Offerors were required to propose costs on a research and development contract where each cost proposal would be evaluated for realism, reasonableness and balance.  During discussions the Air Force informed ICRC its hours proposed “to be high” so ICRC responded by reducing overall proposed labor hours where CTC ultimately got the award because its lower-cost proposal represented the best value to the government.  CTC’s total proposed costs were $316,000 and ICRC’s was $979,000.  In its protest ICRC asserted the agency’s discussions were not meaningful as required because they did not advise ICRC its costs were too high and did not clearly raise the matter during discussions.  ICRC also claimed that CTC was ineligible for award because of an organizational conflict of interest (OCI) arising from a previous task order providing CTC with unequal access to information about the current procurement.  The GAO rejected ICRC’s protest stating the government was not required to advise its total costs were not competitive. It stated that discussions, to be meaningful, could not mislead offerors and must identify deficiencies and significant weaknesses where it stated here the Air Force, correctly, did not consider the proposed costs to be a proposal deficiency.  Rather the large difference in costs was based on the different approaches each offeror took where after a detailed assessment the government concluded ICRC’s approach was reasonable and the number of hours proposed for that approach was also reasonable. The GAO rejected ICRC’s assertion its proposed costs were “per se unreasonable” given CTC’s lower proposed costs stating ICRC did not show the government’s cost realism analysis produced an inaccurate measure of the likely costs of implementing the company’s proposed technical solution. As for the OCI, the GAO ruled ICRC did not show that CTC enjoyed an unfair advantage over other offerors stating the mere existence of a prior or current contractual relationship between an agency and a firm, by itself, does not create an OCI and no preference or unfair action by the government caused CTC to have an advantage (Integrated Concepts & Research Corp., GAO B-309803).

{TAG_FORM_TITLE}