Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Source Selection Decision
General Counsel P.C. Highlight: Source selection decisions must be documented, and include the rationale and any business judgments and tradeoffs made or relied upon by the SSA.
Terex Government Programs protests the award of a contract to Kalmar RT Center LLC, by the Department of the Army, under a request for proposals (RFP) for light capability rough terrain forklifts (LCRTF).
The RFP provided for the award of a fixed-price, five-year requirements contract for LCRTF production and related services, and data. The RFP specified that award would be made to the offeror whose proposal was determined to represent the best value to the government considering the following evaluation factors: technical, price, and small business participation. The technical factor was further divided into the following three equally-weighted subfactors: (1) beach operations; (2) helicopter lift; and (3) pallet handling operations.
With regard to the technical factor, the RFP required offerors to detail their proposed approach to meeting the requirements of the purchase description and to provide substantiating information in this regard. More specifically, offerors were instructed to provide complete and specific technical data documentation and supporting rationale showing how the offered LCRTF would meet the requirements of the purchase description. Concerning substantiating data, the RFP stated that “validated test and inspection data, which establishes the conformance of the offered configuration to required performance levels, represents the most credible form of substantiating data.”
Four offerors, including Terex and Kalmar, were determined to be within the competitive range. Terex was notified that Kalmar’s proposal had been selected for the award and, on the same date, Terex received a post-award debriefing. Terex then filed a protest with GAO. In response, the Army agreed to take corrective action consisting of reevaluating the proposals and making a new best-value decision. GAO therefore dismissed the protest. Following the reevaluation, Terex was notified that its proposal had not been selected for award and that Kalmar remained the awardee. Terex learned that its proposal had received the same source selection evaluation board (SSEB) ratings as Kalmar’s proposal, and that Kalmar had offered a higher price. Notwithstanding the adjectival ratings, the source selection authority (SSA) concluded in the SSDD that Kalmar’s proposal had presented the most credible substantiating data concerning its design and, in the SSA’s judgment, presented less risk than all other offerors. The SSA further explained that despite the appearance of identical technical and small business ratings between the Terex and Kalmar proposals, there were meaningful distinctions between the proposals. Specifically, the SSA found that Kalmar had designed and built a LCRTF specifically to meet the purchase description requirements of the RFP, and was therefore able to provide the most credible substantiating data based on that configuration. According to the SSA, this distinction was worth the $6,299,740 price premium of Kalmar’s proposal, rendering Kalmar the best value to the government.
Terex alleges that the SSDD does not support the Army’s award decision to Kalmar, that the SSA could not have reasonably justified the $6.3 million price premium of Kalmar’s proposal, and that Kalmar’s proposal failed to meet several material requirements of the purchase description of the RFP. GAO states that 15.308 of the Federal Acquisition Regulations (FAR) requires, in the context of a negotiated procurement, that a source selection decision be based on a comparative assessment of proposals against all of the solicitation’s source selection criteria. The FAR further requires that while the SSA “may use reports and analyses prepared by others, the source selection decision shall represent the SSA’s independent judgment.” Source selection decisions must be documented, and include the rationale and any business judgments and tradeoffs made or relied upon by the SSA. However, there is no need for extensive documentation of every consideration factored into a tradeoff decision, nor is there a requirement to quantify the specific cost or price value difference when selecting a lower- or higher-priced proposal for award. Rather, the documentation need only be sufficient to establish that the agency was aware of the relative merits and costs of the competing proposals and that the source selection was reasonably based. In reviewing an agency’s source selection decision, GAO examines the supporting record to determine whether the decision was reasonable, consistent with the stated evaluation criteria, and adequately documented.
Here, the SSA explained that Kalmar’s proposal provided “the most credible data,” and that the data is “clear, concise, relevant and accurate because it was developed directly from the proposed configuration.” GAO sees nothing insufficient in the SSA’s documentation of his award decision. The SSA’s review of the proposals’ equal adjectival evaluation ratings, independent reasoning concerning distinctions between the proposals despite their equal ratings, and decision that certain distinctions in Kalmar’s proposal warranted the payment of a price premium, are clearly documented and thoroughly explained.
Terex next alleges that the SSA’s award decision was unreasonable because the underlying record does not support the SSA’s contention that Kalmar’s proposal presented the most credible substantiating data, and therefore presented less risk than Terex’s proposal. In this regard, the SSA, throughout the SSDD, emphasized the fact that Kalmar had tested a fully-integrated prototype of its proposed LCRTF, built in direct response to the solicitation’s purchase description. Testing on the actual configuration of the proposed LCRTF allowed Kalmar to present the most credible substantiating data, in the SSA’s view. Kalmar’s approach in this regard stood in contrast to that employed by Terex, which proposed to meet the purchase description by modifying an existing commercial forklift, but did not undertake the modifications prior to testing. Thus, Terex’s substantiating data was developed from testing of its base commercial forklift, rather than its proposed final configuration.
Terex argues that it was not reasonable for the SSA to conclude that Terex’s proposed LCRTF, based on a proven commercial design, presented more risk than Kalmar’s “prototype” design. Terex asserts both its own proposal and Kalmar’s proposal presented validated test and inspection data based on their proposed “configurations” and should both have been credited with providing “the most credible form of substantiating data” as required by the RFP. Further, Terex contends that the SSA mistakenly believed that Kalmar’s data had been developed from direct testing of its prototype, rather than equivalency testing. Terex argues that the performance data for Kalmar’s proposed LCRTF was, like Terex’s data, based on equivalency testing and mathematical calculations, and therefore did not present an advantage in this regard.
More specifically, Terex asserts that the SSA mistakenly concluded that Kalmar’s data was more credible in the two areas of the evaluation in which the SSA identified specific risk in Terex’s proposal: the “longitudinal gradeability” and “fording” requirements of the beach operations subfactor of the technical factor.
Based on GAO’s review of the record, GAO sees no error in the SSA’s understanding of the substantiating data provided by the offerors. While both offerors relied on equivalency testing methods in developing their substantiating data, Kalmar performed this testing on a version of its LCRTF that fully integrated all of the major systems proposed for its final production vehicle. In contrast, Terex performed its testing on a base model commercial forklift that did not incorporate up to 44 proposed changes required to modify the commercial vehicle to meet the purchase description requirements, including modifications of major systems such as the replacement of the engine, transmission, and axles. This distinction weighed heavily in the SSA’s consideration of the two offerors’ substantiating data and risk, especially in the “longitudinal gradeability,” and “fording” areas. The protest is denied.