Link: GAO Decision
Protestor: Midwest Tube Fabricators, Inc.
Agency: Defense Logistics Agency
Disposition: Protest Dismissed.
Protest that item offered by awardee cannot have met solicitation specifications merely because awardee offered item at lower price than protester fails to state valid basis of protest.
General Counsel PC Highlight:
Midwest Tube Fabricators, Inc. protested the issuance to E.W. Packing Corporation, Inc. (EWPC) of a purchase order for a quantity of bent, seamless, stainless steel tube. The agency initially issued two RFQs for quantities of tube, contemplating issuance of purchase orders to the vendors submitting the lowest-priced quotation for items conforming to the solicitation specifications. After both Midwest and EWPC submitted quotes for both RFQs, the agency combined the two RFQs and requested single quotations from each vendor. It then selected EWPC’s quote as being the lowest in conformance with the solicitation specifications. Midwest asserted that, based on EWPC’s lower price, the item offered by EWPC could not have met the solicitation specifications.
The GAO dismissed the protest, finding that Midwest’s claim that the item offered by its competitor fails to meet the specifications merely because it was offered at a lower price than Midwest was not a valid basis for protest. It rejected Midwest’s argument that the item cannot meet the solicitation requirements because, in prior procurements, the agency acquired the item at a higher unit price than that offered by EWPC.
In fixed-price contracts, an agency is permitted to accept low or below-cost offers, because the offeror bears the risk that its low price will not be adequate to meet the costs of performance. While a vendor may be disappointed that they were underbid by the competition, unless the solicitation provides for a price realism analysis, the agency may accept a low price so long as the item being acquired conforms to solicitation specifications.