The Government Accountability Office sustained a protest from Veterans Management Services, Inc. (VMSI) after finding the Department of Veterans Affairs improperly excluded years' worth of the company's past-performance history from a competition for acquisition support services, then made award to a lower-priced rival.
Background
The VA's Veterans Health Administration issued RFQ No. 36C24926Q0036 seeking acquisition support services under the Federal Supply Schedule. Because the buy ran through the FSS program rather than a full negotiated procurement, the agency had latitude to set its own evaluation approach for quotes, provided it followed the terms it wrote into the solicitation itself. The RFQ told vendors that price and past performance would carry equal weight in the tradeoff decision, meaning a lower price alone would not guarantee an award if a competitor's performance record was materially stronger.
VMSI and Dynamic Management Associates, LLC (DMA) both submitted quotes for the acquisition support work, along with reference lists documenting their history performing similar contracts for other federal customers. Those references are the raw material evaluators use to assign past-performance ratings, and under FAR-based source-selection practice, agencies are generally expected to consider all relevant references submitted unless a solicitation clearly limits what can be considered.
DMA's quote came in at $2,432,378, well below VMSI's $2,997,106 — a gap of roughly 23 percent. The VA selected DMA for award. VMSI then filed a protest with GAO challenging both the way the agency evaluated past performance and a separate discrepancy it identified in DMA's pricing schedule.
Key Details
At the center of the protest was a single sentence in the solicitation stating that contractor experience within the past three years "may be viewed more favorably" than older work. The VA's evaluators read that language as an outright disqualification: any past-performance reference older than three years was tossed out before anyone assessed its relevance or quality. That approach removed four of VMSI's references and six of DMA's from consideration.
GAO rejected that reading. The decision found the agency's approach rendered the solicitation's own language about older experience "superfluous" — if the RFQ meant to create a hard cutoff, it would have said so, rather than using discretionary language that merely allowed evaluators to favor recent work. By treating "may be viewed more favorably" as "must be excluded," the VA effectively rewrote its own solicitation during evaluation.
The exclusion mattered because VMSI's discarded references were not marginal. GAO noted they carried ratings of 100% "Exceptional" or "Very Good," and their omission could plausibly have shifted the price/past-performance tradeoff in VMSI's favor, since the two factors were weighted equally and DMA's price advantage was not overwhelming. That was enough for GAO to find competitive prejudice, the threshold a protester must clear to win a sustained protest.
GAO denied VMSI's second protest ground, which challenged an incorrect period-of-performance date on DMA's price schedule. The board found VMSI failed to show that error caused it any competitive harm, so it did not affect the outcome even though the past-performance ground did.
The decision, docketed as B-424182.2 and B-424182.3, is dated June 22, 2026, and was posted publicly by GAO on July 10, 2026. GAO recommended the VA either amend the solicitation or reevaluate past performance and make a new source-selection decision, and recommended the agency reimburse VMSI's reasonable costs of filing and pursuing the protest, including attorneys' fees; under GAO's regulations, VMSI must submit its certified cost claim to the VA within 60 days of the decision. Because the sustained ground goes to the core of how the agency compared the two vendors, the VA cannot simply reaffirm its prior award on the existing record — it must either rewrite the evaluation criteria or redo the past-performance scoring for both offerors and revisit the tradeoff from scratch.
What It Means for Contractors
The decision is a reminder that agencies cannot treat hedged, discretionary solicitation language as a categorical bar. Phrases like "may be viewed more favorably," "preferred," or "should demonstrate" describe how evaluators weigh information, not a threshold for what they are permitted to look at. Contractors drafting proposals should read that kind of language carefully, and if a competitor's award seems to rest on an agency quietly converting a preference into a disqualification, that gap is worth raising in a debriefing request or a protest.
The ruling also shows how much weight GAO gives to documented past-performance ratings when assessing prejudice. VMSI did not need to prove it would have won the award outright, only that the excluded references, rated Exceptional or Very Good, could have changed a tradeoff decision where price and past performance carried equal weight. Contractors who lose an award on a thin price gap should scrutinize whether the agency actually considered every reference it received, particularly on FSS orders where evaluation records can be less rigorous than in negotiated procurements.
For agencies, the case is a caution against ambiguous eligibility language in solicitations. If evaluators intend a hard cutoff on the age of past-performance references, the solicitation should say so plainly, rather than relying on soft language that a court or GAO could later read as merely advisory. Discretionary language invites exactly the kind of GAO challenge VMSI won, along with the delay, cost, and reimbursement obligations that come with a sustained protest. The VA must now work through GAO's recommended corrective action, either through a fresh evaluation or a solicitation amendment, and reimburse VMSI's protest costs once VMSI submits its certified claim within the 60-day window GAO's regulations allow.
The denied ground is instructive too. VMSI raised a real defect in DMA's quote — an incorrect period-of-performance date on the price schedule — but GAO would not sustain a protest on that basis without a showing that the error changed the outcome. Contractors building a protest case should prioritize grounds where they can draw a credible line between the agency's mistake and a different result, rather than stacking every technical flaw they can find. A protest with one strong prejudice argument, as VMSI had on past performance, can succeed even when a second, weaker ground falls short.
