In three related bid protest decisions made public last week, the Government Accountability Office (“GAO”) reaffirmed the principle that agencies must meaningfully consider price when making best value tradeoff decisions.  GAO sustained the protests, stressing that merely paying lip service to price while selecting a more expensive, higher-rated offeror is not sufficient — agencies must provide a rational explanation for why they have decided to pay a premium for the awardee’s technical superiority.

In Solers, Inc., B-414672.3 et al.; Technatomy Corporation, B-414672.5; and OGSystems, LLC, B-414672.6 et al., three disappointed offerors challenged the Defense Information Systems Agency’s (“DISA”) award of Multiple Award Task Order contracts to 14 contractors as part of the Systems Engineering, Technology, and Innovation program.

The solicitation provided that DISA would make award on a best-value tradeoff basis considering price and four technical factors that, when combined, were significantly more important than price.  The agency made award to the 14 highest rated proposals in the non-price factors, opining — without elaboration — that “the technical merit of those proposals justifies paying a price premium over lower-rated, lower-priced proposals.”  Indeed, throughout the evaluation process, the agency repeatedly noted — again without elaboration — that the awardees’ proposals were worth a premium.

The three protestors raised a host of different claims, but each one challenged the best value determination, arguing that DISA failed to meaningfully consider price.  GAO agreed, holding that the agency had performed a mechanical tradeoff that relied exclusively on adjectival ratings and excluded technically acceptable proposals without any meaningful consideration of their price.  GAO was unimpressed by the agency’s “one-sentence conclusion” — repeated “nearly verbatim” throughout the evaluation record — that, “due to strengths on the non-price factors, the 14 awardees merited selection over lower-rated, lower-priced proposals[.]”  It found “such consideration of price to be nominal” and opined that “anything less would be to ignore price completely.”

GAO also noted that the source selection authority (“SSA”) missed the point when it concluded that there was a “clear break” between the offerors who received award and the disappointed offerors who purportedly “d[id] not have sufficient technical merit to justify making additional awards.”  In GAO’s view, the SSA failed to consider the relevant question, which was “whether the higher-rated proposals were worth the associated price premium.”  GAO explained that “there is no indication that price played a role in determining the ‘clear break’ in the proposals.”

These decisions serve as an important reminder that disappointed offerors who lose best value tradeoff procurements to a higher-priced, higher-rated offeror should try to assess during the debriefing process whether the agency can articulate a rational justification for paying a premium to the awardee.  If the agency is unable to do so, the disappointed offeror should consider filing a bid protest.

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Photo of Hunter Bennett Hunter Bennett

Hunter Bennett regularly represents government contractors in bid protests before the Government Accountability Office and the U.S. Court of Federal Claims. He also counsels clients in a wide range of formation and disputes issues. Prior to entering private practice, he served as a…

Hunter Bennett regularly represents government contractors in bid protests before the Government Accountability Office and the U.S. Court of Federal Claims. He also counsels clients in a wide range of formation and disputes issues. Prior to entering private practice, he served as a Trial Attorney with the U.S. Department of Justice, where he was a member of the Department’s Bid Protest Team and frequently defended the United States against bid protests filed in the Court of Federal Claims.

During his tenure at the Department of Justice, Hunter served as lead counsel for the United States in dozens of cases involving complex commercial disputes. He also oversaw the litigation of all habeas corpus cases filed by Guantanamo Bay detainees that were pending before the Honorable Gladys Kessler in the United States District Court for the District of Columbia, and personally tried five detainee habeas cases. Additionally, Hunter briefed and/or argued more than 20 cases in the United States Court of Appeals for the Federal Circuit.

Hunter began his career as a prosecutor in the Philadelphia District Attorney’s Office, where he served as lead counsel in over 200 habeas corpus cases filed in the United States District Court for the Eastern District of Pennsylvania, and successfully briefed and/or argued multiple cases in the United States Court of Appeals for the Third Circuit.

In his spare time, Hunter plays bass guitar in the band Dot Dash, whose song “Shopworn Excuse” was dubbed “a jangly piece of heaven” by USA Today.

Photo of Evan R. Sherwood Evan R. Sherwood

Evan Sherwood counsels federal contractors on Contract Disputes Act (CDA) claims, the cost accounting standards (CAS), cost allowability, requests for equitable adjustment (REAs), contract terminations for convenience/default, and related audits, litigations, and investigations. He also advises on contract compliance and formation issues, including TINA/defective pricing…

Evan Sherwood counsels federal contractors on Contract Disputes Act (CDA) claims, the cost accounting standards (CAS), cost allowability, requests for equitable adjustment (REAs), contract terminations for convenience/default, and related audits, litigations, and investigations. He also advises on contract compliance and formation issues, including TINA/defective pricing, data rights, mandatory disclosure rules, ethics, conflicts of interest, teaming arrangements, and other transaction agreements (OTAs). He has litigated matters before the Court of Federal Claims, the Armed Services Board of Contract Appeals, the Government Accountability Office, and the Federal District Courts.

In his work for defense and civilian agency contractors, Evan:

  • Prepares CDA claims and REAs;
  • Litigates matters involving CAS compliance, cost accounting practice changes, and cost allowability under the FAR and grant rules;
  • Defends contractors during audits and investigations involving the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA), and the Office of the Inspector General (OIG);
  • Advises on constructive changes, work delays, defective specifications, stop-work orders, government-furnished property, CPARS, warranty matters, data rights, and quality controls;
  • Counsels on disputes between primes and subcontractors, including teaming disputes; and
  • Conducts internal investigations and defends clients in federal investigations involving whistleblower allegations and retaliation claims.

Evan is a Vice Chair of the ABA Public Contract Law Section’s Contract Claims & Disputes Resolution Committee. He routinely writes and speaks about legal issues in federal contracting.