An agency awarding a fixed-price contract can only evaluate offerors’ proposals for price realism–that is, determine whether offerors’ proposed pricing is so low as to be unrealistic–if the solicitation calls for a price realism evaluation.
In a recent bid protest decision, the GAO confirmed that when a fixed-price solicitation does not advise offerors that a price realism evaluation will be conducted, the agency is not permitted to reject an offeror’s proposal because of unrealistically low pricing.
The GAO’s decision in ERIMAX, Inc., B-410682 (Jan. 22, 2015) involved a NOAA RFQ seeking the establishment of a BPA for acquisition and grant management services. The RFQ called for vendors to submit fully-burdened hourly labor rates for labor categories provided by the agency. Once labor rates were entered, the agency’s spreadsheet would automatically calculate total prices using the rates provided by the vendors. The RFQ stated that proposed prices would be evaluated to determine whether they were fair and reasonable.
Keep reading this article at: http://smallgovcon.com/gaobidprotests/price-realism-evaluation-only-if-solicitation-says-so/
