Bid Protest Solicitation Requirements Matter – $20+ Million Setback

GAO rules that bid protest solicitation requirements is all that matters.

Recently , the Government Accountability Office (“GAO”) released its report denying Sigmatech Inc.’s bid protest regarding its bid to supply the Department of the Army (“the Army”) with programmatic support services. Sigmatech took issue when the Army ultimately awarded the $20 million contract to Total Computer Solutions, Inc. (“TCSI”).

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Two Bids for the Contract

The Army issued its solicitation in early March this year; it received only two bids by the solicitation’s closing date: one from Sigmatech and one from TCSI. For non-price factors, the Army evaluated the two companies as nearly identical: both companies received “outstanding” scores in the experience, functional approach, and socio-economic support categories. However, despite both being rated as “outstanding,” Sigmatech’s experience score was slightly better than TCSI’s.

Thus, based on non-price factors, Sigmatech submitted the better offer. Unfortunately for Sigmatech, TCSI underbid it by nearly $8.5 million ($20.2 million vs. $28.6. million). The Army ultimately chose TCSI because it concluded that the cost-savings that TCSI’s offer provided outweighed the marginally better offer that Sigmatech could provide.

Sigmatech complained that the Army’s decision was unfair for two reasons: 1) the Agency failed to follow its own rating definitions in its evaluation worksheets; and 2) TCSI’s dramatically low price should have raised concerns that it could not deliver on its proposed offer.

One Losing Bid, One Protest

First, Sigmatech argued that the Army should not have given TCSI “outstanding” scores in either its Experience or Functional Approach categories. Sigmatech pointed out that, under the Army’s own internal definitions, an offeror would receive an “outstanding” score only if it demonstrated “very extensive performance.” However, the Army scored several of TCSI’s subsections as either “moderate” or “extensive” (rather than the more impressive “very extensive”). Thus, Sigmatech argued that TCSI should not have been awarded the contract because its scores were significantly superior in two categories.

The GAO disagreed. Although it noted potential deficiencies in the Agency’s evaluation plan, it found that the Agency’s internal instructions are not binding; rather, only the actual solicitation requirements bind the Agency. Thus, as long as the Agency did not violate the actual solicitation requirements, the GAO would not sustain Sigmatech’s argument.

Under the actual solicitation requirements, the Agency was allowed greater leeway in its selection process. For example, under the Experience criterion, the Agency would evaluate quotations based on “the depth and breadth of the offeror’s experience”; the solicitation language did not hold the Agency to the stricter “very extensive” criterion.

Based on this more lenient scoring criterion, the GAO concluded that the Army acted reasonably when it determined that TCSI scored “outstanding” in both Experience and Functional Approach, even though several aspects of its Experience or Functional Approach subsection scored less than “very extensive.”

Furthermore, Sigmatech argued that the Department did not appropriately analyze whether TCSI’s price was too low, such that there was a significant risk of poor performance.

Once again, the GAO referred to the actual solicitation to deny Sigmatech’s claim. According to the solicitation requirements, the Agency did not need to analyze whether the prices were too low such that the offeror posed a legitimate risk of non-performance. Thus, the GAO determined that the Army did not err when it failed to analyze this risk in TCSI’s offer.

Finally, the GAO concluded that the Department acted reasonably when it chose the less expensive TCSI, even though Sigmatech achieved a better overall score in regards to the non-price factors.

Why Submit a Bid Protest?

Although Sigmatech ultimately proved unsuccessful, the potential reward of receiving high-value contract can justify filing a bid protest with the GAO. If your business is involved in government contracting and procurement, the experienced attorneys at Whitcomb Law, P.C. can help you file your bid so that you win the first time or protest the bid if you don’t.

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