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GAO Finds Solicitation for Waste Management Services Defective

Posted on February 4th, 2016 by

In  Red River Waste Solutions, LP, B-411760.2 (January 20, 2016), the GAO upheld Red River’s protest that waste management solicitation pricing evaluation should not be priced on a “per ton” basis because it was unclear whether this is in line with “customary commercial practices.”

FAR requires that contracts for the acquisition of commercial items “shall, to the maximum extent practicable, include only those clauses . . . determined to be consistent with customary commercial practice.” FAR § 12.301(a)(2). In establishing acquisitions for commercial items, FAR § 10.002(b) requires market research by the acquiring agency to address, among other things, customary practices regarding the provision of the commercial items.  Consistent with this approach, FAR § 12.302(c) bars the tailoring of solicitations for commercial items in a manner inconsistent with customary commercial practice unless a waiver is approved in accordance with agency procedures. Verizon Wireless, B-406854, B-406854.2, Sept. 17, 2012, 2012 CPD ¶ 260 at 5-6.  .  .  .

The GAO rejected the agency’s market research in the Red River Waste Solutions because:

  • Fort Polk’s review of other Army refuse contracts was irrelevant because Government Contracts do not reflect customary commercial practices;
  • In response to a Sources Sought Notice published on the Federal Business Opportunities website, four of seven responses suggested the CLIN structure be monthly, and three (3) respondents had no comments to tonnage-based pricing; and
  • Fort Polk did not document its contact with an upstate New York refuse company representative, or the basis for his opinion that tonnage-based pricing was suitable.

In view of these defects, GAO accepted protester’s argument that such contracts are not generally priced on a per-ton basis because costs are driven by the number, frequency, and distance between stops, not by the amount, or weight, of refuse collected during such stops. Accordingly, GAO required the agency to (1) conduct adequately documented market research regarding per-ton pricing in commercial refuse contracts; (2) obtain a properly executed waiver of the FAR requirements; or (3) revise the solicitation to eliminate per-ton pricing.

Red River Waste Solutions, LP, B-411760.2 (January 20, 2016)


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