Protest challenging the agency’s price reasonableness evaluation is sustained, where the agency concluded the awardee’s price was fair and reasonable based solely on the number of offers received, but did not evaluate offerors’ final prices for reasonableness. GAO also sustained a challenge to the assessment of a strength to the awardee’s proposal, finding that the awardee’s proposal to credit the agency when it failed to provide staff was not related to the awardee’s ability to recruit and retain a relevant workforce. GAO also found the agency evaluated proposals unequally when it failed to assess a strength to the protester’s proposal, but assessed a strength in the awardee’s proposal for similar aspects.
Cognosante MVH LLC challenged the Department of Veterans Affairs award of an IT services contract to Booz Allen Hamilton, arguing that the agency failed to evaluate final prices for reasonableness, improperly awarded BAH a strength under the technical factor, evaluated offerors’ technical proposals1 disparately, and failed to evaluate the fixed-price portion of BAH’s proposal for technical risk.
First, the protester argued VA failed to ensure that BAH’s price was fair and reasonable, because its price reasonableness evaluation failed to compare offerors’ prices with one another.
In response, the agency noted that the FAR generally allows for adequate price competition to establish a fair and reasonable price. VA also argued that it compared offerors’ prices to one another, as evidenced by its discussion notice to BAH regarding its high initial price. The agency argued that this comparison of interim prices satisfied the FAR requirement for a “comparison of proposed prices.” However, GAO disagreed with the agency. Even if VA compared initial prices, this would not constitute a comparison of offerors’ final prices.
Next VA explained that it compared BAH’s underlying proposed RTEP rates to BAH’s basic rates under the underlying IDIQ contract and that this was an adequate comparison. However, GAO found the evaluation consisted of the agency confirming that BAH’s proposed pricing contained no mathematical errors. According to GAO, that verification contained no conclusion regarding whether BAH’s price was fair and reasonable.
GAO explained that the presence of competition by itself does not render every price reasonable. Though the agency received seven proposals—six of which were deemed technically acceptable—GAO found the agency unreasonably relied on the mere presence of competition without performing any assessment or comparison of final proposal prices. Because the agency relied on FAR § 15.404-1(b)(2)(i) to support its conclusion, but did not compare offerors’ prices to one another or make any findings about why BAH’s highest price should be viewed as reasonable, GAO found the evaluation unreasonable and sustained the protest on this basis. While the awardee’s price may be fair and reasonable, the mere fact that it was submitted amid competition does not make it so.
Next, Cognosante challenged VA’s award of a strength to BAH for its proposal to offer the agency a credit when BAH fails to propose qualified candidates in a timely manner. The protester argued this strength had no relation to the solicitation’s evaluation criteria. The RFP stated that offerors would be evaluated based on their ability to recruit and retain the necessary workforce. VA awarded BAH a strength, finding that the proposed credit mitigated the risk of staffing delays.
However, GAO disagreed, finding this aspect of BAH’s proposal did not demonstrate how BAH would attract, recruit, and retain its workforce. GAO found agency unreasonably concluded that the proposed credit would guarantee staffing resources, because it did not guarantee that resources would be available or improve personnel recruiting or retention by, for example, offering a signing bonus. GAO found the credit did not affect any factor that would relate to BAH’s ability to attract or retain qualified personnel, and sustained these grounds of protest.
Next, the protester argued that various aspects of the offerors’ proposals were evaluated unequally, generally arguing that its proposal warranted additional strengths. GAO found that VA awarded BAH’s proposal strengths related to general oversight and monitoring functions, and noted that these strengths were assessed for relatively minor enhancements. While the agency argued that the protester’s proposal lacked sufficient detail to warrant the assessment of strengths in this area, GAO found that BAH’s proposal was awarded strengths on less detail than provided by the protester. Further, in the context of the strengths assessed to BAH’s proposal, VA’s decision not to award Cognosante a similar strength supported the protester’s contention that VA established a different and higher standard of review to evaluate Cognosante’s proposal, which amounted to an unequal evaluation. As a result, GAO sustained these grounds of protest.
However, GAO denied several other allegations of disparate treatment, finding that the differences in the evaluations arose from differences in the proposals’ content.
Finally, Cognosante argued that VA failed to meaningfully evaluate whether BAH’s proposed staffing level of effort for the fixed-price portion of the contract was technically acceptable. In addition, after equating level of effort in hours with proposed price, the protester argued that BAH underpriced the fixed-priced portion of its proposal. In response, the agency disagreed that the solicitation required an evaluation of an offeror’s level of effort for the fixed-price portion of the RTEP. GAO found the RFP did not require the agency to conduct a price realism evaluation and therefore the agency was not obligated to do so.
Cognosante LLC is represented by C. Joël Van Over, Alexander Ginsberg, Meghan Doherty, and Kevin Massoudi of Pillsbury Winthrop Shaw Pittman LLP. Booz Allen Hamilton is represented by Marcia G. Madsen, David F. Dowd, Roger V. Abbott, and Luke Levasseur of Mayer Brown LLP. The government is represented by Frank V. DiNicola, Tara T. Nash, and Desiree A. DiCorcia, Department of Veterans Affairs. GAO attorneys Stephanie B. Magnell and Amy B. Pereira participated in the preparation of the decision.