Deloitte prevails in HUD protest battle

This protest battle between Deloitte and Grant Thornton isn’t noteworthy for the dollar value, but it’s another example of how agencies treat pricing as a determining factor in making contract awards.

In question here is a blanket purchase agreement that Deloitte bid $3 million on versus Grant Thornton’s $1.3 million proposal. At that scale, the price difference is a huge gap.

Deloitte originally won the contract to support the budget processes of the Housing and Urban Development Department. HUD said Grant Thornton's approach was too risky because it didn’t align with the expected tasks and made it likely that contract modifications would need to be made after award.

I found that interesting because that’s a complaint I’ve heard from losing bidders: agencies pick the lower-priced bid, but then have to use contract modifications later to get the work done.

So HUD seemed to be going against that philosophy with the first award to Deloitte.

But then Grant Thornton filed a protest, after which HUD agreed to re-evaluate quotations and make a new award decision. As part of that, HUD assigned a new technical evaluation team and opened new discussions with the bidders.

Both companies made adjustments and this time Grant Thornton won the BPA. And Deloitte followed with its own protest.

In both competitions, Deloitte had the higher-rated technical solutions. Ine of its arguments was that HUD didn’t explain why it wouldn’t pick the higher-priced and higher technically-rated proposal.

If this had been a lowest price, technically acceptable evaluation, then there wouldn’t have been an issue. But because it is best value, HUD needs to explain and it apparently didn’t.

The Government Accountability Office ruled in Deloitte’s favor on that front, according to a March 23 decision that was unsealed Tuesday. The agency didn’t adequately explain the basis of the award.

GAO wants HUD to terminate Grant Thornton’s award and give it to Deloitte. If HUD doesn't do that, they should reopen discussions, get new proposals and then more adequately document its award decision.

According to the Federal Procurement Data System, the contract with Grant Thornton has been terminated but no new award to Deloitte has been made.

Discussion about pricing aside, the other thing that struck me was how these two companies pursued protests of such a small contract. I can only imagine the attorney fees will drastically reduce any profits. But I guess sometimes the win is about more than the contract value.