Link: GAO Decision
Protestor: TMCP Health Services LLC
Agency: Department of the Army
Disposition: Protest Denied.
Protest is denied where the agency’s comparison and confirmation of the offerors’ proposed prices constituted a reasonable price realism analysis that was consistent with the terms of the solicitation.
General Counsel PC:
TCMP Health Services LLC protested the award to Aliron International, Inc. of a contract for dental services. The RFP provided for award of a fixed-price ID/IQ contract to the offeror presenting the lowest-price, technically acceptable proposal, considering technical, past and present performance, and price evaluation factors. Proposals would be rated as either acceptable or unacceptable under the technical and past and present performance factors, and total price would be calculated by adding the base year and all option years. All proposals received were evaluated as acceptable for both factors, and award was made to Aliron for offering the lowest total price.
The GAO rejected TCMP’s argument that the agency failed to conduct a reasonable price realism analysis, noting that the agency compared the prices proposed to each other, to the historical price paid under the current contract, and to an independent government estimate. The agency requested that offerors confirm that their prices took into consideration all aspects of contractor employee benefits such as cost of living, housing, and US-dollar-to-Euro differences, and requested that Aliron confirm that its price did not contain any errors or mistakes. The GAO found no support for TCMP’s contention that the other offerors would not be able to meet the retention rates required by the RFP at their low proposed prices.
In awarding fixed price contracts, agencies are not required to conduct price realism analyses because the risk and responsibility for costs and resulting profit or loss is on the contractor. However, an agency may provide for a price realism analysis in the solicitation in order to ensure that offerors understand the solicitation’s requirements. Although a disappointed offeror may believe that the awardee cannot perform at the price it proposed, the GAO will generally defer to the agency’s determination so long as it was reasonable and consistent with the terms of the solicitation.