Price evaluation mistakes nixed Accenture's Air Force win
Gettyimages.com/Michał Chodyra
By
Nick Wakeman
The Air Force left off some labor categories when it evaluated Accenture's bid to provide internet-of-thing solutions.
The Air Force quoted a bid by Accenture to deliver a suite of internet-of-things solutions at about half the price of competitor IBM.
More precisely: Accenture's bid was $24.6 million and IBM’s price was $50 million.
The Air Force saw that price difference as enough to show Accenture represented a better value to the government, despite IBM scoring higher on the technical merits of its proposal.
IBM received an Outstanding and High ratings. Accenture scored an Acceptable and Moderate, according to a newly-unsealed Government Accountability Office decision.
We reported on the outcome of IBM’s protest in early June and how the price differential proved to be Accenture’s undoing as GAO sided with IBM.
Now the written decision is public to provide more insights into IBM’s allegations, the Air Force’s defense and what GAO wants done.
While the decision might raise hopes for IBM, the ultimate victory of winning the contract is not assured for Big Blue.
In its protest, IBM argued that Accenture’s pricing was too low because Accenture’s proposal didn’t include one particular labor line item. Therefore, IBM claimed the Air Force's price realism evaluation was flawed.
The Air Force used an independent government cost estimate that IBM says didn’t include all of the labor categories that needed to be evaluated.
In its analysis, GAO agreed with that one IBM assertion and denied the company's other claims. But the price realism argument was enough to get GAO to recommend the Air Force redo its award decision.
GAO said that without all the labor categories being included in the Air Force evaluation, “we cannot know what conclusions the agency would have drawn about the realism of the awardee’s price.”
In other words, the Air Force can't know who it should pick without a proper price evaluation.
That is important when you consider that the Air Force picked Accenture over IBM because the former's price was so good and overcame the stronger technical proposal.
“The agency traded off Accenture’s significant proposed price advantage against the technical superiority of IBM’s proposal,” GAO wrote.
GAO's recommendation only covers the price realism evaluation, and when that is completed the Air Force will make a new best-value determination.
There is no timetable for the Air Force to make a new award decision.