Government Contracts Monitor

Don’t Win the Battle but Lose the War – Remember to Demonstrate Prejudice

February 3, 2016

By: Eric Whytsell

“Prejudice is an element of every viable protest.” No matter how many times the Government Accountability Office (GAO) intones this phrase in its protest decisions (and it’s in many GAO decisions), the concept of prejudice and the need to prove it to win a protest remain all too easy to forget in the heat of “battle.” The GAO’s decision in Data Recognition Corporation, B-411767.7, (January 20, 2016) provides yet another reminder of how important showing prejudice is to winning a protest, even when some aspect of the proposal evaluation is demonstrably wrong.

The case involved a request for quotations (RFQ) issued by the General Services Administration (GSA) to Federal Supply Schedule contract holders for support services relating to surveys of DoD beneficiaries receiving certain outpatient care. Award was to be made on a best-value basis considering technical, past performance, and price factors. Under the RFQ, the technical factor was more important than past performance and both non-price factors, when combined, were significantly more important than price. As relevant here, the most important technical subfactor, technical approach, provided that “Demonstrated evidence of the capacity to field and complete all aspects of large-scale surveys . . . is important.” In addition, another technical subfactor, management approach, was to be “evaluated for the degree to which the Schedule Holder’s quote reflects a management approach (including approach to staffing) that will lead to the successful accomplishment of the requirement.”

During the evaluation of quotes, the source selection authority (SSA) assigned various strengths to Ipsos’ quotation under the various subfactors, including the technical approach subfactor. More particularly, the SSA awarded a strength to the eventual awardee, Ipsos Public Affairs (Ipsos), under the technical approach subfactor for Ipsos’ proposing a level of effort for direct labor hours for all years that exceeded the independent government cost estimate (IGCE). After also finding the quoted prices of Ipsos and Data Recognition Corporation (DRC) to be fair and reasonable, the SSA conducted a tradeoff analysis and found Ipsos’ quotation to offer advantages over DRC’s under both the technical approach and management approach subfactors and determined that Ipsos’ quotation was a better value than DRC’s because of its superior technical quotation and substantially lower price. After the agency announced its award decision, DRC protested.

DRC’s principal protest ground asserted that the agency unreasonably evaluated Ipsos’ quotation under the technical factor because it failed to consider the impact of a significant labor hour reduction by Ipsos between its initial quote and its final proposal revision. Reviewing the record, the GAO found that DRC was right: despite Ipsos’ reducing its total direct labor hours from its initial quotation to its final revision, the agency evaluators and the SSA continued to assign Ipsos a strength under the technical approach subfactor for proposing more total direct labor hours than the IGCE. Thus, according to the GAO, “the record appears to show an error in the procurement, that is, the agency’s evaluators continued to assign a strength to Ipsos’ quotation that was not supported by its final quotation revision.”

Unfortunately for DRC, however, the GAO went on to state, “The question for our review is whether DRC was prejudiced by this procurement error.” Even more unfortunately, the GAO then concluded that there was no prejudice because: (i) the strength at issue was one of at least nine strengths assigned to Ipsos’ quotation under the technical approach subfactor, and even without the one strength, Ipsos had more than the six strengths assigned to DRC’s quotation under the same subfactor; (ii) DRC did not provide any reason for the GAO to question any other aspect of the agency’s evaluation under the same subfactor, or any other subfactor under the technical factor, so that is unlikely on this record that Ipsos’ technical evaluation would have been significantly impacted; (iii) the record made clear that the SSA did not treat the Ipsos strength in question as a discriminator between Ipsos and DRC such that removal of that strength would impact the SSA’s best-value award decision; and (iv) given that Ipsos’ quotation was technically superior and significantly lower in price, DRC failed to show any reasonable possibility that it was prejudiced by the agency’s procurement error.

In other words, DRC won the battle concerning the agency’s mistaken assignment of a single strength but lost the war because that strength was not dispositive to the outcome: the agency’s proven mistake did not prejudice DRC’s chances for an award. To be sure, it’s not always easy at the outset to tell whether the necessary prejudice exists. But that does not mean contractors considering and prosecuting protests should not focus at every step along the way on the importance of establishing prejudice. Failure to do so can lead to a pyrrhic victory that leaves you with little but legal fees to pay and a bitter taste in your mouth.

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