Agency Must Consider Price in All Best Value Selections

In any type of best value selection, the GAO has again made clear that the Agency must consider price.  Glotech, Inc., B-406761, Aug. 21, 2012.  In Glotech, the US Agency for International Development (“AID”) competed a Blanket Purchase Agreement (“BPA”) worth up to $900 million.

The RFQ specified that award would be made on a best value basis, considering price and six technical factors.  Price was deemed a significant factor in the best value tradeoff. However, in evaluation of quotations, the contracting officer assigned point scores for the technical factors and ranked all proposals from 1 to 11.  Then, the contracting officer reviewed the cost/price quotations, but decided that direct comparison of quotations was not possible because each vendor quoted different discounts and could offer additional discounts when the task orders were issued.  So, the contracting officer merely listed the labor categories, discounts and hourly rates without making any comparative analysis of price.  The contracting officer then selected the 7 highest technically scored quotes with which to establish BPAs.  The agency performed no cost/technical tradeoff.

In sustaining the protest, GAO stated that AID conducted neither an evaluation nor a tradeoff, and the selection was inconsistent with the RFQ and the requirements in FAR 8.405-3, which states that price must be part of any best value determination establishing a BPA.  AID’s failure to consider price was also a direct violation of  41 U.S.C. § 253a (c)(1)(b), which requires that an executive agency “include cost or price to the Federal Government as an evaluation factor … in the evaluation of proposals.” (For DOD procurements, the same requirement is at 10 U.S.C. § 2305(a)(3)(A)(iii)).

Related Post

Season 11: Episode 9: FAR Facts

Hello and thank you for joining us for Episode 8 of Fun with the FAR Season 11! In our next session, we will cover FAR Part 15 (Contracting by Negotiation) As we prepare for our 9th episode of Season 11, here are a few FAR Facts for us to think about: A contract...

Season 11: Episode 8: FAR Facts

Hello and thank you for joining us for Episode 7 of Fun with the FAR Season 11! In our next session, we will cover FAR Parts 9 (Contractor Qualifications) and 14 (Sealed Bidding). As we prepare for our 8th episode of Season 11, here are a few FAR Facts for us to think...