Word to your mother: Protest challenging Immigration and Customs Enforcement’s (ICE) conduct of discussions and price evaluation is denied. The protester alleged ICE conducted misleading discussions because it used one method to evaluate price before discussions and another method to evaluate price after discussions. GAO found that the methods were not different enough to make the discussions misleading. The protester also claimed that ICE had failed to inform it that unrealistically low prices could result in an unacceptable proposal. But GAO found that an amendment had explicitly advised offerors that unrealistic prices could make a proposal ineligible. The protester further objected to ICE’s price realism evaluation. Given that the protester had proposed to perform at a significant loss, GAO declined to find the realism evaluation objectionable.
ICE issued a solicitation seeking services to support its intensive Supervision Appearance Program. The program provides supervision and monitoring to ensure that undocumented immigrants comply with release conditions while allowing them to remain in their communities.
CoreCivic, Inc. submitted a proposal. ICE held discussions and informed CoreCivic that its proposed pricing for many CLINs appeared understated. CoreCivic submitted a revised proposal but it did not increase its price. The company informed ICE that it had intentionally submitted a low price because it expected participants in the Supervision program to generate sufficient revenue and profit.
After receiving revised proposals, ICE issued an amendment, Amendment 5, which advised that price proposals would now be evaluated for realism. ICE directed offerors to submit a revised pricing template that would be used as the contract price for evaluation purposes. CoreCivic and the only other offeror, BI Incorporated, both submitted the revised pricing templates.
Following an evaluation, ICE found that CoreCivic’s price was unrealistic, which posed an unacceptable risk to successful performance of the contract. Accordingly, ICE awarded the contract to BI. CoreCivic protested.
CoreCivic alleged that ICE conducted misleading discussions because it used different pricing tools when comparing initial and final price proposals without reopening discussions. Specifically, during the initial evaluation, ICE compared proposed prices to historical prices, but in the final evaluation, ICE compared proposed prices to a government estimate. CoreCivic claimed that ICE’s price discussions, which were based on historical prices, were rendered inaccurate when the agency changed its comparison point to the government estimate.
GAO found that CoreCivic’s argument relied on a distinction without a difference. ICE had developed the government estimate using historical prices. What’s more, the difference between the historical prices and the government estimate was matter of cents. The difference between the two comparison methods was not enough to make the discussions misleading.
CoreCivic next argued that ICE failed to raise its true concerns during discussion when it did not advise the company that its overall price was unrealistic and that certain CLINs presented a risk. GAO found this argument unavailing. At the time ICE conducted discussions, the solicitation did not contemplate a price realism evaluation. It was only after ICE received revised proposals and issued Amendment 5 that it decided to evaluate realism. Thus, ICE’s concerns with CoreCivic’s overall price did not exist during discussions and thus could not have been raised during discussions.
CoreCivic further contended that ICE’s discussions failed to comply with FAR 15.307, which requires agencies to request final proposal revisions at the conclusion of discussions. GAO found this allegation was not supported by the record. CoreCivic had the opportunity to revise its price after discussions and after Amendment 5. Indeed, Amendment 5 had required offerors to submit a revised pricing template. CoreCivic chose not to raise its price based on a business decision.
CoreCivic also challenged the discussions contending that it was never made aware that its proposal could be rejected for unrealistic prices. But GAO found this unconvincing. Amendment 5 had explicitly stated that unrealistically low pricing cold indicate an inability to understand the requirement and a high risk approach, which could make a proposal unacceptable.
Next, CoreCivic objected to ICE’s price realism evaluation, contending that the agency failed to consider that the company had proposed to perform at reduced profit margins and had offered to provide a performance bond to ensure no risk to the agency.
ICE contended that it reasonably found CoreCivic’s price was too low. CoreCivic’s price was $600 million lower than BI’s and $700 million lower than the government estimate. On some CLINS CoreCivic’s proposed profit margins were between negative 53 and negative 68 percent. ICE had calculated that CoreCivic would need to make up $31 million in CLINs just to break even.
GAO saw no reason to question ICE’s conclusion. While CoreCivic’s protest filings explained how its pricing strategy could support the reduced profit on some CLINs, such detailed explanations were not included in CoreCivic’s proposal.
CoreCivic also challenged ICE’s technical evaluation. But because GAO had already found the company’s proposal unacceptable due to an unrealistic price, CoreCivic could not demonstrate that it had been prejudice by any error in the technical evaluation.
CoreCivic is represented by Kara M. Sacilotto, Samantha S. Lee, Cara L. Lasley, and Adam R. Briscoe of Wiley Rein LLP. The intervenor, BI, is represented by Anuj Vohra, Christian N. Curran, and Zachary H. Schroeder of Crowell & Moring LLP. The agency is represented by Douglas J. Becker and Gabriel E. Kennon of the Department of Homeland Security. GAO attorneys Lois Hanshaw and Evan C. Williams participated in the preparation of the decision.
