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    Government Contracting Database

    Competitive Advantage

    The courts have held that “an agency is not required to neutralize the competitive advantages some potential offerors enjoy simply because of their own particular circumstances rather than any government action.” Worldwide Language Res., LLC. v. United States, 127 Fed. Cl. 125, 133 (2016) (citing WinStar Communications, Inc. v. United States, 41 Fed. Cl. 748, 763 (1998)); For example, “an offeror’s competitive advantage gained through incumbency is generally not an unfair advantage that must be eliminated.” Id. (quoting Comp. Sciences Corp. v. United States, 51 Fed.Cl. 297, 311 (2002). “It is not unusual for an offeror to enjoy an advantage in competing for a government contract by reason of incumbency, and there is no requirement for agencies to equalize or discount such advantage.” Bara-King Photographics, Inc., Comp. Gen. Dec. B-253,631 (15 Sept. 1993). 

    The GAO has held the mere existence of a prior or current contractual relationship between the agency and the contractor does not create an unfair competitive advantage, nor is the agency required to compensate for every competitive advantage inherently gleaned by a competitor’s prior or current performance of a particular requirement. Matter of: Nana Servs., LLC, B-297177.3 (Jan. 3, 2006) (citing Optimum Tech., Inc., B-266339.2, Apr. 16, 1996, 96-1 CPD 188 at 7). For example, an incumbent contractor’s acquired technical expertise or firsthand knowledge of the costs of performing a requirement generally does not constitute an unfair advantage that the acquiring activity is required to eliminate. Id. Moreover, the mere fact that LSI may be more advantageously situated by virtue of its ability to consolidate operations under the two contracts is not the type of competitive advantage that the agency is required to eliminate; every contractor enjoys the advantage of its peculiar market position including, for example, economies of scale available to a large business, but not to smaller concerns. 

    Updated: June 5, 2018

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