Link: GAO Decision
Protestor: Lifecycle Construction Services, LLC
Agency: Department of the Army, Corps of Engineers
Disposition: Protest Sustained.
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GAO Digest:
Protest that agency improperly rejected protester’s proposal as unreasonably low priced is sustained where the agency based its conclusion on a comparison of the protester’s price to the median price proposed by other offerors–including offerors whose proposals were determined to be unacceptable, ineligible for award, or priced unreasonably high.
General Counsel PC Highlight:
Lifecycle Construction Services, LLC protested the award of multiple task orders to four firms under an RFP for general construction and design/build construction in the Corps’s South Atlantic Division, primarily in North Carolina. The RFP contemplated award of up to five ID/IQs to HUBZone companies on a best value basis, considering experience, past performance, and price. Offerors were required to submit a “coefficient” for each of 14 locations where work will be performed, as well as applicable overhead rates, and the agency would evaluate price by applying an offeror’s coefficient to estimates of the total work to be performed.
The agency began its price analysis by comparing offerors’ coefficients at Fort Bragg to the government estimate; prices ranged from 14% below the IGE to 65% above. The contracting specialist analyzing prices was informed that prices within 15% of the IGE would be reasonable; four firms proposed coefficients which were more than 15% above the IGE. Instead of relying on the IGE, the contracting specialist calculated the median of 15 offerors, asserting that this median represented a better representation of the cost the government could expect to pay for construction services. Although Lifecycle proposed a coefficient which was less than 15% below the IGE, it was more than 15% below the median, and the contracting specialist concluded that its price was extremely low and might indicate a lack of understanding of the requirements.
The GAO held that the agency unreasonably rejected Lifecycle’s proposal, in part because the median was materially higher than the IGE due to the inclusion of proposed prices that the agency itself determined were unacceptable, ineligible for award, and/or unreasonably high. It concluded that the median could not be reasonably relied upon as a valid benchmark for comparison. It further noted that the agency’s comparison to the benchmark did not consider the coefficients proposed for the vast majority of the locations identified in the RFP; offerors had not been informed that prices proposed for other locations would not be meaningfully considered.
Disappointed offerors should always request a debriefing so as to better understand the agency’s source selection decision and to improve their own proposal preparation in the future. If an offeror’s price was determined to be unrealistic, that offeror should ask questions as to how the agency conducted their realism analysis. If that offeror believes that the analysis techniques did not comply with the terms of the solicitation, there may be sustainable grounds of protest.