United States: "That Wasn’t Fair!"—Protests Based on Unequal Discussions

Last Updated: September 29 2014
Article by Michelle E. Litteken

Editor's note: This is the fourth post in a series of posts focused on protest allegations related to discussions with offerors. The first post addressed differences between clarifications and discussions. The second post focused on the requirements for discussions to be meaningful. The third post dealt with misleading discussions. The final post in the series will provide a round-up of recent protests involving discussions.

The principles of fair and equal competition drive many aspects of procurement law and policy. These principles are evident in the FAR's requirement that when an agency engages in discussions with offerors, the agency cannot "engage in conduct that [f]avors one offeror over another." Discussions often occur as part of the procurement process, and can be beneficial to the agency and offerors. However, discussions have their drawbacks. If an unsuccessful offeror believes that other offerors were given better direction or provided with more information, discussions can provide the basis for a protest based on purportedly unequal discussions.

At first glance, the rule that discussions between the Government and offerors must be equal and not favor one offeror over another seems clear. However, application of the rule can be complicated because agencies are not required to conduct identical discussions with offerors, and because discussions must be tailored to offerors' different proposals. As such, when GAO or the CFC is faced with a protest alleging unequal discussions, it is not a simple matter of determining how many questions were asked, how long discussions were conducted, or the type and number of issues that were addressed. Instead, the question is whether the agency's questions or statements made during discussions gave an offeror an unfair advantage.

In some instances, determining whether an offeror had an unfair advantaged requires a nuanced analysis. For example, in Sytronics, Inc., the agency told Sytronics that its proposed price "appears high" and told Jenkins Electric Company that its proposed price "appears excessive." When the offerors submitted their final proposals, Sytronics lowered its price by 4% and Jenkins lowered its price by 8%. Although the agency stated that it did not intend to favor one offeror over another, and the use of different adjectives was inadvertent, GAO sustained the protest. GAO reasoned that an offeror would reasonably view the word "excessive" as sending a stronger message than "high," and that distinction was illustrated by Jenkins' larger price adjustment.

Other questions of unfair competitive advantage are more clear-cut. In Zodiac of North America, the protester argued that an agency engaged in unequal discussions when it provided the awardee with multiple rounds of discussion questions and engaged in only one round of discussions with the disappointed offeror. The agency was evaluating the technical proposals on a pass/fail basis, and the agency's concerns with the protester's proposal were resolved after one round of discussions. GAO denied the protest, reasoning that there was nothing wrong with an agency conducting multiple rounds of discussions to resolve significant weaknesses or deficiencies. When the protester's proposal was deemed technically acceptable, it could not improve its proposal. Holding additional discussions with offerors whose proposals were not yet deemed technically acceptable did not disadvantage the protester.

The fact that discussions are tailored to an offeror's proposal can result in an unequal discussions protest, but protesters pursuing such arguments can have a difficult time. For instance, in Apptis Inc., the agency engaged in discussions with the awardee about its technical proposal, past performance, and price proposal, but the Government's questions to the protester were limited to concerns about its price proposal. To someone unfamiliar with government contracts law, this apparent disparity appears to be unfair. However, the agency did not identify any significant weaknesses in the protester's technical proposal or its past performance record. In addition, although the agency identified weaknesses and significant weaknesses in the awardee's technical proposal, it only discussed the significant weaknesses. Because an agency is not required to provide offerors with all-encompassing discussions, and because the agency did not discuss non-significant weaknesses with either offeror, there was no unequal treatment and no basis to sustain the protest.

In one of the leading unequal discussions cases at the CFC, Gentex Corp. v. U.S., the court sustained a protest in which the agency provided the offerors with differing information concerning its technical requirements. The protested contract called for the development of aircrew masks to provide protection in chemical or biological warfare environments. In an email, the agency provided both offerors with information about the requirements for the batteries in the masks (e.g. wear hours, percentage of cold weather operations, etc.). Then, during discussions, the agency advised only one offeror (the awardee) that is proposal was unaffordable and asked whether it considered alternative or rechargeable batteries, or had conducted any cost as an independent variable (CAIV) studies. But the Agency did not provide any comparable information to the protester—and denied the protester's request for exceptions to the requirements.

Gentex argued that the agency conducted unequal discussions, and the CFC agreed. The court explained: "The lack of clarity in the RFP, the discussions which suggested that [the awardee], but not Gentex, consider a CAIV tradeoff in connection with batteries, and the Air Force's failure to correct Gentex's differing understanding of the evaluation scheme of the RFP combined to render this procurement unfair." The court found a clear violation of FAR 15.306.

One difficult aspect of unequal discussions issues is that in most cases, the issues can only be understood by bid protest counsel examining an administrative record released under a protective order (PO), and the issues usually cannot be discussed in any detail with the client (as doing so would be inconsistent with the PO).

When considering pursuing a protest, contractors should be mindful of an agency's obligation to conduct equal discussions. It is important to remember that the number of questions raised or issues addressed is not decisive regarding whether discussions were unequal. Instead, contractors must consider the substance of the discussions—and whether they have any basis to believe the agency provided another offeror with an unfair advantage.

Tags: CFC, GAO, Meaningful Discussions

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