In a recent decision, the U.S. Government Accountability Office (GAO) sustained, in part, a protest challenging a task order award by the Department of Commerce, National Oceanic and Atmospheric Administration (NOAA) to Blue Glacier Management Group, Inc. (Blue Glacier) and Reston Consulting Group, Inc. (Reston Consulting) for cybersecurity support services. The awardee proposed using a teaming arrangement led by Blue Glacier. The protester, IBSS Corporation, a small business, challenged the agency’s evaluation of Blue Glacier’s total compensation plan under the staffing plan factor, asserting Blue Glacier’s proposed compensation levels were unrealistically low as compared to the compensation proposed by the incumbent contractor. GAO agreed and determined the agency failed to reasonably evaluate Blue Glacier’s proposed compensation plan in accordance with the solicitation and FAR provision 52.222-46(b). GAO found that although Blue Glacier’s proposed salaries were lower than incumbent salaries for at least five labor categories, the agency failed to perform any additional analysis to determine whether Blue Glacier’s proposed compensation levels were sufficient to recruit and retain personnel and maintain program continuity. Based on these findings, GAO partially sustained the protest, with a recommendation that the agency reevaluate proposals under the staffing plan factor.

POV: Unsuccessful offerors may viably challenge an awardee’s low compensation rates if the proposed rates call into question the awardee’s ability to properly staff and successfully perform a contract. When an offeror’s proposed compensation levels are lower than those under the incumbent contract, agencies must analyze how low is too low or they may end up jeopardizing their award decisions.

Authors: Kendra Perkins Norwood, Mitch Bailey, Karla Perez Chacon, and Edrius D. Stagg.