United States: GAO Holds NASA Exceeded Its Discretion In Protest Of FSS Task Order

Keywords: Federal Supply Schedule, GAO, NASA, Past Performance.

Challenges to an agency's best value tradeoff decision can be difficult to win, as GAO doesn't reevaluate the offerors' proposals, gives deference to evaluators' judgments, and performs a limited review of whether the evaluation and source selection decision were reasonable (and consistent with the solicitation criteria and applicable procurement laws/regulations). However, every once in a while, GAO finds that an agency exceeded the substantial discretion it has and sustains a protest challenging an agency's best value tradeoff decision. GAO recently did just that in PricewaterhouseCoopers LLP, and the decision provides guidance to contractors challenging an agency's best value tradeoff decision.

The task order at issue in PricewaterhouseCoopers LLP was issued under the GSA's Federal Supply Schedule (FSS) and sought financial statement audit services for NASA's Office of Inspector General. NASA received quotations from two offerors: PricewaterhouseCoopers (PwC), which was the incumbent, and CliftonLarsonAllen (CLA). The RFQ stated that the task order would be issued on a best-value basis, and quotations would be evaluated using three factors: technical, past performance, and price (in descending order of importance). The final evaluation rating and prices were:

GAO's decision focuses on the Source Evaluation Team's technical findings concerning the offerors' proposals. Relevant here, PwC received two significant strengths, two strengths, and no weaknesses for its technical approach. The evaluators gave CLA one significant strength, one strength, and three weaknesses. The evaluators also determined that each weakness increased the risk of unsuccessful contract performance.

The Source Selection Authority (SSA) accepted the technical evaluators' findings without independently reading or evaluating the offerors' quotations. Because both vendors had the same past performance rating, the SSA determined that past performance was not a discriminator. The SSA examined the three weaknesses that CLA had received concerning its technical proposal, and although he accepted the evaluators' findings, he disagreed about whether the weaknesses would affect CLA's ability to perform. The SSA determined that the weaknesses could be addressed through Government oversight and collaboration, and that the weaknesses were mitigated by CLA's positive past performance.

With respect to PwC's significant strengths and strengths, the SSA discounted those assessments by comparing them to discriminators for CLA. The SSA reasoned that PwC's strengths did not provide any meaningful benefit that CLA could not also provide—even though CLA received weaknesses with respect to the same areas of its proposal for which PwC had received strengths. The SSA concluded that CLA's past performance mitigated its technical weaknesses and demonstrated that it could successfully perform. At bottom, the SSA found that  PwC's technical advantage did not justify a $2.2 million price premium.

GAO began its analysis with the familiar proposition that agencies have discretion in making a best value tradeoff decision; its opinion then explained how the SSA had exceeded that discretion in this case. Principally, GAO found that the SSA had unreasonably relied on CLA's past performance (which was assessed as the same as PwC's) as a replacement for its technical ability:

As GAO acknowledged, an SSA is not bound by the evaluators' assessments and findings. However, the SSA's determination must be consistent with the evaluation criteria, and the SSA must provide a reasoned explanation for his decision. Here, the SSA essentially neutralized the weaknesses the evaluators had identified with respect to CLA, but he did not provide a reasonable basis for his decisions. For example, the SSA reasoned that one of CLA's  weaknesses would not affect performance if the Government exercised proper oversight—and defined "'proper government oversight' to include instructing the contractor on what methods and tools to use in order to successful perform the task order." That level of involvement goes beyond oversight. The GAO concluded that the SSA's tradeoff decision did not satisfy the test of rationality.

GAO's PwC opinion may provide helpful precedent for protesters challenging an agency's best value tradeoff. Specifically, the decision suggests a limit on an agency's discretion in that it may not necessarily use a factor for which the offerors were equally rated (or that the SSA previously found was not a discriminator) as a means to offset one offeror's weakness.

Originally published 10th September, 2014

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