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Friday, January 3, 2014

Behold the best value

I have had a continuing discomfort with the rush to embrace best value, for at least a couple of reasons. Mind you, this is just the opinion of an observer.

Chiefly, "best" is always in the eye of the beholder, as in a beauty contest. It makes an objective review of the decision practically redundant, given the need to almost have to prove fraud to set aside an agency decision on the matter. An in awarding any contract, but particularly large contracts, it's the little things that appeal to one eye and not another that makes it a rich environment for dissatisfaction among participants and observers alike. If every finish is perceived to be a photo finish, suspicion turns on the judges by human nature.

Secondly, as practiced, best value has tended to turn to proven performance as the deciding factor to provide some degree of objectivity to ameliorate the first concern. While that is an necessary factor to be determined, when it becomes the essential factor it leads to an old boys network of routine providers who then become too big to jail. Ultimately, relying on the records of those who have survived early contest bouts tends to become anti-competitive.

But I have detected recently a few signs of new focus under the best value rubric, back towards price as an objectively supportable criteria when others tend to fail. What was becoming overlooked is the relevance of price in determining not just best value but best interest of the government. "Best" value is now becoming to be seen as "in a range of best" with price becoming more critical; the government is once again concerned with fiscal stress.

This takes us back to an earlier concept of lowest price, technically acceptability; what the ABA Model Code world recognizes as "multi-step" competitive bidding. On Guam, that is allowed by code in 5 GCA §5211(h), and more usefully described in regulation 2 GAR §3109(r).

The following GAO protest appeals case, as excerpted and reported below, is representative of what I'm talking about here.

Matter of: M&N Aviation, Inc., B-409048, December 27, 2013
M&N Aviation, Inc. (M&N), of San Juan, Puerto Rico, protests the award of a contract to Tradewind Aviation, LLC, of Oxford, Connecticut, by the Department of Justice, U.S. Marshals Service (USMS), under request for quotations (RFQ) for air charter services in support of the agency’s Justice Prisoner and Alien Transportation System (JPATS). M&N argues that the agency made award based on lowest price, rather than based on best value, as required by the solicitation. M&N asserts that had the agency conducted a proper price/technical tradeoff, it would have received award of the contract, and not Tradewind.

Quotations were to be evaluated based on technical, price and past performance criteria, with a contract to be awarded to the offeror whose quote, conforming to the RFQ, represents the best overall value to the government. When combined, technical and past performance were to be significantly more important than price. However, the RFQ instructed offers that where quotes were considered substantially technically equal, total evaluated price was to be the determining factor for award. Quotes were submitted by several offerors, including one from M&N, the incumbent contractor, and Tradewind.

After an initial evaluation, M&N’s quote was rated good under the technical factor, and satisfactory under the past performance factor. With respect to past performance, M&N provided three references, two of which responded to the past performance questionnaire. Tradewind’s quote was rated acceptable under the technical factor and was not rated under past performance. The record shows that Tradewind’s past performance was not evaluated as the firm did not provide any references.

The agency set a competitive range consisting of M&N and Tradewind. In its discussion letter to Tradewind, USMS identified one weakness and one deficiency. The discussion letter to M&N did not identify any significant weaknesses, deficiencies or adverse past performance; it simply provided M&N the opportunity to revise its price quote. M&N did not submit a revised technical proposal, whereas Tradewind did. A new technical evaluation was conducted of Tradewind’s revised proposal, resulting in an upgrade of its technical rating from acceptable to good. A review of Tradewind’s past performance information resulted in a rating of satisfactory.

In its final proposal submission, M&N revised its total price from $2,278,100.00 to $2,240,700.00. AR, Exh. 9, Award Decision, at 3. Tradewind’s price remained unchanged at $1,945,022.20.

The contracting officer determined that both M&N and Tradewind’s quotes were substantially technically equal. Based on this finding, she determined that award to Tradewind based on its lower-priced quote was in the best interest of the government.

While M&N does not specifically challenge the agency’s evaluation of its proposal, the firm does challenge the agency’s determination that its proposal was technically equal to the proposal submitted by Tradewind. A review of the record does not support M&N’s allegation, that award was made based on “best price and NOT by best value criteria.” The award decision clearly reflects the agency’s consideration of the relative technical merits and offered prices of both proposals. The contracting officer ultimately concluded that the proposals submitted by M&N and Tradewind were substantially technically equal and made award based on Tradewind’s lower price. However, it is clear that the contracting officer did consider relative technical merit in reaching this conclusion. In this regard, the contracting officer’s award decision comports with the stated evaluation criteria.

We also find no reason to question the agency’s evaluation of the offerors’ respective proposals. The evaluation of an offeror’s proposal is a matter within the agency’s discretion. A protester’s mere disagreement with the agency’s judgment in its determination of the relative merit of competing proposals does not establish that the evaluation was unreasonable. In reviewing a protest that challenges an agency’s evaluation of proposals, our Office will not reevaluate the proposals, but will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations.

In its protest, M&N lists various aspects of its proposal, which we infer to be offered as support for M&N’s position that its proposal is technically superior to the proposal of Tradewind. However, the protester did not address in its comments any matters related to its own evaluation, despite being provided with the agency’s evaluation documentation. Consequently, we view any challenge to the evaluation of M&N’s proposal as abandoned by M&N and will not consider it further.

With respect to Tradewind’s proposal, the protester primarily argues that the awardee did not offer aircraft that complied with the Statement of Work's requirement of “provisions for a minimum of 7-11 passenger seating” and should have been disqualified from the competition. M&N argues that the aircraft available to Tradewind are certified by the manufacturers to have a maximum of 9 passenger seats, and that such capacity does not meet the solicitation’s requirements. M&N appears to contend that the solicitation requires vendors to offer aircraft with capacity to seat the maximum of the range established in the solicitation, i.e., 11 passengers.

The RFQ nowhere stated that only an aircraft that could seat 11 passengers would satisfy the capacity requirement; instead, the RFQ identified a range between 7 and 11 passengers as its minimum requirement. While it appears to be M&N’s view that the solicitation requires aircraft that seat a minimum of 11 passengers, the RFQ’s statement of the capacity requirement in terms of a range suggests that seating capacity within that range would be considered. As a result, the agency’s reading of the requirement is consistent with the solicitation, and we have no basis to question its determination that Tradewind’s quote met the requirement.

M&N also argues that the agency treated the offerors disparately in the conduct of discussions, to its prejudice. Specifically, M&N asserts that while the agency informed Tradewind of weaknesses and deficiencies found in its proposal, it failed to inform the protester that one of its three past performance references did not return its past performance questionnaire. Second, M&N argues that while Tradewind was given the opportunity to revise its quote and address identified weaknesses and deficiencies, M&N was only given the opportunity to revise its price.

When an agency engages in discussions with an offeror, the discussions must be meaningful. In order to be meaningful, discussions must be sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision in a manner to materially enhance the offeror’s potential for receiving award. An agency may not, through its questions or silence, lead an offeror into responding in a manner that fails to address the agency’s actual concerns; may not misinform the offeror concerning a problem with its proposal; and may not misinform the offeror about the government’s requirements. While the precise content of discussions is largely a matter of the contracting officer’s judgment, such discussions must, at a minimum, address identified deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.

With respect to M&N’s first allegation, it is not objectionable to evaluate an offeror’s past performance based on fewer than the maximum possible number of references the agency could have received. Here, the RFQ did not specify a minimum required number of past performance references, nor is there any evidence that the agency treated the absence of a response from one of M&N’s three past performance references as adverse information. To the contrary, M&N received the highest past performance rating of satisfactory. As such, we do not believe that the agency was required to inform M&N of the absence of the questionnaire during discussions.

With respect to M&N’s second allegation, there is no evidence that the agency found any deficiencies or significant weaknesses in M&N’s proposal. There is also no evidence that the agency identified any adverse past performance information regarding M&N.

Finally, the record does not reflect that the agency limited the protester’s ability to revise its proposal. Our review of the record leads us to conclude that the agency’s discussions with M&N were meaningful and the firm was not treated unequally vis-a-vis Tradewind.

The protest is denied.

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