THIS OPINION WAS INITIALLY ISSUED UNDER PROTECTIVE ORDER AND IS BEING RELEASED TO THE PUBLIC IN REDACTED FORM ON APRIL 15, 1993 DISMISSED AS FRIVOLOUS IN PART; DENIED IN PART: April 7, 1993 GSBCA 12299-P COMPUTER SCIENCES CORPORATION, Protester, v. DEPARTMENT OF THE AIR FORCE, Respondent, and BDM INTERNATIONAL, INC., Intervenor. Kenneth S. Kramer, P.C., Lynda Troutman O'Sullivan, Douglas W. Baruch, and Douglas E. Perry of Fried, Frank, Harris, Shriver & Jacobson, Washington, DC, and Helaine Grace Elderkin and Harvey N. Bernstein of Computer Sciences Corporation, Falls Church, VA, counsel for Protester. Clarence D. Long, III, Office of the General Counsel, Department of the Air Force, Washington, DC, counsel for Respondent. Richard J. Conway, William F. Savarino, and Bruce H. Leshine of Dickstein, Shapiro & Morin, Vienna, VA; Richard J. Webber and John J. O'Brien of Arent Fox Kintner Plotkin & Kahn, Washington, DC; and John W. Polk and Noel H. Gordon of Baker & McKenzie, Washington, DC, counsel for Intervenor. Before Board Judges DANIELS (Chairman), HYATT, and GOODMAN. DANIELS, Board Judge. Computer Sciences Corporation (CSC) protests the award of a contract by the Department of the Air Force (Air Force) to BDM International, Inc. (BDM). The contract is for hardware and services to consolidate existing Air Force Materiel Command[foot #] 1 mainframe computer platforms and provide for future growth of the consolidated system. CSC complains that the Air Force made three fundamental errors in the conduct of the procurement that resulted in this award. First, without seeking a revision of its authority to acquire the goods and services and without informing offerors, the agency changed the focus of what was being purchased from consolidation of computer platforms to a shopping list for vast quantities of equipment which might meet potential growth needs. Second, the Air Force erred in evaluating the costs of the various proposals. Third, the agency failed to follow the stated criteria for evaluating proposals, weighing cost more heavily than was permissible and consequently concluding that an inferior offer should receive the award.[foot #] 2 None of these allegations has merit. We dismiss the first one as frivolous, for CSC knew prior to filing the protest that it was baseless. The other counts are denied. Findings of Fact 1. This procurement was conducted in furtherance of Defense Management Report Decision (DMRD) 924, which "calls for consolidation of Information Processing Centers (IPC) and modernization of communications-computer equipment throughout DoD [the Department of Defense]." Protest File, Exhibit 7, solicitation, statement of work (SOW), at 1. The procurement involves the provision of equipment and services affecting Wright-Patterson Air Force Base, five other Air Force Logistics Command Centers, and five other sites. Id. at 1-3. 2. Prior to issuing the solicitation requesting proposals to meet its needs, the Air Force asked the Administrator of General Services for a delegation of authority to conduct this procurement. See 40 U.S.C. 759(b)(2) (1988). The Air Force stated that it anticipated spending $71.3 million for the initial consolidation effort. The agency explained further: [I]n keeping with the purpose and spirit of . . . DMRD 924 . . . , [the Air Force] is structuring a contract vehicle that will accomplish it's [sic] strategic plan for the next five years. For planning purposes a 20% per year expansion of processing capability ----------- FOOTNOTE BEGINS --------- [foot #] 1 Previously designated the Air Force Logistics Command. [foot #] 2 Additional counts, contending that equipment offered by BDM did not comply with solicitation specifications, were abandoned prior to hearing. ----------- FOOTNOTE ENDS ----------- was determined to satisfy the future processing and maintenance requirement of the command for a total contract value of $362M. More specifically, the Air Force asked for authority to enter into a contract which would entail spending not only a guaranteed amount for initial consolidation, but also additional sums under a five-year indefinite delivery/indefinite quantity (IDIQ) arrangement. The additional figures anticipated were $92.1 million for expansion in accordance with the stated twenty- percent growth estimate and $198.6 million "that can be funded and used by [the Air Force] to satisfy evolutionary requirement changes and the impact of transitioning to CIM [corporate information management] standard systems." Protest File, Exhibit 3 at 5th-6th unnumbered pages; Transcript at 160-61. 3. The solicitation was issued on April 7, 1992. It requested proposals to satisfy three separate needs. a. The first of these was "equipment capacity sufficient to support all workloads and processing production schedules at a level of service equal to or better than current levels of service." Protest File, Exhibit 7, solicitation, SOW, 5.1.2.1. b. The second need was to meet a defined, planned expansion over a five-year period -- "to a capacity sufficient to process" the initial workload, plus (a) "[g]rowth at the compounded rate of 20% per year in communications-computer application workload requirements and 30% per year in on-line storage (DASD [direct access storage device]) requirements" and (b) "[a] surge of up to 50% in the transaction rate at any time from the initial installation through all growth stages." Protest File, Exhibit 7, solicitation, SOW, 5.1.2.2.a. This capacity for expansion came to be referenced as "projected growth." Id., amend. 11, SOW, 5.1.2.2.a. c. The third agency need was for each offeror to "[p]rovide growth options, equipment, equipment configuration, capabilities, features, speeds, capacities, growth limitations, software support, [and] other relevant information as applicable for" numerous items of equipment, such as central processing units. Protest File, Exhibit 7, solicitation, SOW, 5.1.2.2.b. In amendment 10, this list of equipment was made longer and more detailed. Id., amend. 10, SOW, 5.1.2.2.b. In amendment 11, the list was made longer still, and this requirement was labeled "potential growth." Id., amend. 11, SOW, 5.1.2.2.b. Evaluation of proposal costs 4. The pricing tables included in proposals were to include contract line item number (CLIN) 11, entitled "Additional Equipment." The Air Force directed offerors to place in CLIN 11 -- firm-fixed-price fully burdened prices, by item and by FY [fiscal year], for hardware specified by the Offeror to satisfy the requirements of the proposed Consolidated Equipment Configuration and the growth path . . . , which includes the projected growth required by SOW Paragraph 5.1.2.2.a and potential growth required by SOW Paragraph 5.1.2.2.b. Protest File, Exhibit 7, amend. 11, J, Attachment L-1, 7.2.3.1.11. 5. CSC responded by including in its proposal two kinds of pricing -- unit and suite -- for additional equipment. A "suite," in this context, is a set of equipment which is offered at a particular price only if purchased in the precise package specified. CSC used suite prices _______________________________ _________________________________________ Transcript at 75. C S C ' s s u i t e p r i c e s w e r e _____________________________________________ ----------- FOOTNOTE BEGINS --------- ----------- FOOTNOTE BEGINS --------- at 658-60. 6. The Air Force held face-to-face discussions with CSC on October 29, 1992, after the first thirteen solicitation amendments had been issued. The agency's minutes of the session recount that the evaluators recognized that CSC's suite prices could be advantageous, but cautioned the offeror that because "actual growth may occur in different increments or timing" from those on which the best pricing was based, "[t]he Government will order items from [Table] B-1 either in bundled groups or individual items as necessary to satisfy actual mission requirements when they occur." Consistent with this expectation, the Air Force told CSC that both unit and suite prices would be evaluated in Life Cycle Cost scenarios. The agency also said that equipment proposed to satisfy potential growth requirements would also be evaluated, but not as part of these scenarios. Protest File, Exhibit 22, Offeror Orange, Atch 1 at 7; Transcript at 94, 214. CSC reviewed the Air Force's minutes of the meeting; based on notes taken by a company employee, the firm told the agency that the minutes were accurate and complete. Transcript at 79-81. 7. CSC officials testified at hearing that at the face-to- face negotiations, CSC told the Air Force, and the agency understood, that CSC would honor suite prices if the Air Force were to order configurations that were in some way different from the precise packages specified for those prices. Transcript at 75-76, 81-82, 815. In light of CSC's recognition that this was a very important point, the firm's approval of the notes which do not state the point, and the proposal manager's admission that the statement is not included in the firm's proposal, we find ----------- FOOTNOTE ENDS ----------- that this testimony is not credible. See Transcript at 76, 823- 24; Protest File, Exhibit 79. 8. The Air Force also told CSC through the face-to-face discussions that the agency would use Government estimates for the evaluation of Government-furnished software which would be needed to supplement the proposed hardware configurations. Protest File, Exhibit 22, Offeror Orange, Atch 1 at 9; Transcript at 102-03, 625-26. 9. The Air Force advised offerors in the solicitation that costs associated with the proposals would be evaluated in accordance with two specified Life Cycle Cost scenarios, "Basic Life Cycle Cost" (BLCC) and "Enhanced Life Cycle Cost" (ELCC). Essentially, BLCC encompassed the costs of the initial consolidation effort and ELCC the costs of the initial effort plus all projected growth. Protest File, Exhibit 7, solicitation, L, 7.2.4.3.1, 7.2.4.3.2, M, C Cost Area; Transcript at 616. The agency believed, at the outset of the procurement, that the ELCC was the most probable cost scenario. Transcript at 616. 10. In reviewing initial proposals, the Air Force was surprised to see that in response to the ELCC, three of the four offerors proposed providing far more equipment than the agency had estimated would be necessary. The consequence was that the fourth offeror (not CSC or BDM) misleadingly appeared to offer a far more attractive ELCC than did its competitors. Transcript at 617. To establish a fair baseline for comparison of costs for what the Air Force considered necessary to meet projected growth requirements (with regard to quantity and timing of equipment to be supplied), the agency constructed a new "most probable scenario," which it named Total Life Cycle Cost (TLCC). Id. at 406-07, 617-18. 11. On December 3, 1992, the Air Force issued amendment 15, which contained information about cost evaluations. The agency said that this information was being provided for clarification, and that the "Government does not anticipate that the Offerors will need to make any changes to their proposals based on this revision." Protest File, Exhibit 7, amend. 15 at 2 of 5. The Air Force stated in this amendment that it would add a third Life Cycle Cost scenario, the TLCC, to the cost analysis. The agency said that it would incorporate some of its own independent estimates in determining the cost of elements of each proposal, as measured through the BLCC, ELCC, and TLCC scenarios. The agency specifically said that it would use its own estimates of the cost of Government-furnished software which would be needed to supplement the proposed hardware configurations. The potential growth part of CLIN 11, the Air Force said, "will be evaluated using separate scenarios prepared by the Government." Reiterating statements made in discussions, the agency said that these costs "will not be included in the Life Cycle Cost evaluation but will be presented to the SSA [Source Selection Authority] as 'Other Cost' considerations." Id., M, C Cost Area; see also Protest File, Exhibit 133. 12. Air Force evaluators determined, and briefed to the SSA, that using the BLCC scenario, the cost associated with CSC's proposal was $_____ million and the cost associated with BDM's proposal was $_____ million. Protest File, Exhibit 31 at 72d unnumbered page. The Air Force presented at hearing two expert witnesses, both of whom were from an independent accounting firm. One of these witnesses testified that he had reviewed the BLCC evaluation and determined that it had been marred by three errors. The actual evaluated costs, he said, should have been $_____ million for CSC and $_____ million for BDM. Transcript at 769-72; Protest File, Exhibit 315. 13. In evaluating the offerors' proposals against the ELCC scenario, the Air Force used an average of unit and suite prices for projected growth hardware. Transcript at 618. One of the Air Force's expert witnesses testified that the agency's decision to use unit as well as suite prices was reasonable because actual growth is unlikely to follow the precise path necessary for the agency to be able to purchase items in the exact packages mandated by the suites. Id. at 667-68. This was especially important with regard to CSC's proposal because _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ----------- FOOTNOTE BEGINS --------- ----------- FOOTNOTE BEGINS --------- _ _____. Id. at 670-80, 687-90; Protest File, Exhibits 303-09. 14. The evaluators determined, and briefed to the SSA, that using the ELCC scenario, the cost associated with CSC's proposal was either $_____ million or $_____ million (depending on whether a particular alternative was considered), and the cost associated with BDM's proposal was $_____ million. Protest File, Exhibit 31 at 101st unnumbered page. An Air Force expert witness testified that the figures for CSC were correct, but that the number for BDM should have been $_______ higher -- $_____ million. Transcript at 772-78; Protest File, Exhibit 316. 15. To evaluate costs against the TLCC scenario, to meet the Government's view of its most probable requirements for each contract year, the Air Force used "the exact configurations as proposed by each offeror, . . . in exactly the same order as specified by each offeror" for the ELCC. Transcript at 407-13, 420. The difference between the ELCC and the TLCC scenarios was that for the ELCC, each offeror noted the equipment and configurations it believed appropriate to meet projected growth requirements, whereas for the TLCC, the Government selected only that part of the offerors' equipment and configurations it considered necessary. Id. at 415-16. Prices for the individual items of equipment were selected from tables contained in the proposals. Id. at 395. ----------- FOOTNOTE ENDS ----------- 16. In evaluating the offerors' proposals against the TLCC scenario, the Air Force attempted to use suite prices, but found that it could not do so because meeting the growth path and timing envisioned in this scenario required the purchase of items of hardware in groups and at times other than those available in suites. Transcript at 395-96, 618. The evaluators determined, and briefed to the SSA, that using the TLCC scenario, the cost of CSC's proposal was $_____ million and the cost of BDM's was $_____ million. Protest File, Exhibit 31 at 105th unnumbered page. An Air Force expert witness testified that the figure for BDM is correct, but that the number for CSC should have been $___ million higher -- $_____ million. Transcript at 779-84; Protest File, Exhibit 317. 17. For each of these scenarios, the Air Force included an amount to cover the cost of software which it would have to purchase separately for use with the equipment to be bought through this procurement. In determining this amount, the agency evaluators used prices for that software which they found in General Services Administration (GSA) multiple award schedule contracts and in manufacturers' catalogs. Transcript at 436. The resulting figures were as follows: Scenario CSC BDM BLCC $_____ million $_____ million ELCC _____ _____ TLCC _____ _____ Protest File, Exhibits 315-17. One of CSC's expert witnesses testified that purchases of large quantities of software can generally be made at considerable discounts from schedule and catalog prices. Transcript at 493. 18. To perform an assessment of the "other costs" associated with potential growth, the Air Force designed a set of scenarios for such growth, selected hardware from each offeror's tables to meet those scenarios, and applied the cost of that hardware. Transcript at 202. The evaluators determined, and briefed to the SSA, that the cost of potential growth associated with the two proposals was $_____ million for CSC and $_____ million for BDM. Protest File, Exhibit 31 at 105th unnumbered page. CSC's expert witnesses were able to cite one error made by the evaluators in their selection of equipment from CSC's proposal to satisfy one of the potential growth scenarios. This was the choice of a central processing unit that was larger than necessary to perform a certain job. Transcript at 506-07. Had the evaluators selected a processor of appropriate size, CSC's evaluated cost would have decreased by $___ million. Id. at 507, 512-15. 19. CSC's expert witnesses were unable to estimate how much the difference between CSC's and BDM's TLCCs would have been reduced if the Air Force had used suite pricing for this scenario. Transcript at 457, 464-65. One expert blamed the Air Force's late delivery of computer disks containing pertinent information for the inability to calculate an estimate. Id. (Paper copies of this information had been produced earlier, but the expert found them difficult to read. Id. at 539.) We note, however, that CSC did not request these disks until March 10, just six calendar days before the scheduled hearing in this protest and two calendar days before the planned depositions of the experts -- notwithstanding the fact that the expert thought his review of the computer information would take a week to ten days, id. The Board convened a conference on the day after CSC made its request; at that conference, the Air Force agreed to provide the disks later in the day. We also postponed the depositions by one day to permit CSC's experts to study the disks before the questioning. Board's Memorandum of Conference of Mar. 11, 1993, at 2-3; letter from CSC counsel to Air Force counsel, Mar. 11, 1993. One of CSC's experts admitted that the reason that attention did not turn to the cost estimates until the eve of hearing was that the experts had previously devoted most of their time to reviewing compliance of BDM hardware with solicitation specifications -- a subject which, following that investigation, CSC chose not to pursue. Transcript at 537-38; see n.2, infra. 20. CSC's expert witnesses did not analyze how the Air Force should have estimated the cost of Government-furnished software needed to supplement each firm's hardware configuration. Transcript at 469-70. Nor were the witnesses able to calculate how much the difference between CSC's and BDM's evaluated TLCCs would have been reduced if the Air Force had used an allegedly more realistic means of estimating those software costs. Id. 21. CSC's expert witnesses offered no opinion as to the prices at which the Air Force should have evaluated the BLCCs, ELCCs, TLCCs, or potential growth costs of the two offerors, or as to whether any errors the Air Force made in its evaluation of costs was prejudicial to CSC. Transcript at 467-70, 529-30, 536- 37. Evaluation criteria and their application 22. The Air Force announced in issuing the solicitation that "[s]election of the winner will be in accordance with the conditions stated in the RFP [request for proposals, or solicitation]. In particular, the technical and management criteria will be weighed heavily." Protest File, Exhibit 7, solicitation, executive summary, 6. The agency said further, "The acquisition is basically a technical competition, but due to the importance of management the most advantageous proposal may be other than the technically superior." Id., M, 4.1. Additionally, "Although price and other factors will be considered, cost/price are secondary to the Technical, Management and LTD [Live Test Demonstration] Areas." Id., amend. 14, M, 4.4.4. Consistent with these statements, the evaluation criteria were, "in descending order of importance," technical, management, live test demonstration, and cost. Id., amend. 2, M, 4.3, 4.4.4.a. 23. There is no dispute as to the correctness of the ratings of CSC and BDM in the technical, management, and LTD categories. The ratings were based on a color scheme in which blue is highest, followed by green, yellow, and red. As included in the Source Selection Advisory Council (SSAC) report and briefed to the SSA, these ratings were as follows. In the technical area, CSC was considered to have the best solution of the four offerors, with BDM second; CSC was scored as blue with low risk and BDM as blue with moderate risk. In the management area, CSC was again considered to have the best proposal, with BDM second; CSC was scored as blue with low risk and BDM as green with low risk. On the LTD, BDM was evaluated as second best and CSC as third; both offerors received scores of green with moderate risk. Protest File, Exhibits 30, 31 at 104th unnumbered page. 24. Air Force employees told the SSA, in the briefing, that of the three Life Cycle Cost scenarios, the TLCC scenario most closely reflected the Government's expected requirements. Transcript at 140-41, 223-25, 339. The SSA contemplated all three cost scenarios, but considered the TLCC scenario to be most important "because it reflected most probably what we would do." Id. at 343-44, 354. The SSA considered potential growth "as an option." "[I]t wasn't a significant factor in the decision . . . because it . . . might come about, it might not." Id. at 327. The source selection decision document does not mention potential growth. Protest File, Exhibit 32. 25. The SSAC recommended to the SSA that he determine that BDM's proposal was most advantageous to the Government. Protest File, Exhibit 30 at 30-31; Transcript at 331-32. The SSA agreed with this recommendation. Transcript at 332. His source selection decision states: I conclude that CSC offers a slightly better overall solution than BDM. However, the slight technical advantage offered by CSC is not worth the additional cost of CSC, whether viewed from the [BLCC] Scenario, the [ELCC] Scenario or the [TLCC] Scenario. . . . BDM's proposal offers the best overall value to the Government. Protest File, Exhibit 32 at 2. 26. One of CSC's expert witnesses testified that based on the information briefed, the SSA made a decision which -- was not irrational. He was trading off what he viewed as being relatively small technical superiorities against very large hardware cost deltas [differences] . . . . And I think he made a decision that it basically wasn't worth it to spend the additional money. So I don't have a problem with his decision, as we've just discussed it. Transcript at 510. 27. At hearing, the SSA was presented with the Air Force's independent expert's revisions to the three Life Cycle Cost scenarios. The SSA was asked whether, if he had been presented with these numbers at the briefing, his selection decision would have been different. He responded: I would have made the same decision. . . . Because it doesn't reflect a significant difference except in the basic life cycle cost[.] [T]he probable life cycle cost essentially remained the same and the expanded life cycle cost essentially remains the same so I didn't see anything in there that would sway me to believe that I needed to go back and review everything. Transcript at 356-59. 28. The contract was awarded to BDM on February 3, 1993. The contract price is not to exceed $362 million, of which not to exceed $248.3 million is encompassed by CLIN 11 (hardware for projected and potential growth). Protest File, Exhibit 34 at 1, 14; Exhibit 59. This protest ensued on February 12. CSC's understandings of the procurement 29. The March 30, 1992, issue of a trade newspaper, Government Computer News, contained an article about the Air Force's computer consolidation plans. The story says: By next year, the Air Force's Logistics Command will take over the wholesale logistics systems that now run at five air logistics centers and at Wright-Patterson Air Force Base, Ohio. . . . A formal request for proposals should be released soon . . . . The acquisition, estimated at $350 million, will include $80 million for the logistics command effort and $270 million for other logistics modernization work. Protest File, Exhibit 201 at 78. CSC's proposal manager, who had been planning the firm's effort to win this contract since the previous January, read this article and was aware of it as he constructed the proposal. Transcript at 57-59. In light of the clear relationship between the particular statement in the article and the solicitation's statement of work, we find lacking in credibility the proposal manager's testimony that he did not recognize that the statement pertained to this procurement. Id. at 59-61. 30. On November 9, 1992, in briefing CSC's senior management on the firm's proposal prior to submission of best and final offers, the proposal manager represented the potential revenues from the IDIQ portion of the contract as being as great as $300 million. Protest File, Exhibit 212 at 30; Transcript at 69-74. 31. The CSC division vice president who was responsible for the pricing in the firm's proposal understood that as the competitors' technical solutions became more similar, cost would assume greater importance in the award decision. Transcript at 554, 583. After face-to-face negotiations with the Air Force, he concluded that because the discussions had been so extensive, and offerors had been given an opportunity to correct identified weaknesses as well as deficiencies in their proposals, technical differences among proposals would be reduced and "cost will become [the] main discriminator" among them. Id. at 560-75; Protest File, Exhibit 206 at 10th unnumbered page. Consequently, he believed that CSC's strategy for securing contract award had to include offering the lowest possible price. Transcript at 593-94; Protest File, Exhibit 206 at 10th unnumbered page. We find incredible the attempts the vice president made at hearing to explain away his written conclusions. The first of these is the assertion that technical differences were likely to be reduced, and cost likely to become the main discriminator, only on the aspect of CSC's proposal as to which the Air Force had discussions. As the witness testified, differences probably were reduced in all areas of all offerors' proposals as to which the agency provided information regarding weaknesses and deficiencies. See Transcript at 575-77, 581-83. We also find implausible the vice president's statement that his concept of the procurement was rejected by CSC decision-makers; neither his deposition testimony nor the documentation of the relevant briefing shows such a conclusion, and he admitted that his notes (which support our finding) were retained although CSC internal documents relating to rejected conclusions were routinely thrown away. See id. at 577-80, 600; Protest File, Exhibits 206 at 10th unnumbered page, 207. Discussion Nature of the procurement CSC alleges that this procurement began as one which was essentially for the consolidation of computing resources, and contained a modest provision for growth. According to protester, in violation of the delegation of authority under which the procurement was conducted, and without informing offerors, the Air Force "completely changed the nature of the procurment" to a shopping list under which vast quantities of hardware could be bought. As a result, CSC says, the Air Force awarded a contract without ever having obtained competition to fill its true requirements. The Air Force originally envisioned the purpose of this procurement as being to satisfy three different needs: consolidating existing computer platforms, meeting planned growth needs over the next five years, and meeting supplementary requirements that might arise over the same time period. The agency requested a delegation of authority from the Administrator of General Services to conduct such a procurement. The request specifically stated that the Air Force desired to satisfy the second and third needs through an indefinite delivery/indefinite quantity arrangement. Finding 2. Even before the solicitation was issued, the trade press understood the nature of the procurement. CSC's proposal manager read a published report which described this structure quite precisely; we cannot imagine how he, having been at work on a proposal for more than two months when the article appeared, could not have recognized its relevance. Finding 29. In any event, before CSC submitted its best and final offer, the proposal manager and his senior management understood that the IDIQ portion of the contract could include the vast bulk of revenues which might flow from the award. Finding 30. The contract that was ultimately awarded comports with the delegation of procurement authority and CSC's understanding of the procurement. See Finding 28. CSC's complaint to the contrary is patently wrong. We earlier denied a motion by the Air Force and intervenor BDM to dismiss as untimely filed this portion of the protest. GDE Systems, Inc. v. Department of the Air Force, GSBCA 12298-P et al., 1993 BPD 72 (Mar. 8, 1993).[foot #] 3 BDM renewed its motion after it learned in discovery that the CSC proposal manager had told his management to expect as much as $300 million in revenues from the IDIQ part of the contract. We have difficulty grasping how the concept of timeliness relates to the contention that CSC was surprised to learn that IDIQ revenues from the contract could be very large. An allegation can be timely only if it is filed within a specified period of time after its basis is known. Rule 5(b)(3). There is not now, and never was, any basis whatsoever for the allegation that the ----------- FOOTNOTE BEGINS --------- [foot #] 3 At the time the motion was filed and denied, the instant protest was consolidated with protests filed by the other two disappointed offerors. Since then, the other protesters have withdrawn their cases. GDE Systems, Inc. v. ______________________ Department of the Air Force, GSBCA 12298-P et al., 1993 BPD 77 ___________________________ (Mar. 10, 1993). ----------- FOOTNOTE ENDS ----------- nature of the procurement changed dramatically. Indeed, CSC knew this all along -- well before it filed the protest. We dismiss the contention as frivolous. 40 U.S.C. 759(f)(4)(C) (1988). Cost evaluation CSC maintains that the evaluations of the costs of its proposal were flawed in four ways: suite pricing should have been used for all evaluations; lower figures should have been used for imputed costs of Government-furnished software; the Total Life Cycle Cost scenario was irrational; and potential growth was accorded disproportionate weight in the evaluation. (1) Pricing equipment for projected growth by suites (or sets of equipment), rather than by individual units, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ----------- FOOTNOTE BEGINS --------- _________________________________________________. Finding 5. In discussions, the Air Force told CSC that because "actual growth may occur in different increments or timing" from those on which the suite pricing was based, cost evaluations would be based on unit as well as suite prices. Finding 6. In evaluating proposals against the Enhanced Life Cycle Cost scenario, the agency applied unit and suite prices with equal weight. Finding 13. This action clearly falls within the parameters that the Air Force said it would apply. CSC suggests that weighing suite prices more heavily, particularly in the early years of the contract (where growth could be projected with relative certainty), would have made more sense. Even if this is true, it is not dispositive. Given the statements the Air Force made earlier, the selection of a fifty-fifty split was well within the discretion of the agency evaluators. We agree with the Air Force's expert witness that this choice was reasonable, particularly in light of the narrow constraints within which CSC's suite prices could be of value to the Government. See id. Suite prices were not used in the TLCC scenario, Finding 15, but even if this was improper, as CSC charges, it is of no importance for reasons explained below. (2) The Air Force recognized that as it purchases hardware under the contract awarded through this procurement, it will have to buy through other means software to operate on that hardware. For the purpose of evaluating the costs implicit in each of the offers in this procurement, the agency told offerors that it would use its own estimates. Findings 8, 11. Consistent with this statement, evaluators assigned GSA schedule and catalog prices to relevant software. Finding 17. The agency maintains that the use of these prices was appropriate because the prices are readily ascertainable. CSC contends that the prices are unreasonably high, given the large amounts of software the Air Force expects to buy in association with this contract. CSC's position, which is supported by the testimony of one of its expert witnesses, id., appears logical on its face. ----------- FOOTNOTE ENDS ----------- The problem with protester's analysis, however, is that it does not help us to resolve the case. Any decrease in software prices would affect all offerors, not just CSC, and CSC has presented no evidence as to the extent to which decreases should be made or how they would affect the relative prices of CSC and BDM. Finding 20. In its posthearing brief, CSC maintains that because the two firms offered hardware with similar capacity for purposes of each Life Cycle Cost scenario, the software costs attributable to the two proposals should be the same. This argument is too simplistic; costs vary with the particular software ordered, and since the two firms proposed different hardware, there is no reason to believe that the same software would suit the two solutions. (3) After reviewing initial proposals, the Air Force determined that the scenario it was using for evaluating proposal costs including projected growth, the ELCC, had limited usefulness. The reason was that three of the four offerors, including CSC and BDM, had proposed providing far more equipment than the agency had thought necessary, thereby giving an apparent, but misleading, cost advantage to the fourth firm. The Air Force decided that to make the competition equitable for CSC, BDM, and the third offeror, it would compare all proposals using the agency's own estimates of the quantity and timing of equipment to be purchased for projected growth. Finding 10. An amendment to the solicitation was then issued, announcing that the TLCC would be used. Finding 11. The solicitation's statement about the TLCC does not reveal any plans for cost evaluation notably different from the scenarios already announced. Finding 11; see also Finding 9. The amendment said that it was being provided for clarification, and that the "Government does not anticipate that the Offerors will need to make any changes to their proposals based on this revision." Finding 11. From this information, the offerors could reasonably have expected that the TLCC would yield results consistent with those of previously-announced cost scenarios. As to CSC and BDM, it did exactly that: on both the ELCC and the TLCC, CSC's proposal was evaluated as being roughly ______ percent more expensive than BDM's. Findings 14, 16. Thus, if the Air Force had never devised the TLCC, and had relied more heavily on the ELCC (which CSC says it should have, since offerors proposed to the ELCC), the award decision would not have been affected. Whatever improprieties occurred with regard to the TLCC -- if any -- are immaterial. (4) Protester's allegations about the potential growth portion of the procurement are difficult to comprehend. Paragraphs 14, 18, and 20 of the complaint appear to imply that potential growth should have played a minor role in the evaluation scheme, with its costs secondary in importance to those shown in the Life Cycle Cost scenarios. This actually occurred: costs associated with potential growth were evaluated as "other costs," as prescribed by the solicitation, and the Source Selection Authority did not consider them to be as significant as the LCCs. Findings 11, 18, 25. Count III, at paragraph 36, complains that the solicitation provided no standards or specifications on which to bid. As we found in our interlocutory opinion, this allegation is not really a challenge to the solicitation provisions (which would be untimely, since it was made after proposals were due, Rule 5(b)(3)(i)). Rather, it is a part of the argument that potential growth costs were improperly made pivotal to the award decision. As we have found, these costs were not significant to that decision. Paragraph 43 maintains that the agency failed to perform a technical evaluation of the equipment offered for potential growth. Since this is the same hardware that could be purchased for projected growth, Finding 4, the need for a separate technical evaluation is not apparent. Even if such a separate evaluation should have been performed, CSC does not tell us how it might have affected the relative standings of CSC and BDM as to technical merit. It could not have improved CSC's score, since CSC was already considered to have the highest technical rating possible. Finding 23. The only error CSC has demonstrated in the evaluation of potential growth costs was in the amount of $___ million -- less than ____ percent of the difference between CSC and BDM in this area. Finding 18. (5) A fundamental problem with CSC's approach to the entire subject of cost evaluations is that protester's experts were unable to provide the Board with any analysis showing how (or even that) CSC would have benefited from "correction" of the alleged errors. Findings 19-21. A showing of prejudice is critical to the success of a protest, Andersen Consulting v. United States, 959 F.2d 929 (Fed. Cir. 1992), and CSC has not made such a showing. One of the experts blamed the Air Force's late delivery of relevant documents for his failure to provide the analysis. Finding 19. The record shows, however, the real reason the experts were unable even to address this subject: they devoted much time (fruitlessly, as it turned out) to other investigations, and because of this, CSC did not even demand the documents until too late for them to be analyzed. Id. Were this case one that could proceed at its own pace, we might have postponed depositions and hearings to give the experts an opportunity to scrutinize the documents and present us with an appraisal of them. Protest proceedings are of necessity fast- paced, however. By law, each case must be decided within forty- five working days of its filing. 40 U.S.C. 759(f)(4)(B) (1988). Our Rules require that the hearing in each protest be held no later than the twenty-fifth working day after the case is filed, so that briefs and decisions may be written by the statutory deadline. Rule 19(a)(3). These restrictions place a premium on a quick assessment of which issues and avenues of investigation are most important. CSC's experts made an unwise choice here, and given the constraints of the process, there was no chance to remedy that mistake. Award decision The remaining allegation of protest is that the award decision was incompatible with the criteria specified in the solicitation. Because we have rejected all of CSC's challenges to the evaluation of the costs of the offerors' proposals, we consider that for purposes of reviewing this allegation, the cost evaluations were correct except for the errors admitted by the Air Force's expert witness, Findings 12, 14, 16, and the one found by CSC's expert, Finding 18. The solicitation stated that technical merit was the most important criterion in determining the relative standing of proposals, followed (in order) by management, live test demonstration, and cost. Finding 22. The agency evaluators found the technical aspects of both the CSC and BDM proposals to be superior, with CSC's better. The evaluators considered the management aspects of CSC's proposal to be better than those of BDM's, and the LTDs of the two offerors to be approximately equal, with BDM's a bit better. Finding 23. All in all, except for cost, the SSA understood from this review that CSC offered "a slightly better overall solution than BDM." Finding 25. The SSA was also faced with the fact that under the TLCC scenario, which the agency considered to represent its most probable cost for this procurement, CSC's proposal was about ______ percent more expensive than BDM's. Findings 16, 24. (As we have noted, if the agency had considered the ELCC scenario to represent its most probable cost -- as it originally thought it would -- the relative price difference would have been the same.) Thus, the determination of which proposal was most advantageous to the Government was not clear-cut. We have previously held: [W]here the solicitation does not set forth specific weights to be applied in trading off cost and technical factors, agencies are accorded "great discretion" in determining which proposal is most advantageous to the Government. CRC Systems, Inc., GSBCA 9475-P, 88-3 BCA 20,936, 1988 BPD 136; see Oakcreek Funding Corp., GSBCA 11244-P, [91-2 BCA 24,200, 1991 BPD 156]. The SSA is paid to exercise discretion within the bounds of the award criteria set forth in the solicitation. It is not the function of this Board to "second guess" the decision of the SSA. Our job is to assure that the SSA applied the appropriate criteria and that the ultimate decision was reasonable. TRW Inc., GSBCA 11309-P, 92-1 BCA 24,389, at 121,786, 1991 BPD 205, at 14. The solicitation with which we are concerned here is not quite as unspecific in regard to criteria weights as the one in that case; here, technical, management, and LTD must count for more than three-quarters of each proposal's total rating. Cf. Centel Federal Systems, Inc. v. Department of the Navy, GSBCA 12011-P et al., 1992 BPD 359, at 28 (Nov. 16, 1992) (cost- technical trade-off within range of weights). The principle cited is applicable nonetheless, however. Where great discretion is vested in an administrative officer, we do not substitute our judgment, but rather, assess whether the exercise of that discretion was both within prescribed bounds and reasonable. Given the closeness of the non-cost ratings and the wide disparity of the costs of the two proposals, the SSA in this procurement concluded that "BDM's proposal offers the best overall value to the Government." Finding 25. His decision would have been the same if he had been presented with the cost figures as corrected by the Air Force's expert. Finding 27. Because he gave little weight to potential growth costs, and the identified error in that area was so small, we find it inconceivable that knowledge of this mistake would have changed his judgment, either. See Findings 18, 24. We cannot say that the SSA's decision was unreasonable. One of CSC's expert witnesses admitted as much. Finding 26. And because CSC expected cost to be the "main discriminator" among otherwise similar proposals, Finding 31, we doubt that protester was astonished by the result. Decision The protest is DISMISSED AS FRIVOLOUS insofar as it complains about a surprise change in the nature of the procurement. Otherwise, the protest is DENIED. Our order suspending the Air Force's authority to proceed with contract performance while the protest is pending lapses with the issuance of this decision. _________________________ STEPHEN M. DANIELS Board Judge I concur: _________________________ ALLAN H. GOODMAN Board Judge HYATT, Board Judge, concurring in part and dissenting in part. I concur in the majority's conclusion that the protest should be denied, but differ with the view that protester's allegation that the procurement changed dramatically deserves to be dismissed as frivolous. Protester's complaint does state, among other assertions relating to this ground of protest, that CSC was not aware until after award that the potential growth elements of the acquisition had a not-to-exceed value of $248 million, which is more than 217% of the combined value of all other contract line items, including the consolidation of hardware platforms. In its post-hearing brief, however, CSC characterizes this ground of protest in the following manner: [T]he Air Force misled the offerors regarding the scope and dollar value of the "hardware buy" via the issuance of an RFP that focused, almost exclusively, on the importance of the initial consolidation and systems integration aspect of the procurement. The Air Force's evaluation of the potential growth area was conducted by selecting, for 14 elaborate and undisclosed scenarios, thousands of items from the offerors' B- tables, at prices that offerors premised on a quantity buy of one. These government equipment picks were made utterly without regard to cost. The potential growth configurations were then evaluated as to cost and briefed to the Source Selection Authority ("SSA") as enormous cost differentials, while no consideration whatsoever was accorded to technical excellence or management. Protester's Post-Hearing Brief at 2-3. The majority dismisses the protest as frivolous to the extent that it "complains about a surprise in the nature of the procurement." The majority's conclusion on this point is predicated solely on its belief that CSC could know no less than the trade press and on the admission of CSC's proposal manager that the IDIQ portion of the contract could generate up to $300 million in revenues. Given this knowledge, the majority concludes that CSC could not credibly allege that it was surprised by the change in focus of the procurement. I am not persuaded that CSC's mere cognizance of a trade press article required it to accord more credence to the statements in the article than to the terms of the RFP itself. Nor can I agree that offerors should be expected to inquire of an agency whether it is the stated terms of a solicitation or the revelations of the trade press, which may or may not be accurate, that are controlling as to the conduct of an ADP procurement. In the same vein, I believe the majority places unwarranted emphasis on the testimony of the CSC proposal manager, who, in attempting to project revenues and profits that might be generated by the contract, "guesstimated" that the Air Force might spend up to $300 million in IDIQ growth purchases. Program managers frequently project possible buying scenarios, likely and unlikely, that could occur under a contract, in order to bid responsibly. This does not necessarily mean that they expect any possible scenario that might be foreseen to occur or that proposals will be so evaluated. It simply does not appear to me, from reading the complaint and post-hearing brief, that CSC's point is actually limited to, or centered on, the allegation dismissed as frivolous by the majority. From my reading of the post-hearing brief, the gravamen of this protest count is not so much that CSC could not have anticipated that the IDIQ portion of the contract could have such a large dollar value, but that it was misled as to the importance that would be placed on this aspect of the procurement, as compared to consolidation of hardware platforms, in the evaluation process. It is this focus that it ultimately complains was altered without notice to offerors. As such, my reading of the complaint and CSC's post-hearing brief, taken as a whole, persuades me that CSC's actual argument, although not persuasive in light of all the evidence of record, is not frivolous. The United States Court of Appeals for the Federal Circuit has noted that the term "frivolous" has "an established legal meaning in various contexts." ViON Corp. v. United States, 906 F.2d 1564, 1566 (Fed. Cir. 1990). One such established connotation is that a claim or appeal raises "legal points not arguable on their merits." Id. (citing Galloway Farms, Inc. v. United States, 834 F.2d 998, 1000-01 (Fed. Cir. 1987)). The Court has also indicated that a claim having only a small chance of success is not, for that reason alone, frivolous. Finch v. Hughes Aircraft Co., 926 F.2d 1574, 1578 (Fed. Cir. 1991). In short, "[t]he line between the tenuously arguable and the frivolous can be an uncertain one. . . ." Id. In my opinion, CSC has not crossed that line, and I respectfully dissent from this aspect of the majority opinion. _________________________ CATHERINE B. HYATT Board Judge