Agency Request for Reconsideration

ACTION requested reconsideration of a decision which sustained a firm's protest against it. In that decision, GAO found that ACTION unreasonably excluded all offers but one from the competitive range in a solicitation for a cost reimbursement contract. As a remedy, GAO recommended that ACTION not exercise an option to extend the contract after completion of the initial year of performance and that the agency take steps to avoid recurrence of the procurement deficiencies noted in that decision. In requesting reconsideration, ACTION stated that, because of the protester's technical score and proposed costs, it had little likelihood of success and conducting negotiations with the firm would only have imposed additional expense on it. Under protest procedures, a request for reconsideration must specify any errors of law made or information not previously considered in the protest. GAO held that the ACTION statement was a reiteration of a previously considered issue raised by the agency in the original protest and was no basis for further consideration. Further, ACTION argued that the protester had certified the accuracy and reasonableness of its proposed indirect cost rate. Thus, to anticipate, as the decision does, that the protester would and could substantially reduce indirect costs during negotiations would clearly question the cost realism of its proposal. The previous decision was concerned with the lack of any cost realism analysis of either proposal, with indirect costs being only one significant factor which should have been considered. Finally, ACTION argued that its determination was based upon the substantial difference in the technical quality of the proposals as well as cost differentials. It believed that the protester's proposal was so inferior and out of line as to price that any discussions would have been meaningless. In the original decision, GAO recognized that the protester had a lower technical rating than the awardee. However, ACTION based its competitive range determination on the final results of a combined technical and cost evaluation formula which placed greater emphasis on proposed costs. GAO held that, by failing to conduct an adequate cost analysis, ACTION was not in a position to determine that any proposal was out of line as to price, so that factor and any technical deficiencies would make further discussion with a particular firm meaningless. Accordingly, the prior decision was affirmed.