One would expect fewer successful bid protests alleging unbalanced bidding following the new rules. The new test of "unacceptable risk" seems more vague and subjective than the objective "mathematical and material" unbalance. To prevail a bid protest does not depend on a numerical analysis of price but on overcoming the discretion of the award decision makers. Indeed this is the case – in a dozen cases since the rewrite of FAR, no protestor has won.

In three decisions the GAO determined there was no unbalanced bidding while in the others the GAO affirmed the agency’s risk analysis in spite of unbalanced bids. Various factors have been cited as upholding agencies’ risk analysis: confidence in estimates used for bid evaluation (J&D Maintenance & Svc., B-282249); a relatively small amount of the bid price was unbalanced (Kellie W. Tipton Const. Co., B-281321); alleged unbalanced items would net out because they would be ordered in pairs (Beldon Roofing Co., B-282970); other bids included a similar amount of risk (So. Atlantic Constr. Co. B-286592.2) and; a special provision in the solicitation prevented the government from paying an excessive price early in the contract (Enco Dredging, B-284107).

Other interesting recent decisions include:

It helps when the agency discusses the unbalanced pricing with the offeror. When the agency asked about their unbalanced prices, the offeror responded the prices were based on its "own pricing strategy and years of experience" and the agency and GAO accepted it (Red River Service Corp., B-282634).

With or without an adequate risk analysis, it helps to show it would be the low bidder. The GAO disagreed with the agency’s assertion no risk analysis needed to be conducted because there was no unbalanced bidding. The GAO ruled there was unbalanced bidding but still denied the protest ruling estimates were not unreliable and the winning offeror convincingly showed it was the low bidder (Citywide Managing Services of Post Washington, Inc., B-281287).

The GAO seems to have retracted from the prior FAR rule that front-loaded unbalanced prices were potentially illegal advanced payments. Noting the removal of the advanced payment provision the GAO suggests if risk is not unacceptable then there is no advanced payment problem. The GAO confirmed there was no unacceptable risk since it found the government was paying a reasonable price for each line item and therefor since the line item prices are reasonable these is no advanced payment (Reece Contracting, Inc., B-284605).

Front loaded pricing is easier to get away with. Under a five year contract for computer hardware maintenance in four separate locations, the winning offeror proposed a first year price which was about 40% of the total price while its fifth year price was 5%. In the unsuccessful protest, the GAO said the agency made a proper assessment of risk before accepting the front-loaded price proposal. In rejecting the argument the proposed price constituted illegal advanced payments the GAO said there was "no showing the agency payments to the awardee in one year were to be applied to another year (CCL Service Corp. v United States, No. 00361).

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