As most government contractors have experienced firsthand, procuring agencies routinely engage in a wide variety of communications after bids have been submitted. On occasion, these exchanges are quite minor and afford an offeror the limited opportunity to clarify aspects of its proposal and/or to resolve clerical errors. Sometimes, however, the exchanges are more critical in nature and allow the contractor to submit proposal revisions as part of the negotiation process. When this occurs, the agency is said to have engaged in “discussions” with the contractor. In this scenario, the Federal Acquisition Regulation (FAR) imposes a host of obligations on the agency’s conduct.
In a nutshell, when conducting discussions with offerors in the competitive range, the agency must ensure that (i) the discussions are tailored to each remaining contractor’s proposal and (ii) each offeror is apprised of proposal deficiencies, significant weaknesses, and adverse past performance information to which it has not had an opportunity to respond. See FAR 15.306(d). Although the agency is not required to spoon-feed the offeror with respect to every aspect of the proposal that could be improved, it nevertheless must ensure that discussions are meaningful, equal, and not misleading. The Government Accountability Office’s (GAO) March 21, 2023 decision in BC Site Services, LLC is a case in which the agency fell far short of these requirements. Here is a brief summary of the relevant facts:
- The protester was a small business construction contractor that submitted its bid in response to a request for proposals (RFP) for phase one of a two-phase design build procurement to be conducted in accordance with FAR Subpart 36.3.
- The solicitation contemplated the award of up to 15 IDIQ multiple-award task order contracts for an estimated ceiling value of $7 billion.
- Although offerors were advised to “put forth their best efforts” and were instructed not to “assume that they will have an opportunity to clarify or correct anything in their proposal after submitting,” the agency explicitly reserved to itself “the right to allow proposal revisions in accordance with FAR 15.306(d) . . . if deemed necessary to determine the most highly qualified Offerors.”
- The agency received thirty-six phase one proposals and thereafter sent evaluation notices (ENs) to nine contractors, including the protester. After receiving offerors’ responses to the ENs, the agency did not invite the protester to submit a phase two proposal. The protester subsequently protested the agency’s decision and the agency took corrective action, which eventuated in a reevaluation of the protester’s proposal and the issuance of a new award decision.
- After the protester was again not invited to proceed to phase two of the acquisition, the protester filed another protest, which alleged, among other things, that the agency failed to engage in equal, meaningful discussions.
FAR Part 15 vs. FAR Part 36
As a threshold matter, the agency insisted that FAR Part 15 was inapplicable to the procurement because the solicitation (i) advised that it was to be conducted under FAR Subpart 36.3 (governing construction procurements) and (ii) stated that FAR Part 15 was to apply only to phase two of the acquisition. The GAO rejected the agency’s argument because—even though the solicitation was styled as a FAR Subpart 36.3 acquisition, the agency explicitly advised offerors that it may conduct discussions pursuant to FAR 15.306. Thus, elevating substance over form, the GAO applied the standards typically reserved to FAR Part 15 negotiated procurements.
The Exchanges at Issue
The RFP required offerors to submit a variety of documentation and expressly advised that failure to do so may cause the proposal to be nonresponsive and ineligible for award. In particular, the RFP stated that each offeror must submit a letter of commitment from its insurance company or surety that identifies the surety and bonding capacity for any single project/task order to be issued under the contract. The record revealed that, for one offeror, the agency used the EN process to allow the contractor to submit a letter of commitment that was not part of its initial proposal. The GAO held that discussions occurred in this instance because the offeror was afforded the opportunity to revise its proposal by providing essential information necessary for the agency to determine the acceptability of the offeror’s bid.
The protester contended that—because the agency conducted discussions with at least one offeror—the agency was obligated by FAR Part 15 to conduct meaningful, equal discussions with all offerors. Here, although the agency issued an inconsequential EN to the protester, it did not conduct discussions because it failed to identify any deficiencies, significant weaknesses, and/or adverse past performance information to which the contractor had not had an opportunity to respond. Furthermore, the protester was not afforded the opportunity to submit a revised proposal, unlike at least one other offeror. The GAO agreed that the agency’s conduct was improper in this respect and sustained the protest on this basis.
Although this decision touches on one of the most often litigated areas of bid protest law, it serves as a critical reminder that contractors should remember to pay careful attention to all post-proposal communications with the agency. Remember, discussions can still occur as a matter of law even if the agency states that the communications are mere “clarifications” or “exchanges” or “evaluation notices” or provides some other benign descriptor for the dialogue. The key is whether or not the agency is allowing an offeror to modify, amplify, and/or explain substantive aspects of its proposal, such that the proposal itself is being modified. If this occurs, remember that the agency will have to comply with a host of detailed regulatory requirements, the purpose of which is to ensure that all offerors in the competitive range are afforded the opportunity to engage in equal, meaningful post-proposal negotiations. If you find yourself in a competition where you believe the agency may have fallen short of these requirements, do not hesitate to consider filing a protest to protect your rights.