Link: GAO Decision
Protestor: Colt Defense, LLC
Agency: Department of the Army
Disposition: Protest Sustained in part, Denied in part.
- Protest challenging the evaluation of offerors’ prices is sustained where the agency failed to follow the solicitation criteria with regard to the application of a 5-percent royalty adjustment to the offerors’ total evaluated prices.
- Protest challenging the evaluation of the awardee’s past performance is denied where the source selection authority’s decision to change the lower-level source selection evaluation board’s initial rating from neutral to satisfactory was reasonable.
- Protest challenging the evaluation of the awardee’s production capability is denied where the solicitation did not require the agency to assess a higher risk rating for proposals that did not have existing facilities and equipment.
General Counsel PC Highlight:
Colt Defense, LLC protested the award to Remington Arms Company, LLC of a ID/IQ contract for a minimum of 10,000 carbines and a maximum of 120,000 carbines in any combination of multiple M4/M4A1 configurations. Award was to be made on a best value basis, considering production capability, price, past performance, and small business participation. The production capability factor was broken into four considerations: manufacturing facilities, key tooling and equipment, production approach, and quality management system.
The solicitation notified offerors that the technical data package for the M4/M4A1 carbines includes licensed technology for which the government must pay a royalty amount pursuant to a licensing agreement with Colt. The RFP indicated that offerors who did not own or have a license for the Colt technology would have their proposed prices increased by a 5% royalty rate.
The GAO agreed with Colt that the agency had failed to apply the 5% royalty adjustment to offerors’ prices in accordance with the solicitation’s price evaluation instructions. Colt argued that the agency improperly applied the royalty adjustment only to certain portions of the proposed prices, based on an undisclosed interpretation of the license agreement between the government and Colt. The agency had determined portions of the carbines that were proprietary to Colt, and applied the royalty rate to that percentage of the unit price in calculating the total evaluated price. The GAO found that, while the agency’s calculations may (or may not) accurately reflect the amount due Colt under the license agreement, the solicitation’s price adjustment provision provided no notice to offerors that the provision would be applied this way.
The GAO rejected the agency’s argument that Colt’s protest was an untimely challenge to the terms of the solicitation, on the grounds that Colt’s special knowledge of the licensing agreement created an ambiguity that obligated Colt to protest prior to the time for submitting proposals. The GAO found that the price evaluation provisions created a latent ambiguity, and that Colt’s objections were therefore timely.
The GAO denied Colt’s objections to Remington’s past performance evaluation, in which the SSAC had disagreed with the SSEB’s assessment of unknown confidence for Remington and increased its evaluation to satisfactory confidence. Finally, the GAO found that the agency had reasonably evaluated Remington’s production capability, disagreeing with Colt’s argument that the solicitation mandated a higher risk assessment for offerors without all of the facilities and equipment that will eventually be required.
If there is an ambiguity in a solicitation that is obvious on its face, prospective offerors are required to protest the terms of the solicitation prior to the time set for the receipt of proposals. However, if the ambiguity is latent, and only becomes apparent after the agency conducts evaluations, a protest will still be timely within ten days of award. Disappointed offerors should always request a debriefing so as to better understand the evaluation process. If the agency conducted the evaluation in a manner that does not appear to be consistent with a reasonable interpretation of the solicitation, there may be valid grounds for protest.