GAO: Agency Discussions Need Not Include “New” Weakness

In a recent bid protest decision, the GAO held that an agency did not fail to provide an offeror with meaningful discussions about an evaluated weakness in the offeror’s staffing approach because the aspect of the staffing plan deemed to be a weakness was introduced in the offeror’s final proposal revision, or FPR.

The GAO’s decision in PAE Government Services, Inc., B-407866 et al. (Mar. 22, 2013) involved a Navy solicitation for base operating services.  The solicitation called for a “best value” evaluation, under which the Navy would consider both price and non-price factors.  One of the non-price evaluation factors was Technical/Management Approach, which was to include an analysis of each offeror’s proposed staffing approach.

PAE Government Services, Inc. submitted a proposal.  After evaluating PAE’s initial proposal, the Navy rated PAE “Acceptable” on the Technical/Management Approach factor.  The Navy subsequently opened discussions with offerors.

In its discussions with PAE, the Navy pointed out that PAE’s technical proposal included two different totals for the number of full-time employees, or FTEs, being proposed.  The Navy also noted that PAE’s price proposal differed from the number of FTEs proposed in the technical proposal.  The Navy asked PAE to correct the discrepancies.

PAE submitted a FPR.  In its FPR, PAE stated that upon further review of the contract’s scope and staffing requirements, PAE had “reevaluated and revised our full time equivalent staffing levels,” and that the revised staffing approach was reflected in the FPR.

Upon reviewing PAE’s FPR, the Navy found that PAE had reduced its proposed staffing “without any explanation for the reduction or an adequate demonstration in its proposal of how it could successfully perform within this level of staffing.”  The Navy determined that PAE’s staffing approach presented a significant risk to the government, and assigned PAE a “significant weakness” for this reason.

As a result of the new weakness, the Navy lowered PAE’s score under the Technical/Management Approach factor from “Acceptable” to “Marginal.”  The Navy then awarded the contract to a competitor.

PAE filed a GAO bid protest.  PAE argued, in part, that the Navy had failed to engage in meaningful discussions because, in addressing the three staffing approaches set forth in PAE’s technical and price proposals, the Navy never advised PAE that a low staffing figure could result in a weakness.

The GAO wrote that “since this weakness was first introduced in PAE’s FPR, the agency was under no obligation to reopen discussions with the protester to afford it an opportunity to correct the problem.”  The GAO rejected PAE’s contention that the Navy should have informed PAE that, if the ambiguity was resolved in favor of lower staffing, it could result in a weakness.  “PAE’s arguments would require the agency to have guessed which staffing level included in its initial proposal was the one the firm intended,” the GAO wrote.  “However, in evaluating proposals, an agency is under no obligation to decipher a poorly organized proposal . . . or to accept a proposal that the agency finds is unclear or ambiguous.”   The GAO denied PAE’s protest.

The PAE Government Services bid protest decision illustrates an important limits on the scope of discussions.  When an agency engages in discussions, it must identify weaknesses, significant weaknesses, and deficiencies in offerors’ proposals, and allow offerors the opportunity to submit revised proposals in response.  However, should a revised proposal contain a new weakness, the agency is under no obligation to inform the offeror, unless it chooses to reopen discussions with all offerors.

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