Opinion ID: 666055
Heading Depth: 3
Heading Rank: 2

Heading: Urban's Use of Cost as the Most Important Factor

Text: 99 Latecoere also argues that the record demonstrates that Urban used cost as the most important factor in his selection, in violation of 41 U.S.C. Sec. 253b(a) (1987), which provides: An executive agency shall evaluate sealed bids and competitive proposals based solely on the factors specified in the solicitation. See also In re Dewberry & Davis, 92-1 CPD p 421, 1992 WL 103406 at  3 (C.G.1992) ([Agencies] do not have the discretion to announce in the solicitation that they will use one evaluation plan, and then follow another; once offerors are informed of the criteria against which their proposals will be evaluated, the agency must adhere to those criteria ... or inform all offerors of any significant changes made in the evaluation scheme.) 100 The G-TIP Solicitation designated itself as a best value procurement in which cost would be the least important factor in determining the award. The Solicitation stated: 101 Cost is not expected to be the controlling factor in the selection of a contractor for this solicitation. The degree of importance of cost as a factor could become greater depending upon the equality of the proposals for other factors evaluated; where competing proposals are determined to be substantially equal, total cost and other cost factors would become the controlling factor. 102 While cost is the predominant factor in making an award in a low-cost, technically-acceptable procurement, according to the Solicitation the G-TIP procurement was not to be a low-cost technically-acceptable procurement. The Solicitation specifically stated that the award may be made to other than the low, technically-acceptable offeror. 103 Latecoere contends that Selection Authority Robert Urban nevertheless treated the G-TIP procurement as a low-cost, technically-acceptable procurement, in violation of the Solicitation. Latecoere points to evidence that Urban, in his selection document, used cost as the controlling factor even though ETC's and Latecoere's technical proposals were never determined to be substantially equal. This evidence is discussed in detail in the next section, which addresses whether Urban's selection document stated a rational basis for his selection. 104 Latecoere also points to testimony that Michael McDonald, the senior procurement analyst responsible for reviewing the G-TIP clearance memorandum for Assistant Director Ford, would not approve an award to an offeror other than the low-cost technically-acceptable offeror. Specifically, McDonald testified that he had a problem with excluding any low-cost offeror, even if specialists had determined that that low-cost proposal was unacceptable and could not be made acceptable without a major rewrite. 105 Finally, Latecoere points to evidence that during the second evaluation, the Training Center's officials drafted but did not disclose to the offerors, a document that, if adopted, would have changed the basis for the award from best value to low-cost technically-acceptable. This document stated, in part: 106 Since the five (5) proposals are substantially equal, cost becomes more important in determining the winner of the competition. Therefore, I determine that the instant acquisition should be considered at time of [the best and final offers] to be one of technically acceptable--low dollar type--wherein, the winning proposal is that which represents the lowest price to the Government (thereby abandoning the Best Value scenario). All offerors should be advised accordingly at time of [the best and final offer] request. 107 Latecoere contends that this document is evidence that Training Center officials actually, secretly, treated the procurement as low-cost technically-acceptable. 108 The Navy and ETC deny that the Training Center changed the basis for the award and that cost was used as the predominant factor. They do not, however, deny that Latecoere's and ETC's technical proposals were never determined to be substantially equal. They simply maintain that Selection Authority Urban's consideration of cost was consistent with the Solicitation. The record belies that contention. Latecoere's rating were clearly superior to ETC's, yet ETC was awarded the contract because its proposal had a stated cost 7.8 percent lower than Latecoere's. Because ETC's proposal was not substantially equal, the express terms of the Solicitation precluded the Training Center from treating cost as the controlling factor. 109 Moreover, even if we assume that Selection Authority Urban did not use cost as a controlling factor, the Advisory Council's arbitrary increase of ETC's marginal ratings infected cost considerations as well. In a best value procurement, the importance of cost becomes greater as differences between technical proposals diminish; thus when the Advisory Council improperly eliminated differences between Latecoere's and ETC's technical proposals, the importance of cost was unjustifiably elevated. Because Urban did not know of the Advisory Council's arbitrary ratings manipulation, he would have accorded greater importance to cost than allowed by the Solicitation, even if he had tried to comply with its terms. In the face of this, the GAO stated: 110 [T]he [Solicitation], read as a whole, clearly provided that where technical proposals are not technically equal, cost alone is not determinative, but nevertheless must be weighed against the other factors to determine the best value to the government. [Wyle, 1990 WL 293722 at  6.] To read the solicitation as suggested by Latecoere would require selection of the highest technically rated proposal regardless of cost. Such a result is inconsistent not only with the [Solicitation] but with the requirement that the government consider cost or price in all its selection decisions. 111 Latecoere, 1992 WL 15029 at  7. In recommending denial of the preliminary injunction motion, the magistrate judge relied on the GAO's findings. Those findings ignore the effect of the manipulation of the ratings on the relative importance of cost and disregard the terms of the Solicitation which rule out cost as a controlling factor absent substantially equal proposals. 112 There is strong evidence that cost was treated as the controlling factor even though Latecoere's proposal was technically superior to ETC's. Under the circumstances of this case, such a violation of the Solicitation would constitute a clear and prejudicial violation of 48 C.F.R. Sec. 15.608(a) and is another reason why the district court should not have granted summary judgment against Latecoere. 113