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. \ THE COMPTROLLER GENERAL

DECISION l i ) OF THE UNITED STATES

WAS H ING TON. D. C. 2054 8e

FILE: B-200672 DATE: December 19, 1980

MATTER OF: Ford Aerospace & CommunicationsCorporation

DIGEST:

1. agency consideration of aspects of proposalwhich exceed solicitation requirements is notimproper and does not establish that suchaspects themselves became unstated evaluationfactors>

2. jfferor's proposal to convert goals to firmperformance requirements while under a cost-typecontract is not illusory where contract requiressuch conversion and o fer is merely to do soearlier than required5.

3. G otester was not prejudiced by most probablecost evaluation conducted by agency which coveredportions of contract for which offerors submittedbudgetary estimates, even though protester wasallegedly advised that most probable cost eval-uation would only cover portions of contractfor which "firm" cost proposals were submitted,since most probable cost determination was anindependent estimate based on a cost data sub-mitted by offerors and not cost proposals orbudgetary estimates., moreover, cost was not pri-mary factor in award decision and protester'smost probable cost for "firm" portion of contractwas not low.

4. (@ency did not violate requirement for conductingmeaningful discussions by riot informing offerorthat two aspects of its proposed approach wereconsidered to be "high risks" since risks didnot prevent proposal from being technicallyacceptable and therefore in conformity withapplicable regulation were not considereddeficiencies which had to be pointed out tooffero9

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5.tAency's acceptance of alternate deliveryschedule proposal by awardee during negotiationswhich differed materially from schedule containedin RFP is improper where differences appear to beof benefit to awardee and to represent relaxationof RFP requirements.

AGC~ oCB-tfoTrd Aerospace & Communications Corporation protests

the award of a contract to Martin Marietta Corporation underthe Department of the Air Force's LANTIRIN (Low AltitudeNavigation and Target Infrared System for flight) program&The contract calls for the development and production of alow-altitude navigation, targeting and fire control systemfor F-16 and A-10 aircraft at a total estimated cost of upto $1 billion. lord Aerospace has, at the same time, filedsuit against the Air Force in the United States DistrictCourt for the District of Columbia seeking to enjoin the AirForce from taking further action with respect to the contractawarded to Martin Marietta. Ford Aerospace & CommunicationsCorporation v. United States Department of the Air Force,Civil Action No. 80-2592, filed October 10, 1980. Althoughby an order dated October 10 the court denied FordAerospace's motion for a temporary restraining order, thecourt requested that our Office render a decision on FordAerospace's protest as "expeditiously-as possible." Thisdecision is in response to that request.

(Briefly, Ford Aerospace contends that the award to MartinMarit ta was improper because the Air Force (1) based itsselection in large part on factors which were not solicitationrequirements; (2) failed to point out weaknesses in FordAerospace's proposal in violation of the statutory mandatethat meaningful negotiations be conducted; and (3) awardedthe contract based on an alternate delivery schedule proposedby Martin Marietta which deviated from the delivery require-ments set forth in the solicitatio Xl We find the protestto be meritorious on the last issue.

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BACKGROUND

On February 6, 1980, the Air Force issued Request forProposals (RFP) No. F33657-79-R-0786 for the developmentand acquisition of the LANTIRN navigation and targetingsystem.

The proposed system integrates a forward looking infraredsensor, a semi-covert manual terrain following device, a lasertarget designator, and a target recognizer into one or twopods which can be attached externally to F-16 and A-10aircraft. The system is designed to permit the aircraft tofly at low altitudes in order to avoid eneray detection,acquire targets, and launch air-to-ground missiles in"under-the-weather" flying conditions 24 hours per day.

The RFP provided for a two phase full-scale engineeringdevelopment program. Phase I included a fire control poddesign and development effort up to and through a designreview and also provided for material acquisition in orderto meet a Phase II production readiness requirement. Inaddition, Phase I included airborne demonstration of thetarget recognizers and other critical technologies identifiedby the contractor. Phase II consisted of design completion,fabrication of six prototype fire control pods, fabricationof interim-support equipment, a comprehensive test program,and production. The RFP indicated that two awards wouldbe made for the Phase I effort. The Air Force contemplatedthat one Phase II contractor would be competitively selectedfrom the two Phase I contractors.

As revised, the RFP also required the submission oftechnical and cost proposals by April 8 and set forth fourgeneral evaluation factors in descending order of importance.These were: technical approach, management and manufacturing,logistics supportability, and cost. The RFP further notedthat cost would not be a primary basis for award.

Ford Aerospace and Martin Marietta submitted pro-posals in response to the RFP. Ford Aerospace proposed asingle pod design which utilized a CO2 laser terrain followingdevice and a target recognizer manufactured by Honeywell, Inc.

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Martin Marietta, on the other 1Sand, proposed a two-podapproach which utilized a modified Ku Band terrain fol-lowing radar manufactured by Texas Instruments, Inc. anda target recognizer manufactured by Hughes Aircraft Company,Inc.

These initial proposals were evaluated by the Air Forceand negotiations were conducted by the use of writtendeficiency and inquiry reports submitted to both offerors.The Air Force also held oral discussions with Ford Aerospaceand Martin Marietta. During these discussions, the offerorswere asked to propose alternatives which would permit theAir Force to complete Phase I of the engineering develop-ment within a $40 million budget. Following these nego-tiations, the Air Force determined that it did not havesufficient funds to support the award of two Phase I con-tracts as originally contemplated by the RFP and decidedthat a change in its procurement strategy was necessary.Accordingly, on July 22 the Air Force issued ModificationRequest-12 (MR-12) to the RFP setting forth the new frame-work for the LANTIRNl fire control pod program.

As modified by MR-12, the RFP contemplated the awardof a single contract for the development and ultimate pro-duction of the LANTIRN fire control pod.* Offerors wererequired by the RFP to propose two different target recog-nizer designs which would be developed in the initialpart of the engineering development effort. The RFP pro-vided that following the completion of the critical designreview, the contractor and the Air Force would select atarget recognizer design for the remainder of the engineeringdevelopment effort which required the fabrication and deliveryof six prototype pods and target recognizers. The RFP alsoprovided for a production readiness option for the fabricationand delivery of three preproduction pods and target recog-nizers. The RFP further provided for three productionoptions for 34 pods and target recognizers (Lot 1), 138pods and target recognizers (Lot 2), and 128 pods and targetrecognizers (Lot 3).

Revised technical proposals were received from FordAerospace and Martin Marietta by August 5 and revised costproposals were received by August 21.

* The term "fire control pod" will be used to designatethe corplete assembly incLudin(j the tar'jet recotjnizercomponent. The term "pod" will be used to designatethat assembly without the target recognizer.

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Ford Aerospace again proposed a single-pod approach thatutilized a C02 laser terrain following device. As requiredby the RFP, Ford Aerospace proposed two different targetrecognizer designs: one designed by Honeywell and theother designed by Elarris Corporation. Ford Aerospace'sproposal conformed with the delivery schedule as set forthin the RFP.

Like Ford Aerospace, Martin Marietta retained itsoriginal design approach. Specifically, Martin Mariettaproposed a two-pod fire control system consisting ofa navigation pod which utilized a terrain following radarand a targeting pod. Martin Marietta also proposed twotarget recognizers as required by the RFP: a designby Hughes and a design of its own.

In addition, Martin Marietta proposed an "accelerated"LANTIRN program delivery schedule. Specifically, MartinMarietta proposed to begin delivery of six navigationpods and six targeting pods without target recognizersstarting in the 23rd month after contract award, threemonths earlier than specified by the RFP planning schedule.Under this proposal the six prototype target recognizerswould be delivered starting in the 26th month after contractaward as set forth in the RFP planning schedule.

Martin Marietta also proposed to accelerate deliveryof the three preproduction navigation pods and the threetargeting pods without target recognizers by the 32ndmonth after contract award, five months earlier thanspecified by the RFP planning schedule. Again, underthis proposal the target recognizers would not be accel-erated and would be delivered beginning in the 37thmonth after contract award, the same as in the RFPplanning schedule.

Martin Marietta further proposed to begin delivery ofthe Lot 1 production navigation pods and targeting podswithout target recognizers in the 43rd month after contractaward, eight months earlier than specified in the RFPplanning schedule. Martin Marietta also proposed to delivertarget recognizers between the start of the 51st month andthe end of the 61st month after contract award. This repre-sented a one month extension beyond that set forth in the RFPplcn l1rrei in:; -:}schcdle O

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In addition to the "accelerated"' delivery schedule,Martin Marietta proposed to make various target recognizerperformance standards firm requirements rather than "goals"as part of its initial development effort. Under the RFP,target recognizer performance standards were set as goals,and were not to become requirements until after criticaldesign review. Martin Marietta further proposed to exceedthe specified Mean Time Between Failure (MTBF) test require-ments for the fire control pods. Under the RFP, fire controlpods were to have an Upper Test MTBF of 100 hours when operatedin any mode and a Lower Test MTBF of 50 hours in accordancewith MIL-STD-781C. Martin Marietta, however, proposed an UpperTest MTBF of 140 hours and a Lower Test MTBF of 70 hours.

Discussions were held with both offerors and the finaltechnical evaluation by the Source Selection EvaluationCommittee (SSEC) was completed on August 30. Both proposalswere found to be acceptable by the SSEC. Ford Aerospacereceived green ratings in the technical approach, managementand manufacturing approach, and logistics supportabilityareas for an overall green rating. Under the source selec-tion procedures a green rating signified that the proposalwas average, satisfied most requirements, had a good pro-bability of success, and any deficiencies could be corrected.Martin Marietta, on the other hand, received a blue ratingin the management and manufacturing approach area and greenratings in the technical approach and logistics supportabilityareas, for an overall green rating. A blue rating signifiedthat a proposal exceeded specified performance or capabilityand that such excess was useful, had a high probability ofsuccess, and that there were no significant weaknesses.

Offerors were then requested to submit their best andfinal offers in the form of executed model contracts nolater than September 4. Ford proposed a cost of $234,085,383through the Lot 1 production phase if the Honeywell targetrecognizer were selected after critical design review and$235,718,642 if the Harris. target recognizer were selected.Martin Marietta proposed a cost of $242,504,555 through the

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Lot 1 production phase if the Hughes target recognizer wereselected and $242,413,991 if its own target recognizer wereselected.

In addition, Martin Marietta's best and final offerproposed a delivery schedule for major contract itemswhich differed from the "accelerated" schedule initiallyproposed with respect to the sequence of the delivery oftarget recognizers. By letter dated September 3 submittedin connection with its best and final offer, MartinMarietta also set forth the terms of its "accelerated"delivery schedule, under which final delivery of productionLot 1 target recognizers would occur by the end of the60th month after award, the same as contemplated bythe RFP planning schedule. Martin Marietta further indi-cated that if the Air Force preferred delivery in accord-ance with the delivery schedule contained in the RFPthat it was prepared to meet the RFP schedule also atthe prices quoted in its best and final offer.

Thereafter, on September 10, the SSEC presented itsfindings to the Source Selection Authority (SSA) by meansof a formal briefing. The briefing consisted of an oraland viewgraph presentation outlining the approaches pro-posed by the offerors, their strengths and weaknesses,advantages and disadvantages, risks, proposed costs andmost probable cost.

Following the briefing, the SSA, by a memorandumdated September 11, selected Martin Marietta for the LANTIRNcontract award. In making this selection, the SSA notedthat Martin Marietta's design approach met or exceededthe technical performance requirements of the RFP. Specifi-cally, the SSA noted thatLAlartin Marietta proposed to meetvarious target recognizer performance standards as firmrequirements rather than goal*>and to exceed the MTBF testrequirements for the fire control pod. The SSA further notedthat the target recognizers proposed by Martin Marietta wereassessed as offering the lowest technical risk, and the bestprobability of success for meeting the schedule for thetechnical demonstration requirements, flight testing, andproduction. Accordingly, the SSA requested the contractingofficer to make an award to Martin Marietta and to includeits proposed "accelerated" schedule as part of the contract.

Subsequently, on September 18, the Air Force awardedthe LAN.4TIR11 contract to Martin Marietta. The awardedcontract reflocted the delivery schedule contained in MartinMarietta's best and final offer. The contract, however,did not reflect the earlier milestones set forth in MartinMarietta's letter of September 3 andl upon which Marietta'sbest and final offer was conditioned.

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I. Evaluation and Selection

We will first consider the protester's contentionsthat in several respects the evaluation and selectionwas improper. According to Ford Aerospace, certaintechnical aspects of the Martin Marietta proposed system--all weather performance and blind letdown capability--inproperly became evaluation factors even though they werenot RFP requirements. In addition, Ford Aerospace contendsthat two other aspects of Martin Marietta's proposal--the conversion of target recognizer performance goals to firmrequirements and the increase in MTBF test requirements--were improperly considered and relied upon by the AirForce because 1) the protester was not advised that theAir Force was interested in these "requirements" and2) the apparent benefit to the Government of the MartinMarietta promises were illusory or otherwise meaningless.Ford Aerospace also disputes the evaluation of mostprobable cost.

As indicated, the award selection was made by theSSA based in part on a September 10 briefing by the SSEC.The briefing was divided into five parts: introduction,proposal analysis, contractual considerations, cost tothe Government, and findings. As part of the proposalanalysis portion, the SSA was advised as to the RFP'stechnical requirements and evaluation factors. The SSAwas then given a technical description of the Ford Aerospaceand Martin Marietta proposals.

Next, the SSA was briefed on five special interestareas in the technical approaches proposed by Ford Aerospaceand Martin Marietta. These were: target recognizer approachesproposed by the offerors, the F-16 and A-10 weapon deliverycapability of the systems, aircraft systems performanceanalysis, the terrain following approaches, and the terrainfollowing weather capabilities of the Ford Aerospace andMartin Marietta approaches.

First, the SSA was advised that one of the targetrecognizers proposed by Ford Aerospace and both of thoseproposed by Martin Marietta were considered to be highrisk items. The Harris recognizer proposed by Ford Aerospacewas characterized as a very high risk item because it was

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centered around a large scale integrated circuit which waslarger than any Harris had previously produced. Additionally,the SSEC noted Harris was experiencing problems as a sub-contractor on another Air Force contract.

With respect to the weapons delivery capabilities ofthe proposed system, the SSA was advised that the overallcapability of the Martin Marietta system was better than thatof Ford Aerospace especially in poor weather. *

The SSA was then presented with the followingcomparison of the terrain following sensor approaches ofFord Aerospace and Martin Marietta:

FORD CO, LASER

ADVANTAGES DISADVANTAGES

SMALL SIZE HIGH RISK

(SINGLE POD) NEW TECHNOLOGY

LAB TESTS ONLY

LOW PROBABILITY WEATHER PERFORMANCE

OF DETECTION REDUCED RAIN & CLOUD

JAM RESISTANT PERFORMANCE

MINIMUM BLINID LETDOWN

LIGHTWEIGHT CAPABILITY

LOW A/C POWER

DEMAND

WIRE DETECTION

* Our discussion of this aspect of the briefing is limiteddue to its classified nature.

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MARTIN .16 HGz RF

ADVANTAGES DISADVANtiAGES

ADVERSE WEATHER LARGER SIZE

PERFORMANCE (TWO PODS)

BLIND LETDOWN EMISSIONS

CAPAB ILITY DETECTABLE

LOW RISK HIGH AIRCRAFT POWER

REQUIREMENT

GREATER RANGE

In connection with this comparison, the briefing officialstated:

"The terrain following radar and CO2 lasersensor advantages and disadvantages are asindicated on the chart. The only item I wouldlike to draw your attention to is the minimumblind letdown capability for the CO laser.There will be very few situations where theCO2 laser will provide a blind let downcapability through weather."

The SSA was further presented with a chart comparingthe terrain following weather capability of two proposedapproaches and informed:

"The only RFP terrain following weather require-ment is for an under-the-weather capability. 11ow-ever, as the source selection proceeded the ter-rain following system weather performance becamean issue. This viewgraph addresses the issueby comparing the weather limited operationalutility of both CO laser and 16 Gl1z sensorsin West Germany. Mrote that this comparisonis for informational purposes and is nota comparison against a source selections*tardard.

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"Both contractors meet the "under-the-weatherRFP requirement. * * *

Next, the SSA was given a technical analysis ofthe Ford Aerospace and Martin Marietta proposals. Aviewgraph used in the briefing indicated the strengthsof the Ford Aerospace and Martin Marietta proposalsas follows:

FORD MARTIN

EXPERIENCE BLIND LETDOWN CAPABILITY

HONEYWELL TARGET FINS & TAS PERFORMANCE

RECOGNIZER

SINGLE POD APPROACH RISK REDUCTION EFFORTS

POSITIVE STRUCTURAL MARGIN GRACEFUL SYSTEM DEGRADATION

IMPROVED CLUSTER WEAPON DUAL BORESIGHT CORRELATOR

DELIVERY

The SSA was then presented with the weaknessesof the competing approaches. The following viewgraphchart was used in the briefing:

FORD MARTIN

CREW STATION IMPACTS CREW STATION IMPACTS

ADDED SOFTWARE FOR F-l6 TW10 POD APPROACH

A-10 INTERFACE WINDOW EXPOSED TO BLAST

FINS PERFORMANCE POD MOUNTING

CO2 LASER PERFORMANCE UNPROVEN TAS & FINS DESIGN

HARRIS/ERIM TARGET ECU INLET DESIGN

RECOGNIZER VOLATILE OFP MEMORY

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The SSA was then briefed on the major risks associatedwith the Ford Aerospace and Martin Marietta proposals. Aviewgraph used in the briefing outlined the risks as follows:

FORD MARTIN

TARGET RECOGNIZERS (HIGH RISK) TARGET RECOGNIZERS (HIGH RISK)

CO2 LASER (HIGH RISK)

ADDED AIRCRAFT MODIFICATIONS ADDED AIRCRAFT MODIFICATIONS

ELECTRICAL POWER ELECTRICAL POWER

INFRARED SENSOR PERFORMANCE PRODUCIBILITY OF IR DETECTORS

GaAs INFRARED WINDOW SVV STRUCTURAL CASTINGS

After explaining in detail these major risks of theFord Aerospace and Martin Marietta proposals, the briefingofficial concluded that "the weaknesses for both the Fordand Martin proposals are correctable and that the risksare manageable if proper emphasis is provided by the con-tractor and the Air force in these areas."

Following the proposal analysis, the SSA was briefedon the management and manufacturing aspects of the twoproposals, contractual considerations, and the cost tothe Government. The SSA was advised that Ford Aerospace'smost probable cost through Lot 1 production was $317 millionwhile Martin Marietta's was $305 million. The SSA was alsoadvised that Ford Aerospace's most probable cost for thetotal production called for under the LANTIRN program(preproduction phase and Lots 1,2, and 3) was $894 millionwhile Martin Marietta's was $770 million.*

The SSA was then presented with the final findingsof the SSEC. The SSA was advised that Ford Aerospace

* The total production figures do not include the mostprobable cost figures for the full scale engineeringdevelopment effort included in the most probablecost fi;jures throLugin Lot 1 production. Ford Aerospace'sriost probabie cost for this eLtort was $l143 million whileMartin riarietta's was $144 million. Thus, Ford Aerospace'smost probable cost for the total LANTIFRN programn was $1.037billion and Martin Marietta's was 914 million.

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received green ratings in the technical, management andlogistics areas for an overall green rating, while MartinMarietta received a blue rating in the management area andgreen ratings in the technical and logistics areas for anoverall green rating.

Blind Letdown and All Weather Performance Capability

The protester's position is simply that it compliedwith the RFP requirement for a semi-covert terrain followingcapability and preference for a single pod design, but thatthis compliance was overshadowed by the Air Force's concernwith the unspecified requirements of all weather performanceand blind letdown capability.

The Air Force denies that it improperly consideredthese features, stating that the SSA was advised that bothblind letdown capability and all-weather performance werenot RFP requirements. The Air Force also states that thecomparison of the all-weather performance of the FordAerospace and Martin Marietta terrain following devices wasmade to give the SSA and the SSA's advisors a "thoroughunderstanding of a complicated subject." The Air Forceargues that "[o]nce it is determined that a proposal meetsRFP requirements, it is appropriate to mention a proposalwhich exceeds the basic RFP requirements" and that MartinMarietta was properly credited with strengths for its blindletdown capability and all-weather performance. The Air Forcefurther argues that in any event blind letdown capabilitywas not, as alleged by Ford Aerospace, a "key consideration"in the selection of Martin Marietta as it was not evenmentioned by the SSA in his source selection justification.

It is undisputed that the RFP contained no specificrequirements for "all-weather" or "blind letdown" capa-bilities. It is also clear from the SSEC briefing documentsthat although the SSEC warned the SSA that these charac-teristics were not RFP requirements, it informed the SSAthat it considered these characteristics strengths in theMartin Marietta proposal and the lack of these capabilitiesto be weaknesses in Ford Aerospace's approach.

Ile agree with the Air Force that in a procurementsuch as this where the emphasis is on technical innovationit was appropriate for the S.LtC to hnave credited MlartinMarietta for those characteristics of its proposed terrain

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following sensor approach which exceeded the required RFPperformance characteristics in a manner consideredbeneficial. See Automated Systems Corporation, B-184835,February 23, 197G, 76-1 CPD 124. On the other hand, we donot think the SSEC should have cited as "weaknesses" or"disadvantages" the lack of these performance characteristicsin Ford Aerospace's approach which met the RFP performancerequirements, see Signatron, Inc., 54 Comp. Gen. 530 (1974),74-2 CPD 386, although the SSA was certainly entitledto know that one offeror proposed these features and thatfrom a technical standpoint they were desirable. We donot perceive this SSSB action to have been prejudicialto Ford Aerospace since the SSEC concluded that both firmsproposed technically acceptable approaches.

Nevertheless, the record contains no evidence whichshows that the SSA based his decision on these factors.No reference concerning blind letdown or all-weather per-formance capabilities is contained in the SSA's sourceselection justification of September 11 nor is there anyother indication in that document that the Air Force'sminimum needs changed to require those capabilities.All that appears here is that Martin Marietta, whilemeeting the RFP requirements, also proposed certaincharacteristics which while not inconsistent with the RFPrequirements, went beyond them in a way deemed advantageousto the agency. There is nothing improper with an agency'sconsideration of such matters in a technical evaluation.See, e.g., Automated Systems Corporation, supra.

In this respect, we do not agree with Ford Aerospacethat the Air Force abandoned its preference for a singlepod approach or that it waived its requirement for asemi-covert terrain following capability. As indicatedabove, a review of the briefing documents clearly showsthat Ford Aerospace's proposal was credited with "strengths"for its single pod approach and for the nondetectabilityof its CO2 laser approach. The fact that the SSEC statedthat emissions from Martin Marietta's sensor were "detectable"does not establish that it did not meet the semi-covertrequirement. In this regard, the Air Force indicates thatthe semi-covert requirement was satisfied if there

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was a low probability that emissions from the terrainfollowing device would be detected. The evaluationrecords clearly show that the Air Force believed there wasan overall low probability that Martin Marietta's emissionswould be detected in a combat situation even though theywere more detectable than Ford Aerospace's.

We do not believe as Ford Aerospace argues, that itnecessarily would have been significantly upgraded bythe SSEC if it had known that blind letdown and all-weathercapabilities were desired by the agency and had proposedan approach similar to Martin Marietta's design involvingtwo pods and a terrain following radar sensor. The SSECdocuments show that Martin Marietta was downgraded because ofthe two pod approach and the detectability of its radaremissions while Ford Aerospace's single-pod approach andlack of detectable emissions from its CO2 laser were listedas strengths.

Target Reoqnizer Performance Goals and MTBF Test Requirements

The SSA justification indicates that the award decisionwas based in large measure on Martin Marietta's willingnessto have target recognizer performance standards set as require-ments rather than goals, its willingness to increase theMTBF requirements for the fire control pod, and the overallassessment that Martin Marietta's two target recognizersoffered the best probability for success. In this regard,the SSA's decision in pertinent part provides:

"5. I have determined that the LANTIRN FCPcontract will be awarded to Martin MariettaCorporation. The following is the rationalefor this Source Selection Decision:

a. The Martin Marietta FCP design ap-proach, including the RFP requirementfor selection of two distinct TargetRecognizer (TR) designs, meets or ex-ceeds the technical performance * * *requirements of the solicitation.For example, the TR performancerequirements were establishedas goals in the REP. * * *

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b. Martin Marietta also proposed toexceed the Mean Time Between Failure(MTBF) Reliability Test requirementsfor the overall FCP. * * *

c. In the area of Life Cycle Cost Analysis(LCCA), the evaluation results reflectthat the MMC [Martin Marietta] two-poddesign will be less expensive for costownership to the Government.

d. Finally, reference paragraph 5.a, above,the M1M1C selection of Target Recognizerdesigns (Martin Target Recognizer andHughes Target Recognizer), assessedas the lowest technical risk, offer thebest probability of success for meetingthe schedule for the Technical Demonstrationrequirements, flight testing, and production.

e. Other factors considered in the sourceselection decision and as a part of thetotal integrated assessment of the M1MCproposal included the selection of thesubcontractors based upon each one'stechnical capability as well as relevantpast performance. In addition, Mt.IC alsoconveyed in the Management and ManufacturingProposal, a very detailed in-depth analysisof the Mlanufacturing-Technology (MAN-TECH)requirements of the RFP as well as anextensive commitment to incorporatevarious MAN-TECHE applications that couldpotentially result in even greateracquisition cost savings.

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"6. Cased upon all the factors as documentedabove, I have determined that the MMChas the better probability for successfulcompletion of the LANTIRN FCP program.Therefore, the LANTIRN FCP award is tobe made to MMC."

Ford Aerospace asserts that the Air Force'sreliance on Martin Marietta's proposal to establishvarious recognizer performance standards as firm require-ments rather than "goals" before critical design reviewas set forth in the RFP and to increase the tMTBF testrequirements was improper because the protester was neverinformed that the Air Force was interested in these increased"requirements." Ford Aerospace also argues that MartinMarietta's proposal to set various target recognizer per-formance standards as firm requirements rather than goalsis illusory because the initial target recognizer effortis to be on a cost reimbursement basis and the riskof nonperformance is on the Government. The protesterfurther argues that the Air Force's reliance on MartinMarietta's proposal to increase MTBF test requirements wasarbitrary because the cost-reimbursement target recognizersare included in the fire control pod system which is thesubject of the MTBF test requirement and therefore "the riskof not meeting the inflated MTBF numbers is on the Government,not Martin Marietta." Ford Aerospace further asserts thatMartin Marietta agreed to MTBF figures for pods with targetrecognizers, and pods without target recoynizers of 30 and35, respectively, for award fee determinations, the sameas Ford Aerospace did. In this regard, Ford Aerospace argues"it is incredible that the Air Force would rely on theinflated MTBF numbers, when Martin Marietta's promise is,by contract unenforceable and when Martin Marietta would,by contract, obtain an award fee by achieving r1TBFs whichare the sane as those proposed by Ford Aerospace."

We find no merit to these contentions. First, we agreewith the Air Force that its acceptance of Martin Marietta'sapproach does not represent a change in requirements butmerely reflects acceptance of a proposal which exceededthe minimum requirements. As indicated in the precedingsection, there is notinq improper tw.ith an aLiency's con-si-ierat~iun and acceptance of such a proposal.

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VKith respect to the assertion that Martin Marietta'soffer to convert the target recognizer performance goals intofirm requirements before critical design review is illusory,the Air Force explains that under the RFP provisions thecontractor must convert target recognizer performance goalsinto performance requirements after critical design reviewand notes that the entire target recognizer development pro-gram is a cost-type effort from critical design review throughfull scale engineering development. In the agency's view,Martin Marietta merely offered to make the change from goalsto requirements earlier than was required under the RFP andin either event would operate under cost-type conditions.

The Air Force further disagrees that the increase in theMTBF test requirements is illusory because the "cost reim-bursement target recognizers" are part of the fire controlpod. The Air Force contends that the target recoynizersare "only one of many components" that go into making thefire control pod which as a system was a fixed price itemunder the RFP and notes that the cost of the target recognizerwas only about five percent of the total unit productioncost of the system.

The Air Force also notes that the target recognizerperformance requirements are software related and arebasically unrelated to meeting the MTBF test requirementsfor the fire control pod as a whole which is largelyhardware dependent. In other words, the Air Forcestates, "the performance parameters of the target recog-nizers are independent of how long a component may operatewithout a failure." Thus, regardless of how well or howpoorly the target recognizer performs, under Martin Marietta'sproposal that firm would be contractually bound to 70 and140 hours NTBF on the fire control pod system. The Air Forcefurther asserts that the MTBF verification test requirementsof 30 and 35 hours associated with the award fee are independentrequirements from the tlTDF test requirements of 70 to 140hours which waere the laboratory type tests. The MTBF require-ments of 30 and 35 hours are related to field tests whichare measured after systems are delivered. The laboratory MTBFtests, the Air Force states, are "the only reliability typetest that can be performed prior to delivery [and acceptance]of the system." The Air Force argues that while the awardfee was tied only to the MTBF verification field tests, thatfact "does not reduce the importance of the MTBF' laborat-orytests."

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We do not believe that the Air Force was unreasonablein concluding that Martin Marietta's offer was beneficial inthese areas. It may be true, as Ford Aerosoace argues, thatunder certain circumstances in a cost-type environment theGovernment will bear a part of the risk that a requirementcannot be met. However, as the Air Force points out, theentire target recognizer portion of the project is on a cost-reimbursement basis. Ford Aerospace does not suggest thatthe RFP provision which'changes target recognizer goalsinto requirements after critical design review is illusory.Thus, although it may be that the difference between a goaland a requirement is largely academic in the overrun situationwe cannot conclude that a requirement would not be morebeneficial to the agency under other circumstances. As faras the MTBF limits are concerned, the fact that the costreimbursement target recognizers constitute only five percentof the fixed-price fire control pods which are the subjectof the tests would seem to eliminate Ford Aerospace's argumentsthat increases in test MT1BF limits are illusory becauseof the cost reimbursement nature of the target recognizers.Further, as the agency points out, the MTBF requirementsof 30 and 35 hours are for different tests than the disputedMTBF requirements of 70 to 140 hours.

Most Probable Cost Evaluation

Ford Aerospace contends that the Air Force violatedthe selection ground rules by not restricting its mostprobable cost evaluation'to the "firm phases" of theLANTIRN program. The protester asserts that it wasadvised that the Air Force's evaluation would be restrictedto the "firm phases" of the contract, i.e., those that wouldbe under contract or the subject of priced options (throughLot 1 production), but that the SSEC briefing documentsreveal that the Air Force's evaluation extended beyondthe firm phases to unreliable budgetary estimates submittedfor Lot 2 and Lot 3 production quantities.

The Air Force asserts that its most probable cost cal-culations were based on cost data submitted by the offerorsand that an independent estimate was generated from this dataand other data through use of an RCA price model in accordancewith the REP. The Air Force further states that the briefingof the SSA "clearly segregated the most probable cost cal-culations as bIetween the portion of the proe raqi that wasLirTly priced arnd that portion which was not." In thisregard, the Air Force further arJUCes that in any event MartinMarietta's most probable cost for the firm phases was lowerthan Ford Aerospace's and that cost was not a primary factorin the award decision.

B-200672 20

As indicated by the Air Force, the most probable costevaluation was an independent estimate and was not baseddirectly on an offeror's proposed cost or its budgetaryestimates but rather on cost data submitted by the offerors.Additionally, cost was not a primary factor in the SSA'saward decision and Martin Marietta's most probable cost forthe LANTTIRN program through Lot 1 production was lowerthan Ford Aerospace's. Thus, we fail to see how FordAerospace was prejudiced by the Air Force's most probablecost evaluation of the total LAN4TIRN program.

II. Negotiation

Ford Aerospace argues that the Air Force's failureto point out perceived weaknesses in its proposal deprivedit of its statutory right to meaningful discussions and thatthis in turn deprived it of the opportunity to submit, andthe Government to receive, the best possible offer. Specifi-cally, Ford Aerospace complains the Air Force did not indicateduring negotiations that the SSEC considered the HarrisCorporation design for the target recognizer (Harris wasFord Aerospace's subcontractor for one of the two targetrecognizer designs required by the RFP) as imposing a "veryhigh risk" and Ford Aerospace's terrain following CO2 lasersysten as involving a "high risk."

The Air Force maintains that it considered the FordAerospace proposal to be technically acceptable in bothof these areas but that it was the SSEC's assessmentthat there was a high risk that Ford Aerospace "could notactually accomplish its proposed development of the C02 laserfor use in an operational tactical system and a very highrisk that Ford could not accomplish the development andmanufacture of the Harris Target Recognizer on schedule."The agency states that these problems did not constitutedeficiencies as they involved areas of Ford Aerospace'sproposal which met the Covernment's requirements, but werecomparative weaknesses which it was not required to discuss.Further, the agency argues that it would have been unfairto Martin Marietta to have discussed these matters withFord Aerospace as such discussions could well have resultedin the "transfusion" of Martin Marietta's successful designapproach for these functions to the protester or in "leveling",a process through which a proposal is brouqht, through dis-cussions, to the level of a superior proposal.

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10 U.S.C. § 2304(g) (1976) requires that oralor written discussions be held with all offerors ina competitive range, and we have recognized that thismandate can be satisfied only by discussions thatare meaningful. Union Carbide Corporation, 55 Comp. Gen.803 (1976), 76-1 CPD 134. In order to be meaningful,discussions in general must point out weaknesses, excessesor deficiencies in proposals so that the Governmentmay obtain the most advantageous contract. DynalectronCorporation, B-184203, March 10, 1976, 76-1 CPD 167.

At the same time, we have also recognized that inferioraspects of technical proposals need not always be related toofferors during discussions. Systems Engineering AssociatesCorporation, B-187601, February 24, 1977, 77-1 CPD 137.As we indicated in 51 Comp. Gen. 621, 622 (1972): *

" * * * [10 U.S.C. 2304 (g)] should not beinterpreted in a manner which discriminatesagainst or gives preferential treatment toany competitor. * * * Obviously, disclosureto other proposers of one proposer's innovativeor ingenious solution to a problem is unfair.We agree that such 'transfusion' should beavoided. It is also unfair, we think, tohelp one proposer through successive roundsof discussions to bring his original inadequateproposals up to the level of other adequateproposals by pointing out those weaknesseswhich were the result of his own lack ofdiligence, competence, or inventivenessin his proposal."

In this regard, whether a given weakness or inadequacymust be discussed is to be determined by the nature of theweakness or inadequacy and the impact that its disclosurewould have on the competitive process. pynalectronCorporation, supra. Furthermore, the content and extent

* Ford Aerospace arcjues that this case is not controlling.We believe the cited proposition is clearly applicable.The proposition is not limited to a particular methodof proc urr~ment: or a(lency but is cleoarl~y si jni.cicaritin any procureŽi.ent such as trhe ins tant one wlhieretechnically com:.plex innovative approaches are requiredof offerors. See, for examle, Could Inc., fl-192930Play 7, 1979, 79-1 ClD 311; Dynalectron Corporartion,

B-200672 22

of discussions is a matter of judgment primarily forthe agency and not subject to question by our Officeunless clearly arbitrary or without a reasonablebasis. Washington School of Psychiatry, B-189702,March 7, 1978, 78-1 CPD 176.

Here, the SSEC considered the technical approachesfor these areas in Ford Aerospace's proposal to meetthe soecification requirements but believed that itwould be difficult for the firm to transform its pro-posed designs into an operational system. The SSECbelieved that in order for Ford Aerospace's proposedCO laser system to perform properly all its componentsand processor would have to operate near their theoreticallimits. It was also the SSEC's assessment that Harriswould have difficulty meeting Ford Aerospace's deliveryrequirements because of potential problems in producingthe large scale integrated circuits required by thedesign. In the SSEC's judgment, this could have jeopardizedan important feature of the overall procurement--meaningfulcompetition between the contractor's two target recognizersources.

Wle do not believe that the agency acted unreasonablyby not discussing these matters with Ford Aerospace. Theseweaknesses were not the result of Ford Aerospace's failureto include substantiation for its proposed approaches orthat firm's misunderstanding of RFP requirements. Theysimply were areas where in the SSEC's technical judgmentFord Aerospace's and Harris' acceptable design approacheswere not as advantageous as those proposed by MartinMarietta. These weaknesses appear to have been inherentin Ford Aerospace's and Harris' proposed design approachesand would have required extensive proposal revisions toresolve. In this regard, we have held that the "negotiationprocess should not be used to re-write an offeror's proposal* * *." * aes t inahouse Electric Corp., 13-189730, Mtarch C,1978, 78-1 CPD 181.

Moreover, the Air Force's actions were consistentwith Defense Acquisition Regulation 5 3-805.3, which requiresthat during discussions offerors be advised of deficienciesin their proposals but defines deficiency as "that part ofan offeror's proposal which would not satisfy the Govern-ment's requirements." Since the Ford Aerospace proposalwas viewed overall as technically acceptable, these relativejudgments about the efficacy of the firm's technical approachesclearly were not viewed as deficiencies requiring discussion.

Cu:1sr-fuently, we cannot conclude that thu Air Uorceerred in not explicitly informirng Ford Aerospace of itsconcerns regarding risk.

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III. Delivery Schedule

Ford Aerospace maintains that the Air Force deniedit the opportunity to compete on an equal basis swith MartinMarietta by accepting Martin Marietta's alternate deliveryschedule without permitting it to propose the same schedule.Ford Aerospace contends that while the contract awarded toMartin Marietta may result in the earlier delivery ofpods, in some cases it results in significant delays inthe delivery of preproduction and Lot I production targetrecocjnizers. Thus, the protester concludes, this scheduleconstitutes a relaxation of the REP terms which should havebeen communicated to all offerors through an amendment to theRFP.

While the Air Force does not deny that the alternatedelivery schedule differs from that contained in the RFP, itargues that Ford Aerospace could not have been prejudicedby the acceptance of the alternate schedule because thatschedule was not considered in the evaluation and untilMartin Marietta was selected as the contractor on the basisof a proposal which conformed to the RFP. The Air Forcealso denies that the alternate delivery schedule results indelays in the delivery of preproduction and Lot 1 productiontarget recognizers and contends any confusion on thispoint was due to the failure of the awarded contract toaccurately reflect the understanding of the parties.*

It is difficult'to conclude, on the basis of therecord before us, that the proposed alternate deliveryschedule played a significant role in the evaluation andaward selection. On the one hand, the SSEC briefingdocuments (which represent the SSEC's recommendation tothe SSA) and evaluation record indicate that the MartinMarietta alternate schedule was evaluated and considereda strength by that body, and contributed to the SSEC'sconclusion that Martin Marietta merited an outstandingrating for its management approach. On the other hand,it appears that the evaluation of the technical, logisticsand cost areas was based on the RFP delivery scheduleand not the proposed alternate. Moreover, the SSA, who

* On November 25 we received a copy of a modification tothe contract which is said to reflect the understandingreached by the Air Force and Martin Marietta during thediscussions prior to the submission of best and final1.u .E . ,e r L; . 1 tU.J U j Iw i iCLiur~ x;i3 rece ived AIL 'I ta t!he

date snecified for the close of the record and cliffers froman earlier proposed modification which was submitted toour Office as part of the Air Force's report, we haveconsidered it in reaching our decision.

B-200672 24

had the sole authority to make the final award selectionand whose decision was based at least in part on thebriefing by the SSEC, did not in his source selectionjustification of September 11 mention the alternate deliveryschedule as one of the factors in the selection of MartinMarietta. While it seems likely that the Air Force's viewof Martin 'Marietta's management was influenced, at leastin part by the fact that the company had proposed anaccelerated delivery schedule, we believe that overallthe record does not establish that the evaluation of MartinMarietta's proposal was based on anything other than theRFP schedule.

The more significant question is whether the AirForce, having evaluated Martin Marietta's proposal onthe basis of the RFP delivery schedule, properly canaward a contract to the firm on the basis of a differentschedule. The Air Force, asserting that the alternatedelivery schedule was more favorable to the Government,likens its acceptance of the alternate schedule toacceptance of a price reduction offered by a contractorafter its selection for award, which long has been heldto be permissible. See, e.g., Leitman v. U.S., 104 Ct. Cl.324 (1945).

If this were indeed-comparable to a price reduction,where there is no relaxation of specifications and thetotal benefit of the change accrues to the Government,we would have no problem with the propriety of theAir Force's acceptance of the alternate delivery schedule,since generally the Government may accept more favorableterms offered by the winning bidder or offeror. 40 Comp.Gen. 466 (1961). If, however, the specifications (includingdelivery terms) have been significantly relaxed so that itcan be said that the awarded contract is not the one for whichthe competition was held, then considerations of both statutory

B-200672 25

requirements and fundamental fairness would compel the con-clusion that the award is improper. Our review and analysis*indicates that under the alternate schedule significant delaysin the delivery of preproduction and Lot 1 production targetrecognizers (although not prototype target recognizers)could result and that this appears to represent a relaxationof requirements. Our analysis, necessarily in some detail,follows.**

The RFP contained a detailed schedule for thecompletion of the engineering development phase of thecontract and for items to be provided under the productionreadiness and Lot 1 production phases. The RFP schedule forsome of the major contract items is set forth below:

Item 0001AA - Demonstration of target recognition function

Complete 14 months after contract award.

Item 0002 - 6 Pods (Prototypes)

1st Pod to be completed 26 months after date of award.The 2nd, 3rd, 4th, 5th, and 6th pods are to be completedrespectively 27, 28, 29, 30, and 31 months after award.

* The various delivery schedules consist of narrativeprovisions and charts which are set out in the amendedRFP, Martin Marietta's initial response to that amendedRFP, its various letters to the agency, its best andfinal offer, the contract and two modifications (onedraft and one executed) to that contract. In fact,the schedule is so complex and confusing that the AirForce and Martin Marietta could not agree on itsterms until well after the contract was awarded.Since there was no single set schedule but a seeminglyinfinite number of combinations depending on whenoptions are exercised or tests conducted, our analysisis based on various assumptions. In each instancewhere the schedule is discussed below we have indicatedthe assumptions which we have made. It should be recog-nized that the variations discussed are not the onlypossible incarnations of the schedule and that dueto imperfect meshing of the various documents andcharts (which do not in every instance appear tohe consistent) may contain somne inaccuracies.

** The item numbers and option numbers contained inMartin Marietta's best and final offer and the awardedcontract differ from those contained in the RPP. Forthe purpose of clarity we will use the item numtberrsa..J °ip ior~Ji flu;!..r JL.contained I i n IC rrr.

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Item 0004 - 6 Tarcet Recognizers (Prototypes)

1st Target Recognizer to be completed 26 months afterdate of award. The 2nd, 3rd, 4th, 5th, and 6th targetrecognizers are to be completed respectively 27, 28,29, 30, and 31 months after award.

Item 0022 (Option V) - 3 Preproduction Pods.

1st Pod to be completed 19 months after exercise ofOption V. The 2nd and 3rd pods are to be completedrespectively 20 and 21 months after the exercise ofOption V.

Item 0024 (Option V) - 3 Preproduction Target Recognizers

1st Target Recognizer to be completed 19 months afterexercise of Option V. The 2nd and 3rd target recog-nizers are to be completed respectively 20 and 21 monthsafter exercise of Option V.

Item 0031 (Option VII) - Long lead production items

To be completed 3.1 months after exercise of Option VII.

Item 0032 (Option VIII) - 34 Pods

1 Pod to be completed 12 -months after exercise of Option VIII.1 Pod to be completed 13 months after exercise of Option VIII.2 Pods to be completed 14 months after exercise of Option VIII.2 Pods to be completed 15 months after exercise of Option VIII.3 Pods to be completed 16 months after exercise of Option VIII.3 Pods to be completed 17 months after exercise of Option VIII.4 Pods to be completed 13 months after exercise of Option VIII.5 Pods to be completed 19 months after exercise of Option VIII.6 Pods to be completed 20 months after exercise of Option VIII .7 Pods to be completed 21 months after exercise of Option VIII.

Item 0034 (Option VIII) - 34 Tarqget DRcc2qnizers

1 Target Recognizer to be completed 12 months after exerciseof Option VIII.1 Target Recognizer to be completed 13 months after exerciseof Option VIII2 Y.rJ'2t decojoizers to be coLipicLtcd 14 iunthie after exerciseol Option VIII.2 Target Recognizers to be completed 15 months after exerciseof Option VIII.

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3 Target Recognizers to be completed 16 months after exerciseof Option VIII.3 Target Recognizers to be completed 17 months after exerciseof Option VIII.4 Target Recognizers to be completed 18 months after exerciseof Option VIII.5 Target Recognizers to be completed 19 months after exerciseof Option VIII.6 Target Recognizers to be completed 20 months after exerciseof Option VIII.7 Target Recognizers to be completed 21 months after exerciseof Option VIII.

In connection with this schedule, the RFP gave theAir Force the right to exercise Option V (three preproductionpods and target recognizers) within 120 days of completionof critical design review. The RFP also gave the Air Forcethe right to exercise Option VII (long lead productionitems) within 30 days after completion of the F-16/fire con-trol pod (F-16/FCP) integration tests and the right to exerciseOption VIII (Lot l production) within 460 days after the com-pletion of the F-16/FCP integration tests.

In addition to the schedule set forth in the RFP, theExecutive Summary accompanying MiR-12 set forth a planningschedule for the LANTIRN program which established mile-stones for completing critical design review, conductingF-16/FCP integration tests and the exercising of variousoptions including Options V, VII, and VIII. Specifically,the planning schedule contemplated completing critical designreview 14 months after the award of the contract and conductingthe F-16/FCP integration tests between the beginning of the28th month and the end of the 29th month after the awardof the contract. The planning schedule also indicated thatthe agency contemplated that Option V (preproduction podsand target recognizers) would be exercised at the beginningof the 19th month after award of the contract, that OptionVII (long lead production items) would be exercised at thethe 30th month after contract award, and that Option VIII(Lot 1 production) would be exercised at the beginning ofthe 40th month after contract award.

Thus, under the RFP and the planning schedule accompany-ing ,M!R-12, the dCelivery of the six prototype fire control

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pods would begin in the 26th month after contract award;delivery of the three preproduction fire control podswould start in the 37th month following contract award;delivery of the long lead production items would commenceat the beginning of the 30th month after award and becompleted by the end of the 60th month; and the 34 Lot1 production fire control pods would be delivered duringthe 51st through 60th months after contract award. Thedelivery schedule in the RFP and the planning schedulecontemplated simultaneous delivery of pods and targetrecognizers in the prototype, preproduction andproduction phases.

As indicated, the RFP required the delivery of threepreproduction pods and target recognizers concurrentlyat the rate of one a month beginning 19 months after theexercise of Option V. Although the RFP planning scheduleindicated that the Air Force planned to exercise this optionat the beginning of the 19th month after award of the con-tract, the RFP (Paragraph 23, Section J, MR-12) gave theAir Force the right to exercise Option V within 120 daysof completion of critical design review. The RFP planningschedule indicates that critical design review is to becompleted -14 months after contract award. Thus, if theAir Force exercised Option V at the earliest date permittedunder the RFP (at finish of critical design review, 14months after award), delivery of the three preproductionpods and target recognizers would be required to start atthe rate of one a month beginning in the 33rd monthfollowing contract award (14 months after award plus 19months). However, under Martin M1arietta's alternate deliveryschedule, target recognizer deliveries would not begin atthe earliest until 37 months after contract award, fourmonths beyond the earliest delivery the Air Force couldobtain under the REP, while pods would be deliveredearlier than under the RFP at the rate of one a monthbeginning in the 31st month after contract award. (MartinMarietta's alternate delivery schedule called for deliveryof pods at the rate of one a month between 18 1/2 and20 1/2 months after the exercise of Option V and deliveryof target recognizers at the rate of one a month between 241/2 and 26 1/2 months after the exercise of Option V; asspecified by Martin Marietta's September 3 letter, exerciseof Opt~ion V waa to occur 12 1/2 iuiontLK3 afttr contract award.)

B-200672 29

Additionally, the RFP required deliveries of 34Lot 1 production pods and target recognizers to occurconcurrently between the 12th and 21st months afterthe exercise of Option VIII. Although the planningschedule indicated that Option VIII would be exercised39 months after contract award, the RFP gave the AirForce the right to exercise Option VIII within 460days after completion of the F-16/FCP integration tests.The planning schedule indicated F-16/FCP integrationtests were to occur in the 29th month after award.Consequently, if the Air Force exercised Option VIIIat the earliest date permitted (29 months after contractaward at completion of the F-16/FCP integation testsper RFP planning schedule) delivery of the 34 podsand target recognizers would occur between the 41stand 50th months after contract award (29 months plusthe 12th through 21st months allowed for delivery).This compares with the earliest delivery of pods betweenthe 43rd and 52nd month after contract award and deliveryof target recognizers between the 51st and 60th monthsafter contract award under the alternate schedule.(Under Martin Marietta's alternate delivery schedulethe delivery of pods was to occur between the 12thand 21st months after exercise of Option VIII, while thedelivery of target recognizers was to occur between the20th and 29th months after exercise of Option VIII; by theSeptember 3 letter, exercise of Option VIII was to occur 31months after contract award.)

Thus, assuming the Air Force exercised Options V andVIII at the earliest time permitted by the RFP and thatMarietta's schedule is governed by the milestones in itsSeptember 3 letter, delivery of the three preproductiontarget recognizers would begin four months later under MartinMarietta's schedule and the delivery of the Lot 1 productionpods would begin two months later and the target recognizersten months later. In addition, the requirement for concurrentdelivery of pods and target recognizers is changed as wellas the planned dates of the exercise of Option V (18 monthsafter award to 12 1/2 months) and Option VIII (39 monthsafter award to 31 months).

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Our consideration of the contract modificationdated :Novemnber 14 does not affect our conclusion.The modification apparently reflects the understandingreached bv MJlartin Marietta and the Air Force duringthe course of negotiations prior to the submission ofbest and final offers. In essence, it affirmsthat the milestones contained in Martin Marietta'sSeptember 3 letter are the earliest dates on whichthe Air Force could exercise options and provides thatif the Air Force exercises Options V and VIII after thespecified milestone month there will be an equivalentshortening of the delivery time for target recognizers.The shortening of the delivery schedule insures thatthe completion of target recognizer delivery will beno later than the 60th month after contract award. Forexample, if the Air Force exercises Option VIII on the 32ndmonth after contract award rather than the 31st monthafter contract award as set forth in the September 3 letter,delivery of target recognizers would be required to bemade between the 19th and 28th months after the exerciseof Option VIII or the 51st and 60th months after contractaward. As noted above, if Option VIII had been exercised31 months after contract award deliveries would be requiredto occur between the 20th and 29th months after exercise ofOption VIII or also between the 51st and 60th months aftercontract a>ard. In addition, under this modification thenumber of Lot 1 production target recognizers to bedelivered any given month changes with respect to the dateOption VIII is exercised.* The contract as modified doesnot, however, under any circumstances entitle the AirForce to have preproduction and Lot 1 production targetrecognizers delivered earlier than the 51st and 60thmonths after contract award. Thus, the November 14modification does not eliminate the fundamental dif-ferences between the alternate schedule and the RFPschedule when options are exercised at the earliestpossible dates.

* The delivery rate for the Lot 1 production targetrecognizers contained in the November 14 modificationL C t i{fl VIII i I.;A rci (,d thce 3 1s; t mon thL toercontt-act award difeters f7ro01. the delivery rate containedin Martin Marietta's best and Linal ofLer as well asfrom the delivery rate contained in the earlier proposedmodification.

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A comparison of the RFP schedule, the schedulecontained in Martin Marietta's best and final offerand the schedule reflected in the November 14 modifi-cation for the preproduction and Lot 1 production podsand target recognizers is as follows:

Item REP Delivery Alternate Delivery November 14Schedule Schedule Modification(Early exercise of (Martin Marietta's Delivery

options) Best and Final Offer) Schedule

0022 1 pod 33 months* 1 pod 31 months 1 pod 31 months

Prepro-duction 1 pod 34 months 1 pod 32 months 1 pod 32 monthsPods - pod 35 months 1 pod 33 monts 1 pod 33 months

0024

Prepro- 1 TR 33 months 1 TR 37 months 1 TR 37 monthsduction 1 TR 34 months 1 TR 38 months 1 TR 38 monthsTarget 1 TR 35 months 1 TR 39 months 1 TR 39 monthsRecog-nizers (TR)

0032

Produc- 1 pod 41 months 1 pod 43 months 1 pod 43 monthstionPods 1 pod 42 months 1 pod 44 months 1 pod 44 months

2 pods 43 months 2 pods 45 months 2 pods 45 months


* Months A>toi: Contract Awxard

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0034

Pro- 1 TR 41 months 7 TRs 51 months 7 TRs 51 monthsductionTarget 1 TR 42 months 6 TRs 52 months 9 TRs 52 monthsRecog-nizers 2 TRs 43 months 5 TRs 53 months 2 TRs 53 months(TR)

3 TRs 44 months 2 TRs 54 months 2 TRs 54 months

3 TRs 45 m6nths 2 TRs 55 months 2 TRs 55 months


4 TRs 47 months 2 TRs 57 months. 2 TRs 57 months


6 T.Rs 49 months 3 TRs 59 months 3 TRs 59 months


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Martin Marietta maintains that Lot 1 production targetrecognizers could not be obtained any earlier than between the51st and 60th months after contract award. In this regard,Martin Marietta argues that Option VIII could not under the RFPschedule be exercised any earlier than 39 months after contractaward because the RFP required that there be a 10 monthperiod between the exercise of Option VII (long lead productionitems) and Option VIII. We do not agree.* We can find nothingin the RFP requiring that 10 months elapse between the exerciseof Option VII and Option VIII. The RFP provided that OptionVII could be exercised within 30 days after completion of theF-16/FCP integration test and Option VIII could be exercisedwithin 460 days after completion of those tests. While the RFPplanning schedule contemplated a 10 month period between theexercise of Option VII and Option VIII, in our view theAir Force had a right under the RFP to exercise both optionsat the same time and a right to have delivery of pods andtarget recognizers begin 12 months thereafter.

Even assuming, aruendo, that the earliest the Air Forcecould exercise Option VIII under the RFP was 39 months aftercontract award so that under the RFP Lot 1 production podsand target recognizers could not be delivered any earlierthan between the 51st and 60th months after contract award(delivery of pods and target recognizers under the RFP mustbegin 12 months after exercise of Option VIII), the alternatedelivery schedule still differs significantly from the RFPschedule. First, there still exists a four month delayof preproduction target recognizers. Second, in order toobtain delivery from Martin Marietta of Lot 1 productionpods earlier than under the RFP schedule, the Air Force,under Martin Marietta's assumption that a 10-month periodmust exist between the exercise of Options VII and VIII,would be required to exercise Option VII prior to completingthe E-16/FCP integration tests and, in fact, prior to receivinga completed prototype fire control pod. (Under the RFPthe Air Force could not exercise Option VII until aftercompletion of the F-16/FCP integration tests). Third, the AirForce must also agree to restrict its right to exerciseOption VIII. In this regard, under the November 14 modification,Option VIII could be exercised between 60 and 460 days after

* By a letter dated November 18, Martin Marietta alleged thatFord Aerospace had misrepresented the delivery schedule con-t:ij ned it KC b [c , :i ri tL inj d C Opt LOF VII Tnd it_re Lationship) to Option VIII. Althoucjh the letter was submittedafter the close of the record on November 10, a date agreed toby the parties before the court, we have considered it becauseFord Aerospace promptly commented on it.

B-200672 34

integration tests; however, under the RFP, the Air Forcehad the right to exercise Option VIII any time within460 days after completion of the F-16/FCP integrationtests. Finally, the most obvious difference is the changein the requirement for concurrent delivery of pods andtarget recognizers.

These various differences clearly do-not appear to beentirely or solely beneficial to the Government. While weare not in a position to dispute the Air Force's conclusionthat overall the alternate delivery schedule was moreadvantageous to it than the RFP schedule, certain elementsof the alternate schedule, such as the later delivery ofthe target recognizers and, under Martin Marietta'sinterpretation of the schedule, the restriction on theexercise of Option VIII, would seem to be less advantageousthan what the RFP provided. Moreover, some of thesedifferences would appear to benefit the contractor and tobe a relaxation of RFP requirements. The most obvious ofthese is the relaxation of the target recognizer deliveryrequirements by from four to ten months.

We recognize that the alternate schedule contains someapparent trade-offs, e.g., while it provides for laterdelivery of the target recognizers, it also provides forearlier delivery of pods than called for by the RFP.However, under the early option exercise assumption uponwhich our analysis was based, it is only the threepre-production pods which are delivered early; the muchlarger quantity of production pods, and both thepre-production and production target recognizers, aredelivered later than the RFP schedule would permit.Moreover, it is the target recognizer which is the morecomplex and difficult item to produce, so that whilethe contractor under the alternate schedule obligatesitself to a somewhat earlier delivery of the relativelysimple pod, it is permitted additional time to furnishthe item with which significantly more risk is associated.

-We further recognize that the actual impact of thisrelaxation of requirements is difficult to measure, as ouranalysis, based as it is on the assumption that the AirForce will exercise options early, may not reflect the-AirForce's most likely course of conduct in this procurement.

B-200672 - 35

Nevertheless, the Air Force has not provided anyinformation on this point, and thus vie can onlyassume that in light of the RFP requirements theAir Fiorce at least wanted to have the contractualright to exercise the options at an early dateand in that instance to have target recognizerdeliveries at the times specified by the RFP andconcurrently with the pod deliveries.

We have long held that a contract award mustreflect the requirements upon which the competitionwas based and that a material change in Governmentrequirements may not be negotiated only with theotherwise successful offeror. A&J ManufacturingCo., 53 Comp. Gen. 838 (1974), 74-1 CPD 240; UnionCarbide Corp., 55 Comp. Gen. 802 (1976), 76-1CPD 134; Cohu, Inc., 57 Cor.lp. Gen. 759 (1978), 78-2CPD 175. When there is such a change, the Governmentis required to amend its solicitation and seek newoffers. Computek Inc. et al., 54 Comp. Gen. 1080(1975), 75-1 CPD 384; International Business MachinesCorp., B-194365, July 7, 1980, 80-2 CPD 12; DAR 3-805.4.The reason, of course, is that the statutory andregulatory requirements for maximum practicablecompetition-cannot be met if all offerors are notprovided an equal opportunity to compete to satisfythe Government's actual needs; in addition, it isobviously inherently unfair to one or more offerorswho do compete for a particular contract that isawarded on a basis other than what the Government saidit wanted in its solicitation.

Generally, a delivery schedule or time of performancerequirement is regarded as a material requirement, LawrenceJohnson & Associates, Inc., B-196442, March 11, 1980, 80-1CPD 188, a change in which must be communicated to all offerors.Development Associates, Inc., 13-188416, August 1, 1977, 77-2CPD 64. Here, in light of the discussion above indicatingthat a relaxation of requirements was involved, we believethe Air Force's willingness to accept the Martin Mariettaalternate delivery schedule represents a change in the AirForce's stated material requirements and that the acceptabilityof a delivery schedule that would permit relaxation of RFPrequirements shoulld have been communiccted to Fordc Aerospace,

BN-200672 36

the other offeror in the competition. In this regard,we point out that while Ford Aerospace's contentionthat it could have offered a more favorable proposalfrom both a cost and technical standpoint had it knownit could have proposed a different delivery schedule,is speculative, the proper way to determine what anofferor would or could do is through competition undercommon specification requirements. DevelopmentAssociates, Inc., supra.

In reaching this conclusion in this case, we aremindful of the Air Force's apparent belief that therewas nothing improper here because the RFP permittedsubmission of alternate proposals and both offerorstook advantage of that provision, with Martin Mariettaproposing the alternate delivery schedule and FordAerospace proposing an additional 66 pods. The RFPhowever, did not provide for alternate proposalswhich deviated from the RFP. It provided only forsubmission of proposals with a pod configuration whichdiffered from that contained in the basic proposal.In other words, if an offeror proposed one pod, it couldalso propose two pods as an alternate, or vice versa.See Section C16 of the RFP. In short, the REP did notprovide for submission and consideration of a proposalwhich deviated materially from RFP requirements.

CONCLUSION

We sustain the protest on the one issue involvingthe propriety of the Air Force's acceptance of the MartinMarietta alternate delivery schedule. We do so becausethat schedule appears to significantly relax the RFPdelivery requirements and because we see nothing inthe evaluation record or in the Air Force or MartinMarietta submissions which indicates that the obviousdifferences between the RFP and the accepted scheduleare not materially advantageous to the contractor.We point out that our conclusion is bottomed not somuch on what the record before us clearly shows, buton what it does not show. In other words, from theentire record before us it apt, for the reasonsstated in this decision, that the alternate deliveryschedule involves chanyes which relax the REF provisionsand could give the awardee an advantage others did notl.vVc. Wi jxi force Iiu:; riot irc...cd this Lu)nZspecitically and thus has not shown that what other-wise appears to be so in Lact is not. Thus, we can

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only conclude as we have, and must now recommend theappropriate remedial action to be taken if the AirForce or Martin Marietta does not, in the court pro-ceedings, effectively rebut what the record beforeus indicates.

Given the nature of the procurement deficiencyinvolved here, we recommend that negotiations bereopened, that the Air force amend the RFP to indicatethat a modified delivery schedule may be considered,and that the two offerors be given the opportunityto submit revised proposals. If, upon evaluation, theAir Force determines that the Ford Aerospace proposalis more advantageous than the Martin Marietta proposal,then the contract awarded to Martin Marietta shouldbe terminated for the convenience of the Government.

In making this recommendation, we are mindful thatthe technical and pricing features of the competing pro-posals have been revealed to the parties. However,given the deficiency in this procurement and the possibleunfairness to the protester, the only effective remedyis to permit submission of revised proposals which reflectactual award requirements. Although normally offerorsdo not and should not know anything concerning theircompetitors' proposals prior to award, we have recog-nized that-in large measure competition in a situationsuch as this is equalized when all competitors are madeaware of each other's offers. See T1 Systems, Inc.,55 Comp. Gen. 1066 (1976), 76-1 CPD 299.

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