In its proposal to provide information management services, CITI initially planned to staff the effort with 37 full time equivalents (FTEs) which resulted in a price of $110 million.  The Army’s cost estimate was $13 million and the Army told CITI its price was “overstated” after which CITI lowered its final price to $89.9 million based on 27 FTEs.  Because it considered CITI’s price as “unreasonably high” and “unrealistic” it made a best value award to two other companies whose prices were based on nine and 3.75 FTEs respectively.  In sustaining CITI’s protest the GAO said while an agency need not “spoon feed” an offeror during discussions each and every item that could be revised to improve its proposal, it must provide sufficient information to give offerors a fair and reasonable opportunity to identify and correct deficiencies, excesses or mistakes in their proposals.  Here, in characterizing the issue simply as one of price, the agency had failed to address the underlying cause of CITI’s unreasonable price – the company’s misconception of the staffing level required.  The GAO concluded the agency’s discussions were not “meaningful.”  The GAO also rejected the Army’s argument that CITI was not harmed because its price was significantly higher and its technical rating lower.  It ruled that when an agency fails in its duty to hold meaningful discussions and then argues the protester was not prejudiced (e.g. harmed), then the GAO will resolve any doubts concerning the prejudice in favor of the protester (Creative Information Technologies, Inc. GAO, No. B-293073).

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