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Contradictory Provisions Cause Bid Protest

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When an agency creates a request for proposals (RFP) under the procedures of Federal Acquisition Regulation (FAR) part 12, it must ensure the request not only follows the requirements outlined in the FAR but it must ensure the request is clearly written. If the request is unclear or sections contradict one another, the proposal and/or award can be protested. In the following case, the RFP issued by the Department of Health and Human Services, Indian Health Service (IHS) contained numerous contradictory provisions making it unclear to the offerers how the proposals would be evaluated. Due to how the RFP was written and the actions of the IHS during the evaluation process, a protest was filed with the U.S. Government Accountability Office (GAO) contesting the award.

Rice Solutions, LLC GAO Protest No. B-420475
Decision issued April 25, 2022

THE SOLICITATION

The contract in question was issued by the IHS for a certified registered nurse anesthetist (CRNA) contractor to provide critical anesthesia services at the Pine Ridge Service Unit (PRSU) healthcare facility in Pine Ridge, South Dakota. The contract award was a fixed-price, indefinite-delivery-quantity contract for one base year and the option of four more years. The IHS’ Technical Evaluation Team (TET) reviewed three proposals, including the proposals from Rice Solutions, LLC (Rice Solutions) and SOPOR LLC. The solicitation listed price, problem and approach, past performance, and key personnel as factors that would be considered but also included a number of contradictory provisions making it unclear how the factors listed would be weighed in the evaluation. 

After receiving the proposals, the TET evaluated each one. IHS then began discussions with only SOPOR LLC on January 7, 2022. Four days later, on January 11, 2022, IHS requested a best and final offer from SOPOR. The following day, IHS selected SOPOR for the award. 

Rice Solutions filed a bid protest with the GAO alleging IHS engaged in unreasonable conduct throughout its process of evaluating proposals for a contract.

THE PROTEST

Rice Solutions challenged the evaluation of proposals and alleged IHS unfairly conducted discussions with only one offeror, SOPOR, resulting in permitting only SOPOR to submit a revised proposal. By denying Rice Solutions the opportunity to submit a revised proposal, they were not considered for the award. The basis of this protest rested on three primary issues: (1) technical acceptability of Rice Solutions, (2) competitive range, and (3) competitive prejudice.

THE GAO DISCUSSION

Technical Acceptability of Rice Solutions

IHS alleged that since only SOPOR’s proposal was found to be technically acceptable, it was reasonable to only enter discussions with SOPOR, and a de facto competitive range of one was established. However, there was some discrepancy between the provisions in the solicitation that discussed how proposals would be rated. One section stated technical factors would be evaluated with a rating of outstanding, good, acceptable, marginal, and unacceptable; whereas another section stated the composite rating of acceptability and unacceptability of each proposal would be a direct result of the panel’s deliberations. 

The evaluation ratings for Rice Solutions greatly varied from acceptable to marginal to unacceptable. In their first finding, the evaluators determined there was a lack of sufficient information and evidence to fully evaluate Rice Solutions’ proposal, but due to their status as the incumbent, the proposal was rated as “Acceptable”. During the second finding, the evaluators determined that since Rice Solutions received many marginal ratings and a few unacceptable ratings, the proposal would be considered “Technically Unacceptable”.

Aside from these two findings and the adjectival ratings themselves, there were no other statements or assessments regarding Rice Solutions’ proposal, nor were there any attempts to reconcile the first and second findings. 

GAO stated they cannot conclude that an initial rating of “Technically Unacceptable” would have automatically excluded Rice Solutions from the competitive range if one had been established by the agency. In addition, GAO found it was unclear from the evaluation record that Rice Solutions’ proposal was even found to be “Technically Unacceptable”. 

Competitive Range

Per FAR part 12, a solicitor or an agency is allowed to establish a competitive range with only the most highly rated proposals but a proposal simply containing weaknesses does not automatically exclude it from the competitive range. In fact, a competitive range is created so the agency can enter into discussions with the offerors to address any weaknesses in the proposals. Although this solicitation didn’t require IHS to hold discussions with all offerors, once it decided to begin discussions with one offeror in a negotiated procurement, it must enter into discussions with all offerors included in the competitive range. In addition, an agency must not engage in any activity that favors one offeror over others. 

However, if an agency doesn’t adequately document its evaluation of proposals, its decision can be seen as unsupported, in which case GAO may be unable to determine if the agency had a reasonable basis for the decision. Here, the agency needs to show it had sufficient information to support its rationale. 

IHS argued it was appropriate for them to hold discussions only with SOPOR because it had established a de facto competitive range of one. Since the other two offerors were found to be “Technically Unacceptable”, IHS determined SOPOR was the only offeror left in the running. However, when asked for additional information on how IHS determined the competitive range, the declaration from the chair of the TET stated “[p]rior to this Protest, I was not familiar with the terms ‘competitive range’ or ‘competitive range determination’ and have only come to understand what those terms mean through this Protest.” This statement contradicted any statement from IHS that it established a competitive range before it entered into discussion with SOPOR.

Competitive Prejudice

Rice Solutions needed to demonstrate, if not for the agency’s actions, they would have had a substantial chance of receiving the award. The GAO could not conclude with certainty that if IHS had established a competitive range or properly conducted discussions, Rice Solutions would still be eligible for the award. The GAO stated it would be reasonable that if Rice Solutions was placed in the competitive range, IHS would have held discussions with them. 

THE OUTCOME

The GAO sustained Rice Solutions’ allegations that IHS “failed to establish a competitive range before holding discussions, and thus the agency’s conduct of discussions with only the awardee was improper.” The GAO recommended the agency amend the solicitation so provisions no longer contradicted each other and clearly explain how the proposals will be evaluated. Additionally, it was also recommended IHS allow offerors an opportunity to submit revised proposals based on the amended solicitation, enter into the evaluation process again, and make a new source selection decision. After this new evaluation, if the project is awarded to a company other than SOPOR, IHS should terminate its contract with SOPOR. Lastly, the GAO also recommended Rice Solutions be reimbursed for the costs of filing and pursuing their protest.

THE TAKEAWAY

The RFP created by IHS contained a number of contradictory provisions, making it unclear how the proposals would be evaluated. The solicitation stated the award would be made on a “best value basis.” However, contradictory provisions made it unclear whether an award would be made using the best-value tradeoff process or the lowest-priced, technically acceptable methodology, a process that is also on the best-value continuum. In one section, the solicitation advised the technical factors were “listed in order of importance”, while in another section, the solicitation stated the technical factors were “of equal importance.” In another section, “The Contractor’s technical capability and relevant past performance when combined, are more important than price for the purposes of quote evaluation.” However, “technical capability” was not listed as an evaluation factor, and was not described or referenced in any other part of the solicitation. These contradictory factors made it difficult for the proposals to be evaluated equally by the TET without additional discussions with all of the offerors.

If you believe your proposal was wrongly evaluated and/or the solicitor acted in an inconsistent and unfair way that was improper, contact us at Whitcomb, Selinsky, PC. We are here for you. 

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About the AuthorWhitcomb, Selinsky, PC Staff

Whitcomb, Selinsky, PC is a full service law firm serving clients’ diverse legal needs. Our focus is in helping people in their interactions with federal, state and local governments.

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