Agency Assessed Weakness for Not Proposing Enough FTEs. Did this Determination Amount to a Price Realism Evaluation?

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The agency assessed a weakness to the protester for failing to propose enough FTEs. The protester argued that in assessing this weakness, the agency had elected to evaluate price realism but botched the evaluation. GAO, however, found the agency had not performed a price realism evaluation. Rather, the weakness had been assessed to the protester’s technical approach for unrealistically low staffing. The agency had not penalized the protester for an unrealistically low price or level of effort.

Teya Enterprises, GAO B-420907


The Army issued an RFP seeking environmental cleaning services. The RFP contemplated award of a fixed-price contract to the offeror with the lowest-priced, technically acceptable proposal. After reviewing 13 proposals, the Army awarded the contract to Main Building Maintenance, Inc. (MBM). An unsuccessful offeror, Teya Enterprises, protested.


Past Performance

Teya argued the Army erred in finding two of MBM’s past performance references relevant. Teya reasoned that one of MBM’s references was performed in a 900,000 sq. ft facility, which was not similar to 1.3 million sq. ft. contemplated by the RFP. Another reference was performed at 15 different facilities, the largest of which was only 391,540 sq. ft. Teya contended the facilities were too small to be relevant.

GAO, however, found the agency had reasonably found the references relevant. The past performance evaluation was not based solely on size but as also type of complexity and services performed. While MBM’s 900,000 sq. ft. reference was smaller than the effort contemplated by the RFP, the Army reasonably concluded, based on all the past performance criteria, that the effort was similar to the RFP. As to the other reference involving 15 locations, GAO noted that the total square footage at all locations was 2.8 million sq. ft. GAO reasoned that it was more than reasonable for the Army to have totaled up the square footage for a contract performed at multiple locations.

Price Realism

The RFP sated that while the agency did not intend to conduct a price realism analysis, it could choose to do so. Teya contended the agency had chosen to analyze realism but had failed to conduct the analysis in a reasonable manner. Teya had been assessed a weakness a weakness for not proposing enough FTEs. Teya reasoned the assessment of this weakness was tantamount to a price realism analysis because the agency had effectively considered whether Teya’s price reflected an understanding of the solicitation’s requirements.

GAO didn’t buy it. Contrary to Teya’s contentions, the Army had not been concerned about an overall lack of understanding of the RFP’s requirements. Rather, the agency had expressed concern that Teya did not understand a few specific portions of the RFP based on the number of FTEs proposed. The agency had been worried that the proposed staffing, not the proposed price, was unrealistically low. The criticism pertained to Teya’s technical approach not to the level of effort. Thus, the Army never actually conducted a price realism evaluation.

Teya is represented by Edward T. DeLisle and Andres M. Vera of Offit Kurman, P.C. The agency is represented by Major James S. Kim and Michael McDermott of the Army. GAO attorneys Heather Self and Peter H. Tran participated in the preparation of the decision.

–Case summary by Craig LaChance, Senior Editor

GAO - Teya Enterprises