Government Contracts Award Disregarded RFP’s Ownership Requirement
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Monday, November 4, 2019

Award Disregarded RFP’s Ownership Requirement

By Government Contracts Editorial Staff

The Court of Federal Claims enjoined performance of a food distribution contract because the awardee was ineligible to receive an “outstanding” rating for a technical evaluation factor, and the best value determination was therefore unreasonable. The request for proposals seeking a distributor to supply and deliver food items to troops and other personnel in Kuwait, Iraq, Syria, and Jordan provided that an “outstanding” rating for the warehouse technical evaluation factor would be assigned only to proposals contemplating that a “majority of the [Outside the Continental United States] operations will be performed from offeror-owned facility(ies).” Although the awardee proposed the use of a warehouse owned by an affiliate, the government treated the awardee as the owner and assigned it an “outstanding” rating.

Ownership by Affiliate. Justifying the rating, the government noted affiliates had “the same interest in providing access to the warehouse facilities,” and the affiliate “relationship provides for a level of control that lessens the risk of losing access to and control over the proposed warehouse facilities.” Responding to the protester’s contention the awardee’s promotion to ownership status was contrary to the terms of the RFP, the government argued “[n]othing in the evaluation criteria prohibited considering the facility of an offeror’s affiliate as owned by the offeror.” The government determined the protester’s technically better proposal did not warrant its 14-percent price premium over the awardee’s proposal, which also received a technical rating of “good.”

Unambiguous Term. The CFC determined the RFP’s rating criteria clearly required ownership by the offeror to merit an “outstanding” rating, and the government’s discretion did not extend to expanding the definition of an unambiguous term. The awardee’s proposal could not meet the standard for “outstanding,” because the awardee was not the owner of the proposed warehouse. Further, the best value determination, which was based on the flawed evaluation of the awardee’s proposed warehouse, was not reasonable or consistent with the solicitation’s evaluation criteria. Finding the protester, which was the incumbent, was at risk of irreparable harm from the loss of 40 percent of its business and that a bridge contract would protect national defense interests by ensuring supplies to the troops, the court permanently enjoined the government from proceeding with the award. (ANHAM FZCO v. U.S., et al., FedCl, 63 CCF ¶81,751)

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