Ripple Effect Communications, Inc.

B-413722.2 Jan 17, 2017 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights Ripple Effect Communications, Inc., a small business of Rockville, MD, protests the United States Army's proposed corrective action related to a prior protest filed by Venesco, LLC, a small business of Chantilly, VA, of solicitation No. W81XWH-16-R-0023, for program administration and technical support services. The protester contends that the agency's proposed corrective action is unreasonable. We deny the protest. We deny the protest. View Decision DOCUMENT FOR PUBLIC RELEASE The decision issued on the date below was subject to a GAO Protective Order. This redacted version has been approved for public release. Matter of:  Ripple Effect Communications, Inc. File:  B-413722.2 Date:  January 17, 2017  Antonio R. Franco, Esq., Patrick T. Rothwell, Esq., Julia Di Vito, Esq., and Stephen J. Kelleher, Esq., Piliero Mazza PLLC, for the protester. CPT Sarah E. Park, Department of the Army, for the agency. Michael Willems, Esq., and Edward Goldstein, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest challenging solicitation amendment clarifying that agency will not evaluate fixed prices for price realism is denied where the agency has wide discretion when deciding whether to include a realism evaluation provision in a solicitation for the award of a fixed-price contract.  DECISION Ripple Effect Communications, Inc., a small business of Rockville, MD, protests the United States Army’s proposed corrective action related to a prior protest filed by Venesco, LLC, a small business of Chantilly, VA, of solicitation No. W81XWH-16-R-0023, for program administration and technical support services.  The protester contends that the agency’s proposed corrective action is unreasonable. We deny the protest. BACKGROUND On March 21, 2016, the agency published the instant solicitation providing for the award of a fixed-price, indefinite-delivery, indefinite-quantity contract.  While the solicitation initially provided that price would be evaluated for fairness and reasonableness, subsequent agency answers to industry questions included  inconsistent statements regarding the scope of the agency’s price evaluation.  See RFP at 34-35 and RFP Amendment 0002 at 4.  Specifically, the industry questions and answers, which were incorporated in the solicitation via amendment, in some cases indicated that the agency would assess prices to determine if they were not only fair and reasonable, but also “realistic.”  Id. On September 2, the agency made award to Ripple Effect.  On September 7, the agency provided a debriefing letter to Venesco, another offeror, indicating, among other things, that the agency had concluded that Venesco’s price proposal was unrealistic.  Venesco Debriefing Letter at 2.  Shortly thereafter, Venesco protested the award alleging that the agency’s price evaluation was unreasonable since, among other things, the agency conducted a price realism evaluation in contravention of the terms of the solicitation.  Following Venesco’s protest, the agency indicated that it intended to take corrective action by: (1) amending the solicitation to clarify that no price realism analysis would be conducted; (2) allowing offerors to submit new proposals; and (3) performing a new evaluation and source selection.  Agency Corrective Action Rationale Memorandum at 1.  While Venesco’s initial protest was dismissed as academic on October 17, Ripple Effect protested the proposed corrective action.[1] DISCUSSION As a preliminary matter, we note that Ripple Effect does not challenge the agency’s decision to take corrective action, but rather the specific form the corrective action will take.  Specifically, Ripple Effect challenges the agency’s decision not to include a price realism evaluation in the revised solicitation. [2]  Protester’s Comments on the Agency Report at 1.  Ripple Effect maintains that the agency should instead amend the solicitation to explicitly provide for a price realism evaluation given the agency’s concerns with respect to Venesco’s labor rates, which were far below the average of all evaluated proposals for all but one labor category.  Id. at 2.  According to Ripple Effect, it would be unreasonable for the agency not to consider the risk posed by Venesco’s prices.  Id. The agency responds by noting that it never intended to perform a price realism evaluation.  Agency Report at 8.  The agency additionally notes that, while it made a “conclusory finding” concerning the price realism of Venesco’s proposal in its award decision, it did not in fact perform a thorough price realism analysis that would support such a conclusion.  Id.