Government Contracts Monitor

Agency Failure to Answer Clarification Question

February 23, 2015

A recent decision by the Civilian Board of Contract Appeals (CBCA) demonstrates the importance of both (i) bidders asking questions to clarify potentially ambiguous solicitation provisions, and (ii) agencies providing clear answers to bidder inquiries, definitively resolving any potential solicitation ambiguities. Specifically, in Leeward Construction Corp. v. Department of Veterans Affairs, CBCA No. 3724 (Jan. 26, 2015), the CBCA sustained a contractor claim for asbestos abatement costs where first, the solicitation was ambiguous as to which party was responsible for such costs, next, bidders raised questions, and finally, the agency failed to provide answers resolving the ambiguity. As stated by the Board, “The VA had the opportunity and the responsibility to clarify an ambiguous specification and it chose not to do so.”

The case arose out of an invitation for bids for construction work at a VA Medical Center (VAMC). In the Board’s words, the specifications and resulting contract, with one exception, “certainly require[d] the contractor to perform the asbestos abatement work, as the specification is replete with references to the contractor performing the work.” However, the specification section on asbestos abatement contained the phrase “(PROVIDED BY VAMC)” in its title, as follows:

ASBESTOS FLOOR TILE AND MASTIC ABATEMENT
(PROVIDED BY VAMC)

As stated by the Board, “With this phrase included . . . the specification becomes much less clear about which party is to perform this work.” The Board concluded that this “phrase is obviously inconsistent with the rest of the specification that calls for the contractor to perform the abatement” and, therefore, determined that the specification was “patently ambiguous,” and the contractor had an obligation to inquire. Had the bidders done nothing further, VA would have won and the contractor’s claim to recover the costs of the asbestos abatement would have been denied.

However, fortunately for the contractor here, one or more of the bidders (even if apparently not the contractor here) did inquire during a site visit (“All abatement is by the owner, correct?”), and the VA subsequently posted the questions and VA’s answers as an amendment to the solicitation, twice responding simply by stating “Per contract documents.” The Board obviously viewed this response as inadequate, going so far as to characterize this as a deliberate choice by the VA not to clarify an ambiguous solicitation. The Board stated that “Under these circumstances, the only rational conclusion that a reasonable bidder could draw would be that the VA would perform the work,” stating that “To conclude otherwise would put bidders at risk of losing the award to a bidder who did so conclude.” The Board therefore held that the contractor was entitled to recover its costs plus overhead and a reasonable profit for the subject work.

The Board rejected VA’s suggestion that the actual winner had to have raised the question, stating that “If that were true, there would be no purpose in disseminating the questions and answers to all bidders and to incorporating the questions and answers into the solicitation. Mandating that only the winning bidder’s inquiry is relevant makes little sense. That would necessitate that all bidders ask the same question at the bidders conference to protect themselves, as no one would know at that point who the winning bidder would be.”

The takeaways from this case are (i) bidders need to seek clarification of ambiguous solicitation language, (ii) agencies have a duty to clarify ambiguities and respond clearly to bidder inquiries, and (iii) contractors need to clearly document all elements of their claim and to distinguish between allowable REA preparation and negotiation costs and unallowable claim prosecution costs.