Offerors whose proposals are disqualified for immaterial typographical and data input errors will want to read an interesting new protest decision from the Court of Federal Claims. In Aspire Therapy Services & Consultants, Inc. v. United States, the Court sustained a protest because the procuring agency did not seek clarification before rejecting a proposal for what the Court found to be an “obvious and typographical” error in the protester’s proposal. While recognizing agencies ordinarily are not required to seek clarifications, the Court found the agency abused its discretion by not requesting a clarification under these facts. Although the Government Accountability Office (GAO) has never adopted such a rule and is unlikely to do so, and Aspire will not bind other judges of the Court of Federal Claims, this case may offer hope to some offerors with otherwise hopeless cases.
Background and Analysis
The error at issue was a mismatch between the 2,366 proposed direct hours appearing in the labor summary of the protester’s proposal and the 2,336 proposed direct hours appearing in its pricing sheet. (If you read that sentence quickly, you may not have noticed the third digits differ in the two figures.) If the labor summary’s figure was correct, the true price would be 0.063 percent higher than shown in the pricing sheet. Review of the math in the pricing sheet showed “with virtual certainty” that the labor summary’s 2,366 was correct, and the pricing sheet’s 2,336 figure was a data entry error. The procuring agency eliminated the discrepant proposal from the competition with no further ado.
Likely realizing a protest was almost certain to fail under the GAO’s unforgiving precedents, the disqualified offeror took its protest straight to the Court of Federal Claims. The Government argued the erroneous digit was a material error the offeror could correct only through discussions and a proposal revision, which the agency rationally chose not to permit.
The Court discussed the well-established difference between “discussions” and “clarifications.” The chief difference is that discussions under FAR 15.306(d) permit material proposal revisions (and must be offered to all offerors in the competitive range), whereas clarifications under FAR 15.306(a) permit an offeror only to “clarify certain aspects of proposals” and “resolve minor or clerical errors,” and need not be offered to all offerors. The Court rejected the agency’s position that only discussions could resolve the protester’s data entry error.
The Court held the Solicitation’s repeated admonition to make sure all figures are consistent did not make perfect consistency a material requirement of the Solicitation. Transposition of one digit—with a negligible effect on total price—was, in the Court’s view, clearly a minor error for purposes of the clarification regulation. The Court also cited Federal Circuit precedents for the principle that clarifications can allow some proposal revision, even regarding price, as well as providing new information that may be essential for evaluation. The Court noted this is particularly true when the error is apparent on the face of the proposal, and when the correct information is already found elsewhere in the proposal.
Having found that a clarification could resolve the discrepancy, the Court considered whether it was rational for the agency not to have exercised its discretion under these facts. The Court acknowledged that, under FAR Part 15, clarifications are always within an agency’s discretion. But it noted that, on a few occasions, some judges of the Court have found agencies to have abused that discretion by refusing to seek a clarification. Although there are no bright-line rules, the Court identified four factors that weigh against denying an offeror the opportunity to clarify an error:
- The error “is especially minor and can be easily corrected.”
- The error is obvious from the face of the proposal.
- The proposal is otherwise very competitive, particularly with respect to price.
- Information elsewhere in the proposal could clarify or correct the error.
The Court found all four factors weighed in favor of an exercise of discretion to conduct clarifications with the protester in this case. And the Government provided no rational countervailing reason not to have conducted them. Therefore, the Court enjoined the protester’s exclusion from the competition and directed the agency to allow the protester to clarify its proposal, after which the agency must evaluate the corrected proposal.
Takeaways
- The first takeaway is to strive to submit a proposal without any discrepancies or errors (major or minor) in the first place.
- The Aspire holdings work only for “minor” errors requiring information or alterations that do not materially alter the proposal. The bigger the problem in the proposal, the more likely it is to be an issue that only discussions can remedy. There is a large body of case law at the Court and GAO on where the fuzzy line between the two categories of error lies.
- If an agency rejects your proposal for an error that meets one or more of the four Aspire factors, consider citing Aspire and asking the agency to allow a clarification. This may be more practicable in the context of a pre-award exclusion.
- When considering a bid protest following an exclusion or adverse evaluation due to an error that could have been clarified, there likely is a higher probability of success (on that particular issue) at the Court than at the GAO. The Court, though, does not have jurisdiction to hear task order protests, and an automatic stay is not guaranteed.
- If an agency has a uniform practice of not seeking clarifications without opening discussions, or looking for minor nits to cull proposals without further thought, Aspire provides an incentive to rethink that. The Court’s decision provides a thoughtful regulatory rationale for favoring clarifications as part of good acquisition policy. Clarifications generally remain in the agency’s discretion, and there will be good reasons for opting not to clarify in many cases. Under Aspire, though, an agency should stop to ask whether it has a rational reason for not seeking a clarification, particularly if multiple Aspire factors are satisfied.
- A final caveat: Aspire is not binding on the GAO or any other judge of the Court. And the Federal Circuit has not yet endorsed (or rejected) the proposition that an agency can abuse its discretion by not seeking a discretionary clarification. The Aspire holding is also unusual, as the Court of Federal Claims has only rarely told an agency that it erred by not seeking clarifications in a FAR Part 15 procurement. So, Aspire is not a get-out-of-jail-free card. Each offeror still bears the burden of submitting a well-written proposal. But the decision is at least one potential tool for offerors whose proposals are derailed by some minor error or lack of clarity.