Government Contracts Monitor

Short Take: Agencies Still Aren’t Required to Tell You When Your Price Is Not Competitive

April 3, 2016

Last Spring, we published an article explaining that the requirement that discussions be "meaningful” does not ensure you will obtain any information about your proposed price. The recent Government Accountability Office decision in Southeastern Kidney Council, B-412538 (March 17, 2016) makes clear that the GAO has not changed its mind on this issue.

The decision involved a protest by the Southeastern Kidney Council (SKC) alleging in part that the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) had failed to conduct meaningful discussion because “the agency should have informed SKC that its proposed price, which was higher than [the awardee’s] proposed price, was too high to be competitive. . . . Specifically, SKC argues the agency should have informed it that it needed to reduce its staffing, which would have resulted in a lower proposed price.”

Once again, the GAO made short work of this argument. As the GAO explained, while agency discussions must be meaningful (i.e. sufficiently detailed that they lead an offeror into the areas of its proposal requiring amplification or revision), and must address a proposal’s deficiencies and significant weaknesses, “the precise content of discussions is largely a matter of the contracting officer’s judgment.” Further, “[t]here is no requirement . . . that an agency inform an offeror during discussions that its price may be too high, where the offeror’s price is not considered excessive or unreasonable.

Where, as was the case here, the agency did not consider an offeror’s proposed price excessive or unreasonable (or find that the offeror’s final proposed staffing level was too high) “there is no support for a finding that the agency’s discussions with the protester, in this regard, were unreasonable.”

If you’re still laboring under the belief that fairness requires agencies to reveal such price information during discussions, let it go. Your sense of fairness may require that level of detail, but the GAO does not.