Link: GAO Decision
Protestor: American Technical Services, Inc.
Agency: Department of the Navy
Disposition: Protest Denied.
- Protest that the agency performed an unreasonable cost realism analysis is denied where the record shows that the agency reasonably relied on indirect cost rate data that was provided by the protester specifically for cost analysis purposes.
- Protest that the awardee’s subcontractor had an unequal access to information organizational conflict of interest is denied where the allegations were not based on hard facts.
General Counsel PC Highlight:
American Technical Services, Inc. (ATS) protested the award to AdapTech Corporation of a contract to provide technical, engineering, assessment, laboratory, calibration program, and test equipment analysis support services for the product engineering assessment department of the Naval Surface Warfare Center, Corona Division. The RFP, issued to small business, contemplated award on a best value basis considering technical and management approach, past performance, and evaluated cost evaluation factors. In conducting its cost realism analysis of ATS’s proposal, the agency could not obtain relevant rate information for ATS from DCAA and therefore requested two recent government contract invoices from ATS. Using the actual indirect rates from the two ATS invoices, the agency upwardly adjusted ATS’s total evaluated cost. Although ATS was rated higher on the non-price factors, the agency found that its superiority did not warrant the price premium.
The GAO rejected ATS’s argument that the agency should have relied on more recent indirect rates in conducting its cost realism analysis, pointing out that one of the invoices submitted by ATS was dated only one day before the agency’s request for invoices and that the invoices ATS argued should have been used did not exist at the time of the agency’s request. The GAO also rejected ATS’s complaint that AdapTech had an unmitigated OCI based on one of AdapTech’s subcontractors under a different contract having access to “staffing, personnel, and cost information” of one of ATS’s proposed subcontractors under this contract. The GAO found that ATS had not identified hard facts evidencing an OCI.
If a disappointed offeror believes that the awardee has an unmitigated OCI, they must present hard facts to the GAO indicating the existence or potential existence of a conflict. While a disappointed offeror may suspect there is an OCI, the GAO will not sustain a protest based on mere inference or suspicion. Furthermore, even if there is the potential for an OCI, the agency may reasonably make award if the awardee provides a mitigation plan that adequately addresses any OCI concerns.