Bar is raised for justifying best value contracts

A recent Government Accountability Office bid protest decision demonstrates that federal agencies must be more diligent in justifying decisions to award contracts to companies that are not the lowest bidders, procurement specialists said on Wednesday.

GAO on March 4 sustained Reston, Va.-based Access Systems Inc.'s challenge of a $25.6 million task order for ongoing Marine Corps Systems Command technical and management support. Access Systems -- the incumbent contractor -- had submitted a lower bid than winner Avineon Inc. of Alexandria, Va.

The Marine Corps' request for quotes stated that the task order would be issued on a best value basis, where "overall technical merit [was considered] to be of significantly greater importance than evaluated price." But GAO decided the Marine Corps failed to provide necessary justification for the higher price.

"It's not about us deciding which company's services are better, or second-guessing the decision of the agency," said Michael Golden, associate general counsel at GAO. "We're just saying there needs to be proper documentation."

Acquisition officials rated both companies' understanding of the required services as acceptable and past performance as low risk. Access Systems and Avineon held comparable technical certifications and both had qualified personnel.

"When you consider the range of activities that can make up an IT support contract, there is an enormous challenge in attempting to quantify performance with metrics," said Ray Bjorklund, senior vice president and chief knowledge officer for the consulting firm FedSources. "I think that, as thin as they are stretched, the acquisition workforce needs more practical training in how to apply best value principles."

Neither company would comment on GAO's ruling.

"The decision reiterates the fact that best value does not equate to an unfettered free hand," said Stan Soloway, president of the Professional Services Council. "Evaluation criteria do matter -- a lot."

Best value contracts often end up going to the lowest bidder, due to increasing pressure to cut costs, fear of protests, failure to understand program requirements, or inability to separate the best deal from the best overall value to the government, Soloway said. That's not ideal, because companies intentionally will low-ball bids to win work and then renegotiate the terms, driving up costs, according to Larry Allen, president of the Coalition for Government Procurement.

"We're in a more risk-averse environment," Allen said. "You don't want to see a procurement model where low cost is presumed to be the best solution in each scenario, because that ignores a lot of other factors that government should be looking at. But government is looking for sharper pencils from its offerors."

Agencies could see demand for thorough justification of best value awards increase under President Obama.

Nothing from the administration suggests a lack of support for best value contracting, but Bjorklund noted that Obama's calls for greater visibility and transparency certainly should drive agencies to be more diligent in documenting awards.

"As the new administration turns up the heat to try to reduce the costs associated with government acquisitions, there is a very real risk that the government will leave best value contracting behind in order to make things easy," said Warren Suss, president of the IT firm Suss Consulting. "But that would be a very bad decision. Best value contracting is very important -- even as it continues to be a challenge for the government."