WHAT IS A FAIR MARKET PRICE IN SET-ASIDES?

What is a fair market price, or a fair and reasonable price? The Federal Acquisition Regulation (“FAR”) requires that in a small business set-aside, the government must have a reasonable expectation that the award price will be reasonable, i.e., award will be made at “fair market prices:” FAR 19.502-2 Total small business set-asides. [] (b) [] The contracting officer shall set aside any acquisition over $150,000 for small business participation when there is a reasonable expectation that— (1) Offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns [] and (2) Award will be made at fair market prices. Partial set-asides include the same “fair market price” requirement: 19.502-3 Partial set-asides. (a) The contracting officer … Continue reading

LATENT AMBIGUITY

It is an important rule of interpretation for both solicitations and contracts that the reader must examine the plain language of the document, and resolve questions of interpretation by reading the document as a whole and in a manner that gives effect to all provisions. Where the language is unambiguous, then it can be interpreted and its meaning understood. But, where there are two possible reasonable interpretations of a document, then an ambiguity exists. There are two types of ambiguities: Patent ambiguities: where the ambiguity is an obvious, gross or glaring error (for example, one page includes a specification of six inches for an item, but on a later page, the same specification is referred to as 7.5 inches). Latent ambiguity: a more subtle ambiguity … Continue reading

IMPROPER DISCUSSIONS: AGENCY TREATED NEUTRAL PAST PERFORMANCE AS “INCREASED RISK” WITHOUT MENTIONING IT IN DISCUSSIONS

In a recent bid protest case, the Court of Federal Claims included two important conclusions: (1) in determining whether a deficiency or weakness exists in a proposal, an agency must use a fact-centered, materiality or competitive impact analysis, not a categorical statement that an offeror has received a “neutral” past performance rating; and (2) although a neutral past performance rating (described in FAR 15.305(a)(2)(iv)) may have been given to a proposal, the agency may not choose to treat the proposal as having an increased risk of unacceptable performance, unless it identifies it to the offeror as a significant weakness in discussions. Precision Asset Management Corp. v. United States, No. 16-261C (Fed. Cl. Dec. 13, 2017). The Federal Housing Authority issued a solicitation for asset management … Continue reading

NO ACCEPTANCE MEANS NO CONTRACT

The U.S. Forest Service manages our national forests, which includes organizing and administering timber sales. These sales result in government contracts—but in reverse—the timber companies bid a price they will pay the government for the right to remove (and presumably sell) the timber. Generally, the high responsible bidder in a timber sale is the awardee. This case address when a timber contract is formed. After reviewing two prospectuses for timber sales in two areas of the Plumas National Forest in California, Pew Forest Products submitted two bids. See Pew Forest Products v. U.S., COFC No. 09-814C (May 7, 2012). On June 26, 2007, the contracting officer opened the bids and declared Pew the high bidder on both. Because of negotiations with environmental groups, the Forest … Continue reading

IMPROPER AGENCY DISCUSSIONS AND MIS-EVALUATION OF PAST PERFORMANCE

Agencies continue to make errors in the way they handle discussions with offerors in the competitive range. Recently, in Language Select LLP, B-415097, Nov. 14, 2014, the Government Accountability Office (“GAO”) sustained a protest because the agency had improperly labeled a discussion question as a simple request for a clarification, thereby resulting in unequal discussions. The agency also mis-evaluated an offeror’s past performance. Before discussing Language Select, it may be worthwhile to restate the rules and typical mistakes in discussions, both of which were set forth in a blog titled “Six Recurring Agency Mistakes in Discussions” (May 9, 2016), as follows: Rules on Discussions Clarifications are limited exchanges, between the Government and offerors, that may occur where offerors are given the opportunity to clarify certain … Continue reading

RAND CORPORATION REVIEWS BID PROTESTS AND CONCLUDES THAT MAJOR CHANGES ARE NOT APPROPRIATE

The RAND Corporation, at the request of the Congress in the 2017 National Defense Authorization Act (“NDAA”) recently completed a study titled, “Assessing Bid Protests of U.S. Department of Defense Procurements—Identifying Issues, Trends and Drivers” by M. Arena, B. Persons, I. Blickstein, M. Chenoweth, G. Lee, D. Luckey and A. Schendt, January 2018. The study includes a wealth of information on bid protests at both the Governmental Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”). However, the general conclusion of the assessment is that the system is working well and major changes in bid protests are not appropriate. Major Findings: DOD personnel are generally dissatisfied with the current bid protest system, believing that contractors have an unfair advantage in that they are able … Continue reading

ALWAYS CURE ANY MATERIAL OMISSION IN YOUR FINAL REVISED PROPOSAL

Offerors must take advantage of every opportunity they are given to maximize their chance for award in negotiated procurements. Unfortunately, not ever offeror seems to understand the way the system works. Geotech Environmental Services lost an opportunity to win an Air Force contract to construct water wells at Malmstrom Air Force Base, Montana because it failed to correct a material omission in its proposal when it submitted a final proposal revision. Geotech Envir. Svcs., B-415035, Nov. 8, 2017. The Federal Acquisition Regulation (“FAR”) makes it clear that in negotiated procurements, if negotiations (discussions) are held with an offeror in the competitive range, the intent of such discussions is to “allow[] the offeror to revise its proposal.” FAR 15.306(d). At a minimum, the contracting officer must … Continue reading

“WHEN IN DOUBT”AT THE GOVERNMENT ACCOUNTABILITY OFFICE

A recent Government Accountability Office (“GAO”) bid protest decision held that the source selection authority did not meaningfully explain the decision rationale in the written record, and the rationale appeared inconsistent with the contemporaneous evaluation record and the solicitation. Immersion Consulting, LLC, B-415155; B-415155.2, Dec. 4, 2017. The procurement was for program management services, and was issued by the Department of Defense Human Resources Activity. The GAO noted that competitive prejudice is an element of every viable protest. (A protester must demonstrate that but for the agency’s actions, it would have had a substantial chance of receiving the award). In this protest, GAO did not know what the ultimate source selection might have been if the source selection flaws had not occurred. GAO said “[in] … Continue reading

CORRECTIVE ACTION WILL IMPROVE AN ADVERSE PAST PERFORMANCE IN SOURCE SELECTION

Past performance is a significant aspect of source selection in negotiated procurement. When faced with an adverse performance review that is being considered by an agency in a new procurement, what should be the contractor’s approach? A recent Government Accountability Office (“GAO”) bid protest gives a concrete answer: effectively implement and document corrective measures that will change the past performance assessment for the instant procurement. DynCorp Int’l LLC, B-414647.2, .3, Nov. 1, 2017. In that source selection, both the protester and the awardee had documented instances of adverse past performance, but only the awardee had effectively implemented corrective measures, and improved its evaluation score because of those measures. The Significance of Past Performance in Negotiated Procurement The Federal Acquisition Regulation (“FAR”) states that “[p]ast performance … Continue reading

ORAL ADVICE CANNOT AMEND A SOLICITATION

This blog has frequently frowned on a government contractor taking oral advice from any government official, even a contracting officer. For the most part, unless confronted with an emergency or time sensitive situation, contractors should insist that contracting officers place advice or direction in writing, modifying a solicitation or an actual contract as necessary. (Even if a contractor accepts oral advice in an emergency, it should email or otherwise immediately document to the agency the contracting officer’s emergency advice or direction.) This is an elementary protective tactic for contractors. Recently, in Technology and Telcom. Consultants, Inc., B-415029, Oct. 26, 2017, the Government Accountability Office (“GAO”) denied a protest where a contractor relied on oral advice on how to interpret a solicitation that was given during … Continue reading