Protest challenging the terms of a solicitation is granted in part and denied in part. The solicitation contemplated a tradeoff methodology in which proposals would not be ranked and evaluated against each other. Rather, the agency would pair proposals and then evaluate them against other pairs. GAO found that methodology unreasonable because it did not make award based on a proposal’s own merits. Instead, award would be based on how well proposals complemented some other unknown proposal with unknown attributes. Although GAO sustained the protest on this ground, it denied the protest on other grounds, finding that the solicitation did not unduly restrict competition and did not set forth an ambiguous price evaluation methodology.
The Air Force issued a solicitation for commercial launch services as part of the National Security Space Launch program. The Space Launch program seeks to deliver national security space satellites into orbit, to provide intelligence, communications, navigation, and weather imaging capabilities. The solicitation contemplated the award of two fixed-price requirements contracts.
A prospective offeror, Blue Origin Florida, LLC, filed a protest, objecting to various provisions of the solicitation. First, Blue Origin challenged the solicitation’ source selection methodology. Instead of ranking proposals and then making a tradeoff determination based on the benefits of each individual proposal, the solicitation contemplated a “when combined” tradeoff. Under this methodology, the Air Force planned to perform a tradeoff by pairing proposals and then comparing one pair to other pairs. Thus, for example, if the Air Force received proposals for offerors A, B, C, and D, it would compare each possible pairing—AB, AC, AD, BC, BD, CD—to other pairings. Once the Air Force determined which pair offered the best value, the offeror that provided the overall best value would receive the first requirements contract, which covered 60% of the requirements. The other awardee would receive the second contract.
Blue Origin alleged that this best value methodology was flawed because each proposal would not be evaluated on its own merits against the evaluation criteria. Rather, proposals will be evaluated based on how well the proposal complemented some other unknown proposal with unknown qualities.
GAO agreed with Blue Origin, finding that the solicitation failed to provide an intelligible and common basis for award. The agency expressly anticipated not making award based on the evaluation of individual proposals against the solicitation’s criteria. Indeed, the Air Force’s methodology allowed the agency to effectively deviate from the evaluations criteria.
For instance, the Air Force identified a scenario where the top two highest rated offerors might not receive award because when paired, they might—through, say, sharing a common weakness—not offer the best value. Instead, a pairing of the highest rated proposal and third ranked offeror, could, in combination, offer complementary strengths and thus a better value.
GAO reasoned that in this scenario, the second ranked offeror would not be assessed based on the merits of its proposal against the solicitation criteria or even against other offerors. Rather, the Air Force would be evaluating based on undefined criteria, that is, whether the offeror proposed distinct or complementary attributes when compared to the highest ranked offeror. Short of colluding, offerors have no control over the contents of another offeror’s proposal. Offerors could not intelligently compete when their ability to receive award was not based on the merits of their own proposals.
Blue Origin also contended that the solicitation unduly restricted competition. Blue Origin had been awarded an Other Transactions agreement to develop a launch system prototype for the Air Force. The OTA stated that recipients would have 18 months to finish the prototype. Blue Origin alleged that the time frame contemplated by the launch services solicitation reduced the time to develop the prototype to 12 months. This truncated schedule, Blue Origin contended, limited the competitiveness of offerors who were still developing launch system prototypes.
GAO was unconvinced. While Blue Origin may have been disadvantaged because it was currently working on a prototype, this did not mean the Air Force was restricting competition. The fact that a requirement may be burdensome for a particular firm does not make it objectionable so long as it reflects the agency’s needs. An agency does not need to delay satisfying its needs in order to allow a particular offeror to develop the ability to meet the government’s requirements. Blue Origin did not contend that the Air Force did not need the launch services sought under the solicitation. The truncated development schedule was therefore unobjectionable. Indeed, GAO noted, Blue Origin’s real argument was that it had been denied the benefit of its bargain under its OTA, which was a matter of contract administration that GAO does not consider.
Blue Origin further argued that the Air Force’s decision to acquire five years of requirements restricted competition. By getting five years of requirements at once instead of a more incremental acquisition, Blue Origin posited, the Air Force would stifle competition by limiting the number potential competitors for future requirements.
But GAO found that Blue Origin had improperly based its argument on cases related to sole source contracts. Those cases hold that when firms are developing capability to meet the agency’s requirement, the agency should only procure its immediate needs through sole source contracts. These cases are inapposite where, as here, the agency is procuring its actual requirements and it anticipates receiving proposals from multiple offerors. Blue Origin did not argue that the Air Force lacked five years worth of launch requirements. The company’s mere difference of opinion on how the Air Force should fulfill its requirements was not enough to sustain a protest.
Blue Origin next challenged the solicitation’s price evaluation methodology. It contended that the solicitation was ambiguous because it did not disclose the relative weighting for each mission type that the agency would use to calculate total evaluated price. But GAO reasoned that there is no requirement that a solicitation be drafted in such a way as to eliminate all risk for offerors. Ghe solicitation disclosed adequate information for the offerors to formulate line item pricing. Blue Origin argued that if it knew how the Air Force was weighting missions, it could structure its proposal to be more competitively advantageous. But this was the type of gamesmanship that Air Force wanted to avoid by refusing to disclose the weighting.
Blue Origin also contended that the weighting would distort price differences between proposals and result in a misleading evaluation. GAO found this argument meritless because Blue Origin failed to explain how the evaluation scheme would distort prices.
Finally, Blue Origin argued that the solicitation contained provisions that were inconsistent with commercial practices. The FAR requires that in procurements for commercial items, the government must, where practicable, adhere to customary commercial practice.
Blue Origin alleged that a provision governing grace periods within which the Air Force or the contractor could delay a launch were inconsistent with commercial practice due to discrepancy between periods for the agency and the periods for the contractor. But Blue Origin did not provide an evidentiary support to identify commercial practice concerning grace periods. Consequently, GAO had no basis to object to the solicitation.
Additionally, Blue Origin claimed that a provision that prohibited offerors from using extra space in the launch vehicle for anything other than the agency’s launch missions. GAO found no evidence this provision was inconsistent with commercial practices. And, in any event, it was not a blanket prohibition. The Air Force could, upon request, release excess capacity for use by the contractor.
Blue Origin is represented by Scott E. Pickens, Scott N. Godes, Michael A. Hordell, and Matthew J. Michaels of Barnes & Thornburg LLP. The agency is represented by Alexis J. Bernstein, Heather M. Mandelkehr, Erika L. Whelan Retta, and Jonathan P. Widmann of the U.S. Air Force. GAO attorneys Evan D. Wesser and Edward Goldstein participated in the preparation of the decision.
