L-3 Brashear

B-413138.4 Dec 27, 2016 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights L-3 Brashear (L-3), of Pittsburgh, Pennsylvania, protests the award of a contract to Raytheon Company (Raytheon), of Albuquerque, New Mexico, under request for proposals (RFP) No. W900KK-15-R-0001 issued by the Department of the Army, Army Materiel Command for an optical tracking system. L-3 challenges the agency's evaluation of proposals and best-value determination, and alleges that the agency failed to meaningfully consider evidence of the awardee's unbalanced pricing. We deny the protest. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of:  L-3 Brashear File:  B-413138.4 Date:  December 27, 2016 Gregory H. Petkoff, Esq., Cynthia J. Robertson, Esq., and Carla J. Weiss, Esq., Jenner & Block LLP, for the protester. Joseph P. Hornyak, Esq., and Gregory R. Hallmark, Esq., Holland & Knight LLP, for Raytheon Company, an intervenor. Erica A. Harder-Smith, Esq., and Deborah Muldoon, Esq., Department of the Army, Army Materiel Command, for the agency. Lois Hanshaw, Esq., Glenn G. Wolcott, Esq., and Christina Sklarew, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Award based on a proposal that included unbalanced pricing was proper where the agency specifically and reasonably determined that the unbalancing did not pose an unacceptable risk to the government. DECISION L-3 Brashear (L-3), of Pittsburgh, Pennsylvania, protests the award of a contract to Raytheon Company (Raytheon), of Albuquerque, New Mexico, under request for proposals (RFP) No. W900KK-15-R-0001 issued by the Department of the Army, Army Materiel Command for an optical tracking system.  L-3 challenges the agency’s evaluation of proposals and best-value determination, and alleges that the agency failed to meaningfully consider evidence of the awardee’s unbalanced pricing.  We deny the protest. BACKGROUND The RFP, issued on January 27, 2015 under Federal Acquisition Regulation (FAR) subpart 15.3, contemplated the award of a single indefinite-delivery, indefinite-quantity (ID/IQ) contract for the design, development, integration, test, manufacture and delivery of an optical tracking system called the Advanced Range Tracking and Imaging System (ARTIS)[1] with a five-year period of performance, and a five-year option period.  RFP at 1, 15, 104, 109. The Government envisioned the ARTIS project as a two-phased effort, albeit performed under a single contract.  AR, Tab 23, Source Selection Advisory Council (SSAC) Memo to Source Selection Authority (SSA), at 2.  The first phase will consist of engineering, manufacturing, and development (EMD) of the tracking system, and use cost-plus-fixed-fee (CPFF) contract line items (CLINs).  Id.  After the initial operational capability for the EMD phase is achieved, the contract will employ fixed-price CLINs for production of additional systems.  Id. The RFP contemplated that award would be made on a best-value basis, considering four evaluation factors, listed in descending order of importance: (1) technical, (2) management, (3) past performance, and (4) cost/price.  RFP at 104, 129.  All non-cost/price factors, when combined, were significantly more important than price.  Id. at 130.  The RFP also stated that the importance allocated to cost/price would increase as the offeror’s proposals became more equal in other evaluation areas.  Id. at 130.  As relevant here, the cost/price factor required offerors to complete a spreadsheet that provided a cost breakdown for the CPFF CLINs for the EMD phase and the fixed‑price CLINs for the manufacturing phase.  Id. at 116.  The RFP provided for “range pricing” of the fixed-price CLINs based on the RFP’s planned ordering schedule, which was broken down by quantities and performance period.  Id. at 20, 133.  That is, in submitting prices for the fixed-price CLINs, an offeror was required to price units based on ranges of quantities (1-3, 4-6, or 7+) for each year during the option period.[2]  See, AR, Tab 18d, Pricing Workbook, Range Priced CLINs Worksheet, at 1.  The solicitation provided that the government was not bound to order the quantities listed, or to follow the ordering schedule, explaining that the schedule was provided “for informational purposes and price evaluation only.”  RFP at 20. The RFP stated that the CPFF CLINs would be evaluated for cost realism, while the fixed-price CLINs would be evaluated for price reasonableness.  Id. at 133.  Additionally, the RFP provided that the agency would evaluate the total evaluated price (TEP), which would consist of the sum of the cost realism analysis of the CPFF CLINs, and the price analysis of the fixed-price CLINs.  Id.