Link: GAO Opinion
Agency: Defense Threat Reduction Agency
Disposition: Protest denied.
Protest that agency unreasonably discontinued negotiations under a Broad Agency Announcement is denied, where the agency reasonably determined, after four months of negotiations, that the parties could not reach agreement on contract terms concerning intellectual property rights.
General Counsel P.C. Highlight:
Spaltudaq argues that the agency failed to engage the firm in meaningful discussions. More specifically, it complains that it was misled about the agency’s requirements regarding intellectual property rights, and denied a fair and reasonable opportunity to correct proposal deficiencies that led to the agency’s decision to terminate negotiations. The protester asserts that the requirement for meaningful discussions, as articulated in Federal Acquisition Regulation (FAR) part 15, applies to the evaluation of proposals under a BAA. GAO states that it is true that in prior cases it has looked to FAR part 15 for guidance in reviewing the agency’s conduct of discussions under a BAA when an agency uses negotiated procedures as part of the selection process, in which case the discussions must be meaningful.
Here, however, the negotiations that occurred between Spaltudaq and the agency were not part of the evaluation and selection process, but occurred after the evaluation had been completed and Spaltudaq’s proposal had been selected for award. Thus, the requirement for meaningful discussions as stated in FAR part 15, and in the cases interpreting that part, does not apply. That is not to say that the agency’s conduct of post-selection negotiations under a BAA is not reviewable. Although GAO finds that DTRA had no obligation to follow the specific requirements for discussions set forth in FAR Part 15, agencies may not conduct themselves in an arbitrary manner, and they must negotiate in good faith and in a manner consistent with the BAA.
The BAA provided for post-selection negotiations with firms that were selected for award. The BAA permitted the agency to discontinue discussions if an offeror failed to provide necessary information in a timely manner, or if the parties failed to reach agreement on contract terms within a reasonable time. Here, the record shows that over a four-month period, the parties engaged in good faith negotiations in an attempt to reach agreement over the parties’ rights to intellectual property, but that no agreement could be reached. The record shows that Spaltudaq proposed a number of approaches that limited or restricted the government’s rights, and the agency repeatedly objected to these approaches. The agency articulated its final negotiation position regarding intellectual property in its August 7, 2008 letter and unambiguously stated that the Government is unwilling to consider recent proposal changes that would limit or restrict the government’s rights to data or inventions. Despite this admonition, Spaltudaq responded with a revised statement of work that included previously submitted proposal revisions to restrict the intellectual property rights granted to the agency. In GAO’s view, the agency reasonably determined that the parties had failed to reach agreement within a reasonable time, and the agency could discontinue negotiations on this basis alone.
The protester contends that it was misinformed about the agency’s intellectual property requirements, specifically with regard to Spaltudaq’s I-STAR platform. The protester asserts that, in revising the statement of work, it only intended to clarif[y] that that developments and improvements to the I-STAR platform would be excluded from the scope of work, as a result of Spaltudaq’s belief that the agency was not interested in this platform. The protester asserts that the agency’s August 7, 2008 final negotiation position letter did not prohibit the revisions that Spaltudaq proposed, and that DTRA’s counsel led Spaltudaq to believe that the proposed clarification would not be objectionable, and would likely be acceptable, to DTRA. However, the contemporaneous record does not support Spaltudaq’s arguments.
While the record shows that there were several communications between the agency’s counsel and Spaltudaq’s counsel concerning the I-STAR platform and related work, the record does not evidence that the agency or its counsel ever agreed to exclude from the scope of work future developments and improvements to the I’STAR platform, or agreed to Spaltudaq’s proposed funding allocation approach to exclude subject inventions. Even if the agency or its counsel had indicated a willingness to consider such provisions, DTRA’s August 7 letter made clear that such revisions would no longer be considered. As stated above, the agency’s final negotiation position was that the government is unwilling to consider [Spaltudaq’s] most recent proposal changes. The fact that Spaltudaq chose to ignore the agency’s warnings does not require the agency to reopen negotiations here. The protest is denied.