In a typical bid protest, the protester argues that its proposal should have been evaluated more favorably or that its competitors should have received a less favorable evaluation. However, in a recent bid protest, the protester turned those arguments on their head, instead arguing that its proposal was so poor that the government owed the protester an opportunity to remedy its shortcomings.
The solicitation called for awards to be made on the basis of a best-value tradeoff. With regard to price, the solicitation called for consideration of both price realism (whether a price is too low) and price reasonableness (whether a price is too high). After proposals were submitted, the Army conducted multiple rounds of discussions with offerors to provide them an opportunity to clarify and improve the proposals. During those discussions, the Army issued more than 100 evaluation notices (EN) to the protester, DynCorp, noting issues with its proposal, including 39 related to price. Ultimately, DynCorp was not awarded a contract because its proposal received lower technical ratings than its competitors and its prices were the highest of all offerors.
While a summary of the various protests filed by DynCorp could fill a book (rather than a blog post), the crux of DynCorp’s arguments focused on the nuances of “discussions” in the context of a negotiated procurement. After receiving proposals, an agency may opt to conduct discussions with offerors to allow them to clarify and strengthen their proposals. To satisfy the requirement that discussions be “meaningful,” the agency must advise each offeror of significant weaknesses and deficiencies that need correcting to give them a reasonable chance of award. However, the agency is under no obligation to address each and every weakness that could be improved upon. In the context of price, an agency has no obligation to notify an offeror that its price is higher than others unless the agency believes the price is unreasonable, thereby rendering the offeror ineligible for award.
DynCorp argued that the Army should have deemed DynCorp’s price unreasonable because it was higher than the other prices, and had the Army found DynCorp’s price to be unreasonable, DynCorp would have been entitled to revise its price and would have been more competitive. In other words, DynCorp argued that its price was so unreasonable that the Army was obligated to permit DynCorp to revise its proposal.
The U.S. Court of Federal Claims rejected those arguments, and the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) affirmed that decision. The Federal Circuit summarized its decision by stating, “DynCorp’s proposed price was high. But it was not unreasonably high for the technical approach it proposed.” The Federal Circuit’s decision should remind contractors of the limits of discussions in a negotiated procurement. The government is required to raise fatal flaws in a proposal that will prevent an offeror from receiving an award (“significant weaknesses” or “deficiencies”), but that does not mean that the government must identify each and every minor issue in a proposal (mere “weaknesses”).
While the Federal Circuit’s decision highlights the limits of the discussions process, protesters frequently succeed in challenging an agency’s failure to provide meaningful discussions. The key to a successful protest is understanding what exactly must be raised by the government during the discussions process. Our Government Contracting Group is available to assist you with questions regarding discussions and any other government contracting matters.