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FAR 8.405-2:  Ordering procedures for services requiring a statement of work

Comptroller General - Key Excerpts

Evaluation Report and Source Selection Decision

The record shows that the technical evaluation report did not reflect a consensus of the evaluators, but simply provided a mathematical average of the individual evaluators’ scores assigned to the vendors. The accompanying spreadsheets listed the individual evaluators’ scores, the resulting average, and narrative strengths for each firm (and, for C&C, the invalid past performance weakness discussed above). By simply averaging the individual evaluators’ scores, by not considering that the only weakness identified in the evaluation report spreadsheets for C&C was apparently invalid, and by making no effort to reconcile or explain the significantly negative views of one evaluator with the strongly positive views of the other three, the evaluation report provided an unsound foundation on which to base a source selection decision.

Even apart from those issues, the source selection decision was unreasonable. This procurement was a competition among FSS vendors for services defined by a statement of work. See FAR § 8.405-2. An agency evaluation may assign adjectival ratings and point scores, but those are guides to--not substitutes for--intelligent decisionmaking. Opti-Lite Optical, B-281693, Mar. 22, 1999, 99-1 CPD ¶ 61 at 4. Scores and ratings do not mandate automatic selection of a particular proposal. Midland Supply, Inc., B-298720.3, May 14, 2007, 2007 CPD ¶ 104 at 5. Source selection officials have broad discretion in determining the manner and extent to which they will make use of, not just the adjectival ratings and point scores, but also the written narrative justification underlying those technical results, subject only to the tests of rationality and consistency with the evaluation criteria. Id. The propriety of the price/technical tradeoff decision turns on whether the selection official’s judgment concerning the significance of the difference in the technical ratings was reasonable and adequately justified. Johnson Controls World Servs., Inc., B-289942, B-289942.2, May 24, 2002, 2002 CPD ¶ 88 at 6.

The sole rationale of the FTA’s source selection decision here was AOC’s high score, without discussing what, if anything, the difference between the technical scores of AOC and C&C actually signified. The record contains no evidence that the agency compared the qualitative strengths and weaknesses of AOC’s quotation to those of C&C’s quotation, or justified why any advantages of AOC’s quotation were worth a $298,000 premium. Such a mechanical evaluation and tradeoff does not provide a reasonable basis on which to base a source selection decision. Shumaker Trucking & Excavating Contractors, Inc., B‑290732, Sept. 25, 2002, 2002 CPD ¶ 169 at 6. Indeed, in contrast to the impression conveyed by AOC’s higher score and adjectival rating, the technical report narrative described C&C’s quotation as providing “extraordinary wealth of knowledge, applicable skills, and their method . . . which will lead to a comprehensive [vi]ew of the organization,” while the narrative for AOC’s quotation simply states that the firm’s technical approach and personnel “met” the requirements. AR, Tab 6b, Evaluation Spreadsheet, at 1. Despite this, there is no sign in the source selection decision that the contracting officer compared the evaluated merits of any quotations or their prices.

The source selection decision is thus improper, both because it is based on the misevaluation of C&C’s quotation, and because it fails to document a reasoned source selection rationale. The source selection decision shows only that the contracting officer considered the evaluated point scores and found that the incumbent, AOC, had the highest score. There is no indication that the contracting officer considered the merits of the evaluations; the decision lists only scores. There is no indication that the contracting officer considered C&C’s or other vendors’ lower prices; the decision lists only AOC’s price, and compares it only to a government estimate. Although the RFQ provided for a tradeoff among non-price and price factors, the source selection decision shows that AOC’s quotation was selected simply because it had the highest score and an acceptable price. There was no meaningful consideration of the other vendors’ evaluations (beyond their total point scores) or their prices. The source selection decision is thus unreasonable and inconsistent with the RFQ. (Castro & Company, LLC B-412398: Jan 29, 2016)  (pdf)

TPS asserts that, as it was the incumbent for this requirement, the agency acted improperly in not furnishing it a copy of the solicitation. As noted by the protester, section 863 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No. 110-417, 122 Stat. 4356, 4547-48 (2008), mandated the issuance of regulations in the FAR “to require enhanced competition in the purchase of property and services by all executive agencies pursuant to multiple award contracts.” Id. In addition, while the statute permits notice to fewer than all contract holders under multiple award contracts, it requires that such notice be “provided to as many contractors as practicable.” Id. at § 863(b)(3)(A).

As relevant here, the FAR was amended pursuant to the Act to provide that, in the case as here of a proposed FSS order for services exceeding the simplified acquisition threshold:

(iii) The ordering activity contracting officer shall--

(A) Post the RFQ on e-Buy to afford all schedule contractors offering the required services under the appropriate multiple-award schedule(s) an opportunity to submit a quote; or

(B) Provide the RFQ to as many schedule contractors as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that quotes will be received from at least three contractors that can fulfill the requirements. When fewer than three quotes are received from schedule contractors that can fulfill the requirements, the contracting officer shall prepare a written determination to explain that no additional contractors capable of fulfilling the requirements could be identified despite reasonable efforts to do so. The determination must clearly explain efforts made to obtain quotes from at least three schedule contractors.

FAR § 8.405-2(c)(3)(iii); see 76 Fed. Reg. 14548, 14550, 14553 (Mar. 16, 2011). TPS argues that, given the Act’s emphasis on enhancing competition for the award of orders placed under multiple-award contracts, the VA “had an affirmative duty under procurement law and regulation to solicit an offer from TPS unless the agency could establish that doing so was somehow not practicable.” Comments at 10 (emphasis in original).

Our Office, however, has previously rejected the position that agencies are required to solicit the incumbent FSS contractor. See Allmond & Co., B-298946, Jan. 9, 2007, 2007 CPD ¶ 8 at 2 (the applicable statute and regulations simply do not require an agency to solicit the incumbent FSS contractor); Lockmasters Security Institute, Inc., B-299456, May 21, 2007, 2007 CPD ¶ 105 at 3 (under the FSS, a vendor has no legal expectation or entitlement to be one of those vendors solicited merely because it was the incumbent). Although, as noted by the protester, these cases predate the change made in the FAR pursuant to the Act, resulting in the current FAR § 8.405-2(c)(3)(iii) quoted above, TPS points to nothing in the statute, the legislative history, or in the implementing regulations, nor are we aware of anything, which specifically mandates soliciting the incumbent FSS contractor. Thus, we are aware of no violation of procurement law or regulation to be found solely from an agency’s decision not to solicit its incumbent FSS contractor.

In addition, TPS’s contention, in essence, is that for those situations where an agency is not electing to post an RFQ on e-Buy (FAR § 8.405-2(c)(3)(iii)(A)), providing the RFQ to as many schedule contractors as “practicable” should translate to a requirement that the incumbent schedule contractor must be solicited. We disagree. The word “practicable” in the regulation is followed by an explanatory clause. Specifically, an agency that elects not to post on e-Buy its FSS solicitation (valued above the simplified acquisition threshold) is required to solicit “as many schedule contractors as practicable, consistent with market research appropriate to the circumstances, to reasonably ensure that quotes will be received from at least three contractors that can fulfill the requirements.” FAR § 8.405-2(c)(3)(iii)(B) (emphasis added). Here, the record shows that the agency solicited 14 vendors and received 6 quotations. Accordingly, the agency met the competition requirements of the regulation.  (Technical Professional Services, Inc. B-410640: Jan 20, 2015)  (pdf)


CPS contends that its quotation documented more relevant past performance than Arc Aspicio’s quotation, which ICE [Immigration and Customs Enforcement] failed to credit in its evaluation and selection decision. In this regard, CPS notes that the RFQ informed vendors that past performance was of equal weight to the other evaluation factors and that more relevant past performance (and/or past performance with higher quality ratings) would be considered more favorably. AR, Tab 3, RFQ, amend. 1, at 5. CPS also argues that the RFQ required vendors to identify at least three examples of relevant past performance, but that only two of Arc Aspicio’s three examples of past performance were relevant. Specifically, CPS objects that one of the awardee’s past performance examples involves a significantly smaller effort than the work here (approximately [DELETED] of the value).

The agency responds that the evaluators and contracting officer reasonably considered the vendors’ past performance, assigning each a low risk rating based upon the determination that there was little doubt that they could perform the task order. Supp. AR at 11-23. ICE argues that it was reasonable to assign Arc Aspicio’s past performance a low risk rating, given the awardee’s submission of three relevant examples of past performance with high quality ratings. Id. at 15. In this regard, the agency contends that CPS was not prejudiced, because its past performance received the highest possible past peformance rating (that is, low risk). Id. at 23.

Where an agency issues an RFQ to GSA FSS contractors under FAR subpart 8.4 and conducts a competition, we will review the record to ensure that the agency’s evaluation and selection decision are reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations. See Digital Solutions, Inc., B‑402067, Jan. 12, 2010, 2010 CPD ¶ 26 at 3-4; DEI Consulting, B‑401258, July 13, 2009, 2009 CPD ¶ 151 at 2. For procurements conducted pursuant to FAR subpart 8.4 that require a statement of work, such as this one, the agency’s evaluation and trade-off judgments must be documented in sufficient detail to show that they are reasonable. FAR § 8.405-2(f); Neopost USA Inc., B-404195, B-404195.2, Jan. 19, 2011, 2011 CPD ¶ 35 at 7.

Here, the RFQ provided that award would be made on a best-value basis, considering past performance as one of three equally-weighted evaluation factors. The RFQ further stated that the agency would “assess the relevance and quality of the offeror’s performance record in assessing past performance.” AR, Tab 3, RFQ amend. 1, at 5. Thus, the solicitation provided for the evaluation of past performance on a qualitative basis that considered the relative merits of the firms’ past performance in terms of relevance and quality. Where, as here, the solicitation anticipates the use of a best value evaluation plan--as opposed to selection based on low price and technical acceptability--the evaluation of quotations is not limited to determining whether a quotation is merely technically acceptable; rather, quotations should be further differentiated to distinguish their relative quality under each stated evaluation factor by considering the degree to which technically acceptable quotations exceed the stated minimum requirements or will better satisfy the agency’s needs. See US Info. Techs. Corp., B-404357, B-404357.2, Feb. 2, 2011, 2011 CPD ¶ 74 at 9; see also Systems Research and Applications Corp.; Booz Allen Hamilton, Inc., B-299818 et al., Sept. 6, 2007, 2008 CPD ¶ 28 at 24.

The record shows that CPS submitted five relevant examples of its past performance (two of which were for the exact work here) and that ICE received good to excellent references for four of these examples. In contrast, Arc Aspicio submitted three examples of its past performance (one of which was of significantly less magnitude than the work being procured here), and two of which the agency found that Arc Aspicio had excellent ratings (although, as noted above, for one of these two examples the TET had not received a rating for the work it found most directly relevant). The record thus indicates that the firms’ past performance may present qualitative differences in terms of either relevance or quality. For example, CPS’s subcontract work on the incumbent contract indicates that CPS may have more specific, relevant past performance than does Arc Aspicio, particularly given that one of Arc Aspicio’s past performance examples is significantly smaller than the work presented here.

Despite the indication in the record that there may be differences in the quality of CPS’s and Arc Aspicio’s past performance, at least in terms of relevance, there is no evidence in the contemporaneous evaluation record showing that either the TET or the contracting officer considered the relative merits of the two firms’ past performance. Rather, the record shows that the TET simply catalogued the firms’ respective past performance and quality ratings before concluding that both proposals should be rated low risk under the past performance evaluation factor. AR, Tab 6, Evaluation Report, at 5-6, 13-14. At no point in this record is there any consideration by the TET or the contracting officer of whether the past performance of these vendors is equally relevant or why the two firms’ past performance was equivalent. Id.; AR, Tab 7, Contracting Officer Decision Document, at 6-7. In this regard, there is no discussion of the respective merits of the firms’ past performance in the contracting officer’s trade-off analysis, which only focuses upon the respective merits of the vendors’ quotations under the technical approach and solution factor and price.

The agency’s failure to consider the relative qualitative merits of the firms’ past performance may have been driven by the adjectival rating scheme that was employed by the TET and contracting officer. As noted above, the highest rating that a vendor could receive for past performance was low risk, indicating that there was no doubt that the vendor could perform the task order work. This scheme provided no adjectival ratings to account for better or more relevant past performance. Regardless, we have long stated that evaluation ratings, whether adjectival or numerical, should be merely guides to intelligent decision-making, and that therefore evaluators and selection officials should reasonably consider the underlying bases for ratings, including the advantages and disadvantages associated with the specific content of competing quotations, in a manner that is fair and equitable and consistent with the terms of the solicitation. See Systems Research and Applications Corp.; Booz Allen Hamilton, Inc., supra. This was, however, not done here.

In short, because the record does not show that the TET or the contracting officer reasonably considered the relative merits of the vendors’ past performance consistent with the RFQ’s evaluation scheme, we sustain the protest.  (CPS Professional Services, LLC, B-409811, B-409811.2: Aug 13, 2014)  (pdf)


The protester raises a number of objections to the agency’s reevaluation of proposals and selection decision. Among other things, the protester objects to the agency’s decision to upwardly adjust its proposed labor hours to perform the first call, which resulted in NikSoft’s evaluated price being higher than LS3’s. In this regard, NikSoft complains that DOJ ignored NikSoft’s individual technical approach and improperly assumed that NikSoft would perform the first call in the same manner as LS3, which had a different technical approach to providing these services. See Comments at 15-16.

Where, as here, an agency issues an RFQ to FSS contractors under Federal Acquisition Regulation (FAR) subpart 8.4 and conducts a competition, we will review the record to ensure that the agency's evaluation is reasonable and consistent with the terms of the solicitation. See Digital Solutions, Inc., B-402067, Jan. 12, 2010, 2010 CPD ¶ 26 at 3-4; GC Servs. Ltd. P'ship, B-298102, B-298102.3, June 14, 2006, 2006 CPD ¶ 96 at 6. With regard to the establishment of BPAs under FSS procedures, the FAR requires that the agency establish the BPA with the contractor that provides the best value, considering price and other identified factors. FAR § 8.405-3(a)(1), (2). In this regard, FAR § 8.405-2(d) requires the agency to evaluate all responses received using the evaluation criteria provided in the solicitation, and to consider the level of effort and the mix of labor in evaluating the offered prices. See Advanced Tech. Sys., Inc., B-296493.6, Oct. 6, 2006, 2006 CPD ¶ 151 at 9-10.

While we are mindful that, when an agency places an order under a BPA, limited documentation of the source selection is permissible, the agency must at least provide a sufficient record to show that the source selection was reasonable. FAR § 13.303-5(e); see also FAR § 8.405-2(e) (minimum documentation requirements include documenting the rationale for any tradeoffs when establishing a BPA or placing an order); e-LYNXX Corp., B-292761, Dec. 3, 2003, 2003 CPD ¶ 219 at 8 (even for procurements conducted under simplified acquisition procedures, an agency must have a sufficient record to allow for a meaningful review).

The record here provides no basis to support the agency’s determination that NikSoft’s level of effort or labor mix was insufficient to perform the first call, or to support its determination that NikSoft’s level of effort should be increased to the same level of effort proposed by LS3. Specifically, apart from the agency’s conclusion that NikSoft’s level of effort is insufficient and that LS3’s level of effort is sufficient, there is no analysis or explanation in the agency’s price evaluation and source selection decision to support these determinations. Nor has the agency provided any explanation or support for these conclusions in response to NikSoft’s protest. This is particularly problematic given DOJ’s recognition that the two vendors had differing approaches to performing the call.

FAR § 8.405-2(d) does not elaborate on the precise method of analysis, or the extent of consideration an agency must give to a vendor’s proposed level of effort and labor mix. In our view, agencies are not required to conduct a formal evaluation of the kind typically performed in a negotiated procurement under FAR Part 15. However, in light of the significant differences between NikSoft’s and LS3’s levels of effort and labor mixes, the conclusory statements in the record simply are not adequate to demonstrate that DOJ reasonably considered whether NikSoft’s level of effort and labor mix were sufficient to perform the call, or to explain the agency’s decision to upwardly adjust NikSoft’s level of effort to that of LS3’s. We, therefore, sustain the protest on this basis.  (NikSoft Systems Corporation, B-406179.2, Aug 14, 2012)  (pdf)


NikSoft’s protest challenges numerous aspects of the agency’s technical evaluation and the resulting source selection decision. NikSoft specifically argues that the agency’s source selection decision failed to meaningfully consider whether LS3’s higher-priced quotation merited the associated cost premium.

Where, as here, a procurement conducted pursuant to FAR subpart 8.4 provides for award on a “best value” basis, it is the function of the SSA to perform a price/technical tradeoff, that is, to determine whether one quotation's technical superiority is worth its higher price. InnovaTech, Inc., B-402415, Apr. 8, 2010, 2010 CPD ¶ 94 at 2, 6 n.8; The MIL Corp., B-297508, B-297508.2, Jan. 26, 2006, 2006 CPD ¶ 34 at 13. Specifically, FAR § 8.405-2(d) requires the agency to evaluate all responses received using the evaluation criteria provided in the solcitation and to consider the level of effort and the mix of labor proposed to perform the task in evaluating the offered prices. See Advanced Tech. Sys., Inc., B-296493.6, Oct. 6, 2006, 2006 CPD ¶ 151 at 9-10. While we are mindful that, when an agency places an order under a BPA, limited documentation of the source selection is permissible, the agency must at least provide a sufficient record to show that the source selection was reasonable. FAR § 13.303-5(e); see also FAR § 8.405-2(e) (minimum documentation requirements include documenting the rationale for any tradeoffs when establishing a BPA or placing an order); e-LYNXX Corp., B-292761, Dec. 3, 2003, 2003 CPD ¶ 219 at 8 (even for procurements conducted under simplified acquisition procedures, an agency must have a sufficient record to allow for a meaningful review).

Here, as indicated by the contemporaneous documentation set out above, there is no evidence that the agency gave any meaningful consideration to NetSoft’s lower price in making the source selection decision. Rather, the record shows that the agency’s selection decision was solely based on LS3’s higher technical rating. Indeed, the contracting officer explains that the basis for the agency’s selection decision was as follows: “Given [LS3’s] rating of ‘exceptional,’ with no other bidders having received an equivalent or higher rating, thereby rendering further analysis under the trade-off approach unnecessary, LS3 was selected for award.” CO’s Statement at 413. Because the agency did not consider price as required by the solicitation and applicable regulations, we sustain NikSoft’s protest on this basis.  (NikSoft Systems Corp., B-406179, Feb 29, 2012)  (pdf)


With respect to USIT's challenge to the agency's evaluation of 5D's price, USIT complains that DLA relied upon a flawed independent government estimate in evaluating prices, because the government estimate ($7,359,688) was overstated by approximately $900,000 due to the inclusion of costs and labor hours associated with the technical support tasks that had been removed from the procurement by amendment 3. Protester's Comments at 9. USIT argues that 5D's quoted price should have been found to be approximately 22.5 percent higher than the government estimate (and not 8 percent higher) once the estimate was corrected to remove the hours and costs associated with the deleted technical support tasks. See Protester's Comments at 11; see also AR, Tab 20, Selection Decision, at 12. USIT also argues that the price evaluation was unreasonable because DLA did not evaluate 5D's reallocation of labor hours from the deleted technical support tasks to the customer support tasks in its revised quotation. Protester's Comments at 11; Protester's Supp. Comments at 5.

When an agency issues an RFQ to vendors holding FSS contracts for the delivery of services at hourly rates, and, as here, a statement of work is included, the ordering agency must evaluate the quotations received consistent with the stated evaluation criteria. FAR sect. 8.405‑2(d). The FAR also requires the agency to consider the level of effort and the mix of labor proposed to perform the task being ordered, determine that the total price is reasonable, and document the agency's price reasonableness determination. FAR sect. 8.405‑2(d), (e) ; see also Advanced Tech. Sys., Inc., B‑296493.6, Oct. 6, 2006, 2006 CPD para. 151 at 9-10.

In our view, the record here does not show that DLA's price evaluation was reasonable. As noted above, vendors were required to provide detailed pricing information, labor hours, and labor mix for each PWS task and to demonstrate the relationship between their pricing structure and their technical approach. See RFQ sect. 4.2.4.1. USIT and 5D both provided labor categories, corresponding labor rates, and hours by labor category for each task, as required by the RFQ. USIT and 5D apparently have very different approaches to performing the PWS tasks, given the dramatic differences in the vendors' quoted labor hours and labor mix for the PWS tasks. For example, with respect to the customer support task (to which 5D reallocated its labor hours from the deleted technical support task), USIT quoted a total of [DELETED] hours at a price of $2.4 million, and 5D quoted a total of [DELETED] hours at a price of $4.5 million. 

At best, the record here indicates that the vendors' quoted labor hours were reviewed by the [technical evaluation panel] TEP, and found "sufficient to complete the tasks." See, e.g., AR, Tab 17, Final Consensus Evaluation Summary for 5D, at 1. As noted above, the CO also compared 5D's quoted price to the government estimate (noting that 5D's total price was within 8 percent of the government estimate) and concluded that 5D's quoted price was fair and reasonable "based on the existence of full and open competition, the fact that the [TEP] accepted the total labor hours, and the use of [FSS] pricing." AR, Tab 20, Selection Decision, at 12-13.

There is no documentation in the record demonstrating that the TEP or the CO evaluated 5D's, or USIT's, labor mix to perform the PWS tasks, or performed the analysis required by FAR sect. 8.405-2(d) to determine whether the labor mix proposed--albeit at fixed hourly rates--would result in a reasonable price for performance. Rather, the TEP's evaluation report and CO's selection decision merely state that the TEP found that the vendors' total labor hours were considered sufficient to perform the PWS tasks. The record also lacks any analysis of 5D's reallocation of over 6,000 labor hours (at a price over $878,000) from a task that had been deleted from the PWS to another task. There is also no explanation for why reallocating these hours to another PWS task was reasonable. Moreover, no such analysis or explanation has been provided in response to this protest. On this record, we cannot find a basis to uphold DLA's determination that the vendors' overall price (which is based upon the application of the vendors' FSS rates to their quoted labor hours for each labor category) was reasonable.  (U S Information Technologies Corporation, B-404357; B-404357.2, February 2, 2011)  (pdf)


The protester asserts that it was improper for GSA to rescore the quotations after receiving the evaluation materials prepared by IHS’s technical evaluators. According to the protester, this rescoring resulted in the technical superiority of CSN’s quotation being exaggerated, and also ultimately led to the SSA’s not considering OPTIMUS’s quotation in the price/technical tradeoff decision, notwithstanding OPTIMUS’s substantial price advantage over CNI.

We will not reevaluate quotations in reviewing a protest challenging an agency’s technical evaluation; rather, we will examine the record to determine whether the agency’s evaluation conclusions were reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations. Engineered Elec. Co. d/b/a/ DRS Fermont, B-295126.5, B-295126.6, Dec. 7, 2008, 2007 CPD para. 4 at 3-4.

GSA’s scoring changes here are unobjectionable. The record shows that both the GSA program manager and SSA did not change the scores in a vacuum; rather, the changes were made with reference to the contents of the quotations and the evaluation materials prepared by the IHS evaluators (and, in the case of the SSA, the evaluation materials prepared by the program manager). In this regard, the program manager states as follows:

I can testify that I created a consensus evaluation document utilizing the comments from the first set of IHS’ evaluations. As is common practice of the Project Manager, I reviewed all [quotations] to verify the comments from the first set of evaluations. I evaluated each [quotation’s] Past Experience/Past Performance, Technical/Management Approach and Staffing Plan. Each of these factors included multiple criteria that received scores in the evaluation. The IHS evaluators, however, did not correlate their scores to the Evaluation Plan Criteria accurately thus resulting in inaccurate scores. In the consensus document, I applied the comments from the first set of evaluations, correlated such comments to the Evaluation Plan Criteria, and applied the correct score. (All [of the IHS evaluators’] evaluation comments were preserved on the consensus evaluation document.) I added comments on the consensus document when the score I applied differed from the technical panel average score for that factor.

Agency Submission, Dec. 8, 2008, Program Manager Affidavit, at 2. Similarly, the SSA states his rationale for changing the scores a second time:

I can testify that the resulting scores from the initial evaluations and consensus document resulted in fractional scores. . . . The scoring criteria in the solicitation was based on . . . whole number scores. . . . To determine whether a score of 2.5 equaled a ‘2’ or a ‘3’, I re-read all 7 [quotations]. As the Source Selection Authority, based on my reading of (1) the [quotations], (2) the solicitation criteria, and (3) the comments of the evaluation panel and the GSA [program manager], I determined the most appropriate whole number score.

Agency Submission, Dec. 8, 2008, SSA Affidavit, at 2.

In the final analysis, ratings, be they numerical, color, or adjectival, are merely guides for intelligent decision making in the procurement process. Citywide Managing Servs. of Port Washington, Inc., B-281287.12, B-281287.13, Nov. 15, 2000, 2001 CPD para. 6 at 11. The germane consideration is whether the record shows that the agency fully considered the actual qualitative differences in the technical quotations or quotations. See, e.g., Bernard Cap Co., Inc., B-297168, Nov. 8, 2005, 2005 CPD para. 204 at 6.

Both GSA officials, after a detailed review of the evaluation materials and the quotations themselves, assigned point scores that they determined more accurately portrayed the relative merits of the quotations, and were consistent with the terms of the solicitation’s evaluation scheme. These actions were in no way inconsistent with the RFQ, and the protester has not shown that the revised scores inaccurately reflected the relative merits of the quotations. We thus have no basis to object to the rescoring.  (OPTIMUS Corporation, B-400777, January 26, 2009)  (pdf)


The protester maintains that the agency failed to provide it with meaningful discussions. According to the protester, the agency’s request for price reductions after the submission of initial quotations constituted the opening of discussions, which obligated the agency to bring to OPTIMUS’s attention the weaknesses the agency identified in the technical portion of its quotation.

This assertion is without merit. As noted, this requirement is being met through the FSS, and was conducted pursuant to FAR part 8.4. There is no requirement in FAR part 8.4 that an agency soliciting vendor responses prior to issuing a task order under an FSS contract conduct discussions with vendors regarding the contents of those responses, even where the solicitation does not specifically advise firms of the agency’s intent to issue a task order without discussions. Avalon Integrated Servs., Corp., B-290185, July 1, 2002, 2002 CPD para. 118 at 4. [5] Under FAR sect. 8.405-2(c)(3)(ii), where, as here, an agency is placing an order under the FSS that exceeds the maximum order threshold, it is required to seek price reductions below the prices included in the vendors’ FSS price lists. The agency’s request for price reductions was pursuant to this requirement, and therefore did not constitute the opening of discussions, such that the agency was obligated to engage in meaningful discussions.  (OPTIMUS Corporation, B-400777, January 26, 2009)  (pdf)


Because GSA administers the FSS program, we solicited GSA’s views on the responsibility determination issue. In its filing, GSA notes that the purpose of the FSS program, as set forth in FAR Part 38, is to provide federal agencies with a simplified process of acquiring commercial supplies and services. In furtherance of this goal, GSA states, it is responsible for awarding indefinite-delivery contracts in accordance with all applicable statutory and regulatory requirements, including compliance with the requirements relating to contractor responsibility (see FAR sect. 38.101(d), (e)). GSA concludes that, because it is tasked with making determinations of responsibility pertaining to the award of FSS contracts, ordering agencies, while not precluded from doing so, are not required to make a responsibility determination prior to placing an FSS order. Letter from GSA to GAO, July 26, 2006, at 1-3. We agree.  Responsibility is a contract formation term that refers to the ability of a prospective contractor to perform the contract for which it has submitted an offer; by law, a contracting officer must determine that an offeror is responsible before awarding it a contract. See 41 U.S.C. sect. 253b(c), (d); FAR sect. 9.103(a), (b). The concept of responsibility expressly applies to “prospective contractors”--not “current” or “existing” contractors--a limitation that is repeated throughout the applicable statutes and regulations, and that indicates that the requirement for a responsibility determination applies before award of a contract. See, e.g., 41 U.S.C. sect. 403 (“As used in this Act . . . the term ‘responsible source’ means a prospective contractor . . . .”); FAR sect. 9.100 (“This subpart prescribes polices, standards, and procedures for determining whether prospective contractors . . . are responsible”); FAR sect. 9.102(a) (“This subpart applies to all proposed contracts with any prospective contractor . . . .”); and FAR sect. 9.103(c) (“A prospective contractor must affirmatively demonstrate its responsibility . . . .”). Consistent with this statutory and regulatory framework, once an offeror is determined to be responsible and is awarded a contract, there is no requirement that an agency make additional responsibility determinations during contract performance. E. Huttenbauer & Son, Inc., B-258018.3, Mar. 20, 1995, 95-1 CPD para. 148 at 2 (holding that a contracting officer was not required to make a new responsibility determination before deciding whether to exercise an option because the concept of responsibility has no applicability with respect to a contract once that contract has been awarded). Contrary to the protester’s position, the extent of the requirement for a determination of responsibility is not tied to the type of contracting vehicle that the government elects to use for an acquisition; thus, there is no basis to conclude that the requirement for a responsibility determination is broader for orders placed under FSS contracts. In this regard, we note that FAR sect. 8.405 and sect. 8.406 set forth the ordering procedures and ordering activity’s responsibilities, respectively, with regard to FSS contracts; there is no requirement in these provisions to make a responsibility determination. In sum, we conclude that the initial responsibility determination made by GSA in connection with the award of the underlying FSS contract satisfies the requirement for a responsibility determination regarding that vendor and that there is no requirement that an ordering agency perform separate responsibility determinations when placing orders under that contract. In view of our conclusion, ATS’s challenge to HUD’s consideration of PSI’s responsibility here does not give rise to a valid basis of protest since HUD was not required to perform a responsibility determination. (Advanced Technology Systems, Inc., B-296493.6, October 6, 2006) (pdf)


Given the clear language of FAR sect. 8.405-2(d)--“the [o]rdering activity is responsible for considering the level of effort and the mix of labor proposed to perform a specific task being ordered”--we conclude that HUD was required to consider each vendor’s proposed level of effort and labor mix as part of its evaluation of quotations here. As explained below, however, while the record indicates that the agency did consider PSI’s proposed level of effort and labor mix as part of its best value determination, the record also indicates a complete lack of support for the agency’s conclusion that PSI’s proposed level of effort and labor mix were sufficient to perform the specific tasks being ordered under this bridge contract. In order for us to review an agency’s evaluation of vendors’ quotations, an agency must have adequate documentation to support its judgment. See Northeast MEP Servs., Inc., B-285963.5 et al., Jan. 5, 2001, 2001 CPD para. 28 at 7. Where an agency fails to sufficiently document its evaluation findings, it bears the risk that there may not be adequate supporting rationale in the record for us to conclude that the agency had a reasonable basis for the source selection decision. Southwest Marine, Inc.; American Sys. Eng’g Corp., B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD para. 56 at 10. The record here does not provide any basis to support the agency’s determination that PSI’s proposed level of effort and labor mix were sufficient to perform the PWS requirements. The agency’s source selection decision provides no support for the contracting officer’s determination--it is simply a conclusion without explanation. Similarly, in the statement submitted after the filing of ATS’s protest here, the contracting officer merely reiterates his conclusion that PSI’s proposed level of effort and mix of labor were determined acceptable, again without providing an explanation of how this determination was made. The only additional information provided in the contracting officer’s statement is that he spoke with other HUD personnel who also concluded, again without explanation, that PSI had proposed an acceptable level of effort and labor mix. FAR sect. 8.405-2(d) does not elaborate on the method or extent of consideration an agency is responsible for giving to a vendor’s proposed level of effort and labor mix in the circumstances here. In our view, agencies are not required to conduct a formal evaluation of the kind typically performed in a negotiated procurement under FAR Part 15. However, here, in light of the significant differences both between PSI’s and ATS’s proposed levels of effort, and between PSI’s own prior and current proposed levels of effort and labor mixes for the identical TRACS requirements, the conclusory statements in the record simply are not adequate to demonstrate that HUD reasonably considered whether PSI’s level of effort and labor mix were sufficient to perform the specific tasks, as required by FAR sect. 8.405-2(d). We, therefore, sustain the protest on this basis.  (Advanced Technology Systems, Inc., B-296493.6, October 6, 2006) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
Technical Professional Services, Inc. B-410640: Jan 20, 2015  (pdf) Castro & Company, LLC B-412398: Jan 29, 2016  (pdf)
OPTIMUS Corporation, B-400777, January 26, 2009  (pdf) CPS Professional Services, LLC, B-409811, B-409811.2: Aug 13, 2014  (pdf)
Advanced Technology Systems, Inc., B-296493.6, October 6, 2006 (pdf) (responsibility determination) NikSoft Systems Corporation, B-406179.2, Aug 14, 2012  (pdf)
  NikSoft Systems Corp., B-406179, Feb 29, 2012  (pdf)
  U S Information Technologies Corporation, B-404357; B-404357.2, February 2, 2011  (pdf)
  Advanced Technology Systems, Inc., B-296493.6, October 6, 2006 (pdf) (level of effort, labor mix)

U. S. Court of Federal Claims- Key Excerpts

A. Whether a Clear and Prejudicial Violation of the FAR Occurred

The crux of MVS’s protest is that the government violated Part 8 of the Federal Acquisition Regulations (“FAR”), found at Title 48 of the Code of Federal Regulations, in considering the materials MVS submitted in response to the RFQ for satellite communications services. Specifically, MVS contends that the government violated FAR 8.405-2(c)(3)(iii)(C), which requires the order activity contracting officer to “[e]nsure all quotes received are fairly considered and award is made in accordance with the evaluation criteria in the RFQ.”

1. The enforceability of FAR 8.405-2.

At the outset, the court notes that “a procurement under [S]ubpart 8.4 is different in kind from one conducted under Part 15, even if some procedures also present in Part 15 are u[s]ed.” Holloway & Co., PLLC v. United States, 87 Fed. Cl. 381, 393 (2009) (quoting Systems Plus, Inc. v. United States, 68 Fed. Cl. 206, 211 (2005)) (alteration in original). In short, the rigorous competitive procedures in Part 15 do not necessarily apply. See id. The government argues that this distinction means that MVS cannot base its challenge on a clear and prejudicial violation of the FAR, relying on Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl. 388 (1999). See Def.’s Mot. at 37. The decision in Ellsworth states:

[In a FAR Part 8 procurement,] a frustrated bidder may still challenge the agency award under the arbitrary and capricious standard articulated in 5 U.S.C. § 706(2)(A). However, the protester will not be able to prevail on the theory that the procurement procedure involved a clear and prejudicial violation of applicable statutes and regulations, because no applicable procedural regulations are contained in Part 8. A protester instead must rely on establishing that the government officials involved in the procurement process were without a rational and reasonable basis for their decision.

45 Fed. Cl. at 395-96. In making this argument, however, the government fails to acknowledge that FAR Part 8 has been amended to include procedural requirements in the 14 years since Ellsworth was decided. Saliently, FAR 8.405-2(c)(3)(iii)(C), on which MVS relies, was established by Interim Rule, effective May 16, 2011, and as a Final Rule, effective April 2, 2012. See 76 Fed. Reg. 14541, 14548 (Mar. 16, 2011) (establishing the interim rule); 77 Fed. Reg. 12912, 12927 (Mar. 2, 2012) (establishing the final rule). Those rules implemented Section 863 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. 110- 417, 122 Stat. 4356 (Oct. 14, 2008). “Section 863 mandated the development and publication of regulations in the FAR to enhance competition for the award of orders placed under multipleaward contracts.” 76 Fed. Reg. 14548. As such, FAR 8.405-2(c)(3)(iii)(C) is a procedural regulation that this court may enforce and which could provide a basis for a claim that the government engaged in a clear and prejudicial violation of the FAR.

 2. The applicability of FAR 8.405-2(c)(3)(iii)(C) to the DISA procurement.

FAR 8.405-2 sets forth procedures to be followed when an ordering activity seeks to obtain services requiring a statement of work through a Federal Supply Schedule contract. FAR 8.405-2(c)(3)(iii)(C) places an obligation on “[t]he ordering activity contracting officer . . . [to e]nsure all quotes received are fairly considered and award is made in accordance with the evaluation criteria in the RFQ.” FAR 8.405-2(c)(3)(iii). The government first contends that MVS’s claim cannot fall within the ambit of this regulation because the provision “addresses the ordering activity contracting officer . . . [which] is DISA, not GSA, so that provision applies to DISA.” Hr’g Tr. 30:25 to 31:4. According to the FAR, an ordering activity is “an activity that is authorized to place orders, or establish blanket purchase agreements (BPA), against the [GSA’s] [m]ultiple [a]ward [s]chedule contracts.” FAR 8.401.

At the time the RFQ was issued, DISA was the activity authorized to acquire commercial satellite communications services against Federal Supply Schedule contracts. See MOA at 1; AR 10-291 (RFQ). However, this role was established in a unique manner — through an MOA between DISA and GSA which the agencies entered in 2009. Prior to the MOA, both agencies had been “manag[ing] separate contractual vehicles to provide these [commercial satellite communications] services, resulting in an overlap of offerings, providers, and markets.” MOA at 2. To “avoid[] duplication of efforts,” MOA at 1, DISA and GSA agreed to a formal partnership in which each agency would assume significant responsibilities in the acquisition process, see, e.g., MOA, App. A. The MOA does not specify which agency would assume responsibility for processing facility clearance applications if such clearances were required for a commercial satellite communications services procurement. Nonetheless, as the government has acknowledged, DISA and GSA agreed that GSA would receive and sponsor facility clearance applications for commercial satellite communications services procurements. See Hr’g Tr. 81:16-24; Def.’s Mot. at 22; see also Pl.’s Reply to Def.’s and Intervening Def.’s Responses to Pl.’s Mot. for Judgment on the Admin. Record (“Pl.’s Reply”) at 12, ECF No. 76. GSA sponsored the facility clearance applications via Schedule 70 contracts that it managed, even though the Schedule 70 contracts did not require security clearances as a condition of award. See AR 9-261 to -62 (E-mail from Donald Carlson to Karen Stewart); Hr’g Tr. 84:13 to 85:6; see also Def.’s Mot. at 22. Security clearances were only required for the award of certain task orders within the commercial satellite communications services procurement program, of whichthe RFQ at issue was one. See AR 1-27 (2009 Industry Day PowerPoint Slides); AR 2-75 (2010 Industry Day PowerPoint Slides); AR 12-546 (Amendment 2). As such, the ordering activity for the RFQ, DISA, did not maintain sole responsibility for all aspects of the order placed against the Schedule 70 contract. Rather, the MOA allocated responsibility for security clearance sponsorship and processing, a key facet of the RFQ, to GSA, as DISA’s partner in the procurement of satellite communications services. Because of that allocation, and because GSA was in sole control of the processing of vendors’ security clearance applications for the RFQ, the court concludes that GSA served as the ordering activity with respect to the security clearance aspects of the procurement.

The court must next inquire whether MVS’s quote was “fairly considered” within the meaning of FAR 8.405-2(c)(3)(iii). MVS only questions the government’s obligations with respect to the receipt and processing of its request for a secret facility clearance needed to obtain the task order at issue. Whether the government’s conduct with respect to that part of the procurement amounted to fair consideration turns on the circumstances surrounding that process. In this instance, GSA held two industry day events in 2009 and 2010 at which it noted that facility clearances might be required for the award of some commercial satellite communications task orders. AR 1-27; AR 2-75. The GSA website also provided a similar notice. AR 53-3235 (Screenshot of GSA website). The statements did not specify that completed copies of DD Form 254 were to be transmitted to GSA, which would enter facility security clearances as modifications to Schedule 70 contracts. MVS, which did not become eligible for these task orders until January 2011 when it received its Schedule 70 contract, apparently did not understand that GSA was responsible for processing the DD Form 254. Instead, it twice submitted a DD Form 254 to DISA “as part of bid packages in which the DD254 was required.” AR 8-258 (E-mail from Karen Stewart to Anne Miller (Nov. 13, 2012)). In November 2012, only a few days before the RFQ at issue was released, GSA contacted MVS directly to ask whether MVS intended to submit a DD Form 254 to obtain a facility clearance that would appear as a modification to the company’s Schedule 70 contract. AR 8-251 (E-mail from Anne Miller to Karen Stewart and Tim Bracken (Nov. 13, 2012)). When MVS expressed confusion in its reply, Mr. Carlson of GSA replied, explaining that the DD Form 254 “that [GSA] award[s] to the Schedule 70 contract is the one you really want to have in the system” and that GSA would act as MVS’s sponsor for such a clearance. AR 9-262 (E-mail from Donald Carlson to Karen Stewart). MVS did not immediately apply for a facility clearance. On December 6, 2012, it submitted a completed DD Form 254 to GSA several days after DISA issued Amendment 2 to the RFQ and clarified that vendors would be required to possess a secret facility clearance priorto award of the task order. See AR 12-546 (Amendment 2); AR 16-774 (E-mail from Tim Bracken to Anne Miller (Dec. 5, 2012)). MVS’s submission to GSA did not make any mention of its need to obtain a facility clearance by a certain deadline, and there is no evidence in the record that Mr. Carlson, the GSA official responsible for processing DD Form 254s for the commercial satellite communications services program, was aware of any exigent circumstances.

The record reflects that Mr. Carlson, who received MVS’s DD Form 254 on December 6, 2012, AR 17-777 (E-mail from Anne Miller to Donald Carlson), did not act to process therequest until February 1, 2013 — 57 days after he received it, see AR 18-782 (E-mail from Donald Carlson to Anne Miller). Action was taken only after MVS called Mr. Carlson on February 1 to inquire about the status of its request. See AR 19-818 (E-mail from Brian Aziz to Cathy Nelson). That same day, Mr. Carlson sent an e-mail to Ms. Miller, GSA’s contract specialist responsible for MVS’s Schedule 70 contract, in which he acknowledged the long period of time which had passed, saying, “[s]orry about the delay in getting back to [you] on the DD-254 for MVS.” AR 18-782. He also asked Ms. Miller to return to him the completed contents of a DD-254 package he had allegedly sent to her, including a signed DD Form 254, sponsor letter, and a contract modification award document. Id. When Ms. Miller explained that he had never sent such a package, Mr. Carlson replied that he would send a “DD-254 package to DISA for [its] approval,” and would send that package to Ms. Miller once approval was given. Id. Approval was given on February 7, 2013, see AR 54-3341 (E-mail from Donald Carlson to Anne Miller), and the DD Form 254 forms were sent to MVS to review, AR 54-3353 (E-mail from Anne Miller to Brian Aziz). MVS sent the completed forms to GSA that same day, see AR 54-3386 (E-mail from Anne Miller to Donald Carlson), and Mr. Carlson sent the forms to DSS for processing on February 8, 2013, AR 54-3431 (E-mail from Donald Carlson to DSS). DSS granted an interim secret facility clearance to MVS on April 8, 2013, Am. Compl., Ex. 10, and a final secret facility clearance to MVS on April 29, 2013, Am. Compl., Ex. 11, too late for MVS to receive the task order award.

The record reflects a long period of inaction between December 6, 2012, and February 1, 2013, on the part of GSA. During that time, MVS did not contact GSA to inquire about its application for a facility security clearance until it received a letter from DISA requesting a final quotation revision and proof of facility clearance. See AR 32-1788 to -89 (Request for Final Quotation Revision). MVS represents that its inactivity was reasonable, because it contends that the evaluation notices sent by DISA in late December made no mention that MVS’s submission with respect to a facility clearance was deficient. See Hr’g Tr. 72:2-18. It claims that it acted promptly to resolve the matter after receiving notice from DISA that proof of a security clearance would be needed in February. See Hr’g Tr. 72:18-22. The court concurs that MVS’s actions are understandable in light of the circumstances. MVS did not hinder the facility clearance application process in any manner.

Regarding GSA’s actions, Mr. Carlson provides an explanation for his delay in processing MVS’s facility clearance request. He notes that between December 6, 2012, and February 1, 2013, he worked “on the development of [six] DD-254 packages, including MVS’s, as well as . . . numerous others that were in various stages of development or modification award processing.” Decl. of Donald V. Carlson (“Carlson Decl.”) ¶ 14 (May 10, 2013), ECF No. 44. He states that he also worked on a security audit report and was on personal leave for sixteen days during that time period. Id. Mr. Carlson additionally says he halted the processing of DD Form 254 requests for a two-week period in January while DSS “was questioning whether a bona fide need existed for any facility clearances under SINs 132-54 and 132-55 under Schedule 70.” Id. ¶ 15. He resumed processing requests after that issue was resolved and “worked on all the vendors[’] requests for facility clearances and did not expedite the request of any particular vendor.” Id. ¶ 16. Mr. Carlson, however, notes that he did expedite the processing of MVS’s request as soon as he was informed that the matter required prompt consideration. Id. ¶ 17.

Under these circumstances, the court cannot say that MVS’s quote and attendant request for a facility security clearance did not receive fair consideration as required by FAR 8.405- 2(c)(3)(iii). While Mr. Carlson certainly did not act with alacrity, vigor, or timeliness, he provided a propinquent level of bureaucratic service and consideration. He did not actively ignore any indications that MVS’s request was urgent, and he provided MVS with appropriate action once he became aware of the exigency. In sum, MVS has not demonstrated that the government, acting through GSA or DISA, has committed a violation of FAR 8.405-2(c)(3)(iii).  (emphais added by Wifcon.com)  (MVS USA, Inc. v. U. S. and Northrop Grumman Systems, Corp., No. 13-246C, July 2, 2013)  (pdf)


D. FAR Part 15 and FAR 8.405-2(e)

Matt Martin contends that the AR does not establish that the SSO conducted an independent best-value analysis “or that she made any tradeoffs or business judgments that would justify accepting a technically inferior proposal.” Pl.’s Mem. 18 (citing FAR 15.308) see also Pl.’s Mem. 11-12. This procurement was conducted pursuant to FAR Subpart 8.4. See AR Tab 13, at 360. FAR Subpart 8.4 and FAR Part 15 are different provisions with different purposes. The amount of documentation necessary in FAR Subpart 8.4 procurements does not rise to the level required by FAR Part 15.11 “The very purpose of FAR Part 8 is to provide a more simplified and flexible approach away from the more formal and rigorous procedures for negotiated procurements.” Allied Tech. Grp. Inc. v. United States, 94 Fed Cl. 16, 50 (2010) (internal quotation omitted). “Orders placed against [Federal Supply Schedule] contracts are viewed as involving ‘full and open competition’ without requiring the use of procedures contained in FAR Part 15.” HomeSource, 94 Fed. Cl. at 486 (citing FAR 8.404(a)). The Evaluation Plan uses some language that also appears in FAR Part 15. See AR Tab 10, at 319. However, the use of some of the same words in two procurements does not transform a FAR Subpart 8.4 procurement into a FAR Part 15 procurement. See Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl. 388, 394 (1999) (“The decisional law does not support plaintiff's contention that an FSS selection process that is handled more like a negotiated procurement must comply with the requirements of Part 15.”).

Matt Martin’s argument in criticism of the documentation of the agency’s decision in this case relies substantially on CRAssociates, Inc. v. United States, No. 10-339 C, 2010 WL 4162118 (Fed. Cl. Oct. 4, 2010, reissued Oct. 20, 2010), and Femme Comp, Inc. v. United States, 83 Fed. Cl. 704 (2008), Pl.’s Reply 11-15, 24-27, two cases interpreting FAR Part 15, not FAR Subpart 8.4. In Femme Comp, the court found that the SSA had failed to document adequately her comparative analysis of each proposal. Femme Comp, 83 Fed. Cl. at 767-68. The court determined that the SSA’s conclusions in her Source Selection Document appeared to have relied on assigned factor ratings instead of underlying evaluations, in violation of FAR 15.308. Id. Matt Martin’s reliance on Femme Comp, as with its reliance on CRAssociates, see supra note 10, is similarly unpersuasive because those cases involve alleged defects in a procurement based on the failure of the evaluations in those cases to comply with the requirement of FAR Part 15.  (Matt Martin Real Estate Management LLC v. U. S. and HomeTelos, LP, BLB Resources, Inc., Ofori & Associates, P.C., and PEMCO Ltd, No. 10-675C, December 2, 2010)  (pdf)


1. Analysis of cost.

The Technical Evaluation Panel used cost-realism analysis in assessing the offerors' proposals while the contracting officer opted instead to perform a reasonableness assessment under FAR Subpart 8.4 to determine which offerors' proposal represented the "best value" to the government.

(sentences deleted)

Holloway seeks to apply procedures from FAR Part 15 — procedures similar to the cost realism analysis mentioned by the Technical Evaluation Panel — to this procurement.

(sections deleted)

However, the government is not always obligated to perform a cost-realism analysis when analyzing competing proposals. Competitive procedures have been classified into specific subtypes, of which competitive proposals are one and FSS contracts are another. See Systems Plus, Inc. v. United States, 68 Fed. Cl. 206, 209 (2005). Applying that distinction, the court in Systems Plus

f[ou]nd it persuasive that [FAR] subpart 8.404(a) explicitly exempts supply schedule procurements from [FAR] Parts 13 (with minor exceptions), 14, and 15. . . . Thus, while the agency can elect to use procedures from these other parts, they are not presumptively applicable.

Id. at 210. The distinction between when “the more formal and rigorous procedures for negotiated procurements set forth in FAR Part 15” are required, and when they are not, has to do with the nature of the procurement. See Labat-Anderson, Inc. v. United States, 50 Fed. Cl. 99, 103 (2001). A procurement taking place under the FSS program involves the selection of “products and services from a list of eligible contractors whose pricing schemes have been preapproved by GSA.” Id. In this circumstance, because the GSA has already determined that the prices of supplies and services under FSS contracts are “fair and reasonable,” the ordering agency is “not required to make a separate determination of fair and reasonable pricing, except for a price evaluation as required by [FAR §] 8.405-2(d).” FAR § 8.404(d). In this context, FAR § 8.405-2(d) instructs that the contracting agency “is responsible for considering the level of effort and the mix of labor proposed to perform a specific task being ordered, and for determining that the total price is reasonable.” FAR § 8.405-2(d) (emphasis added).

In short, “a procurement under subpart 8.4 is different in kind from one conducted under Part 15, even if some procedures also present in Part 15 are u[s]ed.” Systems Plus, 68 Fed. Cl. at 211; see also Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl. 388, 395-96 (1999) (holding that “consistent with the simplified and flexible approach Part 8 takes toward [FSS] procurements, . . . the protester will not be able to prevail on the theory that the procurement procedure involved a clear and prejudicial violation of applicable statutes and regulations, because no applicable procedural regulations are contained in [FAR] Part 8. A protester instead must rely on establishing that the government officials involved in the procurement process were without a rational and reasonable basis for their decision.”). Accordingly, a cost-realism analysis that accords with FAR § 15.404-1(d)(1), quoted supra, is not necessarily required when reviewing offers made pursuant to a negotiated procurement under the GSA’s FSS program. This contrasts with the source selection decisions reviewed by this court in Lumetra and> Alabama Aircraft, neither of which involved an FSS procurement but both of which explicitly mandated that the agency “perform a cost-realism analysis.” Lumetra, 84 Fed. Cl. at 560 (citing Sections L and M of the Request for Proposals); see also Alabama Aircraft, 83 Fed. Cl. at 671 (“Although the . . . contract was to be a fixed-price contract, the RFP explicitly required the Air Force to evaluate the ‘reasonableness and realism of the prices and labor rates proposed’ by the offerors.” (quoting the Solicitation-Request for Proposal)). Here, no such mandate was included in the RFQ.

Holloway argues that “[FAR] 8.4 does not prohibit cost realism assessment, which we believe was required under this RFQ, and which was in fact conducted by the [P]anel [and] which the Source Selection Authority confirmed in the source selection document.” See Hr’g Tr. 34:10-14 (Apr. 14, 2009). Holloway additionally points to CMS’s second amendment to the RFQ, in which CMS asked offerors to submit “a cost or price proposal supported by cost and pricing data adequate to establish the reasonableness and realism of the proposed cost or price,” AR 4-155 (Amendment #2 to RFQ) (emphasis added), as calling for a cost-realism analysis by the contracting officer. See Hr’g Tr. 36:2-7.

The second amendment to the RFQ introduced an ambiguity which was not fully resolved by CMS during this procurement. However, because the RFQ expressly provided that the resulting award was to be a “[t]ask [o]rder” under a “current GSA Schedule contract,” AR 1-1 (RFQ), all offerors were on notice that the framework provided by FAR Subpart 8.4 applied. In the circumstances at hand, a cost-realism analysis would be required only if CMS had specifically set out such a requirement. Moreover, the conduct of CMS does not lend support to the existence of a price-realism mandate. Although the Technical Evaluation Panel at times used cost-realism language, it frequently also referred to the “reasonableness” of the price proposed by various offerors. See, e.g., AR 14-1141 to 14-1144 (Business Proposal Evaluation). In this respect, the contracting officer opined that “[t]he main concern of the TEP was whether or not Grant Thornton’s proposed price was reasonable based on the [Independent Government Cost Estimate].” AR 26-1237 (Addendum to Source Selection Document) (emphasis added). The contracting officer restricted himself to a cost-reasonableness analysis, omitting any mention of cost-realism.

Overall, CMS’s contracting officer was not obligated by the RFQ to employ the detailed cost-realism procedures set out in FAR Part 15. It was sufficient, under FAR Subpart 8.4, for the contracting officer to have conducted, in conjunction with a performance risk assessment, a “best value” inquiry into the reasonableness of the competing proposals.  (Holloway & Company, PLLC, v U. S. and Grant Thornton, LLP, No. 09-53C, May 14, 2009) (pdf)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
MVS USA, Inc. v. U. S. and Northrop Grumman Systems, Corp., No. 13-246C, July 2, 2013  (pdf)  
Matt Martin Real Estate Management LLC v. U. S. and HomeTelos, LP, BLB Resources, Inc., Ofori & Associates, P.C., and PEMCO Ltd, No. 10-675C, December 2, 2010.  (pdf)  
Holloway & Company, PLLC, v U. S. and Grant Thornton, LLP, No. 09-53C, May 14, 2009 (pdf)
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