Protest challenging agency’s price and technical evaluations is denied. The protester alleged the agency had erred in finding that its price was not reasonable. The protester contended the agency should have evaluated its price in light of it technical approach. GAO noted that nothing in the FAR requires an agency to consider an offeror's technical approach in evaluating price reasonableness. The protester’s price was 194% greater than the government estimate. The agency had rationally determined that price was unreasonable without assessing it in terms of the protester’s technical approach. The protester also argued that the agency should have evaluated the realism of the awardee’s price. But the solicitation did not obligate the agency to evaluate price realism. GAO further found that the challenges to the technical evaluation amounted to disagreement with the agency’s conclusions.
The Centers for Disease Control issued a solicitation to holders of the of the Chief Information Officer—Solutions and Partner 3 IDIQ contract seeking cloud computing services. The solicitation anticipated a task order with fixed-price and time-and-materials contract line items.
CDC received proposals from NTT Data Services Federal Government, LLC and Perspecta Enterprise Services LLC. CDC awarded the task order to Perspecta, which had higher-rated and much cheaper proposal. NTT protested.
NTT first alleged that the CDC had unreasonably found that its price was not fair and reasonable. The CDC had found NTT’s price unreasonable because it was 194% higher than the government estimate. Nevertheless, NTT contended that the agency could not find its price unreasonable without first determining whether its price was appropriate for its technical approach.
GAO rejected this argument. Nothing in the FAR requires an agency to consider technical approach in assessing price reasonableness. Rather, the FAR permits an agency to determine reasonableness based on a comparison of prices to each other and the government estimate, which CDC did in this case. GAO had no basis to find that the price reasonableness assessment was flawed.
NTT contended that CDC failed to reasonably evaluate Perspecta’s price, which it contended, was too low to perform the requirements. NTT alleged that the price criteria required the CDC to evaluate whether offerors had a “clear understanding of the solicitation requirements.” Thus, NTT reasoned, although the solicitation contemplated a fixed-price contract, it required the agency to conduct a price realism analysis.
GAO, however, found that the “clear understanding of requirements” language did not obligate the CDC to evaluate price realism. As an initial matter, the term “price realism” was explicitly addressed in a different paragraph than the “clear understanding” language. It would not be reasonable to assume that the “clear understanding” language obligated the agency to conduct a price realism evaluation when another paragraph discussed how the agency may elect to evaluate price realism. Also, the “clear understanding” language did not state that proposals would be evaluated to assess offerors' understanding in the context of a low price. Indeed, the provision did not state that a proposal would be assessed a risk if the CDC found that the low price reflected a lack of understanding.
NTT argued that the CDC should have found Perspecta’s proposal unacceptable because it had proposed to outsource hardware and software services to another company. But GAO found that the solicitation did not prohibit offerors from relying on subcontractor or third party vendors for these services.
NTT also alleged that the CDC should have found Perspecta’s proposal unacceptable because the company did not propose sufficient labor to perform cloud migration support. GAO noted that the CDC had identified a potential concern regarding the hours Perspecta proposed for cloud migration, but it had reasonably concluded that this did not merit finding the proposal unacceptable.
NTT is represented by John E. Jensen, Meghan D. Doherty, Toghrul Shukurlu, and Robert Starling of Pillsbury Winthrop Shaw Pittman LLP. The intervenor, Perspecta, is represented by Daniel R. Forman, Christian N. Curran, and Alexandra L. Barbee-Garrett of Crowell & Moring LLP. The agency is represented by Daniel J. Barry, Dana J. Petti, Elise Harris, and Jared C. Bruff of the Department of Health and Human Services. GAO attorneys Jonathan L. Kang and John Sorrenti participated in the preparation of the decision.