Does “Fair Treatment” Translate to “Equal Discussions”?
When creating a solicitation for services, the solicitor can request certain requirements for all proposals. Requirements can be evaluated on a pass/fail basis or on a best-value tradeoff. A pass/fail evaluation is used when the requirement is not conducive to varying degrees of superiority or inferiority. A best-value tradeoff is used when it is in the best interest of the Government to award a contract based on the greatest value and not necessarily the lowest priced offeror or the highest technically rated offeror. The solicitor can also discuss a proposal with an offeror after submission to clarify any inconsistencies or discrepancies in a proposal. Although the solicitor does not need to engage every offeror nor ask the same questions or depth of questions, each offeror must be treated fairly. The following protest illustrates when unequal discussions led to unfair treatment.
Government Accountability Office (GAO) Protest of AECOM Management Service, Inc. B-418828.4; B-418828.5; B-418828.6
Decision issued March 17, 2021
On December 20, 2019, the Department of the Navy (Navy) issued a fair opportunity submission request (FOSR) for contractor logistics support for the Navy’s Adversary Program. The Navy evaluated the proposals on the following factors: task order administration, contract experience, planned small business participation, program execution, and cost/price. The first three factors were evaluated on a pass/fail basis. If a proposal passed the first three factors, the proposal’s program execution and cost/price were evaluated on a best-value tradeoff.
To qualify for the small business participation factor, offerors were required to meet the applicable threshold to qualify as a small business. This threshold was five percent of the total contract value including option periods. The program execution factor required offerors to detail staffing and supply approaches, including a narrative on the metrics used to determine if adjustments are needed to meet objectives. The proposal’s price/cost factor needed to be reasonable, realistic, and complete. Offerors needed to provide unit prices, labor rates, and estimated amounts. Price and execution had to be consistent, or the proposal had to explain any discrepancies. The FOSR allowed written and oral discussions between the Navy and the offerors and stated all offerors would be treated fairly. The solicitation also stated discussions would not necessarily be held with all offerors, nor would all discussions be of the same nature or depth.
Six offerors, including AECOM and Vertex Aerospace, LLC (Vertex), submitted proposals. During the initial evaluation, the agency provided five written or oral discussions to three of the offerors including Vertex and AECOM. On May 29, 2020, Vertex was awarded the contract. On June 15, 2020, two of the original six offerors filed a protest. In response, the Navy took corrective action and reevaluated the original proposals.
During the reevaluation, the Navy held discussions with AECOM and Vertex. In its discussions with Vertex, the Navy instructed the company to fix its pricing of labor hours. Vertex had not included enough labor hours to cover a 40-hour workweek, which made the proposal technically unacceptable. Additionally, the Navy held a phone conference with Vertex, providing further guidance on this issue. As a result, Vertex submitted a revised proposal changing several elements and adding $20 million to the proposal price. Contrarily, the Navy alerted AECOM to an unclear element in its contract experience volume but did not allow AECOM to submit a revised proposal.
Following the reevaluation, the Navy’s selection authority found Vertex’s proposal was technically superior to AECOM’s proposal based on the program execution factor and a slightly lower price. On November 13, 2020, the Navy awarded the contract to Vertex for a second time.
Shortly after November 13, 2020, AECOM submitted a protest to the Government Accountability Office (GAO) regarding the award of a task order to Vertex under FOSR N00421-20-TO-0001. AECOM protested the award on four objections: unreasonable evaluation of Vertex’s small business plan, application of unstated evaluation criterion in evaluating AECOM’s technical approach, unreasonable evaluation of Vertex’s pricing or required proposal elements, and unequal exchanges with offerors.
AECOM objected to the Navy’s evaluation of Vertex’s small business utilization volume. The GAO stated, “while agencies are not permitted to use unstated evaluation factors in evaluating quotations, an agency properly may take into account specific matters that are logically encompassed by, or related to, the stated evaluation criteria, even when they are not expressly identified as evaluation criteria.” Based on this reasoning, GAO denied this objection.
AECOM protested on “disparate evaluation”, specifically the difference between the way the Navy evaluated the two offerors. The GAO disagreed with AECOM stating “when a protestor alleges disparate treatment in a technical evaluation, it must show that the differences in ratings did not stem from differences between the proposals.” The Navy explained the differences in the evaluations of the two offers were based on the differences between the proposals. The GAO agreed with the Navy. Also, AECOM asserted the Navy should have assigned it a “confidence increaser” because of its teaming agreement with another company.¹ The GAO denied this objection, again choosing not to infringe on the Navy’s discretion in evaluating technical solutions.
In response to AECOM’s protest of the Navy’s evaluation of Vertex’s price proposal, the GAO denied this objection determining “the manner and depth of an agency’s price analysis is a matter committed to the discretion of the agency, which we will not disturb provided that it is reasonable and consistent with the solicitations evaluation criteria and applicable procurement statutes and regulations.” Furthermore, the GAO opined, “the depth of an agency’s price realism analysis is a matter within the sound exercise of the agency’s discretion, and we will not disturb such an analysis unless it lacks a reasonable basis.”
In response to AECOM’s protest of unequal exchanges with offerors, the Navy argued it held discussions with both offerors and the solicitation did not require “equal discussions.” The FOSR contained the following language:
“Because this streamlined evaluation and award is not using the formal source selection procedures of FAR Subpart 15.3, procedures such as a competitive range determination, pre-award notifications to offerors excluded from the competitive range, pre-award debriefings, oral or written discussions with all offerors within a competitive range, and requesting final submission revisions from all offerors included within a competitive range are not required.”
While the solicitation expressly stated discussions would not be conducted as outlined in FAR Part 15 regarding equal discussions by committing to treating offerors “fairly,” the GAO commented the Navy committed to FAR Part 15 standards on fairness. This included equal discussions with offerors. The GAO paid particular attention to the fact that Vertex was allowed to make significant changes to its proposal, including its small business utilization, program execution, and pricing volumes. Meanwhile, the Navy did not inform AECOM of a “confidence decreaser” nor allowed AECOM to revise its proposal. The GAO found that having discussions with two offerors but only allowing one to revise its proposal was not a “fair exchange.”
The GAO found that AECOM was prejudiced by the Navy’s unequal discussions with Vertex. If the Navy had conducted equal discussions, then AECOM would have had an opportunity to revise its proposal and may have won the award. The GAO recommended the Navy reopen discussions and give AECOM an opportunity to revise its proposal. It also recommended the Navy reevaluate proposals and make a new selection decision. Finally, the GAO recommended the Navy reimburse AECOM for its attorneys’ fees and costs associated with filing its protest.
The solicitation specifically stated all offerors would be treated fairly. However, by conducting extensive discussions with one offeror and allowing that offeror to resubmit an updated proposal, and not providing the same treatment to all other offerors, the Navy did not provide fair or equal treatment.
For more information on fair and equal treatment of your proposal, contact Whitcomb Selinsky PC. We have a team of experienced government contract attorneys ready to help you.
¹ The name of the teaming partner was redacted.