Protest Against Cost-Plus-Fixed-Fee Contract Award

A minority business enterprise filed a complaint against the award of a cost-plus-fixed-fee contract. The contract was awarded by the Southern California Rapid Transit District (RTD) under a grant from the Urban Mass Transit Administration (UMTA). The enterprise contended that the RTD Transportation Board's selection of the awardee was arbitrary and an abuse of discretion, because the Board had previously rescinded a selection of a joint venture composed of the awardee and the complainant without giving the complainant a chance to be heard. In addition, the enterprise contended that the grantee's consideration of cost and knowledge of local conditions was improper, because neither of these elements was listed as an evaluation criterion in the solicitation. The evaluation of proposals was conducted in three stages, first by an evaluation board, then by the RTD Board's rapid transit committee, and that committee made a recommendation to the full Board. The Board did not follow the committee's recommendation to make the award to the complainant, but voted in favor of the awardee. The present complainant protested this selection and, as a result, the Board rescinded that selection and voted in favor of a joint venture between the complainant and the awardee; however, when the two enterprises failed to reach an agreement, the Board rescinded that vote and returned to its original decision. The enterprise then filed complaints with RTD, UMTA and GAO. GAO stated that a grantor has primary responsibility to review procurements made by its grantees. The issues raised by the complainant with GAO were the same as those raised before UMTA. UMTA found no basis to conclude that the Board's failure to follow the recommendation of its rapid transit committee or that the consideration by the two preliminary evaluating bodies of cost estimates and knowledge of local conditions was unreasonable. Regarding the Board's decision on the joint venture, UMTA concluded that the rescission was reasonable, since the venture was contingent on a mutual agreement. GAO agreed with the UMTA findings on these matters and, accordingly, the complaint was denied.