COFC decision denying a protest is affirmed. The protester alleged that the agency erred in finding its price reasonable. The protester asserted the FAR had preferred techniques for evaluating price reasonableness, and if an agency does not use the preferred techniques, it must explain why the preferred techniques are insufficient. Here, the agency had not used one of the preferred techniques in finding the protester’s price reasonable. The court, however, did not find this problematic. The FAR provision cited by the protester only expressed a preference for certain techniques; it did not mandate those techniques, and it did not require the agency to explain why it was not using a preferred technique. Indeed, even if the FAR provision required the agency to explain a deviation from the preferred techniques, the record implicitly explained why the preferred techniques in this case were insufficient. The agency had rationally found the protester’s price reasonable.
The Army issued a solicitation seeking logistics support services around the world. The solicitation contemplated the award of four to six IDIQ contracts covering six geographic commands as well as Afghanistan.
The solicitation provided for award on a best value basis considering technical/management, past performance, small business participation, and cost/price. Cost and price were to be evaluated for both realism and reasonableness. The solicitation had cost reimbursement and fixed-price portions. Thus, offerors’ proposed costs and price had to both be reasonable.
Six offerors, including DynCorp International, LLC, submitted proposals. The Army conducted multiple rounds of discussions with the offerors over the course of year. DynCorp had submitted the most expensive proposal, but the Army did not discuss price with the company, finding that, while expensive, DynCorp’s prices were not too high.
The Army ultimately awarded four IDIQ contracts and related task orders. DynCorp did not receive an award. DynCorp filed a protest with the Court of Federal Claims. The court determined that the Army had erred in not evaluating price reasonableness for all offerors. Before the court issued a final decision, however, the Army took corrective action to evaluate all proposals for reasonableness.
Following the new reasonableness evaluation, the Army concluded that all six offerors had proposed reasonable prices. The Army declined to reopen discussions and reaffirmed its prior awards. DynCorp then filed a second protest with the COFC arguing that the Army had erred in finding its price reasonable. The COFC denied the protest, concluding that the Army’s price reasonableness evaluation had been rational.
DynCorp appealed to the Federal Circuit. On appeal, DynCorp again alleged that the Army had erred in finding its price reasonable. DynCorp contended that if the Army had found its price unreasonable, as it should have, then it would have identified a significant weakness or deficiency in DynCorp’s proposal. The FAR requires agencies to discuss deficiencies or significant weaknesses with offerors. Thus, DynCorp argued, had the Army correctly assessed the company’s price, it would have conducted discussions with DynCorp and given the company a substantial chance of receiving award.
DynCorp alleged the Army’s price reasonableness evaluation violated FAR 15.404-1. That section identifies various price analysis techniques. The provisions states that the first two techniques—comparison of proposed prices to each other and comparison to historical prices—are the preferred techniques. The Army did not use either of the preferred techniques. DynCorp claimed the Army could not deviate from the preferred techniques unless it made an affirmative determination that those techniques were insufficient.
The court, however, reasoned that agencies are not so wedded to the preferred techniques. Agencies enjoy wide latitude in evaluating price reasonableness. Moreover, the FAR provided that agencies “may” use the various price analysis techniques. Indeed, the use of the word “preferred” indicated a suggestion, not a requirement. The plain language of the FAR provision did not in any way inhibit or condition the agency’s discretion. The court noted when the FAR wants to inhibit or condition agency actions it does so explicitly using terms like, “no person may” or “shall not.” What’s more, DynCorp had not identified any decision holding that FAR 15.404 restricted discretion in the way it suggests.
The court further reasoned that even if FAR 15.404-1 were to require a specific determination that the preferred techniques were inadequate, in this case, it was clear from the record that the contracting officer had made this determination. When the Army initially evaluated prices, it requested that offerors provide “other than certified costs and price data”—i.e., data that falls under one of the non-preferred techniques under FAR 15.404-1. The Army had stated at the time that this other information was needed to assess reasonableness. In requesting this other data, it was clear that the Army had implicitly determined that the preferred techniques for assessing reasonableness would not do.
DynCorp argued that the Army’s price reasonableness determination was nonetheless arbitrary because the Army failed to square its conclusions with the considerable price disparities between offerors. But the court determined that the Army had not ignored price differences. In fact, it had acknowledged that DynCorp had the highest price. Rather, the Army had rationally determined that each offeror’s price was reasonable for its chosen technical approach. There was nothing problematic about the price disparities.
The appellant, DynCorp, is represented by Aaron Martin Panner and Collin White of Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC. Defendant-appellee Kellogg Brown & Root, is represented by Seth Locke, Lee Paul Curtis, Brenna Duncan, and Julia Fox of Perkins Coie, LLP as well as Dan L. Bagatelli. Defendant-appellee Vectrus Systems is represented by Deanne Maynard, Seth W. Lloyd, Kevin P. Mullen, Michael Qian, and James A. Tucker of Morrison & Foerster LLP. Defendant-appellee Fluor Intercontinental is represented by Andrew E. Shipley and Philip Edward Beshara of Wilmer Cutler Pickering Hale and Dorr LLP. Defendant-appellee PAE-Parsons is represented by Anuj Vohra, Christian Curran, and Zachary H. Schroeder of Crowell & Moring, LLP. The government is represented by William Porter Rayel, Sarah Elaine Harrington, Robert Edward Kirschman, Jr., and Patricia M. McCarthy of the Department of Justice as well as Dana J. Chase, Scott Nicholas Flesch, and Gregory T. O’Malley of the Army.
