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1. Dixon Group, Inc., Command Decisions Systems and Solutions, Inc., B-402118, B-402118.2, B-402118.3, B-402118.4, B-402118.5, January 15, 2010
Link: GAO Opinion
Agency: Department of Health and Human Services
Disposition: Protests denied.
Keywords: Meaningful discussions; Cost realism analysis
General Counsel P.C. Highlight: In order for an agency to have conducted meaningful discussions, it must lead the offerors into the areas of their proposals that reflect deficiencies or weaknesses.
The Department of Health and Human Services issued a request for proposals (RFP) as an 8(a) set-aside in order to provide grants management support services for two of HHS's programs. The solicitation contemplated the award of a cost-plus-fixed-fee contract, and would be awarded on a "best overall value" basis after considering three factors: technical merit, past performance, and cost/price. The RFP specifically stated that subcontractors' past performance would be evaluated under the past performance factor.
Dixon Group, Inc. was the incumbent for the services to be provided by the contract. As part of that performance, Dixon subcontracted with Xtria LLC; however, the relationship between Dixon and Xtria soured to the point where Xtria consciously decided to withhold services in order to receive overdue payments from Dixon. Dixon was one of eight offerors that submitted proposals to HHS for the RFP, a group that also included Command Decisions Systems and Solutions, Inc., who indicated in its proposals that it intended to use Xtria as a subcontractor for the same services that it was currently providing.
After its initial evaluation, a round of discussions, and the receipt of final proposal revisions, HHS concluded that the proposal submitted by Lux Consulting Group, Inc. represented the best overall value to the government. Following this decision, Dixon and CDSS protested.
In its protest, CDSS objected to HHS's decision to downgrade its proposal under the past performance factor based on Xtria's performance under the predecessor contract. However, GAO determined this to be a reasonable downgrade. The RFP specifically provided that subcontractors' past performance would be considered in its evaluation. In light of this, and through communications with the agency, Xtria stated its conscious and deliberate decision to withhold services under the prior contract to exert pressure on Dixon for due invoices, while acknowledging the adverse impact its actions had on the agency. GAO deemed these facts to be sufficient for HHS to reasonably downgrade CDSS proposal. Next DCSS claims that HHS failed to conduct meaningful discussions. In order for an agency to have conducted meaningful discussions, it must lead the offerors into the areas of their proposals that reflect deficiencies or weaknesses. Here, GAO determined that HHS met this burden by specifically advising CDSS that it was considering negative past performance information regarding Xtria. CDSS's response acknowledged the concern and referred HHS to the communications between Xtria and the agency.
Finally, CDSS claimed that the award to Lux was improper because CDSS's proposal was evaluated as technically superior and at a lower evaluated price. GAO's review of the record found that the contracting officer had determined that, except for past performance, Lux's and CDSS's proposals were technically equal. However, the contracting officer assigned a more significant weakness to CDSS's proposed subcontractor and that this weakness outweighed the cost advantage. GAO saw no basis on which to question the contracting officer's determination and denied CDSS's protest.
Dixon first protested the selection decision by claiming that the agency failed to make an appropriate best value determination. GAO's review of the record did not support this claim. In fact, the record showed that Dixon's proposal was rated slightly lower than Lux's proposal under both of the non-cost evaluation factors, and that Dixon's evaluated cost was more than $3 million higher than Lux's evaluated cost. Next, Dixon claimed that HHS engaged in misleading discussions regarding Dixon's proposed costs. In particular, Dixon stated that because its final proposed cost was higher than that of Lux, it was improper for the agency to question certain aspects of Dixon's costs during discussions on the basis that they appeared to be too low. Because the contract was to be awarded on a cost-type contract, and HHS would be required to pay the contractor its actual and allowable costs, the agency is required to perform a cost realism analysis. Based on this requirement, HHS would have been remiss if it failed to identify the aspects of Dixon's proposal that appeared to be unrealistically low, which is exactly what it did and why the GAO supported HHS's position.
Dixon then alleged that the agency failed to perform a proper cost realism analysis regarding Lux's proposal. GAO's review of the record found that the agency had in fact conducted a comprehensive cost realism analysis with regard to Lux's cost proposal, and that Dixon had not persuasively shown any aspects of that proposal to be unrealistic. Finally, Dixon argued that Lux's proposal should have been downgraded for failing to initially include letters of commitment for certain proposed personnel. Again, GAO's review of the record found that Lux had submitted commitment letters following the submission of its initial proposal, and Dixon's mere disagreement with the agency's judgment was not enough to make it unreasonable. Accordingly, Dixon's protest was denied.
2. METAG Insaat Ticaret A.S., B-401844, December 4, 2009
Link: GAO Opinion
Agency: Department of the Army, U.S. Army Corps of Engineers
Disposition: Protest denied.
Keywords: Discussions; price realism
General Counsel P.C. Highlight: In the context of a solicitation that provides for award of a fixed-price contract, an agency may, in its discretion, provide for the use of a price realism analysis for purposes of assessing whether a price is so low as to evince a lack of technical understanding on the part of the offeror and for assessing the risk inherent in an offeror's proposal.
The Army Corps of Engineers issued a request for proposals (RFP) for design and construction services related to a strategic airlift ramp and hot cargo pad at the Manas Air Base in Kyrgyzstan. The RFP contemplated the award of a fixed-price contract to the proposal that was most advantageous to the government, based on price and three non-price factors: management and technical; experience; and past performance. Six offerors were ultimately included in the final evaluation, with the contract being awarded to Serka Insaat Ve Ticaret A.S. METAG Insaat Ticaret A.S. protested this decision.
METAG's protest challenged several aspects of the agency's evaluation of proposals and subsequent award decision. METAG alleged that Serka was ineligible for award because the evaluators had identified "significant informational deficiencies" in Serka's proposal concerning a variety of issues. GAO reviewed the record and found that the RFP stated that offerors "should" provide information concerning qualifications and background experience for management personnel, meaning this information was not a mandatory requirement and the government's evaluation was not unreasonable.
Next, METAG contended that the agency was required to conduct discussions because the cumulative total of identified weaknesses in METAG's and Serka's proposal could be considered a deficiency. However, here the RFP had provided for award on the basis of initial proposals without conducting further discussions. Thus, the agency was not required to hold discussions and GAO grants considerable deference to the contracting officer's discretion for deciding whether discussions are necessary.
Finally, METAG asserts that the agency misevaluated its price proposal as unreasonably low, by arguing that price reasonableness concerns whether a price is higher, not lower, than warranted. When a fixed-price contract is being contemplated, an agency may conduct a price realism analysis for determining whether a price is so low as to evince a lack of technical understanding on the part of the offeror and for assessing the risk inherent in an offeror's proposal. GAO's review of the record determined that METAG's pricing reasonably raised questions as to whether its prices were realistic for the work and whether METAG had a clear understanding of the solicitation. As such, GAO was unable to find a basis upon which to question the agency's evaluation and denied METAG's protest.
3. InnovaTech, Inc., B-402415, April 8, 2009
Link: GAO Opinion
Agency: U.S. Patent and Trademark Office
Disposition: Protest denied.
Keywords: Technical Evaluation; evaluation criteria
General Counsel P.C. Highlight: An agency is not precluded from considering an element of a proposal under more than one evaluation criterion where the element is relevant and reasonably related to each criterion under which it is considered.
The U.S. Patent and Trademark Office awarded a blanket purchase agreement (BPA) to Guident Technologies, Inc. under Guident's General Services Administration (GSA) Federal Supply Schedule (FSS) contract for enterprise data warehouse (EDW) support services. The original request for quotations was issued to three small business FSS contract holders, including Guident and InnovaTech, Inc., who subsequently protested the award to Guident.
In its protest, InnovaTech raised two principal challenges. First, InnovaTech alleged that the agency's evaluation conclusions were not reasonable and were inconsistent with the evaluation criteria. However, GAO's review of the record found that USPTO's evaluation of InnovaTech's quotation was proper. Specifically it determined that, as identified by the USPTO evaluators, several of InnovaTech's responses in its quotation lacked detail and did not provide sufficient descriptions. Moreover, InnovaTech's claim that its successful past performance was an adequate substitute for demonstrating its ability to manage the EDW work was found to be a mere disagreement with the USPTO's judgment, and not a valid basis upon which to overturn the selection decision.
The other component of InnovaTech's protest argued that the agency's best value tradeoff decision was based on criteria not stated in the RFQ. Where a price /technical tradeoff is made, the source selection decision must be documented, and the documentation must include the rationale for the tradeoff. In this instance, the contracting officer (CO) premised her determination on a review of the relative importance of the RFQ's evaluation criteria, and the size of the price difference between the quotes received. In her review, the CO specifically noted various technical advantages in Guident's quote and concluded that it represented the best value because the many technical advantages outweighed the small price premium. GAO's review agreed with this conclusion and did not find any instances in which the CO employed unstated criteria. Based on the above determinations, GAO denied the protest.
