Government Contracts Monitor

Beyond Spoon-Feeding: When an Agency Holds Out in Discussions

May 15, 2016

In a negotiated procurement, it is axiomatic that, when discussions are initiated, an agency must hold “meaningful discussions” with all offerors. On the other hand, the Government Accountability Office (GAO) has held time and again that an agency need not “spoon-feed” an offeror by identifying every area in which an offer could be improved. In Crowley Logistics, Inc., the GAO addressed the difference between spoon-feeding an offeror and providing it with sufficient information to consider discussions meaningful and to allow the offeror a meaningful opportunity to make its otherwise acceptable proposal more competitive.

The procurement in question involved a single ID/IQ freight contract with a $3 billion ceiling, awarded by the U.S. Transportation Command (TRANSCOM). The RFP provided for award based on a best-value tradeoff, considering 5 factors: Corporate Experience, Business Proposal, Technical Capability (including 4 subfactors, one of which was Operational Support, and called for an evaluation of quality control), Past Performance, and Price. For each of the four Technical Capability subfactors, an offeror would be assigned adjectival ratings for both technical merit and risk.

After evaluating initial proposals, the agency created a competitive range of three offerors. Several rounds of discussions with each offeror were held before the agency requested each offeror’s final proposal revision (FPR). On final analysis, Crowley was the lowest priced offeror, and the awardee, GENCO, had the second-lowest price. GENCO’s proposed price was 13.64% higher than Crowley’s, but the source selection authority determined that award to GENCO was worth the price premium and represented the best value to the government.

In the final ratings by the Source Selection Evaluation Board, both Crowley’s and GENCO’s proposals were determined to be “Acceptable” for two of the four non-price factors. Similarly, their evaluations were identical for three of the four technical capability subfactors. For the fourth subfactor (Operational Support), however, Crowley received a rating of acceptable/moderate risk while GENCO was determined to be outstanding with low risk. Specifically, the agency was concerned that Crowley had not made clear how it would proactively ensure early identification and resolution of performance issues to mitigate impact on contract performance.

Crowley also received a Neutral/Unknown Confidence Past Performance rating, in contrast to GENCO’s Satisfactory Confidence determination. Its acceptable and neutral ratings for the technical capability and past performance factors, respectively, put Crowley behind the other two offerors for these factors. After the Source Selection Authority Council recommended award to GENCO, the SSA agreed that GENCO’s higher-rated, higher priced proposal represented the best value to the government, and made the award to GENCO. After its debriefing, Crowley protested to the GAO, alleging that the agency had not conducted meaningful discussions and that its failure had prejudiced Crowley. The GAO agreed with regard to Crowley’s technical capability rating.

The fundamental purpose of discussions is to identify deficiencies and significant weaknesses that an offeror could reasonably address in a proposal revision in order to materially enhance the offeror’s potential for award. After TRANSCOM’s initial evaluation of Crowley’s proposal—and during the subsequent discussions—the agency never addressed the particular issue with which it was apparently concerned: Crowley’s ability to recognize and internally handle performance issues without government involvement, to keep operations running smoothly as required by the Operational Support subfactor. The agency’s procurement record documented the evaluators’ concerns about this particular issue from the initial evaluation forward, but assessed no strengths, weaknesses or deficiencies with regard to the subfactor. However, the agency nonetheless assigned Crowley a Technical Capability rating of acceptable and evaluated its risk as moderate.

Indeed, the agency sent Crowley four evaluation notices (ENs) on the Operational Support subfactor, and not one dealt with its internal risk mitigation concern. Crowley responded to each EN—and the SSEB evaluated its responses to each as satisfactory—yet TRANSCOM again noted its concern in the procurement record that Crowley would not internally mitigate performance problems. After FPR evaluation, Crowley’s rating for this subfactor thus remained unchanged. The agency’s decision document reiterated that Crowley’s lower rating for Operational Support was due to concerns regarding Crowley’s proactivity in identifying and addressing performance issues that might arise during performance. Because the agency’s concern was a material factor in the trade-off decision, Crowley was prejudiced by the agency’s failure, and Crowley was never afforded the chance to respond to the concern, GAO sustained the protest.

This decision provides an important reminder of why unsuccessful offerors should request a debriefing and scrutinize the information provided with great care. What you learn may provide a strong basis for a protest. While the agency doesn’t have to give away the playbook to each offeror for discussions to be meaningful, it does have to address any significant concern that plays a material role in the agency’s decision, and cannot expect an offeror to read the evaluators’ minds. An offeror does not have to be spoon fed, but it should be told where to find the food.