GAO smacks down Air Force contract award for unequal treatment

Bidders on an Air Force contract for IT and acquisition support for the Air Combat Command were not treated equally, according to a new Government Accountability Office decision.

The Air Force rejected a bid by Cubic Corp. saying that its pricing was so low that it made their bid too risky to approve.

Instead they awarded the contract to Science Applications International Corp., even though SAIC’s bid was lower than Cubic.

The final pricing on the contract was arrived at, and the Air Force entered into discussions with each company.

Cubic argued that the Air Force discussions with the company were misleading. Even after the discussions with Cubic, the Air Force felt the “proposed staffing plan and management approach, combined with the proposed pricing, does not demonstrate the offeror’s ability to recruit, hire and retain qualified personnel.”

GAO said it could not find fault with the Air Force for determining Cubic’s pricing was too low.

But where the Air Force got in trouble with GAO was how it evaluated SAIC’s labor rates. The Air Force couldn’t provide any documentation or explanation on why it found Cubic labor rates unacceptable while similar rates proposed by SAIC were found to be acceptable.

The Air Force tried to argue that the SAIC rates were supported by its technical proposal, and that Cubic’s technical proposal didn’t support its proposed rates.

But through its examination of the record of the Air Force’s discussions with the companies, the GAO couldn’t find supporting evidence for the Air Force’s conclusions.

“Absent a reasonable explanation for why SAIC’s apparently exceptionally low rates were not found to be exceptionally low by the agency, we cannot conclude that the agency’s evaluation was reasonable.  Therefore, on this record, we must agree with Cubic that there was disparate treatment of offerors with respect to the agency’s price evaluation,” GAO wrote.

GAO stops well short of saying that if the company’s had been treated equally, Cubic would have won the contract. But GAO is recommending that the Air Force conduct a new price evaluation and make a new decision.

They also want the Air Force to reimburse Cubic for the cost of the protest.