The federal government has decided that using the FAR best value procurement system when evaluating requests for proposals maximizes the level of performance after award. Instead of focusing on solely the pricing aspect of a proposal, the government can use a combination of source selection process tools and approaches. The goal of federal best value contracts is to get the best bang for the buck when soliciting high-risk projects. When filing bid protests either at the GAO or Court of Federal Claims, you should be aware of how the evaluation process actually works and not how you think it should work.
FAR Part 15 governs negotiated procurements and is usually the bible for how federal contracting agencies conduct best value procurement evaluations especially in small business procurements. Approaching bid protest litigation means understanding that the source selection panel has great latitude and discretion in how it chooses a contractor for award.
There is not a mechanical approach to evaluating best value proposals. However, the source selection board must have a reasoned and document file to justify its technically acceptable source selection decision. This is the heart and many bid protest cases.
FAR Part 15 – What is a FAR Best Value Procurement
The federal government can use a variety of approaches to conduct best value procurement evaluations. Depending on the type of acquisition, knowing what is best value procurement also means that the price may be more or less important than non-price factors.
Under FAR Part 15 for example, in acquisitions where the government’s requirement is clearly definable, and the risk of unsuccessful contract performance is very minimal, cost or price factors can be more important during the source selection. For high-level and riskier federal projects, past performance may play a more important role than price. Companies should also understand the difference in FAR Part 15 vs. FAR Part 12. This creates some understanding of how the sole source process undermines the government getting the best value.
The federal government usually includes relative weights of evaluation factors, as opposed to providing for selection of the lowest-priced technically acceptable proposal. The level of evaluating FAR best value contracts allows the agency to look at other factors besides mere technical acceptability. Proposals will be evaluated to distinguish their relative quality by considering the degrees to which they exceed the minimum solicitation requirements or will better satisfy the agency’s needs. Israel Aircraft Indus., Ltd., MATA Helicopters Div., B-274389 et al., Dec. 6, 1996, 97-1 CPD para. 41 at 5-6.
FAR 15.101 — Best Value Continuum Language.
An agency can obtain best value in negotiated acquisitions by using any one or a combination of source selection approaches. In different types of acquisitions, the relative importance of cost or price may vary. For example, in acquisitions where the requirement is clearly definable and the risk of unsuccessful contract performance is minimal, cost or price may play a dominant role in source selection. The less definitive the requirement, the more development work required, or the greater the performance risk, the more technical or past performance considerations may play a dominant role in source selection.
(a) A tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror.
(b) When using a tradeoff process, the following apply:
(1) All evaluation factors and significant subfactors that will affect contract award and their relative importance shall be clearly stated in the solicitation; and
(2) The solicitation shall state whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price.
(c) This process permits tradeoffs among cost or price and non-cost factors and allows the Government to accept other than the lowest priced proposal. The perceived benefits of the higher priced proposal shall merit the additional cost, and the rationale for tradeoffs must be documented in the file in accordance with FAR 15.406.
FAR Best Value Contracts – Approach and Trade off Process
During the evaluation of best value contracts, the contracting agency will use the FAR best value trade off when it is in the best interest of the government to award a federal contract to a bidder that has a higher price. Trade off vs opportunity cost in government contracting is substantially different that in the commercial sector. See information on FAR Part 13.
When using the trade off process and best value approach, the government must expressly state in the solicitation all agency proposal evaluation factors and significant subfactors that will impact the contract award and their relative importance.
Also, the government’s solicitation shall include whether all of the proposal evaluation factors other than cost or price, when combined, are treated as significantly more important than, approximately equal to, or significantly less important than cost or price. See FAR Part 15.
The best value trade off process in the federal government best value contracting system is designed to allow the agency to award to an offeror whose price is not the lowest. The agency, however, must justify its decisions in writing. This means that the contracting officer file must show some level of explanation for the source selection decision. During a bid protest, courts will not second-guess the government unless the source selection record is unreasonable or violates procurement law.
- If government selection officials reasonably look at proposals as being essentially equal technically, price can be a determining factor in making the selection and award, notwithstanding that the evaluation criteria assigned price less importance than technical factors.
FAR Best Value Procurement Solicitation contents: When the contracting agency establishes its evaluation criteria, it must include the basis upon which all proposals will be evaluated. See Lloyd H. Kessler, Inc., B-284693, May 24, 2000, 2000 CPD para. 96 at 3.
Government contracting agencies should not tell the public that they will use one evaluation scheme and then use a different one without first informing offerors of the changed plan and then providing them the opportunity to submit proposals on that basis. See Kumasi Ltd./Kukawa Ltd. et al., B-247975.7 et al., May 3, 1993, 93-1 CPD para. 352 at 7.
Technically superior proposals will usually win under the FAR best value approach. Most government solicitations will state that it will award on a “best value” or “most advantageous to the government” basis. Under these types of procurement, the source selection authority must perform price/technical tradeoffs.
Higher priced awards: The government will decide whether one proposal’s technical superiority is worth the higher price. However, the source selection authority must still be rational and consistent with the solicitation’s stated evaluation criteria. Chenega Technical Prods., LLC, B-295451.5, June 22, 2005, 2005 CPD para. 123 at 8.
Under FAR part 15.101-1(C) and FAR 15.308, the contracting agency must document its price and technical trade off for government contract awards. The best value approach method requires the agency to document its rationale for any tradeoffs made, including the benefits associated with additional costs. See also information about FAR sole source contracts.
There are a variety of legal issues that can arise when challenging the agency’s FAR best value procurement award decision. For additional concerns or legal representation in a bid protest, call Watson & Associates, LLC at 1-866-601-5518.