Summary
Dyncorp International, LLC v. United States, 2021, Fed. Cir. This bid protest case addresses the scope of a contracting officer's discretion in conducting price reasonableness analysis under FAR 15.404-1. The Federal Circuit held that FAR 15.404-1(b)(2) and (3) are permissive, not prohibitive; the "preferred" price analysis techniques are encouraged but not required, and a contracting officer may select any appropriate technique without a documented determination that preferred techniques are insufficient. The court also held that the Army's price reasonableness determination was not arbitrary or capricious despite wide price disparities among offerors, because different technical approaches justified different prices, and the Army reasonably concluded each offeror's price was reasonable for its proposed approach. The case clarifies that an unreasonably high price constitutes a deficiency requiring discussions under FAR 15.306(d)(3), but a merely high price that is reasonable for the proposed technical approach does not trigger such discussions.
Topics
Practice areas
Questions Presented
- Whether the Army violated the Federal Acquisition Regulation by using price analysis techniques other than the preferred techniques without first determining that the preferred techniques were insufficient.
- Whether the Army's conclusion that all offerors' prices were reasonable was arbitrary and capricious given the price disparities between offers.
Holdings
- FAR 15.404-1(b)(3) is permissive, not prohibitive; it does not conditionally prohibit a contracting officer from using any particular price analysis technique. The choice of technique is committed to the contracting officer's reasonable discretion.
- The Army's price reasonableness analysis was not arbitrary and capricious; it considered the differences in technical approaches and explained that higher prices resulted from different but reasonable technical choices.
Key quotations
“FAR 15.404-1(b)(3) does not conditionally prohibit a contracting officer from using any particular price-analysis technique. Rather, FAR 15.404-1 leaves the choice of price-analysis technique to a contracting officer’s reasonable judgment in the context of an individual procurement.” (at 14-15)
“The Army did not ignore the price differences. Indeed, it acknowledged that DynCorp had 'the highest total proposed price when compared [with] the total proposed prices of the other offerors.'” (at 23)
“DynCorp’s technical choices were DynCorp’s prerogative. And DynCorp points to nothing specific in its pricing that was unreasonable given those choices.” (at 24)
Factual background
The Army issued a solicitation for logistics support services under LOGCAP V. Six offerors, including DynCorp, submitted proposals. The Army evaluated proposals based on four factors, with technical/management being most important and cost/price least important. DynCorp's proposals were rated 'good' or 'acceptable' on technical factors, and its prices were the highest in five regions. The Army initially did not evaluate all offers for price reasonableness, but after corrective action, it determined all offers were reasonable and maintained the awards to four other offerors.
Procedural history
DynCorp brought a bid protest in the Court of Federal Claims challenging the Army's award of LOGCAP V contracts. The Court of Federal Claims initially found error in the Army's price reasonableness analysis and allowed corrective action. After corrective action, the court dismissed the protest. DynCorp appeals.