Link: GAO Decision
Protestor: Serco, Inc.
Agency: Department of Homeland Security
Disposition: Protest Denied.
- Agency reasonably attributed past performance and experience of affiliated entities to awardee where proposal demonstrated a significant nexus to the affiliates, including a statement that the parent company had declared the program a top corporate priority and indications that the awardee would rely on the personnel and managerial resources of its affiliated entities in performance of the contract.
- Protest that agency should have rejected awardee’s proposal for offering unbalanced prices is denied where the agency reasonably determined that the pricing did not pose unacceptable risk to the government.
General Counsel PC Highlight:
Serco, Inc. protested the award to U.S. Investigations Services, Professional Services Division (USIS, PSD) of a contract for Application Support Center (ASC) operations and facilities services at multiple sites. The solicitation contemplated award of one or two ID/IQ contracts with fixed-unit price and cost-reimbursable CLINs. Award was to be made on a best value basis, considering four evaluation factors in descending order of importance: technical capability, small business participation, past performance, and price. Price would be evaluated for reasonableness using one or more price analysis techniques established by FAR § 15.404. All three offers received were included in the competitive range, and the agency then conducted discussions and requested FPRs. The SSA found that USIS, PSD’s pricing appeared to be unbalanced, and asked the business evaluation committee (BEC) to provide additional information regarding whether the government would be paying unreasonably high prices due to this perceived unbalanced pricing. After receiving further analysis from the BEC, the SSA made award to USIS, PSD.
Despite conflicting referrals to the awardee as both USIS, PSD as well as USIS, LLC (USIS, PSD’s parent company), the GAO was satisfied that the CO was aware of the identity of the offeror as USIS, PSD. The GAO then found no basis to object to the agency’s attribution of the past performance of USIS’ affiliated entities to USIS, PSD, and the resultant “good” rating assigned to that past performance. Although Serco objected to the lack of contemporaneous documentation of the analysis of USIS, PSD’s past performance, the GAO pointed out that the CO’s post-protest explanations were consistent with the underlying record.
The GAO disagreed with Serco that the agency could only consider as “relevant” contracts of similar size, scope, and complexity to the ASC contract in evaluating relevant corporate experience, and that USIS, PSD’s “good” rating under this subfactor was improper. The GAO also pointed out that the record clearly demonstrated that the “outstanding” rating for USIS, PSD’s proposal under the technical capability factor was driven by its “outstanding” rating under the most important subfactor, program management. The GAO then declined to consider Serco’s objections to USIS, PSD’s allegedly unbalanced pricing, because the agency conducted the requisite consideration of risks associated with the unbalanced pricing that may have existed in the proposal. Finally, the GAO rejected Serco’s argument that the agency treated offerors unequally by allowing USIS, PSD to assume higher applicant processing productivity levels than it allowed Serco to assume.
When an unbalanced offer is received, the agency is required to assess the risks to the government associated with the unbalanced pricing in making the award decision. Although a disappointed offeror may believe that the awardee’s pricing is unbalanced, protesting as such will likely not be effective so long as the agency properly evaluated the risks involved. In a negotiated procurement in which non-price factors are significantly more important than price, unbalanced pricing is unlikely to be sufficient grounds to sustain a protest.