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Recent GAO Decision Highlights Possibility of Limited Evaluations in Best-Value Procurements

By Sandy Hoe & Nooree Lee on August 11, 2016
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Offerors in best-value procurements are generally accustomed to a review of their complete proposals during the evaluation process.  The recent Government Accountability Office (GAO) decision in The COGAR Group, Ltd., B-413004 (July 22, 2016) highlights the ability of agencies to blend lowest-price technically-acceptable (LPTA) procurement principles into best-value procurements and thereby limit the scope of proposal evaluations.

The COGAR Group timely submitted a proposal in response to a Department of Homeland Security (DHS) solicitation seeking to award an indefinite-delivery/indefinite-quantity contract under FAR Part 12 for professional security services.  This procurement was structured as a best-value competition, but the solicitation also advised that the agency might not evaluate all technical proposals, and instead the agency might limit the competition to those proposals that were “most competitive” on price.  After receiving 19 proposals, DHS considered the mean ($42,501,995) and median ($42,752,035.66) proposal prices, and concluded that only proposals priced under $40,500,000 would proceed to technical evaluations and the ultimate best-value trade-off.

The COGAR Group’s price of $40,531,635 came in just over the threshold, excluding the company from the technical evaluations.  By comparison, the awardee’s price of $40,399,510 came in just under the threshold.  The COGAR Group protested, arguing that there was a difference of only $132,125 (0.3%) between the two offerors, and therefore it was impossible to assess which offeror presented the best value to the Government without a technical evaluation.

GAO disagreed, holding that the efficient competition provision of the solicitation put offerors on notice of this evaluation scheme and that DHS acted reasonably in determining “that any possible technical advantage of an unevaluated, higher-priced proposal would not warrant an additional price premium over a lower-priced proposal that had been assigned the highest possible technical rating.”  Although not referenced in the decision, the GAO’s decision appears consistent with a literal reading of FAR 15.306(c)(2), which permits “limit[ing] the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals.”

GAO reached this conclusion despite arguments from the protestor that its proposal could also have received the highest possible technical rating and been a stronger technical solution when looking deeper than the overall adjectival rating.  It is theoretically possible that the protestor’s technical solution offered technical discriminators worth a 0.3% price premium. Instead, GAO agreed with DHS that it was not obligated to conduct that technical evaluation.

Photo of Sandy Hoe Sandy Hoe

Sandy Hoe has practiced government contracts law for more than 40 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract…

Sandy Hoe has practiced government contracts law for more than 40 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract disputes through litigation or alternative dispute resolution.  His clients include major companies in the defense, telecommunications, information technology, financial, construction, and health care industries.

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Photo of Nooree Lee Nooree Lee

Nooree Lee represents government contractors in all aspects of the procurement process and focuses his practice on the regulatory aspects of M&A activity, procurements involving emerging technologies, and international contracting matters.

Nooree advises government contractors and financial investors regarding the regulatory aspects of…

Nooree Lee represents government contractors in all aspects of the procurement process and focuses his practice on the regulatory aspects of M&A activity, procurements involving emerging technologies, and international contracting matters.

Nooree advises government contractors and financial investors regarding the regulatory aspects of corporate transactions and restructurings and – more recently – on equity investments by the U.S. government. His experience includes preparing businesses for sale, negotiating deal documents, coordinating large-scale diligence processes, and navigating pre- and post-closing regulatory approvals and integration. He has advised on 50+ M&A deals involving government contractors totaling over $40 billion in combined value. This includes Advent International’s sale of Ultra Maritime to Lockheed Martin for $3.45 billion; Bridgepoint Group’s sale of Evac Group to Altor Equity Partners; the acquisition of Perspecta Inc. by Veritas Capital portfolio company Peraton for $7.1 billion; and Cameco Corporation’s strategic partnership with Brookfield Renewable Partners to acquire Westinghouse Electric Company for $7.8+ billion. Nooree also advised the financial advisor and lead left arranger of MP Materials’ $1 billion in committed financing for its partnership with the Pentagon to build out the U.S. rare earth materials supply chain.

Nooree also counsels clients focused on delivering emerging technologies to public sector customers. Over the past several years, his practice has expanded to include advising on the intersection of government procurement and artificial intelligence. Nooree counsels clients on the negotiation of AI-focused agreements with the U.S. government and the rollout of federal and state-level regulations impacting the procurement and deployment of AI solutions on behalf of government agencies.

Nooree also counsels clients navigating the Foreign Military Sales (FMS) program and Foreign Military Financing (FMF) arrangements. Nooree has advised both U.S. and ex-U.S. companies in connection with defense sales to numerous foreign defense ministries, including those of Australia, Israel, Singapore, South Korea, and Taiwan.

In addition to his government contracts advising, Nooree assists clients with navigating federal Freedom of Information Act and state public records requirements, including objecting to a government agency’s proposed release of a company’s proprietary information.

In addition to his work within the firm, Nooree is the Secretary for the American Bar Association’s Section of Public Contract Law. He also previously served as the firm’s Fellow for the Leadership Council on Legal Diversity program.

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  • Posted in:
    Administrative and Regulatory
  • Blog:
    Inside Government Contracts
  • Organization:
    Covington & Burling LLP
  • Article: View Original Source

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