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GAO Decision – Cyberdata Technologies, Inc. (B-406692, Aug 8, 2012)

Link to the case:   http://www.gao.gov/products/B-406692 - mt=e-report

DIGEST (from GAO)

1. Protester’s argument that its technically acceptable quotation was excluded from the competition without consideration of price in a best value acquisition for the establishment of blanket purchase agreements (BPA) under the Federal Supply Schedule (FSS) is sustained where Federal Acquisition Regulation subpart 8.4 requires that price be considered in establishing BPAs under the FSS, and where the record shows that the agency “downsized” the pool of vendors, by excluding some of them, like the protester, who were technically acceptable, without consideration of their lower prices.

2. Where a protest raises an untimely issue that has not been previously decided and is potentially of widespread interest to the procurement system, the Government Accountability Office (GAO) may consider the issue pursuant to the significant issue exception in its timeliness rules, 4 C.F.R. § 21.2(c) (2012); here, the GAO invokes the significant issue exception and sustains the protest, however, since the protester did not raise the issue in a timely manner--when it clearly could have done so--GAO does not recommend reimbursement of protest costs.

DECISION (from GAO)

Cyberdata Technologies, Inc., of Herndon, Virginia, protests the General Services Administration’s (GSA) decision not to establish a blanket purchase agreement (BPA) with the company under request for quotations (RFQ) No. PGE-01-25-2012, RFQ 646760. Cyberdata asserts that its quotation improperly was excluded from the competition without consideration of its price.

We sustain the protest.

Commentary:   This case was a real shocker for me.  If someone had ask me, “Hey, can we do a two step acquisition where we do a preliminary technical and then do a full best value evaluation on the top technical scores?” I would have said “Sure, go for it!  Just make sure you consider price in your second step to be in compliance with FAR 8.405-3(a)(2).”  According to GAO, that would have been terrible advice on my part.  Even more surprising was the fact they invoked the obscure “Significant Issue Exception” to their own regulations.  They deemed this to be of such importance that it “was too fundamental to ignore” and basically threw out their own rulebook to consider it. 

Wow.  Just wow.  I can see where GAO is coming from in terms of the regulations and the importance of considering price in a best value selection but I have to say I disagree with their decision, particularly the invocation of the Significant Issue Exception.  The source selection plan appears to have been very clear that price was by far the least important factor in this acquisition.  Therefore, since they only selected the top 6 of the 12 who made it past the initial technical screening, how would any quoter ranked 13 or lower have had a reasonable chance to have a BPA established with them?  Without all the records in front of me I can’t be certain, of course, but I would have to say those odds were approaching zero.  Had price been a higher weighted factor, then absolutely this could have been a flawed source selection but in this instance and given the circumstances described in this case, I just can’t see the chosen method affecting the outcome in any meaningful way.

That being said, my disagreement with this decision is ultimately irrelevant.  GAO decided what they decided and it is now a precedent. Therefore, my advice to contracting officers contemplating any type of “two step” process would be to make sure you consider price or this case will come back to haunt your acquisition.  Of course, at that point I would have to ask, “why bother with a preliminary downselection?”  Just do the best value on each quote and then rate and rank them according to your source selection plan.  I can’t see any value to adding an additional step in there if you have to do a full trade-off anyway.

So what do you think of this case (and my opinion on it)?  To quote Dan, “comments, criticisms and smart remarks are always welcome!”

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