Link: GAO Opinion
Agency: Department of Defense
Disposition: Protest sustained.
Keywords: FSS Contracts; MAS Contracts
General Counsel P.C. Highlight: GAO states that when an agency issues an RFQ to vendors holding FSS contracts for the delivery of services at hourly rates, and, as here, a statement of work is included, the ordering agency must evaluate the quotations received consistent with the stated evaluation criteria.
U.S. Information Technologies Corporation (USIT) protests the issuance of a task order under a request for quotations (RFQ), issued by the Department of Defense, Defense Logistics Agency (DLA), for information technology services supporting and sustaining DLA’s “Fusion Center.”
The RFQ, which was issued pursuant to Federal Acquisition Regulation (FAR) subpart 8.4 procedures, sought “proposals” from vendors holding Federal Supply Schedule (FSS) contracts under Schedule 70, Information Technology. The solicitation included a detailed performance work statement (PWS), which identified various design, analysis, support, and sustainment tasks the contractor would perform. Vendors were informed that the task order would be issued on a best value basis, considering price and the following evaluation factors: technical solution; management approach; key personnel/experience; quality control approach; and past performance.
With regard to the technical solution factor, the RFQ provided for the evaluation of the vendor’s overall approach, including approach to staffing and work breakdown structure. With regard to the key personnel/experience evaluation factor, vendors were informed that the agency would evaluate the qualifications and experience of the vendor’s proposed task manager. With regard to past performance, the agency anticipated evaluating the quality of the vendor’s relevant past performance, and success with projects similar in scope and complexity to the tasks identified in the PWS. With regard to price, the RFQ provided that the vendors’ quoted prices must be in accordance with the rates and labor categories established in the vendors’ FSS contracts.
The contracting officer (CO) reviewed the technical evaluation panel’s (TEP) evaluation of the two firms’ quotations and concluded that both vendors’ quotations were equal in technical merit. However, the CO decided to issue the task order to the awardee on the basis of that firm’s lower price.
USIT challenges the agency’s evaluation of the awardee’s price. GAO states that when an agency issues an RFQ to vendors holding FSS contracts for the delivery of services at hourly rates, and, as here, a statement of work is included, the ordering agency must evaluate the quotations received consistent with the stated evaluation criteria. The FAR also requires the agency to consider the level of effort and the mix of labor proposed to perform the task being ordered, determine that the total price is reasonable, and document the agency’s price reasonableness determination.
GAO finds that the record here does not show that DLA’s price evaluation was reasonable. Vendors were required to provide detailed pricing information, labor hours, and labor mix for each PWS task and to demonstrate the relationship between their pricing structure and their technical approach. USIT and the awardee both provided labor categories, corresponding labor rates, and hours by labor category for each task, as required by the RFQ. USIT and the awardee apparently have very different approaches to performing the PWS tasks, given the dramatic differences in the vendors’ quoted labor hours and labor mix for the PWS tasks. The record indicates that the vendors’ quoted labor hours were reviewed by the TEP, and found “sufficient to complete the tasks.” There is also no documentation in the record demonstrating that the TEP or the CO evaluated the awardee’s, or USIT’s, labor mix to perform the PWS tasks, or performed the analysis required by FAR sect. 8.405-2(d) to determine whether the labor mix proposed would result in a reasonable price for performance. Rather, the TEP’s evaluation report and CO’s selection decision merely state that the TEP found that the vendors’ total labor hours were considered sufficient to perform the PWS tasks. On this record, GAO cannot find a basis to uphold DLA’s determination that the vendors’ overall price (which is based upon the application of the vendors’ FSS rates to their quoted labor hours for each labor category) was reasonable.
Next, USIT challenges DLA’s evaluation of the vendors’ quotations under the technical solutions, key personnel/experience, and past performance factors. Specifically, USIT asserts that the awardee’s identified past performance references are not similar in scope and complexity to the work at issue here. GAO states that in reviewing protests of an agency’s evaluation and source selection decision in procurements conducted under FSS procedures, it will not conduct a new evaluation or substitute our judgment for that of the agency but will examine the record to ensure that the agency’s evaluation is reasonable and consistent with the terms of the solicitation.
Finally, the USIT argues that the agency ignored possible discriminators in the quotations that might have formed a valid basis for a cost technical tradeoff. For example, USIT contends that the agency failed to properly consider its specific experience at the Fusion Center, and its offer of the existing Fusion Center task manager. GAO states that where, as here, a solicitation anticipates the use of a best value evaluation plan–as opposed to selection based on low price and technical acceptability–evaluation of quotations is not limited to determining whether a quotation is merely technically acceptable; rather, quotations should be further differentiated to distinguish their relative quality under each stated evaluation factor by considering the degree to which technically acceptable quotations exceed the stated minimum requirements or will better satisfy the agency’s needs. GAO has long stated that evaluation ratings should be merely guides for intelligent decision-making, and that therefore evaluators and selection officials should reasonably consider the underlying bases for ratings, including the advantages and disadvantages associated with the specific content of competing quotations, in a manner that is fair and equitable and consistent with the terms of the solicitation.
Here, the record shows that the TEP considered USIT’s specific experience, and its offer of the existing Fusion Center task manager to be strengths in its quotation. The TEP also noted as a strength the awardee’s similar experience and the offer of a task manager with relevant experience. Given the absence of an explanation in the record about why the differing strengths in the vendors’ quotations did not reflect discriminators that should be considered in a cost/technical tradeoff, and the absence of any explanation about why–despite the assessed differing strengths–the vendors’ quotations were otherwise technically equal, GAO finds that DLA failed to evaluate the quotations in accordance with the RFQ’s criteria. The protest is sustained.
GAO recommends that DLA perform a new evaluation consistent with this decision, reopen negotiations with the vendors (if necessary), and make a new selection decision. GAO also recommends that the agency reimburse USIT for their reasonable costs of filing and pursuing the protests.