Last week the GAO issued a recommendation in the Matter of: Alcazar Trades, Inc.; Sparkle Warner JV, LLC. The Government issued an RFP for a fixed-price contract, with a 1-year base period and four option years, to furnish custodial services for 23 buildings and 7 guard shacks at the Denver Federal Center. The award was to be made to the bidder whose proposal was the “most advantageous to the government,” considering price and the following non-price evaluation factors: management plan (30 percent of the non-price factors), past performance (30 percent), and experience (40 percent). Alcazar Trades, Inc. (“ATI”) submitted the bid with the lowest price. The government found that ATI’s bid was unrealistic such as to “put the government at risk if the Offeror tried to perform the services with inadequate funding.” ATI then filed this bid protest.

The GAO found that as a general matter “[p]rice realism need not necessarily be considered in evaluating proposals for the award of a fixed-price contract, because these contracts place the risk of loss upon the contractor rather than the government.” The GAO further held that “[w]here offerors take a similar approach to meeting the solicitation requirements, our Office has generally not objected to a price realism analysis that focuses on a comparison of an offeror’s price to the government estimate and the prices of other offerors… Our Office has recognized, however, that a price realism evaluation must consider the unique technical approaches proposed by each offeror.” ATI argued that its staffing approach was unique and was not comparable to the other bidders, as such, it was able to offer a much lower price. The GAO agreed and concluded that the government “unreasonably evaluated the realism of ATI’s low price, failing to account for ATI’s unique staffing approach.” It then recommended that the government reevaluate the proposals and reimburse ATI its attorney’s fees and costs.

If you believe that your bid response has been improperly evaluated, contact the experienced bid protest attorneys at Smith & Associates for a free consultation.