Best-value buys still require sound evaluation criteria

Recent protest decisions renew the issue of best value and the latitude an agency has
in arriving at a best-value decision.

If a prospective bidder thinks value is established by the mere fact that it knows the
functions of the agency due to work performed under other contracts, it should take heed
of a decision handed down recently by the General Accounting Office.

An incumbent contractor protesting an agency's award on criteria other than related
experience argued that because it had performed successfully under a similar contract for
the agency, it was uniquely familiar with the type of services required. The protester's
reliance on its status as an incumbent is misplaced, GAO stated. An agency is not required
to consider prior performance if it is not relevant to the requirements in the current

In a more typical best-value analysis, the Navy weighed the lower price performance of
one bidder against the extensive experience and history of performance of another. The
service concluded that the latter proposal offered the best value to the government even
though the price was higher.

Best value also requires a balanced offer. A recent request for proposals contemplated
the award on a best-value basis. The solicitation set forth two equally weighted factors,
price and past performance. Before an offer can be rejected as unbalanced, it must be
found to be both mathematically and materially unbalanced.

An offer is not acceptable when it contains nominal prices for some items and
overstated prices for others. Performance-based value requires that lower costs related to
price and performance gains in technology refreshments be weighed against whether an
agency can expect to take advantage of replacement products that offer such gains.

An agency's determination of price reasonableness is a matter of administrative
discretion involving the exercise of business judgment. Protest boards do not usually
question such judgment unless the determination is clearly unreasonable. An agency can
select whatever price analysis techniques will ensure a fair and reasonable price.

The fact that one vendor offers a higher bid than another is not a basis to object to
an agency's price reasonableness determination.

Best value may not necessarily mean higher cost. An agency considers many other factors
in determining best overall value to the government. An award can be made to a technically
lower-rated, lower-priced bidder even if the solicitation states that technical
superiority is more important than price.

Typically, a solicitation will not provide for award solely on the basis of the highest
technical point score but should state that price will be considered as a substantial
evaluation factor.

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