Government Contracts Monitor

Sometimes Less Than Complete Information Is Enough, but Don't Count on It

September 6, 2018

As a general rule (and best practice), offerors should always strive to ensure their proposals provide complete and accurate information that strictly complies with the solicitation requirements--and gives the procuring agency what it needs to make a favorable award decision. To do otherwise is to flirt with an agency determination that the proposal is nonresponsive or otherwise insufficient. In some cases, however, offerors may be able to achieve responsiveness without presenting every bit of information that the solicitation arguably requires, so long as the information provided is sufficient for the Government’s purposes. This is the situation described in the Government Accountability Office (GAO) decision in Addison Construction Company; B-416525; B-416525.2 (September 4, 2018).

The case involved a Department of Energy (DOE) solicitation seeking a contractor to construct and complete a 345-kV capacitor bank at the Liberty Substation for the DOE Western Area Power Administration’s Desert Southwest Region. The solicitation anticipated award of a fixed-price contract to the lowest-priced bidder whose bid conformed to the solicitation requirements. As a part of the work to be performed, the successful bidder was to purchase and install certain electrical equipment and related items.

Importantly, the solicitation incorporated both Federal Acquisition Regulation (FAR) 52.225-9, Buy American--Construction Materials, and FAR 52.225-10, Notice of Buy American Requirement--Construction Materials. FAR 52.225-9 requires the contractor to use only domestic construction material in performing the contract, unless an exception applies. One such exception applies where the cost of domestic construction material is unreasonable, i.e., when the cost of domestic construction material exceeds the cost of foreign material by more than six percent. If no exception applies, FAR provision 52.225-10(d)(3)(i) requires the agency to reject, as nonresponsive, any bid that is based on the use of foreign construction materials.

Of the 10 bids the agency received in response to the solicitation, Addison Construction Company’s was the second lowest. After the lowest bid was rejected as nonresponsive, the agency considered Addison’s bid, which requested an exception to the Buy American Act based on the unreasonable cost of three categories of items: (1) switches; (2) a disconnecting switch with grounding blades; and (3) station posts. The agency verified with Addison that it intended to include the foreign version of these items in its bid. Then the contracting officer reviewed the bid and determined that it was nonresponsive because it failed to provide information required by FAR 52.225-9 and FAR 52.225-10.

When the agency awarded the contract to the next lowest-priced bidder, Addison protested, arguing in part that its bid met the essential requirements of the solicitation, including those governing requests for exceptions to the Buy American Act based on the unreasonable cost of domestic material. More particularly, Addison asserted that its bid fully declared its intent to provide foreign-manufactured construction materials and also provided pricing and location information demonstrating that the material qualified for the applicable exception.

FAR 52.225-9 requires a contractor seeking an exception to the Buy American Act construction materials requirement on the basis of unreasonable cost to include, with its bid: the price, quantity, unit of measure, and a description of the foreign and domestic materials at issue, along with a detailed justification for the use of foreign construction materials, a “reasonable survey of the market,” and a completed price comparison table in the format provided in FAR clause 52.225-9(d). It also requires the contractor to provide the time of delivery or availability of the materials, the location of the construction project, specific supplier information (including the name, address, and telephone number for the supplier, and a copy of the supplier’s response or a summary thereof), and “other applicable supporting information.” FAR clause 52.225-9(c), (d). Here, Addison’s bid included a chart that listed, for both the foreign construction material included in the bid and the corresponding domestic material: a description of the material, unit of measure, quantity, unit price, total cost, and country or state of origin. Addison’s bid did not, however, contain the name, address, telephone number, and contact information for the suppliers that had been surveyed, a copy of such suppliers’ responses, or any other supporting information.

The DOE argued that, because Addison’s bid was missing information required by the FAR, the agency could not determine whether a Buy American Act exception applied and, therefore, it properly determined that Addison’s bid did not qualify for the requested exception and rejected it as nonresponsive for failing to meet the domestic construction material requirement.

The GAO explained that, in order to be considered for award, a bid requesting the use of foreign construction material on the basis of the unreasonable cost of domestic construction material must establish on its face the amount of foreign material to be used and the price of that material. This requirement reflects the need to eliminate the bidder’s opportunity to manipulate its overall price--and thus relative standing--after bid opening. But, according to the GAO (and its prior decisions), a bid should not be rejected as nonresponsive simply because it does not include all of the information needed to determine whether a Buy American Act exception applies so long as the agency can obtain the missing information through its own investigation and that information would not affect the relative standing of the bidder.

In this case, the GAO found that the information provided in Addison’s bid made it responsive. The GAO noted that, while the bid did not include all of the information required under FAR 52.225-9 and FAR 52.225-10, it nonetheless included sufficient information for the agency to understand the foreign material being provided, as well as the quantity and costs of such material. Thus, while the bid was missing required supporting documentation and details, the omission of such information would not enable Addison to alter the price, or change the relative standing, of its bid. The GAO also rejected DOE’s argument that the inclusion of FAR 52.225-9 and FAR 52.225-10 rendered prior GAO decisions inapplicable by creating an inflexible requirement for bidders to submit specific information to support any request for a Buy American Act exception.

In this regard, the GAO noted that, while these requirements clearly require the submission of such information in order “[t]o permit evaluation of [exception] requests,” nothing in either FAR 52.225-9 or FAR 52.225-10 requires an agency to reject a bid as nonresponsive simply because it does not include such information. Instead, the GAO explained, the agency is permitted to conduct its own investigation to determine the applicability of the requested Buy American Act exception provided that the information not included would not be the type that would enable a bidder to alter or amend the price, or relative standing, of its bid. Here, because the missing information would not allow Addison to alter its acceptance of the IFB terms, the GAO concluded that the agency erred in determining that the missing information required the rejection of the exception request.

At the end of the day, the GAO recommended that the DOE investigate whether the foreign construction materials listed in Addison’s bid qualify for an exception to the Buy American Act on the basis of unreasonable cost and then identify the lowest-priced responsible bidder. Obviously, the DOE investigation might not lead to an award to Addison, but it is certainly better than being thrown out of the running altogether. In any event, offerors should still do their best to avoid such arguments on the front end by providing all conceivably relevant or necessary information in their proposals. But if the Government ever tosses your proposal for lack of information, this decision and the principles it stands for may come in handy.

Attorneys

Lindsay Simmons