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FAR 15.306 (d)(3):  Discussions - Meaningful or Misleading

Comptroller General - Key Excerpts

New Piton raises various challenges to the agency's conduct of discussions and its evaluation of price. While our decision here does not specifically discuss each and every argument, and/or variation of the arguments, we have considered all of the protester's assertions and find none furnishes a basis for sustaining the protest.

We first address Piton's contentions that discussions were misleading, and not meaningful. In this regard, the protester essentially argues that it was unreasonable for the agency to fail to disclose during discussions that it considered Piton's price to be not fair and reasonable, and improper for the agency to ultimately conclude that Piton's price was not fair and reasonable after Piton reduced its price in response to the agency's discussion question. Protest at 8; Comments at 5.

When an agency engages in discussions with an offeror, the discussions must be "meaningful," that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision in a manner to materially enhance the offeror's potential for receiving the award. FAR § 15.306(d); WinStar Fed. Servs., B-284617 et al., May 17, 2000, 2000 CPD ¶ 92 at 10. The requirement that discussions be meaningful, however, does not obligate an agency to spoon-feed an offeror or to discuss every area where the proposal could be improved. FAR § 15.306(d)(3); Cubic Simulation Sys., Inc., B-410006, B-410006.2, Oct. 8, 2014, 2014 CPD ¶ 299 at 12.

We find no merit to the protester's arguments. The record shows that the agency clearly led Piton to the area of its proposal needing revision by indicating that Piton's total price, as well as its price for a particular labor category, were high. AR, Tab 13, Agency Discussions with Piton, at 3. As such, the agency fulfilled its obligation to conduct meaningful discussions. Additionally, contrary to the protester's assertions, the record also shows that the agency only concluded that Piton's price was not fair and reasonable after evaluating FPRs. AR, Tab 13, Agency Discussions with Piton, at 1; Tab 27, SSDD, at 10. Although Piton asserts that it should have received an award because it lowered its pricing in response to the discussion question, the record shows that other proposals from technically-acceptable offerors received awards because they offered lower prices. In light of the record here, the protester has not shown that the agency's conduct of discussions was unreasonable.  (Piton Science and Technology B-414634: Jul 28, 2017)

Global Dynamics contends that the Army repeatedly asked it during discussions to raise its prices. Protest at 4. The protester further contends that the agency’s identification of its prices as being low during discussions was a directive to raise its prices. Protester Comments at 3.

In conducting discussions with offerors, an agency may not consciously mislead or coerce an offeror into raising its price. Serco Inc., B-407797.3, B-407797.4, Nov. 8, 2013, 2013 CPD ¶ 264 at 5. However, we will not find discussions to be improper where the agency in good faith provides accurate information to an offeror, even where the offeror uses that information to its ultimate competitive detriment. XtremeConcepts Sys., B‑406804, Aug. 31, 2012, 2012 CPD ¶ 253 at 4; EMR, Inc., B‑406625, July 17, 2012, 2012 CPD ¶ 209 at 4-5.

The record shows that the agency did not ask the protester to raise its price. As noted above, the discussions letter merely advised Global Dynamics of the relative standing of the firm’s proposed evaluated price and specific labor rates relative to the prices of the proposals received, and asked that the firm review its prices. AR, Tab 4, Global Dynamics Discussion Letter, at 5. We see nothing in the agency’s communications with the protester that could be construed as directing the protester to take any particular action, but rather it left to the firm’s business judgment whether it should raise its prices or explain the prices earlier submitted. See ITW Military GSE, B-403866.3, Dec. 7, 2010, 2010 CPD ¶ 282 at 4 (agency informing offeror that pricing was lower than government estimate does not compel offeror to take a specific action or mislead offeror).  (Global Dynamics, LLC B-413313, B-413313.2: Sep 20, 2016)


EDT maintains that there were “significant procurement administration errors” in the acquisition. Protest at 2. Specifically, EDT contends that the agency engaged in improper and misleading discussions. In this connection, EDT asserts that each of the three response options set forth in the Corps’ discussion letter “is presented as equal,” and that the discussion letter “provided no indication that one type of response is preferred over another.” Protest at 12. EDT explains that it “took the discussion letter at face value in submitting its comments,” and, as a consequence, employed the first option where “an identified weakness was self-evident (that is, a detailed narrative response was not necessary to explain how it would comply with the RFP requirements).” Id. at 12-13. EDT further argues that the CO’s comments in the debriefing letter revealed the agency’s “previously unstated preference for narrative responses to its discussion questions.” Id. at 14. According to the protester, it was arbitrary for the agency to consider narrative responses more favorably than mere acknowledgments of compliance given that the discussion letter indicated that both would be acceptable. As explained below, we find EDT’s argument to be unpersuasive.

The regulations concerning discussions under Federal Acquisition Regulation (FAR) part 15, which pertain to negotiated procurements, do not, as a general rule, govern task and delivery order competitions conducted under FAR subpart 16.5, such as the procurement here. NCI Info. Sys. Inc., B-405589, Nov. 23, 2011, 2011 CPD ¶ 269 at 9. In this regard, FAR § 16.505 does not establish specific requirements for discussions in a task order competition; nonetheless, when exchanges with the agency occur in task order competitions, they must be fair and not misleading. CGI Fed. Inc., B-403570 et al., Nov. 5, 2010, 2011 CPD ¶ 32 at 9. In our decisions addressing an agency’s obligations in conducting discussions under FAR part 15, we have held that an agency may not mislead an offeror through the framing of a discussion question into responding in a manner that does not address the agency’s actual concerns, or otherwise misinform the offeror concerning a problem with its proposal. Refinery Assocs. of Texas, Inc., B-410911.2, Mar. 18, 2015, 2015 CPD ¶ 116 at 6. CEdge Software Consultants LLC, B‑408203, July 19, 2013, 2013 CPD ¶ 177 at 7.

The discussion letter here advised EDT that it could respond in “at least one” of three ways, including an option that permitted a clarifying narrative response. Although the protester is correct that the discussion letter did not indicate that one response was preferred by the agency over another, the discussion letter also did not indicate that all permitted response options would be equally advantageous to an offeror.

EDT appears to have made a business decision to rely on simple statements of compliance with regard to most of the weaknesses identified by the agency in discussions. Where an agency affords an offeror a choice in how to respond to a weakness identified during discussions, and the offeror exercises its business judgment in electing one of the alternatives, the agency has not engaged in misleading discussions. See Onyx-Technica, JV, B-412474, B-412474.2, Feb. 26, 2016, 2016 CPD ¶ 65 at 4. In addition, it was not reasonable for EDT to assume that, because a simple statement of compliance, without explanatory information, would be acceptable under the RFP, submission of associated explanatory information could not improve its chances of a higher evaluation rating. When an RFP asks firms to provide a discussion of their technical approach, the agency evaluation may reasonably consider the level of detail provided in the requested discussion. TtEC-Tesoro, JV, B-405313, B‑405313.3, Oct. 7, 2011, 2012 CPD ¶ 2 at 8. Furthermore, where a firm merely indicates that it will meet a particular requirement, thereby discussing only the end results, but provides little or no detail about how it plans to meet or exceed the requirement, the agency may reasonably downgrade the proposal. SunGard Data Sys., Inc., B-410025, Oct. 10, 2014, 2014 CPD ¶ 304 at 4; Leader Commc’ns Inc., B-298734, B-298734.2, Dec. 7, 2006, 2006 CPD ¶ 192 at 6. Ultimately, an agency’s evaluation is dependent upon information furnished in a proposal, and it is the firm’s burden to submit an adequately written proposal for the agency to evaluate. Id. A simple statement of compliance promises but does not demonstrate compliance. As the agency points out, “[a]n offeror can say that it intends to comply with the requirements in the RFP but if it describes how it will comply with the requirements, the evaluators have more information with which to judge the quality and likelihood of successful performance by the offeror.” Memorandum of Law at 2-3. In sum, we find to be without merit the protester’s argument that the agency misled it by failing to advise it that narrative responses to discussion questions might result in more favorable ratings than simple statements of compliance.

EDT further argues that the Corps improperly used unstated evaluation criteria by preferring narrative responses over straightforward statements of the intent to comply. The protester also asserts that the agency’s best-value trade-off was flawed and resulted in an erroneous award decision. These arguments are based on substantially the same arguments raised by EDT in its challenge to the agency’s discussions, which, as indicated above, we found unpersuasive. We also note that the agency responded to both arguments in its agency report, and the protester did not take issue with or seek to rebut the agency response in its comments on the report; thus, we consider it to have effectively abandoned these arguments. TPMC-Energy Solutions Envtl. Servs. 2009, LLC, B-408343.2 et al., Aug. 23, 2013, 2013 CPD ¶ 215 at 8.  (Engineering Design Technologies, Inc. B-413281: Sep 21, 2016)


AAR Airlift Group, Inc., of Palm Bay, Florida, protests the award of contracts to Erickson Inc., of McMinnville, Oregon, under request for proposals (RFP) No. N62387-15-R-8008 (‑8008) and RFP No. N62387-15-R-8009 (‑8009), issued by the Department of the Navy, Military Sealift Command, for ship-based and/or shore-based vertical replenishment services.

(* * * * *)

This table shows the results of the evaluation of proposals under solicitation -8008::
 

Offeror

Technical Rating Past Performance Price
Erickson Acceptable Acceptable $36,634,581
ACHI (submission one) Acceptable Acceptable $55,028,722
ACHI (submission two) Acceptable Acceptable $50,152,895
AAR Acceptable Acceptable $60,301,046

This table shows the results of the evaluation of proposals under solicitation ‑8009:

Offeror

Technical Rating Past Performance Price
Erickson Acceptable Acceptable $32,550,667
ACHI (submission one) Acceptable Acceptable $40,837,235
ACHI (submission two) Acceptable Acceptable $50,490,307
AAR Acceptable Acceptable $59,383,184

(emphasis added)

(* * * * *)

AR, Tab M, Source Selection Decision, at 5; Protest at 8.

The agency notified the protester on February 12, that it had made award to Erickson, the lowest‑priced, technically-acceptable offeror under each solicitation. The agency provided AAR with a debriefing on February 22. Protest at 2. This protest followed on February 26.

Discussions

AAR next argues that the agency failed to conduct meaningful discussions by failing to inform it that its price was higher than other offerors’ prices and the independent government estimate (IGE). We disagree and find no basis to conclude that the agency failed to conduct meaningful discussions with AAR.

When an agency engages in discussions with an offeror, the discussions must be “meaningful,” that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Southeastern Kidney Council, B‑412538, March 17, 2016, 2016 CPD ¶ 90 at 4. Although discussions must address deficiencies and significant weaknesses identified in proposals, the precise content of discussions is largely a matter of the contracting officer’s judgment. FAR § 15.306(d)(3); Southeastern Kidney Council, supra. Where an offeror’s price is high in comparison to competitors’ prices or the government estimate, the agency may, but is not required to, address the matter during discussions. IAP World Services, Inc. B-297084, November 1, 2005, 2005 CPD ¶ 199 at 4. That is, there is no requirement that an agency inform an offeror during discussions that its price may be too high where the offeror’s price is not considered excessive or unreasonable. Southeastern Kidney Council, supra. Thus, if an offeror’s price is not so high as to be unreasonable and unacceptable for contract award, the agency reasonably may conduct discussions without advising the offeror that its prices are not competitive. IAP World Services, Inc., supra.  (emphasis added)

Here, there is nothing in the record to indicate that the agency considered the protester’s price to be excessive or unreasonable. As such, the agency was under no obligation to inform AAR that its price was high in comparison to the prices proposed by ACHI or Erickson. In this regard, the record indicates that the agency’s price evaluation of initial proposals included: (1) a comparison of the prices submitted by all four offerors; (2) a comparison to an independent government estimate; and (3) a comparison to historical prices for the services sought by the solicitation. AR, Tab K, Price Evaluation Report, at 3, 8, and 10. Based on its findings, the record reflects that the agency informed AAR, during discussions, that it considered its prices high in certain areas. Specifically, the agency advised AAR that its delivery and redelivery price for heavy lift appeared high in comparison to the IGE. AR, Tab P, AAR Discussion Items and Responses, at 1. The agency also informed AAR that its escalation rate from the base period to option period one for per diem was unbalanced and appeared high. Id. In response, AAR made adjustments to its prices proposed in those areas.

Additionally, although the agency did not conclude that AAR’s total evaluated price was excessive or unreasonable, it did find that AAR’s overall price was high, and mentioned during discussions that “this is a competitive procurement” and that AAR “should provide its best and final offer.” Id. at 2; AR, Tab K, Price Evaluation Report, at 3. In response, AAR acknowledged the message, and confirmed that it was revising its proposed price to provide its best and final offer. Id. In sum, the record shows that the agency conducted meaningful discussions, and went beyond what is required with regard to the protester’s proposed price.  (AAR Airlift Group, Inc. B-412789.2, B-412790.2: Jun 2, 2016)  (pdf)


Crowley alleges that the agency’s discussions regarding the evaluation of the firm’s proposal under technical capability subfactor 4, operational support, were not meaningful. Protest at 16-21. Crowley points out that the agency documented a significant concern that the firm’s proposal lacked detail as to how Crowley would be proactive in identifying performance issues before notification by the agency. Protest at 19. Crowley then alleges that the agency improperly failed to raise this issue in discussions. Id. at 16-19. For the reasons discussed below, we agree.

It is a fundamental principle of negotiated procurements that discussions, when conducted, must be meaningful; that is, discussions must identify deficiencies and significant weaknesses in an offeror’s proposal that could reasonably be addressed so as to materially enhance the offeror’s potential for receiving award. Sentrillion Corp., B-406843.3 et al., Apr. 22, 2013, 2013 CPD ¶ 207 at 6; Spherix, Inc., B‑294572, B-294572.2, Dec. 1, 2004, 2005 CPD ¶ 3 at 13; Federal Acquisition Regulation (FAR) § 15.306(d).

Here, the record reflects that after the initial evaluation of Crowley’s proposal, the SSEB assessed no strengths, weaknesses, or deficiencies under subfactor 4, and assigned it a technical rating of acceptable and a risk rating of moderate under this subfactor. AR, Tab 60, SSEB Rep., at 14. However, the SSEB also documented its finding that “[t]he proposal lacked indication that the Offeror would be proactive in identifying issues prior to notification by the Government which could cause degradation in performance throughout the life of the contract.” Id.

As stated above, the evaluation criteria for the technical capability subfactors included numerous areas. The SSEB finding quoted above apparently relates to the area of quality assurance, or, more specifically, the solicitation’s statement that under subfactor 4, the agency would evaluate the extent to which an offeror’s quality assurance surveillance plan “reflects that the contractor, not the government, is responsible for ensuring performance meets the terms of the contract” and the extent to which the plan “[e]nsures early identification and resolution of performance issues to minimize impact on mission performance.” RFP at 53. As relevant here, other subfactor 4 evaluation areas included staffing and, under the heading quality control, shipment loss/damage mitigation, claims processing, and low volume/low frequency sites. Id. at 52.

Following the initial evaluation of Crowley’s proposal, four evaluation notices (EN) regarding subfactor 4 were issued to the firm. AR, Tab 60, SSEB Rep., at 317-20, 334-37. These ENs were identified as pertaining to the areas of shipment loss/damage mitigation, claims processing, low volume/low frequency sites, and staffing. Id. Hence, none of the ENs were identified as pertaining to the early identification and resolution of performance issues. Additionally, none of the ENs addressed Crowley’s approach to being proactive in identifying issues before notification from the agency.

Crowley submitted responses to the ENs, which the SSEB evaluated as “satisfactory.” See AR, Tab 60, SSEB Rep., at 23. However, the SSEB also repeated its finding that “[t]he proposal lacked indication that the Offeror would be proactive in identifying issues prior to notification by the Government,” and it added that this issue “could cause degradation in performance throughout the life of the contract.” Id. No further ENs regarding subfactor 4 were issued to Crowley.

Following the submission and evaluation of Crowley’s FPR, the firm’s subfactor 4 technical rating remained acceptable, and its subfactor 4 risk rating remained moderate. AR, Tab 60, SSEB Rep., at 30. At this point, the SSEB prepared a comparative analysis of the proposals in the competitive range. Under subfactor 4, the SSEB documented the following:

Crowley’s proposed approach is considered to be the least preferable under this Subfactor as they received a technical rating of Acceptable along with a Moderate risk rating. The moderate risk associated with Crowley’s proposal is due to a lacking indication that the Offeror would be proactive in identifying issues prior to notification by the Government which could cause degradation in performance throughout the life of the contract.

Id. at 36 (emphasis in original). Thus, the SSEB made clear that the concern regarding whether Crowley would be proactive in identifying issues before notification from the agency was the reason for the elevated risk rating assigned to the firm’s proposal.

As discussed above, the SSA selected GENCO’s higher-rated, higher-priced proposal for award based essentially on three factors: Crowley’s past performance rating of unknown confidence/neutral versus GENCO’s rating of satisfactory confidence, Crowley’s technical rating of acceptable under subfactor 4 versus GENCO’s rating of outstanding, and Crowley’s risk rating of moderate under subfactor 4 versus GENCO’s rating of low. See AR, Tab 62, SSDD, at 4-7. As also discussed above, the source selection decision specifically highlighted the finding underpinning Crowley’s elevated risk rating (i.e., the concern over whether Crowley would be proactive in identifying issues before notification from the agency), as well as the finding that [DELETED]. Id. at 4.

As previously stated, in order to be meaningful, discussions must identify deficiencies and significant weaknesses in an offeror’s proposal. Here, the agency did not label its concern regarding whether Crowley would be proactive in identifying issues as a significant weakness or deficiency. For the reasons discussed below, however, we find that the issue represented a significant weakness.

First, SSEB repeatedly documented its view that the issue “could cause degradation in performance throughout the life of the contract.” AR, Tab 60, SSEB Rep., at 14, 23, 36. Second, the SSA echoed this conclusion in his source selection decision. AR, Tab 62, SSDD, at 4. We have previously concluded that when an agency finds, as it did here, that the risk associated with a given aspect of an offeror’s proposal may jeopardize successful performance of a contract, it represents a significant weakness. See Raytheon Co., B-404998, July 25, 2011, 2011 CPD ¶ 232 at 7; AT&T Corp., B‑299542.3, B-299542.4, Nov. 16, 2007, 2008 CPD ¶ 65 at 11; see also FAR § 15.001 (defining a “significant weakness” as a proposal flaw that appreciably increases the risk of unsuccessful performance). Given the degree of risk that both the SSEB and the SSA attributed to the concern, we view it as a significant weakness, regardless of the fact that the agency did not expressly characterize it as such. See Raytheon Co., supra; AT&T Corp., supra.

Prejudice is an element of every viable protest. See Piquette & Howard Electric Serv., Inc., B-408435.3, Dec. 16, 2013, 2014 CPD ¶ 8 at 10; Supreme Foodservice GmbH, B-405400.3 et al., Oct. 11, 2012, 2012 CPD ¶ 292 at 14. Here, the SSA selected GENCO’s proposal for award notwithstanding its evaluated price premium of more than $1 billion. AR, Tab 62, SSDD, at 6-7. Further, he based his tradeoff decision essentially on only three factors, one of which was Crowley’s elevated risk rating under subfactor 4. As discussed above, the record shows that the sole basis for the elevated risk rating was a concern that should have been, but was not, raised in discussions. Given the magnitude of difference in the total evaluated price of the two proposals (more than $1 billion), we cannot say what the award decision might have been had Crowley been provided the opportunity to improve its risk rating under subfactor 4. In such circumstances, we resolve doubts regarding prejudice in favor of a protester since a reasonable possibility of prejudice is a sufficient basis for sustaining a protest. See Supreme Foodservice GmbH, supra; Kellogg, Brown & Root Servs., Inc.--Recon., B-309752.8, Dec. 20, 2007, 2008 CPD ¶ 84 at 5. Accordingly, we conclude that there is a reasonable possibility that Crowley was prejudiced by the agency’s actions.

In sum, we sustain Crowley’s claim regarding discussions because: (1) in its initial evaluation, the agency documented concern over whether Crowley would be proactive in identifying issues before agency notification; (2) the agency did not raise this issue in discussions but instead documented it as a significant performance risk; and (3) the issue was a material factor in the agency’s best-value tradeoff, demonstrating prejudice to Crowley. We therefore recommend that the agency reopen the competition, conduct meaningful discussions with the competitive-range offerors, request and evaluate revised proposals, and make a new source selection decision.  (Crowley Logistics, Inc. B-412628.2, B-412628.3, B-412628.4: Apr 19, 2016)  (pdf)


MetalCraft also claims that, during discussions, the Navy misled the protester into believing that the agency simply wanted MetalCraft to “clarify” its initial proposal with regard to the impact of its proposed [DELETED] on stability and buoyancy, but not necessarily revise its initial proposal in that regard. Supp. Protest at 2-3; Comments at 10-11, 14-16. In this respect, the protester cites the agency’s written discussions questions, which explicitly requested that MetalCraft “provide clarification” regarding specified items. Comments at 10. MetalCraft also maintains that the Navy was required to reopen discussions because the agency only identified concerns over the weight of water on deck after reviewing MetalCraft’s FPR. Supp. Comments at 9-10.

The Navy maintains that it should have been clear to the protester that the Navy was simply using the term “clarify” in its discussion questions to mean “address” or “explain,” and that the substance of the questions and the required responses otherwise constituted discussions under FAR § 15.306(d). Id. at 13. The agency also disputes that it was required to reopen discussions because MetalCraft, in its FPR, submitted a new stability analysis, including new stability curve data and related information. Supp. AR at 11-14; 1st Declaration of Naval Architect & Sr. Craft Design Mgr. at 4-5, citing AR, Tab 11, MetalCraft FPR, Vol. 1, § 2.a.4, Rev. Stability Analysis.

FAR § 15.306 describes a spectrum of exchanges that may take place between a contracting agency and an offeror during negotiated procurements. Clarifications are limited exchanges between the agency and offerors that may occur when contract award without discussions is contemplated; an agency may, but is not required to, engage in clarifications that give offerors an opportunity to clarify certain aspects of proposals or to resolve minor or clerical errors. FAR § 15.306(a); Satellite Servs., Inc., B-295866, B‑295866.2, Apr. 20, 2005, 2005 CPD ¶ 84 at 2 n.2. Discussions, by contrast, occur when an agency communicates with an offeror for the purpose of obtaining information essential to determine the acceptability of a proposal or quotations, or provides the vendor with an opportunity to revise or modify its proposal. Diversified Collection Services, Inc., B-406958.3, B‑406958.4, Jan. 8, 2013, 2013 CPD ¶ 23 at 11-12; see FAR § 15.306(d). It is the actions of the parties that determine whether discussions have been held and not merely the characterization of the communications by the agency. See Priority One Servs., Inc., B‑288836, B‑288836.2, Dec. 17, 2001, 2002 CPD ¶ 79 at 5.

We find that, notwithstanding the Navy’s request that the protester “provide clarification” under certain enumerated discussion questions, the exchanges at issue constituted discussions, not clarifications.[8] Here, the information the agency requested that MetalCraft provide with regard to sea state conditions, stability, and buoyancy, was necessary to determine the acceptability of MetalCraft’s technical proposal, including its alternate design for a craft with [DELETED]. See, e.g., ADNET Sys., Inc., et al., B‑408685.3 et al., June 9, 2014, 2014 CPD ¶ 173 at 14-16. Moreover, the protester was permitted an opportunity to revise its proposal through the submission of a FPR.

We also find no merit to the protester’s arguments that the agency should have reopened discussions with the protester. Discussions, when conducted, must identify proposal deficiencies and significant weaknesses that reasonably could be addressed in order to materially enhance the offeror’s potential for receiving award. Serco Inc., B-405280, Oct. 12, 2011, 2011 CPD ¶ 237 at 11. However, agencies are not required to reopen discussions to afford an offeror an additional opportunity to revise its proposal where a weakness or deficiency is first introduced in the firm’s revised proposal. Raytheon Co., B‑403110.3, Apr. 26, 2011, 2011 CPD ¶ 96 at 7. Here, the protester essentially concedes that the agency’s stability concerns regarding weight on water on deck arose from new stability data introduced in MetalCraft’s FPR. See, e.g., Supp. Comments at 8.  (MetalCraft Marine Inc., B-410199, B-410199.2: Nov 13, 2014)  (pdf)


First, NPP challenges the scope of the agency’s corrective action, asserting that the agency failed to comply with the FAR requirement that, in conducting discussions, an agency must identify deficiencies, significant weaknesses, and adverse past performance to which the offeror has not yet had an opportunity to respond. See FAR § 15.306(d)(3). NPP asserts that the agency’s ultimate determination that approximately [redacted] percent of NPP’s proposed cost savings were not feasible constituted a significant weakness in NPP’s proposal and, therefore, the agency was obligated to have brought to NPP’s attention during discussions the particular bases for the non-feasibility determinations.

When an agency engages in discussions with an offeror, the discussions must be meaningful. For discussions to be meaningful, they must identify significant weaknesses, deficiencies, and adverse past performance to which the offeror has not yet had an opportunity to respond. FAR § 15.306(d)(3). A significant weakness is a flaw that appreciably increases the risk of unsuccessful contract performance. FAR § 15.001. A deficiency is a material failure to meet a government requirement or a combination of significant weaknesses that increases the risk of unsuccessful contract performance to an unacceptable level. Id. In contrast to the requirement to discuss significant weaknesses and deficiencies, an agency need not discuss areas in which a proposal may merely be improved, JWK Int’l, Corp. v. U.S., 279 F.3d 985, 988 (Fed. Cir. 2002), nor is an agency required to point out every aspect of a proposal that offers a less desirable approach than that offered by its competitors. ProLog, Inc., B‑405051, Aug. 3, 2011, 2012 CPD ¶ 84 at 7; PWC Logistics Servs., Inc., B‑299820, B-299820.3, Aug. 14, 2007, 2007 CPD ¶ 162 at 6.

The agency responds that NPP’s proposed cost savings did not constitute a significant weakness in its proposal. To the contrary, the agency points out that NPP’s proposal was rated excellent under the management approach/cost savings evaluation factor, and was assigned a significant strength specifically because of its proposed cost savings. As noted above, in assigning this strength, the agency stated:

The IPT found approximately [redacted] B[illion] of the cumulative savings . . . to be feasible without impact to effective security and mission deliverables (See Exhibit E). The size of the feasible cumulative cost savings to the Government is approximately [redacted] of the total projected ten year budget for the CLIN 001 scope of work. . . . The [redacted] B[illion] feasible savings is a significant benefit to the Government because it represents a substantial amount of cost savings relative to the operating budget. . . . The size of these cost savings for reinvestment will become increasingly more important as federal budgets continue to decline.

AR for NPP’s Current Protest, Tab E-1, IPT Supp. Evaluation Report, Oct. 28, 2013, at 11-12.

In short, the agency asserts that, rather than constituting a significant weakness or deficiency in NPP’s proposal, the proposal offered a substantial amount of feasible cost savings that constituted a significant benefit to the government. The fact that NPP also proposed cost savings which the agency found to be infeasible did not constitute a deficiency or significant weakness. See Hearing Transcript for NPP’s Current Protest (Tr.C), Testimony of SSA, at 841-42.

In asserting that the agency’s infeasibility determinations regarding [redacted] percent of its proposed cost savings constituted a significant weakness in its proposal, NPP refers to the solicitation’s “gateway” provision, which provides that in order to be eligible for exercise of a contract option, the awardee must have achieved, by the end of year three, at least 80 percent of the cost savings that it proposes to achieve by that time. RFP at 21. NPP further notes that, in his source selection decision, the SSA stated that, because NPP’s feasible cost savings constituted a lower percentage of its total proposed cost savings than that of CNS, NPP would need to “reach farther” than CNS to extend contract performance, noting that NPP’s efforts in this regard “could lead to a loss of management focus on security, safety, and mission.” SSD at 6.

Here, we do not view the portion of NPP’s proposed cost savings that the agency found to be infeasible as constituting a significant weakness or deficiency. As noted above, the IPT and the SSA both concluded that NPP’s proposal was properly rated as excellent under the management approach/cost savings evaluation factor, and further recognized that the substantial amount of feasible cost savings that NPP proposed constituted a significant benefit to the government. Further, the evaluation record supports the view that NPP fully understood the contract requirements and the SSA testified that he did not question NNP’s capability to successfully perform the contract. Tr.C at 841-42.

In arguing that its proposed cost savings constituted a significant weakness, NPP’s reliance on the solicitation’s “gateway” provision is misplaced. Successful performance of the contract requirements was not conditioned on achieving 80 percent of the proposed cost savings, or upon being eligible for contract extension. Rather, the solicitation’s “gateway” provision was clearly intended to function as both an incentive for offerors to propose achievable cost savings, and a tool for the agency to use in administering the contract. In our view, the SSA’s recognition that a contractor’s interest in achieving greater cost savings could lead to loss of management focus did not constitute a determination that this aspect of NPP’s proposal constituted a “flaw that appreciably increases the risk of unsuccessful contract performance”--that is, the agency reasonably concluded that it did not rise to the level of being a significant weakness.

Even if we were to conclude that NPP’s infeasible cost savings constituted a significant weakness (which we do not), the record supports the agency’s alternative argument that it did not know--and could not have known--the bases for finding a portion of NPP’s proposed cost savings to be infeasible when it evaluated NPP’s previously-submitted FPR. That is, it was not until NPP submitted its corrective action addendum, with the additional information required, and in the format mandated by the agency, that the magnitude of NPP’s infeasible cost savings became reasonably apparent. Accordingly, the agency was not required to reopen discussions. See L-3 Communications Corp., BT Fuze Products Div., supra.

Finally, as the agency also notes, NPP was, in fact, advised by the agency’s discussion letter that it must provide supporting information for each and every cost savings initiative it had proposed. Among other things, the agency directed NPP to “[e]xplain the basis for each initiative,” and to “provide a concise description of the basis for each estimate.” AR for NPP’s Current Protest, Tab F.1, Discussion Letter for NPP, at 1 (underlining added). NPP does not dispute that it did, in fact, provide additional supporting information for each and every cost savings initiative, and it has not identified any particular additional information that it would have provided if discussions had been reopened. On this record we reject NPP’s assertion that the agency failed to conduct meaningful discussions in connection with its corrective action.  (Nuclear Production Partners LLC, B-407948.10, B-407948.11: Feb 27, 2014)  (pdf)


Significant Weakness 1: Individual Approach for Sub-Annexes

West argues that the Navy failed to conduct meaningful discussions regarding West’s sub-annex approach under annexes 15 and 16. The protester contends that although the agency directed it to amplify its approach for four of the six sub-annexes under annex 15, the agency made no mention of any concerns with West’s approach to the eight sub-annexes under annex 16. For this reason, West argues that by pointing out problems with its approach to addressing the requirements of annex 15, but saying nothing about annex 16, the agency’s discussion questions here were inadequate and misleading. We agree.

To address the first significant weakness, the agency’s discussion question requested that West “explain the method and approach proposed to accomplish the requirements of the BUMED, Pest Control, Integrated Solid Waste, and Pavement Clearance annexes.” AR, Tab I2, Evaluation Notice, Enclosure 2, Non-Price Discussion Questions, at 1. The discussion questions made no mention of any issues regarding a method or approach to any of the eight sub-annexes under annex 16. Id. In response to the discussion questions, West revised its proposal regarding annex 15. In its final evaluation, the agency concluded that West’s revised proposal did not address the annex 15 and 16 requirements, and that the significant weakness remained. AR, Tab D2B, Final Technical Evaluation-West, at 8.

During the course of this protest, the Navy acknowledged that its question to West “may have omitted by typing error” any mention of the utilities requirements, under the annex 16 sub-annexes. Agency Response to Comments (May 13, 2013), at 8. The agency contends, however, that its question about annex 15 should have been sufficient to advise West of the agency’s concerns about annex 16 because the question also “clearly reminded the offeror that they must discuss their approach for each annex.” Id. at 7. In essence, the agency argues that, because the question advised the protester of the need to address--in detail--four of the six sub-annexes under annex 15, the protester was on notice that it should have also addressed in detail the eight sub-annexes under annex 16. The Navy also asserts that its price discussion questions should have also put West on notice of issues with its utility annex.

Based upon our review of the record, we find that the specific nature of the agency’s questions misled West to respond only to concerns about annex 15, and not about annex 16. We do not agree with the agency that its reference to an individual approach for four sub-annexes under annex 15 could have alerted West to the agency’s concerns regarding West’s approach to the eight sub-annexes under annex 16. We also have no basis to conclude that the Navy’s price discussion questions notified West of the agency’s concerns with regard to utilities under the technical approach/methods factor. These questions, which alerted West to its apparent high or low prices and requested West ensure adequate consideration of its FTEs, did not address West’s approach to meeting the annex requirements. Accordingly, we sustain the protest on this basis.

Significant Weakness 2: FTEs/Staffing Level

West also argues that the Navy failed to conduct meaningful discussions regarding its concern with West’s proposed FTEs. The protester contends that although the agency advised West that its proposed FTEs were low in annex 15 and 18, the agency failed to notify it with regard to the other annexes it had determined to be low. In this regard the agency’s decision to eliminate the protester’s proposal from the competitive range was based on a finding that the protester had proposed low FTEs in ten annexes. See AR, Tab H2, SSA Report, at (unnumbered) 6. West argues that the specific nature of the agency’s questions about annex 15 and 18 misled it into believing that its proposed FTEs for annexes other than 15 and 18 were adequate.

In response, the Navy asserts that West was reasonably alerted to the agency’s concerns about low FTEs in seven of the ten annexes considered low by the Navy--even though the Navy acknowledges that to reach this conclusion requires reviewing the overall mix of both price and non-price discussion questions. With regard to the remaining three annexes, the Navy argues it was not required to conduct discussions about these annexes because the proposed FTEs were not found to be low until the agency’s second evaluation.

As discussed above, the agency’s initial technical evaluation concluded that West proposed low FTEs for annexes 15 and 18. AR, Tab D1b, Technical Evaluation- West, at 6-7. The technical evaluation team also found that “[a]ll other annex staffing is commensurate with the IGE.” Id. at 7. The price evaluation team concluded that West’s proposed FTEs were low for six recurring annexes: 1502000, 1503030, 1503060, 1603000, 1607000, and 1609000. AR, Tab E, Price Evaluation, at 59-101. The SSAC initial evaluation did not conduct an assessment of West’s proposed FTEs.

The agency’s non-price discussion questions, for the technical approach/method factor, stated that “Annex 15 and 18 proposed staffing appears low when compared to the RFP requirements for these annexes. Please confirm your staffing is sufficient to comply with the solicitation’s scope.” AR, Tab I2, Evaluation Notices, Enclosure 2, Non-Price Discussion Questions, at 1. The price discussion questions notified the protester of each annex where the agency found its proposed price was outside of the normal distribution, that is, the annex pricing appeared high or low. For the recurring work annexes with pricing outside the normal distribution, the agency also requested that West “ensure that adequate consideration was given to FTEs.” Id., Enclosure 1, Price Discussion Questions, at 1-2.

West’s revised proposal modified its proposed FTE levels for some, but not all annexes. See AR, Tab C3, West Revised Proposal, Full Time Equivalent Worksheet, at 1-4. The technical evaluation team concluded that West’s revised proposal failed to make significant changes to its FTE levels. AR, Tab D2B, Final Technical Evaluation-West, at 7. The price evaluation team concluded that West’s revised proposal continued to offer low FTEs for the same six recurring work annexes as its initial proposal. AR, Tab E2, Final Price Evaluation, at 70-128. The SSAC’s assessment of West’s revised proposal found that ten annexes offered low FTEs: 1501000, 1502000, 1503060, 163000, 1604000, 1605000, 1606000, 1607000, 1609000, and 1800000. AR, Tab G2, Final SSAC Report, at 6. As result, the significant weakness assessed for West’s initial proposal remained.

Based upon the record, we agree with the agency that West was reasonably alerted about the agency’s concerns with low FTEs in seven of the ten annexes as set forth in greater detail below. First, the agency expressly stated that it was concerned with low FTEs in annex 15 and 18. Thus, this concern alerted West to problems with four of the ten annexes the SSAC ultimately concluded offered low FTEs: 1501000, 1502000, 1503060, and 1800000. Second, we agree with the Navy that the price discussion questions lead West into the area of its proposal where the Navy had concerns about low FTEs under 1603000, 1607000, and 1609000. Specifically, these questions advised that the overall price for these sub-annexes “appears low,” and requested that the protester “[r]eview proposed Sub-LIN as well as supporting prices . . . and ensure that adequate consideration was given to FTEs.” AR, Tab I2, Evaluation Notice, Enclosure 1, at 2. Accordingly, we think the agency reasonably advised West of seven of the ten annexes where it had concerns with low FTE levels. See Insignia-Spectrum, LLC, B-406963.2, Sept. 19, 2012, 2012 CPD ¶ 304 (in order for discussions to be meaningful, the agency need only lead an offeror into the areas of its proposal requiring amplification or revision).

For the final three annexes, 1604000, 1605000, and 1606000, we see no basis in the record to conclude that the Navy advised West of its concerns. The Navy argues that it was not required to discuss these three remaining annexes with West, since the agency had not evaluated these annexes as containing low FTEs until its evaluation of revised proposals. The record shows, however, that the protester did not revise its proposed FTEs for these annexes. Where, as here, an agency identifies new concerns during a post-discussions reevaluation, and those concerns would have been required to be raised had they been identified before discussions were held, the agency is required to reopen discussions in order to raise the concerns with the offeror for discussions to be meaningful. Ewing Constr. Co., Inc., B-401887.3, B-401887.4, April 26, 2010, 2010 CPD ¶ 108 at 3.

Moreover, the documents provided to our Office with regard to the initial and final evaluation of these annexes were heavily redacted. Based on the record provided by the agency, we cannot determine whether (or when) the agency concluded that these three annexes had low FTEs. Although an agency is not required to retain every document generated during its evaluation of proposals, the agency’s evaluation must be sufficiently documented to allow our Office to review the merits of a protest. Supreme Foodservice GmbH, B-405400.3 et al., Oct. 11, 2012, 2012 CPD ¶ 292 at 10. Thus, for these three annexes, we conclude that the agency failed to provide meaningful discussions.

In sum, we conclude that West was advised of low FTEs for the four annexes raised in the non-price discussion questions, and the three annexes raised in the price discussion questions (1603000, 1607000, 1609000). These questions address only seven of the ten annexes cited to as the basis for the agency’s significant weakness and serious concern with regard to West’s low FTEs. Accordingly, we find that the agency’s discussion questions did not properly alert West to the agency’s concerns with its low FTEs, and we sustain the protest on this basis.  (West Sound Services Group, LLC, B-406583.2, B-406583.3, Jul 3, 2013)  (pdf)


Sentrillion primarily contends that the Marshals Service failed to conduct meaningful discussions. Specifically, the protester argues that, although the agency advised the protester during discussions of concerns regarding missing or expired business licenses or applications, the agency failed to advise it of deficiencies regarding certain license applications that were viewed by the agency as incomplete. Because the agency’s evaluation of the protester’s revised proposals found these same incomplete license applications rendered Sentrillion’s proposals technically unacceptable, the protester argues that the agency’s discussions were misleading and not meaningful. For the reasons discussed below, we agree.

In reviewing a protest challenging an agency’s evaluation of proposals, our Office will not reevaluate proposals but instead will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. While we will not substitute our judgment for that of the agency, we will question the agency’s conclusions where they are inconsistent with the solicitation criteria, undocumented, or not reasonably based. DRS ICAS, LLC, B-401852.4, B-401852.5, Sept. 8, 2010, 2010 CPD ¶ 261 at 4-5 (sustaining a protest where the agency’s evaluation was not reasonable and consistent with the solicitation).

It is a fundamental principle of negotiated procurements that discussions, when conducted, must be meaningful; that is, discussions must identify deficiencies and significant weaknesses in an offeror’s proposal that could reasonably be addressed so as to materially enhance the offeror’s potential for receiving award. PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD ¶ 124 at 8; Spherix, Inc., B-294572, B-294572.2, Dec. 1, 2004, 2005 CPD ¶ 3 at 13; Federal Acquisition Regulation (FAR) § 15.306(d). An agency may not mislead an offeror through the framing of a discussions question into responding in a manner that does not address the agency’s actual concerns, or otherwise misinform the offeror concerning a problem with its proposal. Metro Mach. Corp., B-281872 et al., Apr. 22, 1999, 99-1 CPD ¶ 101 at 6. Additionally, if an agency identifies concerns during a re-evaluation of proposals that should have been raised had they been identified before discussions were held, the agency is required to reopen discussions in order to raise the concerns with the offerors for discussions to be meaningful. See Ewing Constr. Co., Inc., B-401887.3, B-401887.4, April 26, 2010, 2010 CPD ¶ 108 at 3.

As discussed above, the Marshals Service’s initial evaluation assigned a deficiency for each of Sentrillion’s three regional proposals under the business licenses subfactor because the protester did not provide proof of a current license, or an application for a license, for all of its service providers. AR, Tab 27, Price Negotiation Memorandum, at 9, 12, 15. The agency also assigned a second deficiency under the business licenses subfactor to Sentrillion’s Central and Eastern region proposals because Sentrillion submitted expired licenses for certain of its proposed service providers. Id. at 10, 13. Both of these deficiencies were raised in discussions with Sentrillion. AR, Tab 21, Sentrillion Discussions Letter, at 1-4. The agency’s discussions letter did not, however, advise the company that, in the agency’s view, some of Sentrillion’s other license applications were incomplete.

As a result, the record shows that Sentrillion addressed the issues that were identified in the agency’s discussions letter, but made no changes to the applications that were submitted in its initial proposals and were not questioned by the agency. See AR, Tab 23, Sentrillion Revised Proposals (Nov. 15, 2012), at 1-2; Technical Proposals, Business Licenses (Central, Eastern, and Western). Nonetheless, in its final evaluation, the agency found that these license applications failed to contain the information required. Consequently, Sentrillion’s proposals received an unacceptable rating under the business licenses subfactor, which eliminated the protester from further consideration for award.

Sentrillion argues that if it had been advised during discussions that the agency viewed its applications as incomplete, it would have addressed this issue in its revised proposals. See Protest at 18. In response, the agency asserts that it did not mislead Sentrillion because its discussions letter led Sentrillion into the general area of its proposals that required amplification or revision. In this regard, the agency contends that it advised Sentrillion that it needed to provide “a current company license or the application for a company license” for each service provider performing services in each region proposed. AR, Tab 21, Sentrillion Discussions Letter, at 1, 3, 4.

Based upon our review of the record, we find that the agency failed to convey its concerns with the protester’s license applications, which ultimately led to Sentrillion’s unacceptable rating under the business licenses subfactor. Whether the agency was aware of the incomplete applications during its initial evaluation, or became aware of the issue only in its final evaluation, the agency’s ultimate concerns relate to a deficiency that existed in Sentrillion’s initial proposals, that was not identified as a problem during discussions. Since this deficiency led to Sentrillion’s ultimate elimination from the competition, we conclude that Sentrillion was not provided with meaningful discussions. See Ewing Constr. Co., supra.  (Sentrillion Corporation, B-406843.3, B-406843.4, B-406843.5, Apr 22, 2013)  (pdf)


Sharp argues that the Navy’s discussions were misleading because the Navy advised Sharp to “increase its proposed [cost] on the basis that it was ‘understated,’ when, in reality, Sharp’s total proposed cost was already $3 million higher than Global’s overall evaluated [cost].” Protest at 6. Sharp contends that it should have been advised that its proposed costs were too high, and advised to find ways to reduce its costs. Id. Sharp argues that by advising Sharp that its costs were understated, the Navy misled Sharp into thinking that the only cost adjustment it could reasonably consider making would be an upward adjustment. Sharp’s Response to Navy’s Request for Partial Summary Dismissal, at 2. As a result, Sharp argues it was denied an opportunity to make its cost proposal more competitive.

In negotiated procurements, if an agency conducts discussions, the discussions must be meaningful. E.g., The Communities Group, B-283147, Oct. 12, 1999, 99-2 CPD ¶ 101 at 4. That is, agencies must lead offerors into the areas of their proposals that contain significant weaknesses or deficiencies, and it may not mislead offerors. While an agency must advise an offeror if its proposed cost/price is considered unreasonably high, Price Waterhouse, B-220049, Jan. 16, 1986, 86-1 CPD ¶ 54 at 6-7, an agency need not advise an offeror that its costs are higher than those of its competitors if the higher costs are not viewed as unreasonable. E.g., DeTekion Sec. Sys., Inc., B-298235, B-298235.2, July 31, 2006, 2006 CPD ¶ 130 at 15.

We do not find that the Navy’s discussions with Sharp were misleading. As an initial matter, the record does not support Sharp’s assertion that the Navy advised Sharp to increase its “total proposed cost.” To the contrary, the record shows that, the Navy accurately conveyed its cost realism concerns regarding specific elements of Sharp’s costs, which initially appeared understated based on a comparison of the proposed costs with Sharp’s incumbent contract costs, as well as information from DCAA and DCMA.

By informing Sharp of its concerns, the Navy properly lead Sharp into the areas of its proposal that required Sharp’s own input in the form of revisions, explanations, clarifications, or amplifications. Rather than encouraging Sharp to raise its costs, the agency requested further justification for the prices the protester had initially proposed.

Additionally, the Navy did not prohibit Sharp from lowering its total proposed cost, and, in fact, explicitly encouraged Sharp to review all the cost elements of its proposal, in light of the competitive environment. Protest, Exhibit 5, Discussion Letter from Navy, August 29, 2012, at 2. Sharp’s decision to preserve its initial cost estimate, with the exception of its fee, was an exercise of its independent business judgment and in no way suggests misleading or otherwise improper discussions. See Enterprise Information System, B-401037.5, B-401037.6, Dec. 1, 2009, 2009 CPD ¶ 233 at 3.

In addition to arguing that the Navy misled it to believe that the only cost adjustment Sharp could make would be an upward adjustment, Sharp also asserts that the Navy should have explicitly advised it to lower its costs in order to be competitive with the lower cost proposal submitted by Global. Where, as here, an offeror’s costs are high in comparison to those of its competitors, the agency may, but is not required to, address the matter during discussions. Mechanical Equipment Company, Inc. et al., B-292789.2, et al., Dec. 15, 2003, 2004 CPD ¶ 192 at 18. Accordingly, if an offeror’s costs are not so high as to be unreasonable and unacceptable for contract award, the agency may reasonably conduct meaningful discussions without advising the offeror that its costs are not competitive. Id.

As mentioned above, the Navy reminded Sharp of the competitive environment and encouraged the company to review its proposed costs. That said, since the agency viewed Sharp’s cost proposal as acceptable for contract award, considering its proposed approach, and did not view its proposed costs as unreasonably high, it was not required to expressly raise the matter in more detail than to advise Sharp to be mindful of the competitive environment. In our view, this reminder should have served as a caution to Sharp. In short, we find that the agency did not mislead Sharp during discussions.  (George G. Sharp, Inc., B-408306, Aug 5, 2013)  (pdf)


Misleading Discussions

DynCorp finally contends that the agency engaged in misleading discussions with the firm. According to DynCorp, the agency posed discussion questions that led it to increase its proposed staffing. The protester asserts that, ultimately, it was led to propose more staffing than was necessary to perform the contract, and that it was thereby prejudiced by the agency’s actions. In support of this assertion, DynCorp points to an observation allegedly made by the contracting officer during one of DynCorp’s debriefings to the effect that the evaluators thought DynCorp may have included requirements or processes relating to performance of the predecessor contract that were not required by the current solicitation.

However, the evaluation record, not the agency’s alleged statements during a debriefing, provide the basis for our review. Our concern is with the manner in which the evaluation was conducted, not the protester’s understanding of the agency’s subsequent explanation of how it cnducted its evaluation, and a debriefing is only an explanation of the agency’s evaluation and source selection, not the evaluation or decision itself. Keystone Sealift Servs., Inc., B-401526.3, Apr. 13, 2010, 2010 CPD ¶ 95 at 5.

The record here does not show that DynCorp’s proposal was downgraded or otherwise less favorably evaluated based on its alleged offer of excess staffing, and DynCorp has not directed our attention to anything in the evaluation record to support its argument. Since DynCorp’s allegation relating to misleading discussions would necessarily have to be predicated on a finding by the agency that its proposed staffing was excessive, and since the record does not reflect such a finding, it follows that the agency did not mislead DynCorp during discussions into proposing excessive staffing. We therefore deny this aspect of DynCorp’s protest.  (DynCorp International LLC, B-407762.3, Jun 7, 2013)  (pdf)


Misleading Discussions

The protester contends that it was misled during discussions into raising its building and maintenance reserve from $[deleted] to $[deleted], despite the fact that Fedcar’s lower reserve was later evaluated to be acceptable. Protest at 4. Walsh argues that it was misled by the characterization of its reserve as “too low,” and misled by the agency’s use of the average amount proposed for building and maintenance reserve to provide feedback even though the agency did not rely on this average when evaluating proposals. Comments at 4-5.

The Federal Acquisition Regulation (FAR) requires that when conducting discussions pursuant to FAR part 15, contracting officers must raise with each offeror proposal deficiencies and significant weaknesses; contracting officers are also “encouraged to discuss other aspects of the offeror's proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award.” FAR § 15.306(d)(3). During discussions, agencies may not consciously mislead or coerce an offeror into raising its prices. Eagle Tech., Inc., B-236255, Nov. 16, 1989, 89-2 CPD ¶ 468 at 3-4. However, we will not find coercion in discussions where an agency in good faith provides accurate information to an offeror, even where the offeror uses that information to its ultimate competitive detriment. XtremeConcepts Syst., B-406804, Aug. 31, 2012, 2012 CPD ¶ 253 at 5; EMR, Inc., B-406625, July 17, 2012, 2012 CPD ¶ 209 at 5.

Here, the record does not support the protester’s assertion that it was misled or coerced into raising the amount of its building and maintenance reserve. During discussions, the agency informed each offeror of the relationships between the average prices proposed by all offerors and the prices proposed by that offeror. In this regard, the agency informed both Walsh and Fedcar that their building and maintenance reserve was low compared to the average proposed by all offerors. As GAO has long made clear, it will not sustain a protest where, as here, an agency has treated offerors equally by providing them with the same information during discussions, and where the protester responds by increasing its proposed price primarily for reasons within its business judgment. XtremeConcepts Sys., supra; see Robinson’s Lawn Servs., Inc., B-299551.5, June 30, 2008, 2009 CPD ¶ 45 at 8. We therefore find nothing unfair or improper about the agency’s discussions.

Further, we find no basis to sustain the protest based on the agency’s decision to advise offerors of the average amounts proposed by all offerors. We find the decisions cited by the protester, Ranor, Inc., B-255904, Apr. 14, 1994, 94-1 CPD ¶ 258 and DTH Mgmt. Group, B-252879.2, B-252879.3, Oct. 15, 1993, 93-2 CPD ¶ 227, to be distinguishable from the case here. In Ranor, the agency repeatedly advised the protester that its price was “too low” in comparison to the government’s cost estimate. After the agency advised the firm to raise its price, the agency made award to an offeror with a price lower than the protester without regard to the government estimate. In DTH Mgmt. Group, the agency advised the protester that its price was so low in comparison to the government estimate that it had been evaluated as unrealistic. The protester raised its price based on the agency’s advice, but the agency then awarded to a lower-priced offeror, disregarding the government estimate.

In contrast to those cases, the agency here never advised Walsh that its price was “too low,” despite the protester’s numerous claims that it did. Rather, the agency advised each offeror of where various portions of their price proposal stood in relation to the averages of all offerors. Both the protester and the awardee were informed that their reserve prices were below the average and both the protester and awardee decided to raise their reserve prices when submitting their FPRs. Further, the agency here made award to the higher-priced offeror. Under these circumstances, we cannot find that the information provided by the agency during discussions was misleading. This protest ground is denied.  (Walsh Investors, LLC, B-407717, B-407717.2, Jan 28, 2013)  (pdf)


After evaluating initial proposals, AID assigned Nexant’s proposal a weakness for misunderstanding the geographic scope, as well as the nature of the tasks, outlined in the solicitation. Specifically, the evaluators identified the following weakness in the Nexant proposal:

Nexant failed to understand that Optional Task 6 is designed to support focused country-level PFAN activities in any country, not just countries in South Asia. Thus, Nexant did not provide any creative ideas on leveraging sufficient resources and partnerships to engage South Asia as part of the overall program rather than relying entirely on Optional Task 6 resources . . . .

AR, exh. 7, Initial TEC Report, at 33.

During discussions, AID asked Nexant to address the following question: “Please clarify Nexant’s overall understanding [of] Optional Task 6.” AR, exh. 9, Nexant Discussion Questions, at 2. In response to the question, Nexant explained that it would expand PFAN activities in up to 4 South Asian countries, should funding be made available, and explained that Nexant already had a presence in three of the South Asian countries identified in the solicitation: India, Maldives and Sri Lanka. AR, exh. 11, Nexant Discussion Responses, at 10-11.

In evaluating Nexant’s response, the agency evaluators continued to assign Nexant’s proposal a weakness in this area, finding that Nexant did not understand that task 6 was not limited to the South Asian countries identified in the solicitation. AR, exh. 13, Final TEC Report, at 24.

Nexant argues that AID’s discussion question was misleading because it did not afford it an opportunity to address the agency’s actual concerns regarding this weakness. As noted, the evaluators were concerned with two aspects of Nexant’s proposal in this area: (1) its apparent failure to understand that optional task 6 was intended to be available for exercise in any country, and not just in the countries identified by the RFP as South Asia; and (2) Nexant’s apparent failure to provide any creative ideas for leveraging resources and partnerships to engage South Asian countries as part of the overall program, rather than relying entirely on optional task 6 resources. AR, exh. 7, Initial TEC Report, at 33. We agree with Nexant that the agency’s discussion question in this area was misleading.

To the extent the agency’s discussion question focused on either of these two areas of concern, it was limited to directing Nexant’s attention--obliquely--to the first concern, namely, Nexant’s apparent misunderstanding of the geographical scope of optional task 6. We agree with the protester, however, that the discussion question did not adequately convey to Nexant the nature of the first concern because the protester was only asked, without elaboration, to clarify its understanding of optional task 6, and was never advised of its apparent misunderstanding of the geographic scope of optional task 6. More importantly, the question entirely failed to advise the protester of the agency’s second concern, which was Nexant’s apparent failure to provide creative ideas for leveraging resources and partnerships to engage South Asian countries as part of the overall PFAN program. Nexant therefore improperly was deprived of the opportunity to improve its proposal in this area.  (Nexant, Inc., B-407708, B-407708.2, Jan 30, 2013)  (pdf)


Program Manager Turnover and Invoicing Delays

MEP maintains that the agency unreasonably assigned weaknesses to its proposals for having turnover in its program manager position, and for delaying the submission of its invoices. According to the protester, these problems were the result of agency actions rather than its own deficient performance. For example, the protester maintains that the only reason there was turnover with its program manager was because the agency hired its original program manager and, thus, MEP had to engage in various interim and remedial actions to put another permanent hire in place. MEP also maintains that its delays in submitting invoices were caused by the inconsistent directions of the Army’s contracting officers concerning how the invoices should be prepared. The protester also argues that, to the extent the agency had concerns in these two areas, the agency never discussed these concerns with the protester.

Despite the fact that these concerns are reflected in the contemporaneous record, the agency responds that these two areas were not the cause for its assignment of a “No Go” ratings to the protester’s proposals. According to the agency, it assigned the “No Go” ratings to MEP’s proposals solely because of MEP’s allegedly low fill rates. The agency therefore maintains that, even if the protester is correct that these two concerns were improperly identified in the evaluation of MEP’s proposals, this did not prejudice the protester because they were not the underlying reason for rating its proposals “No Go.” The agency also contends that, since these concerns were not the underlying cause for the assignment of the “No Go” ratings, it was not required to discuss them with MEP.

As stated above, the record shows that, in fact, the agency identified three concerns during its evaluation--turnover in the program manager position, delays in submitting invoicing and MEP’s fill rate--and these three concerns together appear to have formed the underlying basis for the agency’s “No Go” rating. For both acquisitions, the agency’s competitive range determinations and source selection decision documents provided as follows:

MEP – Most categories were rated Above Average with performance in accordance with the PWS, with the exception of Program and staff management. The rating for this category for June was Average with a notation that the incumbent PM [program manager] resigned without notice. The rating for July was Below Average with a notation that MEP was now on its fourth in-country PM within a 3-month period which was impacting continuity. The ratings for August were mostly Average with the exception of promptness in submission of required deliverables, which was give[n] a rating of Unsatisfactory with the notation that MEP is six months late in submitting invoices and submitted Feb[.] through July 2012 invoices in one batch. The PWS, para[.] 3.0.8 requires submission of invoices within seven days of the end of a billing cycle. MEP has experienced difficulty with achieving the required 90% fill rate. MEP’s overall average fill rate for June was [deleted]%, July was [deleted]%, and August was [deleted]%. The latest report submitted by MEP shows that for Task Order 0002 and 0003, it has a [deletetd]% fill rate. For the remaining Task Orders the fill rates are: 0004 – [deleted]%, 0005 – [deleted]%, and 0006 – [deleted]%. Therefore, the current overall average fill rate for MEP is [deleted]%. While monthly rates continue to improve, MEP has not yet achieved the required 90% rate. MEP received a “No Go” on Current Contract Performance.

AR (B-407493), exh. 10, at 2.

Thus, contrary to the agency’s current position, the record shows that there were three concerns (rather than just one) that it identified in its “No Go” rating of MEP’s proposals. Of the three concerns identified by the agency, turnover in the program manager position and delays in submitting invoices were the first and second reasons, respectively, that the agency identified as concerns, ahead of its concern relating to MEP’s fill rate. Additionally, in concluding that the MEP proposals merited “No Go” ratings, the contemporaneous evaluation materials do not differentiate among the three reasons identified as the basis for the agency’s assignment of the “No Go” rating, except to the extent that one of them--delays in invoicing--was assigned a rating of unsatisfactory. In our view, a fair reading of the contemporaneous evaluation was that it was a combination of the three concerns that resulted in the “No Go” ratings.

Where, as here, an agency proffers an explanation of its evaluation during the heat of litigation that is not borne out by the contemporaneous record, we give little weight to the later explanation. CIGNA Gov’t Serv’s., LLC, B-401062.2, B-401062.3, May 6, 2009, 2010 CPD ¶ 283 at 6; Boeing Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 97-2 CPD ¶ 91 at 15. We therefore find that, contrary to the agency’s current explanation, the contemporaneous record appears to show that the agency identified three apparently equal concerns that provided the underlying basis for rating the MEP proposal “No Go.”

In light of our conclusion above, we also find that, to the extent that the agency identified program manager turnover and delays in invoicing as weaknesses or deficiencies in MEP’s performance on previous task orders, it was required to raise those concerns during the discussions the agency chose to conduct. In this connection, although the regulations concerning discussions under Federal Acquisition Regulation (FAR) part 15 do not, as a general rule, govern task and delivery order competitions conducted under FAR part 16, Hurricane Consulting, Inc., B-404619 et al., Mar. 17, 2011, 2011 CPD ¶ 70 at 6, our Office nonetheless will review task order competitions to ensure that the competition is conducted in accordance with the solicitation and applicable procurement laws and regulations. Imagine One Tech. & Mgmt., Ltd., B-401503.4, Aug. 13, 2010, 2010 CPD ¶ 227 at 7. While FAR § 16.505 does not establish specific requirements for discussions in task order competitions, exchanges in that context, like other aspects of such a procurement, must be fair and not misleading. CGI Fed. Inc., B-403570 et al., Nov. 5, 2010, 2011 CPD ¶ 32 at 9. Here, we do not regard the discussions as fair because the record shows that the agency identified two weaknesses or deficiencies that appear to have formed the underlying basis for its assignment of a “No Go” rating to the MEP proposal, but those weaknesses or deficiencies were never brought to MEP’s attention.

In view of the foregoing considerations, we sustain this aspect of MEP’s protests.  (Mission Essential Personnel, LLC, B-407474, B-407493, Jan 7, 2013)  (pdf)


EMR also asserts that it was improperly coerced into raising its labor rates, thereby putting its proposal outside of the range of awardees. According to the protester, “[w]hen the government cites a weakness in a contractor’s proposal, that contractor is compelled to revise its proposal in response.” Protest at 4.

This issue is without merit. During discussions, agencies may not consciously mislead or coerce an offeror into raising its prices. Eagle Tech., Inc., B-236255, Nov. 16, 1989, 89-2 CPD ¶ 468 at 3-4. Here, however, the record does not support EMR’s assertion that it was misled or coerced into raising its labor rates. The first EN advised EMR that the agency had found its field rates for certain labor categories to be “low in relation to other offerors,” and EMR does not dispute, nor is there any basis in the record to question, the accuracy of this information. AR, Tab 14, at 1. Further, the EN did not require EMR to raise its labor rates, but instead simply directed that “[t]he offeror shall verify that the prices are what it intended to propose or make adjustments as necessary and provide the revised prices in response to the Evaluation Notice.” Id. (emphasis added).

The fundamental purpose of discussions is to afford offerors the opportunity to improve their proposals "to maximize the Government's ability to obtain best value, based on the requirement and the evaluation factors set forth in the solicitation." FAR § 5.306(d); see Gulf Copper Ship Repair, Inc., B-293706.5, Sept. 10, 2004, 2005 CPD ¶ 108 at 6. In discussions, an agency is required to discuss with each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond. In addition, the contracting officer also is encouraged to discuss other aspects of the offeror’s proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award. FAR § 15.306(d)(3).

Here, the agency advised EMR of areas of its proposal that needed to be explained or altered to enhance the proposal’s potential for award. We will not find coercion in discussions where, as here, the agency in good faith provides accurate information to an offeror, even where the offeror uses that information to its ultimate competitive detriment. See Academy Facilities Management--Advisory Opinion, B-401094.3, May 21, 2009, 2009 CPD ¶ 139 at 6 (discussions were not misleading or coercive where information provided by agency accurately reflected the agency’s concerns); SIMSHIP Corp., B-253655.2, Dec. 2, 1993, 93-2 CPD ¶ 293 at 4-5 (agency did not coerce or mislead protester into raising its price where, based on concern that protester had offered unreasonably low prices, agency during discussions advised protester to review proposed prices, without stating that the protester was required to raise its prices). In sum, EMR’s decision to revise certain prices upward reflected the exercise of the firm’s own business judgment, not improper conduct by the agency. See First Preston Housing Initiatives, LP, B-293105.2, Oct. 15, 2004, 2004 CPD ¶ 221 at 3.

The protest is denied.  (EMR, Inc., B-406625, Jul 17, 2012)  (pdf)


Misleading Discussions

KPMG first notes that, consistent with the RFP requirement that offerors “must include a professional resume” for all proposed personnel, RFP at L-5, the CIA instructed KPMG during discussions that it must propose 14 FTEs in each contract year, and that “[r]esumes should be provided for all personnel proposed to perform over the lifespan of the contract.” AR Binder 1, Tab 12, Discussions Letter from CIA to KPMG, at 1. As quoted above, KPMG notes that the CIA’s discussions with Deloitte provided essentially the same instruction (“Deloitte should either submit resumes for the less experienced personnel forecasted, or revise the cost proposal to reflect the labor categories for the resumes provided . . .”). Supp. AR Binder 3, Tab 6, Discussions Letter from CIA to Deloitte, Jan. 13, 2012, at 1. Yet, the agency thereafter found Deloitte’s submission of a single “representative resume” for each of the three labor categories to be acceptable. On this record, KPMG argues that it was misled by the agency during discussions and/or subsequently treated unequally, because although KPMG complied with the agency’s direction, Deloitte did not--and, indeed, Deloitte’s noncompliance formed the basis for effectively lowering its evaluated costs.

The CIA responds that the RFP did not require resumes for employees that were proposed to perform beyond the initial performance period, that the agency’s discussions question to KPMG did not reflect a mandatory requirement, and that KPMG bears the responsibility for its voluntary decision to submit resumes of existing employees for the full term of the contract. CIA Response to Third Supplemental Protest, at 4-6. The CIA further asserts that, even if the RFP, or the agency’s discussions, required KPMG’s submission of additional resumes, the agency could waive the requirement, and if it has done so here, the agency’s actions did not prejudice KPMG. We disagree.

In negotiated procurements, whenever discussions are conducted by an agency, they are required to be meaningful, equitable, and not misleading. Metro Mach. Corp., B-295744, B-295744.2, Apr. 21, 2005, 2005 CPD ¶ 112 at 19. In conducting discussions with offerors, agency personnel also may not engage in conduct that favors one offeror over another. FAR § 15.306(e)(1). Thus, agencies may not engage in what amounts to disparate treatment of the competing offerors. Front Line Apparel Group, B-295989, June 1, 2005, 2005 CPD ¶ 116 at 3-4. Where the manner in which an agency communicates with an offeror during discussions misleads an offeror into responding in a way that does not address the agency’s concerns, the discussions are inadequate. Metro Mach. Corp., B-281872 et al., Apr. 22, 1999, 99-1 CPD ¶ 101 at 6-7. Thus, for example, where an agency advises an offeror in discussions to revise its proposal in a way that does not reflect the agency’s evaluation, the discussions are misleading. SeKON Enter., Inc.; Signature Consulting Group, B-405921, B-405921.2, Jan. 17, 2012, 2012 CPD ¶ 26 at 7 (protest sustained where agency discussions advising protester to increase staffing level were not based on initial evaluation, and agency gave no consideration to increased staffing level in evaluation of revised proposal).

Here, as discussed above, the agency clearly advised KPMG that it “should” provide personnel resumes “for all personnel proposed to perform over the lifespan of the contract.” In the context of the CIA’s current position that the RFP did not require submission of resumes for personnel that were proposed to perform beyond the initial performance period, the agency’s discussions with KPMG were clearly misleading. Further, in cases such as this, we need not establish with certainty what the protester’s approach would have been if the discussions had been meaningful; rather, a protester’s reasonable assertion of a claim that it could have improved its competitive position is sufficient to demonstrate prejudice. Hughes STX Corp., B-278466, Feb. 2, 1998, 98-1 CPD ¶ 52 at 11. In this regard, KPMG has reasonably maintained that the agency’s misleading discussions precluded the firm from proposing its own cost-saving approach. See Second Supp. Protest (Mar. 26, 2012) at 20-22; Third Supp. Protest (Apr. 16, 2012) at 24, 31. We find this sufficient to establish prejudice. Accordingly, we sustain the protest on this basis.  (KPMG LLP, B-406409, B-406409.2, B-406409.3, B-406409.4, May 21, 2012)  (pdf)


 UC first asserts that the agency misled UC during discussions by “inducing” UC to “needlessly” increase its proposed staffing levels, while permitting HP to retain lower staffing levels. Protest at 1, 7-8. The record does not support UC’s assertion.

It is fundamental that a procuring agency’s discussions with offerors must be meaningful and may not be misleading. See, e.g., The Boeing Co., B-311344 et al., June 18, 2008, 2008 CPD ¶ 114 at 49. That said, an agency need not “spoon-feed” an offeror by specifying a particular approach, nor is it required to effectively write an offeror’s proposal for the offeror by identifying each and every particular aspect of a proposal that could be improved. Rather, an agency must lead an offeror into the areas of its proposal that requires the offeror’s own input in the form of revisions, explanations, clarifications, or amplifications. See, e.g., L-3 Commc’ns Corp., BT Fuze Prods. Div., B-299227, B-299227.2, Mar. 14, 2007, 2007 CPD ¶ 83 at 19.

Here, in its discussions with UC, the agency provided the following detailed information with regard to weaknesses in UC’s initial proposal:

1. Total project cost on [UC’s] summary spreadsheet is incorrect as [UC] neglected to include the base period in its summary.

2. [UC] deviates from the government’s IGE [internal government estimate] for staffing projections, in some cases significantly. Starting [in] the base period, the government believes [UC’s] projection of [deleted] FTEs [full time equivalent] for task 3.1.7 – Application Hosting is insufficient. The government’s estimate was 51 FTEs. Over time, [UC] cuts this number to [deleted] [FTEs] by the end of OY1 [option year one] and [deleted] [FTEs] in OY2. [UC] holds this count steady from OY2 through the end of the contract. Unfortunately [UC] does not justify this reduction in staff. Nothing in its technical proposal indicates how [UC] would complete the tasks in the PWS with a [deleted] staff reduction for this task. No automation tools that might garner efficiencies in this area are noted or priced in [UC’s] proposal.

3. A number of [UC’s] labor categories see reduced rates over the course of this contract. Some examples: A database administrator’s starting rate in the base period is [deleted] per hour. By the end of OY4 it is [deleted]. Most other labor categories show similar decreases over time that the government finds unrealistic. Customarily there is an escalation in labor rates over time. This refutes [UC’s] claim it can attract and retain qualified staff and places project success at serious risk.

4. [UC] reduces staffing and comes under government estimates in other tasks as well. The most egregious is section 3.1.5 – Compliance. In the base period [deleted] staff members provide [deleted] hours. In OY1 only [deleted] staff member supplies [deleted] hours. From OY2 through OY4 [UC] supplies no labor for this task. In its pricing proposal, [UC] justifies this on page 2-3 in the first bullet under section 3.0 –Assumptions: “[UC] assumes that CDC OPB will want to obtain ISO 20000 certification under their names as soon as May 2013. Therefore we assume that current ISO leadership roles will be assumed by government staff with assistance from [UC] after the May 2012 annual audit. . . . [UC] will continue to provide significant support to CDC to ensure we maintain compliance with all ISO requirements for this certification.[”] In its technical proposal, [UC] stressed it had looked at and understood the government’s organizational structure appendix. That appendix shows contractor staff supplying significant labor to the compliance section, doing more than just transferring the ISO certification to CDC. The government does not believe compliance needs can be met with no staff and refutes [UC’s] assumption above that ISO certification and compliance can be satisfied with no contractor staff.

AR, Tab 10, Discussions Questions/Request for UC’s Revised Proposal, at 10.

UC refers to the agency’s discussions in paragraph 1 above, which stated that “the Government believes [UC’s] projection of [deleted] FTEs for task 3.1.7 – Application is insufficient,” maintaining that the agency’s use of the word “insufficient” effectively required UC to increase its proposed staffing level to the government estimate. Protest at 10. In this regard, UC asserts that, even though UC “continued to believe” its initial staffing was “adequate,” it would have been “foolish” for UC to attempt to justify its initially proposed staffing levels, and maintains that “the only rational action that [UC] could take” was to “propose an FTE level at or very close to the Government’s estimate.” Id. In this context, and in light of the agency’s ultimate acceptance of HP’s staffing levels, which were below the agency estimate (but substantially higher than UC’s initially proposed levels), UC maintains that the agency’s discussions with UC were misleading. We disagree.

First, we do not view the agency’s statement that it “believed” UC’s initially-proposed staffing was “insufficient” in any way precluded UC from explaining why the agency’s belief was not well founded. Directly following the agency’s observation that it believed the staffing was insufficient, the agency expressly advised UC that it had not justified its lower staffing---clearly communicating to UC that its revised proposal could, and should, include such justification, if it existed. Moreover, in addition to suggesting that UC justify its staffing approach in its revised proposal, the agency went further and identified the specific form that such justification might take, referring to “automation tools that might garner efficiencies.” AR, Tab 10, Discussion Questions/Request for UC’s Revised Proposal, at 10. On this record, we find no merit in UC’s assertions that the agency’s discussions were “misleading” and that “the only rational action” was for UC to propose staffing that was “at or very close to the Government’s estimate.” Protest at 10.

In a similar vein, UC protests that the agency treated the offeror’s “unequally” with regard to discussions, asserting that the agency “apparently” did not question HP’s proposed staffing levels. Protest at 12. The record is to the contrary.

In connection with the requirement that discussions be meaningful, offerors may not be treated unequally; that is, offerors must be afforded equal opportunities to address the portions of their proposals that require revision, explanation, or amplification. However, the requirement for equal treatment does not mean that discussions with offerors must, or should, be identical. To the contrary, discussions must be tailored to each offeror’s own proposal. Federal Acquisition Regulation (FAR) §§ 15.306(d)(1), (e)(1); WorldTravelService, B-284155.3, Mar. 26, 2001, 2001 CPD ¶ 68 at 5-6.

Here, HP’s initial proposal contemplated a higher staffing level than the staffing level in UC’s initial proposal. Nonetheless, because HP’s staffing level was lower than the agency estimate, the agency’s discussions with HP did, indeed, include expressions of concern with regard to particular aspects of HP’s proposed approach. For example, the agency specifically questioned HP’s proposed staffing levels with regard to tasks [deleted] and task [deleted], stating, among other things, “[s]taffing reductions in task [deleted] are especially difficult to understand.” SAR, Tab 3, Discussion Questions/Request for HP’s Revised Proposal, at 7.

On this record, we reject as factually inaccurate UC’s assertion that the agency failed to question HP with regard to its proposed staffing levels. To the contrary, the record establishes that the agency, in fact, tailored its discussion questions to HP in a manner that sought HP’s responses to various aspects of its proposed staffing approach. Accordingly, we find no merit in UC’s assertion that the agency’s discussions were unequal.  (Unisys Corporation, B-406326, B-406326.2, B-406326.3, Apr 18, 2012)  (pdf)


Signature contends that the agency misled the firm into increasing its FTEs, which resulted in the firm's evaluated costs being higher than Tantus's. Signature Protest at 14. Specifically, Signature complains that in directing the firm to increase its FTEs for task order 1, CMS ignored the firm's evaluated technical approach (which relied upon the use a subcontractor that was already performing the task order 1 work for CMS). Signature contends that, instead, CMS mechanically applied an unstated staffing level in the agency's IGCE. See Signature Comments at 14-15. In this regard, Signature states that the agency informed it during discussions that it needed to increase its FTEs because the agency "had funding for additional positions under Task Order 1 and wanted to obligate these funds." See id. at 14; see also Declaration of Signature President ¶ 12. The protester also contends that the contracting officer informed Signature at its debriefing that CMS requested the increased FTEs for task order 1 due to "budgeting concerns;" Signature states that the contracting officer represented that he did not know what the budget would be for the next year, and increasing the FTEs would ensure the agency kept the necessary funding. Signature Protest at 18.

CMS denies that it requested that Signature increase its FTEs for task order 1 because of budget considerations. See Legal Memorandum at 15. CMS states that its discussions with Signature reflected the agency's concern that Signature had proposed less FTEs than the agency estimated as necessary in its IGCE. The agency argues that if Signature had not proposed additional FTEs, it would have adjusted the firm's costs in the agency's cost realism evaluation. Id.

It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful, equitable, and not misleading. See Federal Acquisition Regulation (FAR) § 15.306(d); The Boeing Co., B-311344 et al., June 18, 2008, 2008 CPD ¶ 114 at 49.

Here, we find that Signature was misled during discussions. As explained below and contrary to CMS's arguments, the agency's direction to Signature during discussions--to increase its FTEs for task order 1--was not based upon an evaluation of the protester's proposed approach to performing the task order.

Consistent with the RFP's instructions, Signature's technical proposal identified its approach and staffing allocation (approximately [deleted] FTEs) for performing task order 1. See, e.g., AR, Tab 65a, Signature Technical Proposal at 1, 4-6, 14-16. There is no document in the contemporaneous evaluation record showing that the agency had concerns about the level of Signature's proposed staffing for task order 1. Rather, the agency assigned 461 of 500 possible points to Signature's proposal under the managerial and operational approach factor (under which the RFP provided for the evaluation of proposed staffing). In addition, the agency identified eight strengths in the proposal, including that the protester was currently performing the task order 1 work. The one weakness identified was that Signature's [deleted] was offered for only [deleted] of an FTE, rather than [deleted] FTE. See AR, Tab 21, TEP Score Sheet for Signature, at 3. Also, the agency's documentation of Signature's oral presentation does not indicate any concern by the technical evaluators with Signature's staffing level for task order 1. See AR, Tab 25, Feedback on Signature Case Presentation.

The agency's failure to assess the merits of Signature's approach to performing task order 1 is corroborated by the fact that, after the adjustment, no change was made to Signature's technical score for performing task order 1, despite the firm's 40 percent increase in FTEs.

Moreover, the contemporaneous record supports the protester's contention that CMS's direction to Signature to increase its proposed number of FTEs for task order 1 was based upon budget concerns and not upon an evaluation of the firm's technical approach. For example, in its direction to Signature to increase its FTEs for task order 1, the agency stated that the additional positions could be determined later but that the agency "require[d] the work requirements to be considered and budget allocated." See AR, Tab 40, Evaluation of Signature Final Revised Proposal, at 3-4.

We also find no merit to the agency's contention that, even without discussions, it could have simply increased Signature's proposed FTEs for task order 1 during the cost realism evaluation. Where, as here, an agency evaluates proposals for the award of a cost-reimbursement contract, the agency is required to perform a cost realism analysis to determine the extent to which an offeror's proposed costs represent what the contract costs are likely to be under that offeror's technical approach, assuming reasonable economy and efficiency. See FAR §§ 15.305(a)(1), 15.404-1(d)(1), (2); Systems Tech., Inc., B-404985, B-404985.2, July 20, 2011, 2011 CPD ¶ 170 at 5. The record here is devoid of any evidence that these cost realism adjustments were based on an assessment of the offerors' likely costs of performance considering their proposed approaches to performing the task order work. That is, the record does not show that, for any of the competitive range offerors, CMS assessed the proposed hours and labor mix in light of the firms' individual approaches to performing the task order work. Absent such a reasoned assessment, the agency could not simply increase FTEs to an unstated staffing level.

In sum, the record shows that the agency's direction to Signature to increase its proposed FTEs for performance of task order 1 was not based upon a reasonable assessment of the realism of Signature's proposal. CMS has identified no reasonable basis for its direction to Signature to increase its FTEs by approximately 40 percent, thus increasing Signature's proposed costs for task order 1 by $[deleted]. Absent this adjustment, Signature's overall costs would have been lower than the awardee's, which would have required the agency to conduct a cost/technical tradeoff analysis to determine which firm's proposal represented the best value to the government. Under these circumstances, we find that CMS prejudicially misled Signature during discussions by directing the firm to increase its FTEs for the performance of task order 1.  (SeKON Enterprise, Inc.; Signature Consulting Group, B-405921,B-405921.2, Jan 17, 2012)  (pdf)

Next, L-3 argues that the agency's discussions were inadequate because they failed to advise the protester that it had not provided sufficient detail regarding the asset identification information to be recorded and stored in its configuration management database. In this connection, the SOW instructed offerors to "provide, configure, populate, and manage a Configuration Management Database (CMDB)" identifying all assets supporting NRC services. The SOW further instructed that offerors should

Minimize the discrepancy between assets/inventory recorded in the CMDB and actual NRC assets/inventory. This includes ensuring minimally the following information for each unit:

  • Asset Tag
  • Serial Number
  • User Location (PCs and related peripherals only)
  • Configuration (OS, loaded software, etc.)
  • Asset Status
  • Responsible Owner
  • Host Name (Servers only)
  • IP Address (Servers only)
  • Business Function/Application (Servers only)
  • Business Owner (Servers only)
  • Make/Model
  • Physical Location (Non-mobile units)
  • Warranty Info/Maintenance Certificate Number (Servers only)

SOW sect. C.5.2.3.3.2(5).

During the initial round of discussions, the agency instructed the protester to address the requirement to "minimize the discrepancy between assets/inventory recorded in CMDB and actual NRC assets/inventory. (PSOW C.5.2.3.3.2(5), p. 61)," since L-3 had not addressed this requirement in its initial proposal. AR, Tab 11c, Discussion Questions for L-3 at 1. In its response, L-3 failed to describe how it would ensure that the specific information identified in SOW sect. C.5.2.3.3.2(5) (i.e., asset tag, serial number, etc.) was recorded in the CMDB. In his source selection determination, the SSO found the lack of detail regarding the information concerning assets to be recorded and stored in the protester's CMDB to be a "worrisome" aspect of L-3's proposal.

The protester argues that the agency's discussion question failed to furnish it with adequate notice of the weakness in its proposal because it cited only the first sentence of SOW sect. C.5.2.3.3.2(5)--that is, according to the protester, while the agency notified L-3 that it had failed to address the requirement to minimize the discrepancy between assets/inventory recorded in the CMDB and actual NRC assets/inventory, the agency did not also indicate that its failure to address the recording of the asset tag, serial number, etc., was also considered to be a weakness.

We find the protester's argument to be without merit. Agencies are not required to "spoon-feed" offerors during discussions, but rather need only lead offerors into the areas of their proposals that require amplification or revision. Martin Elecs., Inc.; AMTEC Corp., B-404197 et al., Jan. 19, 2011, 2011 CPD para. 25 at 6. The agency's discussion question here specifically informed the protester that it had not adequately addressed the requirement set forth in SOW sect. C.5.2.3.3.2(5) to minimize the discrepancy between actual and recorded assets/inventory. Moreover, the clear terms of SOW sect. C.5.2.3.3.2(5) furnished notice that minimizing the discrepancy required that, at a minimum, information such as the asset tag and serial number be recorded in the CMDB. In our view, the foregoing was more than sufficient to lead the protester into the area of its proposal that required amplification. Having sufficiently led L-3 to the area of concern in the first round of discussions, NRC was not required to raise the matter again in any subsequent round of discussions, even where it continued to be considered a concern by the agency. U.S. Filter Operating Serv's., Inc., B-293215, Feb. 10, 2004, 2004 CPD para. 64 at 3.  (L-3 STRATIS, B-404865, June 8, 2011)  (pdf)


ACS protests the adequacy of the agency's discussions in connection with a single aspect of its proposed solution to the requirement. ACS, the incumbent contractor, has been providing the agency's requirements using a highly customized software product developed for DOL, and [deleted]. In its initial proposal, ACS offered to transition its software product from the [deleted] it currently uses to an [deleted] solution (referred to in the record as [deleted] or [deleted]), and to do so during performance under its predecessor contract, so that ACS could offer the [deleted] solution to the agency for the solicited requirement. The protester maintains that the [deleted] solution would offer improved performance and, potentially, lower cost over the life of the solicited requirement.

After evaluating ACS's initial proposal and advising the firm that implementation of the [deleted] solution under its predecessor contract was not acceptable, the agency subsequently advised the protester during discussions that its proposal was based on an incorrect assumption, specifically, the assumption that the agency would allow ACS to migrate its existing system to an [deleted] solution during performance of the predecessor contract. The agency therefore advised ACS that "'[b]ecause [ACS's] assumption is incorrect, the Offeror may wish to reconsider the effect of this incorrect assumption and revise its proposal accordingly."' AR, exh. C-5, Initial Ratings, Factor 1, deficiency.

In response to the agency's initial discussion question, ACS eliminated the proposed migration from its current [deleted] system to its originally proposed [deleted] solution, stating as follows:

ACS understands, respects, and will attend to the DOL's remarks regarding the [deleted] Migration referenced in our original proposal. In response to DOL's concerns, ACS has halted the [deleted] Migration and removed [deleted] from the revised proposal. Instead, ACS will deliver a . . . solution based upon the proven [deleted].

AR, exh. J-1-1, File 6, at 2.

In the source selection decision, the agency identified a risk associated with the firm's use of its existing [deleted] system. Specifically, the agency noted that, because ACS was proposing legacy technology (i.e., its [deleted] system), support for the system might end, and the expertise required for the [deleted] system and the [deleted] used by ACS in its [deleted] system solution could become scarce over time. Source Selection Decision Document, at 9.

ACS asserts that the agency never identified this specific risk during discussions, despite the fact that the agency engaged in several additional rounds of discussions after ACS proposed eliminating the [deleted] solution and using its [deleted] solution instead. According to the protester, the agency's failure in this regard amounted to inadequate discussions because this risk constituted a new deficiency in its proposal, and the agency was obliged to discuss it with ACS.

We have no basis to object to the adequacy of discussions here. Discussions are adequate where offerors are advised of the weaknesses, excesses or deficiencies in their proposals. US Filter Operating Serv's., Inc., B-293215, Feb. 10, 2004, 2004 CPD para. 64 at 3. While discussions should be as specific as practicable, there is no requirement that they be all-encompassing or extremely specific in describing the agency's concerns; rather, the legal requirement is that they generally lead the offerors into the areas of their proposals that require amplification or correction, without being misleading. Id. Moreover, where an agency has advised an offeror of its concern, there is no requirement that it raise the issue again in subsequent rounds of discussions, even where the issue continues to be a concern to the agency. Id.

Subsequent to the written discussions described above, the agency and ACS engaged in oral discussions, during which ACS again represented that it intended to use its [deleted] solution instead of the [deleted] solution originally proposed. Specifically, the protester's representative stated:

ACS has withdrawn and completely removed any references to our technology refresh initiative. We referred to this previously as [deleted] migration . . . . We intended to have this refresh completed in our current contract year. And quite frankly, cost . . . lower cost infrastructure was the driver behind that . . . . We decided not to put it in our current proposal because we believe that implementing both the enhancements [to the [deleted] system] to meet the additional requirements and the technology refresh quite honestly compounded the complexity and introduced risk.

Video 1, at 13:00-13:49. ACS's representative also specifically recognized during those oral discussions that its current [deleted] solution, while generally meeting the solicitation requirements, nevertheless was, in his words, "'short of state-of-the-art."' Id. at 40:15.

The protester's representatives went on to suggest that, once its [deleted] solution was fully implemented and certified, ACS intended again to propose to the agency migration from the [deleted] solution to the [deleted] solution. Video 1, at 41:55-42:22. In response to that suggestion, the agency's technical evaluation panel chairman specifically cautioned the protester that it would not receive credit for any proposed migration from one [deleted] to another, unless such a migration was included in the firm's proposal:

[A]ny tech value enhancement . . . would probably, may, add value to the best value decision that we have to make. But, what you just stated about doing this sometime in the future, we can't consider that unless it's part of the proposal.

Video 1, at 42:31-42:49. In response, the protester's representative specifically acknowledged that he understood, but that the firm had made a decision--based on its assessment of implementation risk--to forego offering the migration from one [deleted] to another as part of its proposal. Id.

In summary, the record shows that ACS understood that its proposed [deleted] solution was "'short of state-of-the-art,"' but that it had made a business decision to forego implementation of the state of the art [deleted] solution because of risks inherent in implementing any migration. The record further shows that ACS understood that the agency would not give it credit in the evaluation and source selection decision based merely on a suggestion that the migration could take place sometime in the future. While the protester is correct that the agency did not expressly identify the specific risk it ultimately articulated in its source selection decision during discussions, we think it nonetheless adequately led the protester into that area of its proposal, and made clear to the protester that the consequences of not including the [deleted] solution in its proposal would affect the agency's best value deliberations. In response, the protester clearly decided, on the basis of its business judgment, that not including the [deleted] solution in its proposal was its best--least risky--proposal strategy. We therefore conclude that the agency's discussions with the protester in this area were adequate. Simply stated, an agency need not identify every conceivable consequence of an offeror's business decision in order to discharge its duty to engage in meaningful discussions.  (ACS Federal Solutions, LLC, B-404129, January 7, 2011)  (pdf)


ITW complains that it was misled during discussions. Specifically, the protester maintains that the Navy improperly advised it during discussions that its prices for two contract line item numbers (CLIN) were "somewhat lower" than the independent government estimate (IGE). ITW states that, in reliance on this notification, it increased its final price for these two CLINS. ITW also maintains that it was required to review its final pricing for all CLINs as result of the Navy's comments with respect to these two CLINs. Protester's Comments at 3.

When discussions are conducted, they must at a minimum identify deficiencies and significant weaknesses in each competitive-range offeror's proposal. Federal Acquisition Regulation (FAR) sect. 15.306(d)(3); Multimax, Inc., et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD para. 165 at 12. Discussions must be "meaningful," that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Smiths Detection, Inc., B-298838, B-298838.2, Dec. 22, 2006, 2007 CPD para. 5 at 12. An agency may not mislead an offeror--through the framing of a discussion question or a response to a question--into responding in a manner that does not address the agency's concerns, or misinform the offeror concerning a problem with its proposal or about the government's requirements. Academy Facilities Mgmt.--Advisory Opinion, B-401094.3, May 21, 2009, 2009 CPD para. 139 at 6; Multimax, Inc., et al., supra. In the context of discussions relating to cost or price, agencies may not coerce or mislead an offeror during discussions into raising its prices. Academy Facilities Mgmt.--Advisory Opinion, supra.

Here in its discussions with ITW, the Navy identified a number of weaknesses and deficiencies in the protester's initial proposal; these weaknesses and deficiencies were identified in 25 evaluation notices (ENs). AR at 3. The agency's concerns with ITW's proposed prices were not discussed in any of the ENs, but were communicated to ITW in the letter transmitting the ENs.[3] With respect to the pricing for the two CLINs (for which the agency was concerned the pricing was low), the agency informed ITW as follows:

[Y]ou are advised to carefully review the price proposal for any misunderstanding of the requirements, as several proposed . . . CLINs appear out of line with the Government estimate. . . . [B]ased on market research . . . CLINs . . . appear to be priced somewhat lower than the government estimate; therefore you are advised to carefully review your price proposal for any misunderstanding of the requirements.

AR, Tab 2, Navy Discussions with ITW, at 1.

In its FPR, ITW raised its prices for these two CLINs by approximately $32,000, and lowered its overall price by more than $1 million. AR, Tab 11, Navy Analysis of ITW's Prices, at 3.

We do not find that the Navy's discussions with ITW were misleading. The record shows that the Navy found that in these two particular instances ITW's prices appeared understated in comparison to the IGE. The agency accurately conveyed its concerns to ITW in discussions. ITW does not dispute that its pricing for these two CLINs was below the IGE. Rather, ITW essentially argues that the Navy "implie[d]" that unless the offeror raised its prices it would be removed from the competition and/or downgraded regarding its ability to perform the work at the proposed price. Protest, Sept. 14, 2010, at 1; Protest, Oct. 23, 2010, at 3 ("how else would ITW be expected to respond other than increase [its] pricing?"). We find no merit to this argument. The agency simply communicated to ITW that its CLIN pricing appeared lower than that of the IGE in two particular regards, and asked the protester to review its pricing. This did not compel ITW to take any particular action, but left to the firm's business judgment whether it should raise its prices or explain the prices earlier submitted.  (ITW Military GSE, B-403866.3, December 7, 2010)  (pdf)


CIGNA points out that while the agency conducted three rounds of discussions with the competitive range offerors, the only issue regarding CIGNA's approach to printing and postage costs raised by the agency concerned CIGNA's initial failure "to include HH&H claims volume in calculating the proposed costs for Internet/Communications and Output Mail Postage," which CIGNA corrected in its FPR. Protester's Comments at 11; see AR, Tab 17, CIGNA Discussion Questions and Responses (Sept. 30, 2008), at 101. As noted by CIGNA, the record shows that the agency did not raise any other concerns during discussions regarding CIGNA's proposed printing and postage costs.

The Federal Acquisition Regulation (FAR) requires that where an agency undertakes discussions with offerors, the contracting officer shall discuss with each firm being considered for award deficiencies and significant weaknesses identified in the firm's proposal. FAR sect. 15.306(d)(3). Discussions must be meaningful, equitable, and not misleading. Cygnus Corp., Inc., B-292649.3; B-292649.4, Dec. 30, 2003, 2004 CPD para. 162 at 4; Lockheed Martin Corp., B-293679, May 27, 2004 CPD para. 115 at 7. Discussions cannot be meaningful unless they lead an offeror into those weaknesses, excesses or deficiencies in its proposal that must be addressed in order for the proposal to have a reasonable chance of being selected for contract award. Cygnus Corp., Inc., supra; Lockheed Martin Corp., supra.

The agency does not argue that it raised its concerns regarding CIGNA's proposed printing and postage costs during its discussions with the protester, acknowledging that, as reflected in the record, the "discrepancy" between the printing and postage costs proposed by the other competitive range offerors and CIGNA "was only identified after the submission of FPRs, when each offeror's proposed costs were compared with one another." AR at 45 n.7; Agency Supp. Report at 11. Rather, the agency contends that its "cost adjustment to [CIGNA's] proposal was minor," in that "it increased [CIGNA's] total evaluated cost by [DELETED]% and reduced the cost difference between [CIGNA] and [Highmark] from [DELETED]% to [DELETED]%." Agency Supp. Report at 17. The agency continues here by arguing that because the adjustment was "minor," the "adjustment was not the equivalent of a 'significant weakness,' nor did it concern 'an aspect[] of the offeror's proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal's potential for award," and thus the agency's concerns here did not have to be raised with CIGNA during discussions. Agency Supp. Report at 17 (quoting FAR sect. 15.306(d)(3)).

We disagree. In this regard, we first reject the agency's contention that its concerns with CIGNA's proposed printing and postage costs, and the resultant upward adjustment to CIGNA's proposed costs, were "minor" or otherwise concerned matters that did not have to be raised with CIGNA in order for discussions to be meaningful. As set forth above, the agency's upward adjustment constituted, by the agency's own calculations, an $[DELETED] or [DELETED] percent increase to CIGNA's proposed costs, which caused the cost advantage associated with CIGNA's proposal to be reduced from [DELETED] percent to [DELETED] percent. We simply fail to see, and do not believe that the agency has adequately explained, why an upward adjustment to CIGNA's proposed costs of [DELETED] percent can reasonably be characterized as "minor" or otherwise inconsequential under the circumstances here. Additionally, we note that the agency has not pointed to anything in the contemporaneous record of the evaluation and source selection stating or otherwise providing that the failure to raise this issue with CIGNA during discussions was due to the agency's view that the cost adjustment was "minor." As such, we give little weight to the agency's assertions crafted in the heat of litigation that the agency's upward cost adjustment to CIGNA's proposal would have been and should be considered "minor," and thus was not required to be raised during discussions. Novex Enters., B-297660; B-297660.2, Mar. 6, 2006, 2006 CPD para. 51 at 4; Boeing Sikorsky Aircraft Support, B-277263.2, B‑277263.3, Sept. 29, 1997, 97-2 CPD para. 91 at 15. In the context of the trade-off actually made here, we cannot conclude that this adjustment was "minor."

Although the agency correctly points out that an agency has no duty to reopen discussions to allow an offeror to address proposal defects or significant weaknesses first introduced in the offeror's response to discussions or in a post-discussion proposal revision, Honeywell Tech. Solutions, Inc., B-400771; B-400771.2, Jan. 27, 2009, 2009 CPD para. 49 at 10, such was not the case here. That is, the agency does not claim, and there is nothing in the record to indicate, that the discrepancy between CIGNA's proposed printing and postage costs and the other offerors' proposed printing and postage costs was different in any material way between the offerors' initial proposals and FPRs. In other words, the aspect of CIGNA's cost proposal that caused the agency concern was present in CIGNA's initial proposal. The fact that the agency did not realize until after discussions had concluded and the agency had received FPRs that CIGNA's proposed printing and mailing costs were substantially lower than the costs proposed for these same services by the other offerors, and thus, in the agency's view, were understated, does not relieve the agency of its obligation to conduct meaningful discussions. Al Long Ford, B-297807, Apr. 12, 2006, 2006 CPD para. 68 at 8. Where, as here, an agency, after discussions are completed, identifies a concern pertaining to the proposal as it was prior to discussions that would have had to be raised if it had been identified before discussions were held, the agency is required to reopen discussions in order to raise its concern with the relevant offeror. Id.

(Sections deleted)

In sum, we find that the agency's concerns with CIGNA's proposed printing and postage costs should have been raised with CIGNA during discussions in order for discussions to have been meaningful, and sustain the protest on this basis.  (CIGNA Government Services, LLC, B-401062.2; B-401062.3, May 6, 2009)  (pdf)


AMEC argues that the agency's discussions regarding the weakness identified in its proposal under factor 3, preliminary project schedule, were not meaningful because they did not disclose the true nature of the agency's concern regarding its proposed use of the Microsoft Project software. AMEC also contends that the agency failed to properly consider as part of its technical evaluation under factor 2, particular project execution strategies, the fact that the seed project site has been designated as a wetlands area, as disclosed by AMEC during its discussions with the agency.

The record reflects that the agency's discussions with AMEC with respect to factor 3 were flawed. It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful, equitable, and not misleading. AT&T Corp., B-299542.3, B-299542.4, Nov. 16, 2007, 2008 CPD para. 65 at 6. An agency may not mislead an offeror‑‑through the framing of a discussion question or a response to a question--into responding in a manner that does not address the agency's concerns, or misinform the offeror concerning a problem with its proposal or about the government's requirements. MCT JV, B-311245.2, B-311245.4, May 16, 2008, 2008 CPD para. 121 at 15-16; Multimax, Inc., et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD para.165 at 12; Metro Mach. Corp., B‑281872 et al., Apr. 22, 1999, 99-1 CPD para. 101 at 6.

Here, as noted above, the agency's technical evaluation team identified a weakness in AMEC's technical proposal based on its use of the software program Microsoft Project, which the agency concluded was "not the most applicable for managing the [design/build] process or construction projects . . . lacks the analytical capabilities of other construction oriented software . . . and may adversely impact the overall management and reporting effort." AR, Tab 15, Technical Evaluation, at 000485. In its discussions with AMEC, the agency's questions, however, focused on specific features of the Microsoft Project software, in particular, its ability to manage schedule "float." While AMEC was able to satisfactorily address the agency's specific questions in this regard, the record reflects that the agency continued to fault AMEC for proposing Microsoft Project as adversely impacting the overall management and reporting effort of the project, and that it was the presence of this weakness which prevented AMEC from achieving a higher rating under factor 3, therefore materially affecting the agency's technical evaluation of AMEC's proposal. In this regard, the record reflects the agency's view that AMEC's proposal had several strengths under factor 3 and no other weaknesses, but that, based on the risks associated with its software selection, AMEC was not entitled to a higher technical rating. AR, Tab 19, Technical Evaluation Report, at 000584. By being asked only to address specific questions regarding the particular features of Microsoft Project, AMEC could not have reasonably understood the true nature of the agency's broader concerns about the use of Microsoft Project. As a consequence, the agency's discussions were materially misleading, thereby depriving AMEC of an opportunity to address the agency's concern regarding the use of Microsoft Project in the management of the seed project.

The agency raises several arguments in defense of the adequacy of discussions, none of which alters our conclusion that its discussions with AMEC were fundamentally flawed. Specifically, the agency contends that, pursuant to FAR sect. 15.306(d)(3), it was not required to discuss its general concerns regarding AMEC's use of Microsoft Project since the weakness was not "significant," and it was not identified as a deficiency. In this regard, the agency suggests that it did not consider AMEC's use of Microsoft Project to be an unacceptable approach since the technical evaluation team determined that it had the "minimum acceptable level of scheduling capabilities." AR, Tab 15, Technical Evaluation, at 000485. Moreover, the agency argues that identifying the use of Microsoft Project as a weakness would have been inappropriate since it would have been tantamount to directing AMEC to implement a particular technical approach and thereby imposing an undisclosed requirement.

While it is true that agencies are only required to address "significant" weaknesses and deficiencies during discussions, FAR sect. 15.306(d)(3) further indicates that these are the "minimum" areas for discussion. The record reveals that the agency went well beyond these minimum requirements during its discussions with the eight firms in the phase II competition. In this regard, the record reflects that the agency identified nearly every weakness, in most instances verbatim, from the technical evaluation findings, without regard to whether the weakness was considered "significant" or whether the weakness was associated with an "unacceptable" approach. By way of example, in its discussions with one of the awardees, the agency indicated that it considered the offeror's use of soil-supported ground slabs to be "acceptable," yet the agency advised the offeror that its proposed approach was considered "to be more prone to long term settlement issues." AR, Tab 16, Agency's Discussion Questions, at 000572. Given the agency's decision to hold broad discussions with all firms, which went well beyond the FAR's minimum requirements, it was incumbent on the agency to do so with all offerors equally, and it may not now defend its failure to have apprised AMEC of a perceived weakness in AMEC's proposal based on the FAR's minimum discussion requirements. See also, FAR sect. 15.306(e) (an agency shall not engage in exchanges that "favors one offeror over another.")

In addition, we find the agency's concerns about directing AMEC toward a particular technical approach to be misplaced. Had the agency simply identified to AMEC the perceived risks associated with AMEC's proposed software, AMEC would then have been in a position to develop an appropriate response, which could have ranged from continuing to propose the software notwithstanding the associated risk, justifying its decision to the agency, or proposing to use a different software package, any of which could have addressed the agency's concerns. While there might have been tradeoffs associated with these various options, AMEC should have been allowed to make such a decision based on an understanding of the true nature of the agency's concerns regarding its technical proposal.

We also find that the agency's consideration of the wetlands issue under evaluation factor 2 was improper. AMEC argues that it was the only offeror to have identified the project site as a potential wetland and that the agency failed to reasonably consider this fact in its evaluation of the other offerors' proposals. As noted above, for factor 2, particular project execution strategies, offerors were required to address project site specific conditions at Cape May, New Jersey, to include "environmental, and complications related to doing work in the New Jersey area." RFP at 82. This provision essentially required offerors to perform due diligence regarding the nature of the agency's requirements and to incorporate their findings in their proposals.

In its initial proposal, AMEC advised the agency that the project site "may be classified as wetlands in accordance with State of New Jersey standards," and went on to address the potential wetlands designation as an aspect of the permitting process, which was incorporated in AMEC's project schedule. AMEC Proposal at 000686-000688. The record indicates that the other offerors did not specifically identify this potential concern.

During discussions, the agency asked AMEC to clarify its wetland reference and to identify "information which would alter the conclusion that the site is not in a designated wetland area." AR, Tab 17, Discussion Questions, at 000566. In its response, AMEC provided the agency with publicly available information contained in the New Jersey Department of Environmental Protection's iMap-NJ system, which specifically identified the project site as a wetland, and provided the basis for AMEC's belief that there was a need for the wetland issue to be addressed with the state of New Jersey, notwithstanding the fact that it was unlikely the project site ultimately would be found to be a wetland.

The agency concedes that the iMap-NJ system does in fact identify the project site as a wetland and it does not dispute the propriety of AMEC's consideration of the iMap information. Contracting Officer's Supplemental Statement, at 000873. Rather, the agency asserts that the site is not in fact considered a wetland by the state of New Jersey, as reflected by a 2003 Integrated Natural Resources and Environmental Assessment, which had been provided to the agency by the New Jersey Department of Environmental Protection, as well as information solicited from an official within the New Jersey Department of Environmental Protection, thereby rendering immaterial the failure of the other offerors to identify the project as potentially a wetland. Supplemental Agency Report, at 000865. We disagree.

The information upon which the agency now relies was not publicly available and was not otherwise made available to any of the offerors during the competition. For this reason, once the agency learned of AMEC's reasonable reliance on the publicly available iMap information, which was in direct conflict with the information that was in the agency's sole possession which shaped the premise of its technical evaluation of the other offerors' proposals, the agency was obligated to clarify the agency's understanding of wetland requirement with AMEC. Absent clarification of the matter, AMEC was placed in the position of addressing a solicitation requirement in a manner different than the other offerors and which placed it at a competitive disadvantage to the other offerors given the conflicting public and nonpublic information. The agency's failure to clarify the wetland issue was contrary to the fundamental principle that a solicitation must provide for the submission of proposals based on a common understanding of the agency's requirements. See Media Funding, Inc. d/b/a Media Visions, Inc., B-265642, B-265642.2, Oct. 20, 1995, 95-2 CPD para. 185 at 3. We therefore sustain the protest on this basis as well.  (AMEC Earth & Environmental, Inc., B-401961; B-401961.2, December 22, 2009)  (pdf)


Sabre asserts that the agency failed to provide it with meaningful discussions regarding previously unidentified weaknesses under the demonstrated understanding and management/technical approach subfactors. For example, it maintains that the weaknesses related to its DPM, quality assurance surveillance plan, updated CSA manuals, and work breakdown structure (WBS) stemmed from issues present in its original proposal and were unrelated to the discussion questions raised, such that it was not on notice of the specific issues of concern to the agency.

When an agency engages in discussions with an offeror, the discussions must be meaningful, that is, they must lead the offeror into the areas of its proposal that require correction or amplification. Hanford Envtl. Health Found., B‑292858.2, B‑292858.5, Apr. 7, 2004, 2004 CPD para. 164 at 8. However, an agency is not obligated to reopen negotiations to give an offeror the opportunity to remedy a defect that first appears in a revised proposal. American Sys. Corp., B-292755, B‑292755.2, Dec. 3, 2003, 2003 CPD para. 225 at 8.

The discussions here were unobjectionable. For example, the agency's initial discussions noted that Sabre's WBS did not provide sufficient detail to depict all SOW requirements. In our view, the initial question was sufficient to lead Sabre to provide a response that included a more detailed WBS, and the TET found Sabre's response to this weakness to be adequate during the FPR evaluation. In re-evaluating the FPRs, however, the TEP came to a different conclusion based on its identifying continuing weaknesses, specifically, missing milestones regarding some operational tasks and deliverables. There was nothing unreasonable or improper in the TEP's changing its original view as to the adequacy of Sabre's discussions response based on the re-evaluation. Since the identified weaknesses represented defects first appearing in Sabre's FPR in response to the original discussions--rather than newly identified weaknesses in Sabre's initial proposal--the agency was not required to reopen negotiations to provide Sabre another opportunity to respond.

We reach the same conclusion with regard to Sabre's proposed DPM. As mentioned above, during the original discussions, the TEP identified a weakness regarding Sabre's failure to clearly identify the different roles and responsibilities related to implementing its communications initiatives. TEP Evaluation at 10. When Sabre's FPR added a DPM as part of its solution, the TEP identified a new weakness based on the lack of information on this individual; since the weakness was introduced in Sabre's FPR, the agency did not raise the matter again. Id. Sabre argues that, since its initial proposal mentioned the DPM (e.g., in its organization chart and part of its risk review team), but did not then identify him, his role, or his function, the DPM concern really was a weakness in its original proposal--rather than a new weakness--that the agency should have raised during the original discussions. Thus, once the agency's re‑evaluation identified the lack of that information as a weakness, the agency was required to re‑open discussions to address it. See Lockheed Martin Simulation, Training & Support, B-292836 et al., Nov. 24, 2004, 2005 CPD para. 27 at 11 (where weakness, present in initial proposal, is identified for first time in re-evaluation, agency must discuss the new weakness).

We disagree. The fact that Sabre's initial proposal contained little information on the DPM is irrelevant; it was Sabre's proposing the DPM as part of its communication initiatives, without detailed information, that led to the agency's specific concern. Prior to that time, the agency had no specific reason to be concerned about the lack of detail on the DPM's role and function. Once Sabre proposed the DPM as part of its solution to an identified weakness, it was Sabre's responsibility to provide complete information. See Carlson Wagonlit Travel, B‑287016, Mar. 6, 2001, 2001 CPD para. 49 at 3 (offeror is responsible for submitting an adequately written proposal). Its failure to do so here led to a new evaluated weakness, which--because it was introduced for the first time in its FPR--did not obligate the agency to reopen discussions following the re-evaluation. American Sys. Corp., supra.

The protest is denied.  (Sabre Systems, Inc., B-402040.2; B-402040.3, June 1, 2010)  (pdf)


The protester argues that the agency conducted materially misleading discussions regarding Ewing's proposed roofing system, and that the agency's evaluation of Ewing's and Overland's proposals was unreasonable in a number of respects.

This protest is illustrative of one of the challenges an agency faces when, for whatever reason (but here in taking corrective action in response to a previous protest), the agency reevaluates proposals after discussions are complete. In this regard, we have held that where an agency, during a reevaluation of proposals, identifies new concerns in a proposal and those concerns would have had to be raised had they been identified before discussions were held, the agency is required to reopen discussions and raise the new concerns with the offeror. Lockheed Martin Simulation, Training & Support, B-292836.8 et al., Nov. 24, 2004, 2005 CPD para. 27 at 11; DevTech Sys., Inc., B-284860.2, Dec. 20, 2000, 2001 CPD para. 11 at 4.

Here, prior to taking corrective action, the agency raised its concerns regarding Ewing's proposed roofing system during discussions, and specifically identified its concerns as a "significant weakness." After evaluating Ewing's final proposal revision, the agency assigned the proposal ratings of "marginal" under the technical solution factor and "satisfactory" overall. AR, Tab 5, Ewing Discussion Letter (June 8, 2009). These ratings were consistent with the terms of the solicitation, which stated that a "significant weakness" may result in an adverse impact on the proposal's rating under the technical solution factor and overall rating. RFP at 10.

In contrast, during the reevaluation--performed as part of the agency's corrective action in response to Ewing's initial protest--the agency determined that Ewing's proposed roofing system constituted a "deficiency in meeting the stated solicitation requirements." Rather than downgrading Ewing's proposal, this reassessment rendered the proposal "ineligible for award," in accordance with the terms of the RFP--which, as quoted above, expressly stated that proposals with uncorrected deficiencies would be ineligible for award. AR, Tab 2, BCM, at 15, 19-20; RFP at 10. Because the agency did not reopen discussions with the offerors, Ewing was never informed that its proposal was deficient. Although the agency is correct that its concern with Ewing's proposed roofing system was raised during discussions (such that the concern is not a "new concern"), the identification of the concern as a "significant weakness," rather than a "deficiency," misled the protester. Specifically, the protester was never apprised of the severity of the agency's concern, or the ramifications of not adequately addressing it--i.e., ineligibility for award.

It is a fundamental concept of negotiated procurements that discussions, when conducted, must be meaningful; that is, discussions may not mislead offerors and must identify deficiencies and significant weaknesses in each offeror's proposal that could reasonably be addressed in a manner to materially enhance the offeror's potential for receiving award. Federal Acquisition Regulation (FAR) sect. 15.306(d); Lockheed Martin Corp., B-293679 et al., May 27, 2004, 2004 CPD para. 115 at 7. An agency may not, through silence, the framing of a discussion question, or in a response to a question, mislead an offeror into responding in a manner that does not address the agency's concerns, or that misinforms the offeror concerning a problem with its proposal or the government's requirements. Lockheed Martin Corp., supra; Metro Mach, Corp., B-281872 et al., Apr. 22, 1999, 99-1 CPD para. 101 at 6.

Under the circumstances here, since the agency's concerns with the protester's proposed approach changed during the reevaluation to the point that, should they remain unaddressed, the proposal would be rejected as ineligible for award, the agency was required to reopen discussions. On this issue, the protester represents that "[h]ad the Agency identified the proposed roof design as a deficiency during discussion[s], [Ewing] would have been made aware that its proposal was ineligible for award, which would have elicited a different response from [Ewing] to the Discussion Letter." Protest at 6; see Protester's Comments at 6.

The protest is sustained.  (
Ewing Construction Co., Inc., B-401887.3; B-401887.4, April 26, 2010)  (pdf)


Lack of Meaningful Discussions

The protester argues that the evaluators failed to conduct meaningful discussions with it by failing to advise it that they considered its schedule to be overly aggressive. We agree.

When an agency engages in discussions with a vendor, the discussions must be "meaningful," that is, sufficiently detailed to lead the vendor into the areas of its quotation requiring amplification or revision. Honeywell Tech. Solutions, Inc., B‑400771, B-400771.2, Jan. 27, 2009, 2009 CPD para. 49 at 10.

Here, we do not think that the request for a new schedule reasonably conveyed to the protester that the evaluators viewed its proposed schedule as too aggressive; given that a period of over a year had elapsed between submission of the vendors' initial quotations and submission of their final quotations, we think that vendors could reasonably have understood the request to be nothing more than a request for updated information. We note in this connection that the evaluators furnished precisely the same request for a new schedule to Privasoft, and in its case, the request was not intended to convey a concern over the duration of the schedule. We think that by failing to advise the protester in discussions that they considered its project schedule to be too short, the evaluators failed to conduct meaningful discussions with it. Moreover, we think under these circumstances that the advice given at the debriefing did not obviate the need to raise this concern when the agency reopened discussions.  (AINS, Inc., B-400760.4; B-400760.5, January 19, 2010) (pdf)


As discussed above, on June 6, after various conference calls regarding the terms of the Velos license agreement, the contracting officer prepared a marked up version of the document that reflected the areas where the agency and Velos had agreed upon the terms of the special license agreement for the software. See AR, Tab 33, Email from Contracting Officer to Velos (June 6, 2008); Tr. at 323-28, 338. As indicated above, however, the contracting officer, in his award determination, found the Velos license agreement submitted with its July 7 final proposal revision was unacceptable because the language containing paragraph 2.1 (quoted above) conflicted with the RFP requirements that the agency be granted a perpetual use license to distribute and use the software without limits within the boundaries of the NCI Clinical Research Enterprise. The record evidences that paragraph 2.1 of the license submitted with Velos's final proposal revision is the exact language that Velos and the contracting officer agreed was acceptable after lengthy discussions. Tr. at 323‑28; compare AR, Tab 33, Velos's Final Proposal Revision (July 7, 2008), Special License Agreement) (also designated Hearing exh. No. 3) with Hearing exh. No. 15, Marked Up Velos License Prepared by Contracting Officer (June 6, 2008).

As to Velos's refusal to agree to a provision stating that "any conflict between the terms of this Agreement, and the Contract or applicable Federal law of regulation, shall be resolved by the terms of the Contract or applicable Federal Law or Regulation," Velos asserts that this was a matter discussed earlier in the negotiations. Velos's Post-Hearing Comments at 10. According to Velos, this matter was resolved by including the following language defining "Contract" in the software license and agreeing to include the license in Attachment J-1 to the contract:

"Contract" shall mean Contract No. 1406-04-08-CT-20201, executed by and between the Parties hereto on June XX, 2008. This Special License Agreement shall be Attachment J-1 to the Contract and shall be incorporated by reference into the Contract at Section J.

AR, Tab 33, Velos's Final Proposal Revision (July 7, 2008), Special License Agreement), Definitions, at 1. Velos explains that under the contract's order of precedence clause, incorporating the license in Attachment J would subordinate it to the rest of the contract. Velos Post‑Hearing Comments at 10; see FAR sect. 52.215-8 (incorporated by the RFP at 38). As argued by Velos, the record shows that the identical provision defining "Contract" included in the earlier markup that Velos and the contracting officer agreed was acceptable to the parties was contained in the final proposal revision. See Tr. at 329-30; compare Tab 33, Velos's Final Proposal Revision (July 7, 2008), Special License Agreement) (also designated Hearing exh. No. 3) with Hearing exh. No. 15, Marked Up Velos License Prepared by Contracting Officer (June 6, 2008).

The problems the contracting officer found with the language in Schedule B are based solely upon the problems that he now has with paragraph 2.1 of the license and not the Schedule B language per se. See AR, Tab 51, Award Summary, at 15. In fact, at the hearing, the contracting officer admitted that he may well have prepared the Schedule B language in question. Tr. at 352.

As to the escrow agreement, the record shows that this agreement was not required by the RFP and was only included at the request of the agency. See Contracting Officer's Statement at 12. The contracting officer also testified that he never advised Velos during the negotiations that there was a problem with the proposed terms of Velos's escrow provision. Tr. at 350.

The agency asserts that there was no agreement on the terms of the Velos license. Hearing exh. No. 16, Statement of Contracting Officer (Oct. 31, 2008). In support of this assertion the agency references a string of emails that occurred after June 6, culminating in the June 27 email closing negotiation because of numerous unresolved issues and advising that the competition would be reopened. Id. The agency also references the request for final proposal revisions (quoted above) and an email in response to a question submitted after the request for final proposal revisions that advised offerors to be aware that licenses that were inconsistent with federal law, regulation, or the solicitation requirements might result in the proposal being eliminated. AR, Tab 37, Request for Final Proposal Revisions (June 27, 2008); Hearing Exh. No. 13, Email from Contracting Officer (July 2, 2008). In fact, Velos agrees that there was no final agreement on the terms of its license when the negotiations were closed. Velos's Post Hearing Comments at 6.

However, there is no evidence in the record that the contracting officer ever specifically or even generally told Velos that the previously agreed-upon language in its license agreement in the "Grant of License" paragraph and in the "Contracts" definition was considered unacceptable by the agency. Because the reasons provided by the contracting officer in determining that the Velos license was unacceptable are based upon the precise language that Velos and the agency had found acceptable, and because the agency had not advised Velos that this language was no longer acceptable, we find that Velos was prejudicially misled in submitting its final proposal revision that included the agreed-upon language. We sustain the protest on this basis.  (Velos, Inc.; OmniComm Systems, Inc.; PercipEnz Technologies, Inc., B-400500; B-400500.2; B-400500.3; B-400500.4; B-400500.5; B-400500.6; B-400500.7, November 28, 2008) (pdf)


Clark/Caddell also argues that the agency failed to engage in meaningful discussions regarding the performance capability evaluation factor issue in that the agency asked misleading questions and failed to provide meaningful responses. Specifically, the protester contends that the agency did not provide meaningful guidance to remedy the purported discrepancy between the protester's CLIN schedule and its summary schedule.

Discussions, when conducted, must be meaningful; that is, discussions may not mislead offerors and must identify deficiencies and significant weaknesses in each offeror's proposal that could reasonably be addressed in a manner to materially enhance the offeror's potential for receiving award. PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. Agencies are not required to "spoon-feed" an offeror during discussions; agencies need only lead offerors into the areas of their proposals that require amplification. LaBarge Elecs., B-266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6.

As a preliminary matter, we recognize that the first IFN erroneously directed Clark/Caddel to confirm the correct number of days proposed for construction duration, as opposed to contract duration. On the other hand, the words of the schedule were clear, i.e., the CLIN entry (identified in the discussion question) was preceded by the words "Contract Duration in Calendar Days After the Notice to Proceed is received." RFP at 1.

That said, we think that by holding two rounds of discussions, the agency guidance was ultimately sufficient to put the protester on notice that the agency wanted the CLIN schedule to include the total contract duration. As discussed above, the agency's concerns that the protester's summary schedule in its technical proposal for contract duration was different from the enforceable contract duration listed in the CLIN schedule was reasonable, especially given the liquidated damages provisions of the RFP.

Furthermore, we note evidence in the record that suggests the protester understood the agency's concerns. In a declaration submitted by a representative of Clark/Caddell describing his conversation with the contract specialist on September 18, the representative stated that he asked the contract specialist "how Clark/Caddell could commit to a fixed duration when Clark/Caddell had no control over the actions of others." Clark/Caddell Response to Agency Dismissal Request, Nov. 2, 2009, Exh. 10, at 2. The Clark/Caddell official explained that his "was an attempt to get [the contract specialist] to understand that the longest fixed duration in the solicitation is the 450-day duration for construction, which would be the only reasonable and enforceable entry on the CLIN Schedule." Id. Thus, it appears that the protester was concerned about being bound to an overall contract duration period as opposed to the construction duration period.

In conclusion, we see no support for the protester's arguments that the discussions here were misleading.

The protest is denied.  (Clark/Caddell Joint Venture, B-402055, January 7, 2010)  (pdf)


In its revised proposal, TMM provided a revised drawing of its plan and a chart that compared the proposed size of TMM’s rooms with that required by the SFO. TMM’s chart showed that a number of TMM’s proposed rooms were smaller than that specified by the SFO. TMM’s Revised Proposal, Room Size Chart. With regard to renovations to its existing building, TMM informed VA that “[o]ther than painting, we do not believe there will be many renovations in the existing space.” TMM also did not propose to widen the 5-foot corridor, but did offer that “[i]f the VA wants all the fifty doors to be enlarged from 36” doors to 42” doors, the cost would be an additional $50,000 ($1,000 per door).” AR, Tab 4, TMM Revised Proposal, at 2.

VA determined that TMM’s revised proposal did not reflect the best value to the government, although TMM offered the lowest evaluated price of $4,790,436. Specifically, VA noted that TMM failed to meet the contract requirements for corridor width, room square footage, and TMM “would only [be] making minor renovations (painting) to the existing . . . space.”[3] AR, Tab 6, Price Negotiation Memorandum, at 11. In contrast, the agency found that Alpine’s proposal at an evaluated price of $5,215,654 offered “the best proposed” layout for the space, meeting the specified room sizes. Id. at 10. Award was made to Alpine, and this protest followed.

TMM complains that VA did not conduct meaningful discussions with the firm. Specifically, TMM argues that the agency’s request that TMM “clarify” its room sizes was inadequate to put the firm on notice that the agency had found TMM’s room sizes to be a deficiency. We disagree.

Discussions, when conducted, must be meaningful; that is, discussions may not mislead offerors and must identify deficiencies and significant weaknesses in each offeror’s proposal that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award. PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8.

Here, we find that VA conducted meaningful discussions with TMM. Specifically, VA informed TMM that it should “clarify” its room sizes “in accordance with Schedule A.” This request should have informed TMM of the agency’s concern under the technical quality evaluation factor that TMM had not demonstrated “how they are going to meet the identified space and square footage requirements and room build‑out details in Schedule A.” See SFO at 17. Although TMM believes that the agency should have been more specific about its concerns, an agency is not required to “spoon-feed” an offeror during discussions, but need only lead the offeror into the areas of its proposal that requires amplification. LaBarge Elecs., B-266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6.

TMM also appears to argue that VA’s discussions were not meaningful because the agency did not inform TMM that the agency viewed the firm’s proposed build-out plans to be inadequate. The record indicates that TMM was also led into this area of its proposal that required amplification. In any event, the protester fails to show that it was prejudiced. Competitive prejudice is an essential element of a viable protest; where the protester fails to demonstrate that, but for the agency’s actions, it would have had a substantial chance of receiving the award, there is no basis for finding prejudice, and our Office will not sustain the protest. Trauma Serv. Group, B‑254674.2, Mar. 14, 1994, 94-1 CPD para. 199 at 6; see Statistica, Inc. v. Christopher, 102 F.3d 1577 (Fed. Cir. 1996). TMM does not state that, had it been notified of the agency’s concerns in this regard, it would have offered any renovations to its space or otherwise modified its proposal in any way.  (TMM Investments, Ltd., B-402016, December 23, 2009) (pdf)


Argon maintains that any inadequacy of the MTBOMF1 information it provided was the result of its being misled by the agency regarding its MTBF information during discussions. Specifically, Argon asserts that, because the agency did not object to Argon’s MTBF data (provided in its response to the initial discussion questions) being based on performance of its CPS at 55C, it assumed that it could also present its MTBOMF data based on 55C.

This argument is without merit. Discussions, when held, must be meaningful; that is, they must lead offerors into those areas of their proposals requiring amplification or revision, and may not prejudicially mislead the offeror. American States Utilities Servs., Inc., B-291307.3, June 30, 2004, 2004 CPD para. 150 at 6-7. However, agencies are not required to engage in successive rounds of discussions until all proposal defects have been corrected, nor are agencies required to reiterate concerns that were not alleviated by a firm’s proposal revisions. Id. Where an agency engages in initial discussions that lead an offeror to revise its proposal, the agency’s subsequent silence in connection with those proposal revisions during a subsequent round of discussions cannot reasonably be understood as an indication that the agency determined that the initial weakness or deficiency was cured. Id.

Here, under the circumstances, there was no reasonable basis for Argon to interpret the agency’s silence regarding the MTBF data as a waiver of the plainly stated RFP requirements regarding MTBOMF. See American States Utilities Servs., Inc., supra. Simply stated, since the RFP clearly required MTBOMF information to be presented in terms of a particular temperature, and the RFP was not amended in this regard, Argon was required to provide the information in those terms. To the extent Argon chose to rely on its impressions from the agency’s silence instead of complying with the RFP’s clear requirements, it did so at its peril. 
(Argon ST, Inc., B-401387, August 6, 2009)  (pdf)

---------------------------

1 mean time between operation mission failure.



Discussions

AAA next argues that the Forest Service never advised the company that its dressing area drainage was insufficient, and therefore the agency failed to conduct meaningful discussions regarding this perceived deficiency in its units. Protest at 15.

In negotiated procurements, contracting agencies generally must conduct discussions with all offerors whose proposals are within the competitive range. Federal Acquisition Regulation sect. 15.306(d)(1). Agencies are not required to afford offerors all-encompassing discussions. Reflectone Training Sys., Inc.; Hernandez Eng'g Inc., B-261224; B-261224.2, Aug. 30, 1995, 95-2 CPD para. 95 at 10. Although discussions must be meaningful, leading an offeror into the areas of its proposal requiring amplification or revision, the agency is not required to "spoon-feed" an offeror as to each and every item that could be revised or addressed to improve its proposal. Comprehensive Health Serv., Inc., B-310553, Dec. 27, 2007, 2008 CPD para. 9 at 7.

Here, as noted above, the agency conducted oral and written discussions with AAA, during which it noted the apparent problems with drainage in the dressing area. In the handwritten notes attached to the May 17 discussion letter, the Forest Service expressed a "concern that [the] dressing area does not have the ability to contain all gray water" and that the units "may have a drainage issue." AR at 448 (AAA Discussion Letter Notes at 1). As evidenced by the record here, the agency clearly communicated its concerns that the dressing area drainage was deficient. Also, it is clear from the protester's cover letter--discussed in greater detail below--that it was aware of these issues from the discussions. AR at 455-56 (AAA's Cover Letter to its Final Proposal, May 29, 2008 at 2-3). Therefore, we deny AAA's contention that discussions in this area were inadequate.  (AAA Mobile Showers, Inc., B-311420.2, March 27, 2009)  (pdf)


Lack of Meaningful Discussions

Honeywell protests that the agency failed to conduct meaningful discussions by failing to raise the one technical weakness it found in Honeywell's FPR.

As set forth above, the RFP contained four RTOs that offerors were to address in their technical proposals, either by the submission of a TIP and cost proposal (RTOs #1-3) or a study paper (RTO #4). RTO #1 concerned a new space-to-ground link terminal (SGLT) at the White Sands Complex, New Mexico. The RFP informed offerors that as part of an effort to ensure adequate SN grounds systems resources were available, a project to develop a new SGLT was being initiated. The stated task requirement was for the contractor to complete the first phase of the new SGLT project, including planning, definition of the architecture, operations concepts, requirements, external interfaces, and preliminary design. RFP, RTO #1, at 01245. The solicitation also informed offerors that a TIP submission was to include, at a minimum, the technical approach for the specific requirements of the task, identification of potential technical challenges, identification and mitigation of risks, and a detailed description of any assumptions made in the response. SOW at 00845.

Honeywell submitted its TIP for RTO #1 as part of its initial proposal. AR, Tab 13, Honeywell Initial Proposal (Mission Suitability), at 2021-47. The SEB rated Honeywell's initial proposal, including RTO responses, excellent under the technical approach subfactor, and identified a total of seven strengths and two weaknesses supporting its determination. Id., Tab 40, Initial SEB Report, at 09941-47. Both of the technical approach weaknesses identified in Honeywell's initial proposal concerned its RTO #1 TIP. The SEB first found that Honeywell's RTO #1 response did not identify certain specific noteworthy risks associated with the completion of the RTO #1 requirement. Second, the agency evaluators found that Honeywell's RTO #1 TIP contained various questionable assumptions. Id. at 09946-47. It is the second of the identified weaknesses that is the subject of Honeywell's protest here.

NASA then conducted discussions with Honeywell and informed the offeror of both identified technical approach weaknesses. With regard to the second weakness, the agency stated, "Honeywell's RTO #1 response contains the following questionable assumptions, which require clarification and/or substantiation, or should be corrected and their impact on the RTO be addressed," and then identified the specific assumptions the agency evaluators had questioned. Id., Tab 43, NASA Discussions with Honeywell, at 10143.

Honeywell addressed the agency's discussion topics as part of its FPR. The offeror's FPR included a "highlighted" version that specifically indicated those portions of its revised proposal that had been changed (either added or deleted). The SEB considered Honeywell's discussion responses as part of the evaluation of the offeror's revised proposal, and determined that Honeywell had remedied both originally-identified weaknesses. Specifically, with respect to the second weakness--that Honeywell's RTO #1 TIP contained various questionable assumptions--the SEB found the offeror's revised proposal had adequately addressed each assumption. Id., Tab 80, Final SEB Report, at 23649-50.

The SEB determined, however, that Honeywell's FPR contained a new weakness, namely that the offeror's response demonstrated an inadequate understanding of the requirements analysis, trade study execution and analysis, and requirements identification aspects of the systems engineering process. Id. at 23647-48. Each of the findings on which the SEB based its determination of the new weakness in Honeywell's FPR resulted from the new (i.e., highlighted) sections in the offeror's revised proposal. Id., Tab 46, Honeywell's FPR, at 10663-80. For example, Honeywell's assertion that the candidate architecture could be interfaced with the legacy antenna interconnect mechanisms was a new section in the offeror's revised proposal, as was Honeywell's assertion that a to-be-completed upgrade to the White Sands Complex local area network would have sufficient margin to support the requirements for the new SGLT. Id. at 10674-75, 10680.

Although discussions must address deficiencies and significant weaknesses identified in proposals, the precise content of discussions is largely a matter of the contracting officer's judgment. See FAR sect. 15.306(d)(3); American States Utils. Servs., Inc., B-291307.3, June 30, 2004, 2004 CPD para. 150 at 6. When an agency engages in discussions with an offeror, the discussions must be "meaningful," that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Hanford Envtl. Health Found., B-292858.2, B-292858.5, Apr. 7, 2004, 2004 CPD para. 164 at 8. Where proposal defects are first introduced either in a response to discussions or in a post-discussion proposal revision, an agency has no duty to reopen discussions or conduct additional rounds of discussions. L-3 Commc'ns Corp., BT Fuze Prods. Div., B-299227, B-299227.2, Mar. 14, 2007, 2007 CPD para. 83 at 19; Cube-All Star Servs. Joint Venture, B-291903, Apr. 30, 2003, 2003 CPD para. 145 at 10-11.

We conclude that NASA's discussions with Honeywell were meaningful. As set forth above, the discussions expressly informed Honeywell of the specific weaknesses that the SEB had identified in the offeror's initial proposal. Further, the record clearly reflects that the specific significant weakness which Honeywell claims that NASA failed to mention in discussions was first introduced in Honeywell's post-discussions FPR and was not part of its initial proposal. As a result, NASA had no obligation to conduct additional rounds of discussions in order to permit the offeror to address this matter. See L-3 Commc'ns Corp., BT Fuze Prods. Div., supra.  (Honeywell Technology Solutions, Inc., B-400771; B-400771.2, January 27, 2009) (pdf)


As noted above, if the agency in accordance with FAR sect. 25.502 determines that Tiger’s vehicles are TAA-compliant, then the agency must evaluate Tiger’s quotation, including whether Tiger’s quoted price is fair and reasonable. We recognize that the agency determined that Tiger’s price was “exorbitantly unreasonable” and found Tiger ineligible for award on this basis. AR, Tab 56, Price Negotiation Memorandum, at 13. However, the record also confirms that the agency failed to raise this issue during discussions, even though it held numerous rounds of discussions with the vendors and requested revised quotations inviting vendors to reduce their price. Although the agency asserts that “discussions were not intended” and were not held, we find that the “numerous questions and clarifications” issued to vendors followed by the agency’s request for “best and final offers,” which included revisions to vendor’s prices, constitutes discussions as contemplated by the FAR. AR, Tab 56, Price Negotiation Memorandum, at 12; Contracting Officer’s Statement at 9; Tr. at 173; see FAR sect. 15.306(d).

Although the solicitation here did not require the agency to hold discussions with vendors, once an agency chooses to do so, as occurred here, the discussions are required to be meaningful; that is, the agency is required to raise with a vendor significant weaknesses and deficiencies identified in the vendor’s quotation. FAR sect. 15.306(d)(3). Discussions cannot be meaningful if a vendor is not advised of the significant weaknesses or deficiencies that must be addressed in order for its quotation to be in line for award. DevTech Sys., Inc., B-284860.2, Dec. 20, 2000, 2001 CPD para. 11 at 4. There is no doubt that Tiger’s quoted price was viewed by the agency as a deficiency, as Tiger’s price was the sole basis for the agency’s finding that the quotation was ineligible for award. In holding discussions with Tiger, but not raising with the firm the concern that Tiger’s price was unreasonable, the agency did not provide Tiger with meaningful discussions. DevTech Sys., Inc., supra, at 4-5.

We find a reasonable possibility that Tiger was prejudiced by the agency’s failure to hold discussions concerning the reasonableness of the firm’s price. Had the agency raised its concern with Tiger, then Tiger would have had the opportunity to explain why its price was fair and reasonable or to reduce it, such that the agency may have ultimately found the price to be fair and reasonable and, thus, Tiger’s quotation would have been in line for award. Coupled with the agency’s failure to properly evaluate TAA eligibility, we find that the agency’s failure to hold meaningful discussions prejudiced the protester, and we sustain the protest on these bases. See Cogent Sys., Inc., B‑295990.4, B‑295990.5, Oct. 6, 2005, 2005 CPD para. 179 at 10-11.  (
Tiger Truck, LLC, B-400685, January 14, 2009) (pdf)


Burchick complains that VA did not conduct meaningful discussions with Burchick, given that VA did not apprise the firm of, or provide it with the opportunity to address, significant evaluated weaknesses in its technical proposal. The protester contends that it could have resolved the agency’s concerns with the firm’s proposal had the firm been provided with discussions concerning its technical proposal.

VA argues that the scope and extent of discussions to be conducted with offerors is “a matter of contracting officer judgment” and that agencies are not required to discuss every area in which a proposal can be improved. In this regard, VA contends that the agency was not required to conduct discussions with respect to Burchick’s technical proposal, given that the contracting officer concluded that the firm could not have materially improved its technical proposal. AR at 6-7.

We agree with VA that a procuring agency has considerable discretion in determining whether and how to conduct discussions in a negotiated procurement under Federal Acquisition Regulation (FAR) Part 15. However, where, as here, discussions are conducted, they must at a minimum identify deficiencies and significant weaknesses in the proposals of each competitive range offeror. FAR sect. 15.306(d)(3); Multimax, Inc., et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD para. 165 at 12; PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. Discussions must be “meaningful,” that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Smiths Detection, Inc., B-298838, B‑298838.2, Dec. 22, 2006, 2007 CPD para. 5 at 12; Symplicity Corp., B-297060, Nov. 8, 2005, 2005 CPD para. 203 at 8.

We find that VA did not conduct meaningful discussions with Burchick, since the agency limited its discussions to the firm’s cost proposal and did not identify any of the agency’s significant concerns with Burchick’s technical proposal that resulted in the firm’s proposal receiving only 50.8 points out of 100 possible points.[6] In particular, the protester’s proposal received only 22 of 40 available points under the past performance factor, based upon the agency’s judgment that Burchick had provided detailed information on only one relevant project, where the solicitation requested a minimum of four projects. Similarly, Burchick’s proposal received only 14.4 of 30 available points under the construction management factor, based upon the agency’s conclusion that Burchick had failed to identify a project manager and to detail its quality control plan, as required by the RFP. Burchick’s proposal received no points under the small business participation factor, because the agency found that Burchick had essentially not provided the required small business participation plan. Given the significant reductions in Burchick’s technical point score associated with these identified concerns, and the importance to the agency of the omitted information, we find that these concerns can only be considered to be significant weaknesses or deficiencies, and that the agency’s failure to identify them during discussions was inconsistent with its obligation to conduct meaningful discussions.

We also do not agree with VA that Burchick could not have materially improved its proposal if discussions were conducted with the firm with respect to the evaluated concerns in its technical proposal. The protester has explained that it could have addressed each of the agency’s concerns that resulted in Burchick’s technical proposal being downgraded. For example, with respect to the evaluation of the firm’s past performance, Burchick contends that it identified 37 other healthcare projects in its technical proposal, which the protester could have detailed if the firm had been asked in discussions. Protester’s Comments at 4. With respect to the identity of its project manager and to its proposed quality control plan under the construction management factor, Burchick states that, had it received discussions, the firm would have clarified the identity of its project manager and provided further detail with respect to its quality control plan. Id. at 6-7. With respect to the small business participation factor, Burchick states that it could have further explained the firm’s proposed teaming relationship with a service-disabled veteran-owned small business.

In sum, we find that VA failed to conduct meaningful discussions with Burchick, because the agency failed to identify significant weaknesses or deficiencies in the firm’s technical proposal. We also find a reasonable possibility that Burchick was prejudiced by the agency’s failure to conduct meaningful discussions, given that Burchick offered the lowest price and could have addressed these concerns in its technical proposal such that it may have been found to offer the best value to the agency.  (Burchick Construction Company, B-400342, October 6, 2008) (pdf)
 


The record demonstrates that the agency, in conducting discussions with the protester, forwarded a detailed list of discussion questions to IVI, and answered a number of questions from IVI regarding the discussion questions. Contrary to the protester’s assertion, we find based upon our review of the record that the agency’s discussions were meaningful.

For example, IVI argues that the agency “failed to conduct meaningful discussions regarding software engineering.” Protester’s Comments at 21. In this regard, the protester first points that the agency’s initial technical evaluation noted as a weakness under the technical approach criterion to the technical factor that

[t]he Software Engineering section of this proposal is not discussed in detail. This could lead to major deficiencies in the design, implementation, and testing of the suggested software development tasks. 

AR, Tab 3, Initial Technical Evaluation, at 26. The protester next points out that the relevant discussion question it received was as follows:

The software section of the proposal is not discussed in detail. This could lead to major deficiencies in the design, implementation, and testing of the offeror’s proposed changes in software.

AR, Tab 5, IVI Discussion Questions, at 5. The protester argues that “[s]oftware engineering is a different concern than software in general,” and that because of the discussion question IVI received from the agency, “IVI was not informed of the potential significant weakness in its software engineering.” Protester’s Comments at 21.

The agency explains that the reference in the initial evaluation to “software engineering” was a simple error, given that the neither the RFP nor IVI’s proposal contained “software engineering” sections, but rather, both included sections addressing software maintenance and security. Agency Supp. Report at 10; RFP amend. 6, at 5-6. The agency explains that the contracting officer, in preparing IVI’s discussion questions, deleted the discussion question’s reference to “software engineering” in order to correct this error, and that IVI was in fact properly informed during discussions of the agency’s perceived weaknesses in the software section of IVI’s proposal. Agency Supp. Report at 10.

Although IVI continues to complain “that the agency misled IVI from addressing the evaluators’ actual concern: software engineering,” and that because of this, the “evaluators may have downgraded IVI for failing to answer a question that was not asked,” see Protester’s Supp. Comments at 12, the protester does not explain, and we cannot see, how this could possibly be the case, given that neither the RFP nor IVI’s proposal included a “software engineering” section, and given that there is no evidence in the agency’s evaluation of FPRs that IVI’s FPR was downgraded for failing to address “software engineering.”

As another example, the protester argues that the agency “failed to conduct meaningful discussions regarding the biweekly literature surveillance memoranda.” Protester’s Comments at 4; Protester’s Supp. Comments at 13. The record reflects that the agency noted as a “strength” in IVI’s proposal that it provided “a clear discussion of how the biweekly literature reports will be organized,” and that the “[o]rganization of [the biweekly literature reports appears to be relevant to the aims of the . . . staff.” AR, Tab 3, Initial Evaluation, at 25. The agency also commented while noting the various weaknesses in IVI’s initial proposal that “[b]iweekly literature surveillance memos would be helpful in judging the potential quality of the data output.” Id. at 26.

In response to the protester’s complaint that it “was not informed during discussions that the agency found IVI’s proposed biweekly literature surveillance memoranda problematic,” Protester’s Supp. Comments at 13, the agency explains that it did not raise this evaluated weakness with IVI during discussions given its overall view that “IVI’s proposal with respect to biweekly literature surveillance reports was at least as much a strength as it was a weakness.” Agency Supp. Report at 13. The agency concludes that the concern expressed in its initial evaluation regarding IVI’s biweekly literature surveillance memoranda was not significant, and that under the circumstances, did not have to be raised with IVI during discussions. Id. We agree.

As stated previously, the record reflects that the agency had extensive discussions with IVI regarding its proposal, and that the agency’s concerns regarding this aspect of IVI’s proposal were insignificant given the other evaluated weaknesses in IVI’s proposal, as well as the fact that overall this aspect of IVI’s proposal was found to constitute a strength. Additionally, IVI has not pointed to, and we cannot find, any indication in the evaluation of IVI’s FPR, or source selection documents, that this aspect of IVI’s proposal was considered a weakness or had any effect on either IVI’s overall rating or the source selection. In light of this, and the fact that agency’s are not required to identify other than deficiencies and significant weaknesses in each offeror’s proposal, or to conduct discussions that are all encompassing, we cannot find the agency’s conduct here to be objectionable. See PAI Corp., supra.  (Information Ventures, Inc., B-299361.2; B-299361.3, October 1, 2008) (pdf)


Turning to NAVSEA’s evaluation of the cost proposal submitted by MCT JV, while we find that the agency had reasonable concerns about MCT JV’s allocation of labor hours in its cost proposal, we conclude that the agency’s discussions regarding this matter were not meaningful. Specifically, the record reflects a wide disparity between MCT JV’s proposed allocation of labor hours in its technical proposal and the allocation of labor hours in its cost proposal. As noted above, in its technical proposal MCT JV allocated [Deleted] percent of the labor hours to MHI, [Deleted] percent to Colonna’s, [Deleted] percent to Tecnico, and the remaining [Deleted] percent to other specialty subcontractors. NAVSEA, however, determined that MCT JV’s final cost proposal reflected an allocation of [Deleted] percent of the total labor hours to MHI, [Deleted] percent to Colonna’s, [Deleted] percent to Tecnico, and [Deleted] percent to other subcontractors. The [Deleted] percent allocation to other subcontractors had the effect of significantly reducing MCT JV’s estimated cost since MCT JV proposed a significantly lower labor rate for those subcontractors.

In its protest, MCT JV specifically complains that NAVSEA’s reallocation of its labor hours under item 999-99-999--where the disparity between MCT-JV’s allocation of labor hours between its technical proposal and cost proposal is even greater--was unreasonable. As noted above, under item 999-99-999, MCT JV allocated only [Deleted] percent of the work to its partners and [Deleted] percent to “other subcontractors.” Because item 999-99-999 represented approximately [Deleted] percent of the total projected labor hours used to estimate MCT JV’s total cost, by allocating [Deleted] percent of these labor hours to a category of other subcontractors with a significantly lower labor rate, MCT JV was able to significantly reduce its estimated cost. This extensive reliance on subcontractors for the purpose of calculating its total estimated cost, however, was clearly at odds with MCT JV’s technical proposal, which indicated that MCT JV would allocate a much smaller percentage [Deleted] of the work to specialty subcontractors.

NAVSEA was thus presented with a situation similar to the one it faced in Metro Mach. Corp., B-297879.2, May 3, 2006, 2006 CPD para. 80, where an offeror attempted to reduce its total estimated cost by allocating all of its labor hours for notional work items to its team member with the lowest labor rate, notwithstanding the fact that the entire team would be performing the actual work under the contract. In that case, we held that the Navy’s cost realism evaluation was unreasonable because the Navy accepted the proposed allocation without further question and thus failed to consider the impact of the team members’ higher rates in determining the offeror’s probable cost of performance under the contract. In response to our decision in Metro, NAVSEA included item 999-99-999 to capture the total labor effort of a typical availability when combined with the specific notional work items identified in the RFP, and instructed offerors to ensure that their labor hour allocations for this item were consistent with their proposed technical approaches. AR at 23-24; RFP at 124-25.

While we commend NAVSEA’s efforts to adjust MCT JV’s allocation of labor hours to reflect a labor mix that was more consistent with its technical proposal and MCT JV’s joint venture agreement, and therefore reflective of a more realistic total probable cost for MCT JV, given our conclusion, discussed below, that NAVSEA’s discussions with MCT JV regarding its concerns in this regard were fundamentally flawed, any allegation regarding the propriety of NAVSEA’s reallocation is academic at this juncture.

It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful, that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Smiths Detection, Inc., B-298838, B-298838.2, Dec. 22, 2006, 2007 CPD para. 5 at 12; Symplicity Corp., B‑297060, Nov. 8, 2005, 2005 CPD para. 203 at 8. Further, an agency may not mislead an offeror--through the framing of a discussion question or otherwise--into responding in a manner that does not address the agency’s concerns, or misinform the offeror concerning a problem with its proposal or about the government’s requirements. Multimax, Inc., et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD para. 165 at 12; Metro Mach. Corp., B‑281872 et al., Apr. 22, 1999, 99-1 CPD para. 101 at 6.

Here, the record reflects that with respect to the allocation of labor hours in MCT JV’s cost proposal, NAVSEA asked MCT JV to explain why the allocation was inconsistent with its “resource agreement.” As noted above, MCT JV responded that the resource agreement did not apply to its proposal; rather, it was an agreement among MHI, Colonna’s, and Tecnico relating to a separate proposal submitted by MHI as the prime contractor. The record further reflects that the CAP accepted MCT JV’s response, agreeing that the resource agreement did not apply to the joint venture. Thus, by questioning MCT JV’s allocation of labor hours in its cost proposal solely by reference to a resource agreement that by its terms did not apply to this proposal, NAVSEA never conveyed to MCT JV its actual concern--that the labor hour allocation in the cost proposal appeared to be inconsistent with its technical proposal and joint venture agreement. Accordingly, we find that the agency’s discussions in this regard were misleading and therefore not meaningful. 
(MCT JV, B-311245.2; B-311245.4, May 16, 2008) (pdf)


Discussions, when conducted, must be meaningful, that is, they may not be misleading and must identify proposal deficiencies and significant weaknesses that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award. PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. While an agency generally need only lead an offeror into the general areas of concern about its proposal, the agency must impart during discussions sufficient information to afford the offeror a fair and reasonable opportunity to identify and correct deficiencies, excesses, or mistakes in its proposal. Advanced Sci., Inc., B‑259569.3, July 3, 1995, 95-2 CPD para. 52; Aydin Computer and Monitor Div., Aydin Corp., B-249539, Dec. 2, 1992, 93-1 CPD para. 135.

The discussions here were not meaningful. While the record shows that the agency indeed advised JPDT that it could improve its technical score by providing amenities within its offered building, this information was conveyed, not to identify deficiencies in JPDT’s offer, but as part of the agency’s general advice that every offeror received. This general advice amounted to no more than a restatement of the SFO’s evaluation criteria. It did not reasonably apprise JPDT that the agency had found its proposal to contain specific significant weaknesses regarding access to amenities, including the proximity and number of amenities generally, the proximity and number of fast food restaurants, and the variety, quantity, and proximity of table service restaurants. See Integrity Int’l Sec. Sys., Inc., B‑261226, Sept. 1, 1995, 95‑2 CPD para. 98 at 8 (general boilerplate-type reminder that was provided to all offerors during discussions was insufficient to provide notice of protester’s specific deficiency).

Further, while the record also supports the agency’s claim that it informed JPDT that it was unable to verify the existence of two of the identified restaurants and the identified sports club, this very specific information likewise fell short of advising JPDT that its proposed amenities were a concern overall. Indeed, by providing its concerns regarding particular restaurants and a particular fitness facility without indicating that it considered JPDT’s offer to have significant weaknesses regarding the proximity and number of amenities generally, the proximity and number of fast food restaurants, and the variety, quantity, and proximity of table service restaurants, we think GSA led JPDT reasonably to believe that GSA’s concerns were limited to those particular establishments and were not broader in nature. See Spherix, Inc., B‑294572, B-294572.2, Dec. 1, 2004, 2005 CPD para. 3 at 14 (agency failed to conduct meaningful discussions where it determined that offeror’s entire quality control plan was a significant weakness, but identified only two specific aspects of the quality control plan in discussions). We conclude that the agency’s discussions failed to provide JPDT with sufficient information to afford it a fair and reasonable opportunity to identify and correct the evaluated significant weaknesses in its offer. (New Jersey & H Street, LLC, B-311314.3, June 30, 2008) (pdf),  (See Trammell Crow Company, B-311314.2, June 20, 2008)  (pdf)


It is a fundamental precept of negotiated procurements that discussions, when held, must be meaningful; that is, discussions may not mislead offerors and must identify deficiencies and significant weaknesses in each offeror’s proposal that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award. Federal Acquisition Regulation (FAR) sect. 15.306(d); Lockheed Martin Corp., B-293679 et al., May 27, 2004, 2004 CPD para. 115 at 7. Based on our review of the record, and for the reasons set forth below, we find that the agency’s discussions with the protester were meaningful.

To the extent that ICRC argues that the agency was required to consider its proposed costs unacceptable, and thus a proposal deficiency, we note first that the contemporaneous evaluation record indicates that the agency did not consider the matter to be a proposal deficiency. Instead, the evaluators reached a different conclusion. Specifically, the agency conducted a detailed assessment of whether the number of hours identified was reasonably related to ICRC’s approach to the sample task. This assessment led the agency to conclude that the proposed solution to the sample task was an acceptable one, but one that involved a high number of labor hours. As a result, the agency advised ICRC during discussions that the number of labor hours proposed appeared high. Upon receipt of this information, ICRC reduced its overall proposed labor hours, thereby altering its proposed costs.

Our review of the record here has revealed nothing to lead us to conclude that the agency’s assessment was unreasonable. In fact, the cost realism analysis here fulfilled its purpose--i.e., it examined whether the costs proposed by ICRC’s technical approach were consistent with the firm’s likely actual cost of performance. While the protester claims that its own proposed costs were per se unreasonable, given the lower costs proposed by the awardee, it has not shown that the cost realism analysis produced an inaccurate measure of the likely cost of implementing the company’s proposed technical solution. Moreover, the record shows that the contracting officer specifically noted in his source selection decision that the significant variance in evaluated costs was directly attributable to the significant differences in the technical approaches adopted by the competing offerors.

Finally, the protester has not shown that the discussions were misleading, or, in any way, inadequate. Where an offeror’s proposed cost is high in comparison to competitors’ costs, the agency may, but is not required to, inform the offeror that its costs are not as competitive as those of its competitors during discussions. See FAR sections 15.306(d)(3), (e)(3); SOS Interpreting, Ltd., B-287477.2, May 16, 2001, 2001 CPD para. 84 at 3; see also Mechanical Equip. Co., Inc.; Highland Eng’g, Inc.; Etnyre Int’l, Ltd.; Kara Aerospace, Inc., B-292789.2 et al., Dec. 15, 2003, 2004 CPD para. 192 at 18; MarLaw-Arco MFPD Mgmt., B-291875, Apr. 23, 2003, 2003 CPD para. 85 at 6. In sum, since ICRC’s proposed costs were not evaluated as either unreasonable or unrealistic, and since the agency was not obligated to advise the company that its proposed costs were not competitive, we conclude that the agency’s discussions with ICRC were adequate.  (Integrated Concepts & Research Corporation, B-309803, October 15, 2007) (pdf)


Boeing also complains that the agency conducted misleading discussions with Boeing with respect to whether Boeing had fully satisfied the KPP No. 7 objective, Net-Ready Capability. RFP, SRD sect. 3.2.4.1.1; app. A, Net-Ready Capability KPP, at 3. The KPP No. 7 objective provides that the offeror’s “system should be capable of accomplishing all operational activities identified in Table 5.” RFP, SRD, app. A, at 4. Table 5 of the appendix identified a number of information exchange requirements. Id. at 15-25.

Specifically, Boeing complains that at its mid-term briefing it was informed of an uncertainty regarding the firm’s net ready capability, see AR, Tab 129, Mid-Term Briefing to Boeing, at 77, and that ultimately the firm responded to an EN concerning the firm’s System Requirements Matrix and System Specification with respect to complying with the SRD requirements for KPP No. 7. See AR, Tab 210, Boeing Response to EN BOE-MC1-041. Boeing believed that its EN response charted how its proposal met the KPP No. 7 thresholds and objective in total, see Boeing’s Comments at 29, and during the firm’s Pre-Final Proposal Revision Briefing the Air Force informed Boeing that the firm “met” both the KPP thresholds and the objective requirements for KPP No. 7. See AR, Tab 135, Boeing’s Pre‑Final Proposal Revision Briefing, at 57. Accordingly, Boeing made no further revisions to its proposal in this area. Boeing’s Second Supplemental Protest at 53. The Air Force, however, changed its evaluation rating of this aspect of Boeing’s proposal to “partially met” the KPP objective (the same rating that Northrop Grumman received) without further notice to Boeing. Boeing contends that the Air Force’s misleading discussions prevented the firm from addressing the agency’s concerns with respect to this objective.

The Air Force does not dispute that it informed Boeing during discussions that the firm had satisfied all of the thresholds and the objective under KPP No. 7, but contends that at the time it later determined that Boeing had not fully satisfied this objective, discussions had already been closed. See Second Supplemental COS at 77. The agency argues that, in any event, it was under no obligation to inform Boeing of the changed evaluation rating associated with this objective because the objective “constituted trade space,” the absence of which would not be a deficiency or weakness. Agency Memorandum of Law at 131.

We do not agree with the Air Force that the agency was permitted, after informing Boeing that its proposal fully met this objective, to change this evaluation conclusion without affording Boeing the opportunity to satisfy this requirement. It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful, equitable, and not misleading. See 10 U.S.C. sect. 2305(b)(4)(A)(i); AT&T Corp., B-299542.3, B‑299542.4, Nov. 16, 2007, 2008 CPD para. 65 at 6. Here, by informing Boeing prior to the submission of the firm’s final proposal revision that it satisfied all aspects of KPP No. 7, the Air Force deprived the firm of the opportunity to further address these particular requirements. See AT&T Corp., supra, at 12; see also Bank of Am., B‑287608, B-287608.2, July 26, 2001, 2001 CPD para. 137 at 13.

In contrast, the Air Force informed Northrop Grumman prior to the submission of that firm’s final proposal revision that it had only partially met this KPP objective, which permitted that firm the opportunity to further address the KPP objective requirements. See AR, Tab 205, Northrop Grumman’s Pre-Final Proposal Revision Briefing, at 61. Moreover, Boeing submitted its final submission addressing this KPP objective several months prior to the pre-FPR briefing, and, as indicated above, the agency actually reopened discussions on other subjects after submission of the FPRs and obtained revised FPRs. Boeing’s Protest at 66; Boeing’s Second Supplemental Protest at 53. In short, the Air Force misled Boeing when the agency advised the firm that it met this objective, but later determined that Boeing did not fully meet this objective, and did not reopen discussions with Boeing on this issue. The Air Force also treated the firms unequally when it provided Northrop Grumman, but not Boeing, with continued discussions on this same objective. It is axiomatic that procuring agencies may not conduct discussions in a manner that favors one offeror over another. See FAR sect. 15.306(e)((1); Chemonics Int’l, Inc., B-282555, July 23, 1999, 99-2 CPD para. 61 at 8-9.

We also find a reasonable possibility that Boeing was prejudiced by the Air Force’s misleading and unequal discussions, given the greater weight that KPPs were supposed to receive in the agency’s evaluation. In this regard, if Boeing had been evaluated as fully satisfying this KPP objective, which was the only KPP objective in the operations utility area, it could well have been considered to be superior in this area to Northrop Grumman, which was evaluated as only partially satisfying this KPP objective. 
(The Boeing Company, B-311344; B-311344.3; B-311344.4; B-311344.6; B-311344.7; B-311344.8; B-311344.10; B-311344.11, June 18, 2008) (pdf)


The protester next argues that the EPA failed to conduct meaningful discussions regarding several issues. The record, however, does not support the protester’s allegations with regard to any of the areas where it argues that the agency failed to provide meaningful discussions. For example, IBM argues that it was misled during discussions regarding page limitations. Specifically, IBM claims that the agency advised IBM that Volume 3 of its proposal exceeded the page limitation, but orally advised that IBM could include additional pages regarding its work breakdown structure (WBS) and integrated master plan (IMP) in Volume 5, rather than Volume 3 of its proposal--despite the fact that the RFP expressly required that these matters be addressed in Volume 3. IBM contends that it relied on the agency’s advice and placed those items in Volume 5, which, unlike Volume 3, had no page limitations. In evaluating IBM’s proposal, the agency did not provide the WBS and IMS documents to the evaluators because they were not contained in Volume 3; the agency evaluators concluded that the absence of a detailed WBS and IMP constituted a weakness in the proposal. AR, Tab 41, SSD at 23.  The protester argues that the agency’s discussions here were misleading, and therefore not consistent with the agency’s obligation to ensure that discussions are meaningful. See L-3 Comm. Corp., BT Fuze Prods. Div., B-299227, B-299227.2, Mar. 14, 2007, 2007 CPD para. __ at 18-19. The agency denies making such a statement, and notes that such instructions would have been contrary to the RFP instructions. Because the allegedly misleading agency statements would have resulted in a material deviation from the solicitation, namely the page limitation, the protester could not reasonably rely on such oral advice--even if the record demonstrated that the agency made such a statement, which it does not. S3 LTD, B-287019.2 et al., Sept. 14, 2001, 2001 CPD para. 165 at 6. Offerors cannot rely on oral modifications to an RFP which are inconsistent with its written terms, absent a written amendment to the RFP or written confirmation of the oral modification. Id. This clear principle provides fairness to all parties by ensuring that competitions are conducted under equal terms, and protects both protesters and agencies from the kind of credibility disputes raised here, as well as protecting the integrity of the procurement process overall. Id. (IBM Corporation, B-299504; B-299504.2, June 4, 2007) (pdf)


AT&T protests that the agency failed to adequately raise the concerns it had regarding AT&T’s staffing plan during the discussions held with the offeror. AT&T also contends that the agency’s discussions were misleading, because SSA identified one narrow area of the offeror’s staffing plan as lacking sufficient detail and failed to inform AT&T of the true nature and breadth of the evaluated weaknesses here. The protester argues that the lack of meaningful discussions was prejudicial to it, since the perceived weaknesses in AT&T’s staffing plan became a major factor in the agency’s subsequent best value tradeoff determination. Protest, Sept. 20, 2007, at 44-51.

When discussions are conducted, they must at a minimum identify deficiencies and significant weaknesses in each competitive-range offeror’s proposal. Federal Acquisition Regulation (FAR) sect. 15.306(d)(3); Multimax, Inc., et al., B-298249.6 et al., Oct. 24, 2006, 2006 CPD para. 165 at 12; PAI Corp., B-298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. Discussions must be “meaningful,” that is, sufficiently detailed so as to lead an offeror into the areas of its proposal requiring amplification or revision. Smiths Detection, Inc., B-298838, B-298838.2, Dec. 22, 2006, 2007 CPD para. 5 at 12; Symplicity Corp., B-297060, Nov. 8, 2005, 2005 CPD para. 203 at 8. For example, discussions are not meaningful where the agency fails to apprise an offeror that its staffing levels are viewed as unreasonably low. Professional Servs. Group, Inc., B-274289.2, Dec. 19, 1996, 97-1 CPD para. 54 at 4. Further, an agency may not mislead an offeror--through the framing of a discussion question or a response to a question--into responding in a manner that does not address the agency’s concerns, or misinform the offeror concerning a problem with its proposal or about the government’s requirements. Multimax, Inc., et al., supra; Metro Mach. Corp., B-281872 et al., Apr. 22, 1999, 99-1 CPD para. 101 at 6.

(sections deleted)

In its report to our Office, SSA argues that its actions here were proper for the following reasons: (1) the weaknesses found by the agency in AT&T’s staffing plan were not significant ones, so no discussions were in fact required here; (2) the agency nevertheless conducted meaningful discussions with AT&T regarding its staffing plan; and (3) the agency was not required to re-open discussions with AT&T simply because AT&T’s staffing plan subsequently became a discriminator for source selection purposes. AR, Oct. 1, 2007, at 1-5, AR, Nov. 2, 2007, at 1-6.  As discussed in detail below, we conclude that the agency’s actions were improper because: (1) the agency’s initial technical evaluation regarded AT&T’s staffing plan as a significant weakness; (2) the agency failed to conduct meaningful discussions with AT&T regarding this significant weakness; and (3) the agency’s substantial reliance on AT&T’s staffing plan in its best value tradeoff determination clearly demonstrates that the lack of meaningful discussions here was prejudicial to AT&T.


As set forth above, the record reflects that the TET’s initial evaluation of proposals identified two separate concerns with AT&T’s proposed staffing plan. First, the evaluators found that AT&T’s staffing appeared to be at minimal levels in relation to the RFP’s requirements. Second, the TET also believed that AT&T’s entire staffing plan lacked sufficient detail, as exemplified by the offeror’s staffing for the VNOC and help-desk personnel at the Durham and NCC locations. Moreover, the agency evaluators considered AT&T’s staffing plan to be a significant weakness, as evidenced by the initial evaluation report. Specifically, in addition to stating that “[t]he proposed staffing at current levels would be considered inconsistent with the proposal implementation schedule without a clear understanding of the support personnel,” the TET expressly found that “[t]he risk of implementing a minimal staffing plan as [AT&T] presented could jeopardize the success of the project.” AR, Tab 13, Initial Technical Evaluation Report, app. 5, Evaluation of Proposed Project Lifecycle Staffing Plans, at 7. We think that when an agency finds, as it did here, that the risk associated with a given aspect of an offeror’s proposal may jeopardize the overall success of the project, this represents a significant weakness. See FAR sect. 15.001 (a “significant weakness” in an offeror’s proposal is a flaw that appreciably increases the risk of unsuccessful contract performance). Given this finding regarding the risk associated with AT&T’s staffing plan, the fact that SSA did not expressly characterize the staffing plan as a significant weakness is not controlling. See Alliant Techsystems, Inc.; Olin Corp., B-260215.4, B-260215.5, Aug. 4, 1995, 95-2 CPD para. 79 at 7-8. Accordingly, we conclude that the agency was required to conduct discussions with AT&T regarding its staffing plan.  Further, while the record shows that SSA did conduct discussions with AT&T regarding its staffing plan, we think that these discussions were not meaningful. As set forth above, the agency provided AT&T with one discussion item regarding its staffing plan. This item informed AT&T only of SSA’s concern that the staffing plan lacked sufficient detail (“the personnel staffing charts do not provide sufficient information to determine that the staffing levels are consistent with AT&T’s proposed programmatic methods,” AR, Tab 15, Discussions with AT&T, at 13-14), and completely failed to mention the agency’s equal, if not greater, independent concern that AT&T’s staffing levels were considered too low. An agency’s belief that an offeror’s staffing levels are too low is materially different from a concern that a staffing plan lacks sufficient detail; the fact that both involve staffing is not sufficient to conclude that the agency here provided meaningful notice to AT&T as to the total scope of its concern. See Andrew M. Slovak, B-253275.2, Nov. 2, 1993, 93-2 CPD para. 263 at 4 (discussions limited to a food menu’s item cycle did not put offeror on notice of the agency’s separate concern that the menu also failed to provide for healthy food items).  Moreover, the discussion item here specified only one particular area of AT&T’s staffing plan as lacking sufficient detail (“[s]pecifically, staffing levels for VNOC and Help Desk problem intake,” id. at 14), when the agency’s real concern was that AT&T’s entire staffing plan lacked sufficient information. See Spherix, Inc., B-294572, B-294572.2, Dec. 1, 2004, 2005 CPD para. 3 at 14 (agency failed to conduct meaningful discussions when it determined that offeror’s entire quality control plan was a significant weakness, but identified only two specific aspects of the quality control plan in discussions). In our view, not only was AT&T inadequately advised of other areas of its staffing plan that lacked sufficient detail, but the agency’s failure to identify the scope of its concern may have misled the offeror into believing that those areas did not require further adjustment.[18] Also, unlike other identified management approach weaknesses, the discussions here did not characterize AT&T’s staffing plan as a significant weakness, or inform the offeror of the agency’s belief that the risk associated with AT&T’s minimal staffing plan could jeopardize the success of the project. See AR, Tab 15, Agency Discussions with AT&T, at 8, 13-14. Under the circumstances here, we cannot conclude that AT&T, reviewing the agency’s discussions in conjunction with the material that it had submitted with its proposal, reasonably could have recognized the total scope of the agency’s concerns regarding both the staffing levels and the lack of detail in AT&T’s entire staffing plan.  The record also reflects that AT&T was prejudiced by the lack of meaningful discussions regarding its staffing plan. In its final evaluation report, the TET found that AT&T’s staffing levels, while higher than those proposed originally, were still “minimal and conservative,” and the lack of detail in AT&T’s staffing plan (in areas other than VNOC and Help desk, which AT&T’s FPR specifically addressed) represented potential performance risks if AT&T was unable to staff appropriately. Id., Tab 33, Final Technical Evaluation Report, at 9, app. II, Evaluation of Proposal Project Lifecycle Staffing Plans, at 6. The agency’s subsequent best value tradeoff determination then went further, and characterized AT&T’s staffing levels as the offeror’s “principal weakness and area of risk,” since its staffing levels were “so low as to potentially threaten the ability of the vendor to successfully deliver the proposed solution in accordance with the Government’s delivery schedule and to support the TSRP user community across the contract term in a fully satisfactory manner.” Id., Tab 35, Best Value Tradeoff Memorandum, at 22. Quite simply, AT&T’s staffing plan, which the agency considered to be a significant weakness from the time of the initial evaluation, was a material factor in the agency’s source selection determination.  (AT&T Corp., B-299542.3; B-299542.4, November 16, 2007) (pdf)


DRS maintains that the agency engaged in unequal discussions, specifically, that it was given more exacting questions and was required to provide far more detail in its responses than Onan. In effect, DRS is arguing that it was given a greater level of detail in its discussions than was given to Onan. We fail to see how providing more detailed discussions to DRS was improper or prejudicial to DRS. Discussions need not be identical; rather, discussions are to be tailored to each offeror’s proposal. Federal Acquisition Regulation sect. 15.306(d)(1), (e)(1); PharmChem, Inc., B-291725.3 et al., July 22, 2003, 2003 CPD para. 148 at 6. We find no impropriety here.  DRS also asserts that its discussions were misleading. As noted, the agency relaxed the solicitation’s requirements relating to the fuel efficiency standards for the generator sets. The agency advised both offerors of its intention to relax the specifications, and requested comments relating to the revisions, by e-mail dated October 18, 2006. AR, exh. 30. DRS commented by letter dated October 23, stating that, in its view, the changes were unnecessary because it could meet the original, more stringent, standards. AR, exh. 31. Notwithstanding DRS’s position, the agency revised the specifications on November 1. AR, exh. 32. Thereafter, by letter of November 2, DRS requested that the Army engage in discussions relating to the deficiencies identified in its original phase II and III proposal. In response, the agency provided DRS with two rounds of discussion questions, first by letter dated November 3, and subsequently by letter dated January 16, 2007. In both letters, the agency provided DRS with detailed questions that had been developed by the evaluators after their review of DRS’s initial proposal, including questions relating to DRS’s ability to meet the original, more stringent, fuel efficiency standards. (Engineered Electric Company d/b/a/ DRS Fermont, B-295126.5; B-295126.6,  December 7, 2007) (pdf)


Discussions, when conducted, must be meaningful, that is, they may not be misleading and must identify proposal deficiencies and significant weaknesses that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award. PAI Corp., B‑298349, Aug. 18, 2006, 2006 CPD para. 124 at 8. However, agencies are not required to “spoon feed” an offeror during discussions; they need only lead offerors into the areas of their proposal that require amplification. LaBarge Elecs., B‑266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6.  The discussions here were unobjectionable. As noted above, the discussion letter specifically advised Blane that its delivery plan was difficult to read and follow. In this regard, Blane’s initial delivery plan consisted of a chart containing various item descriptions (down the left hand side of the chart), amounts (throughout the chart, including various blank spaces), and country names (down the right hand side of the chart), formatted in such a manner that the columns contained no headings--thus making it unclear to what the columns referred--and the rows contained amounts that were not clearly on the same line, making it unclear which amount referred to which item description.[2] Since the nature of the agency’s difficulty with the chart was, simply, that it was difficult to read and follow, the discussion letter was sufficient to lead Blane into the area of its proposal that required improvement or further clarification. Blane asserts that the agency should have reviewed its entire proposal, including the quantities contained in a “transportation matrix,” and then brought any discrepancies to its attention during discussions. Protester’s Comments at 3. However, while the protester may believe that it would have been better able to address the deficiencies in its delivery plan if the agency had approached discussions as it suggests, the agency was not required to do so; again, the agency was only required to lead the protester into the area of concern. Moreover, given the lack of clarity in the chart, and the agency’s resultant inability to determine precisely what Blane intended, we think the agency was not in a position to provide more information in its discussion letter; certainly, it was not required to provide more detailed questions based on its speculation as to what Blane may have intended.  (Blane International Group, Inc., B-310329, December 13, 2007) (pdf)


Cornell next argues that, because the agency had “serious concerns about the location offered by Cornell from the time that the site visit was performed,” Comments at 7, the agency was required by the FAR to raise those concerns in discussions. When discussions are held they must at least address deficiencies and significant weaknesses in the proposals. FAR sect. 15.306(d)(3). However, the agency is not required to discuss every area where a proposal could be improved, and the scope and extent of discussions is a matter within the contracting officer’s discretion. Id. In this regard, we review the adequacy of discussions to ensure that agencies point out weaknesses that, unless corrected, would prevent an offeror from having a reasonable chance of award. Brown & Root, Inc. and Perini Corp., a joint venture, B-270505.2, B-270505.3, Sept. 12, 1996, 96-2 CPD para. 143 at 6.  As discussed above, the record demonstrates that Cornell’s site location was never considered to be a significant weakness or deficiency, and never prevented Cornell from having a reasonable chance for award. Nowhere in the SSEB working papers, the SSEB consensus papers, the technical/management evaluation memorandum, or the SSD was the weakness of Cornell’s site location characterized as significant or as a deficiency. [2] Further, Cornell’s proposed site location was found to meet the requirements of the solicitation at every stage of the evaluation. Because there is no evidence to suggest that Cornell’s site location ever kept its proposal from being rated acceptable under the site location or technical/management factor, or otherwise prevented Cornell from having a reasonable chance of receiving award, the agency was not required to raise the issue in discussions. See Northrop Grumman Info. Tech. Inc., B-290080 et. al., June 10, 2002, 2002 CPD para. 136 at 6; Brown & Root, Inc. and Perini Corp., a joint venture, supra.  (Cornell Companies, Inc., B-310548, December 3, 2007)  (pdf)


We recognize, as PADCO points out, that the TEC did in fact describe the level of effort feature of its proposal as a “weakness.” Contrary to PADCO’s argument, however, discussions are not inadequate simply because a weakness, which was not addressed during discussions, subsequently becomes a determinative factor in choosing between two closely ranked proposals, as was the case here. See, e.g., Gracon Corp., B-293009 et al., Jan. 14, 2004, 2004 CPD para. 58 at 3; Hines Chicago Inv., LLC, B‑292984, Dec. 17, 2003, 2004 CPD para. 5 at 3-4. Further, regarding PADCO’s contention that the weakness must have been significant because its final ratings were decreased, the agency reports, and the record confirms, that this weakness was not viewed by the agency as significant. At PADCO’s debriefing, USAID expressly stated that it did not consider the above weakness to be significant. Consistent with this statement, the evaluation documents show that none of the evaluation comments characterize PADCO’s distribution of its level of effort as a “significant weakness,” a term the agency had used to describe other weaknesses it identified in its evaluation. See, e.g., AR, Tab 55, Competitive Range Determination, at 9 (discussing a “significant weakness” in the initial proposal submitted by The Services Group). While the distribution of PADCO’s level of effort presented a “risk,” as indicated by the TEC, there is nothing to suggest that it created an unacceptable level of risk or “appreciably” increased the risk of PADCO’s proposal. See FAR sect. 15.001 (defining a “weakness” as “a flaw . . . that increases the risk of unsuccessful contract performance” and a “significant weakness” as “a flaw that appreciably increases the risk of unsuccessful contract performance”). Ultimately, under both the management and staffing plan subfactor and the overall technical approach factor, PADCO’s proposal received a rating of “acceptable,” which, as noted above, was defined by the RFP as a proposal which meets all solicitation requirements, is “complete” and “comprehensive,” and exemplifies an understanding of the tasks required. RFP at M-2. (Planning And Development Collaborative International, B-299041, January 24, 2007) (pdf)


It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful; that is, discussions must identify deficiencies and significant weaknesses in each offeror’s proposal that could reasonably be addressed so as to materially enhance the offeror’s potential for receiving award. PAI Corp., B‑298349, Aug. 18, 2006, 2006 CPD para. 124 at 8; Spherix, Inc., B-294572, B-294572.2, Dec. 1, 2004, 2005 CPD para. 3 at 13. An agency fails to conduct meaningful discussions where it fails to apprise an offeror that its prices were viewed as unreasonably high. Price Waterhouse, B-220049, Jan. 16, 1986, 86-1 CPD para. 54 at 6-7. Further, an agency may not mislead an offeror--through the framing of a discussion question or a response to a question--into responding in a manner that does not address the agency’s concerns; misinform the offeror concerning a problem with its proposal; or misinform the offeror about the government’s requirements. Metro Mach. Corp., B‑281872 et al., Apr. 22, 1999, 99-1 CPD para. 101 at 6. In conducting exchanges with offerors, agency personnel also may not “engage in conduct that . . . favors one offeror over another,” FAR sect. 15.306(e)(1); in particular, agencies may not engage in what amounts to disparate treatment of the competing offerors. Front Line Apparel Group, B-295989, June 1, 2005, 2005 CPD para. 116 at 3-4. Here, in the discussions questions issued to NGI and Multimax (as well as to other offerors such as BAE) questioning the proposed rates for particular labor categories as significantly overstated, the agency advised as follows: “Your proposed labor rates are significantly higher than the Independent Government Cost Estimate (IGCE) rates for the following labor categories . . . . The offeror should consider revising the price proposal. If you do not revise the identified rates, please provide an explanation for the basis of the rate.” See IFN1 to NGI no. 51, Nov. 3, 2005; IFN to NGI no. 298, Jan. 6, 2006; IFN to BAE no. 50, Nov. 3, 2005; IFN to BAE no. 297, Jan. 6, 2006; IFN to Multimax no. 49, Nov. 11, 2006. Thus, there was no reference in the IFNs to the agency’s reliance on the two-standard-deviation calculation, but instead only to the proposed labor rate being “significantly higher than” the IGCE as the basis for the IFN. The Army’s price discussions with NGI and Multimax (as well as with BAE) were inadequate because, due to the agency’s reliance on the two-standard-deviation formula to identify “outlier” rates--and the broad range of acceptable prices resulting from the formula--it failed to bring to the protesters’ attention numerous rates that reasonably should have been considered significantly overstated. In this regard, the record shows that proposed rates that were not questioned in the IFNs could actually exceed the IGCE rates by a greater percentage than the rates that were identified. Thus, for example, although NGI’s rate for [REDACTED] at the contractor site was [REDACTED] percent higher than the IGCE rate, this rate was not identified in an IFN because it was within the wide range of acceptable prices established under the formula. At the same time, although NGI’s proposed rate for [REDACTED] at the contractor site was only [REDACTED] percent higher than the IGCE rate, because it fell outside the range established by the two-standard-deviation test, NGI was advised that its rate was “significantly higher” than the IGCE. There simply is no reasonable basis for bringing the former rate to the offeror’s attention, but not the latter. The above example is not an isolated one. NGI calculates that [REDACTED] of its proposed labor rates that were not identified during price discussions were similar to this example--they exceeded the corresponding IGCE rate by a higher percentage than one or more of the rates identified in its price IFNs. NGI notes further that [REDACTED] of its unquestioned rates exceeded the IGCE rates by a greater percentage than did some rates that were questioned in other offerors’ IFNs. Likewise, the record indicates that Multimax was not advised that its proposed rates for a significant number of labor categories were higher than the corresponding IGCE rates, despite the fact that these proposed rates deviated from the IGCE by a greater percentage than rates that were identified in discussions with Multimax or other offerors. Multimax calculates that [REDACTED] of its unquestioned rates (only [REDACTED] of its rates were identified in IFNs) exceeded the IGCE rates by a greater percentage than the rates that were questioned in other offerors’ IFNs (during initial price discussions). We conclude that not only were offerors not adequately advised of all of their significantly overstated rates, but the agency’s failure to identify the additional rates actually misled the offerors into believing that those rates did not require further adjustment. In these circumstances, we conclude that the agency failed to conduct meaningful discussions with the protesters.  (Multimax, Inc.; NCI Information Systems, Inc.; BAE Systems, B-298249.6, B-298249.7, B-298249.8, B-298249.9, B-298249.10,October 24, 2006) (pdf)

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1 Items for negotiation (IFN)


Where contracting agencies conduct discussions with offerors whose proposals are within the competitive range, the discussions must be meaningful. Professional Servs. Group, Inc., B-274289.2, Dec. 19, 1996, 97-1 CPD para. 54 at 3. Discussions cannot be meaningful if an offeror is not advised of the weaknesses, deficiencies, or excesses in its proposal that must be addressed in order for the offeror to be in line for award. Mechanical Contractors, S.A., B-277916.2, Mar. 4, 1998, 98-1 CPD para. 68 at 4. Here, we think that the agency’s failure to raise its concerns regarding the achievability of ALF’s proposed delivery schedule constituted a failure to conduct meaningful discussions because the protester might well have been determined to be in line for award if it had been able to validate its proposed schedule. Further, we do not think that the agency was relieved of its obligation to conduct discussions due to the circumstance that it did not learn of the information giving rise to its concerns until after discussions had concluded. If, after discussions are completed, the agency identifies concerns pertaining to the proposal as it was prior to discussions that would have had to be raised if they had been identified before discussions were held, the agency is required to reopen discussions in order to raise the concerns with the offerors. See DevTech Sys., Inc., B-284860.2, Dec. 20, 2000, 2001 CPD para. 11 at 4. The key fact is that the concerns (while identified after discussions have been closed) relate to the proposal as it was prior to discussions. Id. (Al Long Ford, B-297807, April 12, 2006) (pdf)


IAP also complains that the Navy improperly failed to inform IAP that its proposed price was too high. In this regard, IAP notes that its proposed price was substantially higher than both the government estimate (by 34 percent) and EJB’s price (by 21 percent) for the definite-quantity elements of the RFP, and 39 percent higher than EJB’s price for the ID/IQ elements.  Where an offeror’s price is high in comparison to competitors’ prices or the government estimate, the agency may, but is not required to, address the matter during discussions. Grove Resource Solutions, Inc., B-296228, B-296228.2, July 1, 2005, 2005 CPD para. 133 at 5 n.5. Thus, if an offeror’s price is not so high as to be unreasonable and unacceptable for contract award, the agency reasonably may conduct discussions without advising the offeror that its prices are not competitive. Id.; cf. Creative Info. Tech., Inc., B-293073.10, Mar. 16, 2005, 2005 CPD para. 110 at 7 (price nearly 7 times the government estimate and 4.6 and 9 times competitors’ prices is unreasonable on its face). Here, the agency determined that IAP’s overall price was reasonable for the work to be performed and for what IAP proposed, SSB Report at 19, and the price difference, even as calculated by IAP, is not of a magnitude that suggests that IAP’s price was unreasonable on its face. See Grove Resource Solutions, Inc., supra (agency not required to discuss protester’s high price where awardee’s price was about 40 percent lower). Under these circumstances, the Navy was not required to raise the matter of IAP’s higher price during discussions. (IAP World Services, Inc., B-297084, November 1, 2005) (pdf)


We find that the record does not establish a reasonable basis for the agency’s assessment of a significant weakness with respect to Cogent’s proposed scanner. First, as the record shows and the Army now admits (see Agency’s Hearing Comments at 13-14), the evaluators failed to recognize that Cogent had proposed a different scanner in its revised proposals to satisfy the solicitation requirements--this failure itself renders unreasonable the agency’s evaluation judgment concerning Cogent’s proposed scanner. Despite the error, the Army’s evaluator nevertheless asserted that the weakness was based upon Cogent’s failure to explain how it could offer a compliant scanner when the firm had asserted in its initial proposal and earlier protest that no such scanner existed. TR at 122-24. However, even assuming this latter evaluation judgment was reasonable, the Army failed to provide Cogent with meaningful discussions with respect to this scanner. The FAR requires at a minimum that contracting officers discuss with each firm being considered for award “deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” FAR sect. 15.306(d)(3). Here, the Army twice provided Cogent with written discussions after it proposed the Epson Perfection 4870 scanner as a compliant product, but never identified its concern that Cogent had not explained how it was now able to offer a compliant product, even though the evaluators regarded this as a significant weakness. In short, we find no reasonable basis in the record for the agency’s judgment that Cogent’s proposed scanner was a significant proposal weakness. We also find that, in any event, the Army failed to conduct meaningful discussions with Cogent with respect to this aspect of the agency’s evaluation. (Cogent Systems, Inc., B-295990.4; B-295990.5, October 6, 2005) (pdf)


When contracting agencies conduct discussions with offerors in the competitive range, such discussions must be meaningful. Kaneohe Gen. Servs., Inc., B-293097.2, Feb. 2, 2004, 2004 CPD paragraph 50 at 3. In order for discussions to be meaningful, agencies must advise an offeror of weaknesses, excesses, or deficiencies in its proposal, correction of which would be necessary for the offeror to have a reasonable chance of being selected for award. In this regard, the actual content and extent of discussions are matters of judgment primarily for determination by the agency involved, and we generally limit our review of the agency's judgments to a determination of whether they are reasonable. J.G. Van Dyke & Assocs. , B-248981, B-248981.2, Oct. 14, 1992, 92-2 CPD paragraph 245 at 4. Specifically, with regard to the adequacy of discussions of price, an agency generally does not have an obligation to tell an offeror that its price is high, relative to other offers, unless the government believes the price is unreasonable. State Mgmt. Servs., Inc.; Madison Servs., Inc., B-255528.6 et al. , Jan. 18, 1995, 95-1 CPD paragraph 25 at 5-6; Marwais Steel Co., B-254242.2, B-254242.3, May 3, 1994, 94-1 CPD paragraph 291 at 6. The issue here is whether the Army's discussions with CITI were meaningful where the Army advised CITI merely that its total price appeared "overstated," given the unique circumstances of this case--specifically, the extraordinary disparity between CITI's proposed level of effort and price as compared to the government estimate as well as the level of effort and prices of the other offerors in the competitive range. We conclude that they were not. In addressing this issue, we recognize that it is within the agency's discretion to decide whether to inform an offeror that its price is considered too high and to reveal the results of the analysis supporting that conclusion or to indicate to all offerors the cost or price that the government's price analysis, market research, and other reviews have identified as reasonable. See FAR 15.306(e). The question is whether the agency's judgment in this instance was reasonable. While an agency is not required to "spoon-feed" an offeror during discussions as to each and every item that could be revised to improve its proposal, see ITT Fed. Sys. Int'l Corp. , B-285176.4, B-285176.5, Jan. 9, 2001, 2001 CPD paragraph 45 at 6, agencies must impart sufficient information to afford offerors a fair and reasonable opportunity to identify and correct deficiencies, excesses or mistakes in their proposals. Matrix Int'l Logistics, Inc. , B-272388.2, Dec. 9, 1996, 97-2 CPD paragraph 89 at 9. In this case, we conclude that CITI could not be reasonably expected to have understood the true nature and magnitude of the agency's concern with its proposal based upon the information provided by the Army during its discussions with CITI, thus rendering those discussions essentially meaningless.  (Creative Information Technology, Inc., B-293073.10, March 16, 2005) (pdf)


In order for discussions to be meaningful, agencies must, at a minimum, point out to competing firms deficiencies, significant weaknesses, and adverse past performance information to which the firm has not previously had an opportunity to respond. FAR 15.306(d)(3). The FAR also encourages contracting officers to discuss other aspects of a firm's proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal's potential for award. Id. Discussions must be meaningful, equitable and not misleading; discussions cannot be meaningful unless a firm is led into those weaknesses, excesses or deficiencies that must be addressed in order for it to have a reasonable chance for award. TDS, Inc., supra, at 6-7. LMC asserts that the agency identified 11 weaknesses in its proposal that were based on language from the earlier, pre-corrective action, version of its proposal. LMC maintains that the agency was required to discuss these 11 weaknesses with the firm pursuant to our decision in DevTech Sys., Inc. , B-284860.2, Dec. 20, 2000, 2001 CPD 11 in which we held that, where an agency identifies new weaknesses in a proposal during a reevaluation of that proposal in an acquisition where discussions have previously occurred, it is required to discuss those new weaknesses with the offeror. The agency responds that, with respect to 6 of the 11 alleged weaknesses arising from proposal language that predated the current FPRs, the agency did not assign a weakness to the LMC proposal during its evaluation, and thus was not required to raise the matter in discussions. Agency Legal Memorandum, Sept. 30, 2004, at 11833. While the agency is correct that the six weaknesses to which LMC refers were not identified as weaknesses in the technical evaluation report on LMC's proposal, all six are specifically identified in the agency's final evaluation and tradeoff analysis report as weaknesses and as bases for distinguishing between the LMC and EDS proposals. AR, exh. 116, atviix,xiv. Given that they ultimately were listed in the best value analysis--they related to 6 of the agency's 10 identified best value items--and that they contributed in some manner to the proposal's receiving an overall marginal/high risk rating, we do not think the fact that they were captured in the best value determination, rather than the technical evaluation report, provided a basis for concluding that these issues were not significant weaknesses. Further, while it is not clear how significant they were, given that they played a large part in the best value determination--and therefore presumably were among the most important reasons for downgrading LMC's proposal--absent some clear showing by the agency that they were not significant, since they were based on information in LMC's original proposal, and the agency had not previously discussed the issues with LMC, it was obliged to do so. DevTech Sys., Inc. , supra , at 4-5. (Lockheed Martin Simulation, Training & Support, B-292836.8; B-292836.9; B-292836.10, November 24, 2004) (pdf) 


We do not agree with CHS that the agency's referring to staffing and labor hours interchangeably was misleading. Rather, we think the agency's references to "labor hours for full time employees" (oral discussions) and the adequacy of CHS's proposed EAP staff (written discussions) both reasonably could be interpreted in only one way: the agency was concerned that CHS had not proposed enough staff to perform adequately. The agency's questions were adequate to bring this concern to CHS's attention, and therefore were meaningful.  (Comprehensive Health Services, Inc., B-294608, December 1, 2004) (pdf)


As described above, the SSET identified Spherix's marketing approach, including a lack of projected growth, to be a "significant weakness." See AR, Supplemental Documents, Source Selection Briefing Slides, at 2985. Spherix's approach to the marketing plan requirement was not discussed with the protester, and therefore we conclude that the agency failed to conduct meaningful discussions with the firm in this respect. We also find that the agency did not conduct meaningful discussions with Spherix with respect to its proposed quality control plan, which was also determined to be a significant weakness. The RFP provided for the evaluation of offerors' draft comprehensive quality control plan "to include a Performance Work Summary (PRS) with Standards, Acceptable Quality Level (AQL), and Incentives." RFP M, at 333. Spherix's initial proposal described its proposed quality control plan, see AR, Tab103, Spherix Initial Proposal, at 2139-214, which the SSET evaluated to be a weakness, stating that Spherix's "overall quality control plan . . . is not a complete approach . . . Vendor must amplify a more thorough approach to quality control ensuring that [DELETED] are addressed." See AR, Supplemental Documents, Final SSET Evaluation Worksheets for Spherix, at 2997. The SSET also evaluated Spherix's proposed approach to the PRS and AQL requirements to be weaknesses. Id. In its discussions with Spherix, the agency addressed only the firm's proposed approach to the PRS and AQL requirements, and Spherix's proposal revisions sufficiently addressed those aspects of its proposal such that the agency no longer identified them as proposal weaknesses. Id. The agency did not otherwise address Spherix's quality control plan during discussions. Id. In its final evaluation, the SSET noted that Spherix had not changed its proposal with respect to its proposed quality control plan, and stated that discussions were not conducted on this weakness because Spherix "had a plan[; the] plan was simply weak." Id. Ultimately, this aspect of Spherix's proposal was identified by the SSET identified to be a "significant weakness." See AR, Supplemental Documents, Source Selection Briefing Slides, at2985. We therefore find that the agency failed to conduct meaningful discussions with Spherix with respect to its proposed quality control plan. We also find that Spherix did not receive meaningful discussions with respect to its proposed transition period staffing, which was evaluated as a part of the proposed project implementation plan under the management approach factor. See RFP M, at 333. Spherix's response to this requirement was evaluated as a weakness, because the SSET found that Spherix did not provide detailed information; SSET did not conduct discussions on the matter with Spherix because it concluded that Spherix's proposal "spoke to staffing but weak in identification." See AR, Supplemental Documents, Final SSET Consensus Evaluation Worksheets for Spherix, at 2999. This aspect of Spherix's proposal, which was identified by the SSET as a "significant weakness," see AR, Supplemental Documents, Source Selection Briefing Slides, at2985, also should have been raised with Spherix during discussions, but was not.  (Spherix, Inc., B-294572; B-294572.2, December 1, 2004) (pdf)


PDMG asserts that the agency improperly failed to conduct adequate discussions for the Area 5 and 6 awards and, as a result, treated offerors unequally. Specifically, PDMG maintains that, after the initial rounds of discussions--during which the agency asked PDMG about its experience as it related to performing the RFP's mortgagee compliance requirements--the agency continued to have a concern in the area, but did not again raise it with PDMG. The protester contrasts this with the agency's actions in conducting discussions with SAAM; in both the first and second rounds of discussions, the agency pointed out to SAAM that its prices for certain line items appeared low. PDMG asserts that the agency's repeated discussions with SAAM in the area of price, compared to the single round of technical discussions with PDMG covering the agency's experience concern, evidence disparate treatment. This argument is without merit. PDMG's proposals received good ratings in the area of experience following the agency's discussions in the area. AR, exhs. 9 at 80, 10 at 57. Agencies are not required to discuss every element of a technically acceptable proposal that receives less than the maximum possible score, nor are they required to afford an offeror multiple opportunities to cure a weakness remaining in a proposal that previously was the subject of discussions. Bioqual, Inc. , B-259732.2., B259732.3, May 15, 1995, 95-1 CPD 243 at 45. In any case, the record shows that the two firms were given the same opportunity to revise their proposals as to both technical matters and price during the first round of discussions, AR, exhs. 5, 6, 7, 8, and that revisions for both firms were limited to the pricing proposals during the second round. Id. Thus, contrary to PDMG's assertion, both firms received virtually identical discussions, albeit in different proposal areas depending on the particulars of their offers.  (Portfolio Disposition Management Group, LLC, B-293105.7, November 12, 2004) (pdf)


Chapman also argues that HUD misled it into believing that its responses to the discussion questions had satisfied HUD's concerns. Specifically, Chapman asserts that, during each round of discussions, HUD required Chapman to address only those issues currently raised and informed it that all prior issues had been resolved. Chapman's assertions are belied by the record. While HUD's discussion letters included the statement Your written responses to the written negotiations/ discussions should address only the areas set forth above. . . . (emphasis in original), the letters nowhere stated that prior issues had been resolved, and (other than the initial letter, which did not request FPRs) specifically advised that offerors may address any area in their FPR. Discussion Letters dated Apr. 27, 2004, May 21, 2004, and June 8, 2004.  (Chapman Law Firm, LPA, B-293105.6, B-293105.10, B-293105.12, November 15, 2004) (pdf)


NIH's discussions with Cygnus did not comply with the requirement that discussions be meaningful. As noted above, in explaining why THG's proposal was superior to Cygnus's proposal such that, notwithstanding the significantly lower cost of Cygnus's proposal, THG's proposal represented the best value to the government, the source selection authority cited a number of weaknesses in Cygnus's proposal (as well as strengths in THG's proposal). NIH, however, failed to raise several of these weaknesses during the discussions with Cygnus. Thus, the agency failed to advise Cygnus that the agency viewed as a major weakness (under the single most important technical evaluation subcriterion) the evaluated limited [DELETED]; had assigned a weakness to Cygnus's proposal on the basis that [DELETED]; and had concluded that Cygnus, although displaying an understanding of the scope of work, had not presented a [DELETED]. At the least, in conducting discussions with Cygnus, the agency was required to discuss the first of these concerns, since the agency indisputably viewed it as major weakness. Moreover, while NIH did raise other matters of concern during discussions, the record indicates that the agency misled the protester as to the results of those discussions, advising Cygnus that it had successfully addressed the agency's concerns when this in fact does not appear to have been the case. In this regard, NIH advised Cygnus during discussions of its concern that the proposed leader of Cygnus's team of meeting planners would [DELETED]. Further, NIH viewed Cygnus's failure to furnish samples of its graphics designers' work to be a major weakness, and the agency therefore requested that Cygnus submit such samples. NIH Discussions Letter to Cygnus, Oct.9, 2002. In response, Cygnus sought to explain its rationale for the specified level of effort for [DELETED]. In addition, Cygnus furnished [DELETED]. Cygnus Discussions Response, Oct. 24, 2002. NIH also requested and received from Cygnus additional information regarding, and verification of, several elements of Cygnus's proposed costs, and the agency specifically negotiated [DELETED]. See , e.g. , NIH Discussion Letters to Cygnus, Oct.9, 2002, Dec. 2, 2002, and Jan. 28, 2003. NIH did not find Cygnus's response with respect to the team [DELETED] to be satisfactory, and, according to the agency, it [DELETED]. Further, as noted above, the agency considered the costs negotiated with Cygnus to be [DELETED]. Nevertheless, notwithstanding its continuing concerns with Cygnus's proposal, the agency advised Cygnus in the March 26 request for an FPR that as a result of the oral discussions with it, "in which we negotiated cost issues concerning your proposal," including the [DELETED], a "total estimated cost of[DELETED] . . . is considered to be fair and reasonable." NIH Request to Cygnus for FPR, Mar. 26, 2003. NIH further advised Cygnus on March 27 that "[d]iscussions concerning Cygnus Corporation's proposal have concluded... . It is understood that these discussions have resulted in agreement of all technical and cost issues raised during negotiations." NIH Request to Cygnus for FPR, Mar. 27, 2003. Likewise, when the agency afforded Cygnus and the other offerors on April30 an opportunity to submit a second FPR, it advised Cygnus in its letter that "discussions held on March 26, 2003, resulted in agreement of all technical and cost issues raised during negotiations." NIH Request to Cygnus for FPR, Apr. 30, 2003. (Cygnus Corporation, Inc., B-292649.3; B-292649.4, December 30, 2003)  (pdf)


Here, ASUS admits that, “[d]uring discussions . . . the Navy expressed concerns about [the subcontractor’s] size and its capability to perform the subcontracted work if it were to experience rapid growth as a result of this project.” ASUS Comments at 7. However, ASUS notes that, in response to these expressed concerns, it provided financial records regarding the subcontractor’s viability, a corporate guarantee from ASUS’s parent company, and an explanation of the subcontractor’s plans to hire the workers from the existing government workforce necessary to operate the wastewater systems. ASUS argues that the agency’s apparent “acceptance” of the information and “failure to point out any continuing perceived weaknesses” was misleading and denied ASUS the opportunity to revise it proposal. Id. at 8. We disagree.  Nothing in the record suggests that the agency misled ASUS regarding its concerns. ASUS has pointed to no affirmative statements by the Navy indicating that the agency viewed the concerns it had raised regarding the proposed subcontractor as having been resolved. Further, since the agency was not required to reiterate concerns that were not alleviated after reviewing the protester’s response to the initial discussions, OMV Med., Inc. , supra , the mere fact that the Navy remained silent after the protester’s response could not reasonably be understood here as an indication that the agency found ASUS’s response to be satisfactory. (American States Utilities Services, Inc., B-291307.3, June 30, 2004) (pdf)


Here, as discussed above, despite Lockheed’s inclusion in its initial proposal of “contractor-specific” savings, including the savings associated with the [deleted], the agency declined during discussions to indicate in any way that such savings would be excluded from the agency’s calculation of AUPC.[13] The agency asserts that Lockheed should have known that “contractor-specific” savings would be excluded from the agency’s AUPC calculation due to the RFP’s statements that an “independent Government estimate” of AUPC would be conducted and that various estimating tools would be used to “either validate contractors’ cost estimates or to develop Government cost estimates.” RFP § M.3.1.1.1. We disagree. Neither the language of the solicitation, nor the information provided by the agency during discussions, reasonably placed the offerors on notice that “contractor-specific” savings would have no effect on the agency’s calculation of AUPC. Although we agree that, if the agency actually intends to compete the follow-on production contract, there is nothing inherently unreasonable in evaluating only “design-specific” costs,[14] the offerors were not clearly advised of this. As noted above, the RFP stated that the agency would evaluate the AUPC of “the offeror’s proposed munition” and that such evaluation would be based on an assessment of “the bidders’ production cost estimates.” RFP § M.3.1.1.1. Further, the agency clearly knew, or should have known, that Lockheed’s initially proposed AUPC was based on “contractor-specific” costs, including the costs associated with the proposed [deleted]; yet the agency failed to advise Lockheed during discussions that such costs would be replaced with “industry rates” in calculating the evaluated AUPC. Consistent with the terms of the solicitation, and the information provided during discussions, Lockheed reasonably believed that it could reduce its evaluated AUPC by increasing its proposed “contractor-specific” savings. On this record, the agency failed to conduct meaningful discussions because it failed to advise Lockheed that “contractor-specific” savings would not be reflected in the agency’s calculation of AUPC. (Lockheed Martin Corporation, B-293679; B-293679.2; B-293679.3, May 27, 2004) (pdf)


USF does not protest the evaluation of its proposed price. Rather, USF maintains that the agency failed to engage in meaningful discussions with it by failing to provide adequate notice that its price exceeded the government estimate, and by failing to adequately discuss the implications of its “all or none” proposal. With respect to the former point, the record shows that the agency did apprise USF in the second negotiation message that its proposed price exceeded the government estimate. USF maintains, however, that when it thereafter submitted pricing that continued to exceed the government estimate, the agency was required to again raise the matter with the firm. With respect to the latter point, the record shows that, in its request for FPRs, the agency asked USF to clarify whether its offer was still “all or none.” AR, exh. 12, at 1. USF maintains that the agency was required to apprise it of the fact that unbundling the proposal could have made it eligible for award of the wastewater system. We have no basis to object to the adequacy of discussions here. Discussions are legally adequate where offerors are advised of the weaknesses, excesses and deficiencies in their proposals. Professional Performance Dev. Group, Inc., B‑279561.2 et al., July 6, 1998, 99-2 CPD ¶ 29 at 5. While discussions should be as specific as practicable, there is no requirement that they be all-encompassing or extremely specific in describing the agency's concerns; rather, the legal requirement is that they generally lead offerors into the areas of their proposals that require amplification or correction, without being misleading. Id. Where an agency has advised an offeror of an area of concern, there is no legal requirement that it raise the issue again in a subsequent round of discussions, even where the issue continues to be of concern to the agency. Id. at 5 n.3. (USFilter Operating Services, Inc., B-293215, February 10, 2004) (pdf)


An agency is not required to afford offerors all encompassing discussions, or to discuss every aspect of a proposal that receives lower than the maximum score, and is not required to advise an offeror of a minor weakness that is not considered significant, even where the weakness subsequently becomes a determinative factor in choosing between two closely ranked proposals. Northrop Grumman Info. Tech., Inc., B‑290080 et al., June 10, 2002, 2002 CPD ¶ 136 at 6. Here, none of the identified weaknesses prevented AO’s proposal from being considered fully acceptable or otherwise from having a reasonable chance of receiving the award. Rather, the weaknesses merely resulted in AO’s proposal being rated good rather than excellent under the factors in question, and the award ultimately was made to AMTEC, not because AO’s proposal was deficient, but because AMTEC’s was superior. Development Alternatives, Inc., B-279920, Aug. 6, 1998, 98-2 CPD ¶ 54 at 7. Under these circumstances, the agency was not required to discuss these weaknesses with AO.  (American Ordnance, LLC, B-292847; B-292847.2; B-292847.3, December 5, 2003)  (pdf)


Although discussions must address at least deficiencies and significant weaknesses identified in proposals, the scope and extent of discussions are largely a matter of the contracting officer’s judgment. In this regard, we review the adequacy of discussions to ensure that agencies point out weaknesses that, unless corrected, would prevent an offeror from having a reasonable chance for award. For discussions to be meaningful, they must lead offerors into the areas of their proposals requiring amplification or revision. The Communities Group, B‑283147, Oct. 12, 1999, 99-2 CPD ¶ 101 at 4. The agency provided MacB with meaningful discussions. Specifically, it issued several evaluation notices (EN), two of which requested clarification of MacB’s plans to use incumbent personnel. The first sought clarification of the “commitment of individuals listed as key technical personnel . . . and . . . who they propose to fill key . . . positions if incumbents are not interested.” AR 14 at 1. A second EN sought clarification of an apparent contradiction in MacB’s proposal relating to its plan to offer the right of first refusal to incumbent personnel while at the same time proposing to have 30 percent of the effort staffed by subcontractor personnel. Id. While these ENs did not specifically refer to “risk,” they clearly were sufficient to communicate the agency’s concerns about MacB’s ability to successfully acquire the incumbent workforce, upon which the moderate risk rating ultimately was based. This satisfied the requirement for meaningful discussions in this area. (MacAulay-Brown, Inc., B-292515; B-292515.2, September 30, 2003)  (pdf)


The agency's initial evaluation under this sub-criterion downgraded M&S Farms' proposal for not identifying what each individual would do, and downgraded Carr's proposal to the same degree because its resumes did not list references. Agency Report, Tab 7, Initial Rating Sheets for M&S Farms' Proposal, at 51, 109; Tab 8, Initial Rating Sheets for Carr's Proposal, at 22, 51. Discussions with M&S Farms did not include a question regarding this sub-criterion, or otherwise identify the concern for which M&S Farms' proposal was downgraded, Agency Report, Tab 11, Discussions with M&S Farms, but discussions with Carr did include a question that disclosed the agency's concern under this sub-criterion. Agency Report, Tab 12, Discussions with Carr (Feb. 14, 2002), at 2. Carr then provided the requested references and the agency increased Carr's score to the maximum points available under the sub-criterion, which accounts for the majority of the difference in technical scores between these proposals. Agency Report, Tab 14, Carr's Response to Discussions, at 34; Tab 17, Revised Rating Sheets for Carr's Proposal, at 3. The agency thus treated the offerors unequally on this point, with the awardee receiving a prejudicial competitive advantage as a result.  (M&S Farms, Inc., B-290599, September 5, 2002)  (pdf)


However, as the agency points out, this was just one of several noted weaknesses in Northrop's approach to performing the contract, with no indication that it was considered significant. COR at 23-24. This being the case, and since there is no evidence that the weakness prevented the proposal from being rated acceptable under the systems management/program management subfactor, or otherwise prevented Northrop from having a reasonable chance of receiving the award, the agency was not required to discuss this issue with Northrop. See Brown & Root, Inc. and Perini Corp., a joint venture, supra.  (Northrop Grumman Information Technology, Inc., B-290080; B-290080.2; B-290080.3, June 10, 2002)  (pdf)


While agencies generally are required to conduct meaningful discussions by leading offerors into the areas of their proposals requiring amplification, this does not mean that an agency must "spoon-feed" an offeror as to each and every item that could be revised or otherwise addressed to improve its proposal. LaBarge Elecs., B-266210, Feb. 9, 1996, 96-1 CPD para. 58 at 6.  (DeLeon Technical Services, Inc.; TekStar, Inc., B-288811; B-288811.2; B-288811.3, December 12, 2001)


Where agency knew or should have known that the protester interpreted the solicitation as limiting technical proposals to 100 pages, discussions with the protester were not meaningful when the agency did not advise protester that the solicitation permitted 200 page proposals, declined to advise the protester of the agency's repeatedly expressed concerns that the protester's proposal lacked detail, and advised the protester there were no technical weaknesses in its proposal.  (Bank of America, B-287608; B-287608.2, July 26, 2001)


Under Federal Acquisition Regulation (FAR) § 15.306(e)(3), "the [CO] may inform an offeror that its price is considered by the Government to be too high, or too low, and reveal the results of the analysis supporting that conclusion." This language clearly gives the CO discretion to inform the offeror that its price is too high, but does not require that the CO do so, especially where, as here, the agency does not consider the price a significant weakness or deficiency that the offeror could alter or explain to enhance the proposal's potential for award. National Projects, Inc., B-283887, Jan. 19, 2000, 2000 CPD ¶ 16 at 5; see also KBM Group, Inc., B-281919, B-281919.2, May 3, 1999, 99-1 CPD ¶ 118 at 8-9 (agency did not mislead protester during discussions, even though award was ultimately made based on price and agency did not inform protester that its price was higher than awardee's price, where agency did not believe that protester's price was too high for the approach taken).  (SOS Interpreting, Ltd., B-287477.2, May 16, 2001)


The agency's discussions with IRRI specifically identified the individual CLINs for which the agency considered IRRI's proposed prices too low, which constituted half of the CLINs, as well as that IRRI's overall price was too low. It then afforded IRRI an unrestricted opportunity to submit final proposal revisions. The record thus shows that the Air Force conducted meaningful discussions on the issue.  (International Resources Recovery, Inc., B-287160, March 30, 2001)


We will not find that an agency improperly failed to advise an offeror of a weakness reasonably viewed during the evaluation as minor merely because, as the competition played out, the weakness could have been a determinative factor in choosing between two closely ranked proposals. Brown & Root, Inc. and Perini Corp., a joint venture, B-270505.2, B-270505.3, Sept. 12, 1996, 96-2 CPD para. 143 at 6.  (Millar Elevator Service Company, B-284870.4, December 27, 2000)


This case highlights the challenge that an agency may face when, for whatever reason, it reevaluates initial proposals after discussions are complete. If during the reevaluation of proposals the agency identifies concerns that would have had to be raised had they been identified before discussions were held, the agency is required to reopen discussions in order to raise the concerns with the offerors. Mechanical Contractors, S.A., supra, at 5-6; CitiWest Properties, Inc., supra, at 5. The key fact is that the concerns (while identified relatively late) relate to the proposals as they were prior to discussions.  (DevTech Systems, Inc., B-284860.2, December 20, 2000)


Contracting agencies are not obligated to afford all-encompassing discussions that "spoon-feed" an offeror each item that must be addressed to improve a proposal; agencies are only required to lead offerors into the areas of their proposals considered deficient and requiring amplification.  (SDS International, B-285821, September 21, 2000)


Contracting agencies are not obligated to afford all-encompassing discussions that "spoon-feed" an offeror each item that must be addressed to improve a proposal; agency reasonably led protester into the areas of its proposal with shortcomings that warranted amplification or clarification.  (Arctic Slope World Services, Inc., B-284481; B-284481.2, April 27, 2000)


Allegation that discussions with protester were not meaningful is sustained where the record shows that the evaluators were concerned over the protester's pricing methodology and the source selection official shared that concern, but the protester was not afforded an opportunity during discussions to explain its pricing strategy.  (ACS Government Solutions Group, Inc., B-282098; B-282098.2; B-282098.3, June 2, 1999)


For discussions to be meaningful, they must lead offerors into the areas of their proposals requiring amplification or revision; the agency is not required to "spoon-feed" an offeror as to each and every item that could be revised so as to improve its proposal, however. Du and Assocs., Inc., supra, at 7-8; Applied Cos., B-279811, July 24, 1998, 98-2 CPD para. 52 at 8.  (LB&B Associates, Inc., B-281706, March 24, 1999)


Protest that discussions were not meaningful because agency failed to point out excesses in protester's technical proposal is denied where claimed beneficial features in fact were not excesses, but rather (1) were considered by the agency to be desirable, (2) were simply protester's approach to complying with the solicitation requirements, or (3) did not render the proposal unacceptable, result in a significant reduction in score, or result in an unreasonable, grossly excessive price.  (Consolidated Engineering Services, Inc, B-279565.5, March 19, 1999)


Written discussion questions generated by a contracting agency should reasonably apprise offerors of the areas that the agency considers deficient such that the offerors will understand the agency's concerns.  (Stratus Systems, Inc., B-281645, February 24, 1999)

Comptroller General - Listing of Decisions

For the Government For the Protester
New Piton Science and Technology B-414634: Jul 28, 2017 Crowley Logistics, Inc. B-412628.2, B-412628.3, B-412628.4: Apr 19, 2016  (pdf)
Global Dynamics, LLC B-413313, B-413313.2: Sep 20, 2016 West Sound Services Group, LLC, B-406583.2, B-406583.3, Jul 3, 2013 (pdf)
Engineering Design Technologies, Inc. B-413281: Sep 21, 2016 Sentrillion Corporation, B-406843.3, B-406843.4, B-406843.5, Apr 22, 2013  (pdf)
AAR Airlift Group, Inc. B-412789.2, B-412790.2: Jun 2, 2016  (pdf) Nexant, Inc., B-407708, B-407708.2, Jan 30, 2013  (pdf)
MetalCraft Marine Inc., B-410199, B-410199.2: Nov 13, 2014  (pdf) Mission Essential Personnel, LLC, B-407474, B-407493, Jan 7, 2013  (pdf)
Nuclear Production Partners LLC, B-407948.10, B-407948.11: Feb 27, 2014  (pdf) KPMG LLP, B-406409, B-406409.2, B-406409.3, B-406409.4, May 21, 2012  (pdf)
George G. Sharp, Inc., B-408306, Aug 5, 2013  (pdf) SeKON Enterprise, Inc.; Signature Consulting Group B-405921,B-405921.2, Jan 17, 2012  (pdf)
DynCorp International LLC, B-407762.3, Jun 7, 2013  (pdf) CIGNA Government Services, LLC, B-401062.2; B-401062.3, May 6, 2009  (pdf)
Walsh Investors, LLC, B-407717, B-407717.2, Jan 28, 2013  (pdf) AMEC Earth & Environmental, Inc., B-401961; B-401961.2, December 22, 2009  (pdf)
EMR, Inc., B-406625, Jul 17, 2012  (pdf) Ewing Construction Co., Inc., B-401887.3; B-401887.4, April 26, 2010  (pdf)
Unisys Corporation, B-406326, B-406326.2, B-406326.3, Apr 18, 2012  (pdf) AINS, Inc., B-400760.4; B-400760.5, January 19, 2010 (pdf)
L-3 STRATIS, B-404865, June 8, 2011  (pdf) Velos, Inc.; OmniComm Systems, Inc.; PercipEnz Technologies, Inc., B-400500; B-400500.2; B-400500.3; B-400500.4; B-400500.5; B-400500.6; B-400500.7, November 28, 2008 (pdf)
ACS Federal Solutions, LLC, B-404129, January 7, 2011  (pdf) Tiger Truck, LLC, B-400685, January 14, 2009 (pdf)
ITW Military GSE, B-403866.3, December 7, 2010  (pdf) Burchick Construction Company, B-400342, October 6, 2008 (pdf)
Sabre Systems, Inc., B-402040.2; B-402040.3, June 1, 2010  (pdf) MCT JV, B-311245.2; B-311245.4, May 16, 2008 (pdf)
Clark/Caddell Joint Venture, B-402055, January 7, 2010  (pdf) New Jersey & H Street, LLC, B-311314.3, June 30, 2008 (pdf)  (See Trammell Crow Company, B-311314.2, June 20, 2008)  (pdf)
TMM Investments, Ltd., B-402016, December 23, 2009 (pdf) The Boeing Company, B-311344; B-311344.3; B-311344.4; B-311344.6; B-311344.7; B-311344.8; B-311344.10; B-311344.11, June 18, 2008 (pdf)
AAA Mobile Showers, Inc., B-311420.2, March 27, 2009  (pdf) AT&T Corp., B-299542.3; B-299542.4, November 16, 2007 (pdf)
Honeywell Technology Solutions, Inc., B-400771; B-400771.2, January 27, 2009) (pdf) Multimax, Inc.; NCI Information Systems, Inc.; BAE Systems, B-298249.6, B-298249.7, B-298249.8, B-298249.9, B-298249.10,October 24, 2006 (pdf)
Information Ventures, Inc., B-299361.2; B-299361.3, October 1, 2008 (pdf) Cogent Systems, Inc., B-295990.4; B-295990.5, October 6, 2005. (pdf)
Integrated Concepts & Research Corporation, B-309803, October 15, 2007 (pdf) Creative Information Technology, Inc., B-293073.10, March 16, 2005 (pdf)
IBM Corporation, B-299504; B-299504.2, June 4, 2007 (pdf) Lockheed Martin Simulation, Training & Support, B-292836.8; B-292836.9; B-292836.10, November 24, 2004 (pdf)  

Engineered Electric Company d/b/a/ DRS Fermont, B-295126.5; B-295126.6,  December 7, 2007 (pdf)

Spherix, Inc., B-294572; B-294572.2, December 1, 2004 (pdf)
Blane International Group, Inc., B-310329, December 13, 2007 (pdf) Cygnus Corporation, Inc., B-292649.3; B-292649.4, December 30, 2003  (pdf)
Cornell Companies, Inc., B-310548, December 3, 2007  (pdf) Lockheed Martin Corporation, B-293679; B-293679.2; B-293679.3, May 27, 2004 (pdf)
Planning And Development Collaborative International, B-299041, January 24, 2007 (pdf) M&S Farms, Inc., B-290599, September 5, 2002)  (pdf)
Al Long Ford, B-297807, April 12, 2006 (pdf) Bank of America, B-287608; B-287608.2, July 26, 2001
IAP World Services, Inc., B-297084, November 1, 2005 (pdf) DevTech Systems, Inc., B-284860.2, December 20, 2000
Comprehensive Health Services, Inc., B-294608, December 1, 2004 (pdf) Checchi and Company Consulting, Inc., B-285777, October 10, 2000
Portfolio Disposition Management Group, LLC, B-293105.7, November 12, 2004 (pdf) CRAssociates, Inc., B-282075.2; B-282075.3, March 15, 2000
Chapman Law Firm, LPA, B-293105.6, B-293105.10, B-293105.12, November 15, 2004 (pdf) ACS Government Solutions Group, Inc., B-282098; B-282098.2; B-282098.3, June 2, 1999
American States Utilities Services, Inc., B-291307.3, June 30, 2004 (pdf) Metro Machine Corporation, B-281872; B-281872.2; B-281872.3; B-281872.4, April 22, 1999
USFilter Operating Services, Inc., B-293215, February 10, 2004 (pdf) Biospherics, Inc., B-278278, January 14, 1998
Hines Chicago Investments, LLC, B-292984, December 17, 2003 (pdf)  
American Ordnance, LLC, B-292847; B-292847.2; B-292847.3, December 5, 2003  (pdf)  
American Systems Corporation, B-292755; B-292755.2, December 3, 2003 (pdf)  
MacAulay-Brown, Inc., B-292515; B-292515.2, September 30, 2003 (pdf)  
Northrop Grumman Information Technology, Inc., B-290080; B-290080.2; B-290080.3, June 10, 2002)  (pdf)  
McBride-IHS, B-290074, June 3, 2002  
Information Systems Technology Corporation, B-289313, February 5, 2002  (Pdf Version)  
DeLeon Technical Services, Inc.; TekStar, Inc., B-288811; B-288811.2; B-288811.3, December 12, 2001  
SOS Interpreting, Ltd., B-287477.2, May 16, 2001  
International Resources Recovery, Inc., B-287160, March 30, 2001  
Digital Systems Group, Inc., B-286931; B-286931.2, March 7, 2001  
Interstate Electronics Corporation, B-286466; B-286466.2, January 12, 2001 (pdf)  
ITT Federal Systems International Corporation, B-285176.4; B-285176.5, January 9, 2001  
Millar Elevator Service Company, B-284870.4, December 27, 2000  
J. A. Jones/Bell, A Joint Venture, B-286458; B-286458.2, December 27, 2000  
IT Facility Services-Joint Venture, B-285841, October 17, 2000  
Apex Marine Ship Management Company, LLC; American V-Ships, B-278276.25; B-278276.28, September 25, 2000  
SDS International, B-285821, September 21, 2000  
Trusted Hand Service, Inc., B- 285355, August 21, 2000  
DevTech Systems, Inc., B-284879; B-284879.2, June 16, 2000  
Information Network Systems, Inc., B-284854; B-284854.2, June 12, 2000  
Basic Contracting Services, Inc., B-284649 , May 18, 2000  
WinStar Federal Services, B-284617; B-284617.2; B-284617.3, May 17, 2000  
Arctic Slope World Services, Inc., B-284481; B-284481.2, April 27, 2000  
Davies Rail & Mechanical Works Inc., B-283911.2, March 6, 2000  
Williams Communications Solutions, LLC, B-283900, January 18, 2000  
The Moreland Corporation, B-283685, December 17, 1999    
PeopleSoft USA, Inc., B-283497, November 30, 1999  
The Communities Group, B-283147, October 12, 1999  
Johnson Controls, Inc., B-282326, June 28, 1999  
LB&B Associates, Inc., B-281706, March 24, 1999  
Consolidated Engineering Services, Inc, B-279565.5, March 19, 1999  
Stratus Systems, Inc., B-281645, February 24, 1999  
National Steel and Shipbuilding Company, B-281142; B-281142.2, January 4, 1999  
Professional Performance Development Group, Inc., B-279561.2; B-279561.3; B-279651; B-279651.2, July 6, 1998  
   

U. S. Court of Federal Claims - Key Excerpts

New C. The Adequacy of the Government’s Discussions with Q Integrated

Q Integrated further argues that the government violated the terms of the solicitation and applicable regulations by failing to hold “meaningful discussions” with it. Pl.’s Mot. at 26-30. Specifically, Q Integrated asserts that the government should have disclosed the fact that its past performance references were considered “Not Relevant” in the preliminary evaluation and that the evaluation team had concerns about the impartiality of the past performance questionnaires submitted by Matt Martin. Id. at 28-30. According to Q Integrated, the government’s failure to disclose these weaknesses, or to provide any other meaningful commentary about the past performance evaluation, deprived Q Integrated of the opportunity to address these concerns or make pertinent revisions to its final proposal. Id. at 29.

The government has the option of conducting discussions with offerors after establishing a competitive range. FAR § 15.306(d). Such discussions must be “tailored to each offeror’s proposal.” FAR § 15.306(d)(1). The government does not need to disclose “every area where the proposal could be improved,” and “[t]he scope and extent of discussions are a matter of contracting officer judgment.” FAR § 15.306(d)(3). Nonetheless, the contracting officer must “[a]t a minimum, . . . indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” Id.

A deficiency is defined as “a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level.” FAR § 15.001. A significant weakness is defined as “a flaw [in the proposal] that appreciably increases the risk of unsuccessful contract performance.” Id. These definitions have been inconsistently applied in decisions by this court and the GAO. See John Cibinic, Jr., et al., Formation of Government Contracts 894 (4th ed. 2011) (“Subsequent decisions provide little confidence that deficiencies and significant weaknesses can be distinguished from other matters that must be discussed.”). Many decisions emphasize that deficiencies and weaknesses must be “material,” granting protests where the matter in question precluded the offeror from receiving the award, and denying protests where disclosing the matter would not have improved the offeror’s chance for award. Id. at 894-95 (citing numerous cases, including Cube Corp. v. United States, 46 Fed. Cl. 368, 384 (2000) (“Plaintiff has not demonstrated how [disclosure of the evaluation information] would have improved materially Cube’s chance for award.”), and CRAssociates, Inc., B-282075.2, 2000 CPD ¶ 63, 2000 WL 365909 (Comp. Gen. Mar. 15, 2000) (“Had the agency pointed out these matters, CRA could have added additional information . . . . Discussions cannot be meaningful where, as here, the agency fails to advise the offerors, in some way, of material proposal deficiencies.”)); see also Caddell Constr. Co. v. United States, 125 Fed. Cl. 30, 45 (2016) (“[W]hen discussions occur, the contracting officer must accurately identify weaknesses. An error in communicating a weakness that causes an offeror to revise its proposal is quintessentially a misleading discussion.”) (citing AshBritt, Inc. v. United States, 87 Fed. Cl. 344, 369 (2009)).

In effect, adverse past performance includes both negative information about the offeror received from references, as well as any other past performance information that would rise to the level of a deficiency or significant weakness. Like deficiencies and significant weaknesses, this court has generally found that adverse past performance information is information that materially affects an offeror’s past performance rating or chance of receiving the award. E.g., Afghan American Army Servs. Corp. v. United States, 90 Fed. Cl. 341, 365 (2009) (denying a protest where undisclosed past performance information was “insufficiently ‘adverse’ to cause a downward change in [the protestor’s] past performance rating”); Fort Carson Support Servs. v. United States, 71 Fed. Cl. 571, 608 (2006) (finding that certain performance information was “adverse,” but the Army was not required to disclose it because “the information did not affect the Army’s decision”). In this instance, the solicitation contained a definition for “[a]dverse [p]ast/[p]resent performance” information, namely, “information that supports a less than satisfactory rating on any evaluation element or any unfavorable comments received from sources without a formal rating system.” AR 2-688 (emphasis added). The solicitation affirmatively stated that “[t]he [g]overnment will provide [o]fferors with an opportunity to address adverse [p]ast/[p]resent [p]erformance information if the [o]fferor . . . has not had a previous opportunity to respond to the information.” AR 2-686.

The court concludes that during its discussions, the government failed to disclose to Q Integrated that its past performance submission either showed “significant weaknesses” or constituted “adverse past performance information,” in contravention of FAR § 15.306(d)(3) and the definitional terms of the solicitation. On its initial proposal evaluation, Q Integrated received a rating of Not Relevant in nine of the ten geographic areas for which it bid, including the three contested areas at issue in this case. AR 8-3332 to -45. This rating resulted from an 80 percent reduction the evaluation team made to the monthly property volume reported by Q Integrated, based on the fact that Q Integrated performed 20 percent of the direct labor under its prior contracts. E.g., AR 8-3333. In particular, the government found that “the relevancy falls far below any acceptable threshold.” AR 8-3327. The government cited these relevancy ratings as the main reason Q Integrated received a Fair/Some Confidence overall past performance rating. E.g., AR 8-3327 (“The [g]overnment rated the offeror a fair/some confidence rating due to the lack of relevance in Area 7A.”). These relevancy ratings constituted “adverse past performance information” under the terms of the solicitation because Q Integrated received a “less than satisfactory rating on [an] evaluation element.” However, the government did not disclose these ratings to Q Integrated during discussions, stating instead in the “discussion points” that there was “[n]o adverse past performance information” for Q Integrated. AR 9-4151.

After the final proposal revision, the government raised Q Integrated’s relevancy ratings to Relevant, but this still reflected a reduction to Q Integrated’s monthly property volumes, which would otherwise have been in the Very Relevant range. AR 11-4686 to -95. The government also maintained its “Fair/Some Confidence” overall past performance rating for Q Integrated, again citing the fact that Q Integrated’s past performance references only reflected work as a subcontractor. AR 11-4681 to -95. In that respect, Q Integrated could have reasonably expected some downward adjustment of its overall past performance rating because its past performance references pertained to work as a subcontractor rather than as a prime contractor. HUD previously stated that “the [g]overnment may adjust the overall confidence assessment upward or downward depending on the relevancy of the submissions, as well as the percentage of relevant work performed by the prime versus subcontractors.” AR 2-698 (emphasis added). Even so, HUD also stated that “[n]o set weighting or number of submissions is assigned to subcontractor versus prime performance, and individual past performance evaluations for each of the three submissions will not be adjusted upward or downward.” AR 2-698 (emphasis added). Contrary to this statement in the solicitation, HUD did in fact adjust downward Q Integrated’s ratings for each of its past performance references by changing the relevancy ratings from Very Relevant to Not Relevant (in the initial evaluation) and from Very Relevant to Relevant (in the final evaluation). Despite this adjustment, HUD stated to Q Integrated in its “discussion points” that there was “[n]o adverse past performance information” related to its proposal. AR 9-4151. The government reiterated this point in its debriefing letter to Q Integrated, stating that “no weaknesses or deficiencies were found” in its proposal. These statements were incorrect.

The government’s concerns about the relevance of Q Integrated’s prior experience constituted “significant weaknesses” or “adverse past performance information” within the meaning of FAR § 15.306(d)(3) and the specific definitions in the solicitation. The rating of “Fair/Some Confidence” meant that “the [g]overnment ha[d] a low expectation that [Q Integrated] w[ould] successfully perform the required effort.” AR 2-687. Because the relevancy ratings and associated concerns were the primary reason for this rating, they fall within the FAR’s definition of a significant weakness as “a flaw [in the proposal] that appreciably increases the risk of unsuccessful contract performance.” FAR § 15.001. Q Integrated had not had “a previous opportunity to respond” to these concerns because the government did not communicate with offerors during the procurement process other than through the boilerplate discussion letters and the questions and answers appended to the various solicitation drafts. The government’s decision to adjust Q Integrated’s relevancy ratings downward adversely affected Q Integrated’s overall past performance rating. See Afghan American, 90 Fed. Cl. at 365. This in turn materially reduced Q Integrated’s chance of receiving the contract awards, because Q Integrated would have otherwise received a higher past performance rating, and it was the lowest-priced or second-lowest-priced offeror within the contested areas. See Fort Carson, 71 Fed. Cl. at 608. Although the government had broad discretion in assigning Q Integrated a lower overall performance rating based on its concerns, see supra, at 19, it nevertheless had an obligation to disclose information about these significant weaknesses or adverse past performance information during discussions. See FAR § 15.306(d)(3); Caddell Constr., 125 Fed. Cl. at 45-46. Not only did the government fail to do so, but it affirmatively misstated that there were no weaknesses or adverse past performance information associated with Q Integrated’s proposal.

Similarly, the government’s determination that the past performance questionnaires submitted by Matt Martin were “not from an unbiased third party” was a significant weakness or adverse past performance information under FAR § 15.306(d)(3). The evaluation team’s reports do not state the extent to which this particular determination harmed Q Integrated’s overall past performance rating. However, because the team noted this issue in its overall past performance rating narrative for both the initial evaluation, e.g., AR 8-3327, and the final evaluation, e.g., AR 11-4682, the court concludes that it had an adverse effect on the overall rating, which in turn materially impacted Q Integrated’s chance of receiving the awards. The final evaluation specifically said: “[the questionnaires] are not from an unbiased third party, so consideration was given, but it accorded this evaluation very little weight.” AR 11-4682 (emphasis added). The government should have disclosed these concerns to Q Integrated during the discussions.

Accordingly, for the two independent reasons stated supra, the court concludes that the government’s discussions with Q Integrated “involved a violation of regulation or procedure,” Impresa Construzioni, 238 F.3d at 1332, with respect to the procurement awards at issue. (Q Integrated Companies, LLC v. U. S. and Sage Acquisitions, LLC, No. 16-101C, April 28, 2016)  (pdf)


2. Standards for Conducting Discussions

Northrop contends that the Air Force engaged in misleading and unequal discussions when it failed to advise Northrop that it had changed its position with respect to the allowability of IR&D costs. As set forth in the FAR, discussions “are undertaken with the intent of allowing the offeror to revise its proposal,” FAR 15.306(d), with the “primary objective of . . . maximiz[ing] the Government’s ability to obtain best value,” FAR 15.306(d)(2). To meet this objective, procuring agencies are “encouraged to discuss . . . aspects of the offeror’s proposal that could . . . be altered or explained to enhance materially the proposal’s potential for award,” but are “not required to discuss every area where the proposal could be improved.” FAR 15.306(d)(3). Indeed, “[t]he scope and extent of discussions” are matters within the procuring agency’s discretion. Id.

Such discretion, however, does not permit a procuring agency to conduct misleading or unequal discussions. Discussions are misleading when a procuring agency issues “incorrect, confusing or ambiguous” communications that misdirect an offeror attempting to revise its proposal. DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 670 (2010); accord Analytical & Research Tech. v. United States, 39 Fed. Cl. 34, 48 (1997) (“‘An agency may not inadvertently mislead an offeror, through the framing of a discussion question, into responding in a manner that does not address . . . the government’s requirements.’” (quoting SRS Techs., B- 254425 et al., 94-2 CPD ¶ 125 (Comp. Gen. Sept. 14, 1994)). A procuring agency also misleads an offeror when the agency “knows that an offeror’s interpretation of the [solicitation] is contrary, in a material way, to its own interpretation and that of a successful offeror,” but fails to advise the offeror of that fact. Gentex Corp., 58 Fed. Cl. at 653. Discussions are unequal when a procuring agency favors “one offeror over another.” FAR 15.306(e)(1). Consequently, although contracting officers should tailor discussions to each offeror’s proposal, FAR 15.306(d)(1), they should not “inform some offerors of a concern . . . while staying silent with respect to identical issues in other offerors’ proposals,” Ashbritt, Inc. v. United States, 87 Fed. Cl. 344, 372 (2009).

3. The Air Force’s Discussions With Northrop Regarding the Allowability of IR&D Costs Were Misleading and Unequal

Raytheon contends that discussions regarding the allowability of IR&D costs were neither misleading nor unequal, and there is support in the administrative record for its position. During the first round of discussions, Northrop unambiguously disclaimed any reliance on IR&D cost reductions in response to one EN, and at the same time raised no objections to the Air Force’s statements regarding the allowability of IR&D costs in response to a separate EN. As a result, when the Air Force decided not to pursue further discussions with Northrop regarding IR&D costs, there is a nonfrivolous argument to be made that the Air Force was merely tailoring its discussions to Northrop’s proposal pursuant to FAR 15.306(d)(1).

Nevertheless, the evidence in the administrative record weighs more heavily in favor of Northrop’s contention that the discussions were misleading and unequal. After the Air Force received the contractors’ responses to the initial set of ENs, it determined that a statement it had communicated to Raytheon and Northrop regarding the allowability of IR&D costs no longer accurately represented its position. By not lodging any further objections to Raytheon’s [. . .] proposed IR&D cost reductions, the Air Force signaled [. . .] that it was permissible to propose such reductions. However, the Air Force never advised Northrop of its changed understanding of the allowability of IR&D costs. Through its silence, the Air Force misled Northrop into believing that it would not accept IR&D cost reductions. Moreover, by advising only Raytheon [. . .] that it would accept IR&D cost reductions notwithstanding the language of its ENs, the Air Force engaged in unequal discussions with the contractors. At bottom, it was the Air Force’s duty to ensure that all three contractors were competing on a level playing field. See, e.g., Joseph L. DeClerk & Assocs., Inc. v. United States, 26 Cl. Ct. 35, 46 (1992), cited in Sys. Application & Techs., 691 F.3d at 1383; see also FAR 1.102-2(c)(3) (requiring procuring agencies to treat all prospective contractors “fairly and impartially”). By misleading Northrop regarding its position on the allowability of IR&D costs and advising only Raytheon [. . .] that it had changed its position, the Air Force violated that duty. Consequently, the GAO attorney’s conclusion that the Air Force engaged in misleading and unequal discussions concerning the allowability of IR&D costs was rational, and the Air Force’s reliance on her conclusion in deciding to take corrective action was also rational.  (Raytheon Company v. U. S. and Lockheed Martin Corporation and Northrop Grumman Systems Corporation, No. 15-77C, June 2, 2015)  (pdf)


Lyon argues that the Navy violated FAR § 15.306(d) by failing to conduct meaningful discussions about its price proposal. Lyon further argues that once the Navy determined that its proposed price was “excessive” and “more difficult to justify as reasonable,” FAR § 15.306(d) required the Navy to reopen discussions. Finally, Lyon asserts that the Navy improperly evaluated the offerors’ price proposals because it “unequally considered task order competition in justifying its award to MHI,” failed to consider Lyon’s historical task order pricing, and made an “apples to oranges” comparison between Lyon’s price and the independent government estimate. The court will address these arguments seriatim.

As the parties agree, agencies generally are required to conduct “meaningful” discussions with all responsible offerors that submit proposals within the competitive range. See 48 C.F.R. § 15.306(d); see also Elec. Data Sys., LLC v. United States, 93 Fed. Cl. 416, 432 (2010); EP Prods., Inc. v. United States, 63 Fed. Cl. 220, 226 (2005), aff’d, 163 Fed. Appx. 892 (Fed. Cir. 2006); Dynacs Eng'g Co. v. United States, 48 Fed. Cl. 124, 131 (2000) (“The law is well-settled that discussions between a contracting officer and offerors must be meaningful.”). Such discussions “are intended to maximize the government’s ability to obtain the ‘best value’ in a contract award based on the requirements and the evaluation factors set forth in the solicitation.” Dynacs Eng'g Co., 48 Fed. Cl. at 130; see also 48 C.F.R. § 15.306(d)(2); ManTech Telecomm. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 71 (2001). However, the FAR emphasizes that “the contracting officer is not required to discuss every area where the proposal could be improved” and that instead “[t]he scope and extent of discussions are a matter of contracting officer judgment.” 48 C.F.R. § 15.306(d)(3); see also Elec. Data Sys., 93 Fed. Cl. at 432; EP Prods., 63 Fed. Cl. at 226; PGBA, LLC v. United States, 60 Fed. Cl. 196, 217 n. 25 (2004), aff’d, 389 F.3d 1219 (Fed. Cir. 2004).

While paying lip service to this discretion, plaintiff asserts that the Navy officials here were obliged to let it know that its price was excessive. But, “there are very few affirmative requirements for discussions,” CRAssociates v. United States, 102 Fed. Cl. 698, 716 (2011), with the main exceptions arising in FAR § 15.306(d)(3), which obliges the agency: (i) to conduct discussions with all offerors in the competitive range if it holds discussions with one of the offerors in that group; and (ii) to discuss “deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” FAR § 15.306(d)(3). FAR § 15.306(e) also lists some discussion requirements in the negative – for example, that the agency “shall not engage in conduct that – [f]avors one offeror over another.” FAR § 15.306(e)(1); see also Elec. Data Sys., 93 Fed. Cl. at 432; Kerr Contractors, Inc. v. United States, 89 Fed. Cl. 312, 329 (2009) (“This regulation does not permit a procuring agency to engage in unequal discussions.”). Moreover, it is well-accepted that discussions may not be misleading. See CRAssociates, 102 Fed. Cl. at 716 n. 18; Bank of America, Metro Mach. Corp., 99-1 C.P.D. ¶ 101, at 6-7 (1999); SRS Techs., 94-2 C.P.D. ¶ 125, at 6 (1994).

Contrary to plaintiff’s claim, there is no rule – either explicit or deriving from the notion that discussions must be “meaningful” – that required the Navy to discuss every weakness appearing in Lyon’s pricing proposal. See CRAssociates, 102 Fed. Cl. at 717; Geo–Centers, Inc., 97-1 C.P.D. ¶ 182 (1997); Ann Riley Assocs., Ltd., 97-1 C.P.D. ¶ 122 (1997); see also Fort Carson Support Servs. v. United States, 71 Fed. Cl. 571, 604 (2006) (“T]he FAR provision requires a discussion of ‘significant weaknesses,’ not all weaknesses.” (quoting FAR § 15.306(d)(3))). In particular, the Navy was not obliged to advise Lyon that its price was higher than those of its competitors. Rather, an agency is obliged to discuss an offeror’s price only if the price submitted ‘“would preclude award to the firm.’” DMS All-Star Jt. Venture v. United States, 90 Fed. Cl. 653, 669 (2010) (quoting Gen. Dynamics-Ordnance & Tactical Sys., 2009 C.P.D. ¶ 217 (2009); see also Elec. Data Sys., 93 Fed. Cl. at 432. Such was not the case here.

To be sure, FAR § 15.306(e)(3) gives the contracting officer discretion to inform an offeror that “its price is considered by the Government to be too high, or too low.” But neither that provision, nor any other, requires the contracting officer to discuss a proposed price that is not considered a significant weakness or deficiency. See Elec. Data Sys., 93 Fed. Cl. at 434; Dynacs Eng’g, 48 Fed. Cl. at 133; Public Facility Consortium I, LLC, 2005 C.P.D. ¶ 170 (2005); AJT & Assocs., 2000 C.P.D. ¶ 60 (2000).  The Federal Circuit made this clear in JWK Int’l Corp., rejecting the notion that an agency must always discuss prices because their adjustment could materially enhance a proposal’s potential for award. In so concluding, that court reasoned –

Because both cost and non-cost factors must be considered and the agency has full discretion to rank the importance of the factors, a downward cost adjustment may not always affect the award. Therefore, cost is not always material, and does not automatically mandate discussions.

JWK Int’l Corp. v. United States, 279 F.3d 985, 988 (Fed. Cir. 2002).7 Based on these precedents, the Navy was not required to discuss plaintiff’s price because the agency had determined that this price was at least arguably reasonable, albeit too high. Therefore, plaintiff’s arguments regarding the lack of meaningful discussions fail to persuade the court.

Nor was Lyon misled in terms of how the agency conducted discussions here. In the first round of discussions, it was advised that its “price proposal for Lot II [was] significantly higher than the Government estimate” and that it should “carefully review [its] pricing.” While the discussion points went on to list potential issues that Lyon should examine in regards to its price and indicated that Lyon should not submit new pricing “at this time,” this in no way suggested that Lyon need not consider reducing its price in its final offer. Lyon appears to have understood this, as it responded to the first round of discussions questions by indicating that it would “review and evaluate all pricing offered for mistakes, completeness, and accountability,” adding that “[s]hould we deem it necessary to make any changes to our pricing, we will do so when requested for final offers.” As a seasoned government contractor and a ten-year incumbent of two prior similar contracts, Lyon should not have presumed that it did not need to modify its final price because the Navy failed to raise any concerns about its high price in the second or third rounds of discussions. At the time it made its best and final offer, Lyon had no reason to think that the IGE had changed and every reason to believe that its price was still well above that estimate. Nor, contrary to its claims, did it have any reasonable basis upon which to assume that the Navy would evaluate it offer based on historical task order prices, rather than the “fully loaded rates” required by the Solicitation. Simply put, Lyon made a business decision not to adjust its price and should not be heard to complain now when that decision led to the loss of the contracting opportunity, particularly as the Solicitation warned that “as non-price factors equalize among competing proposals, price may assume a greater degree of importance.” See Tech Sys., 98 Fed. Cl. at 263 (rejecting a similar argument).

Undeterred, plaintiff complains that the Navy should have reopened discussions with it to discuss its price. But, the decision whether to reopen discussions is largely a matter left to the agency’s discretion. The Matthews Grp., 2013 C.P.D. ¶ 148 (2013); King Farm Assocs., 2012 C.P.D. ¶ 6 (2011); ES, Inc., 95-1 C.P.D. ¶ 168 (1995). To be sure, it has been held that an agency should reopen discussions with an offeror, if after the evaluation of best and final offers, the agency “identifies concerns pertaining to the proposal as it was prior to discussions that would have had to be raised if they had been identified before discussions were held.” Al Long Ford, 2006 C.P.D. ¶ 68 (2006) (citing DevTech Sys., Inc., 2001 C.P.D. ¶ 11 (2000)); see also CIGNA Gov’t Servs., 2010 C.P.D. ¶ 283 (2009); Ewing Construction Co., Inc., 2010 C.P.D. ¶ 108 (2010). But, this requirement applies only to significant weaknesses or deficiencies of the sort that would warrant discussions in the first place. See AT&T Corp., 2008 C.P.D. ¶ 65 (2007). An agency need not reopen discussions simply because it perceives some weakness in an offeror’s best and final proposal. See W.M. Schlosser Co., Inc., 92-2 C.P.D. ¶ 8 (1992); see also Data Gen. Corp. v. Johnson, 78 F.3d at 1561. More specifically, a reopening of discussions is not required where “a weakness, which was not addressed during discussions, subsequently becomes a determinative factor in choosing between two closely ranked proposals . . .” Planning & Dev. Collaborative Int’l, 2007 C.P.D. ¶ 28 (2007); see also Gracon Corp., 2004 C.P.D. ¶ 58 (2004); Hines Chicago Inv., 2004 C.P.D. ¶ 5 (2003). Here, the court sees no evidence that the contracting officer abused his discretion in determining not to reopen discussions with Lyon.

Finally, plaintiff argues that the Navy treated the offerors unequally because it considered MHI’s task order pricing in evaluating MHI’s price, but did not do so in evaluating plaintiff’s price. As defendant points out, however, the Navy referenced MHI’s task order pricing not in evaluating its price, but merely in determining that its price was reasonable. The Navy, of course, also concluded that plaintiff’s price was reasonable, albeit without considering its task order pricing. Both prices were considered reasonable and hence, there was no unequal treatment and certainly no prejudice. Even if the Navy could be viewed as having considered task order pricing in directly evaluating MHI’s price or in conducting its best value determination, plaintiff has not come close to demonstrating that it was prejudiced by the Navy’s conduct in this regard – that but for this error, “there was a substantial chance it would have received the contract award.” Alfa Laval Separation, 175 F.3d at 1367; see also Bannum, 404 F.3d at 1351; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir. 2011). In this regard, plaintiff seemingly dons blinders to the fact that its price was more than $ [] – or [] percent – higher than MHI’s. And that substantial difference existed without any reduction in MHI’s price to reflect its past task order pricing. Since the proposals of the two offerors were otherwise rated the same, the court finds that plaintiff has failed to demonstrate that any alleged error made by the Navy in evaluating its price was prejudicial.  (Lyon Shipyard, Inc. v. U. S., No 13-508C, November 27, 2013)  (pdf)


Ceres’ Protest

Plaintiff limits its protest to the agency’s recompetition in Regions 6a and 6b.  In essence Plaintiff lodges three grounds of protest, claiming that the agency: . . . (3) engaged in unfair, misleading, incomplete, and unequal discussions with Ceres regarding price.

(sections deleted)

The Agency Conducted Adequate Discussions

Plaintiff asserts that the agency engaged in unfair, misleading, incomplete, and unequal discussions with Ceres regarding its price. Plaintiff argues that the agency did not notify Ceres that its price was “no longer competitive” on two separate occasions. According to Plaintiff, the agency did not lead Ceres into the areas of its proposal requiring amplification or correction, as required by the FAR, by failing to discuss cost, which it characterizes as a significant weakness in its proposal.

Plaintiff suggests that the Government had an obligation to advise it that “its price was no longer competitive,” but this argument exhibits a fundamental misconception of the role of discussions in a procurement. Under FAR Subpart 15.3, the contracting officer must

indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond. The contracting officer also is encouraged to discuss other aspects of the offeror’s proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award.

FAR 15.306(d)(3).

Meaningful discussions “generally lead offerors into the areas of their proposals requiring amplification or correction.” Advanced Data Concepts, Inc. v. United States, 43 Fed. Cl. 410, 422 (1999). However, the FAR states that “the contracting officer is not required to discuss every area where the proposal could be improved” and that instead “[t]he scope and extent of discussions are a matter of contracting officer judgment.” FAR 15.306(d)(3). Under this provision, “‘[t]he government need not discuss every aspect of the proposal that receives less than the maximum score or identify relative weaknesses in a proposal that is technically acceptable but presents a less desirable approach than others.’” Cube Corp. v. United States, 46 Fed. Cl. 368, 384 (2000) (quoting ACRA, Inc. v. United States, 44 Fed. Cl. 288, 295 (1999)).

As the Court has recognized, “unless an offeror’s costs constitute a significant weakness or deficiency in its proposal, the contracting officer is not required to address in discussions costs that appear to be higher than those proposed by other offerors.” DMS All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 669 (2010) (citing SOS Interpreting, Ltd., B-287477.2, 2001 CPD ¶ 84 (May 16, 2001)). In the SSEB’s view, Ceres’ pricing was not a deficiency or a weakness – it was not so high or out of line with other offerors’ pricing as to require discussions. Nor did Ms. Guillot suggest that Ceres be eliminated from the competitive range based on its pricing. As such, Ceres’ proposed pricing, while higher than other offerors, did not require amplification or correction.

Under the rubric of unfair discussions Plaintiff also argues that the agency provided AshBritt and P&J access to Ceres’ successful pricing in Region 6b in a debriefing, but failed to mitigate the competitive advantage held by AshBritt and P&J by providing Ceres with reciprocal access to AshBritt and P&J’s prices. Plaintiff apparently contends that the agency should have disclosed its competitors’ pricing during discussions to mitigate this unfairness. However, Plaintiff knew, prior to submission of its proposal in the recompetition, that other offerors had obtained its pricing for the regions in which it was the awardee at the debriefing. Similarly, Plaintiff gained access to the successful pricing of awardees in other regions including Regions 5 and 6a by virtue of the debriefing for those awards. If Plaintiff believed that the procedure for the recompetition had to be amended to ensure that all offerors’ pricing be released, it had an obligation to raise this argument prior to the closing date for receipt of proposals. Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007). Plaintiff’s attempt to challenge the ground rules of the bidding process after award is untimely.

In Blue & Gold, the Federal Circuit held that “a party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action in the Court of Federal Claims.” 492 F.3d at 1313-14. Although the instant case does not involve a “patent error” in a solicitation, it involves an obvious procurement procedure which Plaintiff knew was being applied and chose not to challenge prior to submitting its proposal in the recompetition. All offerors knew that awardees’ prices had been disclosed in debriefings and that the same offerors and former awardees would be competing in the recompetition. If Plaintiff thought this disclosure gave other offerors an unfair advantage in Region 6a, the time to raise that complaint was before the closing date for submission of proposals in the recompetition.

Plaintiff further argues that the agency acted arbitrarily and capriciously by relying on an allegedly flawed IGE as the basis for its price discussions. According to Plaintiff, the agency knew the IGE was flawed and revised the estimate without notifying or discussing the revisions with the offerors. Ultimately, Plaintiff contends, the agency abandoned the IGE and instead relied on competitive pricing as the basis for its reasonableness determinations.

The sole basis for Plaintiff’s contention that the IGE was flawed was Ms. Guillot’s somewhat cryptic statement in an email to the CO:

The previous competition, and the current competition both have an escalated IGE. Although an IGE is not required (it is required for FAR Part 36, construction), its use limits the establishment of a competitive range in this procurement, and does not serve its intended purpose.

If all offerors come in below the IGE, this in itself does not constitute all offerors being in a competitive range. The IGE should have been revised based on the previous and historical contract pricing, and should have also taken into consideration inflation and escalation rates, if an IGE was to be used. This would have provided a more accurate tool to assist in the determination of the competitive range.

CAR 342 (emphasis added).

Plaintiff seizes upon Ms. Guillot’s phrase “escalated IGE” to argue that the IGE was “hopelessly excessive.” Pl.’s Mot. J. AR at 51. However, it is difficult to divine what Ms. Guillot’s comment about the IGE means. While Ms. Guillot said both the previous and current competition “have an escalated IGE,” she may have meant this as shorthand for indicating that both competitions “have an IGE calling for escalation of prices” in the option years. Otherwise, the sentence in the ensuing paragraph would not make sense. That sentence reads the IGE “should have also taken into consideration inflation and escalation rates,” which would mean the IGE was too low because both inflation and the escalation rates would serve to raise the IGE. CAR 342. Further, Ms. Guillot’s unclear criticism of the IGE was limited and directed at what should have been done to make the IGE “a more accurate tool to assist in the determination of the competitive range,” not the ultimate source selection decision. Id. Moreover, despite her determination that the IGE was not useful for determining a competitive range, Ms. Guillot concluded that the agency “received adequate competition, and as a result of that competition, a competitive range can be established.” Id. Ms. Guillot’s internal comment in an email does not demonstrate either that the IGE was so flawed that it should have been scrapped or that the CO erred in continuing to use it as a gauge in discussions. Finally, Plaintiff’s suggestion that the agency ultimately ignored the IGE is not supported by the record.

Plaintiff further argues that the agency failed to hold additional discussions that the Government acknowledged internally were necessary despite seeking – and obtaining – an extension of time from this Court to do so. According to Plaintiff, the agency failed to act on its determination that it was critical to seek an explanation for AshBritt and P&J’s dramatic pricing changes. However, in receiving an enlargement of time to finish the recompetition, the agency was not obligated to follow any particular course of action. There was no requirement that the agency hold a second round of discussions on Schedule B prices in the recompetition. As commentators have recognized:

Reopening negotiations is not a desirable course of action. It adds time and expense to the procurement and extends the time when information may be improperly disclosed.

John Cibinic, Jr. & Ralph C. Nash, Jr., Formation of Government Contracts 915 (3d ed. 1998) (citing Mine Safety Appliances Co. B-242379.5, 92-2 CPD ¶ 76 (Aug. 6, 1992)). Here, the offerors were told which CLINs were priced above or below the IGE and were afforded an opportunity to change their pricing. Some made changes, and others did not. The Government was not obligated to point this out again. See Phoenix Safety Assocs. Ltd., B-216504, 84-2 CPD ¶ 621 (Dec. 4, 1984). While the agency could have amended the solicitation to provide that Schedule B prices had to be used in the STO and received revised STO pricing proposals, it was not required to do so.  (Ceres Environmental Services, Inc. v. U. S. and AshBritt, Inc., No. 09-886C, March 28, 2011) (pdf)


The Court finds Ceres Gulf’s protest grounds to be without merit. As explained below, the Army’s failure to engage in fair and meaningful discussions with Coastal Maritime justifies the decision to take corrective action and to terminate the contract with Ceres Gulf. The amended Solicitation adequately and appropriately addresses the errors in the initial procurement and ensures that all offerors will be evaluated based on the same criteria. Accordingly, the Court will not overturn the Army’s decision to reissue the Solicitation.

1. The Army’s Decision to Take Corrective Action Remedied a Lack of Fair and Meaningful Discussions.

Contracting officers are afforded broad discretion to take corrective action if they determine that “such action is necessary to ensure fair and impartial competition.” Ravens Group, Inc. v. United States, 78 Fed. Cl. 390, 399 (2007) (quoting Omega World Travel, Inc. v. United States, 54 Fed. Cl. 570, 574 (2002) (internal citation omitted)). The contracting officer need not identify a particular error in the procurement process “as a precondition to proposing corrective action.” ManTech Telecomm., Inc., 49 Fed. Cl. at 72. Where “a decision to amend a solicitation and request revised offers is made in good faith, without the intent to change a particular offeror’s ranking or to avoid an award to a particular offeror, that decision will not be disturbed.” Seaborn Health Care, Inc. v. United States, 55 Fed. Cl. 520, 527 (2003) (citing ManTech Telecomm., Inc., 49 Fed. Cl. at 73); see also Omega World Travel, Inc., 54 Fed. Cl. at 574 (“Where a contracting officer’s actions are ‘reasonable under the circumstances’ they will not be determined contrary to law.”) (internal citations omitted)).

In this case, the Court finds rational the Army’s decision to take corrective action following Coastal Maritime’s GAO protest. A review of the administrative record demonstrates that the Army’s discussions with Coastal Maritime were lacking in two respects. First, before closing discussions, the Army did not inform Coastal Maritime that it failed to demonstrate viable leasing arrangements for four heavy tow vehicles. Technical Sub-factor 1c required offerors to include in their proposals “all lease and other agreements in place that establish the Offeror has ready access to required specialized . . . equipment in a timely basis.” AR 196 (emphasis added). During the Army’s review of Coastal Maritime’s initial proposal, the TET noted that Coastal Maritime provided lease proposals for [. . .], but did not provide any information as to the characteristics and capabilities of the [. . .]. See AR 2343; see also AR 917. The Army thus considered as a deficiency Coastal Maritime’s failure to address the leasing arrangements for all of the aforementioned vehicles. AR 2343-44. During its discussions with Coastal Maritime, however, the Army made no mention of this deficiency. See 889-90. Instead, it simply deemed Coastal Maritime’s final proposal technically unacceptable because Coastal Maritime’s proposal lacked proof of lease agreements for all of its heavy towing equipment. See AR 2344 (noting that company “fail[ed] to provide proof of lease arrangements of four . . . Heavy Tow Vehicles.”) The contracting officer’s Source Selection Decision accepted the TET’s findings and determined that Coastal Maritime’s offer was unacceptable because the leasing agreements it provided did not correspond with the equipment listed in its technical proposal. AR 2353. In contrast, the Army specifically advised Ceres Gulf during discussions that it had not provided proof of ownership or lease arrangements in accordance with Technical Sub-factor 1c. See AR 743. Ceres Gulf corrected this deficiency and thereafter received a favorable rating. AR 2340.

FAR Part 15 provides that when engaging in discussions with potential offerors, contracting officers are, at a minimum, required to discuss with each offeror “deficiencies [and] significant weaknesses . . . to which the offeror has not yet had an opportunity to respond.” 48 C.F.R. § 15.306(d)(3). Such discussions are considered meaningful where they “generally lead offerors into the areas of their proposals requiring amplification or correction . . . .” Advanced Data Concepts, Inc. v. United States, 43 Fed. Cl. 410, 422 (1999), aff’d 216 F.3d 1054 (Fed. Cir. 2000). Discussions therefore must be “as specific as practical considerations permit.” Id. Here, the Army failed to engage in any meaningful discussions with Coastal Maritime regarding its leasing arrangements. In fact, the Army based in part its decision to disqualify Coastal Maritime for a deficiency of which the offeror was not aware. In contrast, Ceres Gulf was advised to review its access arrangements and thereafter received a passing rating. Contrary to Ceres Gulf’s assertions, the Army’s discussions with Coastal Maritime regarding its leasing arrangements were unfair and not meaningful. The Army’s decision to take corrective action to address this impropriety thus was reasonable under the circumstances.

The Army’s discussions with Coastal Maritime also failed in another respect. Before the close of discussions, the Army did not inform Coastal Maritime that it had responded inadequately to the deficiency identified in the Army’s January 22, 2010 notification letter. In the letter, the Army merely informed Coastal Maritime that its proposal did not “adequately demonstrate the Specialized Equipment Capability for PSA services.” AR 889. Coastal Maritime thus responded by explaining that industry standards dictate that its proposed equipment could meet the Army’s towing requirements. AR 1738, 2271-73. Despite the TET’s apprehensions on whether Coastal Maritime’s response satisfactorily addressed Technical Sub-factor 1c, the TET nonetheless kept the company within the competitive range and permitted Coastal Maritime to submit final proposal revisions. AR 915. Thus, Coastal Maritime was unaware that, after discussions, its final proposal still was defective with respect to Technical Sub-factor 1c.

As previously noted, FAR 15.306(d) requires contracting officers to at least discuss with an offeror deficiencies or significant weaknesses in its proposal. FAR 15.306(d) further encourages contracting officers to discuss with an offeror aspects of its proposal that could be “explained to enhance materially the proposal’s potential for award.” 48 C.F.R. § 15.306(d)(3). If, after such discussions, an offeror’s proposal still is unsatisfactory, FAR 15.306(c)(3) requires contracting officers to remove the proposal from the competitive range and formally eliminate the offeror from consideration for award. 48 C.F.R. § 15.306(c)(3). As Defendant aptly notes, by failing to engage in meaningful discussions with Coastal Maritime regarding the capability of its equipment, the Army essentially invited Coastal Maritime to submit a final proposal that stood no chance for award. See Def.’s Mot. 19. Despite its concerns on whether Coastal Maritime’s response was “sufficient to meet the technical evaluation standard,” AR 912, the Army neither engaged in further discussions with Coastal Maritime, nor eliminated it from the competitive range for its deficiency. The Army thus properly exercised its discretion to take corrective action and remedy the impropriety in the procurement process.

Ceres Gulf makes much of the fact that the Evaluation Team Lead, in his February 1, 2010 memorandum, emphasized that the Government “clearly described the deficiency [in Coastal Maritime’s initial proposal] and gave Coastal the opportunity to correct it.” AR 886.1; see also Pl.’s Mot. 7; Pl.’s Reply 2-3. The agency may have originally believed that Coastal Maritime had been adequately apprised of its deficiency in responding to Technical Sub-factor 1c. However, that belief does not render the contracting officer’s later decision to take corrective action unreasonable or unlawful. Where a contracting officer’s determination to take corrective action is reasonable under the circumstances, it will not be overturned. Omega World Travel, Inc., 54 Fed. Cl. at 574. In this case, the administrative record demonstrates that Coastal Maritime was not adequately informed of its deficiency in responding to Technical Sub Factor 1c. The Army’s decision to remedy that error therefore was entirely appropriate and shall not be overturned.

2. The Amended Solicitation Serves as an Appropriate Means to Remedy the Errors in the Procurement.

Ceres Gulf argues that even if there were errors in the procurement process, the Army’s decision to reissue the Solicitation lacked a rational basis because the terms of the amended Solicitation do not materially differ from the original Solicitation, but merely provide Coastal Maritime with another opportunity to compete. (Pl.’s Mot. 6-7; Pl.’s Reply 4-5.) The Court’s review of the administrative record, however, confirms that the amended Solicitation reasonably addresses the deficiencies identified in the procurement process.

Coastal Maritime’s protest before the GAO claimed that the Army failed to engage in meaningful discussions with it and improperly disqualified it for a technical criterion that was not articulated in the Solicitation. AR 2425-27. From Coastal Maritime’s perspective, the Solicitation did not require offerors to make detailed calculations that their heavy tow equipment was capable of hauling 150,000 pounds. AR 2425-26. Thus, in response to the Army’s notification letter, Coastal Maritime provided what it presumed was sufficient information from its equipment suppliers demonstrating that its proposal was in compliance with Army’s specifications. AR 2426. However, after discussions, the Army did not again comment upon Coastal Maritime’s response to the discussion question, and “at no time raise[d] any issue with respect to Coastal Maritime’s response to the information previously provided on the [. . .] at issue.” AR 2422. Coastal Maritime argued that “[i]f the government had some very specific requirement about how to make calculations, or how a formula should be displayed it did not engage in meaningful discussions when it failed to disclose that in its negotiation questions with Coastal, and others.” AR 2424; see also AR 2425, 2427.

In response to Coastal Maritime’s GAO bid protest, the Army decided to revise “the solicitation requirement that [was] the subject of Coastal’s protest.” AR 2474. As a result, the Army added four material terms to the amended Solicitation. First, under Technical Sub-factor 1(d), the Army required “manufacturer’s specifications, manufacturer’s test data, and/or . . . a certification from the offeror’s equipment supplier that each piece of proposed heavy tow equipment has the capability to perform the PWS requirements of towing 150,000 pounds on ramp inclines of 12 degrees. . . .” AR 615. The Army emphasized that the capability of offerors’ proposed equipment must be “clearly set forth and not implied or inferred from the information submitted.” Id. In addition, the Army instructed offerors in Technical Sub-factor 1(d) to provide “vendor contingent lease[s] or other similar agreement[s] for the required number of Heavy Tow Vehicles.” Id. The specialized equipment (and the corresponding lease arrangements), moreover, had to be available “at each site from the first day of contract performance throughout the performance period.” Id.

Contrary to Ceres Gulf’s assertions, these revisions to the Solicitation do not offer Coastal Maritime with another opportunity to compete but rather directly address the objections raised before the GAO, and the Army’s failure to engage in meaningful discussions with Coastal Maritime regarding lease arrangements. Indeed, by adding the requirement that all offerors provide manufacturer’s specifications, test data or other certifications, all offerors have a better understanding of how precisely to demonstrate that their equipment can haul 150,000-pound equipment. AR 614-15. The new 12 degree incline requirement similarly assures the Army and offerors alike that the equipment proposed can adequately haul heavy equipment uphill.

Ceres Gulf argues that the Army had no legitimate reason to include in the amended Solicitation a requirement that offerors provide leasing agreements or other similar arrangements. (Pl.’s Reply 3.) Ceres Gulf contends that Coastal Maritime never raised this issue before the GAO and therefore including it in the amended Solicitation is merely a “post-hoc justification.” Id. However, the fact that Coastal Maritime did not raise the issue of leasing arrangements before the GAO does not mean that the Army’s attempt to correct this procurement impropriety was somehow done in bad faith. On the contrary, the administrative record demonstrates that the Army had a reasonable basis to believe that it did not engage in fair or meaningful discussions with Coastal Maritime regarding this factor. As previously discussed, the Army neglected to discuss with Coastal Maritime its leasing arrangements before it disqualified Coastal Maritime’s final proposal as unacceptable. Were the Army to fail to address leasing arrangements in the amended Solicitation, Coastal Maritime would still be disadvantaged during the second round of the procurement process. The Court thus finds that it was entirely appropriate and within the Army’s well-reasoned discretion to include such terms in the amended Solicitation.

Ceres Gulf further suggests that the four new terms of the amended Solicitation do not alter the original Solicitation in any material respect. (Pl.’s Reply 3-5.) In particular, Ceres Gulf takes issue with the Army’s incorporation of a 12 degree incline requirement in the amended Solicitation. Id. at 4-5. According to Ceres Gulf, Coastal Maritime “knew full well” that the stevedoring services in question involved ramps. Id. at 5. Ceres Gulf relies on the fact that all offerors participated in pre-proposal site visits at each of the three ports. During the site visits, the Army answered all questions posed by prospective offerors. Id. at 5 (citing AR 301).) However, a review of the administrative record demonstrates that none of the questions posed by potential offerors discussed whether 150,000-pound vehicles had to be hauled at an incline. See AR 301-02. Moreover, as Coastal Maritime notes, not all vehicles are capable of pulling 150,000 pounds on ramps with 12 degree inclines. (Def. Intervenor’s Mot. 15.) Ceres Gulf’s own proposed [. . .] equipment only was capable of pulling 150,000 pounds [. . .]. AR 1570 (noting that “[. . .] [Ceres Gulf’s] [. . .]”); AR 1727 (noting that most of Ceres Gulf’s [. . .] equipment is capable of hauling 150,000 pounds.). Thus, as neither Coastal Maritime nor Ceres Gulf proposed equipment capable of pulling the maximum weight on an incline, the Court finds reasonable the Army’s determination that this new requirement was necessary to ensure offerors could meet the Army’s mission.

Ceres Gulf also objects to the new requirement that offerors include in their revised proposals manufacturer specifications, test data or certifications to establish towing capability. (Pl.’s Reply 4-5.) However, as previously noted, this new requirement is a reasonable solution to address the prior ambiguity on how offerors can demonstrate that their equipment is capable of pulling 150,000-pound inoperable equipment. Indeed, Ceres Gulf’s final proposal to the Army included only letters from suppliers to prove its equipment was capable of towing the maximum weight capacity, and was still considered technically acceptable. AR 752. Coastal Maritime was not given the same opportunity to prove its equipment also complied with the Army’s 150,000-pound hauling requirement. As such, inclusion of this new term is entirely appropriate to remedy previous unfair and unequal discussions with offerors.

In a similar vein, Ceres Gulf contends there is no basis for the Army to include a requirement that the capability of offerors’ proposed heavy tow equipment “be clearly set forth and not implied or inferred from the information submitted.” (Pl.’s Reply 5.) Ceres Gulf argues that as part of the first round of proposals, the Army required offerors to “provide sufficient information to clearly demonstrate the capability of its equipment.” Id. According to Ceres Gulf, there is no material difference between the phrases “clearly set forth” and “clearly demonstrate.” Id. The Court finds no merit to Ceres Gulf’s assertion. This amendment responds directly to Coastal Maritime’s GAO protest and alleviates any ambiguity on how the Army intended offerors to demonstrate towing capability. The new amendment makes clear that providing industry standards alone is insufficient to be considered technically acceptable. Accordingly, the Court finds that including this amended term in the Solicitation was reasonable and ensures that offerors are fairly apprised of the Army’s requirements.

The Court rejects Ceres Gulf’s allegation that there is no difference between the terms of the original Solicitation and the amended Solicitation requiring offerors to provide proof of leases or other arrangements. Id. at 4. Rather, the amended Solicitation crystallizes the Army’s intent that leases for the required equipment be in place from the start of contract performance. AR 614-15. The original Solicitation merely requires that offerors have “ready access” to any leases or similar agreements. See AR 89. Indeed, Coastal Maritime, in its final proposal to the Army, failed to provide a lease for its [. . .]. AR 2423. Ceres Gulf similarly neglected to provide the necessary proof of leases for its equipment in its initial proposal. AR 917, 2329. This new provision remedies any confusion regarding Technical Sub-factor 1c, and places all offerors on notice of the Army’s desire to have leases in place at the start of contract performance.

Taken as a whole, the Court finds that the amended Solicitation made critical changes to the terms of Technical Factor 1 and appropriately addressed the deficiencies identified in the procurement process. The amended terms of the Solicitation reasonably relate to Coastal Maritime’s objections before the GAO and ultimately promote fairness and integrity in a second round of the procurement process. Accordingly, the Court declines Ceres Gulf’s invitation to render the amended Solicitation unnecessary.  (Ceres Gulf, Inc. v. U. S. and Coastal Maritime, LLC, No 10-319C, September 7, 2010) (pdf)


Plaintiff begins its argument by noting that the SSA’s decision to downgrade plaintiff’s Performance Capability rating from “excellent” to “good” was based entirely on her conclusion that plaintiff did not possess the “type” of specialized experience identified in the solicitation, specifically “apartment complexes, college dorms or their equivalent.” Because this change in rating proved determinative in the contract award, plaintiff argues that the agency was required to raise its concerns about plaintiff’s experience during discussions. Plaintiff asserts that the agency’s failure to do so was a violation of law.

The Federal Acquisition Regulations (“FAR”) set forth the guidelines for an agency’s conducting of discussions. 48 C.F.R. § 15.306 reads, in relevant part, as follows:

At a minimum, the contracting officer must . . . indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond. The contracting officer also is encouraged to discuss other aspects of the offeror’s proposal that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award. However, the contracting officer is not required to discuss every area where the proposal could be improved. The scope and extent of discussions are a matter of contracting officer judgment.

48 C.F.R. § 15.306(d)(3) (2009).

Plaintiff observes that while the agency in fact engaged it in discussions, the contracting officer made no mention of the issue that the SSA ultimately found dispositive: the increase in performance risk attributed to plaintiff’s lack of experience in qualifying new construction. That omission, plaintiff maintains, violated the fundamental precept that an agency, once it has decided to conduct discussions, must ensure that those discussions are meaningful. ManTech Telecomms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 71 (2001) (holding that “[d]iscussions with offerors whose proposals are found to be in the competitive range [must] be ‘meaningful’ ” and observing that “this requirement is not met if an offeror is not advised, in some way, of defects in its proposal that do not meet the requirements of the solicitation”). Meaningful discussions, plaintiff further contends, require that an offeror be given “a reasonable opportunity to address those areas of weakness which could have a competitive impact.” SDS Int’l v. United States, 48 Fed. Cl. 759, 772–773 (2001) (internal quotation omitted). Plaintiff thus urges us to invalidate the SSA’s award decision and to restore to plaintiff the opportunity for meaningful discussions.

We do not agree, however, that the SSA disregarded the requirement for meaningful discussions. As previously noted, 48 C.F.R. § 15.306(d)(3) requires that the contracting officer “[a]t a minimum . . . indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information . . . .” 48 C.F.R. § 15.001 in turn defines the terms “deficiency” and “significant weakness” as follows:

Deficiency is a material failure of a proposal to meet a Government requirement or a combination of significant weaknesses in a proposal that increases the risk of unsuccessful contract performance to an unacceptable level.

****

Weakness means a flaw in the proposal that increases the risk of unsuccessful contract performance. A “significant weakness” in the proposal is a flaw that appreciably increases the risk of unsuccessful
contract performance.

The FAR additionally advises that the primary objective of discussions is to “maximize the Government’s ability to obtain best value, based on the requirement and the evaluation factors set forth in the solicitation.” 48 C.F.R. § 15.306 (d)(2). Taken together, these FAR provisions indicate that a contracting officer must address those elements of a proposal that suggest an offeror’s misunderstanding of a solicitation’s requirements. Mandatory discussions, in other words, are designed to point out shortcomings in an offeror’s proposal as judged from the standpoint of the government’s stated needs, rather than from the standpoint of the proposal’s relative competitiveness. As the Federal Circuit held in JWK Int’l Corp. v. United States, 279 F.3d 985, 988 (Fed. Cir. 2002), “aside from areas of significant weakness or deficiency, the contracting officer need not discuss areas in which a proposal may merely be improved.”

Understood in this light, 48 C.F.R. § 15.306(d)(3) cannot be read to require the sort of discussions plaintiff now seeks. In its proposal, plaintiff fully described its construction experience and the experience of its various subcontractors as required by the terms of the solicitation. Plaintiff’s proposal exhibited no “deficiency” or “significant weakness” within the definition of 48 C.F.R. § 15.001 and the Corps did not assign it one. As this court observed in Academy Facilities Mgmt. v. United States, 87 Fed. Cl. 441, 457 (2009), “[a]gencies need not discuss every aspect of the proposal that receives less than the maximum score or identify relative weaknesses in a proposal that is technically acceptable but presents a less desirable approach than others” (internal quotations and citation omitted). No discussion of plaintiff’s lack of similar construction experience was therefore required.

Nor does it affect the outcome that 48 C.F.R. § 15.306 (d)(3) encourages a contracting officer to discuss aspects of an offeror’s proposal “that could, in the opinion of the contracting officer, be altered or explained to enhance materially the proposal’s potential for award.” Plaintiff’s proposal suffered not from a lack of adequate explanation, but rather from a lack of specific, relevant experience. Thus, any further discussions would not have changed the result. And while plaintiff may be correct in saying that, had it been given the opportunity to address its construction background with the agency, it could have “taken other steps to provide enhanced Specialized Experience,”2 such an assertion does not alter the fact that the information plaintiff set forth in its proposal was fully responsive to the requirements of the solicitation. Under 48 C.F.R. § 15.306(d)(3), the scope and extent of discussions are “a matter of contracting officer judgment” and we see nothing in plaintiff’s proposal that should have caused the agency to conclude that further discussions would materially enhance plaintiff’s potential for award. Plaintiff’s failure to provide more detailed information is chargeable to it alone. CACI Techs., Inc., B- 296946, 2005 CPD ¶ 198 at 5, 2005 WL 3143443 at *3 (Comp. Gen. Oct. 27, 2005) (observing that an offeror has the responsibility to submit a well-written proposal with adequately detailed information that allows for a meaningful review by the procuring agency).  (Structural Associates, Inc./Comfort Systems USA, (Syracuse) Joint Venture, v. U. S., No. 09-372c, December 3, 2009) (pdf)


Under the F.A.R., the contracting officer is obligated to conduct discussions with offerors in the face of potentially deficient or ambiguous information contained in that offeror's bid. Furuno U.S.A., Inc., B-221814, Apr. 24, 1986, 86-1 CPD ¶ 400, at 5 ("[O]ne purpose of discussions is to advise offerors within the competitive range of informational deficiencies in their proposals so that they can be given an opportunity to satisfy the government's requirements."); CACI Field Svs., Inc. v. United States., 13 Cl. Ct. 718, 731 (1987). In accordance with the discretion provided under the F.A.R., "[a]gencies need not discuss every aspect of the proposal that receives less than the maximum score or identify relative weaknesses in a proposal that is technically acceptable but presents a less desirable approach than others." Biospherics, Inc. v. United States, 48 Fed. Cl. 1, 8 (2000) (citing Development Alternatives, Inc., Comp. Gen. B-279920, Aug. 6, 1998, 98-2 CPD ¶ 54, at 7).  (Ryder Move Management, Inc. v. U.S. and Associates Relocation Management Co. Inc, et al, No. 00-599C, January 3, 2001)


Finally, DOE's discussion questions regarding CRIT, CNWDI, and restricted data were not misleading. DOE was concerned that plaintiff's proposal confused these concepts. The debriefing, AR at 203, and the discussion questions, AR at 229-30, both raised this concern. Nevertheless, plaintiff's discussion answers demonstrated continuing confusion of these concepts, thereby confirming DOE's concerns. DOE was not required to explain to plaintiff that plaintiff fundamentally misunderstood concepts used in the Office of Declassification, but only to give plaintiff a reasonable opportunity to correct its errors. The mere fact that the plaintiff's response failed to satisfy the evaluators does not mean that the discussions were inadequate. See generally Reflections Training Sys., Inc., B-261224, Aug. 30, 1995, 95-2 CPD ¶ 95.  (Advanced Data Concepts, Inc. v. U.S., No. 98-495C, April 14, 1999)

U. S. Court of Federal Claims - Listing of Decisions

For the Government For the Protester
Raytheon Company v. U. S. and Lockheed Martin Corporation and Northrop Grumman Systems Corporation, No. 15-77C, June 2, 2015  (pdf) New Q Integrated Companies, LLC v. U. S. and Sage Acquisitions, LLC, No. 16-101C, April 28, 2016  (pdf)
Lyon Shipyard, Inc. v. U. S., No 13-508C, November 27, 2013  (pdf)  
Ceres Environmental Services, Inc. v. U. S. and AshBritt, Inc., No. 09-886C, March 28, 2011 (pdf)  
Ceres Gulf, Inc. v. U. S. and Coastal Maritime, LLC, No 10-319C, September 7, 2010 (pdf)  
Structural Associates, Inc./Comfort Systems USA, (Syracuse) Joint Venture, v. U. S., No. 09-372c, December 3, 2009 (pdf)  
Worldtravelservice, v. U.S., No. 01-232C, May 21, 2001 (.pdf)  
SDS International, v. U.S., No 00-609C, March 5, 2001  
Ryder Move Management, Inc. v. U.S. and Associates Relocation Management Co. Inc, et al, No. 00-599C, January 3, 2001  
Biospherics, Inc., v. U.S. and Aspen Systems Corp., No. 00-429C, October 17, 2000  
Cubic Defense Systems, Inc. v. U.S. and Metric Systems Corp., No. 99-144C, December 3, 1999  
Acra, Inc. v. U.S., No. 99-337C, July 14, 1999  
Advanced Data Concepts, Inc. v. U.S., No. 98-495C, April 14, 1999  

U. S. Court of Appeals for the Federal Circuit - Key Excerpts

For the Government For the Protester
New Raytheon accepts that, for us to uphold the Air Force decision to reopen the bidding process, it is sufficient for us to conclude that the grounds relied on by the Air Force—here, the grounds informally set out by the GAO attorney in predicting the GAO’s likely ruling on the protests of the initial award to Raytheon—rationally justified the reopening under governing law. See Raytheon Opening Br. 51. We agree that such a conclusion suffices under the standards of the Administrative Procedure Act, which are incorporated by the bid-protest provision under which this case was brought. 28 U.S.C. § 1491(b)(4); see Banknote Corp. of America v. United States, 365 F.3d 1345, 1350 (Fed. Cir. 2004) (following 5 U.S.C. § 706(2)(A) for bid-protest cases). Moreover, we have upheld agency corrective actions taken on the basis of formal GAO determinations where the GAO determinations were rational. Honeywell, Inc. v. United States, 870 F.2d 644, 647 (Fed. Cir. 1989); Turner Construction Co. v. United States, 645 F.3d 1377, 1383 (Fed. Cir. 2011). Although this case involves a GAO outcome prediction, rather than a GAO decision, Raytheon accepts, and we agree, that rationality of the GAO outcome prediction should suffice. In stating what grounds are sufficient to uphold the bid reopening, we do not and need not say what grounds are necessary.

We conclude that the Air Force’s unequal communications regarding IR & D accounting, one of the GAO attorney’s grounds, provide a rational basis for the reopening. In 10 U.S.C. § 2305(f)(1), Congress provided that “[i]f, in connection with a protest, the head of an agency determines that [an] . . . award does not comply with the requirements of law or regulation, the head of the agency . . . may take any action set out in” 31 U.S.C. § 3554(b)(1)(A)–(F), and it is not disputed that the permitted actions include reopening of the bidding process here. See also 4 C.F.R. § 21.8 (GAO authority to recommend corrective actions, including where an “award does not comply with statute or regulation”); 48 C.F.R. § 33.102(b)(1) (similar for agency decision on protest). We conclude, agreeing with the GAO attorney, Air Force, and Court of Federal Claims, that the Air Force violated a regulation by its disparate communications regarding the treatment of costs as IR & D costs, a matter of potentially great importance to the bidder’s final bidding decisions. That violation provides a rational basis for reopening.

Under 48 C.F.R. § 15.306(e)(1), “[g]overnment personnel involved in the acquisition shall not engage in conduct that—(1) Favors one offeror over another.” That regulation, in its common-sense meaning in the context of competitive bidding, requires that the agency avoid giving materially disparate information to bidders on matters that could easily affect their decisions about important aspects of the final competing offers that the agency will be comparing. See, e.g., AshBritt, Inc. v. United States, 87 Fed. Cl. 344, 368–69 (2009); Metcalf Construction Co. v. United States, 53 Fed. Cl. 617, 625, 633–35 (2002); Dynacs Engineering Co. v. United States, 48 Fed. Cl. 124, 133–34 (2000). The Air Force violated that requirement in communicating an important position on cost accounting to Raytheon and Northrop, changing that position, then telling Raytheon but not Northrop of the change. Specifically, the Air Force made clear to Raytheon that it could broadly use IR & D accounting—a matter of clear potential importance to the bottom-line prices of the final bids—and did not give the same information to Northrop, leaving Northrop but not Raytheon to rely on the contrary position the Air Force had earlier stated to the two bidders. That disparity in information favored Raytheon over Northrop, in violation of the regulation. (Raytheon Co. v. United States, Lockheed Martin Corporation, and Northrop Grumman Systems Corporation, No. 2015-5086, October 23, 2015) (pdf)

U. S. Court of Federal Claims - Listing of Decisions

For the Government For the Protester
New Raytheon Co. v. United States, Lockheed Martin Corporation, and Northrop Grumman Systems Corporation, No. 2015-5086, October 23, 2015 (pdf)  
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