Protest challenging the agency’s price realism evaluation is denied. The agency had eliminated the protester from consideration, finding that its price was unrealistically low. The protester thought the agency’s realism evaluation was flawed. But GAO backed the agency, noting that protester’s price—which was 50 percent less than the government estimate far and away the lowest among 11 offerors—was exceptionally low and thus almost certainly unrealistic.
The Air Force issued a solicitation seeking enterprise architecture and other related IT services. ACTA, LLC submitted a proposal in response to the solicitation. The Air Force eliminated ACTA from the competition, finding that its price was unrealistic. The Air Force awarded the contract to UNCOMM, LLC. ACTA filed a protest challenging its elimination and the award to UNCOMM.
GAO noted at the outset that ACTA’s price was extraordinarily low—50 percent lower than the IGCE and with labor rates that were 25 to 196 percent lower than those in the IGCE. Indeed, it labor rates were below the average proposed by all the offerors; it proposed the lowest rate for 20 of the 26 labor categories. Its’ proposed price was $40 million lower than the next lowest offeror. The Air Force had found that 77 percent of ACTA’s labor rates were unrealistic. Under these circumstances, GAO did not see a problem with the agency’s conclusion concerning price realism.
ACTA argued that the Air Force’s estimate was unreasonable because it was based on information from 8(a) contracts not from small businesses generally. But GAO did not believe this was a problem given that 8(a) and other small business all had to meet the same size standards.
ACTA also alleged that the Air Force did not evaluate price realism equally because UNCOMM had proposed unrealistic rates for one category and thus its proposal should have also been rejected as unrealistic. But GAO did not find any disparate treatment. UNCOMM proposed one labor rate that could have been considered unrealistic. On the other hand, 77 percent of ACTA’s rates were unrealistic. ACTA’s price was 40 percent less than the average overall price. UNCOMM’s proposal, by contrast, was the third lowest priced proposal and within 10 percent of the fourth through seventh lowest-priced proposals.
ACTA is represented by Damien C. Specht, R. Locke Bell, and Alissandra D. Young of Morrison & Foerster LLP. The intervenor, UNCOMM, is represented by Tod D. Stephens of Armstrong Teasdale LLP. The agencies are represented by Patricia S. Wiegman-Lenz, and Christopher M. Judge of the Air Force as well as Kenneth M. Roth, A.J. Koudelka, and Robert J. Depke of U.S. Transportation Command. GAO attorneys Mary G. Curcio and Laura Eyester participated in the preparation of the decision.
