Balancing price with capability in proposals

Balancing price with capability in proposals

Even in cases where a proposal’s technical score is said to be the most important factor for evaluation, an agency will make a trade off to decide what capabilities are necessary and how much they’re worth. If technical advantages are not worth the higher cost, the lower-cost alternative will win out.

Protesting contractor: General Dynamics Corp., Falls Church

Contracting agency: National Archives and Records Administration

Protest issue: Whether price should carry more weight than a proposal’s technical rating

GAO decision, Jan. 25, 2012: Denied.

Post-mortem: Despite earning the highest technical score for its proposal, General Dynamics lost the contract to IBM Corp., which placed third overall but offered to do the work at a 10 percent lower cost to government. After a thorough review, the evaluation team decided that the enhancements offered by General Dynamics didn’t justify the $25 million premium.

I hear two scenarios from people who call me to discuss whether to file a bid protest, arguing that an award decision was unfair: “We were the lowest bidder, but they gave the contract to another company with a higher technical score.” Or, “we had the best technical score, but they gave the contract to another company with a lower bid.”

Neither argument is necessarily wrong. But both reflect a general misunderstanding of the meaning of “best value,” which depends largely on the requirements of the individual agency.

The key here is to strike the right balance. When a solicitation states that technical score will be weighed more heavily in the evaluation than price, it doesn’t mean that the consideration of price is no longer a factor.

No matter how large the contractor, government expects to get the most for its money.