SAMS El Segundo, LLC, B-291620.3, February 25, 2003

B-291620.3 Feb 25, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Reasonableness of agency's evaluation of offerors' proposed costs or prices is governed by the type of contract to be awarded. 2. Protester's challenge that contracting agency improperly evaluated the prices proposed by the selected offeror is denied where the record shows that the evaluation was reasonable and consistent with the stated evaluation criteria. For the Systems Acquisition Management Support (SAMS) project. /1/ SES argues that the agency's evaluation of Kearny's cost proposal was improper. The Act also provides that the only consideration that the Air Force can receive for the conveyed real estate is "the design and construction on [unconveyed] property . . . of one or more facilities to consolidate the [SMC] mission and support functions.". View Decision SAMS El Segundo, LLC, B-291620.3, February 25, 2003 DIGEST Attorneys DECISION SAMS El Segundo, LLC (SES) protests the selection of LA Air Force Base SMC, LLC (Kearny) under a request for proposals (RFP) issued by the Space and Missile Systems Center (SMC), Air Force Space Command, Department of the Air Force, for the Systems Acquisition Management Support (SAMS) project. /1/ SES argues that the agency's evaluation of Kearny's cost proposal was improper. We deny the protest. BACKGROUND Section 2861 of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 (the Act), Pub. L. No. 106-398, 114 Stat. 1654 (2000), authorizes the Secretary of the Air Force to convey, by sale or lease, all or part of the real property at Los Angeles Air Force Base (LAAFB), California; the Act also provides that the only consideration that the Air Force can receive for the conveyed real estate is "the design and construction on [unconveyed] property . . . of one or more facilities to consolidate the [SMC] mission and support functions." As originally enacted, the statute also established that if the consideration received by the Air Force (i.e., the value of the facility constructed) exceeded the value of the real property conveyed, then the agency could "lease back" the facility from the developer for a period up to 10 years, with the Air Force taking title to the facility at the end of the lease period. Id. Sec. 2861(c). On July 17, 2001, the Air Force issued an RFP for the SAMS project. The initial RFP stated, in broad terms, the agency's desire to exchange up to 57 acres of LAAFB real property for approximately 580,000 square feet of office space. /2/ Phase I RFP at 3. The RFP also informed offerors that the selection process for the SAMS project would occur in three phases. In Phase I, the Air Force intended to select no more than five offerors who demonstrated the highest probability of success. /3/ In Phase II, in which offerors were to submit detailed business and technical proposals for the actual execution of the SAMS project, the Air Force intended to select the offeror proposing the best value to the agency. Phase I RFP, app. D, SAMS Source Selection Process, at 4. In Phase III, the agency planned to conduct final negotiations with the selected offeror to finalize the remaining financial contingencies and to complete the administrative details of implementing all agreements for award to the selected offeror. The solicitation established that the Phase III negotiations would be "administrative in nature and [would] not encompass issues that affect the basis for the [Phase II] source selection decision." /4/ Id. Six offerors submitted proposals in response to the Phase I RFP. Among the Phase I offerors selected by the Air Force for participation in Phase II were SES and Kearny. /5/ On January 24, 2002, the Air Force issued the Phase II RFP for the SAMS project, with its modified objective of exchanging up to 57 acres of LAAFB real property for approximately 560,000 square feet of office space at no additional cost. It is the competition under this solicitation that is the subject of this protest. The solicitation notified offerors that the basis for the Phase II selection decision would be "best value," based on the integrated assessment of the evaluation factors, and could involve the tradeoff of cost and noncost factors. Phase II RFP at 9. The RFP identified the following evaluation factors, in descending order of importance, and subfactors, of equal importance within each factor: 1. Cost to the Air Force /6/ 2. Financial Strategy 3. Facility Capability . A. Building Core and Shell . B. Tenant Improvements . C. Integration with Area B Facilities 4. Project Management . A. Project Execution Plan . B. Project Management Team 5. Proposal Risk 6. Past Performance Id. at 9-10. The solicitation expressed the relative importance of the cost factor by stating: Affordability of the project is a major consideration of this source selection. The goal is to achieve no additional cost to the Air Force.