United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

Decision

Matter of: Rust Consulting, Inc.

File: B-406410

Date: May 18, 2012

Paul Hurst, Esq., Martin D. Schneiderman, Esq., Michael J. Navarre, Esq., and 

Kendall R. Enyard, Esq., Steptoe & Johnson LLP, for the protester.

Thomas O. Mason, Esq., Francis E. Purcell, Esq., and Christopher J. Kimball, Esq., 

Cooley, LLP, for BMC Group Class Action Services; Merle M. DeLancey, Esq., 

Charlotte Rothenberg Rosen, Esq., and Shamir Patel, Esq., Dickstein Shapiro LLP, 

for Garden City Group, Inc.; and Charles Tiefer, Esq., Cuneo Gilbert & Laduca, LLP, 

for Gilardi & Co., LLC, the intervenors.

John R. Caterini, Esq., and John E. Thompson, Esq., Department of Justice, for the 

agency.

Mary G. Curcio, Esq., and David A. Ashen, Esq., Office of the General Counsel, 

GAO, participated in the preparation of the decision.

DIGEST

Protest against price realism evaluation of awardees’ proposals is denied where the 

agency determined that the awardees’ lower proposed labor hours reflected their 

technical approaches and were not so low as to present a performance risk, and 

where the protester has not shown the existence of prejudicial error in the 

evaluation.

DECISION

Rust Consulting, Inc., of Washington, D.C., protests the Department of Justice’s

(DOJ) award of contracts to Gilardi & Co., LLC, of San Rafael, California, BMC 

Group Class Action Services, of Chanhassen, Minnesota, and Garden City Group, 

Inc., of Lake Success, New York, under request for proposals (RFP) No. DJJE-11-

RFP-0721, for federal forfeiture claims administration. Rust primarily asserts that 

the agency failed to reasonably evaluate the price realism of the awardees’ 

proposals. 

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-406410 

BACKGROUND

When the U.S. obtains judicial forfeiture of assets under specific statutes, the 

Attorney General has the authority to distribute certain funds to victims of crime and 

other claimants. RFP § C.1. The solicitation provided for the award of between 

three and five indefinite-delivery/indefinite-quantity contracts to provide claims 

administrative support to the Department of Justice’s Criminal Division Federal 

Forfeiture Program in distributing forfeited funds. In this regard, the contractor will

be required to identify and contact potential claimants and victims; inform them of 

the opportunity to file a claim; receive and evaluate the claims; make 

recommendations regarding the claim’s validity; and, in certain cases, make final 

disbursement. RFP § C.3. Award was to be made on a best value basis 

considering two equally-weighted evaluation factors: technical merit (with subfactors 

for corporate experience and capability, technical approach, management approach, 

and past performance), and price. RFP §§ M.1.2, M.2.

With respect to the price evaluation, offerors were required to complete tables based 

on a sample task order that involved 20,000 claimants, 3 mailings before final 

payment, a telebank, and deployment of a website. In the first table, offerors were to 

propose hours and fixed hourly rates for 11 specified labor categories. The second 

table listed five categories--training, travel, materials, telebank, and postage

--for which the government would reimburse the contractor’s costs. Offerors were 

instructed to propose multipliers that would be applied against these costs and 

reimbursed as a handling factor, except for postage which would be reimbursed on a 

cost-only basis. RFP § L.8.1.4. For purposes of evaluation, the agency calculated a 

total price by multiplying the proposed rates by the proposed hours, and added that 

total to the costs proposed for the reimbursable items (multiplied by the handling 

factor) and the cost of postage. RFP § M.3.1

 The solicitation generally provided that 

the “failure to provide a realistic, reasonable and complete technical and price 

proposal may reflect a lack of understanding.” RFP § M.1.2. Offerors were 

specifically advised that the government would “assess the reasonableness and 

realism of the unit prices and the total evaluated price for performing all services,” 

and would “evaluate the realism and reasonableness of each Offeror’s proposed unit 

prices and multipliers by comparing them to each other and (where available and 

necessary) other contracts for similar items.” Id.

Fourteen offerors responded to the solicitation. Eight offerors initially were removed 

from consideration either because their offers were noncompetitive as to price, 

technically unacceptable, or otherwise not among the most highly rated. The 

remaining six offerors, whose proposals were the highest rated technically, were 

 1

The proposed labor rates and multipliers were to be used by the contractor to price 

any task orders it was later issued.
Page 3 B-406410 

determined to be the most highly-rated offerors overall, with their proposals 

evaluated as follows:

OFFEROR TECHNICAL SCORE PRICE

Gilardi 83 $1,137,760

REDACTED 77 $4,119,884

Garden City Group 68 $2,079,950

Rust 66.3 $5,364,669

REDACTED 65.6 $3,859,563

BMC Group 62.3 $1,107,782

Best Value Recommendation at 3-4. However, before making its best value 

decision, the agency reviewed the evaluation results and determined that both Rust 

and RCB were non-competitive as to price. Id. at 5. The agency accordingly 

considered only Gilardi, Garden City Group, Lockheed Martin, and BMC in its best 

value analysis; Gilardi, Garden City Group, and BMC were selected for awards. 

Rust thereupon protested the awards, asserting that the agency failed to perform a 

price realism analysis as required by the solicitation, and unreasonably evaluated 

Rust’s technical proposal. 

PRICE REALISM

Rust argues that the agency failed to perform an adequate price realism analysis in 

evaluating the awardees’ proposals. The focus of Rust’s protest in this regard is the 

number of hours that each of the offerors proposed to perform the sample task on 

which the price evaluation was based. According to the protester, the awardees 

proposed too few hours to perform the sample task; while Rust proposed to perform 

the sample task using [REDACTED] hours, Gilardi proposed [REDACTED] hours, 

Garden City [REDACTED] hours, and BMC [REDACTED] hours. (The government 

estimate was 780 to 1,000 regular hours, plus 150 overtime hours.) Rust concludes 

that the price realism analysis conducted by the agency was inadequate because it 

did not consider the technical evaluation, the labor mix proposed by each of the 

offerors, or the offerors’ specific technical approaches. 

Where, as here, a fixed-price contract is to be awarded, the agency generally is not 

required to conduct a realism analysis; this is because a fixed-price (as opposed to a 

cost-type) contract, places the risk and responsibility for loss on the contractor. 

WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD ¶ 68 at 3. However, an 

agency may, as it did here, provide for the use of a price realism analysis to 

measure an offeror’s understanding of the requirements or to assess the risk 

inherent in a proposal. The nature and extent of such an analysis are matters within 

the discretion of the agency, and our review of a realism analysis is limited to 

determining whether it was reasonable and consistent with the terms of the 

solicitation. Id. 
Page 4 B-406410 

Here, the record indicates that, in conducting its price realism analysis, the agency in 

fact considered the technical approaches of the offerors. Specifically, the price 

evaluation panel consulted with the technical evaluation panel (TEP) regarding the 

number of hours proposed by all offerors, including the three awardees. In 

response, the TEP chairman informed the contracting officer that all offerors 

proposed an adequate and appropriate labor hour mix (although some offerors, 

including the protester, proposed excessive hours). Agency Statement, Apr. 11, 

2012 at 1-2. In this regard, the solicitation required that an offeror’s technical 

solution describe its proposed use of automated systems, including claim tracking 

databases or systems, websites and interactive voice response (IVR) systems. RFP 

§ L.8.2.2.3; see RFP § C.4.4. 

With respect to the awardees, the TEP panel specifically indicated that the low 

number of hours proposed overall, and for the program manager and claims clerical 

support specifically, was consistent with the awardees’ more automated approach to 

performing the work, as reflected in their technical proposals. In contrast, Rust 

proposed a large number of lower-level claims clerical support hours [REDACTED], 

with significant program manager oversight, indicating to the agency a more labor 

intensive, less automated approach. The TEP concluded that the awardees could 

perform the work with the hours and labor mix proposed based on their technical 

proposals and approach. Agency Statement, Apr. 11, 2012 at 1-2.2

 2 Rust argues that the information regarding the input from the TEP was not 

documented in the contemporaneous record, and thus should not be given any 

weight. We disagree. In reviewing an agency's evaluation, we do not limit our 

consideration to contemporaneously-documented evidence, but instead consider all 

the information provided, including the parties’ arguments and explanations. The 

Eloret Corp., B-402696, B-402696.2, July 16, 2010, 2010 CPD ¶ 182 at 12. While 

we generally give little or no weight to reevaluations and judgments prepared in the 

heat of the adversarial process, Boeing Sikorsky Aircraft Support, B-277263.2, 

B-277263.3, Sept. 29, 1997, 97-2 CPD ¶ 91 at 15, post-protest explanations that 

provide a detailed rationale for contemporaneous conclusions, and simply fill in 

previously unrecorded details, will generally be considered in our review of the 

rationality of selection decisions so long as those explanations are credible and 

consistent with the contemporaneous record. NWT, Inc.; PharmChem Labs, Inc., 

B-280988, B-280988.2, Dec. 17, 1998, 98-2 CPD ¶ 158 at 16. Here, the 

contemporaneous record specifically indicated that the TEP found that all offerors 

proposed a sufficient number and mix of hours to perform the contract based on 

their technical approach. The agency in the course of the protest simply further

explained this conclusion. 

 We conclude, 

therefore, that Rust has not shown that the agency’s approach to the price realism 

evaluation was inconsistent with its obligations under the solicitation. 
Page 5 B-406410 

Rust, however, asserts that in its price realism analysis, the agency failed to 

consider that both Garden City Group and BMC based their price proposals on 

assumptions that were inconsistent with the RFP. In this regard, the solicitation 

statement of work (SOW) required the contractor to “analyze all claim forms”; 

“assess the sufficiency of supporting documentation”; “calculate the net pecuniary 

loss incurred by the victim”; and “contact potential claimants who appear to qualify 

for participation in the claims fund but whose documentation is lacking in some 

respect, and request that they supply corrected documentation.” RFP § C.4.4.3. 

Rust asserts that BMC’s assumption in its proposal, that the “data to be captured 

from each claim form is expected to include confirmation of employment details and 

the existence of a signature on the claim form,” is contrary to the solicitation 

requirement that the contractor analyze and validate each claim. BMC Price 

Proposal at 2. Rust’s position, however, at a minimum, fails to account for BMC’s 

further explanation in its price proposal that its pricing was based on the 

assumptions that “[a]ll data entry will be manually verified and validated to ensure 

100% accuracy before it is integrated into the claims administration database,” and 

“that 5% of the claims are deficient and that BMC will mail deficiency letters.....” Id. 

Accordingly, it is clear that, when read as a whole, BMC’s price proposal 

acknowledged the solicitation requirement to analyze and validate the claims.

Rust further asserts that Garden City Group assumed that the sample claims 

scenario in the solicitation would require a simple claims validation process, 

imposing few requirements on the contractors. GCG Price Proposal at 33. We 

agree with Rust that Garden City Group did make assumptions in its price proposal 

that appear inconsistent with the SOW requirements. Specifically, Garden City 

Group indicated in its proposal that it assumed with respect to the sample scenario, 

that “[t]here are no calculations to be performed by GCG. There is a simple claims 

validation process, such as a check the box or verifying that the claims form 

document is signed.” Id. This assumption appears inconsistent with the SOW 

requirements that the contractor analyze all claim forms, assess whether there are 

any deficiencies, and calculate the pecuniary loss incurred by the victim, RFP 

§ C.4.4.3. As discussed below, however, we do not believe that Rust was 

prejudiced by this error. 

TECHNICAL EVALUATION.

Rust asserts that the agency unreasonably evaluated its technical proposal because 

it assigned Rust a weakness for proposing a program manager that was also 

working on 12 other projects. Rust argues that the program manager was not 

required to be proposed full time, and notes that in its proposal it indicated that the 

program manager would be involved in those projects for a total of only 360 hours 

per year. 
Page 6 B-406410 

The evaluation in this regard was unobjectionable. Specifically, we find reasonable 

the agency concern that Rust’s program manager might not be available when 

needed because he was involved in 12 other projects that were running 

concurrently. Technical Evaluation Report at 20. Although Rust may have 

anticipated that its proposed program manager would spend no more than 

360 hours on the other projects, the fact that he had obligations for as many as 

12 other concurrent projects reasonably could be seen as increasing the risk that 

unexpected developments with respect to the other projects could require additional 

attention such as to interfere with satisfactorily managing the DOJ effort here.

PREJUDICE 

As noted above, the agency made three awards under the solicitation based on a 

best value determination conducted among four offerors. Rust was not among those 

offerors because the agency found that Rust did not propose a competitive price. In 

this regard, Rust’s price was 11th highest out of 14 proposals. While Rust’s 

significantly higher price relative to the awardees largely resulted from its proposal of 

more hours for the sample task, the fact remains that the agency did not believe that 

the much more labor intensive approach proposed by Rust was necessary to 

adequately perform the SOW. In this regard, Rust has made no showing that the 

sample task could not be performed with significantly fewer than the [REDACTED]

hours it proposed.

Further, even if Garden City Group’s proposal was downgraded based on an 

unrealistic price, it does not appear that Rust would be in line for award. Rather, it 

appears that the fourth offeror [REDACTED] that the agency included in its best 

value determination--with an evaluated price $1,505,106 lower than Rust’s and a 

technical score only slightly lower (65.6 versus 66.3 points)--instead would be in line 

for award. Moreover, aside from the four offerors that were included in the best 

value determination, there was another offeror [REDACTED] which, although 

determined to be among the most highly rated offerors, nevertheless was not 

considered in the best value determination because, like Rust, its price was not 

competitive. Id. at 3-4. This offeror, however, received the second highest number 

of technical points (77), more than 10 points higher than Rust’s technical score 

(66.3), and also submitted a price that was $1.2 million lower than the price 

submitted by Rust. Id. It thus appears that this offeror also would be in line for 

award before Rust. Given that there are at least two offerors who would be in line 

for award before Rust, Rust has not shown that it was prejudiced by any 

misevaluation of Garden City Group’s price proposal. Alutiiq Global Solutions

The protest is denied.

, 

B-299088, B-299088.2, Feb. 6, 2007, 2007 CPD ¶ 34 at 7.

Lynn H. Gibson 

General Counsel