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.
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.
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.
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
There is no black and white or rigid approach the 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.
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.