This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
The U.S. Government Accountability Office (GAO) adjudicates bid protests brought against the US federal government and has a long track record of striking down flawed evaluation and award decisions.
By way of recent example, in its January 2016 decision in RELI Group Inc., the GAO ordered the government to amend and re-issue its life cycle support services Request for Proposals (RFP) after finding that its past experience criteria contained a latent ambiguity regarding whether prime bidders could rely on past experience as subcontractors. While noting that bidders generally have the onus of complaining prior to the bid deadline when they discover a patent ambiguity (such as an “obvious, gross, or glaring error”), the GAO upheld the protest, finding that the vague past experience requirement was a more subtle latent ambiguity that was subject to more than one interpretation and could therefore undermine a fair evaluation.
In its December 2016 decision in Target Media Mid Atlantic, Inc., the GAO ruled that the Navy had failed to conduct a proper cost realism analysis in its award of a cost-plus contract. As the GAO noted, when evaluating bids on cost-plus contracts, the government should not accept bidder cost estimates at face value “since the estimates may not provide valid indications of the final actual costs.” However, the GAO found that the government failed to meet the requirements of a valid cost analysis since it never compared the cost estimates against prevailing market rates or against the salaries of incumbent staff. It therefore ordered the government to conduct a re-evaluation.
In its December 2016 decision in Patriot Solutions, LLC, the GAO ordered the government to re-evaluate or redraft and re-bid a corrugated containers RFP. While the original RFP rules stated that the award would go to the highest score, the government ultimately bypassed the high score and awarded to the lowest price. The high scoring proponent challenged the evaluation. The GAO ordered the government to either re-evaluate the proposals and award to the highest score or, if it could not justify awarding to a higher price, cancel the process, redraft a low bid solicitation, and re-tender the requirement.
In its February 2016 decision in Cascadian American Enterprises, the GAO ordered a re-evaluation in a case involving a landscaping services RFP after finding that the Department of the Army had engaged in unfair post-bid discussions with the winning bidder. The GAO found that the Department went beyond mere “clarifications” when it engaged in discussions with the winning bidder to substantiate whether its proposed personnel met the mandatory past experience requirements. The GAO determined that all of the bidders should be given the same opportunity to engage in post-bid discussions during a re-evaluation process that could potentially lead to a new contract award decision.
In its June 2017 decision in Red River Computer Company, Inc., the GAO ordered a re-evaluation after finding inconsistencies in the competing price offers. The case dealt with a Request for Quotations (RFQ) for enterprise-wide computing and cloud computing services. While the solicitation called for “on-demand” pricing, one of the bidders offered “reserved pricing” based on different costing assumptions. The complainant argued that its competitor’s pricing failed to comply with the solicitation requirements. The GAO agreed and ordered a re-evaluation after finding that the government’s evaluation of the non-compliant competing price offer was unreasonable.
In its January 2017 decision in Walker Development & Trading Group, Inc., the GAO found that the government failed to provide proper reasons for the cancellation of a tendering process. The complainant brought a challenge after responding to an RFQ for laundry services that was subsequently cancelled. The GAO found that the government provided “conflicting rationales” when the government decided to cancel its tendering process and directly awarded the contract to another supplier. After noting that the government bears the onus of justifying its cancellation decisions, the GAO voided the direct award and ordered a new tendering process.
As these recent cases illustrate, US federal government entities must follow broadly established due process rules in the evaluation and award of contracts or face having those decision overruled in the face of recurring bid protest challenges.
