The Government Accountability Office (GAO) has just sustained a protest in which the General Services Administration (GSA) "downsized" the pool of vendors by excluding some of them, including the protester, which were technically acceptable without considering their lower prices. It was a best value procurement under FAR Subpart 8.4 which requires that price be considered in establishing a blanket purchase agreement (BPA). Moreover, although the protest was untimely, GAO considered it under its exception to the timeliness rules for previously undecided cases with a potential for widespread interest to the procurement system.
Vendors were advised GSA would "downsize quotations to the most favorably evaluated quotations based on the technical quotation only." Pricing was not considered in the process. FAR 8.405-3(a)(1), however, lists price as the one factor that at a minimum must always be considered when determining best value for purposes of establishing a BPA. Moreover, said GAO, "we have previously held that a best value analysis necessarily encompasses consideration of an offeror's price or cost since, to be meaningful, a best value determination requires weighing of the value and benefits associated with a firm's approach against their associated cost to the government."
Before an agency can select a higher-priced proposal which is technically superior to a lower priced one, the agency must support the decision with a rational explanation of why the higher rated proposal is in fact superior and explaining why its technical superiority warrants a price premium, GAO reiterated.
The protester should have filed its protest prior to the closing of the solicitation since GSA's intention was announced during the question and answer period prior to closing. However, GAO said that it had not previously considered this issue in the context of establishing a BPA. Additionally, because BPA's are so prevalent these days, GAO decided the issue was of such significance to the procurement community that it should decide the case under its timeliness exception.
In the end, however, although relief was granted in the form of requiring an amendment to the solicitation, revised quotations and a new source selection decision, the protester was denied its costs of protesting, including attorneys' fees, because of the delay in protesting.
Lesson: Know the regulations.