal, technical briefings, and parallel development by other manufacturers, is unobjectionable where agency reasonably concludes that component ultimately will be successfully produced. Because agency has right to reject component from introduction as technology insert if it does not meet all specifications, agency reasonably determined that only potential impact of insert component on procurement will be to cost and schedule and thus, properly determined to evaluate component under affordability evaluation factor. 2. In procurement with cost and fixed-price elements, where offerors are committed to meet or better proposed system-life average unit prices (AUP) or face substantial penalties, agency's affordability evaluation is reasonable where it includes appropriate assessment of realism, reasonableness, and completeness of proposed costs which underlie AUP in accordance with evaluation criteria. 3. Award decision is unobjectionable where protester's slight advantage in "instant" contract cost and lower prices through earlier phases of procurement life is outweighed by selected offeror's technical advantages and significantly lower proposed prices over life of procurement. DECISION Alliant Techsystems, Inc. protests the Department of the Air Force's downselection and award of the Wind Corrected Munitions Dispenser (WCMD) Pilot Production Option under contract No. F08626-95-C-0106, P00010 to Lockheed Martin Corporation. Alliant contends that the agency's technical and cost evaluations were flawed and that the source selection authority's best value decision failed to take certain risk and cost factors into account. We deny the protest. BACKGROUND The WCMD is a modification kit that replaces the tail sections on a portion of current inventory cluster munitions. The kit will enable the tail dispensers which carry the cluster munitions to correct for the effects of launch transients, ballistic errors, and unknown winds between the release point and the dispenser's functioning point. Alliant and Lockheed were each awarded 24-month contracts in January 1995, to perform engineering and manufacturing development (EMD) of the WCMD on a cost-plus-fixed fee basis. In accordance with the terms of these contracts, the Air Force issued a call for improvements/request for proposals (CFI/RFP) to each offeror to submit updated proposals for the 20-month pilot production phase and optional low-rate initial production lots (LRIPs 1 and 2), and prices for three full rate production lots (FRP). The solicitation contemplated award of only the pilot production option to one contractor, but reserved the right to exercise the options with both EMD contractors, or to make no option award at all. Exercise of the LRIP 1 option was to be made not later than 14 months after award of the pilot production option and LRIP 2 not later than 14 months after the exercise of LRIP 1. Timing of the FRP awards was not included in the CFI/RFP. Clause H.16 of both EMD contracts sets forth four evaluation areas in descending order of importance: affordability, technical, management, and instant contract cost. General considerations also were to be evaluated, but were of lesser importance than the specified criteria. Clause H.16 also identified evaluation factors under three of the four criteria.