Link: GAO Decision
Protestor: Baltimore Gas and Electric Company
Agency: Defense Logistics Agency
Disposition: Protest Denied.
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GAO Digest:
- Agency reasonably calculated its government should cost estimate used in the economic analysis required by 10 U.S.C. § 2688 (2009) to determine whether the privatization of an electric utility system would reduce the long-term cost to the government of the utility system. Based on this economic analysis, the agency reasonably concluded that the awardee’s proposal provided the required long-term cost reduction, and determined that the protester was ineligible for award because its proposal did not reduce the long-term cost to the government.
- Protest that the agency unreasonably determined the protester’s technical capability was unacceptable and high in risk is denied, where the record shows the agency reasonably determined that the protester’s plans to perform the work were unacceptable and that its performance risk and cost realism risks were high
General Counsel P.C. Highlight:
Baltimore Gas and Electric Company (BGE) protested the award to City Light and Power, Inc. (CLP) of a contract for privatization of the electric distribution system at the Aberdeen Proving Ground in Edgewood, Maryland. BGE argued that the rejection of its proposal on the comparison of its price to the government’s should cost estimate (GSCE) was improper because the GSCE was significantly understated. It also contested the unacceptable rating of its proposal for required initial system deficiency corrections and initial renewals and replacements (ISDC) projects as well as its proposal under the operational transition plan subfactor, both of which contributed to its unacceptable rating under the technical capability factor. Additionally, it challenged the evaluation of CLP’s proposal and argues that it was ineligible for award.
The GAO held that BGE failed to show that the GSCE was defective, noting that BGE included costs of work on the customer side of the meter in its proposal, which was not accounted for in the GSCE. The GAO rejected BGE’s argument that the rating on its ISDC projects was unreasonable, pointing out that BGE’s proposed timeframe for completion of its ISDC projects was outside the RFP’s required 5 years from contract award date. It also held that the agency’s evaluation of BGE’s operational transition plan was reasonable, as BGE failed to provide a clear timeline and detailed descriptions of all activities. It found the agency’s assessment of overall high risk to BGE’s proposal reasonable because BGE did not propose complete ownership of the utility system and there were inconsistencies in BGE’s proposed costs. Finally, it rejected BGE’s arguments with respect to the agency’s evaluation of CLP, finding the agency’s evaluation of its proposal and responsibility determination to be in line with the RFP.
Where an RFP allows for the submission of alternate proposals, offerors should make sure any alternate proposals add value when compared with the requirements of the RFP. They should provide detailed rationale in support of any alternate proposals, explaining the advantages of such a proposal to the government. If the alternate plans dramatically increase the price of the contract, offerors should strongly consider whether the benefit to the government will outweigh that cost increase. The agency may not find the advantage of the alternate proposal to be worth the price tradeoff, and the proposal may receive unacceptable evaluation ratings as it did here.