Contractor Can’t Protest an LPTA Procurement in Disguise

A recent decision from the GAO serves as a harsh reminder that protests based on the terms of the solicitation must be filed pre-award.   

In Megatech Corporation, B-417582 (June 25, 2019), a contractor brought a protest, alleging that the United States Department of the Navy had improperly evaluated proposals received in response to a Request for Quotation (“RFQ”) by using a Lowest Price Technically Acceptable (“LPTA”) methodology, when the agency should have done a best value/tradeoff analysis.

The Navy had previously sought bids in connection with the provision of commercial Chevy 350 engine trainers and mobile start cards for the Interservice Mechanic A-School at the Naval Construction Training Center at Naval Base Ventura, in Port Hueneme, CA.  The RFQ stated that “Buyers and Sellers agree to conduct this transaction through the Unison Marketplace in compliance with the Unison Marketplace Terms of Use.”  The listing on UnisonMarketPlace.com stated as follows:

“Evaluation Criteria/Basis of Award:  Sellers understand that the Marketplace ranks all Bids by price; however, pursuant to applicable acquisition regulations and/or departmental guidelines, Buyers may use criteria other than price to evaluate offers.  Accordingly, please note that, unless otherwise specified in the Buy Terms, below, to the extent required by applicable regulations and/or guidelines, award will be made to the responsible Seller whose offer confirming [sic] to the solicitation will be the most advantageous to the Buyer on the basis of price, technical capability, delivery and past performance.”

The RFQ incorporated by reference FAR § 52.212-2, Evaluation – Commercial Items, which addresses “significant evaluation factors,” and provides:

“The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, price and other factors considered. The following factors shall be used to evaluate offers: …”

Contracting officers are supposed to insert significant evaluation factors into the this clause when it is incorporated into a solicitation; the contracting officer in this case did not provide this information, nor did he/she fill in the blanks that are intended to instruct offerors regarding the relative importance of the evaluation factors.  In short, while FAR § 52.212-2 was incorporated into the RFQ, no information about evaluation criteria was actually provided.

After responses to the RFQ were submitted, the Navy determined that EMD Marine and Supply, Inc, (“EMD”) had submitted the lowest-priced, technically-acceptable bid.  On that basis, the Navy gave EMD the award.  Megatech Corporation (“Megatech”) protested, arguing that the Agency had failed to properly consider the non-price evaluation factors, and had not given consideration to the “value” of the bids provided.  In other words, Megatech argued that LPTA was not the proper evaluation methodology, and that a best-value/tradeoff analysis was required under the terms of the RFQ.

At first, the Navy defended its award decision by arguing that its LPTA evaluation was entirely consistent with the terms of the RFQ.   After the GAO pointed out that the RFQ terms were, in fact, unclear, the agency shifted strategy.  The agency acknowledged that the terms of the RFQ were patently ambiguous, but – it argued – the ambiguous RFQ terms should have been protested prior to responding to the RFQ.  In short, the agency admitted that the RFQ was inherently flawed, but argued for the dismissal of the protest on timeliness grounds.  This strategy paid off, as the GAO ultimately sided with the agency.

The GAO found that the language of the RFQ “could be reasonably interpreted consistent with” an LPTA evaluation, but “could also be interpreted as providing for a best value tradeoff.”  Because there were two reasonable interpretations of the RFQ terms, the solicitation was ambiguous. Pursuant to 4 CFR § 21.2(a)(1), a contractor must protest ambiguous terms in a solicitation prior to the deadline for responding to that solicitation.  Because no one had protested the terms of the RFQ before the response deadline, the GAO concluded that the agency was free to use either interpretation of the RFQ terms, and therefore was permitted to award the contract on an LPTA basis.

Unfortunately, this is not an uncommon scenario.  In recent months, we have seen quite an uptick in solicitations that blur the lines between LPTA and best value – especially in solicitations that make use of FAR § 52.212-2 .  Many contractors do not realize this until it is too late – i.e., until after the award has been made to another contractor and the deadline to protest the ambiguous solicitation language has long passed.   This leaves the contractor without any recourse, and without a contract.

You can avoid this unfortunate result if, when competing for a contract, you make sure to carefully read all of the solicitation’s terms and – to the extent there are terms that you find confusing, ambiguous, incorrect, etc. – analyze your pre-award protest rights.  The particular LPTA issue raised in Megatech may be less of a problem after the pending LPTA changes are finalized.  But the underlying lesson still applies – if you have questions about, or objections to, the terms of a solicitation, don’t wait to do something about it!  Waiting until after award is made will be too late.  To properly preserve your rights, you likely need to file a pre-award protest before the responses to the solicitation are due.  If you have questions about whether you have a basis for a pre-award protest, we are here to help!

 

 

About the Authors

Maria L. Panichelli

Partner

Maria is a partner and the Chair of the Government Contracting department.   She focuses her practice exclusively on federal government contracting and procurement, guiding her clients throughout the entire lifecycle of their...

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Michael A. Richard

Associate

Michael is an attorney in Obermayer’s Government Contracting Department, where he excels at getting clients to the settlement table. Michael’s tenacity is truly a force to be reckoned with. Over the past...

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