Incumbent Not Entitled to “Extra Credit” in Transition Evaluation, GAO Says

An incumbent contract wasn’t entitled to receive “extra credit” in the agency’e evaluation of offerors’ transition plans.

In a recent bid protest decision, the GAO held that the agency reasonably awarded a non-incumbent more strengths than the incumbent in the evaluation of transition plans, writing that incumbency alone doesn’t automatically entitle the incumbent to the highest-possible transition plan score.

The GAO’s decision in Integral Consulting Services, Inc., B-415292.2, B-415292.3 (May 7, 2018) involved an Army task order competition seeking a contractor to provide various support services primarily in support of the National Ground Intelligence Center.  The solicitation called for a best value tradeoff considering technical merit and cost.

The solicitation specified that the Army’s evaluation of the technical factor would include an analysis of each offeror’s transition plan.  The Army was to evaluate “[t]he Offeror’s understanding of the processes and procedures required to transition from an incumbent contract,” as well as “the Offeror’s understanding of the risks associated with its approach, and the strategies it will employ to mitigate those risks.”

The Army received six proposals.  Integral Consulting Services, Inc. was one of the six offerors.  The Army then established a competitive range, which included Integral.

Integral’s transition plan relied on its status as the incumbent.  Integral proposed a complete transition on “day one,” well in advance of the solicitation’s 90-day transition period.

In its discussions with Integral, the Army identified two weaknesses in Integral’s transition plan.  The Army said that Integral’s transition plan “lacked details regarding the processes and procedures it would use, and did not clearly identify risk areas or mitigation strategies, to successfully accomplish transition on day one, as proposed.”

After reviewing Integral’s response, the Army found that Integral had successfully resolved the weaknesses by performing a “more comprehensive look” into its experience and knowledge.  The Army ultimately assigned Integral a single strength for Integral’s transition plan because “unlike a new entity coming in to assume control of the program, the incumbent has only to implement processes already in place.”

The Army gave two strengths to the transition plan of another offeror, The Buffalo Group.  In its evaluation of TBG, the Army assigned a strength for exceeding the 90-day transition timeline and another strength for TBG’s risk mitigation plan.

TBG and Integral were both assessed overall “Outstanding” ratings for the technical factor.  However, TBG’s total proposed cost/price was approximately $89.7 million whereas Integral’s was approximately $131.6 million.  The Army awarded the task order to TBG.

Integral filed a GAO bid protest challenging the award to TBG.  Among its grounds of protest, Integral argued that it was unreasonable for the Army to have assigned more strengths to TBG’s transition plan than to Integral’s.  Integral contended that, as the incumbent, no other offeror could pose less transition risk, which should have led to Integral receiving the higher score.

The GAO wrote that “[t]here is no requirement that an incumbent be given extra credit for its status as an incumbent, or that an agency assign or reserve the highest rating for the incumbent offeror.”  Here, the Army found that it was reasonable for the Army to find that TBG’s transition plan merited two strengths and Integral’s only one.  Moreover, given the large difference in cost/price, there was nothing in the record to suggest that the single extra strength TBG received for its transition plan was “a discriminating factor in favor of TBG in the award decision.”

GAO denied the protest.

Make no mistake–incumbency often is an advantage.  According to a survey published last year, the win rate for incumbents was 54 percent in 2016.  But the incumbent win rate was down significantly from 2015, and the study’s authors suggested that pricing pressures may be largely to blame.

Whatever the reasons, the GAO case law makes clear that mere incumbency does not entitle an offeror to the highest-possible ratings.  GAO has previously held that the incumbent is not entitled to the highest past performance rating.  As Integral Consulting Services demonstrates, the same holds true for transition plans.