• LinkedIn
  • Google +
  • Twitter
  • Facebook

+1-703-556-0411

Bid Protest Weekly
  • Home
  • Bid Protest Ed Center
    • WHAT is a bid protest?
    • WHO can file a bid protest
    • DO I need an Attorney?
    • WHY Should you file a bid protest?
    • WHEN Must you file a bid protest?
    • WHERE can you file a bid protest?
    • READING the RFP
  • Blog
  • Topics
  • About Us
  • Contact Us

Matter of AECOM Management Services, Inc.

  • By GCPC GovCon Legal Team
  • July 7, 2020
  • Cost RealismProposal Detail
  • 0 Comments

Matter of AECOM Management Services, Inc.

Agency: Department of the Army

Disposition: Protest Denied

Decided: May 15, 2020

Keywords: Cost Realism; Proposal Detail

General Counsel P.C. Highlight: 

When an agency evaluates a proposal for the award of a cost reimbursable contract or task order, the offeror’s proposed costs are not dispositive and the agency must perform a cost realism analysis to determine the extent to which the offeror’s proposed costs are realistic for the work to be performed.

Summary of Facts 

AECOM Management Services, Inc., protests the issuance of a task order to Sigmatech, Inc., by the Department of the Army, Army Materiel Command, under RFP No. RS3-18-0077. The Army issued the solicitation on September 16, 2019, seeking proposals to provide technical, engineering, logistical, and material support services for the Aviation and Missile Command at Redstone Arsenal.

The RFP advised offerors that proposals would be evaluated on the basis of five factors, including cost/price. The RFP stated that “the Government will evaluate the realism of the offeror’s proposed costs in accordance with FAR 15.404-1(d) and/or (c),” and advised that “[t]he most probable cost may be determined by adjusting (for purposes of evaluation only) each offeror’s proposed cost, when appropriate, to reflect any additions or reductions in cost elements to realistic levels based on the results of the cost realism analysis to ensure a realistic cost.” 

The RFP also instructed that “[e]ach offeror and its subcontractor(s) shall provide whatever information is necessary to help the Government understand why the proposed costs are realistic.” The RFP warned that “[a]n offeror may be found ineligible for award if the Contracting Officer determines that the low cost poses an unacceptable risk to the Government” and “[f]ailure by the offeror or it[s] subcontractor to submit the required information or documentation in the format . . . specified may render the offeror’s proposal incomplete and the proposal will be eliminated from the competition without further consideration.” The RFP noted that if a proposal “includes accounting approaches that deviate from standard industry accounting practices or caps proposed indirect rates,” offerors were required to “include documentation from DCMA/DCAA showing that the offeror’s accounting system/cost accounting standards allow for the deviation and/or rate cap.”

The Army ultimately found that AECOM’s cost proposal could not be evaluated because it failed to provide the required cost information and concluded that AECOM’s proposal was ineligible for award. The Army issued the task order to Sigmatech on January 15, 2020 and this protest followed.

Basis of Protest 

AECOM argues that the Army unreasonably found that it could not evaluate the realism of AECOM’s proposed costs, and therefore improperly concluded that the proposal was ineligible for award. The Army argues that AECOM’s subcontractor, Subcontractor A’s, cost proposal did not provide information required by the RFP to support its proposed indirect cost rates or to conduct a cost realism evaluation. AECOM argues that even if Subcontractor A did not provide the required information, the Army had enough information to assess the realism of the indirect cost rates.

Protest Dismissed

GAO explained that “when an agency evaluates a proposal for the award of a cost reimbursement contract or task order, the offeror’s proposed costs are not dispositive because, regardless of the costs proposed, the government is bound to pay the contractor its actual and allowable costs.” Thus, the agency must perform a cost realism analysis to determine the extent to which the offeror’s proposed costs are realistic for the work to be performed.

GAO further explained that the agency is not required to conduct an in-depth cost analysis, or to verify each and every item in assessing cost realism. Instead, “the evaluation requires the exercise of informed judgment by the contracting agency.” GAO’s review of an agency’s cost realism evaluation “is limited to determining whether the cost analysis is reasonable; a protester’s disagreement with the agency’s judgment, without more, does not provide a basis to sustain the protest.”

Here, the Army noted that Subcontractor A proposed caps for its general and administrative and overhead indirect cost rates, but did not provide documentation from DCMA or DCAA stating that the firm’s accounting system allowed these caps to be put into place. Without this information, the Army attempted to evaluate the realism of Subcontractor A’s proposed indirect costs by conducting a regression analysis intended to assess the confidence in the proposed indirect cost rates based on trends in the historical cost data.  However, the information required to run this analysis was not provided. Subcontractor A provided some documentation concerning 3 years of incurred cost submissions, but the FY16 and FY17 information did not meet the RFP requirement, because it did not provide detailed cost pool information by expense account to allow the Army to validate the indirect cost rates for those years through a regression analysis. 

AECOM argues that the Army could have calculated the missing cost pool data by using simple calculations. However, the Army states that it requested detailed cost pool and base information so that it could “validate” the proposed rates. GAO held that an offeror “is responsible for submitting a well-written proposal, with adequately detailed information which clearly demonstrates compliance with the solicitation requirements and allows a meaningful review by the procuring agency.” Since AECOM failed to provide required information, GAO concluded that the Army reasonably found that the realism of AECOM’s proposed costs could not be evaluated. 

AECOM also argues that the Army unreasonably failed to use the independent government cost estimate (IGCE) to evaluate the realism of its proposed costs. On this point, GAO noted that when assessing “the realism of offerors’ proposed costs, i.e., whether the costs are too low for the offeror’s proposed technical approach, agencies are not required to follow any particular cost realism evaluation method, or to evaluate offerors’ proposed costs using every possible method of analysis.” Thus, GAO determined the FAR does not require an agency to use an IGCE to evaluate the realism of an offeror’s proposed costs.

GAO concluded that the Army reasonably found AECOM’s cost proposal unacceptable, based on its failure to provide information required by the RFP to conduct a cost realism evaluation. GAO further held that the Army was not required to make assumptions about AECOM’s proposed costs.

The GAO denied the protest on this basis.

 

Share

Related Posts

Open Sesame! Ya Gotta Get the Agency Report and Records.

October 24, 2022

Matter of Patriot Defense Group, LLC

September 4, 2020

Matter of Information International Associates, Inc.

December 6, 2019

In the Matter of: Scope Infotech, Inc.

March 27, 2018

Leave a Reply Cancel reply

You must be logged in to post a comment.

Search Bid Protest Weekly

Need help with a bid protest?

Call us at: 703-556-0411 Or fill out this form:

Categories

  • 8(a) Sole Source Awards
  • Acknowledging Amendments
  • Adequately Written Proposal
  • Adverse Agency Action
  • Adverse Impact Analysis
  • Agency Tender
  • Alternate or Previously-Approved Product
  • Alternative Dispute Resolution
  • Ambiguity in Solicitation
  • Attorney's Fees
  • Bad Faith in Evaluation
  • Below-Cost Offer
  • Best Value
  • Beyond the Scope
  • Bias
  • Bid and Proposal Costs
  • Bid Bond
  • Bid Compliance
  • Bid Protest Decisions
  • Bid Protest Jurisdiction
  • Bid Protests
  • Bidding Best Practices
  • Blanket Purchase Agreement
  • Blanket Purchase Order
  • Blog Articles
  • Bona Fide Needs Rule
  • Brand Name or Equal
  • Broad Agency Announcement
  • Brooks Act
  • Bundling or Consolidation
  • Buy American Act
  • Cancellation of a Solicitation
  • Capability of Contractor
  • CCR Registration
  • Certificate of Competency (COC)
  • Certification Requirements
  • Changes Clause
  • Clarifications
  • Clear and Convincing Evidence
  • Clearly Meritorious Protest
  • Clerical Error
  • Commercial Item Acquisition
  • Competitive Range
  • Compliance
  • Conflict of Interest
  • Construction Design-Build
  • Construction Services
  • Contract Administration
  • Contract Modifications
  • Contracting Preference
  • Contractor Responsibility
  • Corporate Capability
  • Corrective Action
  • Cost Accounting System
  • Cost Evaluation
  • Cost Realism
  • Cost Reimbursement Contract
  • Cost-Technical Trade-Off
  • Customary Commercial Practice
  • CVE
  • DCAA Audit
  • Debriefing
  • Default Termination
  • Deficient Price Proposal
  • Delivery Order jurisdiction
  • Delivery Schedule
  • Designated Employee Agent
  • Disclosure of Price
  • Disclosure of Source Selection-Sensitive Information
  • Discussions
  • Disqualification
  • Documentation of Evaluation
  • Domestic Production Requirement
  • Education Center Articles
  • Electronic Filing
  • Evaluation Criteria
  • Evaluations
  • Events
  • Executive Order Compliance
  • Experience of Contractor
  • Experience Requirement
  • Facility Clearance
  • Fair Market Price
  • FASA
  • FedBizOpps
  • Federal Prison Industries (FPI)
  • Filing Deadlines
  • Final Evaluation
  • Final Proposal Revisions
  • Financial Responsibility
  • Fixed Price Contract
  • Former Government Employees
  • FSS Contract
  • GAO Bid Protest Review
  • GAO Jurisdiction
  • GAO Standard of Review
  • Government Contracts
  • Government Office Closings
  • Government Surplus Material
  • GSA Lease
  • HUBZone
  • ID/IQ
  • Impaired Objectivity
  • In-Sourcing
  • Incentive Fee
  • Inclement Weather Delay
  • Incomplete Proposal
  • Incorporation by Reference
  • Incumbent Capture
  • Incumbent Status
  • Independent Government Estimate (IGE)
  • Individual Environmental Report
  • Industrial Mobilization
  • Innovations
  • Interested Party
  • Invitation for Bid
  • Invited Contractor
  • Javits-Wagner-O'Day Act
  • Joint Venture
  • Key Personnel
  • Labor Hours
  • Labor Rate Pricing
  • Late Proposals
  • Late Submissions
  • Level of Effort
  • Licensing Requirements
  • Limitation on Subcontracting
  • Liquidated Damages
  • Lost Proposal
  • Lowest Price Technically Acceptable
  • Mail-Box Rule
  • Management Planning
  • Market Research
  • MAS Contracts
  • Material Misrepresentation
  • Material Solicitation Amendment
  • Material Solicitation Terms
  • Meaningful Discussions
  • Micro-Purchase Threshold
  • Minimum Requirements
  • Misleading Discussions
  • Mistake
  • Mitigation Strategy
  • Multiple Awards
  • NAICS Code
  • National Security
  • Negotiation
  • News
  • Non-Procurement Instruments
  • Novations
  • Offeror Representations
  • OMB Circular A-76
  • Option Exercise
  • Oral Presentations
  • Organizational Conflict of Interest (OCI)
  • Page Limitations
  • Past Performance
  • Past Performance Information Retrieval System (PPIRS)
  • Performance Based Standards
  • Permits and Responsibilities
  • Personal Conflicts of Interest
  • Post-Award Changes to the Contract
  • Post-Protest Re-Evaluations
  • Practicable Alternative
  • Pre-Award Protest
  • Pre-award vs. Post-award Requirements
  • Pre-Qualification of Offerors
  • Pre-Solicitation Notice
  • Prejudice
  • Price Calculation Error
  • Price Calculation Error
  • Price Evaluation
  • Price of FSS Task Order Quote
  • Price Realism
  • Price Reasonableness
  • Price Reduction
  • Procurement Announcement
  • Procurement Integrity
  • Product Testing
  • Proposal Acceptance Period
  • Proposal Detail
  • Proposal Evaluation
  • Proposal Extension
  • Proposal Standards
  • Proposals
  • Protest Terms of Solicitation
  • Protester Comments
  • Public-Private Competition
  • Randolph-Sheppard Act (RSA)
  • Rate Tenders
  • Re-Certification of Size Status
  • Reconsideration
  • Reevaluation
  • Reevaluation Standards
  • Reimbursed Attorney's Fees
  • Reimbursement of Protest Costs
  • Rejection of Proposal
  • Relaxation or Waiver of Requirement
  • Relevancy of Past Performance
  • Reliance on the Proposal
  • Remedies
  • Requirements Contract
  • Responsibility
  • Responsiveness
  • Restricted Competition
  • Resumes
  • Revision of Proposal
  • Revision of Proposals
  • Risk
  • Rule of Two
  • SBA Status protest
  • Scope of GAO Review
  • SDVOSB Set-Asides
  • Significant Issue Exception
  • Simplified Acquisition Procedures
  • Site Visit
  • Size Determination
  • Size Protest
  • Small Business Innovation Research (SBIR) Program
  • Small Business Set-Asides
  • Small Business Subcontracting Goals
  • Sole-Source Award
  • Solicitation Amendment
  • Solicitation Requirements
  • Source Approval
  • Source Selection Authority
  • Source Selection Decision
  • Source Selection Plan
  • Sources Sought Notice
  • Staffing Plan
  • State and Local Requirements
  • Status of Forces Agreement (SOFA)
  • Subcontract Protest
  • Subcontractor Experience
  • Suspension and Debarment
  • Taking Exception to RFP Requirements
  • Task Orders
  • Teaming Agreement
  • Technical Acceptability
  • Technical Evaluation
  • Technical Evaluation
  • Termination of Award
  • Terms of the Solicitation
  • Timeliness of Protest
  • Timely Filing
  • Timely Performance
  • Timely Proposal Submission
  • Trade Agreement Act
  • Unbalanced Pricing
  • Unduly Restrictive Terms
  • Unequal Access to Information
  • Unequal Treatment of Offerors
  • Uniform Time Act of 1996
  • Unstated Evaluation Criteria
  • Unusual and Compelling Urgency
  • Use of Appropriated Funds
  • Veterans First
  • VIP Database
  • VOSB Set Asides
  • Wage Determination

Get Help


Talk to an
attorney who
specializes
in bid protests:

+1-703-556-0411
Email

Keep up to date
on bid protest
decisions and
policies:

© 2023 Bid Protest Weekly

  • LinkedIn
  • Google +
  • Twitter
  • Facebook
  • Home
  • Bid Protest Ed Center
  • Blog
  • Topics
  • About Us
  • Contact Us
  • Home
  • Bid Protest Ed Center
    • WHAT is a bid protest?
    • WHO can file a bid protest
    • DO I need an Attorney?
    • WHY Should you file a bid protest?
    • WHEN Must you file a bid protest?
    • WHERE can you file a bid protest?
    • READING the RFP
  • Blog
  • Topics
  • About Us
  • Contact Us
  • LinkedIn
  • Google +
  • Twitter
  • Facebook

+1-703-556-0411