Contractors bidding on federal contracts must take the leap of faith that they have accounted for all of the various elements that will affect the cost of their performance. But there’s no need to do so completely blind. Asking key questions of the procuring agency can help shed light on ambiguities in the contract documents.
There may be strategic reasons for submitting a bidder’s question. A government answer to a question may remind other bidders that a more costly set of performance parameters will apply. Whether price is the key evaluation factor or one of many, it is important to make sure that all bidders are working with the same set of assumptions.
When there is an obvious ambiguity in the stated terms of a contract, submitting a bidder’s question is essentially required. The ASBCA’s recent decision in Phoenix Management, Inc., ASBCA No. 57234 (Dec. 13, 2010) [PDF], presents a stark application of this rule. The case involved a contract for vehicle transport services at Robins Air Force Base, part of which involved supporting the Air Force Reserve Band on temporary duty assignments. The Air Force refused to reimburse the contractor’s expenses in providing TDY support services, asserting that the contract required such expenses to be included in the contractor’s fixed price.
In pursuing the claim at the Board, the contractor relied on the pre-bid Q&A, which stated that TDY expenses would be reimbursed by the band. Despite the clear language in the Q&A, which had been incorporated into the contract by a formal amendment to the solicitation, the Board rejected the claim.
In the Board’s view, the terms of the underlying contract provided that contractor TDY expenses would be included in the firm fixed price and not separately reimbursed. The Q&A did not change the terms of the contract or resolve a conflict between two competing terms.
Rather, the Air Force’s response to the bidder’s question created a new ambiguity. Since it was a patent conflict with the original contract requirement, the Q&A triggered a new requirement for the submission of yet another bidder’s question. The contractor’s failure to seek another clarification meant that its reliance on the language of the Q&A was unreasonable.
While there is some logic to the Board’s approach, applying the patent ambuigity rule on these facts seems to conflict with the realities facing parties engaged in competitive procurement. Is it reasonable to expect a contractor to repeat questions that the government purports to have clearly answered? If the contractor had asked the question again, would the government have provided a meaningful answer? Or would it simply have deemed the question answered and referred back to the original contract terms? Even more important, what approach did other bidders take to the question of TDY expenses? It would be unfortunate to penalize one contractor for what the Board’s decision suggests was an error in judgment if even one of the other contractors also planned on having their TDY expenses reimbursed.