Government Contracts Monitor

Agency Must Update Solicitation When It Changes Its Buying Strategy

January 20, 2015

By: Lindsay Simmons

The Government Accountability Office (GAO) recently sustained a protest where the Navy’s evaluation did not reasonably reflect its planned purchases.  Specifically, GAO found that the Navy should have updated its solicitation for a $2.4 billion information technology modernization contract as soon as the Navy changed its buying strategy. “Where an agency’s requirements materially change after a solicitation has been issued,” but before the award, the agency “must issue an amendment to notify offerors of the changed requirements and afford them an opportunity to respond.” CGI Federal Inc., B-410330.

CGI Federal Inc. protested the Navy’s award of contracts to five other offerors for the production of network systems to be installed on Navy ships.  CGI argued that the Navy failed to amend its price evaluation scheme even though it knew, prior to award, that the scheme in the solicitation no longer reflected the agency’s ordering needs.

CGI argued that the agency’s price evaluation methodology – to compare offerors’ prices at the not-to-exceed (NTE) order level of 15 units – did not match the agency’s needs as determined prior to award.  Given this disconnect, CGI claimed the Navy was required to amend the solicitation’s evaluation scheme to provide a basis for comparing offerors’ prices that matched the agency’s ordering needs. According to CGI, if the price analysis had been based on unit prices that matched the Navy’s revised plans – that is, for NTE quantities of 5 per delivery order – CGI’s  evaluated price would have been far more competitive, having an impact on the best value tradeoff decision. GAO agreed.

According to GAO, this case “turns on two fundamental principles”:

First, “while it is up to the agency to decide on some appropriate and reasonable method for evaluating offerors’ prices, an agency may not use an evaluation method that produces a misleading result.”  Said another way, “the method chosen must include some reasonable basis for evaluating or comparing the relative costs of proposals, so as to establish whether one offeror’s proposal would be more or less costly than another’s”.

Second, “where an agency’s requirements materially change after a solicitation has been issued, it must issue an amendment to notify offerors of the changed requirements and afford them an opportunity to respond.”

Here the importance of the price evaluation scheme in the RFP changed between the closing date for receipt of proposals and the date of award. Specifically, during the source selection process the agency decided to increase the number of awardees and the number of delivery orders issued, and significantly decrease the number of units to be acquired under each delivery order. “Given this fundamental shift in the agency’s anticipated ordering plans, it was unreasonable for the agency to proceed with a price evaluation methodology that was divorced from these plans.” According to GAO, at that point the agency was required “to amend the solicitation in a manner that would enable it to evaluate, and make a tradeoff decision based on, the offerors’ relative relevant prices.”

GAO recommends that the Navy amend its price evaluation to (i) “reflect its actual ordering needs”, then (ii) “invite the offerors to submit revised prices” and, finally, (iii) make a new source selection decision.  The Navy could also simply increase the number awardees to six and offer CGI Federal a CANES contract – perhaps the most expedient option.

The Take Away: Procurements often take place in fluid environments.  When the ground shifts, make certain you are not prejudiced by an agency’s failure to alter its solicitation provisions to reflect and match the shift.

Lindsay Simmons is responsible for the contents of this article @ Jackson Kelly PLLC