Decision

Date: December 8, 2021

Jamie F. Tabb, Esq., Tyler E. Robinson, Esq., Elizabeth Krabill McIntyre, Esq., and

John M. Satira, Esq., Vinson & Elkins LLP, for the protester

Major Felix S. Mason, Major Abraham L. Young, and Lieutenant Colonel Stephen M.

Hernandez, Department of the Army, for the agency.

Evan C. Williams, Esq., Ralph O. White, Esq., and Kenneth E. Patton, Esq., Office of

the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

protester’s challenge to the issuance of a task order to Science Applications

International Corporation (SAIC), also of Reston, Virginia. The Department of the Army

issued the task order under request for task order proposals (RFP) No. W91QVN-19-R-

0148, for cybersecurity, network operations, and maintenance of information technology

support. The protester requests that we reconsider our decision on the basis that it

contained errors of fact and law. Specifically, STG argues these errors resulted in a

decision that wrongly concluded the agency did not perform an impermissible price

We deny the request for reconsideration.

based on its low price. Our Office has sustained numerous protests where an agency

challenging an agency’s assessment of performance risk where, in the absence of a

price realism evaluation factor, an agency considers cost or price risk that is associated

with concerns with the protester’s technical proposal.

This request for reconsideration challenges our conclusion in the underlying protest

that, based on the totality of the record, the agency’s discussion of the protester’s

proposed price reflected a continued elaboration of concerns about the protester’s

technical proposal, and not a price realism analysis. Thus, on reconsideration, we must

decide whether this finding constitutes a material error of law or fact. We conclude that

the underlying decision does not contain an error warranting reversal because, while the

BACKGROUND

On February 18, STG filed a protest with our Office challenging the award to SAIC.

Protest (B-418490). STG argued in that protest that the agency conducted an improper

price realism analysis in a fixed-price procurement where the solicitation did not advise

potential offerors of a price realism review. Put differently, STG argued that the agency

applied unstated evaluation criteria. Id. at 13-14. The protester also argued that it was

prejudiced in the agency’s best-value tradeoff decision as a result of the price realism

evaluation. Id. at 31-32.

As noted in the underlying decision, the RFP here did not notify potential offerors that

the agency would use a price realism analysis in its evaluation. Id. at 10. Instead, the

1

For the record, this task order competition was conducted between contractors holding

one of the Army’s Information Technology Enterprise Solutions – 3 Services (ITES-3S)

multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts. Thus, the

procurement was conducted pursuant to Federal Acquisition Regulation (FAR) section

16.505 procedures. The underlying decision notes that GAO has jurisdiction to hear

Among the six evaluation factors identified in the RFP was a management approach

factor. With respect to management approach, the RFP required offerors to describe

their ability “to meet the Government’s IT [information technology] managerial

requirements without introducing unacceptable risk and provide an appropriate

mitigation of risk for continuity of operations.” Id. at 5. Under the management

approach factor, there were six subfactors, one of which was “staffing plan” (and under

the staffing plan subfactor there were five separate elements). Id. at 2-14. The RFP

instructed offerors as follows under the staffing plan subfactor:

objectives in the PWS while maintaining 98% employee fill rate. The

Offeror shall also clearly demonstrate each proposed labor category, the

skill level of each category proposed, the education and experience of

proposed personnel, specific plans to bring all personnel [

] during and

prior to the phase-in period, the time frame for bringing personnel on

board (with consideration to compliance with USFK Regulation 700-19),

as well as a replacement strategy, retention policy and any anticipated

training needed to maintain required certifications of personnel.

Id. at 6.

plan”--the RFP stated that:

2

Citations are to the agency report provided in response to STG’s underlying protest

(B-418490; B-418490.2).

3

The RFP quotation here is presumably missing the word “onboard.” One of the factual

errors alleged in this Request is that our Office “obscured or overlooked” a word in a

quotation in the prior decision where several words were purposely and expressly

omitted. Req. for Recon. at 4. As a result, we elect here not to enter the presumed

time, part time, or subcontractor personnel as applicable. The staffing

plan shall include all proposed number of people, labor categories,

technical skill levels, language skills, the education and experience of

proposed personnel, and a brief description of each position.

Id. at 7. There was no requirement in the RFP, however, for the proposals to identify

the planned rate of compensation for the staff.

Upon receipt of initial proposals, and after exchanges and receipt of revised proposals,

the agency evaluated the proposals received from the three offerors that were found,

4

Our pricing enables incumbent capture and maximizes retention

throughout the life of the contract. With the current incumbent contractor

on our team, we are confident in the appropriate compensation levels to

strategically retain the desired portions of the previous contract’s

workforce. We also know the difficulties the incumbent faced in

maintaining a workforce that could meet the daily requirements of [the

agency]. To address those challenges head on, STG is offering a

comprehensive compensation and benefits package that better allows us

to recruit and retain employees.

AR, Tab 17.6, STG Proposal, Cost/Price Volume, at 5.

At the conclusion of the evaluation, the proposals of STG and SAIC were rated as

AR, Tab 24, Price Negotiation Memorandum and Source Selection Decision Document

With these results, the contracting officer, who also served as the source selection

in significant detail, the SSA’s concerns about the staffing levels the incumbent provided

under the prior contract; the staffing levels estimated to prepare the independent

government estimate (IGE); and the staffing levels proposed by the offerors. Id. at 32,

52-55. Using the price of the incumbent contract, the IGE, and the prices proposed by

that it was reasonable for the contracting officer’s view of similarities between the

predecessor effort and STG’s proposed approach to inform the best-value tradeoff

decision. Id. at 9.

Our prior decision further concluded that the agency’s explanation in the SSDD “does

not represent a price realism evaluation when read in the context of the record as a

whole.” Id. at 10. We further explained that, “based on the totality of the record, the

contracting officer’s statement on which STG bases this protest ground reflects a

continued elaboration of his concerns about STG’s proposal--that is, even if STG’s

proposed technical approach were executed as described, it would still present risks.”

Office to wrongly conclude that the agency did not perform an impermissible price

realism evaluation.

We disagree.

In our view, our prior decision did not contain an error of law or an error of fact. Instead,

our prior decision made a judgment that the facts presented did not demonstrate that

the agency performed a price realism analysis in the context of a solicitation that did not

expressly call for such an analysis.

We also concluded that the considerations and judgments set out in the agency’s

best-value tradeoff decision were not improper, unfair, or impermissible, given the

evaluation and best-value tradeoff decision, as well as allegations of disparate

treatment. See, e.g., Protest (B-418490) at 10-31; Comments & Supp. Protest

(B-418490, B-418490.2) at 20-29. Our Office denied those challenges. Here, the

protester requests reconsideration of our decision only with respect to our conclusion

that the agency did not perform an impermissible price realism evaluation in a

Under our Bid Protest Regulations, to obtain reconsideration the requesting party must

set out factual and legal grounds upon which reversal or modification of the decision is

warranted, specifying any errors of fact or law made or information not previously

considered. 4 C.F.R. § 21.14(a), (c); Voith Hydro, Inc.--Costs--Recon., B-416243.5,

Jan. 31, 2020, 2020 CPD ¶ 41 at 4. We have reviewed in detail each of STG’s alleged

errors, and conclude they do not provide a basis to reverse or modify our earlier

conclusion.

Legal Error

Inc., B-416097.3, B-416097.4, Sep. 24, 2018, 2018 CPD ¶ 339; Metis Sols., LLC, et al.,

B-411173.2 et al., July 20, 2015, 2015 CPD ¶ 221).

As an initial matter, we note that the Federal Acquisition Regulation (FAR) does not

specifically address the topic of a price realism analysis. Indeed, the term is not used in

the FAR’s description of price analyses found in section 15.404-1(b). Instead, FAR

section 15.404-1(d)(1) defines an assessment termed a cost realism analysis, while

section 15.401-1(d)(2) mandates the use of a cost realism analysis for assessing cost

reimbursement contracts. A cost realism analysis is defined in section (d)(1) as follows:

and materials described in the offeror’s technical proposal.

FAR 15.404-1(d)(1).

risk assessments and responsibility determinations. However, proposals

shall be evaluated using the criteria in the solicitation, and the offered

prices shall not be adjusted as a result of the analysis.

FAR 15.404-1(d)(3).

In reviewing uses of the authority granted to agencies by FAR subsection 15.404-

1(d)(3), our prior decisions have explained that “an agency may . . . provide for the use

of a price realism analysis for the limited purpose of assessing offerors’ understanding

of the solicitation’s requirements or the risk inherent in offerors’ proposals.” Star

Travel, Inc., B-291785, Mar. 12, 2003, 2003 CPD ¶ 60 at 4; Star Mountain, Inc.,

B-285883, Oct. 25, 2000, 2000 CPD ¶ 189 at 2.

On the other hand, our decisions have noted that the submission of even a “below-cost”

price in the context of a fixed-price competitively awarded contract is not, by itself,

improper. See Arctic Slope World Servs., Inc., B-284481, B-284481.2, Apr. 27, 2000,

2000 CPD ¶ 75 at 13. For this reason, offerors competing for award of a fixed-price

contract must be given reasonable notice where a business decision to submit a

low-priced proposal may be considered as reflecting on their understanding or the risk

associated with their proposal. Milani Constr. LLC, supra at 4.

lies in how to characterize the analysis conducted by the selection official in making the

best-value tradeoff decision, and whether the analysis was improper or unfair to the

protester given the terms of the solicitation under which this competition was held.

the lowest risk of performance” made the SAIC proposal the best value here. Id.

In reviewing the selection official’s best-value decision, there can be no dispute that

there are several assessments in the decision that invoke price as part of the selection

decision. For example, the selection official’s analysis considered performance risk

based in part on a calculation of the total price per FTE. As quoted above, one of the

possible uses of cost realism analysis techniques in a fixed-price context is that the

“[r]esults of the analysis may be used in performance risk assessments. . . .” FAR

15.404-1(d)(3).

of the same reasons an agency might choose to use cost realism analysis techniques to

evaluate fixed-price competitive proposals, (i.e., quality concerns or risk), our Office has

found that such use does not necessarily translate to a conclusion that this analysis was

an impermissible use of those techniques. See, e.g., Octo Consulting Grp., Inc.,

B-416097.3, B-416097.4, Sep. 24, 2018, 2018 CPD ¶ 339 at 7-9 (finding no

impermissible price realism evaluation where agency’s consideration of cost risk related

to underlying concerns about the protester’s technical approach). So here too, we do

not find that this assessment must be labeled an impermissible price realism analysis

performed in a competitive fixed-price procurement with no warning in the solicitation.

results for the offerors, the incumbent contract, and the independent government cost

estimate--as part of the tradeoff analysis--was an attempt to discern “indicators [of]

whether similar problems will occur.” Req. for Recon. at 3 (citing AR Tab 2 at 11). We

also note, however, that FAR subsection 15.404-1(b)(2)(iii) expressly identifies as a

price analysis technique the use of “rough yardsticks (such as dollars per pound or per