Price Evaluation Was Contradictory and Unsupported

The rejection of a protester’s price proposal was vacated and remanded by the Court of Federal Claims because the administrative record did not support the government’s determination the proposal was incomplete, unreasonable, and unrealistic. The solicitation for a multiple-award construction contract provided for successive technical, price, and past performance evaluations. Unacceptable technical proposals would not be evaluated for price, and price proposals that were not complete, reasonable, and realistic would not be evaluated for past performance. The protester’s initial proposal was rated as acceptable and received a “substantial confidence” past performance rating. Due to significant delays in contract award, the government issued a solicitation amendment requesting offerors to verify their proposed prices were still current or to provide updated pricing with a detailed explanation for the changes. The protester submitted a revised price proposal, noting its update reflected current commodity conditions and labor hour estimates, its overhead factors had recently changed “due to current volume of work in progress,” and it had lowered its profit margin “to be as competitive as possible.” The government then determined the protester’s revised price proposal was incomplete, unreasonable, and unrealistic.

Inadequate Record

The court found the rejection of the protester’s price proposal was wrong in several respects and conflicting in others, and it was impossible to determine the basis for the government’s decision. In the debriefing, the government provided a rationale for rejecting the proposal that was not the same as the source selection evaluation board’s price evaluation summary. For example, the government listed different missing items without explaining why it focused on different items. It also was not clear how the evaluators’ check marks under both “yes” and “no” for some items and positive and negative comments became the government’s stated rationale.

Focus on IGE

In addition, the record did not indicate the government considered the protester’s explanation of its post-amendment price reductions when making its reasonableness determination. This was especially important because the government had determined the initial proposal to be reasonable. The major changes occurred in the protester’s profit, overhead and labor rates for supervisory positions, and prices for HVAC equipment and electrical load studies, but the government’s analysis focused almost exclusively on a gross percentage difference between the protester’s proposal and the independent government estimate. It therefore was unclear what aspects of the proposal caused the government to deem it unreasonable. The government’s math for determining reasonableness was also unclear, and the government did not explain why prices significantly higher than the IGE were acceptable but prices lower than the IGE were not. Finally, the government may have failed to consider historical prices in determining reasonableness, as required by the solicitation. The court instructed the government to provide a reasoned explanation for rejecting the proposal or to adopt a different decision with a reasoned explanation. (KWR Construction, Inc. v. U.S., FedCl, 59 CCF ¶80,687)