Agency: Department of Veteran Affairs
Disposition: Protest Sustained
Decided: August 25, 2017
General Counsel P.C. Highlight:
Agencies must not evaluate the cost of each line item in a vacuum. Rather, the agency must engage in analysis of whether a single high price quote would result in the government paying a price unreasonably high, given the expectations of a typical order.
Summary of Facts
David Jones CPA PC (DJCPA) protests the Department of Veterans Affairs’ (VA) exclusion of DJCPA from consideration for a blanket purchase agreement (BPA) pursuant to a request for quotations (RFQ) for Equal Employment Opportunity (EEO) claims investigations for the Office of Resolution Management (ORM) within the VA. The VA issued an RFQ contemplating at least seven BPAs.
According to the RFQ, the acquisition was consistent with the procedures of the Federal Acquisition Regulation (FAR) Subpart 13.303, and FAR Part 15 did not apply. The evaluation had two phases. In Phase 1, the vendor’s service-disabled veteran-owned small business (SDVOSBs) status would be verified. In Phase 2, technical approach was designated significantly more important than past performance. Past performance and technical approach, combined, were significantly more important than price. Quotations were required to meet a minimum rating of satisfactory for their technical approach to be considered.
The RFQ sought information on requested unit and extended prices on five items yearly over five years of performance as follows:
- individual case, one issue;
- individual case, per additional issue;
- individual case, continuing violation;
- consolidated case, one issue; and
- consolidated case, per additional issue.
Additionally, vendors were instructed to provide a not-to-exceed quantity for each of the line items. The RFQ clearly indicated the agency would not engage a vendor whose price was “questionable for reasonableness.”
Six vendors submitted quotations. Five vendors advanced to Phase 2. Two vendors, including DJCPA, received satisfactory or better ratings for the technical approach. DJCPA’s price for one of the 25 line items was determined not fair and reasonable by the VA. In light of this single finding, the VA excluded DJCPA from further consideration and made the award to the only remaining vendor.
Basis for Protest
DJCPA argued the elimination was unreasonable without discussion or an acknowledgement of the relationship among the CLINs. DJCPA further objected to the VAs failure to consider all DJCPA’s prices were lower than the agency’s benchmarks, save the one found not fair and reasonable.
The VA noted vendors were on notice of the standards and price reasonableness was “conducted based upon an examination of the unit price for each contract line item number.” Consequently, the VA argued the elimination based on a single line item was reasonable.
The VA was required to consider not just each line item, but whether the single line item price “would result in an unreasonably high price overall, or consider whether the single line item price presents some other risk to the government, as in the context of unbalanced prices.” In the case at bar, the VA did not engage in any analysis about whether the single line item with the high price would result in an unreasonably high performance price for a typical order under the BPA.
The GAO holds exclusion without such an analysis is unreasonable.