Rodgers Travel, Inc., B-291785, March 12, 2003

B-291785 Mar 12, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights It was proper for agency to consider in past performance evaluation awardee's experience performing similar services as a subcontractor. Quotes were to be evaluated on the basis of past performance and price. Past performance was to be evaluated on an adjectival basis. Was to be based on a review of references furnished by the vendor. Price was to be evaluated for reasonableness and realism. To determine if the proposed transaction fee was realistic for the work to be performed and reflected a clear understanding of the government's requirement. Award was to be made to the vendor whose quote was considered most advantageous to the government. The agency concluded that all vendors' prices were reasonable and realistic. View Decision Rodgers Travel, Inc., B-291785, March 12, 2003 DIGEST Attorneys DECISION Rodgers Travel, Inc. protests the award of a contract to Kola Nut Travel, Inc. (KNT) under request for quotations (RFQ) No. F29650-02-T-0084, issued by the Department of the Air Force for travel services at Kirtland Air Force Base (AFB), New Mexico. Rodgers challenges the agency's price realism analysis and past performance evaluation. We deny the protest. The RFQ, a section 8(a) small business set-aside, sought quotes to provide all personnel, equipment, tools, materials, supervision and other items/services to manage and operate a commercial travel office at Kirtland AFB. The RFQ contemplated the issuance of purchase orders for the 10-month base period (an estimated 16,800 transactions) and six 6-month options (an estimated 12,600 transactions per option). Quotes were to be evaluated on the basis of past performance and price, with past performance considered more important. Past performance was to be evaluated on an adjectival basis--exceptional, very good, satisfactory, neutral, marginal, or unsatisfactory--and was to be based on a review of references furnished by the vendor, as well as information independently obtained by the agency. Price was to be evaluated for reasonableness and realism, to determine if the proposed transaction fee was realistic for the work to be performed and reflected a clear understanding of the government's requirement. RFQ at 6; Proposal Evaluation Report (PER) at 6. Award was to be made to the vendor whose quote was considered most advantageous to the government. Six vendors, including Rodgers and KNT, submitted quotes. The agency's evaluation included a review of vendors' past performance questionnaires and transaction fees. The agency concluded that all vendors' prices were reasonable and realistic, and evaluated the top three vendors' quotes as follows: . Past Performance Price Rodgers Exceptional $1,339,128 KNT Exceptional $663,600 Vendors Exceptional $1,380,120 The contracting officer determined that, because KNT's past performance was exceptional and its price the lowest, its quote represented the best value to the government. After receiving notice of the award and a debriefing, Rodgers filed this protest. PRICE REALISM Rodgers asserts that KNT's price was not realistic. As the incumbent vendor, Rodgers currently charges $20.00 per transaction and so concludes that KNT's average transaction fee ($7.17 as calculated by Rodgers) must be too low to meet KNT's costs of performance. Rodgers maintains that the agency's analysis failed to take all of KNT's costs into account. Where, as here, an RFP contemplates the award of a fixed-price contract, the agency is not required to conduct a realism analysis; this is because a fixed-price (as opposed to a cost-type) contract places the risk and responsibility for loss on the contractor. World Travel Service, B-284155.3, Mar. 26, 2001, 2001 CPD Para. 68 at 3; PHP Healthcare Corp., B-251933, May 13, 1993, 93-1 CPD Para. 381 at 5. However, an agency may, as the agency did here, provide for the use of a price realism analysis for the limited purpose of measuring offerors' understanding of the requirements or to assess the risk inherent in an offeror's proposal. PHP Healthcare Corp., supra. The nature and extent of an agency's price realism analysis ultimately are matters within the sound exercise of the agency's discretion. Star Mountain, Inc., B-285883, Oct. 25, 2000, 2000 CPD Para. 189 at 6. Here, after concluding that all prices were reasonable, the contracting officer examined whether the prices were realistic. /1/ In concluding that KNT's prices were realistic, the contracting officer considered the following: KNT's specific verification of its proposed fees; its pricing rationale, which included "very low overhead," outsourcing of a number of services, anticipated commissions on car and hotel reservations, and a 5-percent commission paid by Southwest Airlines; and the fact that Southwest currently accounts for approximately 40 percent of the Kirtland contract travel. PER at 6-7; attach.