Yang Enterprises, Inc.; Santa Barbara Applied Research, Inc., B-294605.4; B-294605.5; B-294605.6, April 1, 2005

Yang Enterprises, Inc.; Santa Barbara Applied Research, Inc., B-294605.4; B-294605.5; B-294605.6, April 1, 2005 TITLE: Yang Enterprises, Inc.; Santa Barbara Applied Research, Inc., B-294605.4; B-294605.5; B-294605.6, April 1, 2005 BNUMBER: B-294605.4; B-294605.5; B-294605.6 DATE: April 1, 2005 ********************************************************************** Decision Matter of: Yang Enterprises, Inc.; Santa Barbara Applied Research, Inc. File: B-294605.4; B-294605.5; B-294605.6 Date: April 1, 2005 Walter A. I. Wilson, Esq., and Lawrence M. Prosen, Esq., Bell, Boyd & Lloyd PLLC, for Yang Enterprises, Inc.; and Irene M. Guimera, Esq., and Joseph E. Guimera, Esq., Guimera & Guimera, for Santa Barbara Applied Research, Inc., the protesters. Brian Koji, Esq., Allen, Norton & Blue, PA, for Call Henry, Inc., an intervenor. Maj. Rebecca R. Vernon, and Capt. Samuel T. Casazza, Department of the Air Force, for the agency. Jonathan L. Kang, Esq., and Michael R. Golden, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST 1. Protest challenging evaluation of awardee's technical proposal and past performance is denied where record shows that agency's evaluation was reasonable. 2. Protest alleging agency failed to engage in meaningful discussions is denied where offerors were given meaningful opportunities to address agency concerns during discussions. 3. Protest challenging selection of low cost proposal is denied because, even where cost is the least important factor for award, an agency may award to an offeror with a lower-cost, lower-rated proposal if it reasonably determines that the cost premium involved in awarding to an offeror with a higher-rated proposal is too great. DECISION Yang Enterprises, Inc. (YEI) and Santa Barbara Applied Research, Inc. (SBAR) protest the award of a contract to Call Henry, Inc. (CHI) under request for proposals (RFP) No. F04684-02-R-0024, issued by the Department of the Air Force for the launch operations support contract (LOSC) at Vandenberg Air Force Base (AFB), California. The protesters argue that the agency improperly evaluated the awardee's technical proposal and past performance, failed to conduct a reasonable cost realism analysis of the awardee's cost proposal, failed to conduct meaningful discussions with offerors, and conducted an improper cost/technical trade-off in making the source selection. We deny the protests. BACKGROUND The RFP was issued on August 27, 2003 and anticipated the award of a cost-reimbursement contract (with cost-plus-award-fee line items) for a 1-year base period, with six 1-year option periods. The RFP sought proposals to provide management and support, maintenance and repair, operations support and minor facility alterations for launch and test range systems at Vandenberg AFB. RFP, Statement of Work (SOW), at 1. The RFP stated that "[t]he Government will select the best overall offer, based upon an integrated assessment of Past Performance, Proposal Risk, Mission Capability, and Price/Cost." RFP S M.1.1. The mission capability factor had three subfactors: (1) operation & maintenance (O&M), repair & launch/power plant support; (2) contractor computerized management system (CCMS); (3) reliability centered maintenance (RCM); and (4) phase-in plan. RFP S M.2.2. The relative weights of the evaluation factors were as follows: Factor 1 (Past Performance) and Factor 2 (Proposal Risk) are equal and each is significantly more important than Factor 3 (Mission Capability (Technical & Management)) which is, in turn significantly more important that Factor 4 (Cost/Price). Within the Mission Capability (Technical & Management) factor, the subfactors are of equal importance. All evaluation factors other than cost or price, when combined, are significantly more important that cost or price. Id. The agency received 9 proposals in response to the RFP, and established a competitive range of the 7 most highly-rated proposals. After an initial round of discussions, the agency issued a revised RFP that reflected decreased funding for the program and advised offerors of reductions for certain contract requirements. RFP amend. 5. The agency requested that offerors submit final revised proposals detailing any changes resulting from the decreased funding and requirements. The agency initially selected CHI for award on August 20, 2004. YEI and SBAR each filed protests with our Office. The agency notified our Office on September 29, 2004 that it was taking corrective action in response to the protests, and we accordingly dismissed both protests. The agency's corrective action sought additional and updated past performance references for offerors, and reexamined offerors' evaluation ratings in a revised proposal analysis report (PAR). Contracting Officer's (CO's) Statement at 4, PP 8-9.