The latest updates and analysis from Morrison Foerster
November 13, 2017 - Protests & Litigation

Non-meaningful, Misleading, and Unequal Discussions (Post-award Protest Primer #11)

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

Today’s post is the first of two installments on protest grounds related to discussions. This post will focus on the requirement that discussions be meaningful and not misleading, and treat offerors equally. The next post will look at the difference between discussions and other types of exchanges between agencies and offerors, as well as agencies’ discretion to conduct discussions or not.

The term “discussions” as we use it in this post means communications with offerors after receipt of initial proposals, following establishment of a competitive range, culminating in an invitation to submit revised proposals. Exchanges other than discussions (such as “clarifications”) generally do not allow submission of proposal revisions. The regulations governing discussions – as well as other types of exchanges after receipt of initial proposals – are found at FAR 15.306.

The idea behind discussions is fairly straightforward: A bit of communication with the procuring agency often helps offerors improve the quality of their initial proposals – and improve the bargains they offer to the Government. At the same time, certain initial proposals may be so inferior to the others that the procuring agency decides the chances of a great bargain in a short time from some low-rated offerors aren’t worth the bother and expense. The agency’s division of the sheep from the goats results in the establishment of a “competitive range.” A competitive range may include anything from all of the submitted proposals to a “competitive range of one.” Ordinarily, the competitive range need include only “the most highly rated proposals,” although the agency may reserve its right within the solicitation to reduce the range further for economy’s sake. FAR 15.306(c). Offerors excluded from the competitive range may protest their exclusion in a pre-award protest – a topic for another post. (We’ve previously discussed important timeliness considerations for protesting exclusion from the competitive range.)

Discussions may be oral, written, or some combination thereof. Agencies often issue Evaluation Notices (“ENs”), advising offerors of their initial evaluation results and areas they should consider revising. FAR 15.306(d)(3) requires discussions, when conducted, at a minimum to raise with each offeror in the competitive range all significant weaknesses, deficiencies, and adverse past performance information to which they have not yet had the opportunity to respond. Although the GAO will take note of the label the agency attaches to a particular defect, it also will consider the context of the evaluation to determine whether the defect was so significant it should have been raised in discussions.  See AT&T Corp., B-299542.3, B-299542.4, Nov. 6, 2007, 2008 CPD ¶ 65 at 11.

Importantly, once the agency has addressed an issue, it need not address it again. Thus, if the agency explains its concern to an offeror and the offeror makes revisions that do not solve the problem, the agency is under no obligation to point this fact out. Nor is the agency required to reopen discussions to address problems the offeror first introduces after discussions have closed – for example, when an offeror’s final proposal revisions correct one problem but inadvertently cause a new one.  TASC, Inc., B-412674.2 et al., Aug. 25, 2016, 2016 CPD ¶ 230 at 6.

So, what does all that mean to a protester?

Were the Discussions Not Meaningful?

Discussions are not meaningful if the agency has serious concerns about the evaluated proposal, but does not clearly raise them with the offeror. Agencies are not required to raise mere weaknesses in discussions. Nor are they required to advise an offeror that its price is too high, provided that the agency has not determined that the price is so high as to be unreasonable. If, on the other hand, the evaluators have identified significant weaknesses, deficiencies, and adverse past performance information to which the offeror has not had the opportunity to respond, those must be raised.

An agency need not spoon-feed an offeror or explain the evaluated problems in great detail, but it must at least lead the 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.”  Lewis-Price & Assocs., Inc., B-409851; B-409851.2, Aug. 26, 2014, 2014 CPD ¶ 9-10. Protests alleging lack of meaningful discussions often end up in a fight over whether general concerns the agency raised in discussions were clear enough reasonably to lead the protester to specific deficiencies that the agency had identified but did not expressly address.

Were the Discussions Misleading?

Discussions are misleading if they prejudicially communicate (whether by statements, questions, or silence) a problem that is not there, or assure an offeror that a problem has been resolved, when in fact it has not been, or otherwise induce acts or omissions that are competitively prejudicial to the offeror. For example, if an agency tells an offeror that its price is unrealistically low (when it really is not), and the offeror raises the price, only to lose the contract in part because its price was too high, there may be a viable protest ground on the basis of misleading discussions.  See Vencore Servs. & Solutions, Inc., B-412949; B-412949.2, July 18, 2016, 2016 CPD ¶ 346 at 8-9.

Were the Discussions Unequal?

Unequal discussions are a form of disparate treatment. Discussions need not be identical – an offeror with numerous weaknesses, for example, naturally will receive “more” discussion attention than an offeror with fewer weaknesses. But the basis upon which they are conducted must be equal.

At the most basic level, if an agency conducts discussions with one offeror, it must do so with all offerors that have not been excluded from the competitive range. To do otherwise is unequal treatment. (As we’ll see in the next post, it is not always easy to discern when discussions in the strict sense have been conducted.) Or, if an agency decides to provide one offeror with more detailed discussions than the regulations require, it must provide a similar level of detail to other offerors. Likewise, if an agency follows up with an offeror that did not resolve a concern on the first round of discussions (despite having no obligation to do so), the agency must treat other offerors in the same way.

By their nature, allegations of unequal discussions tend to be supplemental protest grounds that generally are apparent only after the agency record has been produced.

What About Prejudice?

As we’ve discussed before, prejudice is an essential element of every viable protest. This is the “so what?” question. It is the protester’s responsibility to articulate how the alleged procurement error prevented the protester from having a substantial chance of contract award.

In the context of discussions, this generally entails explaining what the protester would have done differently if its discussions had been meaningful, not misleading, or equal, and why those changes reasonably could have put the protester in line for award. Although GAO resolves doubts about prejudice in favor of the protester, the wider the competitive gap between the protester and the awardee, the more closely GAO will scrutinize prejudice.  See, e.g.DynCorp Int’l LLC, B-411465; B-411465.2, Aug. 4, 2015, 2015 CPD ¶ 228 at 16.