In CW Government Travel, Inc. v. United States, COFC No. 12-708-C (April 11, 2013), the United States Court of Federal Claims (“COFC”) sustained CW Government Travel’s (“CWT”) protest challenging the General Services Administration’s (“GSA”) decision to award a multiple award Indefinite-Delivery/Indefinite-Quantity (“IDIQ”) contract valued in excess of $103 million to a single source as inconsistent with Federal Acquisition Regulation (“FAR”) 16.504(c)(1)(ii)(D)(1) because GSA’s determination that only one offeror was qualified and capable of performing was based on a best-value trade off, instead of on an analysis of the offeror’s individual ability to perform. According to the Court, this was a case of first impression. With this opinion, Judge Sweeney provides guidance to agencies and offerors as to when the government may – and particularly when the government may not – issue a single-source IDIQ contract in excess of the $103 million FAR-based threshold.

In the procurement at issue, GSA awarded a single-source IDIQ contract valued at over $1.3 billion for a next generation of travel management services to Concur Technologies (“Concur”). During the evaluation process, GSA assigned Concur’s proposal an overall rating of “Very Good” and CWT’s proposal a “Marginal” rating. Under the solicitation’s definition for a Marginal rating, the proposal “does not meet Government requirements necessary for acceptable contract performance, but the issues are correctable.” CWT and Concur were the only two competitors in the procurement. However, GSA ultimately concluded that not only was Concur’s proposal was more competitive that CWT’s, but also that Concur was the only offeror qualified and capable of performing at a reasonable price because CWT’s proposal received the “lowest technical rating at the highest price.”

Under FAR 16.504(c)(1)(ii)(D)(1), a single-source award of an IDIQ contract valued in excess of $103 million is unauthorized unless one of the enumerated exceptions applies. One exception permits a single-source award where there is “[o]nly one source [that] is qualified and capable of performing the work at a reasonable price to the Government.” FAR 16.504(c)(1)(ii)(D)(1)(iii) (emphasis added).

In weighing the benefits of making a single versus a dual-source contract award, GSA noted that “there is a strong FAR preference for multiple awards.” However, GSA ultimately made a single-source award to Concur on the grounds that 1) CWT was incapable of fulfilling the requirements before award, 2) CWT’s proposal was not as competitive as Concur’s proposal, 3) Concur was the only qualified and capable source of performing at a reasonable price, 4) a single award was less costly than a dual award, and 5) the risks associated with a single award would be manageable.

The Court concluded that GSA “essentially conducted a best value tradeoff,” because GSA determined that CWT was not a capable or qualified offeror by comparing CWT to Concur and, further, that GSA’s award was “inconsistent with what FAR 16.504(c)(1)(ii)(D)(1)(iii) require[s]” because “it was improper [for GSA] to make a single award based on a best value tradeoff approach.” Because CWT’s proposal received a lower rating and had a higher price than Concur’s proposal, GSA determined that CWT was not qualified and capable of performing. However, the Court observed that under a Marginal rating, unlike an Unacceptable rating, any identified deficiencies are correctable, and thus a conclusion that CWT is incapable of performing was improper. Similarly, the Court noted that GSA only determined the price was unreasonable because it was higher than Concur’s, not because it was unreasonable.

Ultimately, the Court granted CWT’s motion for an injunction and ordered GSA to conduct a “reevaluation consistent with FAR 16.504(c), and in particular FAR 16.504(c)(1)(ii)(D)(1)(iii), and this court’s decision.” This decision reinforces the FAR’s preference for multiple awards for large IDIQ contracts, and clarifies limited scope of one of the exceptions to that preference.