United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: Kollsman Inc.

File: B-406990; B-406990.2

Date: October 15, 2012

James J. McCullough, Esq., Brian M. Stanford, Esq., and Michael J. Anstett, Esq.,

Fried, Frank, Harris, Shriver & Jacobson LLP, for the protester.

W. Jay DeVecchio, Esq., Kevin C. Dwyer, Esq., and Ethan E. Marsh, Esq., Jenner 

& Block LLP, for L-3 Communications Corporation, an intervenor.

Marvin D. Rampey, Esq., Department of the Navy, for the agency.

Katherine I. Riback, Esq., and James A. Spangenberg, Esq., Office of the General

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

DIGEST

Protest challenging the evaluation of the awardee’s past performance as providing 

“substantial confidence” is sustained where the record does not support the 

reasonableness of this rating. 

DECISION

Kollsman Inc., an Elbit Systems of America, LLC company, of McLean, Virginia,

protests the award of a contract to L-3 Communications Corporation, of 

Londonderry, New Hampshire, by the Department of the Navy, Navy Surface 

Warfare Center, Crane, Indiana (NSWC Crane) under request for proposals (RFP) 

No. N00164-12-R-JQ03 for handheld laser markers. Kollsman challenges the 

evaluation of price and L-3’s past performance.

1

We sustain the protest.

 

1 Kollsman also asserted that the agency failed to properly investigate serious 

allegations of violations of the Procurement Integrity Act. In its report, the agency 

responded to this issue, yet Kollsman made no further mention of this issue in its 

comments filing. Consequently, we deem this protest issue abandoned. See

Accumark, Inc., B-310814, Feb. 13, 2008, 2008 CPD ¶ 68 at 2 n.1.

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.
Page 2 B-406990, B-406990.2 

BACKGROUND 

The RFP for the Handheld Laser Marker Block II (HLM II) was issued on 

February 9, 2012, and provided for the award of an indefinite-delivery/indefinitequantity (ID/IQ), fixed-price contract for a base year with 4 option years. 

The RFP provided for award on a best-value basis. Offerors were first to provide 

product samples that were evaluated on a “Go/No Go” basis. RFP at 78. The 

offerors who provided acceptable product samples were then evaluated considering 

the following factors: technical, past performance and price, with technical being 

significantly more important than past performance. Each offeror’s past 

performance was evaluated to determine the relevancy of its referenced prior 

contracts, and was assessed as “relevant” or “not relevant.” The agency then 

determined how well the contractor performed on each contract and assigned a 

past performance confidence rating.2

 Although price was not a weighted evaluation 

factor, the RFP stated that price would become increasingly important with “the 

degree of equality of the proposals in relation to the other factors on which selection 

[was] to be based, or when the price [was] so significantly high as to diminish the 

value of the technical superiority to the Government.” RFP at 79. 

The agency received proposals from Kollsman and L-3 by the April 2 closing date. 

The agency evaluated the proposals and held discussions. The agency evaluated 

the final proposals as follows:3

Offerors Technical Rating Past Performance Total Evaluated Price

Kollsman Outstanding Relevant/Substantial Confidence $ 53,625,250

L-3 Good Relevant/Substantial Confidence $ 35,676,406

Agency Report (AR) at 18. In determining that L-3’s proposal represented the best 

value, the source selection authority found that “Kollsman’s evaluated price was so 

significantly high, $17,948,844 higher than L-3, it diminished the value of the 

technical superiority [of Kollsman’s proposal] to the Government.” AR, Tab 4, 

Source Selection Document, at 4. Consequently, award was made to L-3. This 

protest followed.

 

2 The possible past performance confidence ratings were substantial confidence, 

satisfactory confidence, limited confidence, no confidence and unknown confidence. 

RFP at 80.

3 For the technical factor, the agency used the ratings of outstanding, good, 

acceptable, marginal and unacceptable; and for past performance the agency used 

the ratings of substantial confidence, satisfactory confidence, limited confidence, no 

confidence, and unknown confidence (neutral). RFP at 80-81. 
Page 3 B-406990, B-406990.2 

PRICE EVALUATION

The protester first contends that the Navy’s price evaluation was irrational in that it 

was not based on the actual estimated quantities of items the Navy intended to 

purchase in this procurement. 

Offerors were instructed to submit unit prices for certain stepladder quantities of the 

HLM II for the 5 years of the contract as follows:

Quantity Year 1 Year 2 Year 3 Year 4 Year 5

1-20

21-50

51-100

101-200

201+

RFP at 5. To calculate the total contract price of each proposal, the agency used 

the maximum quantity of the HLM II units that could be ordered in each year, which 

the RFP identified as 1,175 units; multiplied this quantity by the unit price offered for 

the quantity range 1 to 20 for each of the 5 years; and totaled these figures. To this

sum, the agency added the not-to-exceed amounts specified in the RFP for the 

other contract line items for spares; test, teardown and evaluation; and nonwarranty repair. Agency Motion to Dismiss (MTD) at 9. 

The protester contends that the agency should have evaluated prices using the unit 

price offered for quantities over 201 units. Additionally, the protester notes that the 

agency would benefit from its volume discount prices if the price evaluation was 

based on the larger quantity.

While the solicitation instructed offerors to submit unit prices as shown above, the 

RFP was silent with regard to how the agency would calculate the total evaluated 

prices. In addition, the RFP says nothing about the rate at which units will be 

ordered throughout the year. While 1,175 is the maximum quantity that could be 

ordered in a year, the amount actually ordered could be less; in addition, units could 

be ordered in small increments. Given that both the agency’s and the protester’s 

method to calculate the total evaluated prices are reasonable, the resulting 

ambiguity was readily apparent from the RFP. Thus, to be timely, any protest on 

this ground had to be filed prior to the closing time for submission of proposals. Bid 

Protest Regulations, 4 C.F.R. § 21.2(a)(1) (2012); Marine Group Boat Works, LLC, 

B-404277, B-404277.2, Jan. 19, 2011, 2011 CPD ¶ 23 at 4. Under the 
Page 4 B-406990, B-406990.2 

circumstances, we have no basis to sustain this protest challenge to the agency’s 

price evaluation.4

PAST PERFORMANCE EVALUATION

Kollsman also contends that the agency’s evaluation of L-3’s past performance was 

unreasonable and undocumented. Specifically, Kollsman contends that L-3’s past 

performance rating of “substantial confidence” was not warranted given L-3’s 

documented negative past performance on the predecessor HLM I contract. 

While, as a general matter, the evaluation of an offeror’s past performance is within 

the discretion of the contracting agency, we will question an agency’s evaluation of 

past performance where it is unreasonable or undocumented. Navistar Def., LLC; 

BAE Sys., Tactical Vehicle Sys. LP, B-401865 et al., Dec. 14, 2009, 2009 CPD 

¶ 258 at 13; Clean Harbors Envtl. Servs., Inc., B-296176.2, Dec. 9, 2005, 2005 CPD 

¶ 222 at 3. 

The contract specialist received and reviewed two past performance questionnaires

regarding L-3’s performance on previous contracts.5 MTD, Tab 3, L-3 Past 

Performance Questionnaire. Of relevance to this protest is the questionnaire that 

concerned L-3’s performance on the predecessor contract for the HLM I.

6

 This 

contract was administered by the United States Special Operations Command and 

technical support was provided by NSWC Crane. The task manager for the HLM I 

contract was stationed at Crane and completed the HLM I past performance 

questionnaire. This questionnaire contained the following:

10a. Did the contractor request any changes to performance 

specifications because they could not be met? 

Through appropriate consideration provided by L-3/Insight, the 

acceptance test plan was re-negotiated to allow for a [DELETED]. 

 

4 The agency also notes that even if the highest-quantity of units (201+) is ordered

each time the agency orders units, the price differential between Kollsman’s price 

and L-3 would only decrease from 38.53 percent to 31.14 percent. MTD at 3. 

5 The contract specialist also received Contractor Performance Assessment 

Reports and past performance information obtained from Past Performance 

Information Retrieval System (PPIRS) and Excluded Parties List System (EPLS). 

Hearing Transcript (Tr.) at 25-26, 70-71. There was no negative information 

regarding L-3 on the PPIRS or the EPLS. Tr. at 58. 

6

 L-3’s other past performance questionnaire involved its performance of a contract 

for coded small lightweight laser markers. MTD, Tab 3, L-3 Past Performance 

Questionnaire, at 5. L-3’s performance on this contract was considered excellent. 
Page 5 B-406990, B-406990.2 

Once this consideration was negotiated, L-3/Insight has consistently 

provided products that met the acceptance test plan. 

10b. If so, what were the areas and what was the ultimate impact on 

system performance, cost and schedule? 

Negotiated areas were beam [DELETED]. Once this consideration 

was negotiated, L-3/Insight has consistently provided products that 

met the acceptance test plan. The Gov’t asked for and received 

[DELETED]. Schedule has been revised twice with a major impact on 

fielding the devices. 

MTD, Tab 3, L-3 Past Performance Questionnaire, at 3. The past performance 

questionnaire regarding L-3’s performance of the HLM I contract contained a few 

“excellent” responses, and the remaining responses were equally divided between 

“good” and “average.” Id. at 2-4 

The contract specialist used this information to draft the past performance 

evaluation section that was included in the Source Selection Evaluation Report

(SSER). Tr. at 111.7 The SSER was prepared by the source selection board 

chairperson, who was the same individual who was the task manager for the HLM I

contract and who completed L-3’s past performance questionnaire regarding that 

contract. Tr. at 111, 118-19, 121. The SSER rated L-3’s past performance as

“substantial confidence” and its report stated that “[t]he references were checked 

and no negative information was obtained.” AR, Tab 5, SSER at 34. The SSER

also included the following:

Have you requested relief from system specification requirements on 

any of your [contracts that are the] same or similar to the proposed 

systems? If yes, please describe the areas and the ultimate impact on 

system performance, cost and schedule for each request.

On a previous contract for a similar system L-3 requested relief from 

system specification [DELETED] for the HLM I. Delivery schedule 

was [a]ffected. However, L-3 provided adequate consideration 

([DELETED] at no cost to the Government) and [is] currently ahead of 

the revised delivery schedule. L-3’s past performance clearly 

demonstrated the contractors’ ability to work with the customer needs 

to ensure minor technical issues were resolved and deliver[y]

schedule was met without sacrificing a quality product. 

 

7 As explained more fully below, our Office convened a hearing on this matter.
Page 6 B-406990, B-406990.2 

Id. The SSER did not otherwise discuss the schedule delays on the HLM I contract 

reported in the questionnaire or further explain why a significant confidence past 

performance rating was warranted.

The contract specialist later received the informal preaward survey for L-3 

completed by the Defense Contract Management Agency (DCMA). AR, Tab 7, L-3 

Preaward Survey; Tr. at 55. This survey concerned an additional performance 

problem, which occurred later in time than the acceptance test plan issue discussed 

in the questionnaire. This problem was based on the complaint of a customer, who

found that a “secondary beam was being transmitted off to one side creating a 

possible safety hazard of laser radiation to the personnel using the product in the 

field.” AR, Tab 7, L-3 Preaward Survey, at 3. This problem caused the HLM I line 

to be shut down until effective corrective action could be taken and caused an 

additional delay in performance. Id. The SSER was not updated to consider this 

problem and there is no contemporaneous evidence as to how this affected L-3’s 

substantial confidence past performance rating.

The source selection decision did not discuss the past performance evaluation 

except to report the substantial confidence ratings and report that both proposals 

received the same adjectival rating. AR, Tab 4, Source Selection Decision, at 3.

Because the contemporaneous record did not explain why L-3’s substantial 

confidence rating was warranted in view of the reported problems under the HLM I

contract, we called a hearing to more fully consider this matter. 

During the hearing, the contract specialist testified that, after the SSER was 

prepared and after he reviewed the preaward survey, he contacted the task 

manager for the HLM I contract who answered the questionnaire to discuss 

“inconsistencies with his written comments and the actual questions that we asked.” 

Tr. at 45. As a result of these discussions, the contract specialist determined that 

the questionnaire responses of the task manager for the HLM I contracts

concerning problems with L-3’s acceptance test plan were erroneously reported. 

Specifically, the contract specialist concluded that the questionnaire asked whether 

the performance specifications had been revised during the course of the HLM I 

contract, and the task manager’s responses concerned problems with L-3’s 

proposed acceptance test plan. The contract specialist testified that this disconnect 

created an impression that the performance specifications had been revised for L-3 

during the course of the HLM I contract. Tr. at 122. The SSER was not amended 

to memorialize these discussions or to mention the preaward survey.

8

 Id. The 

 

8 There is no other documentation in the record that memorializes the contracting 

specialist’s conversations with the task manager or explains how this affected L-3’s 

substantial confidence past performance rating, despite the fact that the task 

manager of the HLM I contract was heavily involved in this procurement as the 

(continued...)
Page 7 B-406990, B-406990.2 

contract specialist stated that additional documentation in the SSER was not 

warranted because L-3’s ultimate past performance rating of “substantial 

confidence” remained the same.9

 Id. 

The contract specialist also testified that the concerns of the task manager did not 

specifically concern modifications to the performance specifications, but dealt with 

the fact that the acceptance test plan had been modified. Tr. at 45-47. However, 

he does not explain why these modifications and concerns are not material. 

Indeed, we fail to see, and the agency has not explained, the distinction between 

modifications to the acceptance test plan and the performance specifications.

10 

The contract specialist testified that schedule delay was “[i]rrelevant” in evaluating 

past performance under this RFP, and that schedule relief for adequate 

consideration was appropriate. Tr. at 125. The contract specialist also testified that 

L-3 was not late in making deliveries after the schedule changed. Tr. at 127. We 

find that this testimony, which does not include any detailed explanation of the 

reported problems under the HLM I contract, does not reasonably support the

“substantial confidence” past performance rating.11 

 

(...continued)

source selection board’s chairperson. The task manager was not offered by the 

agency as a witness at the hearing.

9

 The contract specialist also testified that he considered but did not revise the past 

performance evaluation of L-3 based on the DCMA preaward survey that indicated 

a second delay in L-3’s performance on the HLM I contract. Tr. at 55-56.

10 In fact, it appears that if L-3 failed to produce an acceptance test plan for 

demonstrating how its item can meet minimum performance specifications 

requirements, and the agency did not accept the contractor’s test plan, the end 

result was an inability to demonstrate that the product complied with the applicable 

specifications. This matter appears to have had schedule and cost implications, 

and appears to have caused delays that required a contract modification.

11 The rating of substantial confidence is defined as:

Based on the offeror’s recent/relevant performance record, the 

Government has a high expectation that the offeror will successfully 

perform the required effort.

AR at 19. In contrast, the rating of satisfactory confidence is defined as:

Based on the offeror’s recent/relevant performance record, the 

Government has a reasonable expectation that the offeror will 

successfully perform the required effort.

Id.
Page 8 B-406990, B-406990.2 

Moreover, the past performance ratings on the L-3 questionnaire do not support a 

substantial confidence rating. As stated above, the past performance questionnaire 

regarding L-3’s performance of the HLM I contract contained a few “excellent” 

answers, and the remaining responses were equally divided between “good” and 

“average.” MTD, Tab 3, L-3 Past Performance Questionnaires, at 3. The average 

rating was not a favorable one, and was defined on the front of the questionnaire as 

follows:

AVERAGE-The contractor’s performance was acceptable as expected from 

a qualified source. Although there is a possibility of doing business with this

contractor again, time might be spent looking for a better source.

MTD, Tab 3, L-3 Past Performance Questionnaire, at 1. Thus, without further 

explanation, we think that average ratings on the past performance questionnaire 

do not support a substantial confidence past performance ratings. At the hearing, 

the contract specialist testified with regard to this matter as follows: 

Q. Did you note that there were numerous instances of average responses 

given?

A. Yes. 

Q. And how did you interpret those average responses?

A. Talking with the task manager regarding this past performance 

questionnaire, I believe that his rating of the word average was inconsistent 

with his written and verbal discussion.

Q. You believe they were inconsistent with his verbal discussions?

A. Yes 

Q. In what way?

A. I don’t think he looked at the average definition as being a negative 

rating.

Tr. at 96-97. Considering the referenced problems under the HLM I contract, it 

seems more likely that the task manager intended to respond with the “average” 

rating, as defined in the questionnaire. Given the fact that the same individual 

prepared the past performance questionnaire and prepared the SSER, it seems that 

if any of these documents had not reflected his true intentions that he would have 
Page 9 B-406990, B-406990.2 

noticed any discrepancies and rectified the situation.12 We find that the agency’s 

post hoc arguments presented at the hearing are contradicted by the record. 

Boeing Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 

97-2 CPD ¶ 91 at 15. 

We note that the agency and intervenor argue that the contract specialist’s 

undocumented analysis of L-3’s past performance by the contract specialist was 

reviewed by the contracting officer and the source selection official, who acquiesced 

in his analysis in making the source selection decision. However, the agency can 

produce no documentary evidence of the review by the contracting officer and the 

source selection official, except the source selection decision document prepared 

by the source selection decision, which states that “[t]he remaining subfactors of the 

technical factor and past performance all received the same adjectival rating.” Tr. 

at 42. Given the lack of documentation and support for the substantial confidence 

rating, we find no basis to conclude that the agency reasonably evaluated L-3’s past 

performance.13

 

12 The contract specialist testified that the task manager did not notice any such 

inconsistencies because this was his first experience as chairperson of the source 

selection evaluation. Tr. at 121-22. 

13 We also find that the contract specialist’s testimony does not otherwise support 

the substantial confidence rating. The questionnaire response from the HLM I task 

manager clearly indicated a significant performance problem: 

The Gov’t asked for and received [DELETED]. Schedule has been 

revised twice with a major impact on fielding the devices.

MTD, Tab 3, L-3 Past Performance Questionnaire, at 3. However, when reporting 

this issue in the SSER the contract specialist characterized the problems as “minor 

technical issues” that did not impact the contract schedule. AR, Tab 5, SSER, 

at 34. Except for the testimony discussed above, the record, including the hearing 

testimony, does not specifically indicate why the contracting specialist regarded 

these problems as “minor.” 
Page 10 B-406990, B-406990.2 

RECOMMENDATION

Because we find that the agency failed to adequately support and document its past 

performance evaluation of L-3, we recommend that the agency reevaluate L-3’s 

past performance. We also recommend that Kollsman be reimbursed the costs of 

filing and pursuing this protest, including reasonable attorney fees. 4 C.F.R. 

§ 21.8(d)(1). Kollsman should submit its certified claim for costs, detailing the time 

expended and cost incurred, directly to the contracting agency within 60 days after 

receipt of this decision. 4 C.F.R. § 21.8(f)(1).

The protest is sustained.

Lynn H. Gibson

General Counsel