Government Accountability Office: “Reasoned Judgment” Required When Establishing Competitive Range
On May 19, 2017, the U.S. Government Accountability Office (“GAO”) sustained a protest filed by Pinnacle Solutions, Inc. (“Pinnacle”) challenging its exclusion from the competitive range in NASA procurement for aircraft logistics, integration, configuration management, and engineering services. GAO concluded that NASA had unreasonably evaluated and assigned weaknesses to Pinnacle’s proposal and, as is relevant here, excluded Pinnacle from the competitive range based on “unreasoned distinctions[.]”
The RFP contemplated the evaluation of proposals on two non-price factors: Mission Suitability and Past Performance. The Mission Suitability factor consisted of three subfactors, Management Approach, Technical Approach, and Safety & Health Approach which were allocated point values of 700, 150, and 150 points, respectively. Per the source selection plan, the points corresponded to adjectival ratings: an Excellent was worth 91-100 percent of the points, a Very Good was worth 71-90 percent of the points, a Good was worth 51-70 percent of the points, a Fair was worth 31-50 percent of the points, and a Poor was worth 0-30 percent of the points.
NASA received three proposals in response to the RFP. Pinnacle’s proposal fell between the two others (identified as Offerors A and B). Pinnacle received a 439 out of a total of 1000 points on the Mission Suitability factor. Within the subfactors, Pinnacle’s Management Approach and Technical Approach were both rated Fair, receiving 266 points and 68 points, respectively. Its Safety & Health Approach was rated Good and received 105 points. Pinnacle was also assessed three strengths, one significant weakness, and eight weaknesses under the Management Approach subfactor, two weaknesses under the Technical Approach subfactor, and a strength and weakness under the Safety & Health subfactor. Under the Past Performance factor, Pinnacle was found to merit Moderate Confidence. Pinnacle’s probable cost was determined to be $180.6 million, approximately $10 million less than that of Offeror A, the most expensive offeror.
In establishing the competitive range, the agency excluded Pinnacle, purportedly because it had not received any significant strengths under the management approach or technical subfactors and it was “highly unlikely” that Pinnacle would be able to significantly improve its proposal after discussions. In contrast, Offeror A, despite having a higher probable cost, was included in the competitive range. Offeror A’s proposal had received 719 points for the Mission Suitability factor, 280 more than Pinnacle. In reaching its decision, the agency noted that Offeror A was the “most highly rated” proposal because it had received very good adjectival ratings and a past performance rating of Moderate Confidence. The agency determined that discussions with Offeror A were needed to address weaknesses and provide price clarifications.
In its protest, Pinnacle argued that the weaknesses assigned to its proposal were unreasonable, that NASA ignored strengths in Pinnacle’s Management Approach, and that Pinnacle should have been included in the competitive range. GAO agreed, finding that NASA had conducted an unreasonable evaluation of Pinnacle’s proposal, and applied unstated evaluation criteria.
Significantly here, GAO also found that the Agency’s competitive range determination was unreasonable because it was based entirely upon the differences in point scores and adjectival ratings between the offerors. GAO criticized NASA for failing to “look behind the scores or adjectival ratings, and . . . document a reasoned consideration of the actual evaluation findings or their basis in the proposals.” In the absence of such consideration, GAO concluded that NASA had acted unreasonably in making a “blanket” determination that Pinnacle’s proposal would not benefit from discussions.
In reaching this decision, GAO reiterated that, while an agency may eliminate a proposal that is not among the most highly rated or does not have a reasonable prospect of award, the agency “may not exclude a technically acceptable proposal from a competitive range without meaningful consideration of the cost or price of the proposal to the government.” Of note, GAO reiterated that “reasoned judgment” is required to exclude a proposal from the competitive range, and the decision cannot be based on “unreasoned distinctions” like point scores and “unfounded speculation” about the benefit of discussions.
Offerors should take heart from GAO’s decision. GAO clarified that an agency cannot exclude an offeror from the competitive range without careful consideration of the substantive merits of the proposal, including an evaluation of cost. Going forward, offerors who have been excluded from the competitive range should make sure to review their debriefings carefully to determine if the agency has met its burden.