Government Contracts Multiple Evaluation Errors Halt Awards
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Monday, April 15, 2019

Multiple Evaluation Errors Halt Awards

By Government Contracts Editorial Staff

The Court of Federal Claims enjoined the government from proceeding with 81 contract awards for information technology services because the contracting officer’s evaluation failed to comply with the terms of the solicitation and was irrational. The solicitation for a multiple-award, indefinite-delivery, indefinite-quantity contract entitled an offeror to claim 5500 points if it provided verification that the Defense Contract Audit Agency, Defense Contract Management Agency, or any cognizant federal agency had audited the offeror’s cost accounting system and determined the CAS was acceptable and adequate for establishing costs applicable to the contract or order. The solicitation required offerors to submit the verification, including a letter from the auditing agency attesting the offeror’s CAS had been audited and determined adequate, and an averment that the offeror had not materially changed its CAS since its last audit, in the Systems, Certifications, and Clearances proposal volume. The protester, which fell below the cutoff of 81 awardees, contended the CO erred by crediting a group of offerors with claimed points for an acceptable CAS.

CAS Verification. For two of the offerors, the CO relied solely on DCAA letters discussing the adequacy of the offerors’ incurred cost proposals to conclude the offerors had verified they possessed a CAS that the DCAA had audited and found adequate. This conclusion was irrational because the DCAA’s review of an ICP is not unequivocal evidence of an adequate CAS if, as was the case here, it was not evident the ICP was submitted in connection with a cost-reimbursement contract. In addition, the DCAA letters did not indicate the offerors’ CASs were audited and found adequate by the DCAA or another CFA. The CO also improperly credited a group of 17 offerors for having an acceptable CAS even though they failed to submit the material change averment statement in the proper proposal volume.

Pricing Analysis. The court also determined the CO’s analysis of five offerors’ pricing was irrational. The solicitation required the CO to determine whether the offerors with the 80 top technical scores proposed fair and reasonable pricing. Specifically, the CO would use each offeror’s completed cost/price template and basis of estimate to determine whether the offeror proposed a fully burdened rate for each labor category that was fair and reasonable. The government would also examine whether the components of the fully burdened labor rate—direct labor, indirect labor, and profits rates—were reasonable. The CO’s analysis of five offerors’ proposed fully burdened labor rates was problematic because it used two different sets of averages and upper bounds of the deviation range to compare offerors’ proposed rates for a contract line item to the associated average and upper bound for the CLIN. In addition, for four of the offerors, the CO calculated an average and deviation range for each CLIN using rates proposed by an arbitrary group of offerors and provided no rational justification for the selection of the proposed rates used in the averages. Finally, the CO failed to provide a rational explanation for concluding that rates offerors proposed outside the deviation range were reasonable. (Citizant, Inc. v. U.S., et al., FedCl, 63 CCF ¶81,617)

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