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GAO Construction Contract Protests: Technical Evaluation and Best-Value Tradeoff Decision

By on April 6, 2023 | Posted in

GAO Reaffirms the Stringent Standards of Challenging an Agency’s Technical Evaluation and Best-Value Tradeoff in the Design-Build Construction of Coast Guard Homeport in Oregon

The U.S. Government Accountability Office (“GAO”), decision, on Caddell-Nova, A Joint Venture’s (“Caddell”), protest of the Department of Homeland Security (DHS), United States Coast Guard’s (“USCG”) technical evaluation and best-value tradeoff decision and award to GWWH, A Joint Venture, for design and construction services for a new homeport under a task order announcement (“the TOA”), has valuable lessons for contractors. The GAO decision (“Protest”) denied Caddell’s protest and thereby reaffirmed the great deference that is given to an agency when reviewing award decisions and complying with a solicitation’s evaluation criteria. GAO’s decision is a textbook example of issues a design-build protestor will face when attacking the Government’s award decision.

Key Takeaways for Contractors

Technical Evaluation Challenges: An agency will be given great deference when GAO is determining whether an agency acted unreasonably or inconsistent with a solicitation’s criteria. Therefore, a protestor must develop firm findings of fact from the record to overcome this deference.

Best-Value Tradeoff Challenges: A challenger must show an agency’s decision was irrational and inconsistent with the solicitation’s stated criteria, with an agency not having to provide documentation of every consideration supporting its trade-off decision. A protestor must therefore understand that documentation for every consideration on the trade-off decision is not necessary, and therefore, a protest must focus on documentation in the record that proves an irrational decision inconsistent with the solicitation evaluation criteria.

Technical Evaluation and Best-Value Tradeoff Basis

The TOA was for a Nationwide Multiple Award Construction Contract, with an issuance of a single fixed-price, design-build on a best-value tradeoff basis. Protest at 1-2. The TOA mandated that the USCG would conduct a best-value tradeoff basis taking into consideration price and the following technical factors: design and construction approach for major scope items, phasing plan, and subcontractor management. Id. at 2. The previously listed technical factors were mandated to be combined for equal importance when compared to price.

          i. Technical Evaluations Largely Within Agency Discretion

Technical evaluations by an agency are ratings that an agency assigns to bids indicating how well each bid complies with contract requirements in order for the agency to determine which bid is technically the most advantageous to the government.  Caddell brought its protest  asserting the USCG errored when conducting its technical evaluation of the bid proposals, with Caddell’s bid being assessed weaknesses that were unequally assigned to Caddell in comparison to other proposals. GAO stated that the protester challenged multiple aspects of the agency’s technical evaluation. In this regard, the protester alleged that the agency improperly assessed the six weaknesses and one significant weakness identified in its proposal, and that the agency evaluated offerors unequally.

However, despite the protestor’s arguments to include allegations of unequal considerations based on the agency record, the GAO emphasized that whether an agency’s technical evaluation is reasonable, “is a matter largely within the agency’s discretion” and “when a protester alleges unequal treatment in a technical evaluation, it must show that the differences in the evaluation did not stem from differences between the proposals.”  Id. at 4. (citations omitted). This requires a contractor filing a protest to separate the unequal evaluation alleged from differences in proposals. A protestor must develop firm findings of fact from the record to overcome deference to the agency by GAO.

          ii. The Government Does Not Have to Provide Every Consideration Supporting Its Best-Value Tradeoff Decision

A best-value tradeoff is when the government is required to weigh the technical ratings assigned to each bid in comparison to the price of each bid with the government able to choose a bid that may have a higher price, but technically has a better value. Caddell asserted the Government incorrectly conducted the best-value tradeoff for the USCG homeport contract, because Caddell had a lower price than the awarded proposal, and per the TOA, price was to be given approximately the same weight of importance as technical evaluation ratings.

However, the GAO found that the USCG’s best-value tradeoff was reasonable or consistent with the TOA, as the awarded bid was, “superior on all three non-price factors, and [the USCG] provided reasoned explanations as to why”. Id. at 12. GAO further upheld the standard that a best-value tradeoff decision need only be rational, and the government does not have to provide documentation for every consideration included in its best-value tradeoff decision. Id. Lack of documentation for every consideration on the trade-off decision is not necessary, and therefore a protestor must key in on the documentation that is in the record which proves an irrational decision or inconsistent with the solicitation evaluation criteria.

GAO’s Deference to the Government

The GAO’s decision is a prime example of the great deference that the government is given when its awards are challenged based on technical evaluation errors and best-value tradeoff inconsistencies. In order to be successful on a technical evaluation challenge, the protestor must prove the agency acted unreasonably and inconsistent with a solicitation’s criteria. And for a best-value tradeoff challenge, the protestor must demonstrate the decision was irrational, but the government need not document every factor that went into its tradeoff decision. While this makes such protests an uphill battle, the decision provides lessons on what factual weapons are needed to fight an agency award decision in a protest at GAO.

To obtain help navigating a technical evaluation or best-value tradeoff bid protest, please reach out to the Oles bid protest team attorneys:  Howard W. Roth, Douglas S. Oles, or Sydney M. Sullivan at Oles Morrison Rinker & Baker, LLP.