Government Contracts Monitor

If You Want Extra Credit, Ask In Advance: Threshold Goals vs. Comparative Ratings

August 23, 2016

Before a contractor offers more than the solicitation requires, it should first confirm that it will receive credit for going above and beyond. This is particularly true where the solicitation lays out a clear evaluation scheme and identifies certain evaluation factors as threshold criteria rather than factors to be rated comparatively, with more credit given for exceeding requirements. As the Government Accountability Office (GAO) recently explained in Pro-Sphere Tek, Inc., B-410898.11 (July 1, 2016), an agency source selection decision that doesn’t give an offeror extra credit in such circumstances will be found reasonable and upheld.

The procurement in question was a Veterans’ Administration (VA) effort to obtain a total IT solution addressing all of the agency’s IT needs. To that end, the VA announced that it intended to award up to 20 Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts with a five year base period and a five year option. The ceiling for the entire ID/IQ contract was set at $22.3 billion, and the VA announced it would make awards on a best-value basis. The best value determination was to consider a combination of price and five non-price evaluation factors: technical capability, past performance, veteran involvement, veteran employment, and Small Business Participation Commitment (SBPC). The SBPC factor listed specific percentage-based Small Business goals, and set the overall requirement for Small Business Participation at 35% of the contract value.

The Agency received proposals from 142 offerors and created a competitive range of 39 before conducting discussions. Ultimately, after evaluating final proposals, the VA selected 21 proposals for award. When Pro-Sphere Tek, Inc. learned it was not among the awardees, it protested, taking issue with the award to two of the 21 successful contractors. Like Pro-Sphere, each of the two—Ellumen, Inc., and Favor Tech Consulting, LLC—received four “Acceptable” ratings and two “Good” ratings for the Technical factors and subfactors. The solicitation stated that the past performance determination would be determined on a Relevant/Not Relevant basis and did not contemplate considering degrees of relevance. All three proposals were deemed to pose a Low Risk to the government based on their Past Performance. Pro-Sphere’s evaluated price was $17.16 billion, Ellumen’s was $13.904 billion, and Favor Tech’s was $14.843 billion. The VA awarded contracts to the latter two Offerors but not Pro-Sphere, whose technical proposal was determined to not warrant its significant price premium and found not to represent best value to the government.

Among the several arguments raised by Pro-Sphere were similar attacks challenging the agency’s failure to rate the Past Performance and SBPC factors comparatively. With respect to Past Performance, Pro-Sphere contended that because the request for proposals (RFP) did not state that relevance would be considered as a threshold factor only, the agency was required to consider the comparative level of relevance for each offerors’ references. Because Pro-Sphere was the incumbent, it believed that its references would have been found more relevant than the past performance of other offerors. GAO disagreed with Pro-Sphere’s overarching assertion, however, noting that while the RFP did not advise that past performance relevance would be considered only as a threshold matter, it equally did not state that the agency would consider varying degrees of relevance as Pro-Sphere argued. Instead, the RFP provided that the agency would “conduct a performance risk assessment based on the quality, relevancy and recency of [each offeror’s] past performance, as it relates to the successful accomplishment of the required effort”. According to GAO, the agency was not required to further differentiate offerors based on relative relevance unless required by the RFP – and here the RFP “simply did not require . . . the type of comparative analysis desired by [Pro-Sphere]”.

GAO rejected Pro-Sphere’s argument that it should have received extra credit for the SBPC factor for much the same reason. Pro-Sphere contended that the agency should not have awarded Ellumen and Favor Tech the same “Outstanding” rating it received under the SBPC factor when those offerors only marginally exceed the RFP’s stated small business target and Pro-Sphere’s proposal went far above it. GAO agreed with Pro-Sphere that the RFP provided that the agency would “determine the extent to which the Offeror demonstrates a commitment to meeting or exceeding” the small business goals for various types for small businesses (e.g. SDVOSB, woman-owned). However, it noted that overall business commitment was to be evaluated based only on “whether the Offeror has met the overall Small Business Participation Requirement for this procurement which is 35% of the total contract value” (not the extent by which the overall goal was exceeded). Here, the record showed that the agency did assign strengths under the SBPC factor when proposals exceeded the various small business goals and that those strengths supported the adjectival ratings awarded to proposals. In addition, the agency assessed whether the overall small business goal of 35% had been met – consistent with the RFP. GAO explained that, under these circumstances, it could not conclude that the agency’s evaluation approach was inconsistent with the RFP. Thus, both of Pro-Sphere’s claims of entitlement to extra credit were rejected and GAO upheld the agency’s trade-off decision.

As noted at the outset, the Pro-Sphere decision illustrates the importance of an offeror’s confirming what the RFP says about the evaluation criteria and approach before it prepares its proposal -- or attempts to protest an award decision based on the agency’s failure to follow the RFP. Unless an Agency specifically allows for a comparative rating scheme (or higher ratings reflecting the degree to which an offeror proposes to go above and beyond the stated criteria), there may well be no extra credit given. If an offeror believes a comparative approach is – or may be – established by the RFP, it should clarify that interpretation with the agency. Of course, if it wishes to challenge the solicitation, it must do so before the proposal due date or the issue will be waived.