Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
General Counsel P.C. Highlight:
GAO denied the protest of Mil-Mar Century Corporation regarding the award of a contract to The Entwistle Company, by the Department of the Army, Army Contracting Command Warren, under a request for proposals (RFP), to provide “Load Handling System Compatible Water Tank-Rack Systems,” commonly referred to as “hippos.”
The RFP was issued as the first competitive procurement for the hippo system and anticipated the award of a single fixed-price, three-year, indefinite-delivery/indefinite-quantity contract for a maximum quantity of 845 hippo units, and an additional six units for the first article testing (FAT) purposes. The RFP stated that it would consider three factors: production capability; experience; and price. The production capability factor was the most important factor and considered five separate areas: manufacturing facilities; key tooling and equipment; production approach; time phased critical path; and letters of commitment. The experience factor also included five specific areas that would be considered: comparable items; technical manuals; delivery; low temperature requirements; and welding.
Mil-Mar first argued that the agency’s evaluation of Entwistle’s experience as relevant/low risk was unreasonable because Entwistle never constructed a hippo system. GAO stated that the agency’s evaluation was consistent with the evaluation criteria and not without a reasonable basis. The record demonstrated that the agency justified its overall rating of Entwistle’s experience as very relevant/very low risk under the comparable items criteria based on its assessment of Entwistle’s collective experience, and that the contracting officer went beyond the evaluation ratings to independently assess the risk represented by the offeror’s experience in this regard. GAO concluded that it would not second-guess the agency’s judgment, even if it might have reached a different conclusion, so long as the agency’s conclusion is not inconsistent with the solicitation’s evaluation criteria.
Mil-Mar next argued that Entwistle’s proposal should have been rejected as unrealistically priced, and that the agency conducted a flawed and inadequate price realism analysis. The record shows that the agency conducted a reasonable price realism analysis. In the SDD, the contracting officer acknowledged that a price realism analysis is not usually required in a competitive fixed-price procurement, but that based on Entwistle’s significantly lower price in comparison to the second lowest-priced offeror, he conducted a “comparison of cost elements, and a review of Entwistle’s labor hours and material type(s) to determine risk of successful performance at the offered price.” More specifically, the contracting officer analyzed Entwistle’s line item prices relating to materials over $500–including the 2,000-gallon tank, diesel engine, and frame–other parts below $500, labor hours, other direct costs, and other costs including overhead, general, and administrative and profit.
Finally, Mil-Mar alleged that the agency’s exchanges with Entwistle concerning additional price data constituted improper discussions with a single offeror. The agency maintained that the exchanges with Entwistle were mere clarifications, and did not constitute discussions. The agency argued that the exchanges were of a type expressly anticipated by the RFP, which provided that “the Government reserves the right, as a clarification under FAR 15.306(a), to request additional or more detailed price breakdown data.” The first three exchanges constituted the type of clarification expressly anticipated by the RFP and were within the scope of clarifications as set forth in FAR § 15.306(a). The agency’s fourth exchange asked Entwistle to “clarify how your proposed labor hours are adequate to carry out the steps necessary for production of the First Article Test items and production quantities.” Entwistle provided a two-sentence response, generally indicating that its labor hours were based on its understanding of the requirements and experience with design programs. Although the agency’s question sought additional narrative information, it was apparent to GAO that the exchange was intended to facilitate the agency’s understanding of the underlying components of Entwistle’s price proposal, and that Entwistle was not provided with an opportunity to revise its proposal. Such an exchange does not trigger an obligation to initiate discussions, since Entwistle’s response clarified, but did not modify, its proposal.