When It Comes to Price Realism, a Facile Evaluation Is Sufficient

The protester objected to the methods the agency used to assess price realism. But GAO noted that a price realism evaluation doesn’t need to be precise. Price realism only needs to provide a broad yardstick. The agency’s evaluation cleared this low hurdle.

Leidos, Inc., GAO B-421476.4, B-421476.5

• Incumbent Recruiting – The protester contended the price realism evaluation failed to consider the awardee’s unique staffing approach. The protester reasoned the awardee proposed to use incumbent staff but didn’t propose rates high enough to attract incumbent staff. GAO noted the solicitation dictated the staffing required to perform the requirement. Offerors had no discretion to propose a “unique” approach. In any event, the awardee had merely made a reference to recruiting incumbent staff. Contrary to the protester’s arguments, the awardee’s approach didn’t depend on incumbent capture.
• Labor Rates – The protester objected to the methods the agency used to evaluate the realism of the awardee’s labor rates. GAO saw no problems. A price realism evaluation only needs to provide a broad yardstick against which to measure rates. Price realism is not as rigorous as cost realism. An agency doesn’t need to verify every item with scientific certainty. Here, the methods the agency used used—comparison with Service Contract Act rates and a price evaluation tool—were sufficient.
• Awardee’s Technical Strength – The protester argued the agency erred in assigning the awardee and the protester a strength for using the same software tool. The protester argued it had used the tool on the incumbent contract while the awardee only anticipated getting access to the tool. But GAO found the agency understood the difference in capabilities in connection with the tool. The agency assigned strengths based on the offerors’ different uses of the tool.

The protester is represented by J. Scott Hommer, III, Emily R. Marcy, Rebecca E. Pearson, Christopher Griesedieck, and Lindsay M. Reed of Venable LLP. The awardee is represented by Jason A. Carey, J. Hunter Bennett, Andrew R. Guy, Jennifer K. Bentley, and Emma Merrill-Grubb of Covington & Burling, LLP. The agency is represented by Kathryn M. Navin of the General Services Administration. GAO attorneys Scott H. Riback and Tania Calhoun participated in the decision.

–Case summary by Craig LaChance, Senior Editor