Head Count Risk for Dining Contract is Reasonable
(Editor’s Note. It is often highly desirable to propose unit prices that vary depending on the quantity of items the client buys. The following addresses a limitation on that.)
The Army issued a solicitation for an indefinite-delivery, indefinite-quantity food service contract where the pricing method was to offer a price-per-meal. Timothy thought the cost of meals depended on headcount (i.e. number of meals to be served) and reasoning the bidding was a “risky proposition” filed a protest before proposals were due, asserting the Army’s irrational price-per-meal acquisition warranted an injunction. The court ruled for the Army asserting it had provided the best estimate it could for headcount and because offerors were able to compete intelligently nothing required the Army to bear the risk of the fluctuating head count. The Court added there was nothing unusual about a private business having to assume risk for competing for and performing a contract and here offerors were allowed to use their own estimate of actual head count in calculating their price per meal. The Court noted though the offerors might have preferred the Army permit them to quote different prices to cover various head count possibilities no statute or regulation required doing so (State of North Carolina Business Enterprises Program v US, Fed. Cl. No. 12-459C).
