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Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC
Date: Monday, November 11, 2013, 10:00am EST
Trailboss Enterprises, Inc., B-407093, November 6, 2012
In a procurement to be awarded on a low-price, technically acceptable basis, the procuring agency will generally evaluate offerors’ proposals merely to determine if they are technically acceptable before moving on to a determination of which proposal is the lowest priced. However, agencies conducting a best-value procurement cannot make such a quick and easy determination. In a best-value procurement, agencies are required to evaluate and compare the qualitative strengths and weaknesses of each proposal under consideration in order to determine which proposal offers the best value to the government.
In Trailboss Enterprises, Inc., the procuring agency failed to abide by this evaluation requirement. Here, the U. S. Transportation Command (TRANSCOM) issued a solicitation for aerial delivery services. The solicitation informed offerors that an award would be made on a best value basis, considering three technical factors (Past Performance, Staffing, Implementation) as well as price. When combined, the three technical factors were significantly more important than price. The Staffing and Implementation factors were to be rated according to strengths and weaknesses as well as evaluated risks. Under the Past Performance factor, proposals would be assigned confidence ratings based upon the offeror’s references. Where an offeror had little to no experience, an “unknown confidence” rating would be assigned.
TRANSCOM received three offers to the solicitation, including offers from the protester, Trailboss, and the selected awardee, CAV International, Inc. After receipt of final proposals, TRANSCOM determined that the proposals for Trailboss and CAV received identical ratings of “acceptable/low risk” for both the Staffing and Implementation factors. The differences in the two proposals were in the Past Performance ratings, as well as the offered prices. Where Trailboss received a rating of “substantial confidence” under past performance, CAV received an “unknown confidence” rating. As to price, CAV’s offered price was 11% lower than the price offered by Trailboss.
Despite TRANSCOM determining that each of the proposals demonstrated an ability to meet the solicitation requirements, none of the proposals received any evaluated strengths. In its best value determination, TRANSCOM found that because Trailboss and CAV both received the same “acceptable/low risk” rating under the Staffing and Implementation factors, the proposals were “equal” under those factors. TRANSCOM determined that the relevant difference in the proposals was Trailboss’ “substantial confidence” past performance rating versus CAV’s “unknown confidence” rating. Ultimately, TRANSCOM determined that this one difference did not merit paying the 11% price premium that would go along with selecting Trailboss’ proposal. Thus, CAV was selected for award.
Trailboss filed a protest with GAO, challenging the agency’s best value decision. Trailboss argued that TRANSCOM’s best value analysis was flawed because it failed to consider the technical distinctions between the proposals, and instead limited its analysis to the proposals’ technical acceptability. GAO agreed with the protester, finding that where a solicitation provides for evaluative ratings of the proposals, agencies have to actually consider and compare the qualitative differences between the proposals. GAO further stated that an assigned rating should only be used as a guide by the agency, and that the agency should perform a deeper analysis of the underlying basis for the ratings given to each offeror.
Here, GAO found that TRANSCOM failed to meaningfully consider the technical or qualitative distinctions between Trailboss’ and CAV’s proposals, and instead relied upon assessed technical acceptability. GAO determined that a source selection such as this, lacking any substantive analysis or consideration of whether one proposal is technically superior to another, is insufficient and cannot form the basis of a reasonable source selection decision. GAO sustained the protest, and recommended that TRANSCOM perform a new evaluation of proposals.
This case is significant given the rise in procurements conducted on a low-price, technically acceptable basis. Contractors should be very cognizant of the evaluation method called for by the solicitation, and whether the agency will evaluate according to low-price, technically acceptable or best value. Under the latter evaluation method, the agency has to actually consider and compare the technical merits of each proposal under consideration. To do otherwise, ending the evaluation after proposals are determined to be technically acceptable, effectively converts the procurement from best value to low-price, technically acceptable. This may present a contractor with grounds for a successful protest.