We often see price realism in protests when the protester is making the claim that the awardee’s price, which was lower than the protester’s price, is low enough that the awardee would not be able to perform the work as solicited. Most often, GAO will determine that the agency’s price realism analysis was acceptable. However, in Criterion Corporation, B-422309 (Apr 16, 2024), the agency determined that the lowest priced offeror’s price was too low, and that the company could not possibly perform at the price offered. This led to the next lowest priced offeror receiving the award, and the lowest priced offeror protesting that decision, ultimately winning its argument.
Continue readingTag Archives: price realism
Here’s Why “The Other Guy’s Price Is Too Low” Often Fails As a GAO Bid Protest Argument
Maybe it’s happened to you: your company receives a notice of unsuccessful offeror, and your eyes pop. You can’t believe that the winner’s price is so low. “There’s no way they can successfully perform for that,” you say.
But before you file a GAO bid protest, you should carefully check the solicitation’s evaluation criteria. As one unsuccessful offeror recently learned the hard way, GAO often won’t listen to an argument that “the other guy’s price is too low.”
Continue readingRemoving a Price Realism Evaluation is a Material Change, Says GAO
Price realism—the evaluation of whether a proposed price is too low—is a method the government may use to evaluate fixed price offers to ensure that offerors are proposing pricing that reflects an understanding of the work required by the solicitation.
Prices that are unrealistically low can result in proposal elimination. This means price realism is an important consideration when preparing a bid. But what if an agency decides after proposal submission that a price realism evaluation will not be performed? In a recent decision, GAO confirmed that offerors must be given the opportunity to revise their proposals.
Continue readingProtester Argues the Agency Played “The Price Is Right” During Discussions
Negotiating with the federal government regarding pricing can sometimes feel like trying to win an RV from Bob Barker. Such was the experience of one protester. The government recommended a price increase during discussions and the contractor raised its price. The price increase, however, ultimately cost the offeror the award.
The agency’s conduct was subsequently protested before GAO, but GAO was not receptive.
Continue readingGAO: Agencies Must Explain Cost Realism Evaluation Determinations
GAO recently held in ATA Aerospace, LLC, B-417427 (July 2, 2019) that agencies are required to explain how offerors’ proposed labor hours and prices are, or are not, in line with historical data from predecessor contracts when conducting cost realism evaluations.
Continue readingGAO: Agency Conducted Price Realism Analysis and Misled Protester
Unless a solicitation for a fixed-price contract provides that the agency can conduct a price realism analysis, it can’t. Even so, agencies sometimes perform this analysis without alerting prospective offerors of the possibility.
If they do, however, the ground is fertile for a protest.
Continue readingA Pre-Award Protest Probably Isn’t the Place to Raise Suspicions of Wage Violations
Let’s suppose you’re a contractor that provides services to the federal government. Typically, your contract will require you to pay your employees the prevailing wage rates promulgated under the Service Contract Act.
What if you suspect that, under previous contracts, your competitors failed to pay their employees the mandated prevailing rates? Can you use a pre-award bid protest to obligate a procuring agency to police possible ongoing non-compliance through solicitation provisions? If you say yes, perhaps you should keep reading.