“You realize we’re sitting on 45,000 pounds of fuel, one nuclear warhead and a thing that has 270,000 moving parts built by the lowest bidder? Makes you feel good doesn’t it?” – Rockhound

Armageddon.  Dir. Michael Bay.  Touchstone Pictures, 1998.

The above movie quote is a playoff from quips made by John Glen and Alan Shepard regarding a source selection process that resulted in award to the lowest bidder.  Often when I am talking with people not familiar with the Federal acquisition process, it becomes evident that this is a common misconception; everyone assumes that the Government always awards to the lowest price bidder.  However, as many of you reading this understand all too well, the lowest priced does not always get the contract award.

The most common example of an acquisition that selects other than the lowest priced offeror is one that uses a tradeoff process.  In this approach, a higher priced offeror may be selected for a better technical solution and/or superior past performance rating.  Much of this depends on the relative importance (i.e. significantly more important, approximately equal, or significantly less important) of the non-price factors as they relate to cost or price as stated in the solicitation.  However, just because an offeror is superior in one of the non-priced factors, does not mean they will be selected over the lowest priced offeror.

To select a proposal based on a superior technical or past performance rating, the Source Selection Authority (SSA) must document the process and rationale behind tradeoffs made.  In other words, if the selected proposal results in a premium of $1M, then the award documentation must explain the benefits to the government in selecting the superior technical solution and/or past performance rating to justify the additional price.  In this example, under an acquisition valued at $10M, this premium amounts to 10% of the overall price and therefore, the documentation would need to explain why the superior proposal is worth the extra $1M.  Normally, the best way to support this position is to show the indirect savings and mission assurance that will happen as a result of the proposed solution.  A position that can quantify and show that the savings will exceed the premium price will have the best chance of standing up to the likely protest.  It is a little more subjective when the tradeoff is a result of superior past performance since it is more difficult to quantify a performance confidence rating in a dollar amount.  In this case, the documentation needs to attribute the value of having a contractor with a higher performance confidence rating to the premium paid by explaining the mission and costs impacts should performance issues arise.   With this in mind, offerors should highlight to the government the strengths with the resulting benefits in their proposals when bidding on an acquisition using the tradeoff process.  Even though the selecting official may not agree with all the benefits presented, it may only take one benefit with enough value to the government to select a higher-priced proposal.

A proposal, other than the lowest price, may also be selected under a lowest priced technically acceptable (LPTA) acquisition.  In this case if the lowest priced proposal is not technically acceptable and there a higher priced proposal is determined acceptable, then that proposal can be selected for award without discussions.  I have seen many companies submit proposals with the expectation that they would be able to fix deficiencies through discussions; only to find out to their dismay that award was made from initial proposals.  The government is not required to hold discussions and when an acquisition is pushing to award by a deadline, many times the team will elect to award off initial proposals, even if it is not the lowest price.  For this reason, it is imperative to QA the proposal to ensure it provides what the solicitation requests.  There is nothing more frustrating than losing under an LPTA with the lowest priced proposal found technically unacceptable.

When it comes down to it, the objective of all acquisitions is to obtain the best value for the government whether it is obtained via the lowest price or by paying a premium for a superior solution.  Therefore, when preparing to bid on a requirement, be sure to understand the intention of the acquisition… does the government want a proposal that just meets the requirements or is it looking for a proposal that exceeds the requirements at a benefit to the government?  With the answer to this question in mind, you will be in a better position to develop an award-winning proposal against the government source selection strategy.  But keep in mind, while the government does not always award to the lowest price proposal, price is consideration in every source selection.