Best Value Procurement Not Worth Higher Price – GAO Decision

In a recent GAO bid protest decision, HGS Engineering, Inc.; American Commercial Group, Inc. Challenging the government’s best value procurement decision, GAO agreed with the agency’s source selection decision.

The protestors challenged the agency’s decision that the awardee’s proposal represented the best value to the government.

These bid protest challenges, without anything else, generally fail. Companies bidding on government contracts have to find more to sustain a protest.

These bid protest challenges, without anything else, generally fail. Companies bidding on government contracts have to find more to sustain a protest.

In this case, the litigants argued that the agency improperly converted the best value procurement to one that was lowest priced technically acceptable. The question that the bidders did not entirely overcome was whether the government has to award to a higher priced proposal.

The protestors did not argue that the awardee’s bid was technically unacceptable but simply stated that their higher-priced proposal should have been of better value.

GAO decision: GAO in its decision stated that in a negotiated best value procurement, an agency may properly select a lower-rated, lower-priced proposal where it reasonably concludes that the price premium involved in selecting a higher-rated proposal is not justified in light of the acceptable level of technical competence available at a lower price. Quoting Delaware Res. Group of Oklahoma, LLC, B-408962.3, B-408962.4, Mar. 24, 2014, 2014 CPD ¶ 111 at 12, citing Bella Vista Landscaping, Inc., B-291310, Dec. 16, 2002, 2002 CPD ¶ 217 at 4.  

Is Submitting a Technically Superior Bid Worth it in the best value approach? Many companies may think that it is not worth submitting a higher quality technical proposal in best value approach.

However, the question is whether the government is forced to go to a higher priced bidder. Although the source selection criteria often focus on higher technical proposal scores instead of pricing, the reality is that the agency will almost always win when it reasonably documents its best value trade off.

The protestors, in this case, did not show why the government’s source selection board did not act in accordance with the solicitation requirements. These are more viable arguments in a best value contracting bid protest.

Looking at the solicitation’s evaluation criteria, there is always a question as to whether the government simply looks at the bidders overall pricing.

Paying a higher premium: One may argue that the proposal evaluation scheme focuses on getting technically superior bids given the lower focus on pricing factors. However, in a best value procurement, the government should also show why a superior technical proposal was not worth paying a higher premium.

The bottom line is that although technical superiority plays a large role in best value contracting,  a significantly higher priced proposal falls prey to the agency deciding that the higher rated technical proposal may not be worth the high price charged.

See How We Can Help You in Bid Protest Cases

For help with filing a bid protest in a best value procurement, call our COFC and GAO protest lawyers at 1-866-601-5518 for a FREE INITIAL Consultation.