Bid Protest Weekly

Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC

Date: Wednesday, May 22, 2013, 8:05am EST

FN Manufacturing LLC, B-407936, -.2, -.3, April 19, 2013
Contractors submitting proposals on federal procurements are generally responsible for submitting their best offer, including all relevant information to that procurement. While there may be situations where an agency will have an obligation to consider information not included in an offeror’s proposal, such as where the agency has direct knowledge of a contractor’s past performance history, such situations are extremely limited. Agencies are generally required to only consider information provided in an offeror’s proposal. Offerors should not assume an agency will consider information outside a proposal, even if such information is relatively easily accessible to the agency.

This principle was demonstrated recently in the protest of FN Manufacturing LLC. In the protested procurement, the solicitation required offerors to submit past performance information for up to three contracts or delivery orders. The protester, FN Manufacturing LLC (FNM) submitted three past performance efforts with its proposal, which were evaluated by the agency. The agency’s evaluation personnel were also directed to obtain additional information regarding FNM’s past performance. Agency personnel were able to identify additional delivery orders that were relevant to the subject procurement, however even after checking three different government databases, the agency personnel were unable to verify that FNM actually delivered under those orders.

During its evaluation of past performance, the most important evaluation factor of this procurement, the agency determined that the awardee’s past performance was slightly better than that of FNM. As a result, the awardee was selected for contract award. FNM filed its protest with GAO, challenging the agency’s evaluation of its past performance. FNM argued that the agency unreasonably failed to obtain delivery information for the additional delivery orders, asserting that the agency should have contacted the actual contracting officials in charge of administering the additional delivery orders identified by agency personnel.

GAO rejected this argument, declining to shift responsibility to the agency for finding information from another contract that FNM could have easily included in its proposal. GAO stated that there is no basis to require agencies to take additional steps to ascertain the relevance of past performance information that was not included in an offeror’s proposal. As a result, GAO denied the protest.

Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC

Date: Wednesday, May 15, 2013, 1:05pm EST

Esegur-Empresa de Segurança, SA, B-407947; B-407947.2, April 6, 2013
Earlier this month, we discussed a decision in which GAO denied a protest where the protester argued that the agency failed to conduct a price realism analysis. There, GAO determined the solicitation—for the award of a fixed-price contract—did not explicitly state that a price realism analysis would be conducted, nor did it inform offerors that proposals may be eliminated due to an unrealistically low price. In a decision recently released by GAO, we have almost identical arguments, but with a much different outcome.

In Esegur-Empresa de Segurança, SA, the protester challenged the agency’s award decision, arguing that the agency failed to conduct a price realism analysis. Had a price realism analysis been performed, argued the protester, the awardee’s proposal would have been determined to be unacceptable due to an unrealistically low price. The agency countered by arguing that the solicitation—again for a fixed-price contract—did not call for a price realism analysis, and thus one was not required. In this case, GAO agreed with the protester and sustained the protest.

While the solicitation in question did not appear to use the term “price realism,” it did inform offerors that unrealistically low prices may serve as a basis for the rejection of a proposal. GAO found that the solicitation’s notification that a low offer could be rejected was sufficient to require the agency to perform a price realism analysis. GAO read from that notification an implication that the agency would actually consider whether an offeror’s price was in fact unrealistic, and thus unacceptable.

The agency attempted to convince GAO that because the solicitation simply stated that unrealistically low price proposals “may” be rejected, this meant that the agency had the option to perform a price realism analysis. GAO rejected this argument. While GAO acknowledged that the “may” in the solicitation did give the agency discretion to reject an unrealistically low priced proposal as unacceptable, GAO pointed out that the agency would first have to conduct a price realism analysis to determine if proposals were unrealistically low in order to exercise this discretion. Thus, GAO determined that a price realism analysis was required.

GAO sustained the protest, and recommended that the agency reopen the record and evaluate the awardee’s price for realism.

Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC

Date: Wednesday, May 8, 2013, 8:05am EST

Quest Diagnostics, Inc. v. United States, No. 12-907C, May 1, 2013
In this bid protest filed before the Court of Federal Claims, the protester, Quest Diagnostics, Inc., made several challenges to an award decision made by the Army Medical Command, Center for Health Care Contracting (MEDCOM), in which Laboratory Corporation of America (“LabCorp”) was selected for award. While each of these grounds was dismissed by the Court, the Court’s discussion of one ground in particular warrants further discussion: Quest’s argument that MEDCOM improperly allowed LabCorp to revise its technical proposal after corrective action.

In this procurement, MEDCOM originally selected Quest for award. That award decision was protested by LabCorp, and the agency chose to take corrective action. The offerors submitted revised proposals, and after a new evaluation, MEDCOM selected LabCorp as the awardee. Quest then filed a protest challenging this award decision, and the agency again chose to take a second corrective action. After another re-evaluation, MEDCOM again selected LabCorp as the awardee. Quest filed its second protest with GAO, which was denied.

Quest then filed a protest before the Court, challenging several aspects of MEDCOM’s evaluation and award decision. One of the challenges made by Quest was that MEDCOM improperly allowed LabCorp to amend its proposal after the first corrective action. Quest’s argument was that the agency’s first corrective action only addressed pricing questions, and thus limited the offerors’ proposal revisions to price proposals. Quest pointed out that LabCorp used the opportunity given by the first corrective action to update its technical proposal. Quest argued that the non-price related updates were outside the scope of the first corrective action, and therefore should not have been considered by the agency.

The Court agreed with Quest that while the solicitation amendment issued as the first corrective action dealt with questions of price, LabCorp made revisions to its technical proposal. The updated technical proposal ultimately resulted in an improvement to LabCorp’s technical rating, which as recognized by the Court, may have influenced the award decision. However, the Court noted that while the first corrective action did address only pricing, it did not explicitly state that offerors could not revise other parts of their proposals.

The Court explained that when an agency initiates corrective action that invites proposal revisions, it is essentially a re-opening of the solicitation. Under the FAR, offerors are allowed to submit modifications to their proposals at any time before the closing date for the solicitation. Thus, the Court concluded that when an agency issues an amendment to a solicitation as part of corrective action, offerors may revise any part of their proposal, including those not the subject of the amendment, unless the agency explicitly restricts the scope of revisions.