[Protest of AID Cost Evaluation Scheme Under Technical Services Procurement]

A firm protested the cost evaluation scheme the Agency for International Development (AID) used under a request for proposals (RFP) for 13 indefinite quantity contracts for technical services. AID used a mathematical formula which rewarded those offerers who proposed lower cost multipliers and evaluated only the highest cost multiplier of the protester. The protester argued that the use of its highest cost multiplier was unreasonable. Since the RFP failed to mention the use of varying multipliers, GAO determined that the agency's use of only one multiplier was unreasonable and resulted in an inaccurate analysis of the protester's cost proposal. However, since it was not clear that the protester would have been in line for award with the use of all reasonable evaluation approaches, GAO did not find that the protester was entitled to award. In addition, GAO found that AID failed to properly evaluate the protester's direct and indirect costs; therefore, the evaluation did not properly determine the likely relative cost of competing proposals. Moreover, GAO determined that the agency did not have the proper authority to set aside some of the contracts for minority business firms, because only the Small Business Administration can properly set aside awards for socially and economically disadvantaged firms. Accordingly, the protest was sustained, and GAO recommended that AID recompete for the second and third year contract needs.