Agency Should Have Investigated Proposal Contradictions, Says GAO

Preparing a proposal for a federal procurement is an involved process. On top of the extensive drafting and estimating work, proposals often require supporting documentation like licenses or certifications. But what happens when a proposal and its supporting documentation contradict one another? As one contractor learned the hard way, this contradiction can have disastrous consequences.

Vane Line Bunkering, Inc., B-417859 et al. (Comp. Gen. Nov. 22, 2019), involved a solicitation for fuel transportation services on behalf of the Department of Defense between various ports on the East Coast. Transportation was to be accomplished by tug boats and barges.

As relevant here, each offeror was to propose a primary tank barge, as well as an “on-call” barge. The solicitation set very specific capacity requirements for both the tank barge as well as the on-call barge. Each barge was required to hold no less than 10,000 barrels, but no more than 20,000 barrels of fuel.

The Solicitation further required each offeror to provide a Certificate of Inspection (COI) issued by United States Coast Guard for each proposed barge. The solicitation clarified that COIs were to be used “to verify ownership or control for the barges to be utilized during the contract period of performance.”

Two offerors responded to the Solicitation: Vane Line, and its competitor, Harley Marine Services, Inc. After evaluating offerors and holding discussions, Harley was named the awardee.

Vane Line subsequently protested the award to GAO. Vane Line argued, among other things, that Harley’s proposed on-call barge exceeded the capacity requirements specified in the Solicitation. Specifically, while Harley’s technical narrative stated that it’s on-call barge had a maximum capacity of 19,465 barrels of fuel, the COI issued by the Coast Guard for the barge listed its maximum capacity as 22,600 barrels. According to Vane Line, since the COI stated that Harley’s proposed barge exceeded the maximum fuel storage requirements, it should have been eliminated from competition.

In response, the agency did not deny that there was a conflict regarding the capacity of Harley’s on-call barge. Instead, the agency countered that, under the terms of the solicitation, COIs were only requested to verify ownership. Thus, using the COIs to evaluate technical capacity would have violated the terms of the Solicitation.

GAO did not agree. First, GAO addressed the agency’s arguments that the solicitation precluded it from consideration information in the COIs outside of ownership verification. As GAO explained:

While [the Solicitation] language supports the agency’s view that COIs were requested to establish ownership or control, nothing in this language barred the agency from considering the information contained in the COI, particularly where, as here, the information contained in the [on-call barge’s] COI directly contradicted Harley’s assertion of compliance with the [Solicitation’s] requirements.

Consequently, GAO rejected the agency’s explanation for not evaluating the discrepancy further.

Next, GAO addressed the impact of the conflict on the procurement. As a legal matter, GAO explained that “[a]n agency . . . may not accept representations in a proposal at face value where there is significant countervailing evidence reasonably known to the agency evaluators that should or did create doubt as to whether the representations are accurate.” As applied to Harley’s proposal, since representations in its technical proposal were directly contradicted by Coast Guard issued inspection documents, there was certainly doubt regarding the accuracy of Harley’s capacity representations. As a result GAO concluded, “the agency unreasonably evaluated Harley’s proposals by failing to recognize information on the face of Harley’s proposal that contradicted its proposal’s assertions of compliance.” Vane Line’s protest was sustained on this basis.

GAO’s decision in Vane Line is a reminder of how proposal preparation is a massively important aspect of federal government contracting. While Harley may have been correct that the capacity of its proposed on-call barge was less than what was stated on the COI, the unresolved contradiction sank its proposal. Vane Line is a cautionary tale to contractors: always double check the supporting documents.

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