What is the Best Value Contract Award Procurement Process?

Was the Government Procurement Process for Your Bid Properly Applied? What are Your Options?

Theodore P Watson, Esq.

Federal government agencies tend to use the best value contracting procurement process as the preferred proposal evaluation criteria. The idea is to use taxpayer dollars to buy the best quality and value of services and products possible. The Federal Acquisition Regulation (FAR) does not give a mathematical formula for how to accept, evaluate and award federal contracts.

Instead, procurement law requires that agency actions be reasonable, comply with the stated solicitation requirements and do not violate procurement laws. The final requirement is that the agency document its actions.

• Although the above is generally known to many government contractors, many still fall prey to the government’s evaluation process. Winning a bid protest that challenges the agency’s best value analysis can be daunting. However, taking the right approach can increase your chances of prevailing.

What is Best Value Procurement in Government Contracting?

This concept is usually regulated under FAR 15.  The FAR best value procurement process is used to choose the contractor’s bid that is most advantageous to the agency. What does this really mean?  This is what contractors struggle with when the file bid protests that challenge the source selection process and contracting selection committee members’ contract award decision.

• Government procurement contracts award is a very subjective process.
• Courts allow the agencies great deference when making contract award criteria decisions.

First: The best value award process allows the agency first to compare each proposal to the solicitation requirements and then to each other. The idea is that if the initial proposal does not meet the solicitation requirements, then the offeror’s package should not be further considered for award.

Second: The best value analysis then allows the contracting agency to compare proposals to each other. Each proposal evaluation includes a comparison of price and non-price factors as stated in the solicitation. 

• Per the best value definition, the agency looks at the strengths and weaknesses of each proposal to make a preliminary determination of what companies can reach the competitive range or final pack.

Third: After the agency compares proposals to each other, then a best-value trade-off analysis takes place.

What is Best Value Trade Off Analysis

With government procurement contracts in the evaluation and award phases, the best value trade off process means just what it says. When comparing the strengths and weaknesses of each proposal it all boils down the which company ultimately offers the best value to the government. 

• A best value contracting method means that the government gets the best bang for the buck
• The government best value analysis and determinations should not be conclusory and must also documented in the file
• If the government determines that a higher-priced company offers the best value it should seriously document its rationale or run the risk of a sustained bid protest.
  

In a Best Value Award Does the Government Have to Award to the Lowest Priced Company?

The general answer is no. Such an analysis usually is expected in a lowest-priced technically acceptable procurement.  Just as in the commercial sector, the government can use taxpayer dollars and pay a higher amount if the value offered by the prospective awardee is justified. Hopefully, the agency will document any risks associated with the lower priced offeror. 

• When the solicitation expressly states that price will be evaluated at a lower priority that the non- priced factors,  a court will look for the agency’s documentation for awarding to a higher-priced company.
  
• There are actually some advantages to conducting a best value procurement vs low bid procurement.
• Companies that anticipate filing a bid protest must also realize that the government’s decision to award to a company at a higher price will not be generally overturned by a court. They should proceed with caution and do so by raising the right legal arguments.

Read more about OMB guidance on how government contractors perform with COVID-19 problems.

Advantages of Best Value Procurement?

When looking at the advantages of best value procurements, value analysis takes place when one that stands out is the notion that the agency must disclose to bidders how their proposal will be evaluated. Another advantage is that the process allows offers to give very competitive bids and be creative by adding value to the government. One of the other advantages of best value procurement approaches is that the contracting agencies spend taxpayer dollars.  The rules allow the agency-wide latitude when deciding what the best value in a particular proposal offers. Whereas, dozens of years ago, price was the main factor for award. Since then, the rules allow more choice in deciding what is of better value to the government.

• Not all value added in a bid is in the government’s best interest
• It is up to each bidder to show why they are offering over and beyond what the solicitation asks for

Lower Price or Higher Priced Best Value Award?

Many government contractors find it difficult to overcome the legal issues in a bid protest when it comes to best value contracting tradeoff decisions. Courts find that the contracting offices’ source selection officials in negotiated best-value contract procurements are given very broad discretion when making contract price/technical tradeoffs. 

The only thing that GAO or another court would look for is whether the best value award decision was rational and consistent with the solicitation’s stated evaluation criteria. See World Airways, Inc., B-402674, June 25, 2010, 2010 CPD ¶ 284 at 12.

When you bid on a negotiated procurement,  the contracting agency may can very well select a lower-rated, lower-priced proposal where it reasonably concludes  and documents that the higher price premium involved in selecting the other higher-rated proposal is not justified in light of the acceptable level of technical competence available at a lower price. DynCorp Int’l, LLC, B-412451, B-412451.2, Feb. 16, 2016, 2016 CPD ¶ 75 at 22.

• An agency can award to a higher-priced bidder if some rational connection between the submitted proposal and what the agency thinks is well within it best interest.
• As stated, if the government awards to a higher-priced offeror, then the agency must adequately document the reason for its decision.

Agency Best Value Contracting Method and Evaluation Documentation Required When Awarding a Contract

When the agency conducts a best value procurement contract award, the source selection team must document its reasoning. Sometimes, when a best value analysis takes place, agencies just make conclusions and do not adequately document their findings in the process. This can pose a problem for the agency when there is a bid protest.

As a general matter, when an agency fails to document its evaluation in the best value procurement contract award criteria, it bears the risk that its judgments may not be found reasonable. GAO decided this very issue in Southwest Marine, Inc.; American Sys. Eng’g Corp., B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD). See the full decision here.

Best Value Government Contracting Requires Agency to Follow Stated Solicitation Requirements

The FAR and other procurement laws state that the federal government must make it abundantly clear how it intends to evaluate proposals and also state the factors and subfactors with their relative importance in the solicitation. When the government states its factors and subfactors for its best value trade off analysis, it must follow the solicitation requirements to the letter. A common reason why bid protests are sustained in best value government contracting cases is because the protestor articulates where the solicitation says one thing but the government does something else.

• Making summary or conclusive statements will not win a bid protest. Instead, one has to point out in detail where the government failed to follow its own solicitation requirements when making a best value award.

What Can You Do if the Agency Diverts Away from the Solicitation’s Stated Best Value Evaluation and Contract Award Criteria?

The is a tough argument when filing a best value government contracting bid protest. The courts tend to take a more relaxed stance on this issue.  Also, they tend to figure that federal government procuring agencies are in a better position to determine  what they need and the  most feasible way to procure them. GAO and other courts will not question the agency’s best value and trade off decision unless the protestor shows  clear evidence that the contract award decision is unreasonable. See, e.g., Canaveral Maritime, Inc., B-238356.2, July 17, 1990, 90-2 CPD ¶ 41 at 5; New York Wire Co.,B-235821, Sept. 19, 1989, 89-2 CPD ¶ 246 at 1.

• Approach the non-compliance with the stated evaluation process and weight will require specificity. 
• You must articulate to the court any provision in the solicitation and point to where the government diverted away from the requirements.

Courts have found that when the government contracting agency’s best value evaluation methodology that is not specifically identified in the solicitation, as long as the methodology is rational and consistent with the solicitation’s stated evaluation criteria, the decision will be upheld. See, e.g., Mission Essential Personnel, LLC, B-410431.9, B-410431.10,Mar. 18, 2015, 2015 CPD ¶ 109 at 9; Bonner Analytical Testing Co., B-409586.2, Aug. 7, 2014, 2014 CPD ¶ 258 at 4. 

See also FAR 15.404.1 Price Reasonableness Evaluations & Far Fair and Reasonable Price Bid Protests.

Tips When Assessing a Government Contract Best Value Procurement Model

As a general rule, the agency’s analysis takes place by looking at the following when contemplating a best value procurement contract award:

• Quality and benefits of the solution
• Quality of the performance metrics and measurement approach
• Risks associated with the proposed solution
• Associated risks between competing contractors
• Management approach and controls
• Management team (limited number of key personnel)
• Past performance (how well the contractor has performed)
• Past experience (what the contractor has done)

As offerors in government bids, you want to make sure that your technical proposals cover at least the above issues. 

Tip: When an agency selects a higher-priced solution in a best value contract award that has been rated technically superior to a lower-priced one, the award decision must be supported by a rational explanation demonstrating that the higher-rated one is, in fact, superior, and explaining why its technical superiority warrants the additional cost.

Tip: When contractors’ technical quotations received identical adjectival and risk ratings in a best value award, the agency can look beyond the adjectival ratings to consider the significance of the offerors’ differing evaluated technical strengths.

Tip: Adjectival ratings are merely guides for intelligent decision-making in the best value procurement process. Agencies should not solely rely on them to make award decisions.

Tip: In the best value contracting procurement definition, where price is less important than the non-price factors, a government agency must meaningfully evaluate cost or price in making its source selection decision.

Read. LPTA Contracts Evaluations & Lowest Price Technically Acceptable Bid Protests

GAO’s Best Value Trade Off Analysis for Procurement Contract Award Process

Often, government contractors file bid protests to challenge the agency’s best value award decision. The General Accounting Office (GAO) realizes that federal agencies have broad discretion when conducting source selections. However, the procurement process does require a level of reasonableness when making a best value contract award decision. The following are but a few thoughts to consider when filing bid protests.

• A best-value procurement contract award process requires the agency’s subjective analysis
• Unless your proposal contains strengths that go above the basic solicitation requirements, it may not be possible to challenge
• When conducting a best value trade off analysis in a negotiated procurement, there should be some meaningful comparison between proposals
• Many agencies miss this point. Thus leaving them open to challenge
• The best value  contract  award  criteria should not be reduced to a mechanical or mere scoring approach
• There must be rational and reasonable thinking

How Does the Court of Federal Claims And GAO Analyze a Bid Protest Challenging the Agency’s Best Value Proposal Evaluations?

When analyzing a bid protest challenging the agency’s best value proposal evaluations, the Court of Federal Claims (COFC) and the Government Accountability Office (GAO) follow specific procedures and considerations. Here’s an overview of how they typically analyze such bid protests:

1. Jurisdiction: Both the COFC and the GAO have jurisdiction to hear bid protests. The protester must decide which forum to file the protest in, and the choice depends on various factors such as timing, desired outcome, and preferences.

2. Standing and Timeliness: The protester must demonstrate that they are an interested party with a direct economic interest in the procurement and that they filed the protest in a timely manner. Failure to establish standing or meet the protest filing deadline can result in dismissal.

3. Standard of Review: The COFC and the GAO apply different standards of review. The COFC reviews bid protests de novo, meaning they independently review the evidence and make their own determinations. The GAO, on the other hand, uses a more deferential standard and generally reviews agency decisions for reasonableness.

4. Evaluation Criteria: The COFC and the GAO analyze whether the agency’s evaluation criteria were consistent with the solicitation’s terms and applicable laws and regulations. They assess whether the agency followed the stated evaluation factors and whether they evaluated proposals in a reasonable and consistent manner.

5. Evaluation Process: Both the COFC and the GAO scrutinize the agency’s evaluation process to ensure it was fair, impartial, and reasonable. They examine whether the agency adhered to the solicitation’s requirements and whether the evaluators were qualified and properly trained.

6. Documentation and Record: The COFC and the GAO review the evaluation record to determine whether it contains adequate documentation to support the agency’s decisions. They assess whether the record shows a rational basis for the evaluation results and whether the agency adequately justified its award decision.

7. Discretion and Reasonableness: The COFC and the GAO consider the level of discretion afforded to the agency in its evaluation and award decisions. They assess whether the agency’s decisions were within the bounds of reasonableness, even if the COFC or the GAO may have reached a different conclusion.

8. Prejudice: The protester must demonstrate that it suffered prejudice as a result of the agency’s errors or improper evaluation. They must show that, but for the errors, they would have had a substantial chance of receiving the award.

9. Remedy: If the COFC or the GAO sustains the bid protest, they can recommend or order various remedies. These may include reevaluation of proposals, corrective actions by the agency, or even a re-solicitation of the procurement.

It’s important to note that the specific procedures and considerations may vary between the COFC and the GAO, and they may also evolve over time due to legal developments and changes in regulations.

There is no black-and-white or rigid approach the best value contract award process. The agency has broad discretion to evaluate and award federal contracts. Therefore, when you decide to challenge the contract award, you want to be able to articulate how the agency broke the law or acted unreasonably. Read more information about Commonly Used Evaluation Factors in a Best Value Source Selection Protest.

What are Common Mistakes that Government Contractors Make When Challenging the Government’s Best Value Evaluations?

When challenging the government’s best value evaluations, government contractors may make certain mistakes that can weaken their bid protests. Here are some common mistakes to avoid:

1. Insufficient Understanding of Evaluation Criteria: Contractors should thoroughly understand the evaluation criteria outlined in the solicitation. Failing to comprehend the criteria or not addressing them adequately in their proposal can weaken their protest. It’s essential to align proposals with the stated evaluation factors.

2. Lack of Documentation: Contractors must maintain detailed records and documentation to support their protest claims. If the protest lacks sufficient evidence or fails to substantiate allegations, it becomes challenging to prove that the evaluation was flawed. Contractors should retain all relevant documents and correspondence throughout the procurement process.

3. Failure to Raise Timely Protest Grounds: Contractors must identify and raise protest grounds in a timely manner. If they fail to raise certain issues during the initial protest or within specific deadlines, they may be barred from raising them later. It’s crucial to thoroughly review the solicitation and evaluation documents to identify potential protest grounds and raise them promptly.

4. Insufficient Pre-Award Communication: Contractors should actively engage in pre-award communication with the contracting officer and seek clarification on any ambiguities or concerns. Failing to address potential issues before the award can weaken the protest argument. Clear communication can help resolve misunderstandings and prevent problems during the evaluation process.

5. Lack of Pre-Award Protest: If contractors have concerns about the solicitation or evaluation process, they should consider filing a pre-award protest before the contract is awarded. Waiting until after the award limits the available remedies and can make it more challenging to reverse the agency’s decision.

6. Raising Unsubstantiated or Unsupported Claims: Contractors should focus on substantive issues and raise legitimate protest grounds supported by evidence. Frivolous or unsubstantiated claims can harm their credibility and may result in their protest being dismissed. It’s important to conduct a thorough review of the evaluation and identify specific flaws.

7. Failure to Demonstrate Prejudice: Contractors must demonstrate that the errors or flaws in the evaluation process affected their competitive standing and resulted in prejudice. Simply identifying evaluation errors may not be sufficient; they must show how these errors deprived them of a substantial chance of receiving the award.

8. Inadequate Legal and Procedural Knowledge: Government procurement rules and regulations can be complex. Contractors should have a good understanding of the applicable legal and procedural requirements governing bid protests. Lack of knowledge about protest procedures or failing to engage experienced legal counsel can hinder their ability to present a strong case.

To maximize the chances of a successful bid protest, contractors should carefully review the solicitation, maintain thorough documentation, raise timely and substantiated grounds, and seek appropriate legal advice when necessary.

Can Your Company Withstand a Bid Protest Challenging the Agency’s Best Value Contracting Process?

For help with filing a bid protest, government procurement law, or assistance with agency evaluation errors in the FAR best value contracting and procurement method, call Watson’s bid protest lawyers  and law firms at 1-866-601-5518.