National Steel and Shipbuilding Company, B-281142; B-281142.2, January 4, 1999

National Steel and Shipbuilding Company, B-281142; B-281142.2, January 4, 1999 TITLE: National Steel and Shipbuilding Company, B-281142; B-281142.2, January 4, 1999 BNUMBER: B-281142; B-281142.2 DATE: January 4, 1999 ********************************************************************** National Steel and Shipbuilding Company, B-281142; B-281142.2, January 4, 1999 Decision Matter of: National Steel and Shipbuilding Company File: B-281142; B-281142.2 Date: January 4, 1999 Michael Hordell, Esq., Brian A. Darst, Esq., and Laura L. Hoffman, Esq., Gadsby & Hannah, for the protester. Daniel R. Weckstein, Esq., Howard W. Roth, Esq., and Arthur Serratelli, Esq., Vandeventer Black, for Norfolk Shipbuilding & Drydock Corporation, the intervenor. Daniel W. Wentzell, Esq., and Michelle C. Simms, Esq., Department of the Navy, for the agency. Henry J. Gorczycki, Esq., and James Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Discussions regarding protester's significantly understated staffing estimates were meaningful where the protester was generally advised of a number of significant shortfalls in its estimates, specifically informed of the single-most significant area of concern, and advised to provide detailed support for its estimates. 2. Technical evaluation that concluded that the protester's proposal's staffing estimates for ship conversion work evidenced a lack of understanding was reasonable where the proposed staffing was significantly less than that reflected in the independent government estimate, which was based on actual data from completed contracts for similar ship conversion work, as well as the contract cost experiences on conversion work on sister ships, and the protester's proposal did not provide adequate support for the claims of substantial efficiencies as would justify such low staffing estimates. 3. Agency's application of an "intrinsic value" cost evaluation factor included in a solicitation for ship conversion work to credit offerors for proposed early completion of ship repair was unobjectionable. 4. Where the solicitation gave significant evaluation weight to determining the realism of staffing estimates to assess understanding of the scope of work, the agency properly selected a higher-rated, higher-cost proposal that was determined to exhibit superior understanding instead of a lower-cost proposal, which was reasonably found to lack understanding as evidenced by its offer of staffing levels significantly below those reasonably determined to be necessary to perform the contract work. DECISION National Steel and Shipbuilding Company (NASSCO) protests the award of a contract to Norfolk Shipbuilding & Drydock Corporation (Norshipco) under request for proposals (RFP) No. N00033-98-R-4000, issued by the Department of the Navy, Military Sealift Command (MSC), for the voyage repairs, overhaul and habitability arrangements, and maintenance and repair of the USNS Shasta. RFP at C-1. NASSCO alleges that it received inadequate discussions, and that the agency's technical evaluation of NASSCO's proposal, the agency's cost evaluation of NASSCO's and Norshipco's proposals, and the source selection decision were unreasonable. We deny the protest. The Shasta is one of a group of Navy ammunition ships, which have been transferred to MSC to be operated by civilian crews to provide direct support and underway replenishment for Navy combatant ships. Agency Report, October 26, 1998, at 1-2. MSC has or will have civilian modification (CIVMOD) conversions performed on these ships. Id. The Shasta is in the AE-26 class of ships, along with the USNS Mount Baker and the USNS Kiska. Id. at 2, 9 n.6, Tab 31 at 2, 4. Contracts for similar CIVMOD work have been recently completed by Norshipco on the Mount Baker and by South West Marine (SWM) on the Kiska. Id. The RFP, issued on December 23, 1997, contemplated award of a cost-plus-award-fee contract for CIVMODs to the Shasta. RFP at B-1, L-9.1 [1] The RFP identified more than 50 work items, including option items. RFP, at B-1, Attachment J-1. Award was to be made to the offeror whose offer represented the best value to the government as follows: M-1.2 Evaluation Factors General. In selecting the best value, the following factors will be considered[:] 1. Technical and 2. Price to the Government. The technical evaluation factors and factors other than cost or price, when combined, are significantly more important than cost or price. Price will not be a numerically weighted factor in the evaluation of proposals, neither does the importance of price bear a linear relationship to the technical proposal nor to the offeror's past performance record. Cost or price will be compared to technical competence to determine the combination of the price and technical/management approach that is most advantageous to the Government and award will be made on this basis.