This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its September 2006 decision in Advanced Systems Development, Inc., the U.S. Government Accountability Office (GAO) ordered the Department of Defense to seek new tenders and conduct a re-evaluation after finding that the Department improperly evaluated price and permitted improper post-bid price revisions. The case involved a Request for Proposals (RFP) for information technology support services at a number of Virginia facilities, including the Pentagon. The complainant alleged that the Department failed to properly evaluate the pricing of its competitor’s proposal and permitted that competitor to make improper post-bid price adjustments.
The GAO agreed, finding that the evaluation of pricing was inconsistent with the rules set out in the RFP:
In our view, the record here lacks any persuasive evidence that the agency examined the completeness of the offerors’ price proposals as called for by the RFP. We note that the solicitation here did not merely use the term “completeness” in setting out the parameters of the price evaluation, but explained, in detail, that the agency planned to evaluate completeness, and identified the kind of back-up pricing data that offerors needed to produce for the agency’s evaluation; the agency’s failure to conduct this review was clearly contrary to the solicitation’s requirements. See OMNIPLEX World Servs. Corp., B-291105, Nov. 6, 2002, 2002 CPD ¶ 199 at 10.
The GAO also found that the Department improperly permitted the selected proponent to make post-submission price revisions to its proposal. It therefore directed the Department to accept revised proposals and engage in a re-evaluation:
We find that the agency conducted flawed discussions with KENROB regarding price, improperly abandoned the review of completeness in its price evaluation, and performed an unreasonable evaluation of the KENROB proposal under the initial transition plan subfactor of the technical evaluation factor. As a result, we recommend that the agency reopen discussions, request revised proposals, evaluate those submissions consistent with the provisions of the solicitation, and make a new selection decision.
As this case illustrates, permitting post-submission pricing adjustments can result in a breach of the procurement rules. Purchasing institutions should construct a clear price evaluation structure that enables proponents to make responsive submissions on their first attempt. Furthermore, purchasing institutions should draft price-assessment rules that are consistent with their intended evaluation process, since inconsistencies between what is stated in an RFP and what is evaluated in practice can result in successful legal challenges.
