Link: GAO Opinion
Agency: Department of the Air Force
Disposition: Protests denied.
Keywords: Best value, trade-off
General Counsel P.C. Highlight: In a best value procurement, it is the function of the Source Selection Authority (SSA) to perform a price/technical tradeoff to determine whether one proposal’s technical superiority is worth a higher price. Even where price is the least important evaluation factor, an agency properly may select a lower-priced, lower-rated proposal if the agency reasonably concludes that the price premium involved in selecting a higher-rated, higher-priced proposal is not justified in light of the acceptable level of technical competence available at a lower price.
—————————————————————————————————————————–
Hillstrom’s Aircraft Services (Hillstrom) protests the award of a contract under a request for proposals (RFP), issued by the Department of the Air Force, for aircraft corrosion control services.
The solicitation, which was issued as a total small business set-aside, sought corrosion control services for C-5, C-17, and KC-10 aircraft, including cleaning services and aircraft lubrication. The solicitation anticipated the award of an indefinite-delivery, indefinite-quantity, requirements-type contract with fixed unit prices for a one-year base term and four one-year options. Award was to be made based on the proposal that represented the “best value” to the government, considering a complicated formulation of pricing, technical proposals, and past and present performance history.
Hillstrom previously performed relevant services on all three of the airframes to be serviced, whereas the other offerors had performed relevant services on two of the three airframes. Hillstrom had performed relevant past efforts that were the “same” as the “magnitude of effort and complexities” identified in the solicitation. Hillstrom received a performance confidence assessment rating of substantial confidence, but had the highest priced proposal. The source selection authority determined that the higher performance confidence assessment rating assigned to Hillstrom did not justify the price premium and it was in the “best interest” of the government to make award to a lower priced offeror. Hillstrom’s filed this protest.
GAO states that, in considering protests of an agency’s source selection decision, it reviews the record to determine whether the decision was reasonable and consistent with the terms of the solicitation. An agency may not announce in a solicitation that it will use one source selection scheme, and then follow another.
The solicitation was interpreted by the GAO to state that if the offeror with the lowest-priced, technically acceptable proposal received a performance confidence rating of substantial confidence, award would be made to that offeror without further consideration of the other proposals. The solicitation also provided that if the offeror with the lowest-priced, technically acceptable proposal did not receive a performance confidence assessment rating of substantial confidence, the agency was to successively evaluate the other proposals in order of price. The record here reflects that the lowest-priced, technically acceptable proposal did not receive a performance confidence assessment rating of substantial confidence. Therefore, the agency evaluated the other proposals and made a best value decision.
Hillstrom’s also challenges the reasonableness of the agency’s best value determination. GAO states that in a best value procurement, it is the function of the SSA to perform a price/technical tradeoff to determine whether one proposal’s technical superiority is worth a higher price. Even where price is the least important evaluation factor, an agency properly may select a lower-priced, lower-rated proposal if the agency reasonably concludes that the price premium involved in selecting a higher-rated, higher-priced proposal is not justified in light of the acceptable level of technical competence available at a lower price. The extent of such tradeoffs is governed only by the test of rationality and consistency with the evaluation criteria. Thus, a protester’s disagreement with an agency’s determinations as to the relative merits of competing proposals, or disagreement with its judgment as to which proposal offers the best value to the agency, do not establish that the evaluation or source selection was unreasonable.
Here, the SSA determined that the other offeror’s lower-priced proposal was most advantageous to the government, considering both past performance and price. In making the decision, the SSA recognized the price differential between the higher-rated, higher-priced proposal of Hillstrom’s and the lower-rated, lower-priced proposal of the other offeror. The SSA determined that, notwithstanding the substantial confidence rating assigned to Hillstrom’s, the price premium involved with selecting Hillstrom’s for award was not justified given that the performance risk involved with selecting the other offeror for award was acceptable. GAO thinks that the decision was reasonable. The protest is denied.