GAO recently issued a bid protest decision that illustrates one of the vagaries in selecting a winning bid. In a case where technical evaluation factors, when combined, were more important than price, GSA awarded a contract to a firm who's overall technical score was inferior to the company that filed the protest (in fact, it was rated "marginal") but who's price was 24 percent lower than the unsuccessful bidder (you can read the entire decision here). The GAO denied the protest on the basis that the protester's technically superior proposal was not worth its much higher price.
The contract itself was an 8(a) set-aside for operations and maintenance of a courthouse. The solicitation advised that the award would be made on a "best value" basis, considering price and three technical evaluation factors; prior experience, key personnel, and past performance. Offerors were informed that the three technical factors, when combined, were more important than price.
The bid protester complained that GSA placed too much emphasis on price in its selection decision. GAO ruled that source selection officials in negotiated procurements have broad discretion in determining the manner and extent to which they will make use of the technical and price evaluation results; price/technical tradeoffs may be made, and the extent to which one may be sacrificed for the other is governed only by the test of rationality and consistency with the solicitation's evaluation criteria.
Even where technical merit is significantly more important than price, an agency may properly select a lower-priced, lower-rated proposal if it reasonably decides that the price premium involved in selecting a high-rated, higher-priced proposal is not justified.