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Protest Sustained for Competitive Prejudice

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To win a bid protest, it isn’t enough for a protester to show there was an error in conducting a procurement. The protester must show “competitive prejudice” to have its protest sustained. Competitive prejudice is necessary to show a protester is an “interested party,” and even where the protest is made to the contracting agency, the protester must establish that it is an “interested party” and show “competitive prejudice.”  FAR 33.103(d)(1)(vii).

To prevail in a bid protest, a protester must show a significant, prejudicial error in the procurement process. To establish prejudice, a protester is not required to show that but for the alleged error, the protester would have been awarded the contract. Rather, the protester must show “that there was a substantial chance it would have received the contract award but for that error.” Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999).

In the following case, AT&T claims the Department of Homeland Security failed to evaluate each proposal based on the criteria outlined in the solicitation, creating competitive prejudice.

AT&T Mobility LLC GAO Protest B-420494
Decision issued May 10, 2022

THE SOLICITATION

In March 2021, the Department of Homeland Security (DHS) issued a solicitation seeking proposals for cellular communications services and equipment. The solicitation stated any award would be granted on a best-value tradeoff which considered overall price and three, weighted, non-price factors including: (1) technical (40 percent); (2) transition (40 percent); and (3) corporate experience (20 percent). Contained within the (1) technical factor were 112 core technical requirements that each company had to commit to a meeting. As it evaluated each factor, DHS would assign an adjectival rating of outstanding, satisfactory, or unsatisfactory.

The solicitation yielded two compliant proposals, one from Cellco Partnership d/b/a Verizon Wireless (Verizon) and one from AT&T Mobility LLC (AT&T). Both proposals were deemed technically equivalent and satisfactory. AT&T’s proposal cost was approximately $2M more than Verizon’s and DHS awarded Verizon the contract. In its award decision, DHS’ Source Selection Official (SSO) reportedly considered overall price and four non-price factors, including the three contained within the solicitation but added a separate pass/fail matrix for the core technical requirements. AT&T protested Verizon’s award.

THE PROTEST

In AT&T’s protest, they argued: (1) DHS conducted a pass/fail assessment and not a qualitative assessment of the non-price factors; (2) DHS’ source selection improperly became a lowest-priced, technically acceptable solution rather than a best-value tradeoff procurement; (3) DHS’ price evaluation was inconsistent with the terms of the solicitation.

Non-Price Evaluation 

AT&T argued DHS failed to qualitatively assess AT&T’s proposal and only conducted a pass/fail analysis. Per DHS’ solicitation, the proposals were to be assessed by performing a qualitative assessment under the technical, transition, and corporate experience factors.

When DHS evaluated the technical requirements, DHS utilized a separate pass/fail matrix to determine whether the proposal could meet the agency’s needs. DHS failed to provide any additional commentary or indication that the agency qualitatively assessed the proposals. For AT&T, because there was no commentary and DHS used the pass/fail matrix, the proposal was evaluated in a manner inconsistent with the solicitation. DHS answered that the use of a pass/fail matrix was merely a tool by which the agency evaluated the technical aspects of AT&T’s proposal.

Source Selection Decision

Secondly, AT&T argued DHS did not conduct a best-value tradeoff analysis and simply chose the lowest-priced proposal. DHS acknowledged that, because both proposals were deemed satisfactory, the SSO did not conduct a best-value tradeoff analysis and simply chose the lower-priced proposal. DHS’ record reflects the source selection decision did not include any review or discussion of the perceived benefits of either proposal or of the qualities in the proposals which the evaluators based their assessment of adjectival ratings.

Price Evaluation

In its last argument, AT&T argued the price evaluation was inherently flawed because it was done contrary to the express terms of the solicitation. AT&T asserted a flawed price evaluation contrary to the terms of the solicitation because DHS excluded certain proposal pricing mechanisms in its total price evaluation. DHS argued it did so to keep AT&T competitive given the significant pricing differences between the proposals. AT&T responded that had the terms of the solicitation been adhered to, the cost difference would not have been so extreme.

the outcome

Non-Price Evaluation 

The GAO responded that because the solicitation did not contain a separate pass/fail evaluation, DHS improperly conducted such an evaluation. By assigning a percentage weight to each of the three non-price factors, the solicitation itself suggested DHS would qualitatively assess each proposal. Failing to qualitatively assess the proposals meant the assigned weights of non-price factor importance were meaningless.  

Similarly, in DHS’ evaluation of the transition and corporate experience factors, there was no indication a qualitative assessment was performed, but rather only an acceptable/unacceptable evaluation with no explanatory statements. These factors resulted in GAO sustaining AT&T’s non-price factor protest.

Source Selection Decision

The GAO indicated that when proposals are technically equivalent, the price may properly become the determining factor in making an award decision. However, any finding of equivalency must be made through a qualitative assessment of the proposals and must be reflected in the record.  Once again, there was no indication of a qualitative assessment completed by DHS. Because DHS failed to demonstrate it had qualitatively assessed each proposal, GAO sustained AT&T’s challenge to DHS’ source selection decision.

Price Evaluation

The GAO concluded that if DHS’ improper price evaluation had been the only error reflected in the record, it may have been possible to conclude that AT&T failed to demonstrate how it was competitively prejudiced. However, the errors committed by DHS over the entire proposal evaluation were sufficient for AT&T to establish it experienced prejudice during the price evaluation. GAO sustained AT&T’s price evaluation protest.

The GAO provided DHS with two acceptable solutions. First, DHS could reevaluate both proposals under the terms of the existing solicitation and, after that reevaluation, make the appropriate source selection decision. Second, DHS was permitted to reassess the solicitation requirements and, if necessary, amend the solicitation. Upon amendment, DHS was instructed to permit Verizon and AT&T to submit revised proposals, at which point DHS could conduct new proposal evaluations. GAO further recommended DHS reimburse AT&T the cost of filing and pursuing its protest.

THE TAKEAWAY

Whenever the GAO reviews a protest of an agency’s evaluation, the GAO will review the record to ensure that the agency’s evaluation is consistent with the terms of the solicitation. MetroStar Systems, Inc., B-4 19890, B-419890.2, Sept. 13, 2021, 2021 CPD ¶ 324 at 5. When a dispute exists as to a solicitation’s requirements, the plain language of the solicitation shall be examined, and questions of interpretation will be resolved by reading the whole solicitation in a manner that gives effect to all its provisions. MetroStar Systems, Inc., supra at 11.  

The GAO will not sustain a protest unless the protester demonstrates that, but for the agency’s actions, it would have had a substantial chance of receiving the award. DigiFlight, Inc., B-419590, B-419590.2, May 24, 2021, 2021 CPD ¶ 206 at 8. However, the GAO will resolve doubts regarding prejudice in favor of a protestor because a reasonable possibility of prejudice is a sufficient basis for such a protest. MetroStar Systems, Inc., supra at 10.

DHS committed several errors in its evaluation process, which ultimately caused the GAO to sustain AT&T’s protest. If DHS had followed the evaluation process outlined in its proposal, the outcome might have been in their favor.

If you believe your proposal has been unfairly evaluated, contact us at Whitcomb, Selinsky, PC. 

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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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