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FAR 15.304 (c) (1):  Price or cost evaluation factor requirement

Comptroller General - Key Excerpts

With respect to the evaluation of price under the first tier competition, the RFP provided a pricing matrix that identified systems and modular furniture for which offerors were to submit not-to-exceed prices. The RFP stated that an offeror’s overall evaluated price would be the sum of its not-to-exceed furniture prices and the CLIN prices for the annual program management reviews. RFP amend. 6, at 17-20; RFP, attach. 10, Pricing Matrix.

(sections deleted)

The protester also complains that the RFP fails to provide for meaningful consideration of price in the award of the first tier contracts, because the price evaluation is based upon not-to-exceed furniture prices where furniture is not being procured under the first tier contracts. In this regard, Herman Miller states that the RFP does not provide for meaningful consideration of offerors’ prices for the annual program management reviews and data reporting that is being procured under these contracts.

Agencies must consider price or cost to the government in evaluating competitive proposals. 10 U.S.C. § 2305(a)(3)(ii) (2006). While it is up to the agency to decide upon some appropriate, reasonable method for proposal evaluation, an agency must use an evaluation method that provides a basis for a reasonable assessment of the cost of performance under the competing proposals. CW Gov’t Travel, Inc.-Recon.; CW Gov’t Travel, Inc., et al., B-295530.2 et al., July 25, 2005, 2005 CPD ¶ 139 at 4; Health Servs. Int’l, Inc.; Apex Envt’l, Inc., B-247433, B-247433.2, June 5, 1992, 92-1 CPD ¶ 493 at 3-4.

We find that the solicitation does provide for meaningful consideration of price. Contrary to Herman Miller’s arguments, the first tier contracts will be for more than obtaining annual program management reviews and data reporting. Rather, these contracts also provide for promised not-to-exceed prices that will be relied upon by the manufacturer’s dealers in the second tier competitions. Although Herman Miller contends that such an acquisition approach should not be permitted, it cites to no law or regulation violated by this approach. In this regard, the FAR expressly recognizes that “if a specific strategy, practice, policy or procedure is in the best interests of the Government and is not addressed in the FAR, nor prohibited by law (statute or case law), Executive Order or other regulation, that the strategy, practice, policy or procedure is a permissible exercise of authority.” FAR § 1.102(d).  (Herman Miller, Inc., B-407028, Oct 19, 2012)  (pdf)


IMSG broadly challenges the agency's price evaluation, complaining that NOAA failed to consider the realism of the firms' proposed hourly labor rates. In this regard, IMSG disputes NOAA's determination that IMSG's proposed labor rates were unrealistically low such that the firm would have difficulty retaining quality staff. IMSG contends that, if NOAA had evaluated the realism of IMSG's proposed hourly labor rates, the agency would have found that IMSG's total price for the sample tasks was low, not due to the hourly rates used, but because IMSG had a $400,000 clerical error in the second sample task. See Protester's Supp. Comments at 12-13.

IMSG also complains that NOAA's simple comparison of the awardees' total prices for the sample tasks did not reasonably assess the realism of those firms' loaded hourly rates. IMSG argues that the awardees all proposed unexplained discounts from their proposed ceiling rates and that NOAA did not evaluate the realism of the firms' proposed labor rates as discounted. Protester's Comments at 6-7. In particular, IMSG argues that RTI's sample task pricing reflected drastic discounts from the firm's ceiling rates. For example, IMSG contends that RTI's $[deleted] million price for the second sample task would be approximately $[deleted] million, if RTI's price were based on its ceiling rates. See Supp. Comments, at 10 n. 30.

NOAA agrees that the RFP provided for a price realism analysis, which it states was for the purpose of determining "whether the price estimate is significantly higher or lower than the IGCE and if the contractor understands the work that needs to be accomplished." AR at 15; see also CO's Statement at 4. The agency contends that it reasonably found IMSG's sample tasks price to be unrealistic because it was much lower than the IGCE. AR at 16. NOAA also contends that the sum of IMSG's loaded hourly rates (ceiling rates) for the 40 labor categories is much lower than the other offerors, which NOAA contends also shows that IMSG's price was unrealistically low. CO's Statement at 5. With respect to the agency's realism analysis of the awardees' proposed prices and rates, NOAA does not contend that it assessed the realism of the awardees' ceiling rates or the labor rates used in the sample task pricing, but states that the agency found the awardees' price proposals to be fair and reasonable. Supp. AR at 9. In this regard, the agency notes that the actual rates to be paid under future task orders will be established through competition for the task orders and that the agency expects that the awardees would offer price discounts. Id.

The Competition in Contracting Act of 1984 (CICA) requires contracting agencies to include cost or price as a factor that must be considered in the evaluation of proposals. 41 U.S.C. sect. 253a(c)(1)(B) (2006); Electronic Design, Inc., B-279662.2 et al., Aug. 31, 1998, 98-2 CPD para. 69 at 8; see Federal Acquisition Regulation (FAR) sections 15.304(c)(1), 15.305(a)(1). An evaluation and source selection that fail to give meaningful consideration to cost or price is inconsistent with CICA and cannot serve as a reasonable basis for award. The MIL Corp.. B-294836, Dec. 30, 2004, 2005 CPD para. 29 at 9. It is up to the agency to decide upon the appropriate method for evaluation of cost or price in a given procurement, although the agency must use an evaluation method that provides a basis for a reasonable assessment of the cost of performance under the competing proposals. S.J. Thomas Co., Inc., B-283192, Oct. 20, 1999, 99-2 CPD para. 73 at 3.

Here, the record shows that NOAA did not assess the realism of the firms' hourly labor rates, as required by the RFP. See RFP sect. M.3. Rather, the record shows that the agency's price evaluation was driven by a mechanical comparison to the IGCE of the offerors' proposed prices for the sample tasks, without any consideration of the realism of the rates used in the sample task pricing.

Realism of IMSG's Labor Rates

As noted above, NOAA concluded that IMSG's proposed price for the sample tasks, which was [deleted] percent less than the IGCE for those tasks, was unrealistically low and that, as a result, there was a risk that IMSG would not be able to retain quality staff at its proposed ceiling rates. See AR, Tab 15, Source Selection Decision, at 7. This judgment, however, was not based upon IMSG's proposed loaded hourly labor rates. As required by the RFP, IMSG provided cost information for its loaded labor rates (as did the other offerors) that, for each labor category, identified a wage rate, indirect costs rate, and profit. IMSG explained in its price proposal that the wage/salary rate for each labor category reflected a "[deleted]" wage/salary for that category, based upon such wage rates as those of [deleted]. Protester's Price Proposal, Cost Proposal Methodology and Bases of Assumption, at 1.

The record does not show that IMSG's labor rates for the labor categories included in the sample tasks were significantly lower than the rates contained in the IGCE. In fact, with respect to sample task two (the largest of the sample tasks), IMSG's total price (based upon its year-1 loaded ceiling rates) would appear to be $[deleted], compared to the government's estimate of $[deleted] for this task. In this regard, it is unrebutted in the record that IMSG made a mathematical error in adding its proposed rates, resulting in a sum that was approximately $400,000 lower than the actual sum of the listed rates. Even applying the agency's simple analysis of comparing the firms' total proposed price for the sample tasks to the IGCE, IMSG's total proposed price, if corrected for the mathematical error, would have been within [deleted] percent of the IGCE.

Here, the RFP provided for a realism evaluation of the firms' proposed loaded labor rates and requested cost information that would allow for such an analysis. NOAA did not perform such an analysis of IMSG's price or rates. That is, in determining that IMSG's price was unrealistically low, such that the firm may not be able to retain quality staff, NOAA did not assess whether IMSG's labor rates were too low, but simply assumed that this was the case without analysis. In this regard, the agency did not evaluate the wage rates that IMSG identified for each labor category or consider IMSG's explanation in its price proposal for how it calculated those rates. In the absence of such an analysis, we cannot say that the agency's conclusion that IMSG's price was unrealistically low was supported by the record.

Realism of Awardees' Labor Rates

We also find that NOAA failed to reasonably assess the realism of the awardees' proposed loaded labor rates.

As described above, the RFP established an evaluation scheme under which the agency would consider the sum of the offerors' ceiling rates over the five-year contract period and the sum of their prices for the four sample tasks. Although the RFP also provided for adding these two sums together, as the agency recognized, the sum of the ceiling rates was insignificant in comparison to the sum of the sample task pricing. See Supp. CO's Statement at 10. The record shows that NOAA's judgments concerning the realism and reasonableness of the offerors' proposed prices were determined by the offerors' sample task pricing.

Here, all the awardees' sample task pricing was based upon the use of discounted labor rates. RTI's proposed prices for the sample tasks were, in particular, based upon labor rates that were substantially discounted from the firm's ceiling rates. For example, under sample task two, RTI identifies its ceiling rate for a scientific analyst III as $[deleted] but the discount rate it applied for this labor category is $[deleted]. According to RTI's price proposal, the firm's price for sample task two based upon its ceiling rates is $[deleted] million as compared to $[deleted] million for its price based upon its discounted rates. See RTI's price proposal at 15.

The record shows that NOAA did not assess the realism of the discounted labor rates, although the firms' proposed sample task pricing was based upon those rates. This is particularly troubling here, where NOAA's judgment concerning the realism and reasonableness of the offerors' proposed prices was based only upon a mechanical comparison of the firms' sample task prices to the IGCE. While it is up to the agency to decide upon some appropriate and reasonable method for the evaluation of offerors' proposed prices, an agency may not use an evaluation method that produces a misleading result. R&G Food Serv., Inc., d/b/a Port-a-Pit Catering, B‑296435.4 et al., Sept. 15, 2005, 2005 CPD para. 194 at 4. The method chosen must also include some reasonable basis for evaluating or comparing the relative costs of proposals, so as to establish whether one offeror's proposal would be more or less costly than another's. Id.; see FAR sect. 15.405(b) ("the contracting officer's primary concern is the overall price the government will actually pay").

In the absence of any analysis of the realism of the awardees' discounted rates, we have no basis to find reasonable the agency's conclusion that the awardees' sample task pricing was realistic and reasonable. In this regard, we disagree with NOAA that the agency need not be concerned with the realism of the offerors' loaded labor rates, because "any and all task orders to be issued under this contract will be subject to fair opportunity competition among the awardees." See Supp. Legal Memorandum at 22. Contrary to NOAA's apparent belief, there is no exception to the requirement set forth in CICA that cost or price to the government be considered in selecting proposals for award because the selected awardees will be provided the opportunity to compete for task orders under the awarded contract.  (I.M. Systems Group, B-404583; B-404583.2; B-404583.3, February 25, 2011)  (pdf)
 


With respect to Coastal's challenge that the agency failed to perform a proper best value determination, however, we sustain the protest. In this regard, the protester argues that the agency did not consider the significant price advantage associated with its technically acceptable, low risk proposal. Based on our review of the selection decision, we agree.

In a "best value" procurement, it is the function of the source selection authority to perform a tradeoff between price and non-price factors, that is, to determine whether one proposal's superiority under the non-price factor is worth a higher price. Even where, as here, price is stated to be of less importance than the non-price factors, an agency must meaningfully consider cost or price to the government in making its selection decision. e-LYNXX Corp., B-292761, Dec. 3, 2003, 2003 CPD para. 219 at 7. Specifically, before an agency can select a higher-priced proposal that has been rated technically superior to a lower-priced but acceptable one, the award decision must be supported by a rational explanation of why the higher-rated proposal is, in fact, superior, and explaining why its technical superiority warrants paying a price premium. ACCESS Sys., Inc., B-400623.3, Mar. 4, 2009, 2009 CPD para. 56 at 7.

Here, the record shows that the SSA impermissibly limited her price/technical tradeoff analysis to a comparison of the two highest-rated, highest-priced proposals without any qualitative assessment of the technical differences between these two proposals and any of the other technically acceptable proposals--such as Coastal's--to determine whether either of these proposals contained features that would justify the payment of a price premium. In addition, our review shows that the two higher-rated, higher-priced proposals considered in the tradeoff both received overall adjectival ratings of good and low risk, while Coastal's proposal received the next lowest rating of acceptable and low risk, and is priced approximately 20 percent lower. A proper tradeoff decision must provide a rational explanation of why a proposal's evaluated technical superiority warrants paying a premium. Federal Acquisition Regulation sect. 15.308 (The source selection "documentation shall include the rationale for any business judgments and tradeoffs made or relied on by the SSA, including benefits associated with additional costs."); See ACCESS, Sys., Inc., supra. Here, the SSA did not identify what benefits in ECC's proposal warranted paying a premium to ECC when compared to Coastal's lower-priced proposal which was found to be acceptable and low risk.  (Coastal Environments, Inc., B-401889, December 18, 2009)  (pdf)


With respect to the merits of Access’s protest, the Marine Corps contends that it gave due consideration to the firms’ evaluated prices in determining that Avineon’s quotation reflected the best value to the government. As explained below, we find that the record does not establish that the agency meaningfully considered Access’s lower evaluated price in the agency’s cost/technical tradeoff analysis and sustain Access’s protest on this basis.

In reviewing protests of an agency’s evaluation and source selection decision, even in a task order competition as here, we do not reevaluate proposals but examine the record to determine whether the evaluation and source selection decision are reasonable and consistent with the solicitation’s evaluation criteria and applicable procurement laws and regulations. See Triple Canopy, Inc., B--310566.4, Oct. 30, 2008, 2008 CPD para. 207 at 6-7; Abt Assocs., Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 4. Where, as here, an agency selects a higher-priced solution that has been rated technically superior to a lower-priced one, the award decision must be supported by a rational explanation demonstrating that the higher-rated one is in fact superior, and explaining why its technical superiority warrants the additional cost. e-LYNXX Corp., B-292761, Dec. 3, 2003, 2003 CPD para. 219 at 7. Such judgments are by their nature often subjective; nevertheless, the exercise of these evaluation judgments must be reasonable and bear a rational relationship to the announced criteria upon which competing offers are to be selected. Hydraudyne Sys. and Eng’g B.V., B-241236; B-241236.2, Jan. 30, 1991, 91‑1 CPD para. 88 at 4. In order for us to review an agency’s evaluation judgment, the agency must have adequate documentation to support its judgment. See Southwest Marine, Inc.; American Sys. Eng’g Corp., supra, at 10; see also e-LYNXX Corp., supra, at 8 (it is a fundamental principle of government accountability, even when using simplified acquisition procedures, that an agency be able to produce a sufficient record to allow for a meaningful review where its procurement actions are challenged).

Here, the contemporaneous evaluation record shows that the agency qualitatively evaluated the firms’ technical quotations, and based upon that evaluation identified differing technical strengths. While the firms’ technical quotations received identical adjectival and risk ratings, the agency appropriately looked beyond the adjectival ratings to consider the significance of the firms’ differing evaluated technical strengths. See Citywide Managing Servs. of Port Washington, Inc., B-281287.12, B‑281287.13, Nov. 15, 2000, 2001 CPD para. 6 at 11 (ratings, be they numerical, color or adjectival, are merely guides for intelligent decision-making in the procurement process).

Although the record shows that the agency’s evaluators considered the technical merit of the two firms’ respective quotations, the contemporaneous record, as further explained by the agency in its response to the protest, did not demonstrate meaningful consideration of Access’s lower evaluated price. That is, the BVADM1, which is the only contemporaneous documentation of the agency’s cost/technical tradeoff analysis, does not provide an explanation of why the evaluated technical superiority of Avineon’s quotation warrants its additional cost. Rather, to the extent that Access’s lower evaluated price is addressed at all in the BVADM, the firm’s price advantage appears to be viewed as a technical disadvantage, based upon assumptions regarding the effect that Access’s lower labor billing rates would have on the firm’s ability to retain staff.

Because the contemporaneous record, as explained by the agency, did not provide us with a basis to review the reasonableness of the agency’s cost/technical tradeoff analysis, we conducted a hearing to receive the testimony of the SSA and SSEB chair. That testimony, however, shows that neither witness accorded much weight, if any, to Access’s [deleted] price advantage, nor could the SSA explain what evaluated strengths in Avineon’s quotation justified the payment of this price premium.

Specifically, at the hearing, the SSA was asked how she would characterize the [deleted] difference in price, to which she replied “Insignificant” and “Not significant.” Tr. at 176. She further explained:

Q. What weight did you give to the price?

A. We did not weight price.

Q. And that would be --

A. Because technical was significantly more important than price and we weren’t looking at price realism.

Tr. at 176-77. When asked by the hearing official whether she had credited Access for the firm’s price advantage in making her cost/technical tradeoff judgment, the SSA testified:

No. We discussed whether [the SSEB chairman] wanted to keep the same, you know, status quo. He’s been doing it a long time with them and he was very comfortable with it. But again, pricing, it wasn’t a weight, so I didn’t really - of course, we talked about technically - we were doing a best value, we weren’t doing a technically acceptable low price.

Tr. at 198-99.

Similarly, the SSEB chair testified, in response to the hearing official’s inquiry as to what extent he considered price in preparing the SSEB’s selection recommendation, that “I think from our standpoint, the cost was not a big determinant. It was just another data point in many data points that we had,” Tr. at 55, and that “I hate to say it, [the price differential] did not have a very large impact on our decision . . . .” Tr. at 56-57. When asked whether he had considered Avineon’s price premium in making his recommendation, the SSEB chair replied:

The price was discussed. Contracts, from what I remember, their statements were you don’t have to jump to the lowest price/technically acceptable proposal. This is not [lowest-price, technically acceptable] procurement. This is a best value procurement. It may look like a lot of money, that [deleted] figure, but it’s a five-year contract. That’s a long period of time.

Tr. at 77-78.

In short, the testimony of the agency’s witnesses did not demonstrate meaningful consideration of Access’s price advantage in the selection decision. Moreover, the agency in its post-hearing comments repeatedly argued that Access’s [deleted] lower price did not reflect a price advantage. See, e.g., Agency’s Post-Hearing Comments at 24 (“Protester has continually asserted that its lower price represented a ‘pricing advantage,’ apparently simply due to the fact that it was lower.”). Similarly, the agency argues as follows:

Accordingly, while agencies must consider an offeror’s price, a lower price is not a price advantage if the agency does not consider it to result in the greatest overall benefit. While [Access] could, for its lower price, perform its proposal, in that its proposal was deemed less beneficial, no price advantage existed.

Id. Even in a competition where price is of less importance than the non-price factors, an agency must meaningfully consider cost or price in making its selection decision. See S.J. Thomas Co., Inc., B-283192, Oct. 20, 1999, 99-2 CPD para. 73 at 3. Although the cost/technical tradeoff process allows an agency to accept other than the lowest-priced submission in such a competition, the perceived benefit of the higher-priced alternative must merit the additional price. See e-LYNXX Corp., supra, at 7. In other words, one firm’s technical advantage must be determined to outweigh the other firm’s price advantage.

Here, the SSA was unable to recall with any specificity the relative technical merit of the firms’ quotations that would justify the payment of the price premium associated with Avineon’s quotation. The SSA testified that she was “not a technical person,” and “[knew] nothing about IT,” and had not “read a proposal from beginning to end.” See, e.g.,Tr. at 153, 201. When asked to explain her assertion that she had made her “own independent determination to accept [the SSEB’s recommendation],” the SSA testified, that “[w]hen we talked about this, I knew--I was very clear in what [the SSEB chair] was saying and what he meant. And I--once he laid it out, I saw where he was coming from and he was able to convince me that this was the best thing for the Marine Corps.” Tr. at 201-02. Despite this assertion that at the time she made the selection decision she understood why the SSEB chair believed that Avineon’s quotation was superior to Access’s, the SSA was unable at the hearing to explain why Avineon’s evaluated strengths indicated that firm’s technical superiority. Under the circumstances, we have no basis to find reasonable the SSA’s cost/technical tradeoff analysis (even assuming that price had been meaningfully considered).

The protest is sustained.

We recommend that the agency perform and document a new cost/technical tradeoff analysis that meaningfully considers Access’s price advantage. If Avineon’s quotation is not found to reflect the best value to the government, the agency should terminate Avineon’s task order. We also recommend that Access be reimbursed its costs of filing and pursuing its protest, including reasonable attorneys’ fees. 4 C.F.R. sect. 21.8(d)(1). The protester’s certified claims for such costs, detailing the time expended and costs incurred, must be submitted directly to the agency within 60 days of receiving this decision. 4 C.F.R. sect. 21.8(f)(1).  (ACCESS Systems, Inc., B-400623.3, March 4, 2009) (pdf)

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1 Best Value Award Decision Memorandum (Return)


Instead of documenting a reasonable basis for the tradeoffs that the agency made in preferring the awardees' proposals to MIL's, the record indicates that the agency mechanically made award to all Tier II proposals that received "blue" ratings for two nonprice factors, and declined to make award to any Tier II proposal that did not receive a "blue" rating for those nonprice factors. This mechanical approach failed to make a qualitative assessment of the technical differences among the competing proposals to determine whether the perceived technical superiority of those proposals receiving "blue" ratings for all nonprice factors justified paying the evaluated price premium associated with those proposals that did not receive a "blue" price rating. See Opti-Lite Optical , B-281693, 99-1 CPD 61 at 4. In particular, neither in the contemporaneous record nor during the protest proceeding has the agency offered any plausible reason for finding that MIL's lack of what the agency deemed to be relevant awards--the sole basis for MIL's proposal not receiving a "blue" overall rating--justified the agency's selection of proposals offering significantly above-average prices (earning "yellow" price ratings), rather than the below-average prices offered by MIL. This brings us to the weight that the agency gave to price in the source selection process. The source selection statement provides that "[w]hile price was a consideration, it was not a major one" in determining which proposals should receive award. AR, Tab 11, Source Selection Statement, at 10. The source selection statement explains that as a general matter "each task order will be competed under the COMMITS Fair Opportunity competitive procedures," and because of this, "pricing becomes most important at the task order level where the Fair Opportunity' competitive procedures come into play." Id. at 11. The selection statement continues by stating that "[i]t is within this context that the role of the pricing factor is apparent," concluding here that "[p]rice must be examined to ensure reasonableness among all companies in contention for award." Id. In our view, the record in this case, particularly the source selection statement, demonstrates that the agency has failed to comply with the regulatory and statutory requirement that contracting agencies give cost or price meaningful consideration in source selections. Contrary to Commerce's apparent belief, there is no exception to the requirement set forth in CICA that cost or price to the government be considered in selecting proposals for award because the selected awardees will be provided the opportunity to compete for task orders under the awarded contract. Specifically, the Federal Acquisition Streamlining Act of 1994 (FASA), 41 U.S.C. 253h - 253k, which codified existing authority to award task and delivery order contracts, does not provide any exception to CICA's requirement that cost or price be considered.  Here, in performing its source selection, the agency minimized the potential impact of price because of the "context" of the procurement and effectively made price meaningless as a comparative evaluation factor. Specifically, as indicated above, the source selection statement reflects the agency's view that the evaluation of pricing, although very important in the award of individual task orders, was limited in selecting proposals for award under the solicitation to a pass/fail review to ensure that the prices proposed were reasonable and realistic. At some point, the agency apparently decided to abandon the price evaluation scheme set out in the RFP; in this regard, we note that the source selection statement at one point declares that "hourly rates [the pricing framework requested of offerors by the RFP] used as a comparison are not meaningful in the competitive, solutions[-]based fair opportunity environment for task order awards." AR, Tab 11, Source Selection Statement, at 14. In failing to consider the differences among the offerors' proposed pricing--notwithstanding the agency's evaluation and color-rating of those differences--the agency abandoned the RFP's evaluation scheme and violated the legal requirement that price be given meaningful consideration as an evaluation factor for award. The protest is sustained. (The MIL Corporation, B-294836, December 30, 2004) (pdf)


Next, there is no evidence in the contemporaneous record that the contracting officer performed a proper price/technical trade-off--or, for that matter, even considered offerors’ prices--prior to selecting Topaz for award. There is no evaluation of offerors’ prices--on either an individual or comparative basis--in any of the source selection documentation. This is contrary to the requirement that price be considered in every source selection decision, 41 U.S.C. § 253a(c)(1)(B) (2002); Federal Acquisition Regulation (FAR) § 15.304(c)(1), and the requirement that a source selection decision be based on a comparative assessment of proposals against all source selection criteria in the solicitation and that it be documented. FAR § 15.308; Beacon Auto Parts, B-287483, June 13, 2001, 2001 CPD ¶ 116 at 7. (Locus Technology, Inc., B-293012, January 16, 2004)  (pdf)


Cost or price to the government must be included in every RFP as an evaluation factor, and agencies must consider cost or price to the government in evaluating competitive proposals. 41 U. S. C. sect. 253a( c)( 1)( B) (1994); FAR sect.15.304( c)( 1); Kathpal Techs., Inc.; Computer & Hi- Tech Management, Inc., B- 283137.3 et al., Dec. 30, 1999, 2000 CPD para. 6 at 9. This requirement means that an agency may not exclude a technically acceptable proposal from the competitive range without taking into account the relative cost of that proposal to the government. Columbia Research Corp., B- 284157, Feb. 28, 2000, 2000 CPD para. ___; Kathpal Techs., Inc.; Computer & Hi- Tech Management, Inc., supra. Here, the agency did not consider the relative cost of Meridian's proposal in deciding to exclude it from the competitive range; Meridian's proposal was eliminated solely because its E/ PP score [deleted] was below the cut- off score of [deleted]. The agency gave no consideration to the fact that Meridian's price [deleted] was considerably lower than that of one of the competitive range offerors whose technical score, while above the [deleted] cut- off, nevertheless was very close to Meridian's score (i. e., offeror G, with a technical score of [deleted] and a price of [deleted]).  (Meridian Management Corporation, B-285127, July 19, 2000)  (.pdf)


While it is up to the contracting agency to decide upon the appropriate method for evaluation of cost or price in each procurement, an agency must use an evaluation method that provides a basis for a reasonable assessment of the cost of performance under the competing proposals. See Health Servs. Int'l, Inc.; Apex Envtl., Inc., B-247433, B-247433.2, June 5, 1992, 92-1 CPD para. 493 at 4; KISS Eng'g Corp., B-221356, May 2, 1986, 86-1 CPD para. 425 at 4. Here, we conclude that GSA's methodology provides no reasonable basis to compare the cost of the competing proposals.  (S. J. Thomas Co., Inc., B-283192, October 20, 1999)


The Forest Service's narrowing of the competitive range on the basis of experience installing permanent inventory plots without any consideration of price--and in so doing, excluding Possehn's lowest-priced proposal--was improper unless the excluded proposals were found to be technically unacceptable.  (Possehn Consulting, B-278579.2, July 29, 1998)

Comptroller General - Listing of Decisions

For the Government For the Protester
Herman Miller, Inc., B-407028, Oct 19, 2012  (pdf) I.M. Systems Group, B-404583; B-404583.2; B-404583.3, February 25, 2011  (pdf)
  Coastal Environments, Inc., B-401889, December 18, 2009  (pdf)
  ACCESS Systems, Inc., B-400623.3, March 4, 2009 (pdf)
  The MIL Corporation, B-294836, December 30, 2004 (pdf)
  Locus Technology, Inc., B-293012, January 16, 2004)  (pdf)
  A&D Fire Protection Inc., B-288852, December 12, 2001
  Beacon Auto Parts, B-287483, June 13, 2001  (pdf)
  Meridian Management Corporation, B-285127, July 19, 2000  (.pdf)
  Columbia Research Corporation, B-284157, February 28, 2000
  S. J. Thomas Co., Inc., B-283192, October 20, 1999
  Possehn Consulting, B-278579.2, July 29, 1998
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