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Best Value Procurement for Highway Construction: Legal Issues and Strategies (2023)

Chapter: III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS

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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
×
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
×
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Suggested Citation:"III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS." National Research Council. 2023. Best Value Procurement for Highway Construction: Legal Issues and Strategies. Washington, DC: The National Academies Press. doi: 10.17226/27175.
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NCHRP LRD 90 23 procedures and manuals. ese procedures and rules are key in ensuring that proposing rms are treated fairly. It is imperative that a project team developing procurement procedures for a project understand and address such constraints. In addition, the agency must follow any evaluation procedures communi- cated to the proposers through procurement documents, rec- ognizing that the procurement will be subject to challenge if the process fails to comport with its policies, internal procedures and manuals, and applicable law. In determining how much information to communicate to proposers regarding the evalua- tion process, the agency should consider the benets associated with greater transparency and the potential risk that the evalu- ators might deviate from detailed procedures, thus opening the door to protests. III. POTENTIAL ISSUES CREATING RISK OF PROTESTS IN THE BEST VALUE PROCUREMENT PROCESS e best value procurement process requires precise and in- formative planning, starting with choosing appropriate evalu- ation criteria, which provide a foundation for all subsequent steps. e agency must assign weightings for price and non- price factors that truly reect the agency’s project objectives, assuring the proposers and the public transparency and fair- ness in the process, must select competent evaluation commit- tee members, and must educate the evaluators on the specic project goals and how to avoid bias and subjectivity in selecting the best value contractor.49 50 51 52 Without proper planning and execution, the best value selec- tion process becomes potentially susceptible to bid complaints and protests. e following is a list of commonly cited matters that could give rise to protests of best value procurement: • Ambiguous selection parameters • Inappropriate cutoff point for shortlisting • Failure to maintain confidentiality, including one-on-one meetings • Failure to properly document the evaluation process • Failure to adhere to state procurement requirements and RFP commitments • “Black box” evaluation process • Unfairness in the evaluation process • Perceived subjectivity in the evaluation process, which dis- courages contractors from proposing The agencies surveyed provided information regarding issues they encountered that resulted in protests or complaints, as summarized in Figure 12. Each of these issues should be considered by agencies as they prepare best value procurement 49 See N. Smith et al., Public-Private Partnership (P3) Procurement: A Guide for Public Owners, Project DTFH61-13-D-00022 (2019), Avail- able for download at: https://www. wa.dot.gov/ipd/pdfs/p3/toolkit/ p3_procurement_guide_0319.pdf. 50 See Tran, supra note 3. 51 See Tran, supra note 9. 52 See Abdelrahman, supra note 31. packages. e two top issues on the list concern inconsistencies in evaluating dierent proposals, and ambiguities and conicts in the procurement documents. is highlights the importance of (1)  training evaluators to ensure that they understand the process, (2) consistency and adherence to the specic evaluation requirements specied in the RFP, and (3) clarity and attention to detail by the RFP team as they dra the documents. e survey conducted for this study showed that 10 respond- ing agencies had received bid protests within the last 10 years relating to best value procurement, while 12 agencies reported that they were threatened with the ling of a bid protest (see Table 12). From the bid protest information collected, the following summarizes the formal bid protests reported by transportation agencies that occurred within the past 10 years, collected from the national survey: • e transportation agency made a judgment call that a pro- poser’s design had a critical aw and violated a critical project requirement. erefore, the proposer was deemed non- responsive. e proposer led an unsuccessful protest. • A proposer challenged required qualications for key per- sonnel. e challenge was due to unreasonable require- ments that unduly limited competition. In this case, the project was re-advertised. • A proposer submitted a design that was specically pro- hibited in the contract documents. It argued that its design should work, and that the agency should have evaluated its proposal despite the prohibition. e agency’s contrary position prevailed. • A proposer objected to individual comments made by evaluators as being “incorrect” or biased. e proposer also claimed that an agency’s practice of averaging evaluator scores was unfair if there was an “outlying” score. While in this case, the outcome was in the agency’s favor, the agency has since moved from individual to consensus scoring and has not received further complaints. • e agency determined that a proposer’s higher price was justied by its better technical proposal. e proposer that submitted the lowest price submitted a protest, and the contracting board ultimately upheld the agency’s original decision. While a number of the issues described above were not grounds for a successful protest, it is nevertheless preferable to avoid proposer objections. Some of the issues could perhaps have been avoided by a more thorough analysis in determining RFP requirements, better communication with the proposers regarding the RFP requirements, better training of evaluators, and the use of a consensus process instead of averaging scores. is reinforces the importance of (a) good draing and clear communications with proposers, (b) fairness and lack of bias in evaluations, (c) development of submittal requirements and evaluation criteria that are appropriate and meet the agency’s needs, (d) training to ensure that evaluation procedures are fol- lowed, and (e) provision of information to proposers allowing them to understand the agency’s thought process in establish-

24 NCHRP LRD 90 Table 12. Bid Protests and Threats to Protest Recorded by Transportation Agencies in the Last 10 Years Transportation Agency Number of Bid Protests Number of Bid Protest reats Colorado 0 2 D.C. 1 1 Idaho 2 2 Maryland 1 3 Minnesota 3 7 Missouri 1 0 MTA of Harris County, Texas 2 3 Nevada 1 1 Ohio 1 5 Tennessee 0 0 Texas 0 2 Virginia 1 6 Wisconsin 0 1 Wyoming 1 2 TOTAL 14 35 Figure 12. Potential bid protest factors to consider when developing best value procurements (n = 26). 4% 4% 4% 4% 8% 12% 15% 15% 19% 23% 38% 46% 54% 0% 20% 40% 60% Release of a proposer’s confidential information Inadequate or unequal contracting discussions Legal basis for agency's use of best value procurement Lack of documentation for rating decisions Conflicts of interest relating to proposer teams Agency discretion to accept proposals with errors Unreasonable pass/fail requirements Lack of transparency Inconsistencies in information providedby the agency Appearance of evaluation team bias Claim of arbitrary rating decisions Ambiguities and conflicts in procurement documents Inconsistencies in evaluating different proposals ing the RFP requirements and making selection decisions (e.g., transparency). Each of these issues is discussed in more detail in the sections below. A. Communication with Proposers Communication with potential contractors is a vital compo- nent of any procurement procedure. To assure fairness in com- petition, it is critical to (a) set up a communications system that is consistently followed for communications with all proposers, (b) assure that all proposers receive relevant information regard- ing the procurement, and (c) avoid disclosure of information to any one proposer that would give rise to an unfair competitive advantage. For example, grounds for protest may stem from provision of inconsistent information to dierent proposers, ambiguities in the information given to proposers, or sharing of one proposer’s condential information with another proposer.

NCHRP LRD 90 25 fact, submitted a modied form. e agency notied the pro- poser that submitted the modied form that its proposal was non-responsive and thus ineligible for a stipend. e proposer objected, and the agency agreed to resolve the matter by paying a stipend despite the non-responsive form. Agencies typically advise proposers that all communications with the agency must go through a designated individual, oen the contracting ocer responsible for the procurement. is assures that a consistent message is provided to all proposers. To avoid the situation described above, where pertinent in- formation was communicated to one proposer but not others, most agencies set up a process for written questions and answers where responses to general questions are provided to all pro- posers. It must be cautioned that responses to proposer ques- tions must be carefully draed, or they can themselves present an ambiguity. In Pasha Hawaii Holdings LLC, discussed supra,54 the GAO sustained the protest, nding that the agency’s re- sponse to a proposer’s question regarding an ambiguity in the solicitation supported the unsuccessful proposer’s interpreta- tion of the solicitation. If the procurement includes the oppor- tunity for submittal of ATCs, it will be necessary also to have a process allowing condential communications, but those communications should be monitored to ensure they do not in- clude general information that should be distributed to others. In addition, for one-on-one meetings, it is advisable to desig- nate a single individual (such as a contracting ocer) to attend all meetings and keep track of the information provided to the individual proposers so that any general information discussed in the meeting is provided to the other proposers. Ambiguities in the Information Provided Ambiguities and conicts in the procurement documents lead to dierent interpretations and a lack of clarity for propos- ing rms, which complicates the proposal development process and potentially leads to rms perceiving that the procurement process was unfair. e Wiseman Constr. Co. case discussed in Section 1 above provides an example of a protest that went to the state supreme court relating to an ambiguity in the bid pack- age that could have been avoided by careful draing and cross- checking the documents. In a Maryland bid protest case involv- ing a DBB procurement using A+B bidding,55 the successful bidder challenged the award when it discovered (based on the review of the A+B evaluation information) that the information provided by the agency regarding third-party activities impact- ing the schedule was wildly inaccurate. e court found the IFB contained a material misrepresentation and that it was possible, and indeed likely, that several bids relied on the misrepresenta- tion while others did not. e court ordered rejection of all bids and re-issuance of the IFB with correct information, stating, “[o]nly when bids are prepared using correct information can the State conduct a proper evaluation and determine which bid provides the best value and is most advantageous to the State.” 54 See id. 55 In the Appeal of Milani Construction, LLC, Docket 3074 & 3088, (MSBCA). For all types of procurements, including low bid, best value, and QBS, it is necessary to set up a system for communications with the bidders/proposers. e complexities in submittal re- quirements and evaluation procedures for best value procure- ments, as well as the desire for transparency in the process, make it even more important for the agency to clearly com- municate requirements to proposers and to develop a system to track the information provided and that relevant informa- tion is distributed to all proposers. is includes direct com- munications with proposers for matters such as issuing written responses to questions, holding one-on-one meetings, evalu- ating oral presentations, and exchanging information through clarications and discussions aer receipt of proposals. An agency’s failure to follow applicable rules and procedures in these communications could expose it to bid protests based on claims of bias, unfairness, or allegations that the agency engaged in uncompetitive practices. A recent federal protest (Matter of Pasha Hawaii Holdings LLC) involved an ambiguity in the contract requirements in- cluded in an RFP for procurement of replacement vessels issued by the federal Maritime Administration (MARAD), along with a number of other issues raised by the protester.53 e Govern- ment Accountability Oce (GAO) found that the procurement was awed and upheld the protest. Among other things, it held that the agency’s interpretation of the RFP was unreasonable, or alternatively that the solicitation contained a latent ambiguity about the crew requirements for vessels. In conducting the price realism analysis required by the RFP, the agency should have concluded that the selected proposer’s price was unrealistically low due to a lack of understanding of the RFP requirements re- garding the number of crew required for the fully operational status anticipated by the RFP. e agency contended that the protester had interpreted the RFP incorrectly in determining the crew requirements that formed the basis for its pricing, and specically that the protester should not have reviewed a docu- ment that was not included in the procurement package even though it was referenced in the contract included in the RFP. e GAO disagreed with the agency, nding that the protester’s interpretation was reasonable and was supported by the agen- cy’s published response to a proposer’s question regarding the crew requirements. e decision recommended that the agency revise the solicitation package and obtain and evaluate revised proposals, and also recommended that the agency reimburse the protester’s costs. Lack of Consistency in Communications Inconsistencies in the information provided to proposers may provide an unfair advantage if one rm receives infor- mation not communicated to others. As an example, for one procurement, a proposer specically asked whether it could modify a particular form and was told it would be deemed non-responsive if it did so. at information was not commu- nicated to other proposers, and one of the other proposers, in 53 Pasha Hawaii Holdings LLC, B-419020 et al., (Comp. Gen. Nov. 25, 2020).

26 NCHRP LRD 90 A recent federal protest (Matter of Maersk Line, Limited)58 involving solicitation by MARAD for ship manager services for three Ready Reserve Force vessels involved allegations that the RFP requirements were inconsistent with “full and open com- petition” requirements applicable to federal procurements. e protest concerned the inclusion of minimum eligibility restric- tions in the RFP relating to U.S. citizenship, based on MARAD’s regulation codied 46 C.F.R. 315.5(a)(1). e regulation was promulgated under Merchant Vessel Sales Act of 1946, based on a regulation that was rst adopted in 1951. e protester argued that MARAD had exceeded its authority in adopting the regula- tion and that the citizenship requirement constituted an undue restriction on competition that violated applicable procurement laws and regulations. e GAO denied the protest, deferring to the agency’s long-standing interpretation of the statute and nd- ing that MARAD’s interpretation was reasonable. Since project costs are the major determining factor for con- tract award for the vast majority of construction contracts, there is a general perception that it is reasonable to consider life cycle cost in selecting the winning contractor for a best value pro- curement. However, issues of fairness and accuracy may also present concerns with respect to life cycle cost evaluations. Pro- posing rms have challenged the use of arbitrary or subjective values for various variables in the life cycle analysis, for example, discount rates and the analysis period, which can signicantly impact the validity of the output and create an advantage for one proposer over others. In order to avoid such challenges, it is ad- visable for the agency to disclose the parameters for the analysis in the RFP, and to take other action to assure that the evaluators undertake an unbiased and reliable analysis. C. Bias and Conflicts of Interest As discussed in more detail in Section F, an important strat- egy for mitigating against potential protests regarding the make- up of or decisions made by the RFP and evaluation teams is for agencies to thoughtfully select knowledgeable and impartial individuals for those assignments, and to follow a due diligence process to reduce the risk of conicts of interest. Conicts of interest arise in the RFP development and evaluation processes when an individual participating in the process has a relation- ship with a proposer rm that might unduly inuence their decisions. An individual might have a bias in favor of, or adverse to, a particular proposer due to a prior or current relationship or dealings with the proposer rm or an expectation of a future relationship with the proposer rm. is bias creates an organi- zational conict of interest and can have serious consequences. In one example, an agency decided to rescind the award of a toll systems contract and restart the procurement aer the agency became aware that the spouse of one of its advisors had a con- sulting arrangement with the winning proposer. 58 Maersk Line, Limited, B-406586 et al., (Comp. Gen. Jun 29, 2012). Releasing One Firm’s Confidential Information to Others Releasing condential information from one proposer to others could potentially reduce the technical and fair advantage of one proposing rm over others. For example, in a 2015 case regarding a Florida DOT best value procurement,56 a proposer led a bid protest based on allegations that the department had disclosed one of the proposer’s ATCs to the other proposers in an RFP addendum issued aer submission of technical propos- als but before receipt of the price proposals. e proposer made several arguments regarding the impropriety of the agency’s ac- tions and the fact that the post-proposal addendum meant that the agency evaluated technical proposals based on RFP require- ments that were amended aer delivery of the technical propos- als. However, the administrative hearing board did not reach the merits of the claim as it dismissed the protest as untimely. B. Fairness One of the overriding goals of public procurement laws and processes is to instill condence in the public that contracts are awarded cost-eectively and equitably by fostering fair (or full) and open competition so as to preclude favoritism in selecting the contractor. Avoiding even the appearance of impropriety is benecial since the risk of challenges related to the evaluation and award of a project is signicantly reduced if the proposers and taxpayers perceive that the agency followed a fair process in making the award decision. To ensure this result, principles of fairness must be embedded in the procurement process, and the evaluation team must strictly adhere to the process as described. Fairness issues that potentially lead to bid protests and com- plaints include pass/fail requirements that do not have a solid justication, unreasonably limiting the number of proposers eligible to compete, and unnecessary proposal requirements or evaluation criteria that give certain proposers an unfair ad- vantage over others. Additionally, as discussed in Section 3.1, inconsistent communications and discussions with dierent proposers can lead to claims of unfair advantage. Challenges to procurements alleging an unfair process in- clude a 2015 Florida case57 where the president of the lower- scored proposer had numerous communications with school board members and sta during the time period between the announcement of proposal scoring and the announcement of the school board’s decision on the winning proposer. While the Division of Administrative Hearings acknowledged that there might have been the appearance of an opportunity for favorit- ism, it upheld the award, determining that such contacts did not violate state statutes or the school board’s policies. 56 Ranger Constr. Indus., Inc. v. Dep’t of Transp and Cmty. Asphalt Corp., 15-5535BID (State of Fla. Div. of Admin. Hearings Nov. 12, 2015). 57 A. D. Morgan Corp. v. Sarasota Cnty. Sch. Bd. and Willis Smith Constr., Inc., 15-2362BID (State of Fla. Div. of Admin. Hearings Sept. 17, 2015), available at https://www.doah.state..us/ROS/2015/15002362.pdf.

NCHRP LRD 90 27 In its Design-Build Rule, FHWA denes organizational conicts of interest to mean “that because of other activi- ties or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the owner, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an un- fair competitive advantage.”61 All solicitations for DB highway transportation projects that utilize federal funding must include a provision that addresses restrictions on organizational con- icts of interest and requires oerors to provide information concerning potential organizational conicts of interest in their proposals.62 In addition, the Design-Build Rule provides mini- mum standards for the identication, mitigation or elimination of actual organizational conicts of interest, but permits a state agency to utilize its own standards to the extent they are more stringent. 63 Several states have developed their own organizational con- icts of interest policies to address and mitigate against the risk of organizational conicts of interest. For example, the Florida DOT has adopted procedures regarding consultant services and bidding restrictions for DBB and DB projects64, as well as for P3 projects.65 e Texas Department of Transportation (TxDOT) has similarly adopted rules addressing organizational conicts of interest for its best value procurements for alternative deliv- ery projects.66 ese types of policies guide the agency’s deci- sions in connection with potential organizational conicts of interest that arise during best value procurements and minimize the risk of a proposer having an unfair competitive advantage. D. Concerns Regarding RFP Submittal Requirements, Evaluation System, and Award Algorithm Developing and documenting a clear, transparent and fair evaluation process requires more resources than for a low bid solicitation. As best value procurement includes evaluation of both price and non-price criteria, the potential for proposer complaints and protests increases if the criteria are not well- developed, or if inconsistencies occur in evaluating proposals. A number of successful protest cases regarding best value procurements involve situations where the evaluation process was not clearly dened, followed or properly communicated to proposers. e rst step in developing the evaluation pro- cess is to assess the underlying legal requirements applicable to the procurement. e agency then considers its goals and the project requirements and determines appropriate submittal re- quirements, evaluation criteria, rating system, and award algo- rithm consistent with the enabling authority. is information must then be spelled out in the RFP so that all proposing rms will understand the process. While the agency may revise the 61 23 CFR § 636.103. 62 23 CFR § 636.116. 63 Id. 64 See Procedure Numbers 375-030-006 and 625-020-010. 65 See Policy No. 001-375-020. 66 43 Tex. Admin. Code § 9.155. Even the appearance of bias may be the basis for a success- ful protest. In a 2017 Minnesota case59 involving a best value procurement, the unsuccessful proposer, Rochester City Lines Co. (RCL), challenged the denial of its protest by the City of Rochester to an RFP for the operation of municipal public tran- sit services. At the time of the issuance of the RFP in 2016, RCL and the city were in a publicized legal battle over the city’s denial of a previous protest led by the protester in connection with a procurement for similar services four years earlier, resolu- tion of which was still working its way through the courts. e allegations in the 2012 protest concerned evaluator wrongdoing, favoritism, and bias. e unsuccessful proposer’s 2016 protest was based on the city’s inclusion of ve members of the 2012 evaluation team on the eight-member evaluation committee for the 2016 procurement. In reversing the city’s denial of the pro- test, the Court of Appeals held that the inclusion of the previous evaluators in the current evaluation process, even though it was for a dierent contract, created an impermissible appearance of bias, invalidating both the 2016 RFP process and any contract awarded through that process. Another type of organizational conict arises when a pro- poser has access to information that other proposers do not, due to a past or current relationship between the agency and the proposer or someone on its team. For example, a subconsultant on the proposer’s team might have performed work as a consul- tant on the project that gives the proposer an unfair advantage (which in some cases may be mitigated by the establishment of an ethical wall or by making the consultant’s work product avail- able to other proposers). Another example is where a proposer team member may acquire nonpublic information through its relationship with one of the agency’s procurement consultants. is was the case in a federal action against the Army Corps of Engineers by a successful proposer whose contract was invali- dated due to a successful protest of the award, based on allega- tions that the successful proposer was aorded unequal access to nonpublic information due to an organizational conict of interest.60 In that case, the successful proposer’s team included a design subcontractor, slated to perform approximately 1.5% of the work, that was in merger discussions with the parent com- pany of the Corps’ design consultant during the procurement. e Corps initially denied the protests led by the two unsuc- cessful proposers, but the GAO recommended the Corps in- validate the contract award, re-procure the project, and bar the proposer team with the conict. On appeal, the court upheld the agency’s initial determination that the procurement was valid, holding that the GAO’s decision was irrational. While the Fed- eral Acquisition Regulation requires mitigation of “signicant conicts,” in this case, the attenuated relationship between the parties did not create a signicant conict. Furthermore, there was no evidence that the successful proposer obtained any non- public information or benet from the relationship. 59 Rochester City Lines Co. v. First Transit, Inc., A16-1515 (Minn. Ct. of App. May 15, 2017). 60 Turner Construction Co. v. United States, 645 F.3d 1377 (Fed. Cir. 2011).

28 NCHRP LRD 90 E. Proposer Disagreement with Evaluation Team Ratings Evaluation teams review and provide a score or rating for each proposal received. erefore, the process for rating/scoring proposals needs to be communicated clearly and consistently to all proposing rms. Furthermore, the ratings must be consistent with the process and represent an unbiased evaluation of the proposal. Deviations from the rating system and lack of justi- cation for the ratings given can lead to claims of arbitrary rating decisions. It is advisable for the evaluators to provide contempo- raneous justications for their ratings to clearly show the basis for the recommendation and assure that the agency can respond to any future protests by providing access to the relevant docu- mentation. A 2013 case involving a best value procurement for the design and construction of an embassy building in Moscow69 illustrates the importance of both following proper procedures and maintaining a record justifying the decisions made. In that case, the court held that the Department of State acted arbitrarily in awarding the contract since (1) the record failed to show why the agency reversed its initial decision to disqualify the selected proposer, and (2) the record also failed to show why the agency changed its initial decision not to allow the selected proposer a preference under the Percy Amendment. e court also found that the agency violated procurement regulations, stating: e predetermination in the Pre-qualication Notice to use a trade- o analysis, and the application of a trade-o analysis to evaluate and award the contract to Desbuild-REC when it was consid- ered by defendant to be the lowest-priced and highest technically rated oeror, is peculiar at best. Mr. Krips’ Recommendation for Contract Award stated that “[t]he Government used the tradeo process to determine the proposal that represents the best value to the Government.” Although a trade-o analysis was projected in the Pre-qualication Notice before it was indicated by the oers received, even Mr. Krips’ Recommendation for Contract Award did not seem to direct that a trade-o analysis should be conducted and did not explain if or how the trade-o process was conducted. e use of a trade-o analysis when one was not indicated by the applicable reg- ulations is another indication of defendant’s careless procedures in conducting this procurement.70 Adjectival ratings are generally considered less susceptible to protests than numerical scores but may nevertheless result in complaints and legal challenges from proposers. A 2019 ruling regarding an Army Corps of Engineers procurement71 con- cerned a proposer’s disagreement with the adjectival score it re- ceived for the subcontractor criterion based on the fact that the proposer had committed to self-perform work. e GAO deter- mined that the agency’s decision did not conict with the solici- tation and rejected the proposer’s argument. In another protest case, also involving an Army Corps of Engineers procurement,72 the unsuccessful proposer challenged the best value tradeo 69 Caddell Construction Co., Inc. v. United States, U.S. Ct. Fed. Cl. No. 13-20C, 2013. 70 Id. at 105. 71 Fisher Sand & Gravel Co., B-417496 (Comp. Gen. July 26, 2019). 72 Kiewit Infrastructure West Co. v. U.S., No. 18-76C (U.S. Ct. of Fed. Claims April 25, 2018). RFP following issuance, once proposals are received, any deci- sion to accept proposals that deviate from the published require- ments and failure to strictly follow the evaluation procedures described in the RFP may lead to bid protests and complaints from proposing rms. Furthermore, as shown by the Wiseman Constr. Co. case discussed in Section 1, even a decision not to waive minor errors may result in a protest. Where the best value scoring process is not suciently communicated, proposers may question the propriety of the methodology used. In the Fluor-Astaldi-MCM case,67 discussed supra, among several other complaints, the losing proposer objected to the methodology used to assign technical scores. e proposer argued that the Florida DOT inappropriately cal- culated technical scores by rst adding the individual scores assigned by all scoring members in two separate committees together and then dividing by the total number of members in- stead of rst calculating the average scores of the members of each committee separately and then averaging the two resulting committee scores. e RFP was silent on the method of calcu- lating the technical scores, and testimony was presented at the hearing that the methodology used by the Florida DOT was consistent with its standard internal practices. e Division of Administrative Hearings found that the department’s method- ology was not improper since it was not contrary to the RFP, any statutes, or any rules. e GAO decision in the Matter of Pasha Hawaii Holdings LLC, discussed supra,68 involved claims that the agency failed to follow the terms of the solicitation with respect to the evaluation of past performance and technical pro- posals. e decision sustained the protest on both counts. Regarding past performance, the decision found that the agency unreasonably considered the awardee’s positive past performance under a prior contract while ignoring negative past performance under the same contract, and that the agency unreasonably credited the awardee with past performance for which it did not have performance reviews. e protester also argued that the evaluation included an unstated evaluation cri- terion by considering past performance involving government- owned ships as more relevant than past performance involving other vessels. e GAO agreed that the agency had erred, but did not consider that error in its decision since the protester did not establish it was competitively prejudiced. With regard to the technical proposal review, the issue revolved around the proposer’s understanding, based on the response to a proposer question as well as statements made at the pre-proposal con- ference, that the requirement to submit an Integrated Master Schedule was limited to the rst six line items of the bid, through the purchase of the vehicles. e GAO held that the agency acted unreasonably in assigning a weakness to the protester for failure to address subsequent line items in the schedule. 67 Fluor-Astaldi-MCM, Joint Venture v. Dep’t of Transp. and Archer Western-De Moya, Joint Venture, 17-5800BID (State of Fla. Div. of Admin. Hearings April 10, 2018). 68 See Tran, supra note 9.

NCHRP LRD 90 29 F. Evaluation Teams e transportation agency’s evaluation team oversees re- viewing and evaluating received proposals based on the evalu- ation criteria, evaluation rating system, and award algorithm developed for the best value procurement process for highway construction projects. Evaluation teams need to be trained on how to evaluate best value proposals so that all evaluation team members follow a consistent process. Experience with best value procurements helps the evaluation team make sound re- views and recommendations. However, when proposing rms perceive a lack of qualications or experience with evaluation team members, they may conclude that the evaluation criteria were not applied consistently and the proposals were not prop- erly evaluated, potentially leading to a protest or complaint in the selection decision. Furthermore, evaluation team members cannot exhibit any bias or inconsistencies toward one rm over others since that may give rise to an unfair advantage leading to a bid protest. It is important to keep records of the evaluation process and the justications for evaluator determinations. In Alpha Painting, discussed supra,77 the District Court heard testimony regarding the evaluation process when considering the lowest bidder’s allegation that DRPA’s determination to reject its bid was improper. e evaluator of the safety responsibility factor used a formula based on information submitted with the bid. e evaluator could not provide a rational explanation when asked why the decision was made to reject the lowest bid as not responsible rather than non-responsive. In addition, during the evaluator’s testimony at trial, objections were repeatedly made based on the attorney-client privilege, which prevented further investigation of the rationale for the rejection of the bid. Ulti- mately, the District Court found the evaluation process to be “[o]paque and [u]nreviewable”78 and held that DRPA’s decision was arbitrary and capricious. Another protest79 concerned a challenge to the agency’s decision not to include it on the shortlist. e court denied the protest based on supporting evidence from the agency’s trans- parent and well-documented evaluation process, pointing out the immense importance of transportation agencies to properly document and be transparent throughout the selection process. One protest case relating to the objectivity of the evaluation team is the A. D. Morgan Corp. case, discussed supra.80 e pro- poser led a bid protest aer a school board decided to award a contract for construction management services to another proposer, contrary to the selection committee’s recommenda- tion to give the disappointed proposer the highest ranking. Among other complaints, the disappointed proposer alleged that a selection committee member lobbied to have the school board select the proposer with the lower score. ough the Division 77 See supra note 69. 78 Alpha Painting, 2016 WL 5339576, at *11. 79 Shane et al., Legal challenge to a best value procurement system, J Manage Eng (2006). 80 See supra note 53. decisions of the evaluation committee, as well as various adjec- tival ratings assigned by the evaluation committee to portions of its own and the successful proposer’s proposals. e court rejected the unsuccessful proposer’s arguments because the rationales for the decisions and ratings were well-documented in a 10-page report, the allegations related to the manner in which the Corps exercised its judgment in evaluating the pro- posals, and do not reect disparate treatment by the Corps. Furthermore, regardless of whether there is evidence of bias, if two proposals that appear similar receive dierent ratings, it is essential for the evaluators to consider the reasons for those dif- ferences and include a justication in their evaluation reports. While avoiding a protest may not be possible, the courts will generally defer to agency decisions that have a rational basis. And of course, if the dierences in ratings cannot be justied, the ratings should be modied so that they are consistent, thereby avoiding grounds for a protest. In a Delaware case relating to a low bid DBB procurement,73 the Delaware River Port Authority (DRPA) determined the low- est bidder to be non-responsible based on a lack of safety ratings in its submission. e DRPA did not contact the bidder or per- mit it to provide additional information prior to rejecting the bid. e DRPA then awarded the contract to the second lowest bidder, whose submission also lacked certain safety information but was contacted by DRPA and permitted to submit the miss- ing information. e ird Circuit Court of Appeal armed the District Court’s decision to cancel the award based on DRPA’s disparate treatment of the bidders, stating “[a]gency action is arbitrary and capricious if the agency oers insucient reasons for treating similar situations dierently.”74 One of the arguments raised in the Fisher Sand case75 was that the agency improperly failed to give the proposer higher adjecti- val ratings on the grounds that the proposer had received higher scores for a near-identical proposal on a similar project. e pro- poser argued it would have been successful had it been given the same ratings as it received on a previous solicitation. e GAO rejected the proposer’s argument, reasoning that the dierence in ratings appeared to be the result of “hard graders” vs. “easy graders” in two dierent procurements and was not the result of impropriety. “We have repeatedly recognized that individual evaluators may reasonably reach diering conclusions and as- sign dierent technical ratings since both objective and subjec- tive judgments are involved in technical evaluations; accordingly, ratings assigned by evaluators under one solicitation are not gen- erally probative regarding the reasonableness of ratings assigned by dierent evaluators under a dierent solicitation.”76 73 Alpha Painting & Construction Co. Inc. v. Delaware River Port Authority of the Commonwealth of Pennsylvania and the State of New Jersey. 74 Quoting Nazareth Hosp. v. Sec’y U.S. Dep’t of Health & Human Servs., 747 F.3d 172, 179–80 (3d Cir. 2014), and Muwekma Ohlone Tribe v. Salazar, 708 F.3d 209, 216 (D.C. Cir. 2013). 75 See Tran, supra note 9. 76 Fisher Sand & Gravel Co., B-419238, Jan. 7, 2021, 2021 CPD, 49 at 5 https://www.gao.gov/assets/b-419238.pdf.

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Best value procurement is becoming more popular with transportation agencies because it allows them to consider factors other than cost. However, best value procurement is also more complex and can lead to protests if not conducted properly.

NCHRP Legal Research Digest 90: Best Value Procurement for Highway Construction: Legal Issues and Strategies, from TRB's National Cooperative Highway Research Program, addresses the best value procurement systems used for highway projects and notes the flexibility regarding selection criteria, rating systems, and award algorithms.

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