Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
Keywords: Discussions; Trade-off Decision
General Counsel P.C. Highlight: During contract negotiations (discussions) under FAR Part 15, an agency may not mislead an offeror–through the framing of a discussion question or a response to a question–into responding in a manner that does not address the agency’s concerns, or misinform the offeror concerning a problem with its proposal or about the government’s requirements.
ITW Military GSE protests the award of a contract under a request for proposals (RFP), issued by the Department of the Navy, for shipboard and land based air conditioners.
The RFP provided for the award of a fixed-unit-price, indefinite-delivery/indefinite-quantity (ID/IQ), contract for state-of-the-art mobile, trailer mounted, shipboard, and land based air conditioners. Award was to be made on a best value basis, considering technical, past performance, and price factors.
ITW asserts that it was misled during discussions. Specifically that the Navy improperly advised it during discussions that its prices for two contract line item numbers (CLIN) were “somewhat lower” than the independent government estimate (IGE) and in reliance on this, ITW increased its final price for these two CLINs.
GAO states that when discussions are conducted, they must at a minimum identify deficiencies and significant weaknesses in each competitive-range offeror’s proposal. Discussions must be “meaningful,” that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. An agency may not mislead an offeror–through the framing of a discussion question or a response to a question–into responding in a manner that does not address the agency’s concerns, or misinform the offeror concerning a problem with its proposal or about the government’s requirements. In the context of discussions relating to cost or price, agencies may not coerce or mislead an offeror during discussions into raising its prices.
In this case, the Navy identified a number of weaknesses and deficiencies in ITW’s initial proposal, which were identified in 25 evaluation notices. Concerns with ITW’s proposed prices were communicated to ITW in the letter transmitting the evaluation notices. GAO does not find that the Navy’s discussions were misleading. The record shows that the agency accurately conveyed its concerns to ITW in discussions. The agency simply communicated to ITW that its CLIN pricing appeared lower than that of the IGE in two particular regards, and asked ITW to review its pricing. This did not compel ITW to take any particular action.
ITW also argues that since the RFP established that nonprice factors were significantly more important than price, the Navy’s determination that the awardee’s lower-rated, lower-priced proposal represented the best value was unreasonable.
GAO states that in a best value procurement, it is the function of the SSA to perform a price/technical tradeoff, that is, to determine whether one proposal’s technical superiority is worth the higher price. Even where, as here, price is stated to be of less importance than nonprice factors, the SSA may select the lower-rated, lower-priced proposal, where the SSA reasonably concludes that the price premium involved in selecting the higher-rated proposal is not justified. The extent of such tradeoffs is governed only by the test of rationality and consistency with the evaluation criteria. A protester’s mere disagreement with the 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 does not establish that the source selection decision was unreasonable.
GAO finds the Navy’s source selection decision to be reasonable, consistent with the stated evaluation criteria, and adequately documented. The SSA considered the relative importance of the price and nonprice evaluation factors, the technical advantages possessed by ITW, and the price advantage possessed by the awardee. The SSA concluded the benefits that would be derived from ITW’s lower risk proposal were not significant enough to outweigh the associated price premium, and found that the awardee’s proposal represented the best value to the government. The protest is denied.