EC Corporation

B-266165.2 Feb 20, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Agency's failure to downgrade awardee's proposal for lack of understanding based on price realism analysis that initially found unrealistically low item prices was reasonable where agency determined that awardee's technical proposal. The work to be performed was specified in approximately 224 sub-contract line items (CLIN). 167 were described as fixed-price and 57 were described as indefinite quantity. Estimated requirements were provided for the indefinite quantity items. Offerors were to submit both technical and price proposals (in addition to the section B pricing schedule). Technical proposals were to be evaluated based on three equally weighted factors: organizational experience and past performance. View Decision Matter of: EC Corporation File: B-266165.2 Date: February 20, 1996 Agency's failure to downgrade awardee's proposal for lack of understanding based on price realism analysis that initially found unrealistically low item prices was reasonable where agency determined that awardee's technical proposal, together with its responses to discussion questions concerning the low prices, demonstrated an acceptable level of understanding. Attorneys DECISION EC Corporation protests the award of a contract to Tate Facilities Services, Inc. under request for proposals (RFP) No. N62470-95-R-1151, issued by the Navy for base operating services at the Naval Security Group Activity, Northwest, and its military family housing complex, in Chesapeake, Virginia. We deny the protest. The RFP contemplated award of a fixed-price, indefinite quantity (with award fee) contract for a base period with 4 option years. The work to be performed was specified in approximately 224 sub-contract line items (CLIN); 167 were described as fixed-price and 57 were described as indefinite quantity. Section B of the RFP contained a pricing schedule that required, for the base and each option year, a single price for the fixed-price work, and unit and extended prices for each line item of indefinite quantity work. Estimated requirements were provided for the indefinite quantity items, so that total prices could be computed. Offerors were to submit both technical and price proposals (in addition to the section B pricing schedule). Technical proposals were to be evaluated based on three equally weighted factors: organizational experience and past performance; work accomplishment and methodology; and financial capability. Price proposals were to be evaluated for reasonableness and realism. Price was equal in weight to the technical rating and award was to be made to the responsible offeror whose offer, conforming to the solicitation, would be most advantageous to the agency, price and other factors considered. Three proposals were received, including Tate's and EC's (the third proposal is not relevant here). The evaluators assigned all proposals adjectival ratings of unacceptable but susceptible to being made acceptable, and included all in the competitive range. In the ensuing discussions, which encompassed specific questions and notification of deficiencies, each offeror was advised of sub-CLIN prices having "significant variances" from the government estimate, i.e., prices judged to be either unreasonably high or unrealistically low, and was asked either to reevaluate those prices or to explain the variances in its revised proposal. EC's and Tate's revised proposals were rated acceptable, although the Navy continued to have concerns about excessive pricing by EC. Best and final offers (BAFO) then were requested and submitted; both firms' BAFOs were rated acceptable. Since Tate's BAFO price was [deleted], substantially lower than EC's price of [deleted], and was judged reasonable and realistic based on the government estimate, [deleted], and the third offeror's price, [deleted], the agency concluded that Tate's offer represented the best value to the government, and thus made award to Tate. LOW ITEM PRICES EC maintains that Tate's technical proposal should have been downgraded, based on the price realism analysis, for lack of understanding under the work accomplishment and methodology factor because of "excessive" underpricing of numerous items; EC notes that its own proposal was downgraded for high prices. EC concludes that a proper evaluation would have resulted in a higher rating for EC's proposal than for Tate's and an award to EC based on its superior technical rating. [1] EC's argument is without merit. First, there is no evidence supporting EC's implicit position that its evaluation was negatively affected by the agency's concerns with its overpricing of certain items, and that its proposal therefore was not evaluated on the same basis as Tate's.