Bid Protests – How An Agency Evaluates Proposals

664179_Page_01-791x1024jpgKey to a contractor’s understanding of the bid protest process is understanding how an agency evaluates proposals in a sealed bid procurement, and what rights a contractor has to protest the agency’s evaluation. Take a look at the recent GAO decision in Gaver Technologies, Inc. www.gao.gov/assets/670/664179.pdf, and read both the facts and the legal analysis carefully. This is a rare decision where the GAO agreed that the Agency was unreasonable in its evaluation of the proposals.

The stock phrase in any GAO decision on a contractor’s claim that the selection was somehow “unfair” is a variation of “The GAO will not substitute its own judgment for the Agency’s,” and “Although the contractor may not agree with the Agency’s technical evaluation, mere disagreement with that evaluation is not a valid grounds for protest.” What that means is that just because a contractor may think the Agency’s decision is unfair, wrong, short-sighted, or any other thing calls into question the Agency’s judgment or skill in selecting vendors, doesn’t mean the contractor has a valid protest grounds. For the contractor to have valid grounds for a protest, the Agency’s decision must be so unfair, so wrong, so short-sighted, or so whatever that is is “unreasonable.” Or, alternatively, and this is more likely, either (1) the Agency’s decision must be inconsistent with the “stated evaluation factors” – meaning that the Agency wrote in the RFP that it would evaluate based on a set of criteria and then evaluated based on an entirely different set of criteria, or (2) The Agency didn’t document the basis for its selection.

Turning to the Gaver Technologies decision by way of example: The solicitation was a NASA solicitation for professional, administrative, computational, and engineering (PACE) services. As part of the evaluation, the RFP stated that offerors would be evaluated based on their “Proposed innovative processes…the Offeror suggests for accomplishing…the tasks required in the SOW.”

To evaluate the proposals, NASA constituted a Source Evaluation Board (SEB) which reviewed all of the proposals and produced a written report and recommendation to a Source Selection Authority (SSA), the person tasked with making the decision on which contractor to award a contract to. This is the standard means by which an Agency evaluates proposals. There are variations on who constitutes the SEB, and there may be sub-boards, or multiple boards evaluating separate parts of the proposal (price, technical, management), but the general set-up of a group of people evaluating and then making a written recommendation with supporting documentation to a single person who makes the decision, is common.

The SEB evaluated Gaver positively on its innovative approaches, and pointed out specifically five innovations it felt were particularly strong. When that evaluation went to the SSA, she agreed that the innovations were strengths, but weighed against those strengths her concerns that the cost of implementing those innovations was not accounted for in the proposal, meaning that either the innovations would not be implemented or that the innovations would be implemented, but would cost the Agency money. Or, in my opinion, she thought the innovations without cost being factored in were either proposal fluff – promise the moon and then under-deliver once you have the contract – or were a “bait and switch” – promise the moon but under-price it, then go in and ask for a contract mod once you’ve got the contract.

Although the SSA discounted all of Gaver’s proposed innovations, she only specifically addressed a few of those innovations as examples. The GAO, unusually, granted a hearing for the purpose of determining in more detail what the SSA’s funding concerns were. At the hearing, the SSA identified a different basis for her decision that the innovations were not strengths, which was that the proposed innovations were not described in sufficient detail for a proper evaluation. At that same hearing, the SEB chair, in describing the SEB’s report to the SSA, stated that contrary to the SSA’s claim, the SEB’s evaluation of Gaver’s proposal had covered the costs associated with its proposed innovations, and had determined that (1) there would be no additional cost associated with implementing the innovations; and (2) That Gaver had stated that there would be no additional cost associated with implementing the innovations.

Given the SEB’s testimony and the written record that contradicted the SSA’s claim that there was no discussion or analysis of the cost of innovations, and the SSA’s own changing testimony that her real issue with Gaver’s proposed innovations was that they weren’t sufficiently detailed, the GAO determined that the SSA’s decision was unreasonable and was contrary to the stated RFP criteria which required a offeror be rewarded for offering innovative technical approaches, and therefore granted the protest.

It seems likely that the SSA had legitimate concerns about Gaver’s proposal of innovative approaches. Whether she thought they were “pie in the sky” type items that would never be implemented, and would detract from the real work NASA was hiring Gaver to do, or whether she thought they were good ideas but would cost more money, and that cost wasn’t revealed in the proposal, isn’t clear.

So with all that detailed discussion, what’s the take away? Two things – (1) A contractor is not likely to get a GAO decision on a protest overturning a technical evaluation. This decision is an exception that “proves the rule” in that the SSA’s decision was (a) contrary to the SEB recommendation; (b) unusually poorly documented; and (c) contradicted by the SSA’s own testimony. Most of the time, if a contractor thinks a decision was “unfair,” the contractor is out of luck. The decision has to be so “unfair” that it is unreasonable. (2) SEB recommendations and SSA decision memos are not available to contractors at the outset of a bid protest, so the contractor had to file the protest blind. The contractor may have had a belief that it had more than just an unfairness argument based on other information, or the contractor may have just decided it was worth the outlay to file the protest. Either way, it had to file blind, and it had to have an outside attorney to review the protected, selection sensitive, information.

All in all, a good decision to review for an understanding of the difference between a contractor believing it was evaluated unfairly, and an evaluation actually being deemed unreasonable or against the stated criteria.

If you have bid protest questions, call me or email me.

Chris Shiplett
Randolph Law, PLLC
(p) 703-652-3039
(e) chris.shiplett@randolphlawonline.com