Protest alleging that agency should have found awardee’s proposal unacceptable is denied. The protester alleged the awardee was proposing to understaff the contract and underpay the employees it had proposed, which the protester alleged, created unacceptable risk. GAO, however, found that the protester was essentially alleging that the agency had failed analyze price realism. When, as here, a solicitation seeks to award a fixed-price contract, agencies do not consider price realism. Nothing in the solicitation obligated to the agency to assess price realism. The protest lacked a valid basis.
The U.S. Transportation Command issued an RFQ seeking deployment and distribution support services. Following an initial award, a protest, and a corrective action, the agency awarded the contract to Cargo Transport Systems Company. A disappointed offeror, Raith Engineering and Manufacturing Company, protested.
Raith contended that Cargo’s technical approach posed substantial risk to the agency. Specifically, Raith alleged, Cargo had not proposed enough staff and planned to under-compensate the staff it had proposed. Raith argued the agency had overlooked this unacceptable level of risk.
GAO found that this was essentially a price realism argument. When, as in this case, the solicitation contemplates a fixed-price contract, price realism is ordinarily not considered because the risk of profit and loss is on the contractor. Here, the RFQ did not have a price realism provision or any clause that indicated the agency would assess realism. Raith’s argument failed to state a valid basis of protest.
Raith is represented by Andrew P. Hallowell of Pargament & Hallowell, PLLC. The intervenor, Cargo, is represented by Lawrence J. Sklute and Lana Meller of Sklute & Associates. The agency is represented by Erika Whelan Retta, Isabelle P. Cutting, Rebecca Marquette Tatum, Colonel Patricia S. Wiegman-Lenz, Todd P. Federici, and Robert D. Bowers of the Air Force. GAO attorneys Mercedes Wilson-Barthes and Christina Sklarew participated in the preparation of the decision.
