If you google “GAO discussions,” you will likely see a multitude of results talking about “meaningful discussions.” Source selection authorities (SSA) are given a large amount of discretion beyond that. Despite the high level of discretion SSAs have, there are still certain boundaries that they must work within. These boundaries are premised on the fairness principle that is woven throughout the FAR and other procurement rules. In particular, the process of discussions must fit within these boundaries. Discussions allow all offerors that are still being considered for award an equal opportunity to address deficiencies, weaknesses, and adverse past performance information. But what if the contracting agency engages in discussions with only one offeror, who also happens to be the awardee?
Discussions are governed by FAR §15.306(d) and “occur when an agency communicates with an offeror for the purpose of obtaining information essential to determine the acceptability of a proposal, or provide[ ] the offeror with an opportunity to revise or modify its proposal in some material respect.” Gulf Copper Ship Repair, Inc., B-293706.5 (Sept. 10, 2004); FAR 15.306(d). Contracts may be awarded without conducting discussions, but the solicitation must state this intention. If the agency left the door open to discussions, and finds it necessary to conduct discussions, the rationale must be included in the contract file.
In Rice Solutions, LLC, the Department of Health and Human Services (HHS or Agency) released a solicitation that stated it planned to make an award without conducting discussions, but the Agency reserved the right to conduct them if deemed necessary. Rice Solutions, LLC, B-420475 (April 24, 2022). HHS received three proposals in response to the solicitation, which were reviewed and rated by the Agency’s technical evaluation team. The protester, Rice Solutions, was determined to be the second choice for the award, but the Agency only entered into discussions with the eventual awardee, and requested a best and final offer.
The eventual awardee was permitted to submit a revised proposal, as its best and final offer. That best and final offer led to award of the contract. The Agency’s rationale stated that Rice Solutions’ proposal, as well as the proposal of a third offeror, was technically unacceptable. Therefore, the Agency believed it was not required to conduct discussions with anyone other than the awardee. The Agency also asserted that there was no competitive prejudice created when it allowed only the eventual awardee to submit a revised proposal, because Rice Solutions was not within the competitive range.
However, FAR 15.306(d) requires agencies to involve all offerors who are found to be within the competitive range in discussions. Though the Agency asserted that Rice Solutions was outside of the competitive range, there was no such documentation. GAO stated, “[w]here, as here, there is no record or evidence that the Agency established a competitive range, we will not infer the existence of a de facto competitive range in order to validate an Agency’s omission of an offeror during its conduct of discussions.” Therefore, without documentation showing the establishment of a competitive range, the Agency could not demonstrate that Rice Solutions’ exclusion from discussions was reasonable.
Further, GAO, when reviewing protests on the grounds of unreasonable discussions, will look to whether the protester has established that it “could have revised its proposal in a manner that would result in a substantial chance of the protester receiving the award” if it had only been included in meaningful discussion. GAO found it possible that Rice Solutions may have been within the competitive range if the Agency had completed a competitive range determination and if the Agency had involved Rice Solutions in discussions. But the Agency did neither, and for that, GAO sustained Rice Solutions protest.
So what are the takeaways here? Three things:
First, GAO will not establish a de facto competitive range if the agency fails to do so itself;
Second, agencies must include all offerors in discussions if competitive range has yet to be established; and
Third, discussions, though not required, have the potential to make or break an offer.
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