Protesting contractor: Kollsman Inc, an Elbit Systems of America LLC company, McLean, VA

Contracting agency: Department of the Navy

Protest issue: Agencies must not ignore evaluation requirements just for a lower price.

Decision: Sustained by Government Accountability Office on Oct. 15, 2012.

Post-mortem: Change in acquisition policy, official or unofficial, brings growing pains.

Consider this recent example. Navy published a request for proposals on February 9, 2012 for handheld laser markers. The RFP informed potential offerors that a contract would be awarded to the offeror proposing the best-value to the agency. Proposals were evaluated based on technical considerations, past performance and price. Although price was not a weighted evaluation factor, the RFP informed offerors that it would be considered when “so significantly high as to diminish the value of the technical superiority to the Government.”

Kollsman proposed nearly $18 million more than the eventual awardee L-3 Communications Corp. In making its award to L-3, the Source Selection Authority noted, “Kollsman’s evaluated price was so significantly high… it diminished the value… to the Government.”

Kollsman protested, among other things, the agency’s evaluation of L-3’s past performance — alleging that the rating received was not warranted. Indeed, there were numerous issues with L-3’s performance of the previous contract that, according to the GAO decision, “had schedule and cost implications” that “do not support a substantial confidence rating.”

So why did L-3 win? It is evident with the emphasis the agency placed on price that it made the decision to award to L-3 fairly early in the evaluation process and as a result, failed to properly document its rationale for the award. In its final thoughts the GAO said, “we find no basis to conclude that the agency reasonably evaluated L-3’s past performance.”

The lesson? Regardless of what’s in the proposal, price often rules; and it’s up to the competitors to ensure the result comply with expectations.