Contractor’s Price Revealed to Competitors, GAO Says “Tough Luck”

When a contractor is declared the winner of a competition, the contractor’s bottom-line pricing is usually revealed to competitors.  Typically, the winner has no complaints: it is well-understood that the bottom-line pricing of winning contractors is usually considered public information (the taxpayers have a right to know how the government is spending their money).

But what if, after announcing the supposed awardee’s price, the agency changes its mind and re-opens the competition?  The price of the former “winner” is exposed, while the prices of its competitors remain a mystery.  It sounds unfair, but in a recent GAO bid protest decision, the GAO refused to require the procuring agency to level the playing field.

The GAO’s decision in American Material Handling, Inc., B-406739 (Aug. 14, 2012), involved a GSA solicitation, issued on behalf of the Air Force, for a mobile crane.  The solicitation called for a “best value” evaluation, including price and other factors.

The GSA received five proposals.  On March 13, 2012, the agency awarded the contract to AMH.  Subsequently, the GSA debriefed the losing offerors, and revealed AMH’s bottom-line price in the debriefings.

Shortly thereafter, the GSA realized that the solicitation had omitted DFARS 252.247-7023, which must be included in all solicitations and contracts for the transportation of products intended for Defense Department use.  The GSA issued a stop work order to AMH, and stated that it intended to amend the solicitation to include the clause and request revised proposals from all five offerors.  The GSA then terminated AMH’s contract for convenience.

AMH filed a GAO bid protest, alleging, among other things, that the GSA should have equalized the competitive playing field in the re-solicitiation by releasing the bottom-line prices of the other four offerors.  AMH complained, in essence, that it was unfair for the other four offerors to know AMH’s price, while denying AMH access to similar information.

The GAO’s response?  “Tough luck.”

The GAO wrote, “as a general matter, an agency is not required to equalize the possible competitive advantage flowing to other offerors as a result of the release of information in a post-award setting where the release was not the result of preferential treatment or other improper action on the part of the agency. ”

The GAO held that in AMH’s case, any prejudice was mitigated by the best value evaluation system, the fact that AMH had been told that its pricing was “mid-range” among its competitors, and that the amendment to the solicitation would likely result in different pricing on the re-opened competition.  The GAO denied AMH’s bid protest.

For contractors in AMH’s position, the American Material Handling GAO bid protest decision will be a tough pill to swallow.  If a procuring agency refuses to release competitors’ prices, the former “winner” will suddenly find itself competing on a not-quite-level playing field–and there may not be anything it can do about it.

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