Protest challenging agency’s price, technical, and past performance evaluations is sustained in part in denied part. The agency had found that the awardee had proposed unbalanced prices. Nevertheless, the agency concluded, in one sentence, that the imbalance did not result in performance risk. The court found the agency’s cursory analysis of unbalanced pricing irrational and sustained the protest on those grounds. The court, however, found that the challenges to the technical and past performance evaluations were not compelling and thus denied the protest as to those arguments.
The Defense Health Agency (DHA) issued a solicitation to holders of GSA Schedule 70 contract, seeking information technology services. Three offerors, including The Green Technology Group, LLC (TGTG) and LinTech Global, Inc., submitted proposals. DHA awarded the contract to LinTech. TGTG filed a protest with GAO, challenging the award. GAO denied the protest. TGTG then filed a protest with the COFC.
While the COFC protest was pending, DHA decided to take corrective to reevaluate proposals. But following the reevaluation, DHA re-awarded the contract to LinTech, finding that it had the highest rated technical proposal and the lowest price. TGTG reasserted its protest.
TGTG argued that DHA’s price evaluation was flawed because the agency ignored the risk inherent in LinTech’s unbalanced pricing. The court agreed. Whenever an agency determines that an offeror’s pricing is imbalanced, the agency must, under the FAR, perform a two part analysis to determine whether the imbalance is material. The agency must consider (1) whether the award will result in the government paying unreasonably high prices, and (2) whether the imbalance presents a risk of unsuccessful performance.
Here, DHA determined that six of the CLINs in LinTech’s quote were overstated while five were understated. As to the first prong of the unbalanced pricing analysis, DHA found that the imbalance in LinTech’s pricing did not give rise to a risk the government was pay unreasonably high prices. The court found this conclusion acceptable, reasoning that because the solicitation was for a fixed-price contract, high prices were not really an issue.
DHA’s analysis under the second prong, however, was problematic. The second prong requires the agency to determine whether the imbalance creates performance. DHA had found, in one sentence, that the imbalance did not create performance risk because LinTech had simply distributed its proposed labor differently from other offerors. But the court reasoned that the solicitation did not provide, and DHA did not find, that labor hours were fungible between CLINs. Thus, simply focusing on total labor hours did not support DHA’s conclusion that there was no performance risk. The court found that the type of labor variances in LinTech’s proposal could represent performance risk when the overall labor hours from all three offerors were compared.
TGTG also challenged DHA’s technical evaluation, arguing that the agency upgraded features of LinTech’s proposal that should have been significant weaknesses to weaknesses and improperly assessing a strength to the proposal. The court, however, dismissed these arguments, finding that DHA had adequately documented its conclusions at to LinTech’s proposal. Given the deferential standard of review owed to evaluations, the court would not second-guess DHA’s judgment.
TGTG further alleged that the technical evaluation was flawed because DHA disparately evaluated proposals. The court found that TGTG raised legitimate concerns about disparate evaluation. But even if those concerns had merit, TGTG was unable to demonstrate prejudice. If DHA had assigned TGTG the same strengths and weaknesses as LinTech for their comparable proposal features, LinTech would still have received more strengths and fewer weaknesses than TGTG, so its technical rating would have still been higher than TGTG’s.
Next, TGTG challenged the past performance evaluation, contending that LinTech should have received a lower past performance due to its failure to submit a past performance questionnaire for one of its references. But the court found that the agency did not consider that missing reference in the past performance analysis. While the agency did rate that reference as relevant, the solicitation allowed DHA to consider the relevancy of a reference without a past performance questionnaire.
Having found an error with the price analysis, the court found that TGTG had been prejudiced by the error. If LinTech’s unbalance price posed a risk of non-performance, then the solicitation required DHA to exclude LinTech from the competition. As the highest-rated remaining offerors, TGTG was likely to receive the award.
The court concluded that the award to LinTech should be enjoined.
TGTG is represented by Todd R. Overman, Richard W. Arnholt, and Sylvia Yi of Bass, Berry & Sims. The intervenor, LinTech, is represented by Michelle F. Kantor and James J. Boutrous of McDonald Hopkins LLC. The government is represented by Robert R. Kiepura of the U.S. Department of Justice and Kevin E. Bolin of the Defense Health Agency.
