Government Contracts Monitor

Led Astray? Agency Discussions Are Sometimes Misleading

April 20, 2015

Agencies may not mislead offerors by framing discussion questions that “misinform the offeror concerning a problem with its proposal.” CFS-KBR Marianas Support Services, LLC; Fluor Federal Solutions LLC, B-410486, January 2, 2015. Discussions, when held by an agency in connection with a negotiated procurement, must “identify deficiencies and significant weaknesses in an offeror’s proposal that could reasonably be addressed” and, thereby, “enhance the offeror’s potential for receiving awards.” The Navy failed to follow this protocol in CFS/Fluor and the General Accountability Office (GAO) upheld the resulting protest.

CSF/Fluor is an interesting case but one our readers must be careful not to misinterpret. The protest was based on a narrow set of facts. Specifically, Fluor Federal Solutions LLC (Fluor) initially proposed what it considered to be sufficient staffing to perform the Navy contract. The Navy, using an undisclosed government estimate of the number of staff sufficient for its requirements, concluded that Fluor’s proposed staffing was inadequate, and by a specified number of full time equivalents (FTEs). In the discussion questions posed, the Navy advised Fluor of this staffing deficiency, as follows:

The TET evaluated whether proposed FTEs (quantity and labor mix) are realistic . . . . The TET’s realism review determined your proposed staffing level was not sufficient by [X number] FTEs. . . . Please review and revise accordingly.

Although the agency subsequently issued a clarification letter stating the discussions question was not intended to dictate the number of FTEs proposed, but only to verify that Fluor could perform the requirements with the number of FTEs it had proposed, the agency did not retract its discussion question. Subsequently, Fluor revised its proposal and added the precise number of FTEs identified by the agency as lacking in its initial proposal. Not surprisingly, as a result, Fluor’s final cost proposal was significantly higher. In the end, although Fluor had the highest ranked proposal from a non-cost standpoint, because of the higher cost triggered by the increase in FTEs, it was not selected for the award.

GAO found that (i) the Navy’s discussion question regarding the inadequacy of Fluor’s staffing led Fluor to increase its staff “to a degree that ultimately led its proposal to be noncompetitive”; (ii) Fluor increased its proposed staffing levels “in direct response to the agency’s discussion question”; and, thus, (iii) Fluor “was misled to its competitive prejudice.”

An aspect of this protest that may have colored GAO’s decision-making is that the Navy initially gave both protesters, CFS and Fluor, and the awardee, DZSP, “unacceptable” ratings for the staffing and resources evaluation factor, then posed the same discussion question to all three, whereupon they each increased their staffing levels. But only one, Fluor, was misled by the Navy and, in reliance on the FTE number in the discussion question, increased its staff to the extent indicated as necessary.

Take away: First, make certain you understand the agency’s discussion questions. If you don’t, ask for clarification. Second, while it is critical to be responsive to discussion questions that identify deficiencies and significant weaknesses, and to address them fully in your reply and revised proposal, be careful not to mistake an agency’s concerns for a directive. Determine whether an agency is merely questioning whether or how your technical approach meets the requirements of the RFP, or suggesting/directing that you change your approach. The former may only require that you explain, defend and support your proposal. The latter may dictate that you revise it. It is a delicate balance to strike, but an important one.

Attorneys

Lindsay Simmons