Recently, the Government Accountability Office (GAO) sustained a bid protest involving the U.S. Army Corps of Engineers’ (USACE) evaluation of proposals for remedial action and surface support assistance at the Gilt Edge Mine Superfund Site near Lead, South Dakota. See Arcadis U.S., Inc., B-412828 (2016). While the GAO sustained the protest on approximately ten different grounds, the GAO’s holding with respect to the USACE’s consideration of cost implications during its evaluation of the protester’s technical proposal is particularly noteworthy.

The USACE assigned the protester’s technical proposal various “weaknesses” because the USACE believed that the protester’s technical approach posed a cost risk to the USACE. The protester argued that the USACE’s focus on cost in its evaluation of the protester’s technical approach was unreasonable because the cost of the technical features was included in the protester’s fixed-price proposal, and thus posed no independent cost risk to the government. The GAO sided with the protester on this issue (as well as several others), finding that the USACE’s “focus on cost in the context of making assessments under the technical approach factor – particularly where the approach is otherwise viewed as offering a benefit to the government – was not reasonable.”

Importantly, the GAO’s holding in this regard is applicable far beyond the context of remediation services contacts, such as the one at issue in the protest. Instead, the GAO’s holding applies to fixed-price federal contracts across all industries – including construction and beyond.