Reasonable Cost is not Always Realistic Cost
GAO sustained a protest recently where the agency seemed to think that a reasonable cost was also a realistic cost. That is not necessarily so.
Search Results for: cost realism
GAO: Lower-Paid Incumbents An “Obvious” Price Realism Concern
An offeror’s proposal to hire incumbent personnel–but pay those personnel less than they are earning under the incumbent contract–presents an “obvious” price realism concern that an agency must address when price realism is a component of the evaluation. In a bid protest decision, the GAO held that an agency’s price realism evaluation was inadequate where […]
GAO: Awardee’s Low Price Isn’t Too Low, Absent a Price Realism Evaluation
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 […]
GAO: Agency Reasonably Adjusted Sub’s Unsubstantiated Costs
Under a solicitation for a cost-reimbursable contract, an offeror’s proposed costs are not controlling, because the government is on the hook for the contractor’s actual and allowable incurred costs. Before making an award decision, the government must consider whether the proposed costs should be upwardly adjusted. A recent GAO bid protest decision highlights the need […]
GAO: If Price Realism Will Be Evaluated, Offerors Must Be Notified
Agencies must notify offerors when price realism will be evaluated under a fixed price solicitation. Recently, the GAO sustained a protest where a procuring agency rejected an offeror’s proposal because the offeror’s quoted prices were significantly lower than the government’s estimate–even though the solicitation did not notify offerors that price realism would be evaluated.
GAO: “Best Value” Tradeoff Must Consider Benefits Of Lower-Cost Proposal
In a best value tradeoff evaluation, a procuring agency must consider the benefits of a lower-cost proposal, even if that proposal’s cost is not as close to the agency’s internal cost estimate as a higher-priced proposal. As demonstrated by a recent GAO bid protest decision, it is improper in a tradeoff analysis for an agency […]
Price Realism Evaluation: Only If Solicitation Says So
An agency awarding a fixed-price contract can only evaluate offerors’ proposals for price realism–that is, determine whether offerors’ proposed pricing is so low as to be unrealistic–if the solicitation calls for a price realism evaluation. In a recent bid protest decision, the GAO confirmed that when a fixed-price solicitation does not advise offerors that a […]