Government Contracts Monitor

GAO Holds Low Price Technically Acceptable (LPTA) Award Improper Under Best Value Procurement

April 11, 2017

Bid protestors frequently complain that an agency improperly converted a “best value” procurement into a Low Price Technically Acceptable (LPTA) procurement by awarding to the low-priced offeror, notwithstanding the existence of higher-rated, albeit higher-priced, proposals. Such protests seldom prevail, due to the wide discretion afforded source selection officials to select a lower-priced, lower-rated proposal where the price premium involved in selecting a higher-rated, higher-priced proposal is determined not worth it, or justified. However, the agency must rationally explain the factors considered and reasoning, or risk being overturned. A pro se protestor recently prevailed on this basis at the Government Accountability Office (GAO). Why did this protest succeed, against what would appear to be high unfavorable odds?

First, the agency’s debriefing document explicitly stated, inconsistently with the RFP, that the challenged awards were “based on lowest price technically acceptable [and n]o tradeoffs were used.” Second, the contemporaneous record, which the GAO reviewed, did not support the agency’s assertion that the foregoing debriefing language was merely a “typographical error.” To the contrary, the record established that the agency failed to undertake a comparative evaluation of the proposals, and thus improperly negated the protesting incumbent’s potential past performance advantage, and awarded based strictly on low price. Third, the agency failed to adequately document its reasoning and explain the bases for its conclusion that the proposals were “equal” when, despite giving proposals the same ratings, the evaluators found differences that were not addressed. In short, the agency got it totally wrong pretty much across-the-board.

The case is Patriot Solutions, LLC, B-413779, Dec. 22, 2016, 2016 CPD ¶ 378, involving a pro se post-award protest challenging two contracts for corrugated containers awarded by Federal Prison Industries, Inc. (UNICOR), a wholly-owned government corporation within the Department of Justice (DOJ). The RFP, which was issued on a 100% small business set-aside basis, using simplified commercial items procedures under FAR 12.6 & 13.5, provided that awards would be made on a best value basis, considering the following factors: past performance, technical and price, with past performance and technical being significantly more important than price.

Ultimately, the agency established a competitive range of the three lowest-priced offerors for each of two groups. After receiving and evaluating final proposal revisions (FPRs), the agency awarded to the low-priced offeror in each group. After receiving a written debriefing stating that the awards were “based on lowest price technically acceptable [and n]o tradeoffs were made” Patriot Solutions, the incumbent, filed an agency protest challenging both awards. The contracting officer re-evaluated the proposals, and issued a new award decision with identical evaluation results. The agency protest official therefore denied the protest. Patriot then timely protested to GAO.

Patriot asserted that the agency failed to perform the RFP-required best-value tradeoffs, and instead improperly converted the procurement, as admitted in the agency’s written debrief, to LPTA. The agency admitted the debriefing wording, but argued such was a “typographical error,” and that the Contracting Officer did, in fact, perform a best-value tradeoff. Specifically, the agency argued that the Contracting Officer determined that the past performance and technical ratings were “equal” among the evaluated offers, and that price thus became the determining factor.

The problem with this alternative rationale was that Patriot actually received a higher “More Relevant” past performance rating than the Group 1 awardee’s “Relevant” rating, while the agency found unaddressed differences in the past performance information for Patriot and the Group 2 awardee, even though both received the same “More Relevant” rating.

As pointed out by GAO, the propriety of a price/technical tradeoff decision turns not on differences in technical scores of ratings per se, but on whether the selection official’s judgment concerning the significance or the differences was reasonable and adequately justified in light of the RFP evaluation scheme. Here, GAO found no documented rationale for the asserted equivalency finding, and thus could not determine the source selection official's decision reasonable as to either award. As GAO stated, “[b]y treating all offerors as acceptable, without any comparative evaluation, the agency effectively negated any potential advantage in past performance that Patriot Solutions’ past performance proposal had over the others.” “[I]f a tradeoff analysis had been performed, UNICOR might reasonably have determined that Patriot Solutions’ more relevant experience warranted payment of Patriot Solutions’ higher proposed price.” Under such circumstances, GAO, resolving any doubts as to prejudice in Patriot’s favor, found a “reasonable probability” that Patriot was prejudiced, and sustained the protest.

GAO awarded protest costs, and recommended that the agency re-evaluate proposals and prepare new source selection decisions adequately documenting the best-value tradeoff and whether Patriot’s higher-rated proposals warranted their higher proposed price. Alternatively, if the agency believed that it would be better served by awards on a LPTA basis, then the agency should amend the RFP, seek and evaluate new proposals and make new awards consistent therewith.

Ultimately, one wonders why the agency chose to defend this protest, rather than take clearly warranted corrective action. However, the outcome demonstrates the value of GAO’s protest process to correct agency procurement errors, and that GAO will carefully review the underlying record, even in pro se protests. The decision also provides an important reminder to agencies as to the importance of documenting a clearly stated trade-off analysis, including explaining the resolution of proposal differences and rationale for any equivalency determinations.