Did DLA trick Salient CRGT into raising its bid?

Salient CRGT lost its bid protest of a Defense Logistics Agency contract when its argument that it was tricked by DLA into raising its bid failed to be persuasive.

Salient was the incumbent and was competing with Primescape Solutions, which won the $18 million contract to provide sustainment and audit support services for DLA’s Subsistence Total Order and Receipt Electronic System, or STORES.

Salient won the contract once, but a protest by Primescape caused the agency to pull it back and re-evaluate proposals. DLA also reopened discussions with the companies and asked for new final offers.

The second time around, however, it told Salient that its bid was inadequate for 11 of 13 tasks for the two option years of the contract.

DLA told Salient that its proposed labor hours was insufficient for the options and asked them to explain or revise the proposed level of effort.

DLA also felt that Salient’s proposal for the base year was too high, but they didn’t tell the company that. The evaluation team concluded that it was only required to determine whether the proposed labor hours were adequate and not whether they were high. So, they were silent.

But look at it from Salient’s perspective. It looks like they are told the base year is fine but option years are too low. So, what do they do? They up the labor hours for the option years to be closer to the base year.

And where did they end up? Their bid was $22.7 million with 215,408 labor hours. Primescape’s bid was $18 million with 189,120 labor hours.

Both bids were technically acceptable, so DLA went with the lowest price.

Salient argued that they were misled by DLA because they were not told that the base year was too high. The company says it raised its labor hours by 27,296 more hours than was necessary.

It sounds like a compelling argument to me, but GAO said that DLA didn’t feel Salient’s proposed labor hours were unreasonably high and therefore technically unacceptable.

“At no time did DLA find Salient’s proposal technically unacceptable as a result of too many labor hours in the base year,” GAO wrote. “Therefore, the agency was not required to raise Salient’s higher labor hours vis-à-vis Primescape’s proposed labor hours--and thus higher price--in discussions.”

GAO also rejected Salient’s argument about the price analysis and Primescape’s key personnel. Those seemed like pretty standard arguments to me.

Perhaps DLA didn’t violate any procedures or regulations by not telling Salient that its base year was high, but there is the fairness factor, and it seems like Salient got the short end of this stick.