Liquidity Services, Inc., B-294053, August 18, 2004

B-294053 Aug 18, 2004 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Liquidity Services, Inc. protests the General Services Administration's (GSA) award of a contract to Maximus, Inc., under request for proposals (RFP) No. FAS-PP-03-0004, for the sale of federal surplus property. Liquidity challenges the evaluation of proposals. We sustain the protest. View Decision B-294053, Liquidity Services, Inc., August 18, 2004 DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Decision Matter of: Liquidity Services, Inc. File: B-294053 Date: August 18, 2004 Craig A. Holman, Esq., Paul E. Pompeo, Esq., and Glenn I. Chernigoff, Esq., Holland & Knight, for the protester. Brian A. Darst, Esq., Odin, Feldman & Pittleman, for Maximus, Inc., the intervenor. Sharon Chen, Esq., Harmon R. Eggers, Esq., and Richard R. Butterworth, Jr., Esq., General Services Administration, for the agency. Sharon L. Larkin, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Price evaluation was unreasonable where comparison of offerors' "discount rates" for transportation and warehousing did not reflect actual proposed prices or the cost to the government for these services. DECISION Liquidity Services, Inc. protests the General Services Administration's (GSA) award of a contract to Maximus, Inc., under request for proposals (RFP) No. FAS-PP-03-0004, for the sale of federal surplus property. Liquidity challenges the evaluation of proposals. We sustain the protest. BACKGROUND The Federal Asset Sales (FAS) program seeks to improve and optimize how agencies dispose of billions of dollars of unwanted assets. GSA, the "lead partner" on the FAS initiative, is responsible for developing, implementing, and operating a successful solution in accordance with the FAS program's "high-level" objectives, including: (1) making it easier for citizens and businesses to find and buy government assets, (2) increasing net proceeds from asset sales, (3) decreasing agencies' expenses related to asset sales, (4) reducing asset disposal time, and (5) improving the personal property sales process. RFP Sections A.5.1, A.5.2, C.2. The RFP contemplated award of a fixed-price indefinite-delivery/indefinite-quantity contract to a single "service aggregator" whose proposal best met the FAS program objectives. Specific categories of services to be provided under the contract were marketplace services (including providing online and offline auction venues for selling assets), pre- and post-sale value added services (such as providing appraisals, packaging, and shipping services), marketing, government system integration and security, and administration and oversight services. Id. Sections A.6, C.2. The RFP provided for a maximum 10-year contract period (2-year base period, with one 2-year option, followed by two 3-year option periods), with a minimum guarantee of2,500 and a maximum contract ceiling of $500,000,000 in total revenue to the service aggregator. Id. at i. and Section A.1. The RFP stated that award would be made on a "best value" basis considering the following factors and subfactors: [1] Weight Technical Approach 45% Related Experience 20% Marketplace (5%) Value Added Services (5%) Administration and Oversight (5%) Marketing (2.5%) Performance Management (2.5%) Past Performance 10% Quality of the Services (2.5%) Timeliness of Performance (2.5%) Business Relations/Customer Service (2.5%) Cost Control (2.5%) Price 25% Offerors were required to propose pricing for at least one of two pricing models described in the RFP: a fee-for-service price model (Model 1) and an incentive-aligned price model (Model 2). [2] Under the fee-for-service model (Model 1), the agency will select the services to be performed from a menu of services offered by the contractor, including online and offline marketplace services, value added services, and payment collection services. The contractor will be paid a fee based on a percentage of gross proceeds obtained for each of the services selected under the contract. In addition, the contractor will be reimbursed on a fixed unit-cost basis for transportation, warehousing, and refurbishing services expended. Offerors were required to specify both their proposed fee and fixed unit prices in "Model 1 bid forms" submitted with their proposals for the base and option years, and for different volumes of gross proceeds specified in the RFP. RFP amend. 2, Section B. Under the incentive-aligned model (Model 2), which is a performance-based model, the offerors choose the services to be provided when selling property.