Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC
Date: Thursday August 1, 2013, 4:12pm EST
Lyon Shipyard, Inc., B-407771.2, July 15, 2013
In best value procurements, agencies are not required to make an award to the offeror with the lowest price, or to the offeror with the highest technical score. Rather, the agency can make a tradeoff decision and select the combination of competitive pricing and technical merit that it feels represents the best value to the government. This can lead to frustration on the part of offerors, as being the best technically or the lowest price may not be enough to win.
Obviously, it would be helpful to offerors if they could know where they stood in relation to the other offerors, so that they could try to make their proposal more attractive to the agency. This is partly accomplished through discussions between the agency and the offerors held prior to the award decision. During these discussions, agencies are required to address with each offeror any deficiencies and significant weaknesses in the offeror’s proposal. While the agency must conduct meaningful discussions sufficient enough to lead an offeror to areas of its proposal that could be revised to significantly improve its chances for award, agencies are not required to discuss every little issue with an offeror’s proposal.
This principle was at the forefront of the decision in Lyon Shipyard. In Lyon, the Department of the Navy was seeking to make multiple awards for marine boatyard services. There were six offerors included in the competitive range, including the protester, and the agency engaged in three rounds of discussions with each of those offerors. During the first round of discussions, the agency informed each offeror how their offered price compared to the independent government estimate, i.e., whether it was higher, comparable, or lower than the IGE.
The protester was informed that its price was higher than the IGE during the first round of discussions, but the agency did not mention the protester’s price again during the later two rounds of discussions. The protester’s offer was the highest priced of the six offerors in the competitive range, and ultimately was the only one of the six not selected for award. The protester challenged the agency’s source selection decision, arguing that by not mentioning the protester’s high price during the second and third round of discussions, the protester was misled into believing its price was competitive.
GAO denied the protest. GAO recognized that an agency’s discussions with offerors must be meaningful, however an agency does not need to “spoon feed” an offeror by pointing out every single issue in its proposal that could be improved. Absent a determination that an offeror’s price is unreasonably high, GAO found that agencies are under no obligation to tell an offeror that its price is high as compared to the other offerors.
In this case, the record showed that the agency considered all of the offered prices in the competitive range to be reasonable, including the price offered by the protester. As a result, there were no issues with the protester’s price that the agency was required to raise during discussions.