Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC
Date: Wednesday, August 21, 2013, 6:55pm EST
ST Net, Inc. v. United States, No. 13-223C, August 13, 2013
Albert Einstein is quoted as saying “anyone who has never made a mistake has never tried anything new.” Well that’s a nice sentiment, but for contractors submitting an offer on a federal procurement, it would probably be wiser to forget about trying something new with their offer, and try to avoid mistakes altogether. Because in government contracting, you won’t always get an opportunity to correct a mistake, and this could lead to a costly result.
This principle is demonstrated by ST Net v. United States, a recent bid protest decision by the Court of Federal Claims. In ST Net, the Department of Homeland Security issued a solicitation for the award of a five-year IDIQ contract with a cost ceiling of $3 billion. DHS was seeking to make multiple awards to various small businesses to provide a variety of commercially-available IT products and services. The solicitation required offerors to provide brand/model names, ceiling prices, and discount rates for approximately 70 different types of IT equipment. The solicitation also informed offerors that DHS intended to make an award without discussions.
DHS received over 240 proposals, including a proposal from the protester, ST Net. However, ST Net failed to include the brand/model name, ceiling price, and discount rate for two of the required products. During its evaluation of ST Net’s proposal, DHS determined that because ST Net failed to provide all of the information required by the solicitation, ST Net’s proposal was fundamentally flawed. As a result, ST Net was not recommended for award.
ST Net filed a protest in the Court of Federal Claims, arguing that DHS had an affirmative duty to communicate with ST Net and provide it with an opportunity to revise its offer before being disqualified. ST Net based this argument on two basic principles of government contracting: that contracting officers are required to treat offerors fairly, and that contracting officers have discretion to allow offerors to correct minor errors in proposals. ST Net argued that these two principles, along with the fact that the errors in its proposal were both minor and obvious, meant that it was improper for DHS to disqualify ST Net without first giving it an opportunity to correct its mistakes.
The Court rejected ST Net’s arguments, and denied the protest. Specifically, the Court found that where an agency conducts a negotiated procurement and expressly informs offerors that it intends to make an award without discussions, the agency is under no affirmative duty to allow an offeror to correct a material mistake in its proposal. And in this case, the record sufficiently demonstrated to the Court that ST Net’s errors were not minor or clerical. Rather, correcting ST Net’s mistakes would have led to an increase in its proposed price of approximately 7%. Thus, the Court found that DHS’s decision to disqualify ST Net’s proposal without first allowing ST Net to correct its mistakes was both lawful and reasonable.
While the decision in this case seemed to hinge on the fact the solicitation specifically warned offerors that the agency intended to make an award without discussions, this is a lesson applicable to basically any solicitation. Contracting officers generally have discretion to allow offerors to correct minor mistakes, but just because they can, doesn’t mean they always will, or even should, allow for such a correction. Failing to include required information, particularly line-item pricing information, may be minor in the sense that the amount of missing information is small. But, it could also be incredibly costly, as demonstrated by this decision—a small omission could disqualify you from a big contract opportunity.