Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
Keywords: Best Value
General Counsel P.C. Highlight: Where, as here, a solicitation contemplates award on a best value basis and provides that the non-price considerations are more important than price/cost, agencies have discretion to make award to a concern that has submitted a higher-priced/cost, technically superior offer.
Marine Hydraulics International, Inc. (MH) protests the award of a contract under a request for proposals (RFP), issued by the Department of the Navy, for executing, planning, maintenance, repair and alteration to LPD 17 Class ships.
The RFP contemplated the award of a cost-plus-award-fee/incentive-fee contract for a base year, with four one-year options, for a number of ship “availabilities.” Because the precise work to be performed is unknown in advance, the RFP included a notional work package to which offerors were to respond with technical proposals and proposed cost/fee estimates. Award was to be made to the offeror submitting the proposal representing the “best value” considering evaluated cost and several non-cost factors.
After learning of the initial award to another offeror, MH filed a protest, maintaining that the agency had misevaluated both technical and cost proposals and had made an unreasonable source selection decision. GAO sustained the protest, but only in connection with certain issues relating to the agency’s evaluation of MH’s cost proposal; the record showed that, absent certain errors in the agency’s cost evaluation, MH, rather than the awardee, appeared to have submitted the low-cost proposal. GAO denied MH’s remaining arguments relating to the agency’s evaluation of proposals. In response to the protest decision, the agency reevaluated cost proposals, but still found that the original awardee’s proposal provided the best value to the government although its price was higher than MH’s.
In its protest of the new source selection determination, MH asserts that the agency performed a defective evaluation of the awardee’s proposal because it failed to consider the awardee’s ongoing performance on two contracts for work on the USS San Antonio, an LPD 17 class ship. This aspect of MH’s protest is a restatement of an identical assertion raised in its earlier protest. Although GAO did not discuss the issue in the earlier decision, it concluded that it lacked merit. In particular, the record showed that the San Antonio work was ongoing work for which there was not yet a past performance, the San Antonio work involved principally diesel engine repair and was not particularly relevant to the extensive work contemplated under the notional work packages. Therefore, there is no basis to consider the issue further here.
MH also asserts that, while the solicitation stated that non-cost considerations were more important than cost, the RFP further specified that the importance of cost would increase as differences in overall technical merit decreased. MH concludes that, accordingly, its cost advantage should have been assigned greater importance in the agency’s source selection decision. GAO states that where, as here, a solicitation contemplates award on a best value basis and provides that the non-price considerations are more important than price/cost, agencies have discretion to make award to a concern that has submitted a higher-priced/cost, technically superior offer; the agency’s decision is governed only by the test of rationality and consistency with the solicitation’s stated evaluation scheme.
The record shows that, although the proposals were assigned the same overall adjectival rating, the agency, in fact, determined the awardee’s proposal to be technically superior. The awardee’s proposal received higher adjectival ratings under three of the four non-cost evaluation factors. In addition, the source selection decision identified a number of relative advantages offered by the awardee’s proposal that rendered it superior to MH’s; these advantages formed the underlying basis for the agency’s cost/technical tradeoff. GAO finds that MH’s protest furnishes no basis to object to the agency’s determination, consistent with the terms of the solicitation, that award to the awardee based on its technically superior, higher cost proposal, offered the best overall value to the government. The protest is denied.