Link: GAO Opinion
Agency: Department of Energy
Disposition: Protest sustained.
General Counsel P.C. Highlight:
GAO sustained protests of a $22.8 billion solicitation issued by the Department of Energy, National Nuclear Security Administration, to perform services associated with maintaining the nation’s nuclear weapons. A contract award was made to Consolidated Nuclear Security LLC (CNS) of Reston, VA. The agency announced the award in a January 8, 2013, press release asserting that the award would save $3.27 billion in taxpayer dollars over the life of the contract.
Two firms—Nuclear Production Partners LLC and Integrated Nuclear Production Solutions LLC—protested the award to CNS. The protesters challenged several aspects of the agency’s proposal evaluation process and award decision, however the protest was sustained due to the agency’s unreasonable evaluation of the feasibility and size of the offerors’ proposed cost savings.
The solicitation stated that the offerors’ proposed cost savings would be evaluated under the management approach/cost savings evaluation factor, specifically stating:
The Government will evaluate and assess the feasibility and quality of the offeror’s proposed management approach, including cost savings approach…The Government will also evaluate and assess the feasibility and size of the proposed cumulative savings to the Government…
The agency was to evaluate each offeror’s proposed cost savings, and assign one of four possible ratings: reasonable, partially reasonable, not reasonable, or cannot determine. The agency’s cost savings advisory committee (CSAC) evaluated the proposed cost savings of CNS, and determined that the largest portion of CNS’s proposed cost savings were rated as “partially reasonable.” The agency did not seek any additional information from offerors regarding the proposed cost savings, nor did it conduct any additional analysis beyond that performed by the CSAC.
Despite the lack of new information or analysis, the Source Evaluation Board designated as feasible all offerors’ proposed costs savings, with the exception of those rated as “not reasonable.” The Source Selection Authority (SSA) took this one step further, considering all of the cost savings proposed by the offerors to be feasible, even cost savings rated as “not reasonable.” GAO found that in electing to consider all cost savings proposed by the offerors to be feasible, ignoring the assessments of the agency’s own financial specialists and without performing any independent cost savings analysis, the SSA failed to comply with the provisions of the solicitation.
GAO stated that the solicitation clearly required, at minimum, for the agency to assess and consider the feasibility and size of each offeror’s proposed cost savings. By simply accepting every offeror’s cost savings as proposed, the SSA did not conduct any meaningful assessment of the feasibility and size of the proposed cost savings. Thus, the agency did not comply with the stated evaluation criteria in the solicitation, and as a result GAO sustained the protest. GAO recommended that the agency reopen the procurement, request additional information from the offerors regarding proposed cost savings, and evaluate the size and feasibility of each offeror’s proposed cost savings consistent with the terms of the solicitation.