Ameriko, Inc., B-277068, August 29, 1997

B-277068 Aug 29, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest that contracting agency improperly failed to conduct price realism evaluation of awardee's proposal is denied where the record shows that the agency reviewed each contract line item number (CLIN) of the awardee's price proposal to assess its reasonableness and realism in comparison with historical pricing and the offeror's own cost data. Protest that contracting agency improperly failed to downgrade offeror's technical proposal for its inadequate understanding of the solicitation's requirements based upon its allegedly unrealistic pricing is denied where the allegation of unrealistic pricing is not generally supported by the record. The successful offeror was to be awarded a fixed-price requirements contract to perform these services over one 6-month base period. View Decision Matter of: Ameriko, Inc. File: B-277068 Date: August 29, 1997 * Redacted Decision DIGEST Attorneys DECISION Ameriko, Inc. protests the award of a contract to State Management Services, Inc. under request for proposals (RFP) No. DAHC77-96-R-0034, issued by the Department of the Army to obtain preventive maintenance services at military housing on various military installations on the island of Oahu, Hawaii. Ameriko contends that the Army improperly evaluated State's proposal. We deny the protest. The successful offeror was to be awarded a fixed-price requirements contract to perform these services over one 6-month base period, with up to two 6-month option periods. [1] Offerors were to provide unit and extended pricing for most of the solicitation's 356 CLINs, including those for basic preventive maintenance services for individual dwelling units of varying sizes; supplemental preventive maintenance; electrical, carpentry, plumbing, and pest control service order work; and standing operating order work such as sewer line and water system maintenance. In this regard, offerors were required to document each cost element to show the basis and rationale used in arriving at the amounts proposed. Award was to be made to the offeror whose proposal was most advantageous to the government, price and technical factors considered. The solicitation clearly defined the scope of the evaluation for each technical factor, including the most important one, comprehension of requirements. Each offeror's proposed price was to be evaluated to determine whether it reflected the offeror's understanding of the project and ability to successfully organize and perform the contract; was based on adequate estimating procedures; and was reasonable--each price proposal would be evaluated using price analysis to determine the extent to which it was reasonable, realistic and consistent with the technical proposal. Price was to be evaluated by adding the total price for all options to the total price for the basic requirement. The RFP stated that, although price would not be formally scored, its importance could not be ignored; the importance of price in the selection would increase as the quality difference between proposals decreased. Four offerors submitted proposals in response to the solicitation, including State and Ameriko, the incumbent. The Army evaluated initial proposals and included all four in the competitive range; conducted discussions and evaluated revised proposals; and requested and evaluated best and final offers (BAFO). The final evaluation results were as follows: [2] Technical Price Ameriko 72.47 $6,422,596 State 68.48 $5,642,518 Firm A [DELETED] $[DELETED] Firm B [DELETED] $[DELETED] Independent Government $[DELETED] Estimate (IGE) The price negotiation memorandum summarized various technical and price findings for each offeror, and noted that State's proposal received the highest rating under the comprehension of requirements factor. The contracting officer stated that the technical differences between the proposals submitted by Ameriko and State were not worth the additional $780,078 associated with Ameriko's proposal, and determined that State's proposal represented the best value to the government. Award was then made to State, and this protest followed. Ameriko argues that the Army improperly failed to assess the cost realism of State's pricing proposal, relying only on the "bottom-line prices" without considering "anomalies or aberrations" in State's pricing of certain individual CLINs. Ameriko also cites this allegedly aberrant pricing to argue that the Army improperly failed to downgrade State's technical proposal for its inadequate understanding of the solicitation's requirements. Cost realism--a measurement of the likely cost of performance in a cost reimbursement contract--is generally not a factor in the evaluation of proposals where, as here, a fixed-price contract is to be awarded, because the government's liability is fixed, and the risk of cost escalation is borne by the contractor.