Protest Against Contract Award

B-196518: Mar 12, 1980

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A firm protested the proposed award of an Army contract to another firm. Proposals were solicited for a fixed-price contract for complete housekeeping environmental services at an Army medical center. After receipt of initial proposals, the Army established a competitive range of three offerors. Prices were evaluated for the base period and two 1-year options. The Army proposed to award the contract to the lowest offeror without conducting any negotiations. The request for proposals (RFP) advised that an offer which was clearly more advantageous to the Government than any other offer would be accepted without any written or oral discussions. It also stated that each initial offer should be submitted on the most favorable terms, from a price and technical standpoint which the offeror is capable of submitting. The protester maintained that no offer was clearly more advantageous to the Government than any other because the proposed awardee's technical score was 20 percent lower than the protester's, whereas the proposed awardee's price was 20 percent lower than the protester's. Thus, the protester contended that the Army could not, under the initial RFP provision, make an award to the proposed awardee on the basis of initial proposals. GAO agreed with the protester. While the RFP listed the technical evaluation factors in descending order of importance, it did not advise offerors of the relative importance of price in relation to the technical evaluation factors. It did not consider technical superiority to be advantageous once a proposal met the minimum level of technical acceptability. Offerors are entitled to know if a procurement is intended to achieve a minimum standard at the lowest cost or if cost is secondary to quality. In this case, since price was listed subsequent to the technical factors, an offeror might reasonably conclude that price might not be controlling as between technically acceptable proposals and that technical superiority would be considered. GAO concluded that the offerors were prejudiced by this deficiency because the cost of work force size and other indirected costs in this labor intensive service could have a significant impact on the offerors' technical proposal as well as price. GAO recommended that the Army amend the RFP and advise offerors that award will be made to the technically acceptable offeror satisfying the Government's needs at the lowest price.