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Agencies Can Select Lower-Rated, Lower-Priced Proposal in Best Value Procurement

  • By GCPC GovCon Legal Team
  • January 2, 2014
  • Blog Articles
  • 0 Comments

Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC

Date: Thursday, January 2, 2014, 5:23pm EST

CACI-WGI, Inc., B-408520.2, December 16, 2013
As a new year dawns, some people will tell you now is a good time to sit down and reflect on the experiences of the past year. Others will tell you to move on from the past, and focus instead on what lies ahead. Well fortunately for the faithful readers of the Bid Protest Weekly, GAO recently released a bid protest decision which will allow us to do both. In CACI-WGI, Inc., the protester alleged four different grounds of protest, all of which were rejected by GAO. However, three of the protester’s grounds allow us to look back to articles from the past year, and the fourth provides an opportunity to discuss a new topic.

The first protest ground alleged by the protester in this case challenged the agency’s failure to perform a price realism analysis. However, as discussed in a previous Bid Protest Weekly article, an agency is not required to conduct a price realism analysis in a fixed-price procurement where the solicitation does not explicitly call for such an analysis. The protester’s argument on this point conflated the concept of price realism with price reasonableness. As discussed in our previous article “Price Reasonableness vs. Price Realism,” those two concepts, despite the similar sounding names, are significantly different from one another.

Next, the protester challenged the agency’s technical evaluation—specifically the fact that both the awardee and the protester received the same rating under a certain technical factor. One of the points raised by the protester was that because it was the incumbent, its proposal should have received additional evaluation credit. GAO’s disagreement with this argument serves as a good reminder that incumbency status on its own does not provide a leg up to offerors in proposal evaluations.

The third protest ground offered by the protester focused on the discussions held by the agency. The protester alleged that the agency failed to conduct meaningful discussions because it did not inform the protester that its price was too high. However, as we have previously discussed, unless the offeror’s price is found to be unreasonable, an agency has no obligation to inform an offeror that its price is high as compared to other offers.

Finally, the protester challenged the agency’s best value trade-off decision in which it selected a lower-rated, lower-priced proposal over the protester’s higher-rated, higher-priced proposal. The protester argued that the agency failed to take into account the benefits offered by the protester’s proposal.

GAO stated that agencies conducting a negotiated procurement can generally select a lower-rated, lower-priced proposal over a higher-rated, higher-priced proposal. To do so, the agency must reasonably conclude that selecting the higher-priced proposal is not justified in light of the acceptable level of technical ability offered by the lower-priced proposal. An agency must simply make a trade-off decision that is rational and consistent with the solicitation’s evaluation criteria. GAO found that the agency’s trade-off analysis—which considered and compared the strengths of both the awardee and the protester—was proper in this case.

After analyzing both offerors’ proposals, the agency decided that the protester’s higher-rated proposal did not justify paying the nearly $39 million price premium. That the protester disagreed with this determination does not render the agency’s award decision unreasonable. As a result, GAO denied the protest.

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