In a fixed-price procurement, an agency cannot reject an offeror for proposing a “too low” price unless the solicitation specifically contemplates a price realism evaluation.
This point is one of several interesting issues recently addressed by GAO in URS Federal Services, Inc., B-412580 et al. (Mar. 31, 2016). Another interesting issue—pertaining to an offeror’s protest of the awardee’s subcontractors’ size—will be addressed in a forthcoming post. But this post serves as a reminder of an important limitation to a protester’s ability to challenge an awardee’s price.
When a procuring agency asks for details, an offeror better provide those details–or run the risk of exclusion from the competition.
Recently, the GAO has confirmed that offerors must provide sufficient detail or run the risk of being eliminated from a competition. First, came Res Rei Development, Inc., B-40466.7 (Comp. Gen. Oct. 16, 2015), where GAO held that an agency can find a proposal technically unacceptable when it essentially parrots the terms of the solicitation. Now comes LOTOS S.r.l., B-411717.5 (Comp. Gen. Nov. 19, 2015), where GAO found that the agency had reasonably excluded an offeror from the competition based in part on the offeror’s failure to provide a detailed organizational chart.
The nonmanufacturer rule requires, among other things, that the prime contractor supply the end items of a small business manufacturer, or obtain a SBA waiver of that requirement. Compliance with the nonmanufacturer rule is determined as of the date of the final proposal–and a subsequent switch in manufacturers won’t be recognized by the SBA.
In a recent decision, the SBA Office of Hearings and Appeals held that the SBA had erred by evaluating a prospective prime contractor’s nonmanufacturer rule compliance because the small business end manufacturer in question had not provided a quotation to the prime until well after the prime’s proposal had been submitted.
In a recent decision, the GAO played seventh-grade English teacher, reminding offerors to use their own words to get full proposal-writing credit.
In the case of Res Rei Development, Inc., B-410466.7 (Oct. 16, 2015), the agency found a proposal unacceptable because, in its view, the offeror had simply restated the terms of the solicitation. The GAO agreed with the agency’s decision, writing that a proposal that merely restates the requirements of the solicitation without adding detail and insight into how the offeror would manage and execute the contract can be found unacceptable.
Under certain circumstances, the winning bidder on a fixed-price contract may offer $0.00.
In a recent decision, LCPtracker, Inc.; eMars, Inc., B-410752.3 et al (Sept. 3, 2015), the GAO held an offeror submitting a zero-dollar offer (that is, an offer for $0.00) was eligible to receive a fixed-price contract because both the Government and the contractor would receive benefits under the contract.
An agency’s evaluation of proposals was not improper even though the Source Selection Authority “cut and paste” portions of a selection document used in a similar procurement–including typographical errors and a reference to a firm that had not submitted a proposal.
The GAO’s recent decision highlights an uncomfortable truth of government contracting: while the government can (and often does) demand nearly perfect proposals, the government may be able to get by with sloppy or lazy evaluations.
Subcontractors sometimes prefer to submit their cost or price proposals directly to the government, instead of submitting their cost or pricing information through the prime contractor. In cases where a procuring agency allows it, such independent submissions can ease a subcontractor’s concerns about disclosing sensitive information to the prime contractor.
But when a subcontractor circumvents the prime contractor and independently submits its pricing, the prime contractor is unable to review the subcontractor’s proposal to ensure that it complies with the terms of the solicitation. As demonstrated in a recent GAO bid protest decision, if the subcontractor’s proposal is non-compliant, the entire team may pay the price.