United States Government Accountability Office 

Washington, DC 20548 

Comptroller General

of the United States

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: DynaLantic Corporation 

File: B-402326 

Date: March 15, 2010 

Jason A. Carey, Esq., and Matthew T. Crosby, Esq., McKenna Long & Aldridge LLP, 

for the protester. 

Hilary S. Cairnie, Esq., Baker Hostetler, for Fidelity Technologies Corporation, an 

intervenor. 

Debra J. Talley, Esq., and Harlan Gottlieb, Esq., Department of the Army, and John 

W. Klein, Esq., and Kenneth Dodds, Esq, Small Business Administration, for the 

agencies. 

Charles W. Morrow, Esq., and James A. Spangenberg, Esq., Office of the General 

Counsel, GAO, participated in the preparation of the decision. 

DIGEST 

1. Small Business Administration (SBA) decision finding that awardee is a small 

business concern and a manufacturer for purposes of its status as a small business 

under the protested procurement is binding on GAO because the SBA has conclusive 

authority to determine small business size status for federal procurements. 

2. Protest that awardee’s proposal would not comply with the solicitation’s 

limitation on subcontracting is denied where the proposal did not show that the 

awardee took exception to the requirement. 

3. Agency’s evaluation of the protester’s and the awardee’s technical proposals was 

reasonable and supported the conclusion that the awardee’s proposal was 

technically superior to the protester’s. 

DECISION 

DynaLantic Corporation of Sayville, New York protests the award of a contract to 

Fidelity Technologies Corporation of Reading, Pennsylvania, under request for 

proposals (RFP) No. W900KK-09-R-0042, issued by the United States Army, Program 

Executive Office for Simulation, Training, and Instrumentation, for an MI-17 CT 

(counter terrorism) flight training device (FTD) simulator. 
We deny the protest. 

The MI-17 CT FTD is a virtual simulator of the aircraft cockpit in a MI-171 CT 

helicopter that simulates the flight of this aircraft and is designed to teach flying and 

maneuvering skills to Iraqi pilots. The MI-171 CT helicopter is a Russian 

manufactured medium lift aircraft that has been configured with North Atlantic 

Treaty Organization (not Russian) avionics unique to the Iraq and Afghanistan 

missions.1 Modification of the MI-171 aircraft is being performed under contract by 

ARINC Incorporated, which is responsible for the “newly designed features, 

instruments, communication and navigation systems, defensive systems, and other 

changes to the cockpit configuration.”2

 RFP at 29. The FTD is to be delivered to 

Taji, Iraq as part of the suite of trainers for the Iraq Flight Simulator Program in 

support of the Iraqi Air Force Flight Training Program. 

The RFP, issued on May 7, 2009 as a total small business set-aside, sought to procure 

the manufacture, assembly, integration, installation, check out, and delivery of one 

commercial off-the-shelf (COTS) MI-17 CT FTD simulator under a fixed-price 

contract that at a minimum meets the requirements for a Federal Aviation 

Administration (FAA) Level 5 FTD, with options to purchase two additional FTDs. 

Contractor logistics support, spare parts, operator and maintenance training courses 

and corresponding training manuals, MI-17 CT FTD technical data, and a geo-specific 

visual terrain data base were also required to be provided under the contract. 

The RFP indicated that the American Industrial Classification System (NAICS) code 

for this procurement was for manufacturing. It incorporated by reference Federal 

Acquisition Regulation (FAR) § 52.219-6, “Notice of Total Small Business Set-Aside” 

and FAR § 52.219-14, “Limitations on Subcontracting.” These clauses put the 

offerors on notice that the procurement was set aside exclusively for small business 

concerns and, with respect to the limitations on subcontracting, that “[t]he concern 

shall perform work for at least 50 percent of the cost of manufacturing the supplies, 

not including the materials.” FAR § 52.219-14(b)(2). 

 

1

 The MI-17 helicopter, manufactured by Ulan Ude Helicopter, is utilized throughout 

the world for diverse missions, such as emergency airlift, civilian transport, military 

transport, and flying hospital. 

2

 The RFP statement of work placed the responsibility on the contractor to obtain 

data for the basic MI-171 aircraft necessary to produce the MI-17 CT FTD and 

advised that ARINC would provide the successful contractor with final detailed 

configuration design data concerning modification of the basic MI-171 aircraft. RFP 

at 10. 

Page 2 B-402326 
Award was to be made on a best-value basis considering the following evaluation 

factors listed in descending order of importance: (1) technical, (2) management, 

(3) past performance, and (4) price. The technical factor listed six standards to be 

considered in the evaluation of that factor. Of relevance here were “(1) [t]he 

government will evaluate the offeror’s technical approach for integration of ARINC 

newly designed features, instruments, communication and navigation systems, 

defensive systems, and other changes to the cockpit configuration”; “(2) [t]he 

government will evaluate the offeror’s proposed compliance with the basic 

requirements to meet FAA level 5 [FTD] standards”; and “(5) [t]he government will 

evaluate the offeror’s plans for, and ability to obtain all necessary MI-17 and MI-17 

CT aircraft technical data to insure the accuracy of the simulation design for the 

production of the MI-17 CT [FTD].” RFP at 29. 

Seven proposals, including DynaLantic’s and Fidelity’s, were received by the June 12 

closing date. The technical and management factors were evaluated using an 

adjectival rating scale with identified deficiencies, strengths, significant strengths, 

weaknesses, and significant weaknesses.3 The past performance evaluation resulted 

in a risk assessment of no risk, low risk, moderate risk, high risk, or unknown risk. 

Fidelity’s proposal was based on “acquiring a [DELETED] MI-17 [FTD] and 

modifying the [DELETED] trainer to be compliant with the MI-17 [CT] 

configuration.” It proposed to team with [DELETED], a [DELETED] manufacturer of 

the MI-17 FTD, and [DELETED], which would be responsible for the center pedestal 

of the cockpit CT configuration. Agency Report (AR), Tab 11, Fidelity Proposal, at 1. 

On the other hand, DynaLantic proposed to obtain a license from [DELETED], a 

[DELETED] manufacturer of the MI-17 FTD simulator, to allow DynaLantic to 

 

3

 The RFP defined the ratings relevant here as follows: 

Outstanding – A proposal that satisfies all of the Government’s 

requirements with extensive detail to indicate feasibility of the 

approach and shows a thorough understanding of the problems and 

offers numerous significant strengths, which are not offset by 

weaknesses, with an overall low degree of risk in meeting the 

Government’s requirements. 

Good – A proposal that satisfies all the Government’s requirements 

with adequate detail to indicate feasibility of the approach and shows 

an understanding of the problems and offers some significant strengths 

or numerous minor weaknesses, which are not offset by weaknesses, 

with an overall low to moderate degree of risk in meeting the 

Government’s requirements. 

RFP at 28. 

Page 3 B-402326 
manufacture the simulator at its own facility in the United States based on 

[DELETED] commercial product design and software, and to modify the design to 

incorporate the ARINC-designed CT modification to the MI-17 aircraft. AR, Tab 14, 

DynaLantic Proposal, at 1. 

The evaluation of DynaLantic’s and Fidelity’s proposals was as follows: 

DynaLantic Fidelity 

Technical Good Outstanding 

Management Very Low Very Low 

Past 

Performance 

Good Outstanding 

Price $10,455,000 $10,360,426 

AR, Tab 21, Source Selection Decision, at 2. DynaLantic’s proposal had four noted 

strengths and two weaknesses under the technical factor, while Fidelity’s proposal 

had nine noted strengths and no weaknesses under this factor. Id. at 6-7, 11-12. 

The SSA in a trade-off analysis found that Fidelity’s proposal represented the best 

value as between Fidelity and DynaLantic, given that DynaLantic’s proposal 

showed more risk of technical performance, as was indicated by its lower 

technical rating, and given that DynaLantic’s proposal had a lower management 

rating and a slightly higher price than Fidelity’s proposal. Id. at 16. The Army 

awarded the contract to Fidelity on November 20. 

On November 24, DynaLantic filed a timely size protest with the Small Business 

Administration (SBA), challenging the small business size status of Fidelity. Under 

FAR §§ 19.001 and 19.102(f)(1), to be considered a small business concern under a 

small business set-aside procurement, an offeror must either manufacture its own 

product and have no more than 500 employees, or if it does not manufacture the 

item being purchased, the offeror must comply with the “nonmanufacturer rule”: 

(1) have no more than 500 employees, (2) furnish the end item of a small business 

manufacturer, and (3) furnish an end item that is manufactured in the United 

States. DynaLantic challenged Fidelity’s small business status, asserting that 

Fidelity had more than 500 employees and that its proposal did not comply with 

the nonmanufacturer rule. DynaLantic argued that Fidelity was not the 

manufacturer under its proposal because the changes it proposed to make to the 

FTD unit were minor and its proposal indicated that the FTD was being 

manufactured in [DELETED], not the United States. DynaLantic thus argued that 

Fidelity was not a small business concern for purposes of this procurement. 

DynaLantic concurrently filed this protest with our Office challenging the award to 

Fidelity. Besides challenging the evaluation of the proposals, DynaLantic raised 

the same issue that was before the SBA, i.e., that Fidelity’s proposal was 

unacceptable for failure to comply with the nonmanufacturer rule. In addition, 

Page 4 B-402326 
DynaLantic argued that Fidelity’s proposal was unacceptable because it 

demonstrated, on its face, that Fidelity would not comply with the solicitation’s 

limitation on subcontracting. 

On February 26, 2010, the SBA regional office found that Fidelity qualified as a 

small business. In so doing, the SBA found that Fidelity was the manufacturer of 

the MI-17 CT FTD it was furnishing under the contract because Fidelity was using 

its plant in Pennsylvania to transform the COTS simulator into the CT simulator 

sought by the Army. See SBA Size Determination (Feb. 26, 2010) at 1-2. In its 

protest and its comments on the SBA size determination, DynaLantic nevertheless 

argues to our Office that Fidelity’s proposal still should be considered 

unacceptable because it clearly indicated that Fidelity was not the manufacturer of 

this item. However, the SBA, not our Office, has conclusive authority to determine 

the size status of an offeror for federal procurement purposes, including whether 

the offeror is a manufacturer under the small business size standards. See

15 U.S.C. § 632(a)(2) (2006); Unholtz-Dickie Corp., B-235561, August 30, 1989, 

89-2 CPD ¶ 194 at 3. 

With respect to DynaLantic’s contention that Fidelity’s proposal should have been 

rejected as unacceptable with regard to the subcontracting limitation, the protester 

argues that Fidelity’s proposal indicated, on its face, that it would not manufacture 

the end item in the United States and identified two team members who would 

provide more than 50 percent of the cost of manufacturing. 

We have recognized that, as a general rule, an agency’s judgment as to whether a 

small business offeror is able to comply with a subcontracting limitation presents a 

question of responsibility, which would be subject to review by the SBA under its 

certificate of competency procedures in the event that a small business is found to 

be not responsible. TYBRIN Corp., B-298364.6, B-298364.7, Mar. 13, 2007, 

2007 CPD ¶ 51, at 5. However, where a proposal, on its face, should lead an 

agency to the conclusion that an offeror has not agreed to comply with the 

subcontracting limitation, the matter is one of proposal acceptability and a 

proposal that fails to clearly conform to the requirement is unacceptable and may 

not form the basis for an award. Id. 

As noted above, the SBA found that Fidelity was manufacturing the MI-17 CT FTD 

at its facility in Pennsylvania. In addition, our review of Fidelity’s proposal 

provides no basis to conclude that the proposal on its face should have led the 

agency to conclude that Fidelity could not or would not comply with the 

requirement that the contractor perform work for at least 50 percent of the cost of 

manufacturing the supplies, not including the materials. See Chant Engineering 

Co., Inc., B-402054, Dec. 29, 2009, 2010 CPD ¶ 16 at 3. 

Turning to the protester’s remaining contentions, DynaLantic challenges the 

evaluation of its and Fidelity’s proposals under the most important technical 

factor. The evaluation of technical proposals is a matter within the discretion of 

Page 5 B-402326 
the contracting agency. Marine Animal Prods. Int’l, Inc., B-247150.2, July 13, 1992, 

92-2 CPD ¶ 16 at 5. In reviewing an agency’s evaluation, we will not reevaluate 

technical proposals; instead, we will examine the agency’s evaluation to ensure 

that it was reasonable and consistent with the solicitation’s stated evaluation 

criteria. Decision Sys. Techs., Inc.; NCI Info. Sys., Inc., B-257186 at al., Sept. 7, 

1994, 94-2 CPD ¶ 167 at 7. An offeror’s mere disagreement with the agency’s 

evaluation does not render the evaluation unreasonable. McDonnell Douglas 

Corp., B-259694.2, B-259643.3, June 16, 1995, 95-2 CPD ¶ 51 at 18. 

DynaLantic argues that the Army rated its proposal unequally and unfairly when 

compared to Fidelity’s proposal because the evaluation team assigned a weakness 

for the proposal’s plan to manufacture the FTD in the United States. DynaLantic 

claims that the Army applied a double standard because, in the protester’s view, 

Fidelity’s proposal did not agree to manufacture the FTD in the United States. 

However, as noted, the SBA found that Fidelity’s proposal indicated that it was 

manufacturing the FTD in the United States. As to DynaLantics’ proposal, the 

agency expressed concern that DynaLantic had no previous experience 

manufacturing this particular FTD. AR, Tab 21, Source Selection Decision, at 7. In 

this regard, the evaluation team found: 

[DynaLantic] plans to manufacture (under license in the US) a device 

designed and built by a [DELETED] company. [DynaLantic’s] ability to 

build someone else’s Mi-17 FTD significantly increases the risk to 

contract performance. [DynaLantic] plans to take a [DELETED] design 

and have that tech data shipped to the US and built by a US firm who 

has not previously manufactured a Mi-17 FTD. Utilizing a data package 

from a foreign company has potentially high risk. Translations, 

processes and techniques from one culture to another could result in 

performance issues and schedule delays for the government contract. 

AR, Tab 17, Proposal Evaluation Report, at 20. Both the evaluation team and the 

SSA regarded this as a weakness. Id.; AR, Tab 21, Source Selection Decision, at 7. 

While DynaLantic argues that this assessment was unreasonable because its 

proposal explained that the company has an ongoing relationship with [DELETED] 

and had incorporated [DELETED] software into a similar DynaLantic simulator, 

we believe the agency reasonably assigned a weakness for this aspect of the 

proposal. 

DynaLantic also argues that the proposals were evaluated unequally under the 

technical factor standards 1, 2, and 5, as set forth above. As evidence of unequal 

treatment, DynaLantic notes that its [DELETED] ARINC, and license with 

[DELETED] (whose Mi-17 simulators have been certified by the Russian Mil 

Design Bureau), was assessed as a significant strength in its proposal. In contrast, 

DynaLantic argues that Fidelity’s proposal did not have a [DELETED] ARINC, or 

evidence that it had access to Mil Design Bureau certification and Russian aircraft 

Page 6 B-402326 
Page 7 B-402326 

 

data. Therefore, DynaLantic contends that Fidelity should not have received an 

outstanding rating under the technical factor. 

The record here shows that the evaluation team assigned a significant strength to 

Fidelity’s proposal because the proposal advised that the company had initiated 

discussions with ARINC and formulated the outline for an agreement which would 

be executed after the contract is awarded. The record also shows that each party 

had reviewed the agreement, and both were prepared to execute the agreement 

after award was made. 

Given this information, the evaluation team found that Fidelity had established a 

process to monitor and meet the delivery schedule, and that Fidelity’s close 

relationship with ARINC—[DELETED]--increased the likelihood that the company 

would provide accurate simulation of the MI-17 CT aircraft. While Fidelity’s 

proposal may, in fact, have a less desirable approach in this one area than 

DynaLantic’s proposal, the record shows that Fidelity’s proposal had numerous 

other strengths that contributed to its outstanding rating. Among these evaluated 

strengths were a highly detailed geographic-specific data base, computer 

generated forces capability and vibration seats “that are consistent with the 

characteristics of the MI-17.” AR, Tab 17, Proposal Evaluation Report, at 25-28. 

DynaLantic has not shown that the strengths in these areas were not warranted. 

In sum, the record shows that the SSA reasonably determined that Fidelity’s 

technical proposal, with nine strengths and no weaknesses, should be rated 

outstanding, and that DynaLantic’s technical proposal with fewer strengths and an 

approach that presented more risk than Fidelity’s technical proposal, should be 

rated good.4

The protest is denied. 

 

Lynn H. Gibson 

Acting General Counsel 

4

 While the protester has also questioned the validity of a weakness assigned to its 

proposal for not committing to furnish two technicians for CLS, the record shows 

that its proposal would still be rated lower than Fidelity’s under the technical factor 

even if this weakness had not been assigned. Fidelity’s proposal had more strengths 

than DynaLantic’s and no weaknesses; DynaLantic’s proposal had a weakness that 

posed risk to the government.