Link: GAO Opinion
Agency: General Services Administration
Disposition: Protests sustained.
Keywords: Source Selection Decision
General Counsel P.C. Highlight: Source selection officials may reasonably disagree with the ratings and recommendations of evaluators, but they are nonetheless bound by the fundamental requirement that their independent judgments be reasonable, consistent with the stated evaluation scheme, and adequately documented.
One Largo Metro LLC; Metroview Development Holdings, LLC; and King Farm Associates, LLC, protest the selection of Fishers Lane/JBG Companies, as the apparent successful offeror under a solicitation for offers (SFO), issued by the General Services Administration (GSA) for office space for the Department of Health and Human Services (HHS).
The SFO sought offers for a 15-year lease of up to 935,401 rentable square feet of office space to collocate HHS operating divisions that are currently housed in four separate locations. Offerors were informed that award would be made on a “best value” basis, considering price and three technical factors: location (with subfactors: access to existing Metrorail and access to amenities); building characteristics (with subfactors: number of buildings; planning efficiency and flexibility; and quality of building architecture, building systems, and construction); and past performance and key personnel.
Under the location factor, the access to existing Metrorail subfactor was stated to be significantly more important than the access to amenities subfactor and more important than any other subfactor. With regard to access to an existing Metrorail station, offerors were required to calculate the distance from the main entrance of their proposed buildings to the entrance of the nearest Metrorail station. In addition, offerors were required to identify the walking route for distances less than 2,500 walkable linear feet (wlf). For distances greater than 2,500 wlf, offerors were required to propose a shuttle schedule. The SFO also stated that the highest evaluation credit would be provided based upon how close a proposed building was to an existing Metrorail station.
With regard to access to amenities, offerors were informed that “[o]ffers will be evaluated for amenities within the building or otherwise available” within one mile of the building’s main entrance, and that evaluations would consider “the quantity and variety of the following amenities: fitness facilities, postal facilities . . . restaurants, day care center, fast food establishments, dry cleaners, [banks and ATMs], convenience shops, card/gift shops, hair salons, automotive service stations, and drug stores.” The SFO further advised that the best rating would be given to offers that provide the greatest variety and quantity of amenities existing at the time of occupancy within the building or within 1,500 wlf of the building. The SFO stated that amenities must currently exist or the offeror must provide evidence that the amenities will be available near the time of occupancy, such as construction contracts, signed leases or service contracts, letters of intent, “or any other credible or verifiable evidence.”
The SFO also informed offerors that the agency was required to comply with the National Environmental Policy Act (NEPA) for each offered site. Offerors were required to provide a basis for GSA to determine–in accordance with the NEPA, as implemented by the GSA NEPA Desk Guide–that the proposed building site would receive either a categorical exclusion from the requirement to prepare an environmental assessment or a finding of no significant impact.
Offers were evaluated by the agency’s technical evaluation teams (TET), which assigned adjectival ratings under each non-price evaluation factor supported by a narrative discussion that identified the offerors’ respective strengths and weaknesses. The evaluation reports were provided to the agency’s source selection evaluation board (SSEB), which also evaluated the offerors’ revised proposals. The SSEB assigned adjectival ratings under each subfactor and for the proposals overall, but did not, at this juncture, provide an adjectival rating for the three top-level evaluation factors. The SSEB rated the proposals of Fishers Lane, One Largo, and Metroview as superior overall (the highest technical rating), while King Farm’s proposal was rated highly successful overall (the next highest rating). The SSEB’s adjectival ratings were also supported by narrative discussions of the offerors’ respective strengths and weaknesses under each of the evaluation subfactors. The SSEB’s evaluation report and award recommendation were provided to the agency’s source selection authority (SSA). The SSA was concerned with the SSEB’s rationale for its ratings of the offers and directed the SSEB to reevaluate and review its source selection recommendation. The SSA stated, among other things, that the SSEB’s report did not indicate that the evaluation board had recognized that the location and building characteristics factors were of equal weight and that price was significantly less important than the technical factors. The SSEB reviewed its evaluation ratings as directed and affirmed its subfactor ratings. The SSA reviewed the SSEB’s addendum evaluation report and agreed with the board’s subfactor ratings and its recommendation to make award to King Farm. The SSA, however, disagreed with the SSEB’s conclusion that the offers were technically equal.
The SSA’s selection decision was provided to GSA’s commissioner for the National Capital Region Public Buildings Service, who also serves as the Head of the Contracting Activity (HCA) for this region. The HCA reviewed the SFO, SSP, TET reports, SSEB reports, and the SSA’s decision, and disagreed with the SSA’s conclusion that King Farm’s proposal offered the best value to the government. In making her determination, the HCA stated that she relied upon the SSEB’s subfactor and overall ratings and on the narrative discussion in the board’s evaluation report (before the SSA required the SSEB to review its ratings and before the SSEB provided factor-level ratings). While the HCA relied on the SSEB’s earlier ratings, she did not accept the SSEB’s tradeoff analysis or its recommendation for award. The HCA ranked the offers, based on the percentage of superior ratings received, in the following order: One Largo, Metroview, Fishers Lane, and King Farm. The HCA stated that the Fishers Lane offer presented the best value to the government and selected Fishers Lane for award. With regard to One Largo’s higher-rated offer, the HCA acknowledged One Largo’s technical superiority–based on the adjectival ratings–but stated that One Largo offered no technical advantage to justify its higher per square foot price.
King Farm argues that GSA’s evaluation of proposals under the access to amenities subfactor was not in accordance with the SFO. Specifically, King Farm contends that offerors were advised that the agency would consider the quantity, variety, and proximity of amenities offered. Instead of considering the quantity and variety of amenities, King Farm argues that the agency only considered the number of amenity categories offered. GAO agrees with King Farm, and states that GSA’s approach to evaluating this SFO provision was inconsistent with the terms of the provision.
Specifically, the SFO provided that, “Offers will be evaluated for both the quantity and variety of the following amenities: fitness facilities, postal facilities . . . restaurants, day care center, fast food establishments, dry cleaners, [banks/ATMs], convenience shops, card/gift shops, hair salons, automotive service stations, and drug stores. . . . The final evaluation will consider all of the available amenities and the offers will be scored based on the quantity, variety, hours and proximity of such amenities. . . . The best rating will be given to offers that provide the greatest variety and quantity of amenities with good hours of operation existing at the time of occupancy within the building or within 1,500 walkable linear feet of the building.” The plain language of the SFO requires GSA to evaluate both the overall number of amenities offered as well as the number of amenity categories (i.e., the variety). In this regard, the SFO stressed the importance of having adequate eating facilities nearby, but GSA’s simple counting of categories, such as hair salons or automotive service stations, ignores the type of amenity being offered. For example, King Farm and Fishers Lane offered different quantities of amenities within a number of different categories. GSA’s counting of amenity categories disregarded King Farm’s identification of three restaurants and three fast food establishments within 1,500 wlf of its building, as compared to identification by Fishers Lane of only one restaurant and four fast food establishments within 1,500 wlf. Similarly, GSA’s evaluation does not account for the fact that 7 of 18 amenities offered by Fishers Lane were automotive service stations.
In short, GAO finds that GSA’s assignment of adjectival ratings based only upon how many amenity categories were offered was not reasonable. GAO also disagreed that the protesters were not prejudiced by the agency’s evaluation under this subfactor.
All three of the protesters raise challenges to the HCA’s selection decision. King Farm argues that the HCA failed to perform the required tradeoff analysis, and failed to articulate any rationale for paying the price premium for the Fishers Lane proposal. One Largo, the highest-rated offeror, argues that the HCA’s recitation of offerors’ scores and prices–without additional explanation weighing the strengths and weaknesses of each proposal–was insufficient to support the HCA’s determination that the Fishers Lane proposal represented the best value to the government. Finally, Metroview argues that the HCA failed to meaningfully consider whether Metroview’s proposal, which received a higher percentage of superior ratings than the Fishers Lane proposal, merited the cost premium.
GAO states that in reviewing an agency’s evaluation of proposals and source selection decision, it will examine the supporting record to determine whether the decision was reasonable, consistent with the stated evaluation criteria, and adequately documented. Although source selection officials may reasonably disagree with the ratings and recommendations of evaluators, they are nonetheless bound by the fundamental requirement that their independent judgments be reasonable, consistent with the stated evaluation scheme, and adequately documented. In this regard, ratings, whether numerical, color, or adjectival, are merely guides for intelligent decisionmaking. An agency’s source selection decision cannot be based on a mechanical comparison of the offerors’ technical scores or ratings per se, but must rest upon a qualitative assessment of the underlying technical differences among competing offers. GAO recognizes that while agency selection officials may rely on reports and analyses prepared by others, the ultimate selection decision reflects the selection official’s independent judgment. However, the independence granted selection officials does not equate to a grant of authority to ignore, without explanation, those who advise them on selection decisions.
Here the HCA did not concur with the recommendations of the lower-level evaluators. Although the HCA adopted the subfactor-level adjectival ratings assigned by the SSEB, she did not adopt either the SSEB’s or the SSA’s analyses concerning the relative merits of the proposals or selection recommendations. Rather, without explaining the basis for her disagreement with the conclusions of the lower-level evaluators, the HCA proceeded to make conclusory pronouncements concerning which proposal offered the best value to the government. Moreover, contrary to the agency’s contentions concerning the clarity of support for the HCA’s selection decision, the record shows considerable disagreement between the SSEB and the SSA concerning the relative merits of the proposals. GAO finds from its review of the record no evidence of any meaningful consideration by the HCA of the evaluated differences in the firms’ offers. Rather, the HCA’s tradeoff assessment was based upon a mechanical comparison of the percentage of superior and highly successful ratings assigned to each offer. Where, as here, a solicitation provides for award on a best value basis, the decision as to the relative technical merit of the offers must be based upon a comparative consideration of the technical differences of the proposals.
The SSEB documented a number of differences between the offerors’ proposals, which would appear to provide discriminators for a determination of the relative technical merit of the offers. For example, under the most important subfactor, access to existing Metrorail, the offerors’ proposed buildings were at differing distances from a Metrorail station. Also, King Farm, which offered a building at the greatest distance from a Metrorail station, proposed a shuttle service plan to mitigate that weakness. Similarly, under the planning efficiency and flexibility subfactor, the SSEB noted a number of differing strengths and weaknesses in the offerors’ proposed building layouts. In the absence of a documented, meaningful consideration of the technical differences between the offerors’ proposals, the HCA could not perform a reasonable tradeoff analysis. That is, the HCA had no basis to determine that the Fishers Lane higher-priced proposal outweighed the cost savings offered by the King Farm lower rated, but lower-priced offer. Similarly, the HCA had no basis to conclude that the Fishers Lane proposal was more advantageous than the proposals of One Largo and Metroview. Accordingly, GAO sustains the protesters’ challenge to GSA’s selection of the Fishers Lane offer as the best value to the government.
GAO recommends that GSA reevaluate offers under the access to amenities subfactor in accordance with the terms of the SFO and perform and document a new selection decision consistent with GAO’s decision. If the Fishers Lane proposal is not found to reflect the best value to the government, the agency should award the lease to the offeror whose proposal is determined to be the best value to the government. GAO also recommends that the protesters be reimbursed their reasonable costs of filing and pursuing the protest, including attorneys’ fees. The protests are sustained.