A contractor submitted a proposal for real property construction and engineering services. The solicitation stated that bids would be evaluated for price realism and price reasonableness. When evaluating bids, the Air Force compared each bidders proposed labor rates by labor category to the average of all labor rates submitted by each offeror. Where the proposed rates deviated from the average by plus or minus ten percent, the Air Force notified the bidder(s).
In notifying the bidders, the Air Force was not requiring them to revise their proposals. They were simply asking that the offeror(s) verify that the prices were what they intended to propose or make adjustments as necessary and provide revised prices.
In this case, the Air Force notified the bidder that its rates in 14 categories were lower than the average and its rates in 3 categories were higher than the average. The bidder revised its proposal by increasing the 14 lower than average rates and lowering the 2 higher than average rates. The net affect of the changes increased the overall proposed price.
The Air Force awarded contracts to the ten lowest bidders but this company was not among them. So, they protested, claiming that they were coerced into increasing their bid and moreover, the Government should not have been looking into that level of detail. They should have limited their review to bottom line only.
The GAO denied the protest stating that the bidder was not compelled to revise its bid but was only alerted to the fact that its bid was outside the average. Bidders were also afforded the opportunity to revise their bids but not required to. The GAO also did not buy the "bottom line" argument as the Air Force was very clear in its solicitation as to the methodology it would use to evaluate proposals.
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