United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

Decision

Matter of: Glotech, Inc.

File: B-406761; B-406761.2

Date: August 21, 2012

Thomas K. David, Esq., and Kenneth D. Brody, Esq., David, Brody & 

Dondershine, LLP, for the protester.

R. René Dupuy, Esq., and William C. Buckhold, Esq., United States Agency for 

International Development, and Michael D. Tully, Esq., General Services 

Administration, for the agencies.

Paul N. Wengert, Esq., Glenn G. Wolcott, Esq., and Sharon L. Larkin, Esq., Office of 

the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency failed to meaningfully consider price in issuing blanket purchase 

agreements under Federal Supply Schedule program involving a maximum of 

$900 million in orders is sustained where the record shows that the agency selected 

vendors only on the basis of their technical evaluation scores. 

DECISION

Glotech, Inc., of Rockville, Maryland, a small business, protests the issuance of 

blanket purchase agreements under the Federal Supply Schedule (FSS) to seven 

firms1

 1 The seven successful vendors were identified as IBM Global Business Services--

Federal, of Bethesda, Maryland; Digital Management Inc., of Bethesda, Maryland; 

HP Enterprise Services, of Herndon, Virginia; CGI Federal, Inc., of Fairfax, Virginia; 

Computer Sciences Corporation, of Chantilly, Virginia; Morgan Borszcz Consulting, 

of Arlington, Virginia; and AINS, Inc., of Gaithersburg, Maryland. Agency 

Report (AR) Tab 4, Unsuccessful Offeror Letter from USAID to Glotech, at 1; 

AR Tab 8, Award Explanation to Glotech, at 1. Glotech, a small business, focuses 

its protest on the two small businesses that received BPAs: Morgan Borszcz 

Consulting and AINS, Inc. 

under request for quotations (RFQ) No. SOL-CIO-12-000002, issued by the 

United States Agency for International Development (USAID) for information 

technology supplies and services, known as “USAID IT Forward.” Glotech argues 

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to 

a GAO Protective Order. This redacted version has 

been approved for public release.
Page 2 B-406761; B-406761.2

that USAID failed to evaluate vendors’ prices or to meaningfully consider price in the 

source selection decision. 

We sustain the protest. 

BACKGROUND

USAID issued the RFQ on February 23, 2012, seeking quotations from firms holding 

FSS Schedule 70 contracts, which is the “general purpose commercial information 

technology equipment, software, and services” schedule.2 RFQ at 1. The RFQ 

anticipated the issuance of multiple BPAs for a base year and four annual option 

periods, and specified a maximum value of $900 million. Id. at 2. USAID explained 

that it anticipated establishing up to five BPAs on an unrestricted basis, and intended 

to set aside two more BPAs exclusively for small businesses. AR Tab 3, USAID 

Forward Information Session Briefing Slides, at 4; see also

The RFQ listed 38 categories of infrastructure, IT systems, and “cross-cutting 

activities” that could be ordered under the BPAs, and indicated that statements of 

work would be issued in connection with subsequent task orders. The RFQ 

provided that USAID would issue both fixed-price task orders and labor-hour task 

orders, but also noted that orders might include “cost-reimbursement items.” 

RFQ at 1. 

Id.

The RFQ specified that vendors would be selected on a best value basis, 

considering price and six non-price factors: demonstrated corporate capabilities and 

experiences, techniques for achievement of performance objectives, scenario, team 

composition and management, past performance, and socio-economic business 

strategy.

at 37-39; AR Tab 12, USAID Answers to Vendor Questions, at 8. 

3

 2 Although the RFQ was issued under FSS Schedule 70, the RFQ also directed 

vendors to list any non-schedule items that might be necessary for performance, and 

to explain an approach to providing them, notwithstanding their absence from the 

vendor’s FSS contract. RFQ at 16. The RFQ suggested asking the General 

Services Administration (GSA) to add special item number (SIN) 132-100 to the 

vendor’s FSS contract, which purports to allow orders for supplies and services 

under Schedule 70 that are not within the scope of the existing FSS contract SINs, 

so long as the supplies and services are deemed “in conjunction with or in support 

of” supplies or services that the ordering activity is purchasing under another 

Schedule 70 SIN. Id.; see GSA, Schedule 70 Summary, available at 

www.gsaelibrary.gsa.gov/ElibMain/scheduleSummary.do?scheduleNumber=70

(last visited Aug. 7, 2012). 

 RFQ at 12. These non-price factors were listed in descending order of 

3 In response to several similar pre-quotation questions from potential vendors, 

USAID stated that the socioeconomic factor did not apply to small businesses. AR 

Tab 12, USAID Responses to Vendor Questions, at 1.
Page 3 B-406761; B-406761.2

importance, except for techniques for achievement of performance objectives and 

scenario, which were equally important. Id. The RFQ provided that the non-price 

factors were significantly more important than the cost/price factor, and that the best 

value determination would make a trade-off between technical merit and cost/price. 

Id.

The RFQ then described the information that vendors should submit in response to 

each non-price factor. For the first factor (corporate capabilities and experiences), 

the RFQ listed nine types of experience that vendors should list, such as 

“maintaining IT Systems and Infrastructure in global and international environments, 

including changing and unstable environments” and “managing data and business 

services across multiple heterogeneous networks.” 

 

Id. Responses were to be 

evaluated on whether the vendor had experience in all nine areas. Id.

For the second factor (techniques for performance objectives), the RFQ identified 

four objectives: maintain and operate existing IT systems; design, engineer, and 

deploy future systems; create a public/private partnership with USAID; and enable 

USAID to leverage information and technology in delivering international aid. 

at 13. 

Id.

at 9-10. Responses were to be evaluated on the vendor’s ability to achieve the four 

objectives. Id.

For the scenario factor, the RFQ stated that USAID expected that the agency’s 

future work would be handled “virtually and through cloud service over the Internet,” 

and directed vendors to answer several broad questions, such as how USAID could 

leverage cloud applications, how latency and bandwidth issues in remote areas of 

the world could be addressed, and what were the top five risks arising from total 

migration of service delivery to the Internet. 

at 13. 

Id. at 13-14. Answers to the scenario 

questions were to be evaluated on the vendor’s “vision,” “creativity,” “innovation,” 

and “practicality of the notional Concept of Operations.” Id.

For the cost/price factor, the RFQ directed vendors to submit a comprehensive list of 

all labor categories available under the vendor’s FSS contract, the applicable labor 

rates for each labor category, and any discounts.

at 14. 

4

 Id. at 16. The RFQ stated that 

the cost/price evaluation would “review and evaluate all information,” and would 

consider the vendor’s schedule contract, annual escalation, and burden rate applied 

to travel costs. Id.

In response to questions from vendors for a more specific explanation of the 

cost/price evaluation, USAID stated that it would not establish a total cost/price or 

level of effort, but rather, it stated that the quotations would allow the agency to 

 4 Nevertheless, the RFQ also provided that during performance a vendor was 

expressly permitted to increase its BPA prices “at any time,” up to its maximum 

schedule price. RFQ at 31. 
Page 4 B-406761; B-406761.2

“compare the value of individual labor categories based on the skills and level of 

experience described in [the vendor’s] GSA schedules” and the “final cost/price 

offered to USAID,” including labor rate discounts. AR Tab 12, Answers to Vendor 

Questions, at 5. 

USAID received quotations from 13 firms, five of which were small businesses. A 

technical evaluation panel reviewed the quotations and assigned point scores for the 

non-price factors. As relevant to the protest, the evaluation results for the seven 

successful vendors and the protester are as follows: 

Name Technical 

Rank

Technical 

Score

Size

IBM US Federal 1 71.60 Large

Digital Mgmt. Inc. 2 64.20 Large5

HP Enter. Servs. 3 62.50 Large

CGI Federal, Inc. 4 59.60 Large

Computer Sciences 5 58.70 Large

Morgan Borszcz 6 58.40 Small

AINS, Inc. 10 52.60 Small

Glotech, Inc. 11 48.90 Small

AR Tab 8, Basis of Award Decision Document for Glotech, at 4. 

The contracting officer then reviewed the cost/price quotations, and concluded that 

direct comparison of quotations under the cost/price factor would not be possible 

because each vendor had its own technical approach, quoted different discounts, 

and could ultimately offer additional discounts when each task order was issued. 

Contracting Officer’s Statement at 3. The contracting officer therefore prepared an 

individual “cost/price proposal review” document for each of the vendors, which 

merely listed that vendor’s labor categories, its quoted discount, escalation, and the 

resulting hourly rate for each labor category for each year. E.g.

The contracting officer then selected seven firms with whom to establish BPAs: five 

vendors--at least four of whom happened to be large businesses--and the two small 

businesses with the highest technical scores. AR Tab 8, Basis of Award Decision 

, AR Tab 9 

(Glotech’s Cost/Price Proposal Review Document). The record contains no 

documentation reflecting any comparative analysis of the competing vendors’ pricing 

information. 

 5 During the redaction process, USAID pointed out that, although the record reflects 

that Digital Management received a BPA in the “unrestricted” category, the firm is a 

small business. The issue is not significant to our decision, and determination of 

size status is a matter over which the Small Business Administration has jurisdiction, 

not our Office. 
Page 5 B-406761; B-406761.2

Document for Glotech, at 3. Consistent with the fact that the agency performed no 

meaningful comparison of the competing vendors’ prices, the agency acknowledges 

that it did not perform a cost/technical tradeoff in selecting recipients of the BPAs. 

AR at 10 n.7. 

After Glotech received notice of the selections, and a brief explanation of the basis 

for the selections (which was, essentially, the table shown above), Glotech filed this 

protest. 

TIMELINESS

USAID argues that Glotech’s protest is an untimely challenge to the terms of the 

RFQ. Supplemental AR at 8 n.1. That is, even though the RFQ indicated cost/price 

was an evaluation factor, USAID argues that vendors were subsequently informed 

that the agency would not consider price in response to questions from vendors: 

“For purposes of this BPA competition, USAID will not evaluate a total cost/price or 

level of effort in determining best value. USAID may compare the value of individual 

labor categories [etc.]” AR Tab 12, USAID Answers to Vendor Questions, at 5; see 

also id. at 18. Our Bid Protest Regulations require that a protest based upon alleged 

improprieties in a solicitation that are apparent before the closing time for receipt of 

initial proposals (or quotations, as here) be filed before that time. 4 C.F.R. 

§ 21.2(a)(1) (2012). Additionally, challenges to alleged improprieties that do not 

exist in the initial solicitation but which are subsequently incorporated into it must be 

protested not later than the next closing time for receipt of proposals following the 

incorporation. See Cessna Aircraft Co.

Glotech does not dispute that the RFQ (as supplemented by the answers to vendor 

questions) notified vendors that USAID would not calculate a total cost/price for each 

vendor--that is, the orders valued at a total of $900 million. Glotech argues, 

however, that the agency’s answer did not say that the cost/price factor described in 

the RFQ was no longer to be meaningfully evaluated, or considered in the selection. 

Protester’s Supp. Comments at 6-7. 

, B-261953.5, Feb. 5, 1996, 96-1 CPD ¶ 132 

at 16. 

We consider the issue of timeliness here to be a close question. In our view, a 

reasonable vendor would not have understood USAID’s answer, quoted above, as a 

change to the evaluation scheme, meaning that cost/price would no longer be 

considered in any meaningful way, and would not be part of a tradeoff in the 

selection of vendors. Instead, it was USAID’s explanation of the selection process, 

at the end of the competition, that led Glotech to conclude that no meaningful 

cost/price comparison had been made to select vendors here. Accordingly, we are 

not prepared to conclude that this protest was untimely filed. 
Page 6 B-406761; B-406761.2

DISCUSSION

Glotech principally argues that USAID failed to consider cost or price in the issuance 

of BPAs to vendors. In Glotech’s words, the “cut and paste exercise” performed by 

the contracting officer (i.e.

In addition, Glotech argues that it was competitively prejudiced by the agency’s 

actions. Glotech argues that if the agency had properly performed the cost 

comparison described in the RFQ, and had directly compared Glotech’s labor rates 

with those of the other small business vendors, USAID would have seen that 

Glotech’s labor rates were lower. In fact, Glotech argues that its rates for 

comparable labor categories were more than [DELETED] percent below the nexthigher-ranked small business vendor, AINS. Protester’s Supp. Comments at 2. As 

a result, Glotech also argues that the agency did not perform the best value tradeoff 

required in the establishment of BPAs. Protest at 9; Protester’s Comments at 9-10. 

, listing each vendor’s labor categories and rates in a new 

document), did not constitute a valid consideration of price. Protester’s Supp. 

Comments at 2. 

USAID responds that the requirement to conduct a best value tradeoff is not 

applicable to the issuance of multiple BPAs. Instead, the agency argues that there 

is insufficient information upon which to base a price comparison among vendors 

until there is a competition for the issuance of task orders. AR at 10. The 

contracting officer nevertheless asserts that he did “consider” cost/price by creating 

the “cost/price proposal review” document for each vendor. Contracting Officer’s 

Statement at 6; AR at 9-10. In sum, the contracting officer concluded that the nonprice evaluation (as he puts it, the “techniques proposed for achieving performance 

objectives”) were “the best predictor of future price and overall best value for the 

Agency.”6

Addressing Glotech’s arguments, and USAID’s response, requires not only a review 

of the agency’s evaluation of these quotes, but a review of the procedures for 

establishing BPAs under FSS contracts. As to our review of the evaluation, while 

this process is not governed by the requirements that apply to a negotiated 

competition conducted pursuant to FAR Part 15, we will review the agency's 

evaluation of vendor submissions to ensure that the evaluation was reasonable and 

consistent with the terms of the solicitation. 

 Contracting Officer’s Statement at 5-6. 

Mark G. Anderson Consultants

 6 Nevertheless, USAID emphasizes that, in providing a “solution” to the statement of 

objectives, the agency did not request that vendors identify specific labor categories; 

rather, all vendors understood that they were simply to list all labor categories 

available under their FSS contracts. Supplemental AR at 2. 

, 

B-403250, B-403250.2, Oct. 7, 2010, 2010 CPD ¶ 241 at 5. Here, contrary to the 

RFQ’s statement that USAID would make an evaluation under the cost/price factor 

as described above, and would include cost/price as a significant factor in a tradeoff 
Page 7 B-406761; B-406761.2

decision, the record reflects neither an evaluation nor a tradeoff. Thus, the selection 

of vendors was inconsistent with the terms of the RFQ. 

As to our review of the procedures for establishing BPAs under FSS contracts, FAR 

§ 8.405-3 provides express guidance on these procedures. Paragraph (a) under 

FAR § 8.405-3, entitled “Establishment,” begins with an enumeration of the 

requirements applicable to each and every BPA established under the FSS. The 

subsection then describes the required competitive procedures applicable to BPAs 

for supplies and for services that do not require a statement of work 

(§ 8.405-3(b)(1)), and the required competitive procedures applicable to BPAs for 

services requiring a statement of work, because the services are “priced at hourly 

rates” (§ 8.405-3(b)(2)). 

Within the over-arching principles set forth at the beginning of the FAR’s guidance 

applicable to establishing BPAs under the FSS, agencies are required to “establish 

the BPA with the schedule contractor(s) that can provide the supply or service that 

represents the best value.” FAR § 8.405-3(a)(1). Moreover, price is the one 

common element that must always be part of any best value determination in 

establishing a BPA. FAR § 8.405-3(a)(2) (“[i]n addition to price (see 8.404(d) and 

8.405-4), when determining best value, the ordering activity may consider” various 

other enumerated factors); See also Cyberdata Techs., Inc.

To be meaningful, a best value determination requires a weighing of the value and 

benefits associated with a firm’s approach against their associated cost to the 

government. 

, B-406692, 

Aug. 8, 2012, 2012 CPD ¶ ___ at 4 (protest sustained where agency eliminated 

protester’s quotation from consideration--and subsequently issued FSS BPAs--

without meaningfully considering prices). Finally, the FAR requires that agencies 

“shall, to the maximum extent practicable, give preference to establishing multipleaward BPAs, rather than establishing a single-award BPA.” FAR § 8.405-3(a)(3)(i). 

As a result, we find that USAID’s arguments are at odds with the clear requirements 

for these instruments set forth in the FAR. 

See TtEC-Tesoro, JV, B-405313, B-405313.3, Oct 7, 2011, 2012 CPD 

¶ 2 at 9. In a best value procurement, it is the function of the source selection 

authority to perform a tradeoff between price and non-price factors, that is, to 

determine whether the superiority of one proposal (or as here, quotation) under the 

non-price factor(s) is worth a higher price. Even where, as here, price is stated to be 

of less importance than the non-price factors, an agency must meaningfully consider 

cost or price to the government in making its selection decision. See e-LYNXX 

Corp., B-292761, Dec. 3, 2003, 2003 CPD ¶ 219 at 7. Thus, before an agency can 

select a higher-priced proposal that has been rated technically superior to a lowerpriced but acceptable one, the decision must be supported by a rational explanation 

of why the higher-rated proposal is, in fact, superior, and explaining why its technical 

superiority warrants paying a price premium. See Coastal Env’ts, Inc., B-401889, 

Dec. 18, 2009, 2009 CPD ¶ 261 at 4.
Page 8 B-406761; B-406761.2

In contrast to these requirements and the terms of the RFQ, the contracting officer 

acknowledged here that “there were no direct comparisons on evaluated prices 

between vendors.” Contracting Officer’s Statement at 3. That is, notwithstanding 

the purported “consideration” of vendors’ pricing submissions, the agency did not 

(and indeed, takes the position it could not) draw any conclusion about vendors’ 

prices--not even whether the costs to the government associated with any given 

vendor’s quotation were likely to be higher than, lower than, or equal to the costs of 

any other vendor. 

In explaining why it could not comply with the general requirements applicable to the 

establishment of all BPAs--i.e.

As set forth above, after the “Establishment” paragraph (§ 8.405-3(a)), the FAR 

guidance on establishing BPAs under the FSS turns to the competition requirements 

that apply to different BPA types. As also set forth above, there are separate 

competition requirements applicable to BPAs for supplies and for services that do 

not require a statement of work (§ 8.405-3(b)(1)), and to BPAs for services requiring 

a statement of work, because the services are “priced at hourly rates” 

(§ 8.405-3(b)(2)).

, the requirements to consider price and consider best 

value in selecting BPA recipients--USAID argues that these considerations would 

have been inappropriate in a competition where the agency was not required to have 

a statement of work. In this regard, USAID contends that this was a procurement 

conducted under the authority of § 8.405-3(b)(1). 

Of relevance here, paragraph 8.405-3(b)(1) explains:

The procedures of this paragraph apply when establishing a BPA for 

supplies and services that are listed in the schedule contract at a fixed 

price for the performance of a specific task, where a statement of work 

is not required (e.g., installation, maintenance, and repair).

USAID argues that this provision is applicable to its competition despite the fact that 

the record shows that this competition does not involve services that are listed in the 

FSS at a fixed price for the performance of a specific task; rather, the prices listed in 

the vendors’ schedules are plainly priced at hourly rates. 

During the course of this protest, our Office sought the views of the GSA as to 

whether USAID had followed the rules applicable to establishing BPAs under the 

FSS. GSA expressed its view that USAID’s requirement was for services requiring a 

statement of work, and that FAR 8.405-3(b)(2)(vi) thus applied. 7

 7 FAR § 8.405-3(b)(2)(vi) states: 

Once GSA noted 

The ordering activity contracting officer shall ensure that all quotes 

received are fairly considered and award is made in accordance with 

(continued...)
Page 9 B-406761; B-406761.2

that this competition required the use of a statement of work, it noted that this 

“implies more is required . . . than relying on the base pricing in a GSA Schedule as 

being fair and reasonable.”8 Letter from GSA to GAO, July 18, 2012, at 2. GSA 

further stated that it would defer to our Office’s views as to whether USAID had met 

the applicable legal standard. Id.

For our purposes--as a forum limited to resolving the disputes raised by protesters--

we need not address whether USAID was required to develop a statement of work 

before holding this BPA competition. Instead, we are able to conclude, on this 

record, that the agency gave no meaningful consideration to cost/price in selecting 

the BPA recipients, in violation of the requirement at FAR § 8.405-3(a)(2) that price 

be meaningfully considered in establishing BPAs. We reach this conclusion 

because the requirements of FAR § 8.405-3(a) apply to all BPAs established under 

the FSS, regardless of the BPA type--and regardless of the competition 

requirements that apply to each BPA type. In addition, USAID failed to make a 

proper best value decision before it excluded Glotech from consideration for a BPA. 

 

RECOMMENDATION

We recommend that USAID reevaluate these quotations to meaningfully consider 

cost or price, as required by FAR § 8.405-3(a)(2), and perform a best value analysis, 

as required by FAR § 8.405-3(a)(1). At the conclusion of this reevaluation, we 

recommend that the agency make a new selection decision as to which of these 

vendors represent the best value to the government. We also recommend that 

USAID reimburse Glotech’s costs of filing and pursuing its protest. 4 C.F.R. 

§ 21.8(d)(1). Glotech’s certified claim for costs, detailing the time expended and 

costs incurred, must be submitted to USAID within 60 days after this decision. 

4 C.F.R. § 21.8(f)(1).

The protest is sustained. 

Lynn H. Gibson 

General Counsel

 

(...continued)

the basis for selection in the RFQ. The ordering activity is responsible 

for considering the level of effort and the mix of labor proposed to 

perform, and for determining that the proposed price is reasonable.

8 GSA’s conclusions are consistent with those reached by GAO’s audit teams who 

have looked at this issue. Contract Management: Agencies are not Maximizing 

Opportunities for Competition or Savings under Blanket Purchase Agreements 

despite Significant Increase in Useage, (GAO-09-792, Sept. 2009), at 6, 17-18.