Link: GAO Opinion
Agency: Department of the Army, Corps of Engineers
Disposition: Protest sustained.
Keywords: Best value determination; Tradeoff Decision
General Counsel, P.C. Highlight: In a best value procurement, the Agency must consider the price of all acceptable offerors, even where the lower priced offeror does not achieve the highest technical rating.
Coastal Environments, Inc. (Coastal) protested the Department of the Army’s award of a contract to Ecological Communications Corporation (ECC) based on the Army’s evaluation of proposals and its decision to award ECC the contract despite ECC’s higher proposed price.
The request for proposal (RFP) in this protest was issued as a small business set-aside for the provision of professional marine, terrestrial, and historic culture resource investigation services in Texas and Louisiana. Award of the contract was to be made to the offeror whose proposal was determined to represent the “best value” to the government, after considering technical factors and price. After the proposals were received, they were rated on their non-price factors, and then assessed based on their levels of risk. Finally, the agency calculated a total evaluated price for each offeror using a series of metrics. At that point, the contracting officer, acting as the source selection authority (SSA), reviewed the evaluations and performed a price/technical tradeoff between the two highest rated technical proposals, after which the SSA selected ECC by concluding that “due to the highly specialized nature of the work…ECC’s technical superiority” justified paying a slightly higher price. Coastal challenged several aspects of the agency’s evaluation of proposals. The GAO sustained Coastal’s challenge to the cost-technical tradeoff.
The Agency had evaluated ECC and one other offeror as “Good” on non-price factors. It evaluated Coastal as “Acceptable” on non-price factors, but Coastal’s price was 18% lower than ECC’s price. the Agency’s final decision only considered the two “Good” offerors and their cost difference, it did not consider other acceptable offers with much lower prices, including Coastal’s “Acceptable” rating combined with its much lower price. Even though price was stated to be of less importance than the non-price factors, an agency is still required to meaningfully consider cost or price to the government in making its selection. In particular, when the agency selects a higher-priced proposal that has been rated technically superior to a lower-priced but acceptable one, the decision must be supported by a rational explanation of why the higher-rated proposal is superior and why its technical superiority warrants a price premium.
GAO recommended that the agency perform and document a new price/technical tradeoff analysis, and that if ECC’s proposal was not found to reflect the best value to the government that its contract and award should be terminated.