Link: GAO Opinion
Agency: Department of the Navy
Disposition: Protest denied.
General Counsel P.C. Highlight:
GAO denied the protest of George G. Sharp, Inc. (Sharp) based on the award of a contract to Global, A 1st Flagship Company (Global), by the Department of the Navy, under a request for proposals (RFP), for inactive ship maintenance and repair services.
The RFP was issued for the award of an indefinite-delivery/indefinite-quantity cost-plus-fixed-fee contract with price ordering provisions for one base year plus four one-year options. Award was to be made on a value trade-off basis, considering performance and management approach, past performance, personnel resources, and cost. The agency also noted that it would perform a cost realism evaluation and consider the “offeror’s ability to project costs which are realistic and reasonable and which indicate that the offeror understands the nature and scope of work to be performed.”
The CO opened discussions with Sharp informing the company that its costs appeared understated. In response, Sharp provided additional justification to support its proposed costs. The CO ultimately concluded that the proposed costs were realistic. Sharp made no changes in submitting its final revised proposal.
After award was made to another offeror, Sharp argued that the Navy’s discussions were misleading because the agency advised the offeror to increase its costs even though its overall cost was already much higher than the awardee’s. GAO did not find the discussions misleading. First, the record showed that the agency accurately conveyed its concerns regarding cost to Sharp, which properly led Sharp to the areas of its proposal that required revisions. The agency never prohibited Sharp from lowering its total cost. Finally, Sharp’s costs were not so high as to be unreasonable, and therefore, the agency had no duty to disclose that its costs were not competitive.