Protester Lacks Standing When Several Lower-Priced, Technically Acceptable Offers Stand in Its Way; COFC No. 18-2001C, Eskridge & Associates v. United States and Ansible Government Solutions LLC

Protest challenging the agency’s price evaluation is dismissed for lack of standing, where several other lower-priced and technically acceptable proposals were in line for award ahead of the protester. Though the protester argued that each of the lower-priced proposals were unrealistically low and should be deemed ineligible for award, the court found that the difference in price between the protester’s offer and the very lowest-priced was not significant, and therefore any errors in the evaluation would likely apply to the protester’s proposal as well. The protester argued that the agency had found its proposed price for an earlier iteration of the procurement to be too low, and therefore logically these lower-priced proposals also must be unrealistic, but the court explained that the results of that earlier evaluation were irrelevant, as each procurement stands on its own.

Eskridge & Associates protested the Army’s award of a contract for certified registered nurse anesthetist services to Ansible Government Solutions LLC.

The award in contention had been subject to previous protests and rounds of corrective action, each of which involved Eskridge challenging award to Ansible. The latest solicitation provided that award would be made to a service-disabled veteran-owned small business on a lowest-priced, technically acceptable basis. The agency intended to evaluate only the lowest-priced bids for technically acceptability. Assuming that at least one of the lowest-priced proposals was technically acceptable, the agency would not conduct a technical evaluation of any other proposal.

For technical acceptability, the agency would evaluate general compliance with the solicitation requirements, technical merit, and past performance. The Army considered recruitment and retention to be the biggest technical risk and set a minimum compensation rate of $113.89 per hour, inclusive of fringe benefits. Because the current solicitation did not provide for a price realism evaluation, the Army set the minimum compensation as a technical factor to serve as a price realism regulator, as any proposal below the minimum per hour target rate would be technically unacceptable. The Army later increased this minimum to $122.22 per hour.

The Army received 19 timely proposals, which were sorted by price. Eskridge’s proposal was not among the five lowest priced proposals and so was not evaluated for technical acceptability. The agency stopped the technical evaluation after finding that three of the five lowest priced bids were technically acceptable. Unsuccessful offerors were notified at this time.

The Army then evaluated the remaining proposals for past performance and eventually made award to Ansible, which has submitted the lowest-priced technically acceptable proposal. Two offerors who had submitted lower priced bids had been found to be technically unacceptable.

Eskridge then protester with GAO, arguing the agency failed to evaluate prices for realism. The protester claimed that lower priced bidders did not include costs—such as administrative costs and profit—in their bids. The protester also complained that its debriefing was misleading. The Army urged GAO to dismiss the protest, arguing that Eskridge was not an interested party, because there were multiple offerors who offered lower prices and were found to be technically acceptable. The Army noted that two lower-priced offers were found to be technically acceptable and that four more lower-priced offers had not been evaluated.

However, the Army took corrective action by reviewing Ansible’s proposal to ensure it complied with the required special salary stated in the compensation plan. If Ansible did not, the Army would terminate its contract and make an award decision to the next in line lowest-priced, technically acceptable proposal. The Army then evaluated the ten lowest-priced bidders, culled five technically unacceptable proposals, and evaluated the past performance of the remaining five. The agency also compared the prices of the five remaining offerors to the independent government estimate to determine if prices were fair and reasonable. The Army then affirmed its decision to make award to Ansible.

Eskridge filed another protest challenging the evaluation and again arguing that the lower-priced offers were not responsive because they were too low. Eskridge argued that only its price was acceptable and therefore it should have been awarded the contract. The Army again asked GAO to dismiss the protest for lack of standing, as Eskridge was not in line for award. The Army explained that there were three lower-priced, technically acceptable offers between Eskridge’s proposal and Ansible’s. The Army noted that Eskridge generally complained that the lower priced offers were deficient merely because they were lower priced than Eskridge’s. GAO agreed and dismissed the protest. Eskridge then brought its complaint to COFC.

Eskridge argued that the prices submitted by the four lower-priced offerors could not survive a compensation realism evaluation as instituted by the Army’s corrective action. In other words, Eskridge argued that if the Army had conducted a compensation realism analysis, the other four lower priced bidders would become ineligible, and Eskridge would win the award.

In response, the Army argued that Eskridge did not point to any failure to comply with the terms of the solicitation, nor challenge any aspect of the technical evaluation of proposals. The Army noted that its intent to remove price realism from the initial solicitation and to evaluate only compensation realism was explicitly disclosed in the solicitation.

The court sided with the agency. First, the court noted the Army set out a minimum hourly compensation rate that acted as a price floor, which all five of the technically acceptable bidders exceeded.

By Eskridge’s own calculation, the “minimum bid” was $15,186,441.60, and Ansible’s price, $16,565,441.60, was nearly $1.4 million dollars over this “minimum bid.” Second, Eskridge’s bid was only 9 percent more than Ansible’s and just $200,000 more than Offeror 8’s the fourth lowest, technically acceptable bid – meaning that Eskridge’s own bid would also likely fall to the realism scrutiny if every proposal “in the neighborhood” of Ansible’s were so low as to represent a facially unreasonable bid. The court also noted that the errors claimed by the protester focused primarily on the Army’s alleged failure to conduct a compensation-realism analysis, which as a practical matter would affect each of the five lowest-priced and technically acceptable proposals equally. The court held that Eskridge did sufficiently separate itself from the other technically acceptable bidders based on price alone, especially considering the proximity of Offeror 8’s price.

While the protester argued the awardee’s price was 14 percent lower than the IGCE, it failed to note that its own proposal was also fell below the IGCE, and that its base period price was 14 percent lower. In fact, all four of the lower-priced finalist proposed base period rates that were higher than Eskridge’s. Further, while the option years for the other four offerors are priced below Eskridge’s price, Eskridge’s option years are still 13 percent to 14 percent below the IGE. Accordingly, the court was not persuaded by Eskridge’s claim about the “astounding” low rates of the other bidders.

In short, while Eskridge argued that errors in the evaluation should render the lower-priced competitor ineligible for award, the court found that the alleged errors would also apply to Eskridge.

The Army also argued that Eskridge based much of its complaint on the results of the evaluation that pre-dated the evaluation at issue here. In that evaluation, the Army found Eskridge had offered the lowest price, but that it was unrealistically low. Eskridge successfully protested that the Army had conducted a price realism evaluation, where none was contemplated by the solicitation. Now, the Army argued that Eskridge sought to impose the requirements of that cancelled solicitation to this procurement, by arguing that any price lower than its own must by definition be unreasonable. The Army argued that this challenge had been waived, to the extent that its current protest is rooted in the 2016 solicitation or in the language of the current solicitation.

The court agreed that Eskridge placed significant weight on the earlier solicitation and evaluation, and noted that this current procurement is distinct. Therefore, Eskridge’s arguments in relation to that earlier solicitation were irrelevant. To the extent the protester complained that the solicitation omitted price realism language allegedly agreed to as part of the earlier protest, the court found this complaint untimely, as it was not filed prior to the deadline for proposals.

In sum, the court concluded that Eskridge had no obvious chance for award and therefore lacked standing to challenge the evaluation.

Eskridge & Associates is represented by Joseph A. Whitcomb and Timothy J. Turner of Whitcomb, Selinsky, McAuliffe, PC. The government is represented by Tanya B. Koenig, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, with whom wereJoseph H. Hunt, Assistant Attorney General, Civil Division, and Robert E. Kirschman, Jr., Director, and Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, D.C. Of counsel were Kelli A. Hooks, U.S. Army Legal Service Agency, Contract and Fiscal Law Division, and John T. Harryman and David L. Bell, U.S. Army Medical Command. Ansible Government Solutions is represented by Bryan R. King of Offit Kurman.