The Comptroller General (CG) of the United States decided the case of the Matter of Red River Computer Company, Inc. ,2017 WL 2617670 . The Comptroller General is the head of the Government Accountability Office (GAO). Acting on behalf of Congress, the GAO handles a variety of fiscal, oversight and accountability functions.
Bid Protest Background
On June 24, 2016, The Department of Homeland Security (DHS) submitted a request for quotations (RFQ) number HSHQDC–16–Q–00195. The RFQ called for “enterprise computing services and cloud computing services.” The RFQ outlined the award of blanket purchase agreements (BPAs) to several companies for “infrastructure-as-a-service (IaaS) cloud services,” provided directly or using resellers.
The DHS specified that price would not be the most important factor in the award of the BPAs. The capacity of IaaS services offered was the first consideration. The DHS would weigh past experience and performance heavily. Finally, the DHS would use price to differentiate similar, technically acceptable bids.
Red River Computer Company, Inc. (Red River), Four Points, InfoReliance and Govplace all submitted bids for this RFQ.
The DHS evaluated all of the submitted bids. Four Points, InfoReliance and Govplace were the top three firms, receiving all or mostly “exceptional” ratings. The average discounted monthly prices for the top three firms were as follows: Four Points with $431.59, InfoReliance with $487.24 and Govplace with $227.00.
Red River was not among the top three, receiving one “satisfactory” rating, two “very good” ratings and one “exceptional” rating. Red River’s average discounted monthly price was $509.34.
On February 13, 2017, the DHS announced the award of BPAs to Four Points, InfoReliance, and Govplace.
Red River protested, alleging that the DHS “treated vendors unequally in its technical evaluation.” Red River also contended unfair treatment concerning the clarification process. The DHS chose not to issue a “clarification letter” to Red River, even though other firms received such a letter. Red River further argued that the costs figures of Four Points and InfoReliance were not compliant with the RFQ. Finally, Red River claimed that the DHS award did not align with the RFQ’s selection criteria.
Bid Protest Analysis
In reviewing Red River’s protest, the CG addressed each aspect individually – Technical Evaluation, Clarifications, and Price Evaluation.
Government Contracting Technical Evaluation
The CG reviewed the DHS technical evaluation of bids for evidence of unequal treatment. The Comptroller General first underlined that the DHS must conduct evaluations in a “reasonable” manner, adhering consistently to the specific requirements of the RFQ. So long as the evaluation was reasonable and consistent, the Comptroller General would not overturn the DHS evaluation.
The Comptroller General held that the DHS was reasonable in highlighting significant weaknesses in Red River’s bid. The DHS was also reasonable in considering Red River’s lack of past experience and performance, as compared to other IaaS vendors. The DHS was also reasonable in treating bids differently based on price.
On the whole, the CG determined that the DHS was reasonable and consistent in its technical evaluation and ranking of Red River.
Bid Protest Clarifications
The CG reviewed the DHS decision to send clarification letters to a limited number of bidders, but not to Red River. The CG noted that the RFQ disclaimed the need for discussions or clarifications or negotiations. The DHS imposed no duty on itself to hold such meetings with bidders. Consequently, the DHS was not required to send a clarification letter to Red River.
Bid Protest Price Evaluation
The CG reviewed the price quotations from both Four Points and InfoReliance for signs of error. Concerning Four Points, the CG determined that there was a material error in the price quotation. Four Points did not adhere to the RFQ requirement for “on-demand pricing,” specifying instead “1–year reserved” pricing. This failure led to an unequal evaluation of price quotations by the DHS.
Switching to InfoReliance, the CG determined that there was not a material error in the discount rate. There was consistency between the discounts in the BPA and InfoReliance pricing.
Government Contracting Legal Conclusion
The CG denied Red River’s protest concerning Technical Evaluation and Clarifications. The CG sustained Red River’s protest concerning Price Evaluation.
Overall, The CG determined that Red River suffered prejudice as a result of the unequal evaluation of price quotations by the DHS. Thus, the CG recommended that the DHS terminate the existing BPA awards and restart the evaluation process. In so doing, the DHS should adhere to the specific requirements of the RFQ.
Additionally, the CG ordered reimbursement of Red River’s reasonable court costs and attorney’s fees.
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