Semont Travel, Inc., B-291179, November 20, 2002

B-291179 Nov 20, 2002 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Award based on quotation that the agency considered unbalanced is unobjectionable where the agency considered the risk of unreasonably high prices for contract performance and reasonably determined that the unbalanced pricing did not pose an unacceptable level of risk to the government. Notified vendors that the past performance of technically acceptable vendors was approximately equal in importance to price. The solicitation established that award would be made to the responsible vendor whose quotation was most advantageous to the government. The solicitation also stated that the agency "may determine that an offer is unacceptable if the option prices are significantly unbalanced.". View Decision Semont Travel, Inc., B-291179, November 20, 2002 DIGEST Attorneys DECISION Semont Travel, Inc. protests the issuance of a purchase order to Rodgers Travel, Inc./ American Express under request for quotations (RFQ) No. F05604-02-T-0025, issued by the Department of the Air Force for commercial travel management services at various Air Force installations within Colorado. Semont maintains that the Air Force failed to reasonably evaluate the risks to the government associated with Rodgers' unbalanced pricing in making its award decision. We deny the protest. The RFQ, issued on April 2, 2002, contemplated the issuance of a requirements-type order for a base year, with four 6-month options, to provide travel services for official travel at Peterson Air Force Base (AFB), Schriever AFB, Buckley AFB, and the Air Force Academy. The RFQ established three evaluation factors--technical acceptability, past performance, and price--and notified vendors that the past performance of technically acceptable vendors was approximately equal in importance to price. The solicitation established that award would be made to the responsible vendor whose quotation was most advantageous to the government, and that the agency would utilize a "price performance trade-off technique," whereby the two factors would be traded off, one against the other, in order to make a "best value" award determination. The RFQ's price schedule required that vendors provide a unit price per ticketed transaction (i.e., a transaction fee), as well as an extended price for each performance period based upon agency workload estimates. /1/ The RFQ informed vendors that the agency would take into account all option prices in the evaluation of price, though the evaluation of options would not obligate the agency to exercise the options. The solicitation also stated that the agency "may determine that an offer is unacceptable if the option prices are significantly unbalanced." RFQ at 13. Nine vendors, including Semont and Rodgers, submitted quotations by the June 28 closing date. A technical evaluation team determined that six of the quotations were technically acceptable, and rated each of the vendors that submitted them as exceptional as to past performance. The agency determined that Rodgers submitted the lowest total evaluated price of $1,296,000, while Semont submitted the second-lowest total evaluated price of $1,610,280. The contracting officer, however, expressed concern over Rodgers' pricing structure, which was as follows: . Unit Price Extended Price Base Period $24.00 $684,000 Option 1 $18.00 $243,000 Option 2 $14.00 $189,000 Option 3 $10.00 $135,000 Option 4 $6.00 $81,000 Total $1,296.000 See Agency Report, Tab 10, Source Selection Spreadsheet, Source Selection Decision Memorandum, at 1. By contrast, Semont's quotation was priced at $19.88 per ticketed transaction for the base and all option periods. In a subsequent analysis of Rodgers' pricing, the Air Force determined that Rodgers' prices were unbalanced, but concluded that the lack of balance did not pose an unacceptable risk to the government. Agency Report, Tab 11, Price Analysis of Rodgers' Quotation, at 1; Tab 10, Source Selection Decision Memorandum, at 2. Having determined that Rodgers offered the lowest total evaluated price among technically acceptable quotations submitted by vendors with similar past performance, the contracting officer issued a purchase order to Rodgers. Agency Report, Tab 10, Source Selection Decision Memorandum, at 2. Following a debriefing, Semont filed this timely protest. Semont protests that the agency's decision to make award to Rodgers was improper. Specifically, the protester contends that the Air Force improperly failed to evaluate the risks to the government associated with Rodgers' unbalanced pricing. Unbalanced pricing exists where the price of one or more contract line items is significantly overstated, despite an acceptable total evaluated price (typically achieved through the underpricing of one or more other line items). See Federal Acquisition Regulation (FAR) Sec.