United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

Decision

Matter of: CC Distributors, Inc.

File: B-406450; B-406450.2

Date: May 25, 2012

Michael F. Mason, Esq., C. Peter Dungan, Esq., and Erin L. Alexander, Esq., Hogan 

Lovells US LLP, for the protester.

Michael A. Hordell, Esq., Michael R. Golden, Esq., Heather Kilgore Weiner, Esq., 

and Samuel W. Jack, Esq., Pepper Hamilton LLP, for Noble Supply & Logistics, the 

intervenor.

Col. Mark S. Teskey and Lt. Col. Paul E. Cronin, Department of the Air Force, for the 

agency.

Linda C. Glass, Esq., and Guy R. Pietrovito, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision.

DIGEST

1. Agency reasonably evaluated the awardee’s past performance as excellent/high 

confidence, where agency considered the awardee’s and its proposed 

subcontractor’s history of relevant past performance and the positive comments 

made by the awardee’s references regarding its past performance.

2. Agency performed a reasonable price evaluation of awardee’s proposal by 

comparing the line item prices proposed to other offerors’ proposed prices and the 

agency estimates, and requesting verification for each of the line item prices that 

appeared unrealistically low or high.

DECISION

CC Distributors, Inc., of Corpus Christi, Texas, protests the award of a contract to 

Noble Supply & Logistics, of Rockland, Massachusetts, under request for proposals 

(RFP) No. FA4418-11-R-0018, issued by the Department of the Air Force for the 

operation of two contractor operated civil engineering supply stores (COCESS) 

located at Joint Base Charleston, South Carolina. The protester objects to the 

agency’s evaluation of the awardee’s proposal and its selection for award.

We deny the protest.

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to 

a GAO Protective Order. This redacted version has 

been approved for public release.
Page 2 B-406450; B-406450.2 

BACKGROUND

The solicitation, issued under the commercial item acquisition procedures of Federal 

Acquisition Regulation part 12, provided for the award of a fixed-price contract with 

economic price adjustment for the operation of two COCESS facilities for a base 

year and 4 option years. A COCESS is a contractor operated store on an Air Force 

base that provides hardware, construction materials, and building supplies for 

purchase by civil engineering personnel. 

Offerors were informed that award would be made on a best value basis, 

considering past performance and price. RFP at 10. Past performance was stated 

to be significantly more important than price. Id. The RFP provided that if the 

lowest-priced offer is judged to have an exceptional performance risk rating, that 

offer represents the best value. Id. at 12.

With regard to past performance, offerors were to provide a list of not more than five 

relevant contracts, performed for federal agencies and commercial customers within 

the last three years. RFP at 43. A relevant contract was defined as one where the 

present/past performance effort involved much of the same magnitude of effort and 

complexities as the work solicited here.1 Id. at 11. The RFP explained that the 

evaluation of past performance information would take into account past 

performance information regarding predecessor companies, key personnel who 

have relevant experience, or subcontractors that will perform major or critical 

aspects of the requirement when such information is relevant to the instant 

acquisition. Id. The RFP also stated that the agency would consider the information 

provided by the offeror and may consider any other source when evaluating an 

offeror’s past performance. Id.

Under the past performance factor, the RFP provided for a performance confidence 

assessment based on an evaluation of the offeror’s present and past work record to 

assess the government’s confidence that the offeror will successfully perform the 

contract as proposed. Id. The RFP further provided that past performance would be 

evaluated as exceptional/high confidence, very good/significant confidence, 

satisfactory/confidence, neutral/unknown confidence, marginal/little confidence, or 

unsatisfactory/no confidence.2 Id. at 12. 

 1 The RFP also defined a very relevant contract to be where the present/past 

performance effort involved essentially the same magnitude of effort and 

complexities as the work solicited here. RFP at 11.

2 An exceptional/high confidence rating was defined as “essentially no doubt exists 

that the offeror will successfully perform the required effort.” RFP at 12.
Page 3 B-406450; B-406450.2 

With respect to price, the RFP provided a consolidated stock listing (CSL) that 

identified various hardware, construction, and building supply items and their 

estimated annual quantities. RFP at 46-142. Offerors were required to provide a 

unit price for each item and an extended annual cost for each item. The RFP also 

required offerors to propose a charge to procure a non-priced item (NPI)--that is an 

item not included on the CSL--and stated that this charge would include any and all 

costs such as labor, materials, overhead, general & administrative (G&A), profit but 

not the actual cost of the item or of its transportation. See id. at 45. 

Offerors were informed that price would be evaluated for fairness, reasonableness, 

and realism. Id. The RFP stated that one of the following techniques may be used 

in performing the price analysis:

1. Comparison of proposed prices received in response to the 

solicitation.

2. Comparison of prior prices and contract prices with current 

proposed prices for the same or similar end items.

3. Comparison with competitive published price lists, published 

market prices of commodities, similar indexes, and discount or 

rebate arrangements.

4. Comparison of proposed prices with independent government 

cost estimates. Proposals unrealistically high or low in cost or price, 

when compared to the government estimate, may be deemed 

reflective of an inherent lack of understanding of risks of the 

solicitation and may result in proposal rejection.

RFP at 13. The RFP did not require the submission of cost or pricing data.

The agency received three proposals, including proposals from Noble and CC 

Distributors. Noble, which proposed [Deleted] as a subcontractor, submitted the 

lowest-priced proposal. CC Distributors submitted the second-lowest priced 

proposal. The three offerors, each of which submitted an offer that was less than 

the independent government estimate (IGE), were all evaluated as having 

exceptional/high confidence past performance.3

 3 Offerors’ past performance was evaluated by the agency’s source selection 

evaluation team (SSET), which considered the offerors’ past performance 

submissions and information from the Contractor Performance and Assessment 

Reporting System (CPARS) and Past Performance Information Retrieval System 

(PPIRS). 
Page 4 B-406450; B-406450.2 

Based upon its comparison of offerors’ proposed prices with each other and with the 

IGE, the agency concluded that there were a number of prices for CSL items that 

required further examination. Contracting Officer’s Statement at 5. In this regard, 

the SSET identified 457 items where Noble’s prices varied from the IGE, 143 such 

items for the protester and 202 items for the third offeror.4 Id. 

The Air Force decided to conduct discussions, and included all three offers in the 

competitive range. The agency conducted several rounds of discussions, sending 

written evaluation notices (ENs) that identified offerors’ CSL item pricing that 

appeared to be excessively high or low. See Agency Report (AR), Tab 12, 

Protester’s ENs; Tab 13, Awardee’s ENs. The protester acknowledged that there 

were some errors in the proposed pricing of the 143 identified items and stated that, 

if requested, it would submit a best and final offer. AR, Tab 16, Protester’s EN 

Response. Noble also acknowledged some errors in the pricing of the 457 items. 

AR, Tab 17, Noble’s EN Response.

Revised proposals were requested and received from the competitive range offerors. 

Offerors were advised that, if there were no pricing revisions, they should submit a 

statement that prices were the same as in the initial proposal. See, e.g., AR, 

Tab 14, Request to Protester for Revised Proposal. Following the evaluation of the 

first revised proposals, the SSET determined that there were still questions with 

respect to NOBLE’s pricing of several items. The Air Force asked offerors to either 

provide another revised proposal or send assurance of their submitted pricing. See

AR, Tab 20, Agency Letter to Protester; Tab 22, Agency Letter to the Awardee. In 

response, Noble submitted a revised proposal increasing its price; the protester 

assured the agency that CC Distributor’s pricing was accurate and was unchanged. 

In its review of Noble’s second revised proposal, the SSET identified 13 remaining 

items where Noble’s price substantially varied from that of the IGE. AR, Tab 32, 

Proposal Analysis Report, at 32. Noble was requested to verify its pricing for these 

13 items. In response, Noble stated that it had made miscalculations and submitted 

another revised proposal.

The offerors’ final proposal revisions were evaluated as follows:

OFFEROR PRICE PAST PERFORMANCE 

Noble $3,753,472.50 Exceptional/High Confidence

CC Distributors $4,281,748.25 Exceptional/High Confidence

Offeror A [Deleted] Exceptional/High Confidence

 4 The SSET’s price analysis was based upon identifying offerors’ unit prices that 

were either 50 percent less than, or 150 percent greater than, unit prices in the IGE. 

See Contracting Officer’s Statement at 5.
Page 5 B-406450; B-406450.2 

AR, Tab 33, Source Selection Decision, at 2.

Because Noble submitted the lowest-priced offer evaluated as having 

exceptional/high confidence past performance, its offer was selected for award. 

Following a debriefing, CC Distributors filed this protest.

DISCUSSION

CC Distributors challenges the agency’s technical and price evaluation of Noble’s 

proposal. Specifically, the protester complains that it was unreasonable to assess 

the awardee’s past performance as excellent/high confidence arguing that Noble has 

no relevant past performance. Protest at 9. CC Distributors also argues that the 

agency failed to adequately consider the realism and reasonableness of Noble’s low 

prices. Protest at 10; Protester’s Comments & Supp. Protest at 18. CC Distributors 

contends that, but for these errors, it would have received award. 

Past Performance

The protester contends that Noble is “a relatively new entrant to the COCESS 

industry” and has only recently been awarded a COCESS contract for one of the 

smallest facilities in the program. Protest at 9. CC Distributors argues that Noble 

has no relevant past performance and should have received a neutral rating under 

the past performance factor. The protester also contends that there is no evidence 

that the agency meaningfully compared Noble’s and the protester’s past 

performance in making the selection decision. Protester’s Comments & Supp. 

Protest at 9-10.

In reviewing a protest challenging an agency’s past performance evaluation, we will 

examine the record to determine whether the agency’s judgment was reasonable 

and consistent with the stated evaluation criteria and applicable statutes and 

regulations. Ostrom Painting & Sandblasting, Inc., B-285244, July 18, 2000, 2000 

CPD ¶ 132 at 4. A protester’s mere disagreement with the agency’s evaluation 

provides no basis to question the reasonableness of the evaluators’ judgments. See

Citywide Managing Servs. Of Port Washington, Inc., B-281287.12, 

B-281287.13, Nov. 15, 2000, 2001 CPD ¶ 6 at 10-11.

Here, the record shows that the agency reasonably evaluated Noble’s past 

performance. Of the five references provided by Noble for itself and its 

subcontractor, the Air Force received three questionnaire responses. Two of these 

responses were for work that the agency found was very relevant, and the remaining 

response was found relevant. AR, Tab 9, Protester’s Past Performance Evaluation, 

at 2. Specifically, the Air Force found Noble’s subcontractor’s performance of a 

COCESS contract at [Deleted], and Noble’s performance of COCESS-type contract 

at Travis Air Force Base, California, to be very relevant given its similarity in scope, 
Page 6 B-406450; B-406450.2 

magnitude, and type of work. Id. at 3-4. The Air Force also found that Noble’s 

performance of a commercial contract with [Deleted] to be relevant. Id. at 4. The 

agency also did a search of the PPIRS but found no additional relevant/recent 

assessments on file for Noble or [Deleted]. 

The feedback from all of Noble’s references was very positive and ranged from very 

good to exceptional, with the majority of feedback reflecting exceptional 

performance. Based on the overall ratings provided by Noble’s references the SSET 

assigned Noble an overall performance confidence rating of exceptional/high 

confidence. AR, Tab 9, Noble Rating Worksheet, at 4. Although the protester 

contends that the agency could only rate Noble’s past performance as 

exceptional/high confidence if it determined that there was no doubt regarding 

Noble’s ability to perform, see Protester’s Comments at 2, the record demonstrates 

that the Air Force reached precisely that conclusion--i.e., that it had no doubt about 

Noble’s ability to perform.5

Lastly, the protester complains that the agency did not meaningfully compare the 

firms’ past performance. We find that the agency’s consideration of past 

performance was consistent with the RFP, which provided for the selection of the 

lowest-priced proposal that received an exceptional past performance rating.

Price Realism

CC Distributors also challenges the agency’s price realism analysis, arguing that 

while the agency performed the price analysis required by the RFP in its review of 

initial proposals, the agency did not follow through in discussions to ensure that 

pricing which was deemed too high or too low was either changed or explained by 

Noble to demonstrate realism. Comments at 11. The protester notes that Noble 

changed only its pricing for 21 out of the 362 items identified by the agency in the 

first evaluation notice as being priced unrealistically low.6 Id. 

 5 The protester complains that the agency did not consider information in CPARS

concerning the performance of [Deleted], Noble’s subcontractor. It is true that the 

agency researched the PPIRS, which includes CPARS, and found no past 

performance assessments for [Deleted]. Nonetheless, the record also shows that 

the agency contacted the contracting officer for the [Deleted] COCESS contract

performed by [Deleted]. [Deleted] received the “highest possible marks” for its 

performance of this “very relevant” contract. Contracting Officer’s Supp. Statement 

at 6.

6 Similarly, CC Distributors only changed its pricing for 14 of the 143 items identified 

by the Air Force. See Supp. AR at 6.
Page 7 B-406450; B-406450.2 

Where the award of a fixed-price contract is contemplated, a proposal’s price realism 

is not ordinarily considered, since a fixed-priced contract places the risk and 

responsibility for contract costs and resulting profit or loss on the contractor. 

However, an agency may, as it did here, provide in the solicitation for a price realism 

analysis for such purposes as measuring an offeror’s understanding of the 

solicitation requirements, or to avoid the risk of poor performance from a contractor 

who is forced to provide goods or services at little or no profit. The depth of an 

agency’s price realism is a matter within the sound exercise of the agency’s 

discretion. Grove Resource Solutions, Inc., B-296228, B-296228.2, July 1, 2005, 

2005 CPD ¶ 133 at 4-5. In reviewing protests challenging price realism evaluations, 

our focus is whether the agency acted reasonably and in a manner consistent with 

the terms of the solicitation.

Here, the agency in its price analysis compared individual CSL item pricing to the 

IGE and to proposed prices received in response to the solicitation. Contracting 

Officer’s Statement at 5. Based on an analysis of unit prices from all offerors that 

were either lower than 50 percent or greater than 150 percent of the IGE, the agency 

found that all three offerors’ prices for a significant number of items varied 

substantially from the IGE. These items were identified to the offerors and each 

offeror was given the opportunity to revise or confirm the prices. The agency 

received proposal revisions, including confirmation of pricing, from each offeror, and 

was satisfied with the price realism of all offerors. AR, Tab 32, Proposal Analysis 

Report, at 3.

We find, from our review of the contemporaneous record, that the agency had 

concerns with the unit prices proposed by all offerors, and that it handled these 

concerns in a reasonable manner. That is, the record shows that the agency 

accurately identified the items for which CC’s and Noble’s proposed prices varied 

substantially with the IGE. The agency required that both companies verify their 

prices, and was satisfied with the responses it received. We also note that the 

record shows that the protester’s and Noble’s pricing patterns were very similar. 

The protester argues, however, that because it had significantly fewer questionably 

priced items, it was somehow prejudiced by the agency’s acceptance of the 

awardee’s prices. 

In our view, the record shows that the agency treated the offerors equally in 

accepting their prices. There is no requirement that an agency conduct a “cost 

realism” analysis in evaluating proposals for a fixed-price contract, as the protester 

argues, nor is an agency required to reject a proposal simply because its prices are 

inconsistent with the IGE. Here, the agency determined that based on a comparison 

of prices with the IGE and prices received, the proposed prices of all offerors were 

reasonable and realistic. We see nothing improper about this determination.
Page 8 B-406450; B-406450.2 

Source Selection

CC Distributors also contends that the agency’s selection decision was 

unreasonable, given the past performance and price realism evaluation errors 

asserted by the protester. Given our determination above finding reasonable the 

agency’s past performance and price realism evaluations, the record provides no 

basis to question the agency’s selection decision.7

The protest is denied.

Lynn H. Gibson

General Counsel

 7 The protester also contends that Noble took exception in its proposal to an RFP 

requirement that the contractor must use the Air Force’s Civil Engineering 

Acquisition System to maintain all inventory items identified in bench stock. See

Protester’s Comments & Supp. Protest at 22. The record shows that Noble did not 

take exception to this requirement, but stated that it would comply with all terms and 

conditions of the RFP and that it wished to discuss the future possibility of using an 

alternative system. To the extent that the protester contends that the agency will not 

require Noble to comply with this requirement, this concerns a matter of contract 

administration, which is not for review by our Office. Bid Protest Regulations, 

4 C.F.R. § 21.5(a) (2011).