Protest challenging the award of an IT contract is denied. The protester alleged that the magnitude of the price disparity between its proposal and others so great that offerors could not have had a common understanding of the solicitation’s requirements. GAO, however, found that the protester had not identified any specific part of the RFP that was unclear. The protester objected to the evaluation of its technical proposal. But given the price disparity, GAO found that the protester had not been prejudiced by an error in the evaluation. The protester alleged that discussions were misleading because they did not convey the price disparity. GAO opined that an agency is not required to disclose a price disparity in discussions.
The Department of Homeland Security (DHS) issued an RFP to holders of the GSA’s Enterprise Infrastructure Solutions government acquisition contract. The RFP sought a variety of services to modernize DHS’s information technology capabilities.
AT&T Corp. and Verizon Business Network Services, Inc. submitted proposals. DHS awarded the contract to AT&T. Verizon protested. In response to the protest, DHS took corrective action to reevaluate proposals.
Following the reevaluation, DHS again awarded the contract to AT&T. The agency found that AT&T’s proposal was higher-rated than Verizon’s. Moreover, Verizon’s price, $749 million, was more than double AT&T’s $306 million price. Verizon filed a second protest.
Verizon argued that the price difference between itself and AT&T was so significant that the offerors must not have had a common understanding of the solicitation requirements and thus must not have competed on an equal basis.
But GAO opined that Verizon had not identified any specific parts of the RFP that were vague or otherwise prevented offerors from competing on a common basis. Also, while Verizon argued that DHS should have attempted to reconcile offeror’s divergent prices, it was not required to do so by the RFP.
Next, Verizon objected to the evaluation of its transition and modernization approach, contending that DHS had improperly identified elements of its approach that decreased performance confidence. GAO, however, found that Verizon had not been prejudiced by these putative errors. DHS had identified several aspects of AT&T’s proposal that evinced the company’s technical superiority. Verizon only challenged the evaluation of its proposal, not AT&T’s. Thus, even if Verizon were successful in challenging the evaluation of its proposal, AT&T would likely still have a technically superior proposal with a price that was $442 million less than Verizon’s
Verizon alleged that DHS failed to conduct meaningful discussions because the agency did not alert Verizon to the magnitude of the price difference between its offer and AT&T’s. GAO, however, found that DHS had raised a concern about Verizon’s high price. GAO reasoned that the discussions were sufficiently detailed so as to lead Verizon into the area of its proposal that needed revision.
Verizon intimated that discussions with a high-priced offeror are not meaningful unless the agency conveys the magnitude of the price difference. GAO rejected this argument. GAO noted that in the case Verizon relied on for this proposition, GAO had found that discussions were misleading because the agency had known the cause of the offeror’s high price and yet failed to notify the offeror of the cause. No such situation existed in this case.
Lastly, Verizon alleged AT&T was ineligible for award because its underlying GSA contract did not include software defined wide area network services required by the RFP. But GAO found this argument untimely. GAO will not consider arguments that could have previously been raised in a prior protest. Here, in its initial protest, Verizon had similarly argued that AT&T was ineligible because its GSA contract did not include services required by the RFP. Verizon should have known the basis of its software defined network argument when it filed the first protest.
Verizon is represented Jason A. Carey, Kayleigh Scalzo, Peter B. Terenzio III, and Sarah M. Shepson of Covington & Burling, LLP. The intervenor, AT&T, is represented by Jonathan M. Baker, Christian N. Curran, Alexandra L. Barbee-Garrett, and Rina M. Gashaw of Crowell & Moring LLP. The agency is represented by Peter G. Hartman and Brian C. Habib of the Department of Homeland Security. GAO attorneys Louis A. Chiarella, Emily R. O’Hara, and Peter H. Tran participated in the preparation of the decision.
