Protest challenging the agency’s price evaluation is dismissed, where the protester failed to justify direct labor rates that deviated from an established Department of Labor range and where the agency was not required to document its analysis of a justification that was not provided.
Technical & Management Resources Inc. protested multiple IDIQ contracts awarded by the General Services Administration to eighty-one firms for information technology services, alleging that the agency improperly determined that it did not propose fair and reasonable pricing. After TMR’s GAO protest was dismissed, it brought its challenge to the Court of Federal Claims.
First, TMR argued that GSA failed to document its analysis of TMR’s justification for proposing direct labor rates that were outside of Department of Labor ranges. The solicitation encouraged offerors to propose direct labor rates within an established range that was based on information from DOL, and stated that a direct labor rate found to be either lower or higher than the provided range, could be deemed not fair and reasonable.
In response, GSA argued that it properly concluded TMR failed to justify the direct labor rates falling outside the DOL ranges and that it reasonably did not document an analysis of TMR’s justification because the justification did not exist. The court agreed, finding that TMR’s proposal included no mention of the labor rates falling outside the DOL range.
Second, TMR argued that it adequately justified its pricing. According to TMR, its proposal explained that the direct labor rates were premised on rates approved for its prior government contracts and other relevant information. Specifically, TMR outlined its methodology for determining its rates and provided details on its sources of information.
In response, GSA acknowledged that TMR’s proposal contained an explanation of its pricing methodology and labor and burden rates estimation, but did not satisfy the requirement to supply a clear and convincing rationale for proposing rates outside the DOL ranges. GSA also pointed out that TMR did not acknowledge that its rates were outside of the DOL ranges.
The court agreed that GSA reasonably concluded TMR’s failure to acknowledge the deviations suggested that it was merely meeting the requirement to outline its methodology without justifying its out-of-range rates. The court also rejected TMR’s argument that satisfying the first requirement essentially satisfied both, finding the protester misinterpreted the solicitation requirements.
Finally, TMR argued that GSA’s price evaluation as flawed, because the agency reviewed whether rates were too low, looked at only one element of price, failed to consider that its direct labor rates were maximums that could be discounted, relied on an unstated evaluation criterion, and improperly relied on average pricing proposed by awardees.
In response, GSA argued that the solicitation clearly stated that it would consider whether pricing was too low or too high, that it properly reviewed fully burdened rates as well as direct labor rates, that it was not required to consider potential discounts, and that its chosen method of relying on an average derived from the proposals received was reasonable.
The court reasoned that even if any of TMR’s arguments demonstrated error, the protester was not prejudiced because it did not have a substantial chance of award without a justification for any pricing that deviated from the DOL ranges. Accordingly, the court concluded that TMR failed to demonstrate that GSA erred in its evaluation and findings, and therefore, determined that TMR was not entitled to relief.
Technical & Management Resources, Inc. is represented by Jonathan D. Shaffer. The government is represented by Meen Geu Oh of the United States Department of Justice.
