Some Things to Watch Out For When Technology & Innovation Outweigh Price in Procurement

In the 2019 National Defense Authorization Act (NDAA), Congress placed serious limitations on the Government’s use of Lowest Price, Technically Acceptable (LPTA) procurements. As a result, we should be seeing the Government issue more RFPs in which technology and innovation outweigh price. In these instances, contractors can seek a higher price but are expected to show substantial technological advantages. Two recent protests cases out of GAO illustrate the principles of technical proposal evaluation when technical factors are more important than price, and demonstrate the potential cost/technical trade-offs under these circumstances.

How Agile is Too Agile for the Government?

In the first case, InterOps was participating in an 8(a) set-aside competition with the Coast Guard for software engineering in which technical factors were more important than price. InterOps proposed using multiple agile methods in performing the first task order for the contract.

The Coast Guard’s evaluators felt that using multiple agile methods would create unnecessary complexity—one agile method can be confusing enough—and result in program risk. Thus, the agency held their methodology against InterOps on two different evaluation subfactors, resulting in multiple weaknesses for the contractor’s proposed solution.  The presence of multiple weaknesses added up to a deficient proposal. Deficiency renders a proposal unacceptable and therefore InterOps was removed from the competition.

InterOps headed to GAO to protest, complaining that the Government had twice counted their proposal’s single weakness. GAO countered, saying that the same weakness can count multiple times if it’s related to more than one evaluation factor, as established in GAO case law. Furthermore, GAO cited the FAR, stating that weaknesses can be accumulated until they add up to a deficiency. According the FAR, the definition of deficiency includes a combination of significant weaknesses, and the proposal contained other weaknesses that contributed to InterOps’ dismissal from the competition.

It seems that one agile approach may have satisfied the Government here. Multiple agile approaches amounted to too much of a good thing. 

InterOps, LLC, B-416563; B-416563.2, Oct. 16, 2018.

The Importance of a Well-Documented Evaluation

The next case involves multiple IDIQ contract awards for IT services by the Defense Information Services Agency (DISA). Again, technical factors were more important than price. Among the technical factors, innovation was the most critical subfactor.  

The evaluation process for DISA’s procurement was to start with Evaluation Boards (one for each factor), which would then reported to a Source Selection Evaluation Board, which would then reported to the Source Selection Authority.

A Technical Evaluation Board gave Novetta Inc. four strengths, which was a pretty high rating, for its proposal. At the Source Selection Evaluation Board (SSEB), however, Novetta’s proposal was stripped of two of those four strengths, and the remaining two strengths were deemed less impressive, which resulted in the proposal being downgraded to a lower level. Ultimately, these deductions at the SSEB meant that Novetta did not make the list of 14 awardees.

As a result of their loss, Novetta protested at GAO, complaining that their strengths had been recognized by the first Board only to be subsequently removed in the next step of the process. GAO reviewed the law, which was fairly well-established, and determined that higher authorities (such as the SSEB in this case), don’t have to agree with those reporting up to them. That said, the higher authorities do have to provide reasons when they disagree.

In this case, the Technical Evaluation Board’s report had been very detailed as to the proposal’s strengths and their significance. The SSEB’s report, on the other hand, had simply dismissed them by saying that they “did not agree.” Looking at the record, GAO couldn’t understand the SSEB’s rationale for disregarding these apparently important and well-grounded strengths. As a result, GAO sustained Novetta’s protest.

Novetta, Inc., B-414672.4; B-414672.7, Oct. 9, 2018.

Takeaways on Procurements With Technical Emphasis

When non-price factors, like technology are more important factor than price, industry must write a very clear, well-reasoned proposal that explains why its approach is better. That said, the agency also needs to be clear and logical in evaluating proposals and documenting that evaluation.  That’s particularly critical when higher authority takes a different path than the one recommended.

For more on this case, listen to my interview on Federal News Radio‘s “Federal Drive with Tom Temin.”

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