Link: GAO Opinion
Agency: United States Marine Corps
Disposition: Protest sustained.
Protest is sustained in a competition for the issuance, on a best-value basis, of a task order to a higher-priced vendor under 8(a) Streamlined Technology Acquisition Resources for Services (STARS) government-wide acquisition contract, where the record does not show meaningful consideration of price in the agency’s selection of the higher-price quotation, nor identify the superior capabilities of the awardee’s quotation that would justify paying the price premium associated with that quotation.
General Counsel P.C. Highlight:
Access protests that the Marine Corps failed to meaningfully consider price in its evaluation and source selection decision. Further, Access contends that, while the BVADM identifies apparent advantages in Avineon’s quotation, those advantages are illusory, either because Access offered comparable features, or because the advantages cited are not reflected in, and thus are inconsistent with, the evaluation criteria in the RFQ, so that they do not warrant paying the associated price premium. GAO states that in reviewing protests of an agency’s evaluation and source selection decision, even in a task order competition as here, GAO does not reevaluate proposals but examines the record to determine whether the evaluation and source selection decision are reasonable and consistent with the solicitation’s evaluation criteria and applicable procurement laws and regulations. Where, as here, an agency selects a higher-priced solution that has been rated technically superior to a lower-priced one, the award decision must be supported by a rational explanation demonstrating that the higher-rated one is in fact superior, and explaining why its technical superiority warrants the additional cost. Such judgments are by their nature often subjective; nevertheless, the exercise of these evaluation judgments must be reasonable and bear a rational relationship to the announced criteria upon which competing offers are to be selected. In order for GAO to review an agency’s evaluation judgment, the agency must have adequate documentation to support its judgment.
Here, the contemporaneous evaluation record shows that the agency qualitatively evaluated the firms’ technical quotations, and based upon that evaluation identified differing technical strengths. While the firms’ technical quotations received identical adjectival and risk ratings, the agency appropriately looked beyond the adjectival ratings to consider the significance of the firms’ differing evaluated technical strengths. Although the record shows that the agency’s evaluators considered the technical merit of the two firms’ respective quotations, the contemporaneous record, as further explained by the agency in its response to the protest, did not demonstrate meaningful consideration of Access’s lower evaluated price. That is, the BVADM, which is the only contemporaneous documentation of the agency’s cost/technical tradeoff analysis, does not provide an explanation of why the evaluated technical superiority of Avineon’s quotation warrants its additional cost. Rather, to the extent that Access’s lower evaluated price is addressed at all in the BVADM, the firm’s price advantage appears to be viewed as a technical disadvantage, based upon assumptions regarding the effect that Access’s lower labor billing rates would have on the firm’s ability to retain staff.
Because the contemporaneous record, as explained by the agency, did not provide GAO with a basis to review the reasonableness of the agency’s cost/technical tradeoff analysis, GAO conducted a hearing to receive the testimony of the SSA and SSEB chair. That testimony, however, shows that neither witness accorded much weight, if any, to Access’s [deleted] price advantage, nor could the SSA explain what evaluated strengths in Avineon’s quotation justified the payment of this price premium. In short, the testimony of the agency’s witnesses did not demonstrate meaningful consideration of Access’s price advantage in the selection decision. Moreover, the agency in its post-hearing comments repeatedly argued that Access’s [deleted] lower price did not reflect a price advantage. Accordingly, while agencies must consider an offeror’s price, a lower price is not a price advantage if the agency does not consider it to result in the greatest overall benefit. While [Access] could, for its lower price, perform its proposal, in that its proposal was deemed less beneficial, no price advantage existed. GAO states, additionally that, even in a competition where price is of less importance than the non-price factors, an agency must meaningfully consider cost or price in making its selection decision. Although the cost/technical tradeoff process allows an agency to accept other than the lowest-priced submission in such a competition, the perceived benefit of the higher-priced alternative must merit the additional price. In other words, one firm’s technical advantage must be determined to outweigh the other firm’s price advantage.
Here, the SSA was unable to recall with any specificity the relative technical merit of the firms’ quotations that would justify the payment of the price premium associated with Avineon’s quotation. The SSA testified that she was not a technical person, and [knew] nothing about IT, and had not read a proposal from beginning to end. When asked to explain her assertion that she had made her own independent determination to accept [the SSEB’s recommendation], the SSA testified, that “[w]hen we talked about this, I knew–I was very clear in what [the SSEB chair] was saying and what he meant. And I–once he laid it out, I saw where he was coming from and he was able to convince me that this was the best thing for the Marine Corps.” Despite this assertion that at the time she made the selection decision she understood why the SSEB chair believed that Avineon’s quotation was superior to Access’s, the SSA was unable at the hearing to explain why Avineon’s evaluated strengths indicated that firm’s technical superiority. Under the circumstances, GAO has no basis to find reasonable the SSA’s cost/technical tradeoff analysis (even assuming that price had been meaningfully considered). The protest is sustained.