GAO: Meaningful Discussions Must Disclose Proposal Weaknesses Discovered After a Corrective Action

Given the amount of competition in most solicitations, the ability of a contractor to receive feedback on its proposal can provide valuable information to help the contractor hone its response to best address the key factors sought by the agency in its solicitation. On those rare occasions when an agency reopens its solicitation and provides feedback to the individual offeror’s initial proposal, the contractor is provided such an opportunity–except when the contractor gets left out of the feedback party.

In a recent decision, an agency failed to disclose a flaw it first identified in its reevaluation of a contractor’s unchanged proposal after a corrective action. When the proposals were evaluated after the corrective action, the contractor ended up losing an award for which they were previously selected. As a result, the contractor filed a protest primarily asserting that, because the agency failed to provide feedback on its proposal, the agency’s evaluation of the proposal was unreasonable. GAO sustained the protest.

The case is Sunglim Engineering & Construction Company, Ltd., B-419067.3 (August 6, 2021). In March 2020, the Department of the Army, Corps of Engineers issued a request for proposals, to provide paving and related construction services at airfields in South Korea. The agency received proposals from 10 offerors, including Sunglim as well as Yibon Construction Co., Ltd. The agency determined that the management plan included in each offeror’s proposal was the most important factor to consider.  In its evaluation, the agency excluded several proposals from consideration, including Yibon’s, because it failed to comply with certain solicitation requirements. 

In evaluating Sunglim’s proposal the agency identified several strengths and no weaknesses with respect to the key factor, the management plan. Based upon this evaluation, the agency assigned Sunglim’s proposal the highest rating, “outstanding” and ultimately selected Sunglim’s proposal for award.

Yibon filed a protest of the award with GAO, challenging the agency’s exclusion of its proposal from the competition. In response to Yibon’s protest, the agency decided to take corrective action on the basis that “the solicitation’s instructions might be confusing.” 

The agency subsequently suspended performance of the contract awarded to Sunglim. The agency also issued a solicitation amendment that clarified the solicitation requirements and, among other items, requested revised proposals from all of the original offerors. Along with the amendment, the agency sent discussion questions to some offerors, which included weaknesses that the agency identified in evaluating their proposals. The agency’s discussion letter to Sunglim did not provide information as to any aspect of the proposal that it could strengthen because the agency’s evaluation of Sunglim’s initial proposal did not identify any such weaknesses.  Both Yibon and Sunglim submitted revised proposals; Sunglim’s was not materially changed from its initial proposal.  

A new agency evaluation board, in reviewing Sunglim’s revised proposal, identified multiple strengths, but also identified a weakness in the management plan proposed. Because of this weakness, Sunglim received a rating of “good” instead of the “outstanding” rating the agency assigned to the initial proposal. 

In evaluating Yibon’s revised proposal the evaluation board identified several strengths and no weaknesses under its proposed management plan and assigned a rating of “outstanding.” Based on the evaluation of Yibon’s management plan, and because of its lower price coefficient, the agency selected Yibon’s proposal for award. In other words, Yibon had now replaced Sunglim as awardee. 

Sunglim subsequently filed a protest challenging the agency’s evaluation of its revised proposal. Sunglim argued that the relevant part of its proposal submitted following the agency’s corrective action had not materially changed from its initial proposal and the agency failed to conduct meaningful discussions when it issued the amendment to the solicitation. 

In response, the agency acknowledged that the evaluated weakness in Sunglim’s revised proposal under the most important factor, management plan, “resulted in Sunglim’s management plan rating declining from Outstanding to Good.” However, the agency asserted that it could not have identified this weakness to Sunglim in the discussion letters issued because the initial evaluation identified no significant weaknesses or deficiencies. Since the weakness did not exist in the record there were no discussion items to provide to Sunglim.

GAO disagreed with the agency and sustained Sunglim’s protest. GAO in its ruling expressed that “discussions with offerors must be meaningful.” In explaining meaningful GAO wrote “[a]n agency must point out weaknesses, excesses or deficiencies in a proposal that require correction or amplification in order for the offeror to have a reasonable chance for award. At a minimum, the agency must discuss all deficiencies, significant weaknesses and adverse past performance information to which the offeror has not had an opportunity to respond.” In this regard, when an agency seeks revised proposals, its reevaluation may identify flaws in a materially-unchanged proposal that the agency would have been required to discuss with the offeror had the flaws been identified when the proposal was initially evaluated.  In that situation, the agency must reopen discussions in order to disclose its concerns, thereby giving all offerors similar opportunities to revise their proposals.”

GAO concluded that the weakness the agency identified in Sunglim’s final proposal was under the most important evaluation factor and the factor that ultimately led to the agency awarding the contract to Yibon.  Therefore, the flaws the agency identified in Sunglim’s proposal were a significant factor in Sunglim losing the award. As a result, GAO determined that the agency was obligated to reopen discussions with Sunglim to disclose the newly-identified, pre-existing weakness. Because the agency did not reopen discussions,  the agency failed to conduct meaningful discussions with Sunglim.

GAO sustained Sunglim’s protest and recommended that the agency reopen the procurement, conduct appropriate discussions with all offerors whose proposals were in the competitive range, request revised proposals, and make a new source selection decision.

In this matter, the agency arguably could not provide a discussion of Sunglim’s weaknesses which were not originally identified. However, as GAO agreed, the agency should have disclosed the flaws to Sunglim once they were discovered. Sunglim, in effect, was punished because it originally provided a good proposal.  GAO’s decision supports a basic sense of fairness in procurements; that all offerors have the same information and same opportunities in the solicitation process. This same principle should hold true in cases where an agency reopens a solicitation, seeks revised proposals and provides discussion items to the prior offerors. The underlying purpose of an agency issuing discussion letters is to make offerors aware of weaknesses identified in their proposals with the ultimate goal of getting the best response.

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