Background
ICE solicited quotations for the provision of a formal historic battlefield staff ride program focused on leadership training. The solicitation contemplated the award of a single fixed-price, indefinite-delivery, indefinite-quantity contract with a five-year ordering period, to be made on a best-value trade-off basis. The evaluation factors included (1) technical capability, (2) sample training presentation, (3) past performance, and (4) price. ICE informed offerors that the non-price factors, when combined, were significantly more important than price. The RFP stated that the agency did not intend to establish a competitive range, conduct discussions, or request proposal revisions. However, the RFP also stated that the agency reserved the right to hold discussions if the contracting officer deemed it necessary and to contact any offeror to request additional information.
The evaluation was conducted under the simplified procedures for the evaluation of commercial items in two phases using an advisory down-select process. In phase one, the offerors were evaluated under technical capability, past performance, and price factors. They were then notified of their likelihood of success. The most highly rated offerors were advised to move on to phase two and provide their sample training presentations. Two out of six offerors provided their sample training presentations: Academy Leadership LLC (Academy) and Gettysburg Addresses, Inc. d/b/a The Lincoln Leadership Institute (Lincoln). ICE made an initial award to Lincoln on March 16, 2021. On March 26, 2021, Academy timely protested the award, prompting ICE’s reevaluation.
ICE’s reevaluation resulted in a rating of “some confidence” for Academy in all of the non-price factors and a rating of “high confidence” for Lincoln in two of the three non-price factors. However, Lincoln’s quoted price surpassed Academy’s by nearly $2 million. The source selection authority found that Lincoln’s higher-rated proposal warranted the 53 percent price premium because of Lincoln’s superiority in the two heaviest-weighted factors: technical capability and sample training presentation, and the greater risk Academy’s approach held.
Protest grounds
Academy once again protested the award to Lincoln arguing that: (1) the agency’s communication with the offerors requesting a price reduction constituted discussions, and (2) these discussions were neither meaningful, nor fair and equitable. First, ICE maintained that its request did not constitute discussions. ICE argued that its requests fell within the category of clarifications, which are other exchanges that can take place between agency and offeror. Second, ICE argued that even if its request for a price reduction constituted discussions, the GAO should consider that the discussions were fair and equitable because ICE made the same request of all offerors. Finally, ICE argued that it did not ultimately allow offerors to submit revisions to their technical proposals. The GAO found these arguments unconvincing and agreed with Academy.
The GAO’s findings
The GAO found that ICE’s communications with the offerors provided them an opportunity to revise their price proposals, and thus constituted discussions. The GAO distinguished discussions from clarifications, explaining that clarifications are “limited exchanges” between an agency and an offeror to eliminate minor uncertainties or irregularities in a proposal and do not give an offeror the opportunity to revise or modify. Discussions occur when an agency communicates with an offeror to obtain information essential to determining the acceptability of its proposal or provides the firm with an opportunity to materially revise or modify its proposal. An easy way to distinguish between the two is to apply the “acid test,” which asks whether an offeror was afforded an opportunity to revise or modify its proposal.
Ordinary indicia of discussions are (1) conveying information tailored to the offeror’s proposal, (2) bargaining, and (3) providing an opportunity to revise proposals. In ICE’s request for Lincoln to lower its quotation, ICE said that Lincoln’s proposed price was “significantly higher” than the other offerors’ and asked if the price was “the best offer [they] could provide.” The GAO stated that this was sufficient to constitute conveying information tailored to Lincoln’s proposal and its bargaining, negotiating, or attempting to persuade. Because ICE provided the offerors an opportunity to revise their price proposals, these communications satisfied the “acid test” for discussions.
Significantly, the GAO also found that the discussions with Academy were not meaningful. Meaningful discussions must identify deficiencies and significant weaknesses in an offeror’s proposal that could materially enhance the offeror’s potential for receiving the award. Further, the GAO emphasized that an agency must afford all offerors the opportunity to engage in meaningful discussions when it conducts discussions with one offeror. While ICE requested a lower quotation from all offerors, the GAO distinguished the communications with Academy from those with Lincoln. The GAO explained that the communications with Lincoln advised the firm on its point of weakness by stating that its quotation was “significantly higher” than other offerors’ quotations and then provided Lincoln an opportunity for revision. Academy did not receive this benefit because its deficiencies involved non-price factors – factors for which ICE did not permit revision.
Ultimately, the GAO found that ICE’s communications with offerors were discussions and were not meaningful. The GAO emphasized that the actions of the parties – not the agency’s characterization of the communications – determine whether discussions have been held.
Takeaways
This decision is an important reminder that even a seemingly minor communication, like requesting the lowering of a quotation, may ultimately constitute discussions in the context of a source selection. The GAO has made it clear that no matter the agency’s intention, discussions occur when an agency communicates with an offeror for the purpose of obtaining information essential to determining whether the proposal is acceptable or provides them an opportunity to revise their proposal in some material respect. If a communication falls in the category of discussions, such communication must be meaningful, whether or not the discussions were actually required by the solicitation. This decision is a valuable reminder of what it means for discussions to be meaningful: they must identify those significant weaknesses or deficiencies in a proposal that, if addressed, could materially heighten the offeror’s chances of receiving the award. Offerors are encouraged to avail themselves of opportunities to protest an agency’s source selection activities if they fail to properly engage in meaningful discussions with all equally or if they allow one and not all offerors to materially amend the proposal.
Reed Smith’s Government Contracts Team closely monitors GAO cases and frequently writes on resulting case law developments to keep our clients informed. Read more of our discussions on GAO protest decisions on our Global Regulatory Enforcement Law Blog.
Client Alert 2021-275
