When, in discussions, a procuring agency tells a contractor that an aspect of the contractor’s proposal is a weakness, the natural response is to correct the problem. In one recent GAO bid protest decision, however, correcting a weakness may have cost a contractor a $30 million award.
In EMR, Inc., B-406625 (July 17, 2012), the procuring agency informed the contractor that certain labor rates appeared low in comparison to other offerors’ rates, and labeled the low rates a weakness. In response, the contractor raised the rates in question, thereby increasing its overall price–then narrowly lost out on a low-price, technically acceptable contract.
The GAO’s verdict? The agency did nothing wrong.