When the terms of a solicitation run contrary to the regulations, challenging the solicitation in a pre-award protest may provide contractors the chance to shift the tide in their favor before bids are submitted and an award is made. In January 2020, the Government Accountability Office (GAO) sustained a pre-award bid protest brought by Noble Supply & Logistics, Inc. that challenged the terms of a General Services Administration (GSA) solicitation. Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546 (Jan. 16, 2020). Noble Supply argued the RFQ’s price evaluation methodology, as written, failed to provide for an evaluation of which offeror presented the best value and the lowest overall cost alternative, in violation of FAR part 8.
In the RFQ, GSA asked holders of GSA 51V Hardware Superstore Federal Supply Schedule (FSS) contracts to bid on four blanket purchase agreements (BPAs) to provide hardware products and services to four military branches. For its price evaluation factor, the RFQ stated that GSA would evaluate price quotations “to ensure that offered pricing, to include flat rates and tiered volume discounts, is fair and reasonable.” The RFQ then stated that GSA would not evaluate whether the award was the “lowest-priced technically acceptable” (LPTA), nor would it conduct a “best value tradeoff source selection methodology.” Thus, GSA would only evaluate the quotes for price reasonableness to determine whether prices were unreasonably high.
Noble Supply argued that this price methodology was contrary to 41 U.S.C. sections 152, 8.404(d) and 8.405-3(a), which require GSA to award BPAs to the awardee that provides the “best value and results in the lowest overall cost alternative.” GAO agreed, explaining that “consideration of the lowest cost is an imperative when using the FSS” and therefore GSA is required to “reach a determination regarding which FSS vendor meets the agency’s needs at the lowest overall cost.” Noble Supply & Logistics, Inc., B-418141, 2020 WL 289546, at *6 (Jan. 16, 2020).
This does not mean that the GSA must use the LPTA evaluation methodology. Nor does it mean that GSA cannot select a technically-superior, higher-priced offer. But a price reasonableness evaluation, by itself, is not sufficient because it does not inform the evaluating agency whether the offeror’s pricing presents the lowest cost alternative. GSA cannot eliminate consideration of this factor from the required best value analysis. Rather, it must weigh the “value and benefits with a vendor’s approach against its associated cost to the government.” Id. GAO therefore directed GSA to amend the solicitation consistent with the regulations and request revised quotations.
This case demonstrates the importance of taking action early when potential offerors notice issues with a solicitation. If time permits, asking questions and receiving responses from the awarding agency can alleviate concerns. If the agency is not responsive or does not correct the issue, a pre-award protest is appropriate. Many pre-award bid protests are successful as agencies frequently take corrective action in response to a pre-award protest that identifies flaws in the solicitation.