By: Jonathan Brittin  [8/29/22]

In May 2022, the Court of Federal Claims (“COFC”) issued three interesting decisions, all arising under the same procurement.  Stratera Fulcrum Technologies, LLC v. United States, No. 21-1770; RCH Partners v. United States, No. 21-1702; and M6-VETS, LLC v. United States, No. 21-1736. In the decisions, the COFC held that an agency’s use of the “transitive property of inequality” provides a reasonable basis to evaluate proposals. The COFC further opined that a best value determination based on the “highest technically rated with a fair and reasonable price” (“HTRFRP” or “HTRRP”) is reasonable, properly considers price, and is not prohibited by statute or the Federal Acquisition Regulation (“FAR”). 

On May 29, 2020 the United States Patent and Trademark Office (“USPTO”) issued a Request for Proposals (“RFP”) for an indefinite-delivery indefinite-quantity (“IDIQ”) contract for information technology (“IT”) services. The RFP was issued to twenty-four (24) businesses, consisting of fifteen (15) small businesses and nine (9) large businesses. The USPTO anticipated awarding multiple contracts consisting to a mix of small and large business contractors at a ratio of 3:2 (small-to-large businesses). Rather than conduct a head-to-head comparison of each proposal, the agency used a method known as the “transitive property of inequality” to compare proposals. Considering the results of this analysis, the USPTO then determined which proposals represented best value by using HTRFRP. 

After a series of protests at the U.S. Government Accountability Office (“GAO”), three protesters were filed protests at the COFC. Each challenged, among other things, the USPTO’s use of the transitive property of inequality and the use of HTRFRP during the best value determination. The COFC rejected protester’s arguments. 

First, the protesters argued that the USPTO’s use of the transitive property of inequality, a mathematical principle, was arbitrary because it does not allow head-to-head comparison of each proposal. The transitive property of inequality can be described as: if A is greater than B, and B is greater than C, then A is greater than C. In other words, if Offer 1 is better than Offer 2, and Offer 2 is better than Offer 3, then Offer 1 is better than Offer 3, rendering a direct comparison between Offers 1 and 3 unnecessary. Essentially, the transitive property of inequality allows the agency to determine which proposals represented best value by comparing proposals to a benchmark or control group without going through all the permutations that would be required from head-to-head comparisons of every proposal.  

The protesters argued that the USPTO’s use of the transitive property of inequality is unreasonable because it’s like “comparing apples to oranges.” The protesters argued that if “one prefers apples over oranges and prefers oranges over bananas [that] does not ipso facto mean that one prefers apples over bananas.” The COFC rejected this argument stating that 

One’s preference between fruit is inherently subjective. For evaluations of technical proposals to have any meaning, we have to assume that they are based on objective criteria, whether done through a one-on-one comparison or by the shortcut used here.

The COFC held as reasonable the USPTO’s use of the transitive property of inequality was reasonable since it is not prohibited by statute or the FAR. Moreover, while not binding on the COFC, the Government Accountability Office (“GAO”) has approved its use in previous procurements. Citing to FAR 1.102-4(e), the COFC determined that with twenty-four (24) businesses submitting proposals, it was reasonable for the USPTO to believe that it could cut down on the number of comparisons that had to be made (from “over 170” to only eighteen (18)), allowing it to conduct its best value analysis more efficiently. 

Regarding the best value determination, the protesters argued that the USPTO’s use of HTRFRP unreasonable because it is not expressly permitted by law or regulation. The COFC rejected this argument as untimely under the Blue & Gold standard. For more information on the Blue & Gold standard: Developments in Timeliness: Better Late Than Never.  Protesters further argued that HTRFRP was not expressly permitted by the FAR. Again, the COFC rejected protesters’ arguments reasoning that simply because the FAR does not identify HTRFRP in the best value continuum does not make it contrary or unlawful. While FAR 15.101 specifically provides for “lowest price technically acceptable” (“LPTA”) and a “tradeoff” process, these are only “some” of the best value processes available to the agency. In other words, even though HTRFRP is not expressly identified in the FAR, it is still an acceptable method to determine best value. According to the COFC, an RFP that uses HTRFRP and considers whether the prices of the highest-rated offerors are fair and reasonable is consistent with law and regulation. 

As more and more agencies seek to use differing methods of evaluating proposals and determining best value, the COFC’s decisions provide insight into how the Court will evaluate the reasonableness of the agency’s actions and whether the Court will allow methods that are not explicitly mentioned in the FAR or applicable statutes. 

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