When an incumbent contractor loses a follow-on contract to a lower-priced competitor, the incumbent sometimes complains that after successfully performing the contract, it “knows what it takes” to get the job done, and that based on its experience, the competitor’s price is unrealistically low.
It is a perfectly logical argument, with one big problem: it can be very difficult to convince the GAO that an incumbent knows better than the procuring agency what constitutes a realistic fixed price for a contract. The difficulty in succeeding with such an “incumbent knows best” price realism protest is demonstrated in a recently released GAO bid protest decision, Resource Ltd., B-406492, B-406492.2 (June 6, 2012).