Government Contracts Price Reasonableness Analysis Flawed for LOGCAP V Awards
Tuesday, April 21, 2020

Price Reasonableness Analysis Flawed for LOGCAP V Awards

By Government Contracts Editorial Staff

The Court of Federal Claims sustained a challenge to the government’s price reasonableness evaluation because the government did not analyze fixed-price contract line items for reasonableness, as required by the request for proposals, or comply with FAR 15.404-1(b). The RFP for the Logistics Civil Augmentation Program V provided the government would concurrently award four to six indefinite-delivery, indefinite-quantity contracts and associated task orders to cover six geographic combatant commands and Afghanistan. The protester contended the government’s price reasonableness evaluation did not comply with the RFP, which made an offeror’s consideration for award contingent on its total proposed price for cost-plus-fixed-fee CLINs and the total proposed price for firm-fixed-price CLINS being “separately … found reasonable.” The record showed the contracting officer did not conduct a separate price reasonableness evaluation of the awardee’s FFP and CPFF CLINs in one region, and this failure extended, at minimum, to the CO’s evaluation of a second region.

Problematic Focus. The record also showed the government’s evaluation did not comport with FAR 15.404-1(b). The cost/price factor chair found each awardee’s prices to be reasonable based on “adequate price competition” and a determination that the offeror with the lowest total evaluated price, FFP CLINs, and CPFF CLINs was considered fair and reasonable. But the decision to evaluate only the lowest-priced offeror for reasonableness was problematic, particularly because only one of the COCOM awardees was the lowest-priced offeror, and the CO’s fair and reasonable price determinations did not remedy this deficiency. Thus, there was no meaningful analysis to demonstrate how, despite the wide range in proposed prices, each awardee’s price was fair and reasonable. Equally problematic was the CO’s attempt to complete the price reasonableness analysis by documenting the percentage difference between each offeror and the “difference from low” and “difference from next low” without any further explanation. Such a bare comparison of percentage differentials in price, without any further analysis, was inadequate for evaluating the price reasonableness of each COCOM awardee’s proposed prices. The CO’s heavy reliance on the cost/price factor chair’s incomplete reasonableness determinations violated FAR 15.404-1(b)(4), which requires the CO to conduct a value analysis “in conjunction with” the selected price analysis technique. (Fluor Intercontinental, Inc. v. U.S., et al., FedCl, 64 CCF ¶81,874)

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