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FAR Evaluation Requirements Cause Sustained Protest

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Consider a situation when you submitted a bid that was, admittedly, higher than a competitor’s bid, but you were the most qualified to complete the work. However, the soliciting agency granted the award to your competitor. Can you challenge the award even though your bid was more expensive than your competitor’s?

The successful protest below explains that although an agency has discretion in its bid evaluation process, it must evaluate according to the terms of the request for proposals (RFP). If a protestor experiences competitive prejudice because of an agency’s evaluation, then a post-award protest may be sustained. 

Sabre Systems, Inc. GAO Protest B-420090.3
Decision issued June 1, 2022

THE SOLICITATION

In October 2020, the Navy issued an RFP for services in support of the Navy’s Software Engineering Department and the Naval Air Systems Command program managers. The RFP stated an award would be granted on a best-value tradeoff basis, and the lowest-priced proposal may not be selected if a higher-priced proposal was more beneficial to the government. All proposals were evaluated on three factors (in descending order of importance): (1) technical, (2) past performance, and (3) cost. The RFP stated each offer must include a total compensation plan for professional employees, and the Navy was to evaluate each compensation plan in accordance with Federal Acquisition Regulation (FAR) 52.222-46. 

Sabre Systems, Inc. (Sabre) and American Systems Corporation (American Systems) submitted competing bids, with Sabre’s bid being approximately $21 million higher. In its award decision, the Navy indicated that although Sabre’s proposal offered technical and past performance advantages, those advantages were not significant enough to justify a $21 million price premium. American Systems was awarded the contract.

THE PROTEST

Sabre protested the award with the Government Accountability Office (GAO), raising two arguments. First, the Navy failed to meaningfully evaluate the total compensation plan in accordance with FAR 52.222-46. The Navy argued that when it evaluated the compensation plans, it did so in a manner that gave effect to all provisions of 29 C.F.R. 541, rather than only to the section defining “professional employee.” In doing so, the Navy excluded all employees who met the definitions of “professional employee” and any other labor category.

Additionally, Sabre argued it experienced competitive prejudice. Sabre asserted that when the Navy excluded nearly eighty percent of personnel from its compensation plan analysis, it failed to recognize and analyze the risk present in American Systems’ proposal. Navy countered by stating even if it had done as Sabre suggested, American Systems would have still been selected.

Second, the Navy unreasonably evaluated the proposals under the technical and past performance factors. Sabre contended the Navy unreasonably evaluated Sabre’s technical proposal by failing to recognize multiple additional strengths. Additionally, Sabre contended the Navy unreasonably equalized offerors’ past performance by assessing the same rating to its and American Systems’ proposals despite Sabre’s superior past performance record. Navy countered, stating they had provided credible explanations with detailed reasoning as to why the technical aspects of Sabre’s proposal did not exceed the solicitation’s requirements.

the outcome

The GAO agreed with Sabre’s first argument. To determine whether the Navy’s actions were appropriate, the GAO looked at FAR 52.222-46 as was required by the RFP. Based on the FAR’s language, the GAO determined the Navy could not exclude employees who fell into two or more labor categories; the Navy had to evaluate the compensation plan for all employees who met the definition of professional employees. Because the Navy excluded those employees who fell into two labor categories, in direct contravention of the language set forth in FAR 52.222-46, the GAO sustained this argument in Sabre’s protest.   

Citing a previous case, the GAO ruled that a reasonable possibility of prejudice is a sufficient basis to sustain a protest, and any doubts regarding prejudice would be resolved in favor of a protestor. See Kellogg, Brown & Root Servs., Inc.-Recon., B-309752.8, Dec. 20, 2007, 2008 CPD ¶84 at 5. For the GAO, the Navy’s exclusion of so many employees in its compensation evaluation meant the GAO could not conclude whether the Navy would have awarded the contract to American Systems regardless of this exclusion. Accordingly, this meant Sabre had established competitive prejudice, and GAO sustained the protest. 

With regards to Sabre’s second argument regarding the unreasonably evaluated technical and past performance factors of the proposals, the GAO disagreed. Regarding the technical factor evaluation, the Navy provided credible explanations with detailed reasoning as to why the technical aspects of Sabre’s proposal did not exceed the solicitation’s requirements. Due to these explanations, the GAO determined the Navy had conducted a reasonable evaluation of the technical factors. Regarding the past performance factor evaluation, both Sabre and American Systems were assigned ratings of substantial confidence based on previously completed contracts. Even though Sabre was assigned a slightly higher past performance rating, the rating difference between American Systems and Sabre was not large enough to justify the greater expense. Based on the foregoing, the GAO concluded the Navy’s evaluation of the technical and past performance factors was reasonable, and this portion of Sabre’s protest was denied.

THE TAKEAWAY

Though an agency has significant latitude in evaluating a bid and granting an award, an agency must evaluate in accordance with the terms laid out by the RFP. If a losing contractor can show that the agency went outside the evaluation specifications of the RFP or that it was competitively prejudiced against due to the agency’s actions, a contractor may successfully challenge an award. For contractors, this is an important point; any possibility of prejudice may lead to a successful protest. 

However, Sabre’s second argument on its own was not strong enough to sustain the protest. Contractors should note that when there is minimal difference between assigned ratings, an agency has the discretion to determine whether that rating difference justifies a significant cost premium. 

If you believe an agency has not evaluated your proposal in accordance with the terms in the RFP, contact us at Whitcomb, Selinsky, PC – your trusted partner.

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About the AuthorWhitcomb, Selinsky, PC Staff

Whitcomb, Selinsky, PC is a full service law firm serving clients’ diverse legal needs. Our focus is in helping people in their interactions with federal, state and local governments.

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