FAR Best Value Trade Off Analysis Definition

Some contractors find it confusing when protesting the government’s best value trade off analysis. Without having a basic understanding of the agency’s discretion compared to what the procurement regulations require, your bid protest could be at risk. Get a second bite at the apple!

• Without a proper understanding, contractors quickly find themselves in a vulnerable position during litigation.

In federal government contracting, the best value analysis is a method used by the Source Selection Board to find the bidder with the most advantageous proposal to the government. The contracting agency typically looks at both price and non-price factors to come up with the final best value offeror.

 In a GAO bid protest, best value trade off evaluation decisions become problematic when a Contracting Agency decides to award the contract to another company for “unexplained reasons.” The Agency must not only follow the solicitation’s best value evaluation criteria, but it must also compare proposals at the trade off stage to assess the overall value.

In negotiated procurements under FAR 15.1 and 15.3, the best value trade off definition and meaning require the agency to adequately document the rationale for its award decision. This issue often arises in a bid protest.

Best Value Definition

The FAR does not provide us with the best value definition per se. However, An agency can obtain the best value in negotiated procurements by placing certain values on technical approaches and price. There are a variety of contractor source selection approaches where the agency defines how it meets its best value decision.

Trade Off Definition – What is a Trade Off Analysis?

In federal government contracting, meeting the trade off analysis definition goes directly to what the contracting agency believes that it really is willing to settle for.  Government agencies use the trade off requirements of source selection if it can get the best bang for their buck.

Therefore, source selection boards may want to trade a lower rate for less than optimal technical proposals. Agencies often look at competing proposals when deciding the pros and cons of awarding to one company versus another.

What Does the Agency Look For In Its Best Value Source Selection Process and Trade off trade-off Evaluation Criteria Analysis?

When evaluating proposals under the RFP best value trade-off  evaluation criteria analysis, the government looks for advantages in your bid that could justify the award. Often, the evaluation team looks for strengths that outweigh weaknesses. 

In a negotiated bid, there are factors and subfactors with varying weights assigned. Sometimes the Agency will assign an adjectival rating or numerical score to each factor. Bidders should carefully read the RFP requirements and evaluation information before writing a proposal.

In a negotiated bid, there are factors and subfactors with varying weights assigned. Sometimes the Agency will assign an adjectival rating or numerical score to each factor. Bidders should carefully read the RFP requirements for the trade-off definition that the agency gives. Always read the source selection evaluation information before writing a proposal.

• The solicitation tells you the evaluated weight of each factor or subfactor.
• The agency does not have to show you every aspect of its Source Selection Plan.
• The government must only give you enough information to allow you to bid even-handedly.

In the final proposal evaluation process, the agency looks at your bid for certain indicators for best value. It will then implement its trade off theory. Indicators may include:

• The quality of your proposed technical solution and the benefits associated with it.
• A measure of your technical approach to gauge risks in performance.
• Risks associated with your proposal.
• Management approach and controls.
• Your management team and key personnel.
• Past performance evaluations.
• Proposed pricing.

This is not an exhaustive list. However, for purposes of filing a bid protest that challenges the agency’s best value trade off approach as stated in the solicitation, protestors must understand that the agency has broad discretion on what it believes to be the best value.

• Agencies should not just use mechanical scoring systems to determine the best value contracting award decision.

Government’s Obligation to Justify its RFP Best Value Trade off Requirements Analysis and Source Selection Decision

When litigating a bid protest based on the government’s best value trade off theory, the agency always has to justify its award decision, comply with the solicitation, and it cannot violate procurement law. The award decision must be adequately documented in the source selection record. 

In bid protest litigation, courts will always look to see if the agency’s source selection authority substantively and meaningfully considered the evaluated differences between your proposal and the intervenor’s (awardee’s) proposal. A good example occurs when there is a dispute about past performance records.

How does GAO review the agency’s compliance with procurement law? The GAO looks at documents in the source selection record. The Agency must have some rational basis for its best value trade off  approach. However, it often lacks the legal obligation to find the precise differences between the two competing proposals; this could lead to a successful protest.

Agency must have adequate documentation. In a bid protest, the Contracting Agency’s source selection authority must document the basis for concluding that the differences between competing proposals were not significant, and that choice of the protester’s higher-priced proposal was not justified.

The contracting agency cannot just make conclusions in the record when it comes to its best value trade off evaluation analysis. 

FAR part 16 requires that agencies document the basis for award and the rationale for any trade offs among cost or price and non-cost considerations in making the award decision.

• If a contracting agency fails to document its best value source selection decision for its award adequately, it bears the risk that GAO may be unable to decide whether the decision was proper. This can lead to winning the protest.

Best Value Source Selection Process and Award Criteria

You will often see that an RFP may state that the technical/management approach factor is more important than the past performance factor, and when combined, the non-cost factors are much more significant than the cost factor. This is supposed to alert you, the bidder, on how any best value trade off source selection process will guide the agency to an award decision.

• As a standard practice, past performance is based on past performance references, recency, complexity, size, and scope, or a combination of all.
• After making a competitive range determination, to validate its best value evaluation analysis, the Agency should compare each proposal’s strengths and weaknesses
• Assess the risk variables in technical and non-priced factors
• The Agency can then decide whether your price aligns with the technical evaluation.

GAO Best Value Trade Off Analysis

When it comes to challenging best value contracting in a bid protest, a common approach to this type of protest would be to challenge the agency’s evaluation of the offerors’ proposals and the agency’s best value trade off analysis and decision.  

• If the agency inadequately documents the decision, then there could be a winning chance in the GAO bid protest.

 Agency Best Value Trade Off Decisions are Not Conclusive

GAO, in its bid protest decisions, has ruled that evaluation ratings are merely guides for intelligent decision-making in the procurement process; proposal evaluation and consideration of their relative merit should be based upon a qualitative assessment of proposals consistent with the solicitation’s evaluation scheme. Highmark Medicare Servs., Inc., B-401062.5, Oct. 29, 2010, 2010 CPD ¶ 285 at 19.

The agency has broad discretion in making the best value and source selection evaluation analysis decisions between price and non-price factors, an award decision for a lower-rated, lower-priced proposal must document any significant advantages of the higher-price, higher-rated proposal, and explain why they are not worth the price premium.

• GAO does not make business judgment decisions for the Agency.
• It only looks to see if the decision could make reasonable sense (this is a low threshold).

Protective Order: However, and paramount, is that unless you have a bid protest attorney that is admitted under a protective order, your case will be weak simply because bid protest attorneys are the only ones admitted to the protective order.

• Without admission to the protective order, you cannot support your initial allegations since you cannot see the evidence in the Agency’s selection documents.

It is also important to understand that GAO does not reevaluate proposals but instead only examines the record to decide whether the source selection decision about best value trade off analysis is reasonable and consistent with the solicitation’s evaluation criteria and applicable procurement laws and regulations.

See more information about evaluating best value contract awards.

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If you are contemplating filing a bid protest based upon the Agency’s best value tradeoff analysis, be mindful that the agency has wide discretion on what is valuable to the agency. Our lawyers look for material mistakes made by the agency. Call a Bid Protest Lawyer at 1-866-601-5518 for a free consultation.