Link: GAO Decision
Protestor: Beyel Brothers, Inc.
Agency: Department of the Navy
Disposition: Protest Denied.
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GAO Digest:
Protest that the awardee’s proposed fuel price was unrealistically low fails to state a valid basis for protest where the solicitation provided for the award of fixed-price contract and did not provide for a price realism analysis.
General Counsel PC Highlight:
Beyel Brothers, Inc. protested the award to Northcliffe Ocean Shipping and Trading Company, Inc. (NOSAT) of a contract for the charter of a vessel to perform logistical support resupply services for the Atlantic Undersea Test and Evaluation Center, Andros Island, Bahamas. The RFP, issued as a small business set-aside, provided for award of a fixed-price contract to the firm submitting the lowest-priced, technically-acceptable proposal. Offerors were informed that the lowest evaluated price would be computed by adding the offeror’s charter hire rates for the entire contract period and the cost of fuel.
The GAO rejected Beyel’s challenge to the agency’s price evaluation associated with NOSAT’s fuel consumption rates, distinguishing between price reasonableness and realism. It pointed out that the agency was not required to perform a price realism evaluation for a fixed-price contract. The GAO found without merit Beyel’s argument that NOSAT should have been excluded from the competitive range, because its initial proposal should have been found to be technically unacceptable on the basis of its allegedly low fuel consumption rates. It noted that there is no requirement preventing an agency from including a technically unacceptable proposal in the competitive range for the purposes of conducting discussions.
Price realism analyses are not required as part of the evaluation process for fixed-price contracts. The RFP may provide for some price realism analysis in order to measure an offeror’s understanding of the solicitation requirements, or to avoid the risk of poor performance from a contractor who is forced to provide goods or services at little or no profit. However, the agency may exercise discretion in determining the depth of analysis it will perform in these situations.