The Department of Justice, Office of Justice Programs (“OJP”), issued a request for quotations from  vendors holding contracts under GSA Multiple Award Schedule 80 for a blanket purchase agreement and a task order proposal to provide federal identity, credential and access management services to support the DOJ Office of the Chief Information Officer. Three vendors submitted quotes, including the awardee, LS3, and the protestor, NikSoft Systems Corporation.

OJP evaluated the quotes and issued an “exceptional” rating for LS3 and an “acceptable” rating for NikSoft. The ratings were based on evaluation of corporate experience, past performance, technical qualifications, technical understanding and approach. NikSoft had a lower price, by approximately $120,000.00, but scored lower than LS3 in three of the four other categories. OJP decided to award the task order to LS3. To reach this conclusion, OJP concluded that although LS3 proposed fewer labor hours than the Independent Government Estimate, LS3’s technical approach would nevertheless allow it to perform the work in the number of hours proposed. By contrast, OJP concluded that NikSoft proposed too few labor hours to perform the work and, consequently, OJP increased NikSoft’s labor hours for evaluation purposes to match LS3’s proposed labor hours. This increase in labor hours raised NikSoft’s cost estimate for evaluation purposes by approximately $175,000.00, to a number approximately $56,000.00 higher than LS3’s proposed cost.

NikSoft protested OJP’s evaluation and source selection decision.  NikSoft argued that OJP improperly adjusted Niksoft’s proposed labor hours (and price) upward and ignored NikSoft’s technical approach, which, Niksoft argued, was sufficient to permit it to perform the work within the number of proposed hours. The GAO sustained the protest, holding that OJP’s record failed to support both its determination that NikSoft would not be able to perform the work in the time proposed and its decision to increase NikSoft’s hours for evaluation purposes. Because OJP provided no analysis or explanation, GAO recommended that OJP re-evaluate the level of effort and labor and make a new best value selection decision. NikSoft Systems Corporation, B-406179.2, August 14, 2012.

PRACTICE TIP: Although agencies are not required to conduct formal evaluations of a vendor’s proposed level of effort and labor mix, as part of a best value source selection, they must provide an explanation and support for their conclusions. But this discretion is not unlimited. Whether you should protest an adverse source selection decision should be influenced, among other things, by the degree to which the agency has expressed and documented a logical basis for its decision.