Opinion ID: 666055
Heading Depth: 3
Heading Rank: 3

Heading: Urban's Stated Rationale for Awarding to ETC

Text: 114 Latecoere also contends that Selection Authority Robert Urban failed to provide an adequate rationale in his selection document to support his determination that the superior features of Latecoere's proposal were not worth the 7.8 percent higher cost, and therefore, it contends that the selection of ETC was without reasonable basis, i.e., irrational. 115 In a negotiated procurement, contracting officials have broad discretion to determine the manner in which they will make use of technical and cost evaluation results. TRW, Inc., 68 Comp.Gen. 511, 89-1 CPD p 584, 1989 WL 237497 at  3 (1989). However, it is improper to induce an offer representing the highest quality and then reject it in favor of a materially inferior offer on the basis of a relatively insignificant price difference. In re PharmChem Lab., Inc., 91-2 CPD p 317, 1991 WL 216281 at  3 (C.G.1991). In awarding a contract, a selection authority is required to use the factors established in the solicitation[;] ... consider any rankings and ratings, and, if requested, any recommendations prepared by evaluation and advisory groups; and to provide supporting documentation prepared for the selection decision ... show[ing] the relative differences among proposals and their strengths, weaknesses, and risks in terms of the evaluation factors ... [and] the basis and reasons for the selection decision. 48 C.F.R. Sec. 15.612(d) (1993). Where cost is secondary to technical considerations under [a solicitation] evaluation scheme, ... selection of a lower priced proposal over a proposal with ... higher technical [ratings] requires an adequate justification, i.e., some showing the [selection authority] reasonably concluded that, notwithstanding the point differential between the two proposals, they were essentially equal. In re Dewberry & Davis, 92-1 CPD p 421, 1992 WL 103406 at  4 (C.G.1992); PharmChem Lab., Inc., 1991 WL 216281 at  3. When a source selection authority's documentation for a best value procurement contains inadequate rationale to support a decision to make an award to a lower priced offeror with a lower technical ranking, the selection authority's decision can be said to have no reasonable basis. Dewberry & Davis, 1991 WL 103406 at  4. 116 Latecoere challenges the rationale contained in Urban's selection document. In response, the Navy and ETC contend that the selection was the result of a reasoned trade-off between the costs and technical merits of Latecoere's and ETC's proposals. They rely heavily on the GAO's conclusions about the rationale in Urban's selection document and on the GAO's ultimate finding that Urban's decision was reasonable. According to the GAO, ETC's selection was supported by a comprehensive and rational[ ] source selection document detailing why ETC's offer represented the best value to the government. Latecoere, 1991 WL 15029 at  6. The magistrate judge and the district court relied on the same conclusion and conducted no independent review of Latecoere's contentions. In order to carry out our responsibility of review, we must examine Urban's selection document to determine whether it provides a rational basis for his decision to reject the Advisory Council's recommendation and to award the contract to ETC instead of Latecoere. 117
118 Latecoere received acceptable ratings in nineteen of the twenty-one chapters in the Device Design volume of its proposal, and exceptional ratings on the other two chapters: the Gondola chapter and the Arm chapter. ETC ultimately received acceptable ratings in all twenty-one chapters, but four of those were the critical chapters that had had marginal ratings which the Advisory Council arbitrarily increased to acceptable. Urban characterized the superior features of Latecoere's Gondola and Arm proposals as superfluous technical benefits that would not warrant the additional cost of approximately $800,000 attributable to them. After reviewing Urban's decision, the GAO was unable to conclude that the [Selection Authority] acted unreasonably, but the GAO provided no explanation for its determination. Wyle, 1990 WL 293722 at  5. 119 A best value procurement purposefully solicits proposals with technical features exceeding minimum solicitation requirements. Moreover, the G-TIP Solicitation expressly induced offers with extraordinary safety features and stated that the highest priority in proposal evaluation would be placed on safety. Aside from Urban's statement that the Solicitation did not require Latecoere's superior features, he offered no explanation for his conclusion that Latecoere's greater safety features--which is what the Solicitation was designed to elicit--did not warrant the additional cost. Because Urban's sole stated rationale is incompatible with a best value procurement, it does not adequately support his decision to favor ETC in regard to device design. 120
121 Latecoere received exceptional ratings in seven of the sixteen sections that comprised the non-foundation part of the Facility Design proposal. By contrast, ETC received exceptional ratings in only one of those sixteen sections. Urban concluded that, although Latecoere's enhancements for the non-foundation design part of its Facility Design proposal exceeded the requirements of the Solicitation, they did not appear to provide substantial benefits to the function of the facility. That conclusion flies in the face of the Solicitation, which invited offerors to design a facility that would be not only functional, but pleasant in appearance, of high quality, and most importantly, safe to use. Urban might have preferred a low-cost, technically-acceptable procurement, but the Solicitation that should have controlled his actions did not provide one. It was improper for him to act unilaterally as if it did. 122 Urban similarly refused to ascribe value to the technical superiority--not to mention the lower price--of Latecoere's foundation design, which was the other half of the Facility Design proposal. He summarily concluded that Latecoere's proposal should not have been rated exceptional just because Latecoere intended to consult with a geotechnical engineering firm, a plan that the Evaluation Board thought gave the proposal a high probability of success. Thus, even where Latecoere was superior in terms of cost as well as technical ability, Urban refused to deviate from his stubborn preference for ETC. 123 The GAO stated that Urban considered Latecoere's intent to subcontract with a geotechnical engineering firm to be 'reassuring' but not a substantial benefit over ETC's proposal which met [Solicitation] requirements. Wyle, 1990 WL 293722 at  8. Urban never called Latecoere's proposal reassuring. Instead, he simply rejected the Evaluation Board's rating, apparently reasoning that only a certainty of success would merit an exceptional rating. Urban's rationale for rejecting the rating is absurd. The Evaluation Board used the high probability of success language precisely because it was the very terminology the Solicitation used to define an exceptional rating. Urban's reasoning that a high probability of success rating is not good enough for an exceptional technical rating is further evidence that he ignored the Solicitation. His rejection of the impressive rating that the Evaluation Board gave to Latecoere's foundation design proposal is particularly irrational because the Evaluation Board team that rated this part of the design included geotechnical engineers. There is every reason to believe that they, unlike Urban, knew what they were doing. Those same engineers had previously concluded that ETC was lacking the technical ability to handle the complex foundation design requirements of the G-TIP. 124 Additionally, Urban's refusal to recognize the importance of the differences between Latecoere's and ETC's foundation design ignores important facts that former Selection Authority Rowley had emphasized in his selection document. In that document, which was issued during the first round of the selection process before any Buy American political considerations entered the picture, Rowley pointed out that the government had suffered substantial losses in the past due to problems with the foundations of two other centrifuge trainers. In particular, the government had been forced to abandon a training facility in Houston, Texas, when its foundation failed, and to limit the use of a training facility in Pensacola, Florida, when its foundation shifted. Thus, a stable and secure foundation was a critical safety feature. By equating ETC's and Latecoere's substantially different facility design ratings, Urban, unlike his predecessor in office, acted irrationally. Urban's stated rationale certainly does not support his decision to equate Latecoere's and ETC's facility design proposals. 125
126 Upon considering Latecoere's proposal to complete the project three months ahead of schedule, Selection Authority Urban stated that, although the Government would benefit from a shorter schedule, he had no way of apportioning a specified value to earlier delivery, because the downing of any aircraft or loss of life due to lack of centrifuge training cannot be discussed in monetary terms of gains or losses. Urban stated that centrifuge training was currently available at other facilities. The GAO characterized Urban as having concluded that the value of Latecoere's earlier delivery could not be quantified because alternative training facilities currently exist[ed]. Wyle, 1990 WL 293722 at  9. However, that is not what he said. First, although he implied that current training facilities were adequate, he never actually said so. Instead he simply refused to apportion[ ] a specified value to the earlier delivery because the downing of any aircraft or loss of life due to lack of centrifuge training cannot be discussed in monetary terms of gain or loss. It appears that, because the lives at stake were priceless, Urban gave them no value at all. That decision was, like many other aspects of this procurement, indefensible. 127 Urban's purported reasoning also ignored the Advisory Council's evidence that a lack of centrifuge training had caused recent aircraft crashes. This evidence, which was removed at Urban's direction, strongly indicates that adequate centrifuge training did not exist. Urban claimed that he disregarded this evidence because G forces--and the lack of adequate training facilities--were only a possible, not the certain, cause of the crashes. Urban testified in deposition that it can almost never be determined with certainty that G forces cause a crash. Of course, no risk is certain but that does not make it rational to discount risk altogether. The Advisory Council had concluded that lack of G-force training created a very real probability of greater mishaps. As former Selection Authority Rowley had explained [t]o further delay this project would ultimately delay the essential training of aircrews and could result in further loss of life and resources. Even assuming that Urban was correct in his belief that it could not be proven to a certainty that delayed completion of the training facility would cost human lives, we cannot accept as rational his disregard of the fact, which he implicitly conceded, that delay would increase the risk to human life. That there was a possibility that selecting ETC instead of Latecoere would cost human lives is important, not only because the Solicitation made safety the highest priority, but also because reducing the risk to human life is of value even when that reduction cannot be quantified or fit into a bureaucratic formula. Urban's stated rationale for discounting the superiority of Latecoere's management proposal and estimated completion date is inadequate, to say the least. 128
129 Urban recognized that Latecoere's exceptional-rated Integrated Logistics Support (ILS) proposal was impressive, but said that ETC might eventually prepare a proposal as good as Latecoere's. Urban based this conclusion on the fact that ETC had proposed a higher cost for ILS than had Latecoere. The GAO did not affirm this rationale but instead asserted that the Solicitation did not require submission of logistics system documentation until after the award. Wyle, 1990 WL 293722 at  9. That assertion is not clearly supported by the record. See p. 1353, n. 7, above. 130 Even if the Solicitation did not require the offerors to submit a fully developed ILS proposal, Urban's justification for equating ETC's skeletal ILS proposal, with Latecoere's impressive proposal is irrational. His justification is based on nothing more than the assumption that, since ETC was planning to charge more for its ILS program when it finally got around to fleshing it out, its proposal necessarily would be as good as the impressive proposal Latecoere had already committed to provide. Taken to its logical conclusion, this reasoning would suggest that the most expensive proposal is always the best. Apparently, Urban ignored the distinct possibility that, once ETC got the contract, its profit incentive would tend to cause it to provide a bare bones ILS program. Urban's reasoning does not support his decision to equate Latecoere's and ETC's ILS proposals. 131
132 Latecoere contends that Urban's rationalization for downplaying ETC's poor past performance record eviscerated the significance of past performance as an evaluation criteria. The Solicitation stated that, in evaluating past performance, the following would be considered as indicators of contractor-caused performance problems: receipt by the offeror of a cure notice, late deliveries, failure of delivered equipment to perform as specified, or other failures to perform. The Evaluation Board had awarded ETC a marginal rating on past performance because of three adverse actions initiated against it by other government agencies in the eighteen months preceding submission of the G-TIP proposals. Urban rejected this rating, reasoning that cure notices and late-deliveries were not convincing evidence that [ETC's] performance problems were solely contractor-caused. Once again, Urban ignored the express terms of the Solicitation, something he lacked the authority to do. To make matters worse, Urban went on to conclude, in contradiction to the Solicitation, that past performance was not relevant, because the Training Center would have to continuously supervise the G-TIP contractor's performance anyway and such supervision would ensure adequate performance by ETC regardless of its poor performance history. 133 The GAO opined that Urban's conclusion that the evidence of adverse actions against ETC did not support a marginal past performance rating was a reasoned judgment as to the actual risk posed by a prospective offeror. Wyle, 1990 WL 293722 at  9. Not so. Instead of making a reasoned judgment, Urban effectively scratched the past performance evaluation criteria out of the Solicitation based on the hope that constant government supervision would ensure proper performance. Instead of providing adequate support for his decision to equate the two proposals in regard to the offerors' past performance, Urban's rationale effectively changed the Solicitation's terms, a clear and prejudicial violation of procurement regulations. 134 Therefore, for the reasons discussed above, we find Urban's stated rationale for awarding the contract to ETC to be inadequate. He failed to offer a rational basis consistent with the solicitation for any of the five major proposal volumes: Device Design; Facility Design; Management Plan; Integrated Logistics Support; or Past Performance. 10