International Business Machines Corporation (36C10B23R0006)

B-421841 Oct 11, 2023 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights International Business Machines Corporation (IBM), of Bethesda, Maryland, protests the terms of request for proposals (RFP) No. 36C10B23R0006, issued by the Department of Veterans Affairs (VA) for supply chain modernization services. IBM argues that evaluation criteria assessing offerors' financial liquidity and solvency are unduly restrictive of competition. We deny the protest. View Decision 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: International Business Machines Corporation File: B-421841 Date: October 11, 2023 J. Andrew Jackson, Esq., Ryan P. McGovern, Esq., Robyn B. Celestino, Esq., and Zoe Lensing, Esq. Jones Day, for the protester. Colin L. Nash, Esq., and Peter S. Kozlowski, Esq., Department of Veterans Affairs, for the agency. Todd C. Culliton, Esq., and Tania Calhoun, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that the solicitation contains unduly restrictive terms is denied where the record shows that the evaluation criteria are reasonably related to the agency’s needs and withstand logical scrutiny. DECISION International Business Machines Corporation (IBM), of Bethesda, Maryland, protests the terms of request for proposals (RFP) No. 36C10B23R0006, issued by the Department of Veterans Affairs (VA) for supply chain modernization services. IBM argues that evaluation criteria assessing offerors’ financial liquidity and solvency are unduly restrictive of competition. We deny the protest. BACKGROUND On June 29, 2023, the VA issued the RFP to procure supply chain modernization services. Agency Report (AR), Tab 5, RFP at 1, 12. The selected contractor would provide an easy-to-use cloud-based platform to manage the flow of goods, services, and information internally between agency personnel, and externally between agency personnel and customers. Id. at 12, 17. The RFP contemplates the award of a single indefinite-delivery, indefinite-quantity contract to be performed over a 10-year ordering period. RFP at 41. Delivery and task orders would be placed on fixed-price, time-and-materials, or labor-hours bases. Id. at 78. Award would be made on a best‑value tradeoff basis considering eight factors: corporate expertise; written technical approach; technical demonstration; past performance; small business participation commitment; veterans involvement; veterans employment; and, price. Id. at 79-80. The RFP provides for a multi-step evaluation approach. During step one, offerors will submit their corporate expertise proposals. RFP at 86. Offerors will demonstrate experience under multiple elements, including inventory management, order management, asset management, supply chain risk management, system integration, data management, and general “overarching” categories. Id. at 82-83. Additionally, and as particularly relevant to the protester’s challenge, under the corporate experience factor, offerors also need to demonstrate that their companies are financially liquid and solvent. Id. at 83. Offerors would be assigned points under each element and could achieve a maximum of 10,000 points. Id. Offerors would self-score their proposals and include relevant supporting and substantiating information. Id. at 81. The five offerors receiving the most points would advance to the second step of the evaluation. Id. For step two, offerors would submit their written technical approach, past performance, small business participation commitment, veterans involvement, veterans employment, and price proposals. RFP at 86, 101. Offerors selected for step three will provide the live technical demonstration of their proposed products. Id. at 101. Prior to the July 28 close of the solicitation period, IBM filed this protest with our Office. DISCUSSION IBM asserts that the RFP contains unduly restrictive tests for financial liquidity and solvency under the corporate expertise factor.[1] Protest at 6. First, IBM argues that the liquidity and solvency tests produce meaningless results, and narrowly evaluate a company’s financial health at a particular point-in-time. Id. at 7. Second, IBM argues that the RFP unreasonably assigns points using an “all-or-nothing” approach (i.e., offerors receive all possible points for demonstrating scores above particular ratios, or receive no points at all), as opposed to a sliding scale. Id. at 9. In response, the agency explains generally that the financial liquidity and solvency tests do not restrict competition. MOL at 2.