Federal Construction Contracting Blog : Federal Construction Contracting Law Firm : Cohen Seglias Pallas Greenhall & Furman PC : Construction Law, Dredging and Claims

As the government has expanded its uses of Contracting by Negotiation through the issuance of RFPs ("Requests for Proposals"), as opposed to Sealed Bidding and the issuance of IFBs ("Invitations for Bid"), contractors have had to adapt to this new way of doing business.  All too often, a perfectly capable contractor is not selected for award, even though its price was the lower than its competitors, because it failed to adequately address the evaluation factors listed in the solicitation.  A recent decision by the GAO in the Matter of Capitol Drywall Supply, Inc. ("CDS"), decided on January 12, 2009, highlights the difficulty that a contractor faces when the agency and the GAO conclude that a proposal misses the mark.

The proposal by CDS was one of six submitted to the Corps of Engineers, and was the second lowest in price.  The problem, however, was that CDS was rated as the lowest on the technical merit evaluation factor due, primarily, to a lack of detailed information describing the firm's proposed procedures to perform the statement of work requirements, as well as a failure to demonstrate experience performing contracts similar in size, scope, and complexity, and which were valued at $1 million or more.  Finding that the lowest-priced and third lowest-priced proposals, which received significantly higher technical ratings than the CDS' proposal, represented the best value to the agency, awards were made to those firms; with respect to the latter award, the agency concluded in a price/technical tradeoff determination that the higher technical merit of the higher-priced proposal warranted the payment of the price premium associated with it.

Specifically, the agency evaluators found that while the firm's proposal provided a brief response to the detailed technical approach requirements, in which CDS mentioned the firm's intention to maintain inventory and warehouse operations, specific statement of work requirements were not referenced, as was required (e.g., regarding subcontractor relationships, safety and health plans, quality control, and planned communication and information management), and no planned procedures or detailed methodologies were provided to explain how the firm intended to perform the statement of work requirements. Similarly, under the delivery evaluation factor, while the CDS proposal mentioned the use of certain vehicles and noted that certain reports could be produced, the evaluators found that insufficient detail was provided to ensure an adequate number and type of vehicles would be readily available for simultaneous deliveries, as required, and no detailed methodology was presented to either explain what procedures would be followed to ensure that materials would be expeditiously obtained and delivered, including delivery to remote locations, or to explain in any meaningful detail the firm's planned procedures to meet stated reporting requirements.

In reiterating its position when a protester has failed to adequately respond to the requirements of a solicitation, the GAO stated that "In reviewing protests of alleged improper evaluations and source selections, our Office examines the record to determine whether the agency's judgment was reasonable and in accord with the solicitation's stated evaluation criteria and applicable procurement laws. See Abt Assocs. Inc., B-237060.2, Feb. 26, 1990, 90-1 CPD para. 223 at 4. It is an offeror's responsibility to submit an adequately written proposal that establishes its capability and the merits of its proposed technical approach in accordance with the evaluation terms of the solicitation. See Verizon Fed., Inc., B-293527, Mar. 26, 2004, 2004 CPD para. 186 at 4. A protester's mere disagreement with the evaluation provides no basis to question the reasonableness of the evaluators' judgments. See Citywide Managing Servs. of Port Washington, Inc., B-281287.12, B-281287.13, Nov. 15, 2000, 2001 CPD para. 6 at 10-11. Further, where, as here, technical factors are to be given greater importance than price in the determination of which proposal offers the agency the best overall value, price/technical tradeoffs may be made, and we will not disturb awards to offerors whose proposals have higher technical ratings and higher prices so long as the result is consistent with the evaluation factors and the agency has reasonably determined that the technical superiority outweighs the price difference. See Structural Preservation Sys., Inc., B-285085, July 14, 2000, 2000 CPD para. 131 at 7."

Author's Note:  The lesson to be learned from this case, and others like it, is that a contractor cannot take anything for granted when responding to an RFP.  It is a mistake to assume that the agency knows about your capabilities as a result of previous contracts, and it is similarly a mistake to assume that the government evaluators will learn about your capabilities even though you do not provide detailed information.  Every proposal stands on its own and it is important to prepare your proposal in a manner that provides information that is responsive to the evaluation factors.  Contractors need to make certain that every evaluation factor is addressed clearly and thoroughly.  It is no longer enough to be the best contractor, you now need to be the "best" at putting proposals together, as well.  Most assuredly, you should do everything possible to avoid a conclusion like the one the GAO reached in the CDS case that "[g]iven the lack of detail in CDS's proposal under each technical evaluation factor, we have no basis to question the evaluation."

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A recent GAO decision highlights the need for offerors to fully understand a Request for Proposals (RFP) and to pay close attention to the details when preparing a proposal in response to an RFP.  In C. Martin Company, Inc., the agency rejected the protestor’s proposal, determining that it was technically unacceptable.  The agency discovered that the offeror had referenced outdated regulations, standards, and procedures.  Some of the references were to processes and standards that had been obsolete for at least three years.  It became evident that the offeror had incorporated parts of a prior RFP submission years before on a similar project.

The agency’s technical review team concluded that the proposal was deficient and that the offeror did not have a clear understanding of the RFP’s requirements.  The offeror was not given an opportunity to cure the deficiencies. After the offeror learned of the basis of its rejection during a debriefing, it filed a protest contending that the deficiencies in its proposal were minor and that it should have been given the opportunity to correct its proposal. Its main argument was that its proposal could easily have been corrected. 

The GAO, in denying the protest, stated that neither the ease of the corrective effort nor the “minor” nature of the deficiencies were determinative of whether the proposal should be accepted or rejected. Instead, the GAO held that the need for numerous revisions “evidenced an inherent lack of understanding or awareness of the current RFP’s requirements.”    The GAO succinctly stated in upholding the agency’s rejection of the proposal: “Offerors are responsible for submitting an adequately written proposal, and run the risk that their proposals will be evaluated unfavorably where they fail to do so.”

It cannot be overemphasized that offerors must review and address the RFP’s requirements and that they must be very attentive when drafting their proposals, especially if they copy materials from prior submissions.  If offerors incorporate prior safety, quality control or experience statements in their current submissions, they would be well advised to carefully review and tailor these statements to the RFP. Otherwise, they risk rejection of their proposals, as happened in this case.

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“Discussions” in a negotiated procurement between the government and an offeror are the exception, not the norm, as those of you who have submitted a response to a Request for Proposals know.  Too often the government awards a contract on the basis of the initial proposal, without any discussions or negotiations with the offerors.  The reason that the government refrains from formally opening up negotiations is that if discussions occur between the government and one offeror, then the government must hold discussions with all of the offerors in the competitive range.  (FAR 15.306(d)(1).  That can be time consuming.  (It can be argued that the term “Procurement by Negotiation,” as explained in FAR, Part 15, anticipates that discussions and negotiations will actually occur). 

            Of course, not all communications between the government and an offeror constitute “discussions.”   As the Government Accountability Office stated in a recent case, Overlook Systems Technologies, Inc., Nov 28, 2006, “the acid test is whether an offeror has been afforded an opportunity to revise or modify its proposal.” In Overlook, the contracting officer contacted the successful offeror regarding a perceived organizational conflict of interest because Overlook planned to use a subcontractor that had provided a system to the government that Overlook would now “troubleshoot.”  The GAO determined that the contracting officer’s communications with Overlook were similar to the sort of inquiries the government frequently makes to perform a responsibility determination.  The GAO relied heavily on the fact that the government was required to make such a responsibility determination, citing prior GAO decisions that have held that responsibility inquiries are not “discussions.”

            The GAO held that since the dialogue between the contracting officer and the offeror did not result in changes to the proposal, the communications were not “discussions” and the government was not required to have similar communications with the other offerors.  It should be noted that FAR 15.306(b)(2) permits the government to have communications with an offeror to enhance the government’s understanding of, or interpretation of, a proposal without these exchanges being treated as “discussions.”  Contracting officers should be encouraged to make these kinds of inquiries more often rather simply award contracts on the basis of initial proposals and without any communications whatsoever.

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