Link: GAO Decision
Protestor: Glotech, Inc.
Agency: United States Agency for International Development; General Services Administration
Disposition: Protest Sustained.
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GAO Digest:
Protest that agency failed to meaningfully consider price in issuing blanket purchase agreements under Federal Supply Schedule program involving a maximum of $900 million in orders is sustained where the record shows that the agency selected vendors only on the basis of their technical evaluation scores.
General Counsel PC Highlight:
Glotech, Inc. protested the issuance of BPAs to seven firms for information technology supplies and services under the USAID IT Forward solicitation. The RFQ sought quotations from vendors holding FSS Schedule 70 contracts to establish up to five BPAs on an unrestricted basis, with an additional two BPAs set aside exclusively for small businesses. Vendors would be selected on a best value basis, considering price and six non-price factors, which were significantly more important than the cost/price factor. For the cost/price, vendors were to submit a comprehensive list of all labor categories available under the vendor’s FSS contract, the applicable labor rates for each labor category, and any discounts. USAID stated that it would not establish a total cost/price or level of effort, but would rather compare the value of individual labor categories based on the skills and level of experience described in their GSA schedules and the final cost/price offered to USAID.
The CO concluded that direct comparison of quotations under the cost/price factor would not be possible because each vendor had its own technical approach, quoted different discounts, and could ultimately offer additional discounts when each task order was issued. The CO therefore prepared an individual “cost/price proposal review” for each vendor; the record contained no documentation reflecting any comparative analysis of the competing vendors’ pricing information. The agency did not perform any cost/technical tradeoff in selecting recipients of the BPAs.
The GAO first rejected the agency’s claim that Glotech’s protest was untimely, noting that, although the agency informed vendors during the Q&As that it would not evaluate a total cost/price, a reasonable vendor would not have interpreted that answer as a change in the evaluation scheme necessitating a pre-award protest of the terms of the solicitation. The GAO then found that the selection of vendors was inconsistent with the terms of the RFQ, pointing out that price is the one common element that must always be part of any best value determination in establishing a BPA. Even where price is stated to be of less importance than the non-price factors, an agency must meaningfully consider cost or price to the government in making its selection decision. The GAO disagreed with USAID that the establishment of these BPAs did not require a statement of work because the services are not priced at hourly rates.
The FAR provides general principles which apply to the establishment of BPAs, as well as clear guidance on procedures for selecting vendors depending on the nature of the supplies or services being sought. Agencies are required to consider price and to consider best value in selecting BPA recipients, and should give preference to establishing multiple-award BPAs, rather than establishing a single-award BPA. There cannot be a best value tradeoff if both technical approach and price are not meaningfully considered. As more agencies rely on massive multiple-award BPAs to procure a broad array of supplies and services, it is essential that vendors pay close attention to the terms of these solicitations, to ensure that the agencies continue to comply with relevant law and regulation in awarding these contracts.