In yet another example of one of my long-standing complaints about the GAO’s interpretation of the “Procurement by Negotiation” process specified in FAR, Part 15, the GAO has reiterated its long-standing policy that “there is generally no obligation that a contracting agency conduct discussions where the RFP specifically instructed offerors of the agency’s intent to award a contract on the basis of initial proposals without conducting discussions. In a decision issued today, in the Matter of Gemmo-CCC, B-297447.2, December 13, 2006, the GAO ruled that a protest that the agency should have engaged in clarifications with the protester to resolve material omissions in its proposal must be denied since any such exchange would have constituted discussions, not clarifications, and an agency generally has no obligation to hold discussions where it put offerors on notice of its intent to make award on the basis of initial proposals.
The protester’s offer was not considered for award because the agency believed that important vendor data had been omitted from the proposal. The protester argued that since its price was substantially lower than the awardee’s price, the agency should have informed it if it believed that vendor product data had been omitted and should have allowed the protester to cure the alleged defect. The GAO disagreed and stated that “contrary to the protester’s assertion that the agency was required to hold discussions before making award in light of the protester’s lower price, an agency is not precluded from awarding on the basis of initial proposals basis merely because an unacceptable lower-priced offer might be made acceptable through discussions.” In other words, an agency has no obligation to negotiate a negotiated proposal, even if such negotiations (discussions) might result in an unacceptable low bid being made acceptable. From a taxpayers perspective, that policy does not make sense.