How Agencies Can Avoid One Serious Mistake in Discussions
In negotiated procurements, there are two types of exchanges between the government and offerors:
1) Clarifications are limited exchanges between the government and offerors, that may occur when award without discussions are contemplated. FAR 15.306(a); and
2) Discussions (negotiations) are exchanges with offerors after establishment of the competitive range, that are “undertaken with the intent of allowing the offeror to revise its proposal.” FAR 15.306(d). At the conclusion of discussions, every offeror in the competitive range must be given an opportunity to submit a final proposal revision. FAR 15.307.
Agencies often stumble over these two types of exchanges, and may sometimes conduct discussions without giving all offerors the opportunity to revise their proposals. Merely calling an exchange a “clarification” does not make it so. Whenever discussions are held, all offerors in the competitive range must be allowed to submit a final proposal revision. Failing to do so, or an agency’s improperly stating that it is asking only for clarifications, often results in a sustained protest at the Government Accountability Office (“GAO”). Piquette & Howard Elec. Svc., B-408435.3, Dec. 16, 2013.
Piquette involved replacement of a fire alarm system for the Department of Veterans Affairs (“VA”). Evaluation was based on “lowest-priced technically acceptable proposals.” When the agency discovered a possible mistake in its technical evaluation, it re-evaluated Piquette as well as a competitor, Monument. Piquette’s proposal was found technically acceptable, but there was a problem with Monument’s because it used an incorrect installation sequence.
The VA sent a request for “clarification” to Monument, and Monument agreed to change its sequence of work. VA awarded the contract to Monument. Piquette protested at the GAO.
During the GAO protest, the agency alleged that Monument’s proposal had been technically acceptable during the initial technical evaluation. This was impossible since the agency subsequently found an unrealistic sequence for installation. GAO concluded that VA’s evaluation of Monument’s proposal as technically acceptable ultimately relied on the post-evaluation exchange, which VA had mislabeled a “clarification.”
GAO noted that clarifications may not be used to cure proposal deficiencies or material omissions, or to revise a proposal. GAO explained that it was the actions of the parties that determine if discussions have been held, not the way the agency characterizes the communication. Then GAO noted that when there is a dispute over whether an action constitutes discussions, “the acid test is whether an offeror has been afforded an opportunity to revise its proposal.” Communications that do not permit proposal revisions are mere clarifications. GAO held that the exchange with Monument constituted discussions, and the amendment to its proposal that Monument provided in response to the VA communication constituted a material revision to the proposal by changing the sequence of work. Monument agreed to do something else, it did not merely confirm what it had previously committed to do. Indeed, the source selection decision expressly stated that based on the clarification received from Monument, the Source Selection Board had determined its proposal to be acceptable, but the clarification involved a change to Monument’s proposal.
Piquette & Howard’s protest was therefore sustained.
TIPS FOR CONTRACTING OFFICERS: An acid test is a test that gives an incontestable result. In the old days, prospectors and dealers needed to be able to distinguish gold from base metal. They used nitric acid, which dissolved other metals more readily than gold. GAO’s acid test is simple: if there are proposal revisions there must have been discussions and all the rules for obtaining final proposal revisions apply. This test is very easy to administer in a source selection, and there should be no need for an agency to be confused. If one offeror is permitted to amend its proposal, all offerors must be allowed to do so.
An offeror will have an excellent ground of protest if another offeror is allowed to change its proposal, and the first offeror is not given the same opportunity. This frequently occurs after a source selection decision has been made, where the agency discovers it needs some type of change in the item being procured. The proper action by the Contracting Officer is to amend the solicitation and give all offerors an opportunity to submit a revised proposal based on the changed solicitation. It is a relatively simple procedure, but agencies seem to overlook or ignore it when they are rushed and want to make award. These types of protests can be avoided if the agency complies fully with the FAR.