Why the VA paid a 29% premium to hire Booz Allen

We have already covered the gist of the Government Accountability Office’s decision to deny protests against Booz Allen Hamilton’s win of a $860 million task order at the Veterans Affairs Department.

But GAO’s written decision is now public, which means we get more insights into the competition and how the VA decided to go with Booz Allen.

Cognosante and ProSphere Tek were the protestors that challenged the VA's choice of Booz Allen to continue on as program manager for the massive Cerner electronic health record integration initiative. The protestors' main objection was that Booz Allen had an organizational conflict-of-interest because another part of the company held a separate task order with VA.

As we reported earlier in January, GAO denied the protests because those two orders were managed by different parts of the VA. GAO said Booz Allen could not funnel work from one contract to the other as the protesters alleged, so there was no conflict.

The now-public decision also provides more insights into the protestors' other main arguments regarding the evaluations of proposals, past performance ratings and the VA's best-value tradeoff decisions.

GAO denied those arguments as well in the effort to unseat Booz Allen, which has been the incumbent since 2017.

The VA's Cerner electronic health record project has been controversial and mired in difficulties.

Both Cognosante and ProSphere argued that Booz Allen’s technical proposal should not have received an “outstanding” rating because of the latter's alleged poor performance as an incumbent. The protestors argued that Booz Allen’s performance should factor into the technical rating.

GAO ruled that the solicitation kept the evaluation of the technical proposals and past performance separate. GAO called the performance argument “speculative.”

Booz Allen received the highest technical evaluation of “Outstanding.” Cognosante and ProSphere got ratings of “Acceptable.”

ProSphere’s past performance score was the highest at 17.6, followed by Cognosante at 14.2 with Booz Allen the lowest at 11.

But the VA weighted the technical evaluation criteria as higher.

Booz Allen’s technical rating was high enough for the VA to pick that company as the best value, despite its final proposed price being $859.9 million.

That price was significantly higher than Cognosante’s bid of $664.9 million and ProSphere’s of $628.8 million.

Cognosante and ProSphere challenged the best-value decision, with Cognosante claiming that there was no technical approach offered by Booz Allen that justified the higher price. The VA didn’t conduct a price evaluation.

GAO supported VA’s source selection authority who said Booz Allen’s technical proposal offered strengths that overcame the higher price and the lower past performance score.

The source selection authority said Booz Allen’s proposal offered enough benefits to the VA that warranted paying the 29% price premium.