Link: GAO Decision
Protestor: SoniTech NDT
Agency: Department of the Navy
Disposition: Protest Denied.
- In a negotiated procurement for a fixed-price purchase order, protest that the successful vendor’s price is unrealistically low is denied where the solicitation did not provide for the evaluation of price realism.
- Protest objecting to the agency’s evaluation of the successful vendor’s past performance is denied, where the agency considered the vendor’s history of relevant past performance and the positive comments made by the vendor’s references regarding its past performance.
General Counsel PC Highlight:
SoniTech NDT protested the issuance to Sonic Inspection Corporation of a purchase order for the non-destructive testing of fire protection piping systems using ultrasonic localized guided wave technology within buildings occupied by the Defense Information Systems Agency and located at the Naval Support Activity in Mechanicsburg, Pennsylvania. The RFQ, issued as a small business set-aside under FAR Part 12, contemplated award on a best value basis, considering past performance and price. The RFQ stated that the lowest-priced quotation found to have a substantial confidence past performance rating would be deemed to represent the best value.
The GAO first rejected SoniTech’s objections to the lack of price realism analysis, pointing out that the RFQ did not provide for such an analysis. The GAO pointed out that SoniTech’s argument regarding what it referred to as the flawed price reasonable analysis actually concerned price realism, because Sonic’s price was allegedly too low. The GAO declined to consider objections to Sonic’s responsibility, noting that such issues should properly be before the SBA. Finally, the GAO found that the record did not support SoniTech’s complaint regarding Sonic’s past performance evaluation. It noted that the RFQ provided for consideration of commercial contracts as past performance references, and that Sonic had provided at least one contract that was substantially larger than the instant solicitation.
When an RFP contemplates award of a fixed-price contract, the agency normally doesn’t consider price realism during its analysis, since the risk and responsibility for contract costs and resulting profit or loss is placed on the contractor. However, if the agency does contemplate considering price realism, the solicitation must provide as such, so that offerors are on notice that a very low price could be considered by the agency as unrealistic.