[Protest of Army Cost-Plus-Fixed-Fee Contract Award]

A firm protested a cost-plus-fixed-fee contract award under an Army solicitation for engineering support services. The protester, which offered the lowest cost, technically acceptable proposal, contended that, because the Army did not consider cost in its evaluation, the award was unjustified. The Army argued that the firm's protest was untimely, since it was not filed with GAO within 10 working days from the date that the protester knew that its protest to the Army had been denied. GAO held that, since the timeframe for filing a protest included a Federal holiday, which is not considered a working day, the protest was timely filed. In a negotiated procurement, award selection properly may consider factors other than price. However, if a lower priced, lower scored offer meets the Government's needs, acceptance of the higher priced, higher scored offer should be justified on the basis that the technical superiority warrants the additional cost. GAO found that, while the technical evaluation panel indicated that the awardee's proposal was technically slightly better than the protester's, the record contained no justification for paying the much higher price. Furthermore, GAO noted that the record did not show that the protester's proposed costs were understated or unrealistic. GAO concluded that the Army did not have a reasonable basis for award. Accordingly, the protest was sustained. GAO recommended that the Army conduct a cost realism study of the protester's proposed costs. Further, GAO recommended that, if the Army determines that the protester's costs are realistic, the Army should consider the feasibility of terminating the contract and awarding the remainder of the contract to the protester.