Bid Protest Successful Where Agency Failed to Document “Best-Value Tradeoff Analysis”

A government contractor wins its post-award protest where the agency failed to adequately document its “best value” analysis.  This is the latest of a string of recent successful bid protests wherein the government loses on the basis of poor documentation.  The case is Standard Communications, Inc. v.United Statesand CACI-ISS, Inc. and SAIC, No. 11-530 C (November 22, 2011).

The Department of Veteran’s Affairs issued a Request for Proposals for its Transformation Twenty-One Total Technology (“T4”) Program.  The RFP sought proposals regarding “a total IT services solution encompassing, but not limited to software and IT products incidental to the solution, in conjunction with all services needed to integrate a system, network, or other IT services in order to meet [DVA’s] mission requirements.

The DVA anticipated entering into an Indefinite Delivery/Indefinite Quantity, Multiple Award Task Order contract with a five-year period of performance.  The RFP provided for a maximum selection of fifteen awardees, with at least four contracts being awarded to Service Disabled Veteran-Owned Small Businesses (SDVOSM) and at least three being awarded to Veteran-Owned Small Businesses (VOSM).  The value of this contract was $12 billion with a minimum of $50,000 guaranteed to each awardee.  The award was to be made on “best value” based on five criteria.  Price was the lowest weighed criteria.

Standard Communications bid and lost to other contractors.  It filed a post-award bid protest arguing that the DVA violated the law by failing to document its “best value” analysis.  The FAR specifically requires documentation of the tradeoff process at 15.308.  This documentation must do more than “parrot back the strengths and weaknesses of the competing proposals – rather, the agency must dig deeper and determine whether the relative strengths and weaknesses of the competing proposals are such that it is worth paying a higher price.”  Moreover, “as the magnitude of the price differential between offerors increases, the relative benefits yielded by the higher-priced offer must also increase.”

In this case, with regard to some of the contract awards, this documentation (in a non-conclusory form) did not exist.  The Court of Federal Claims insisted that agencies must state why a proposal’s technical superiority does not warrant a premium.  It is not enough to say simply that it doesn’t.  Therefore, the bid protest was sustained.

Interestingly, Standard Communications also complained that the DVA violated the Veterans First Program which, when applicable, requires that a procuring entity give SDVOSB concerns priority over VOSB concerns.  However, Standard Communications waived this argument by filing a “post-award” bid protest rather than a “pre-award bid protest.”  The lesson for government contractors is that they shouldn’t wait to file a protest once they learn that the rules of the solicitation are improper.  Delay results in wavier.