Protest alleging misleading discussions is denied. The protester contended the agency did not adequately inform the company that submitting a price below the amount budgeted for the project would result in exclusion from the competition. GAO rejected this argument, finding that the agency clearly notified the offeror on three separate occasions that its price exceeded the budgeted amount. The protester’s failure to take to these notifications seriously did not make the discussions misleading.
The Army posted an RFP for construction of a middle school at Fort Campbell, Kentucky. Eight offerors, including a HUBZone firm, Zodiac-Poettker HBZ JV, LLV, submitted proposals. Applying the 10% HUBZone evaluation preference, the Army found that Zodiac’s price was the lowest. But Zodiac’s $612 million price exceeded the agency’s $56 million funding for the project. Because none of the proposals were below the budgeted amount, the Army decided to conduct discussions.
The Army held three rounds of discussions with Zodiac. Each time, the Army told Zodiac to “review your proposal price” because the estimated contract amount was $56.M and “the government cannot guarantee funds above this amount will be available for use.”
But Zodiac didn’t take the hint. It reduced its price to just above $60 million. The Army determined that Zodiac’s price made its proposal un-awardable. The agency selected A&K Construction, Inc., the only offeror that submitted an offer below the $56 million. Zodiac protested.
Zodiac alleged the Army conducted misleading discussions because while it mentioned the funding limits, and advised that funds may not be available, it never specifically informed the company that submitting a price below the budgeted amount would result in exclusion from the competition.
GAO rejected Zodiac’s argument. The record plainly showed that the Army notified Zodiac on three separate occasions that it had concerns with the company’s price. The final discussion letter even advised that the government could not guarantee funding above the budgeted amount and that it may be forced to cancel the award. The Army made it clear to Zodiac that cost constraints were important concerns.
An agency is not required to spoon-feed offerors during discussions. Zodiac’s failure to take the Army’s repeated concerns about funding seriously did not render the discussions misleading.
Zodiac argued that the Army’s funding constraints merely reflected a discretionary decision on how to allocate funding, and that the Army could have obtained additional funds from elsewhere in its budget. GAO, however, will not review an agency’s decision on the allocation of funding. A protester’s disagreement with the agency’s judgment concerning agency needs and how to address them does not establish that the agency’s judgment was unreasonable.
Zodiac is represented by Scott F. Lane, Jayna Rust, and Katherine Nucci of Thompson Coburn, LLP. The intervenor, A&K, is represented by C. Thomas Miller of Whitlow, Roberts, Houston & Straub, PLLC as well as Laurence Schor, David Edelstein, and Allison Geewax of Asmar, Schor & McKenna, PLLC. The agency is represented by Jennifer Kirby-McLemore and Tarrah M. Beavin of the Army. GAO attorneys Katherine I. Riback and Evan C. Williams participated in the preparation of the decision.
