Link: GAO Opinion
Agency: Department of Defense
Disposition: Protest denied.
Keywords: Interested Party Status
General Counsel P.C. Highlight: In order for a protest to be considered, a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award or failure to award a contract.
Intermarkets Global (IMG) protests the Department of Defense, Defense Logistics Agency’s (DLA) award of a contract to Anham FZCO, LLC, under a request for proposals (RFP), for the supply of a full service food line in Kuwait, Iraq, and Jordan. IMG challenges the conduct of discussions, evaluation of proposals, and award determination.
The RFP provided for award of an indefinite-delivery, indefinite?quantity (ID/IQ), fixed-price contract, for a base period of 18 months with four option periods, to serve as a full line food distributor responsible for the supply and delivery of semi-perishable and perishable items to the military and other federally funded customers within Kuwait, Iraq, and Jordan. Award was to be made on a “best value” basis, with technical factors significantly more important than price. Prices–including prices for products and distribution–were to be evaluated for completeness, reasonableness, and balance. In addition, the RFP advised that proposals found unrealistically low in price could be viewed as lacking understanding of the RFP’s requirements.
After a number of amendments and three protests against the terms of the solicitation, IMG, Anham, and another protester submitted proposals. Based on Anham’s higher technical rating and lower price, DLA awarded the contract to Anham. IMG and the other protester protested the award, challenging the evaluation of proposals, conduct of discussions, and price realism analysis. DLA executed an override of the resulting stay of contract performance based on urgent and compelling circumstances significantly affecting the interests of the government. GAO conducted an outcome prediction alternative dispute resolution (ADR) conference in which the GAO attorney indicated that GAO likely would sustain the protests on the basis that the agency’s price realism determination was unreasonable. The GAO attorney also raised concerns about several aspects of the solicitation requirements and related technical evaluation–including the force protection requirements and evaluation of warehouse capacity–but indicated that these concerns would not serve as additional bases for sustaining the protests. Based on DLA’s determination to take corrective action–reopening limited discussions on specific issues, requesting revised proposals, and making a new source selection decision–the protest was dismissed. Both parties again protested the agency’s corrective action and IMG’s protest was denied. Eventually, upon learning of the resulting award to Anham, and after a debriefing, IMG filed this protest.
IMG protests the conduct of the procurement and award to Anham on numerous grounds, including challenges to the evaluation of Anham’s and IMG’s proposals, unequal discussions, and an alleged, improper change in Anham’s proposed team.
First, however, the agency requests dismissal of the protest, asserting that IMG withdrew or qualified its price proposal thereby rendering IMG’s proposal unacceptable. GAO states that in order for a protest to be considered, a protester must be an interested party, that is, an actual or prospective offeror whose direct economic interest would be affected by the award or failure to award a contract. A protester is an interested party to challenge the agency’s evaluation of proposals where there is a reasonable possibility that the protester’s proposal would be in line for award if its protest were sustained. The record shows that IMG is ineligible for award for failing to offer the required firm fixed-price proposal, and that there is another proposal besides the awardee’s eligible for award. Thus, IMG is not an interested party to challenge the award.
IMG’s final proposal revision (FPR) discussed at length how the agency’s clarification of pallet sizes would impact its storage capacity. IMG noted that such changes would likely impact its distribution pricing, but conceded that it had “not analyzed thoroughly the impact” of the changes on its previously submitted price and thus, could not predict whether its revised price would be higher or lower. IMG included the following statement in its FPR, “IMG considers that any award made on the cost proposal that IMG submitted in February/March 2010 is invalid as IMG price due to [deleted] changes will have to be revised to take into consideration those changes.” GAO agrees with DLA that IMG’s FPR statement effectively repudiated its prior price proposal and removed it from consideration. Thus, in the absence of a firm-fixed-price proposal, the agency reasonably determined that IMG’s proposal was unacceptable