Solicitations sometimes contain an efficient competition provision. Under this provision, an agency will only evaluate the technical proposals of the most competitively priced offers. This means that if the agency thinks an offeror’s price is too high, it doesn’t need to evaluate that offeror’s technical proposal. The protester’s price in this case was too high and didn’t make the initial efficient competition cut. The protester argued that its price was only slightly higher than the awardee’s, so its technical proposal should have been considered. But the court wasn’t persuaded. The agency had to draw the line somewhere for competitive prices. Even if the protester’s price was only slightly higher than the competitive prices, the agency had not abused its discretion.
AGMA Security Services, Inc. v. United States, COFC No. 21-1982C
Background
The Federal Protective Service (FPS) issued a solicitation seeking security services in Puerto Rico. The solicitation included an efficient competition provision. Under this provision, FPS reserved the right to not evaluate all the proposals received. Rather, the solicitation stated that FPS would review the price of the offers received and then only evaluate the technical proposals of the most competitive offers. This meant that if an offeror’s price was too high, FPS may not decide to evaluate that offeror’s technical proposal at all.
FPS received proposals from ten offerors, including Kerberos International and AGMA Security Services. After an initial review, FPS determined that Kerberos was among the most competitively priced proposals. AGMA’s price was slightly higher and not among the competitive offers. Kereberos moved on to the technical evaluatio. AGMA did not.
FPS ultimately selected Kerberos for award. AGMA filed a protest with the Court of Federal Claims,
Legal Analysis
- Agency Wasn’t Required to Consider AGMA’s Proposal – AGMA alleged that given the modest price difference between its own proposal and Kerberos’s, FPS should have evaluated AGMA’s technical proposal. Indeed, AGMA argued that by creating groupings of offerors by price, FPS applied unstated criteria. The court rejected this argument. The solicitation expressly stated that FPS may not consider all technical proposals. Sorting proposals into grouping by price was a reasonable means to draw a line among competitively priced proposals. If AGMA didn’t like the efficient competition provisions, it should’ve filed a pre-award protest challenging the terms of the solicitation.
- AGMA Wasn’t Prejudiced by Failure to Include Options in Price Evaluation – AGMA contended FPS erred in not considering offerors’ option prices as part of the total evaluated price. The court agreed this was an error. Unfortunately, AGMA had not shown it was prejudiced by this error. AGMA had only claimed that consideration of options could have led to a different determination. Prejudice requires more than just the possibility of a different outcome.
- Price Realism Analysis Was Legit – AGMA complained that Kerberos was bidding below the incumbent contract price and that this constituted an attempted “buy-in”—that is, the submission of low cost offers with the expectation of increasing the contract price after award. The court, however, didn’t believe this was a buy-in. Kerberos had proposed below the incumbent prices, but the incumbent prices were the product of a different competitive environment; they had been negotiated as part of a sole-source bridge contract.
- Kerberos Satisfied License Requirement – AGMA alleged that the Kerberos did not have licenses prior to the commencement of work as required by the solicitation. AGMA reasoned that the license requirement became operative on the date of contract award, and that Kereberos did not have the required licenses on that date. The court rejected the premise of this argument. The plain language of the solicitation only required the contractor to obtain licenses prior to beginning performance. This did not require Kerberos to have a license at the time of award.
- Teaming Arrangement Wasn’t Improper – AGMA argued that Kerberos’s teaming arrangement was improper because the parties to it agreed not to compete for the contract independently or with any other parties. AGMA believed this provision indicated that Kerberos had induced its teaming partner not to submit a proposal, which violated the FAR. The court disagreed.There was no basis to find that Kerberos had induced its team member to not submit a proposal. In fact, the procurement had been set aside for participants in SBA’s 8(a) Business Development Program. Kerberos’s partner had graduated from the program and thus could not have separately bid on the contract even it wanted to.
AGMA is represented by Alan Grayson. The government is represented by Vincent D. Phillips, Douglas K. Mickle, Patricia M. McCarthy, and Brian Boynton of the Department of Justice as well as H. Weston Miller of the Department of Homeland Security.
