Skeptical of a Competitor’s Technical Evaluation? How One Company Succeeded at GAO

A competitor protested when an Energy Department (DoE) contract awardee proposed an unusual plan for processing radioactive liquid waste. Given the apparent riskiness of the winner’s proposition, it’s not surprising that GAO sustained the protest. What is surprising (and remains a mystery) is how the agency assessed the winning proposal’s technical approach as sound. Read on to learn how one protestor succeeded because of an agency’s murky evaluation.

Balancing Technical Approach & Proposed Cost for a Cost-Plus Contract

DoE sought to award a cost-plus contract for processing radioactive liquid waste at the agency’s Savannah River Site. Three bidders participated in the competition, and DoE eventually awarded the contract to Savannah River EcoManagement (SRE), who had the lowest cost proposal and a “good” technical assessment. The protestor, Savannah River Technology & Remediation (SRTR) had earned the highest graded technical proposal, but also had the highest evaluated cost, and therefore was not selected. The protestor raised the question of whether the agency had properly evaluated the awardee’s technical approach. And GAO was charged with making a determination.

 

A Perceived Flaw in the Winner’s Technical Approach

Specifically, the protestor took issue with the winning bidder’s method for processing 36M gallons of radioactive liquid waste. To provide some background on that process, in order to handle the hazardous material, the contractor needs to vitrify it, separating the radioactive material from the liquid waste and then stabilizing it into solid form. Before that, the contractor must dilute the waste until it is no longer too “hot” to process. The dilution process, in particular, is where the two competitors differed. The winning bidder (who had the lower-cost proposal) planned to dilute the material less than the protestor, thus increasing the concentration of radioactive material. This cost-saving method would have been unprecedented at the Savannah River site, which had never before run at this higher concentration.

 

Support for the Awardee’s Unconventional Strategy

To bolster their case for the unusual method, the awardee pointed to a DoE study on waste removal. When they looked at the study in question, however, GAO had reservations. In fact, GAO found that the study showed that diluting at the higher concentration would result in an unacceptable, potentially flammable end product.

So seeking to understand the agency’s rationale, GAO turned to DoE’s record of the evaluation. The record contained no written indication that they had looked at the associated risks. So DoE produced an affidavit from evaluators saying they had considered the study, but hadn’t written about it in the evaluation. DoE’s evaluators deemed the study’s results inconclusive, and thus dismissed the flammability risks. While DoE was able to show they’d consulted a technical expert on the subject, they did not discuss the dilution issue with her and therefore didn’t have the benefit of her expertise in evaluating the proposal. Ultimately, DoE was unable to ground their decision for selecting a contractor with a potentially problematic technical approach.

 

GAO Upholds the Protest

GAO will not second-guess an agency on technical matters if agencies make considered judgments grounded in rationale. Nothing in DoE’s written record showed how they looked at the dilution question or why they came to the decision they did. When pressed, their support for the award was very weak. As a result, GAO had little choice but to sustain the protest and direct DoE to re-evaluate proposals.

It’s important to note that because this is a cost-plus contract, the financial risk is on the Government. If the facility attempts the higher concentration method and it fails, the contractor must move to a higher dilution and lower concentration, thus slowing down the process and increasing the costs. There would be a cost overrun, but DoE would have to fund that overrun to continue the contract. Thus the Government would bear the financial risk, not the contractor, and that makes the agency’s blasé attitude even more puzzling.

Savannah River Technology & Remediation, LLC; Fluor Westinghouse Liquid Waste Services, LLC, B-415637, et al, Feb 8. 2018.

 

For more information, listen to my interview on Federal News Radio’s Federal Drive with Tom Temin.

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