Protest challenging the agency’s price evaluation is denied, where the agency reasonably performed a price realism analysis and where its IGCE was reasonably based on a reduced scope of work and the presence of competition. GAO also denied allegations the agency altered its requirements to the extent it was required to revise the solicitation, finding that the requirements had not, in fact, changed. GAO also dismissed as untimely challenges to the agency’s use of simplified acquisition procedures, and its intention to provide the successful offeror software the protester considered proprietary, as these aspects of the procurement were known when the solicitation was issued.
MacAulay-Brown Inc. protested the Army’s award of a contract for cyber analytics services to Deloitte & Touche LLP, challenging the evaluation of proposals.
First, MacAulay argued the agency failed to perform a required price realism analysis. Independent of that requirement, the protester argued the agency was required to assess proposals for significant inconsistencies between proposed price and technical/management approach. MacAulay argued that Deloitte’s proposed price is inadequate to cover the cost of sustaining the incumbent work, much less the expanded work contemplated by the RFP.
GAO found the RFP stated that the agency could reject a proposal if there were significant and unexplained inconsistencies between the oral presentation, technical/management approach, and proposed price, if the agency concluded the offeror misunderstood the requirements or might be unable to perform.
The Army argued this language did not trigger a requirement to perform a price realism analysis, but nonetheless, asserted that it performed a sufficient analysis of Deloitte’s price to conclude that it was not unrealistically low.
GAO agreed that a price realism analysis was required, but did not agree with the protester’s assertion that the price evaluation was unreasonable or otherwise failed to identify any significant inconsistencies between Deloitte’s proposed price and its technical approach.
According to the Army, while it did not explicitly use the term “price realism” in evaluating proposals, it did perform an analysis of pricing to determine if Deloitte’s price was too low by comparing it to the IGCE. Specifically, the agency found that Deloitte’s price was about 10 percent higher than the IGCE, and was therefore neither unrealistically low or unreasonably high.
The protester argued the price analysis was based on a flawed IGCE, as the incumbent work could not be sustained with a reduced level of effort. MacAulay argued the addition of new work to the requirement rendered the Army’s IGCE itself unrealistically low. In response, the agency defended the IGCE, explaining that it reflects an intended reduction in scope from aspects of the predecessor OTA efforts, including in the areas of innovation and emerging technology, which resulted in fewer estimated labor hours and personnel than the current effort. Further, the agency removed or reduced hosting infrastructure costs, artificial intelligence, and advanced dashboard development.
GAO found the agency’s IGCE and evaluation reasonable. GAO found entirely reasonable the agency’s belief that utilizing competitive procedures would drive prices down. Accordingly, GAO denied the protest on these grounds.
Next, MacAulay argued the agency changed its requirement from the RFP. The protester alleged the Army knew before award that one of the four infrastructures delineated in the RFP would be unavailable during performance and that the awardee would have to deploy the solution to an entirely different infrastructure.
In response, the agency argued that MacAulay misinterpreted its communications. While the Army is constantly reviewing how it could leverage prototypes developed under OTAs, and assess capabilities and their interoperability with current platforms, its requirements for the present RFP remain unchanged. The Army explained that it communicated with MacAulay about halting, and potentially cancelling, one of the infrastructures under the OTA, not under this solicitation. Further, the Army has provided a declaration stating that one week after award, it hosted an integration meeting to first discuss the “development of a pilot” to integrate the two platforms.
GAO found the agency had not changed its requirements. While the record indicated that it was contemplating potentially integrating existing infrastructures, no such change occurred prior to award. Further, the only changes that appear to have been made are with regard to a separate OTA, which is not at issue here.
Next, MacAulay argued the agency erroneously assumed it could provide Deloitte with MacAulay’s proprietary software as government-furnished equipment, which it does not have authorization to do. According to MacAulay, Deloitte will not be able to perform as intended without this software. However, GAO found this charge untimely, as the RFP stated that the Army would provide a platform as government-furnished equipment and that the successful offerors would be required to deploy analytics in a cloud environment. To the extent MacAulay believed the contractor would only be able to accomplish these functions using its proprietary software, it was required to raise this concern prior to the deadline for proposals.
Essentially, MacAulay argued that it is the only firm that can satisfy the requirement, because only it has access to its own proprietary software. However, the solicitation was issued as a full and open competition, meaning someone other than MacAulay would win the contract. If the protester thought the agency was offering its proprietary software in error, it was required to say so prior to the deadline for proposals.
Finally, MacAulay argued that the Army improperly used the simplified acquisition procedures in FAR subpart 13.5 for this procurement, but GAO also found this argument untimely. The protester asked GAO to consider this challenge under its significant issue exception, arguing the value of the contract was in excess of the limits allowed by the FAR and DoD policy.
As a general rule, the FAR authorizes the use of simplified acquisition procedures for procurements of commercial items when the value does not exceed $7 million, or $13 million for procurements of commercial items that facilitate defense against or recovery from nuclear, biological, chemical, radiological, or cyber attack. The Army also asserted that FAR 18.202 provides it the authority to use simplified acquisition procedures for procurements, such as this one, valued above the $13 million limit. MacAulay challenged this assertion, arguing that FAR 18.202 simply refers the reader to other FAR provisions that authorize the use of simplified acquisition procedures.
However, GAO found this issue did not raise to the level of widespread interest to the acquisition community, such that it would override its timeliness rules.
MacAulay-Brown Inc. is represented by Jason A. Carey, J. Hunter Bennett, and Andrew R. Guy of Covington & Burling, LLP. Deloitte & Touche LLP is represented by David S. Cohen, John J. O’Brien, and Daniel J. Strouse of Cordatis Law LLP. The government is represented by Debra J. Talley and Warren A. Reardon, Department of the Army. GAO attorneys Joshua R. Gillerman and Tania Calhoun participated in the preparation of the decision.
