Change in Ordering Strategy After Final Proposal Revisions Requires That the Solicitation Be Amended
Updated: Aug 18, 2020
By Dick Lieberman, Consultant and Retired Attorney
There are two fundamental reasons for conducting discussions in negotiated procurements and allowing contractors to modify their initial proposals:
(1) To permit contractors to respond to government-determined deficiencies and weaknesses in their offer and revise it so as to make it a better value to the government.
(2) To allow the Government to modify the solicitation when specifications or needs have changed since the original proposals were submitted, and to permit contractors to revise proposals to meet the changed needs .
The Government Accountability Office (“GAO”) has frequently sustained bid protests where there were flaws in the discussion or final proposal revision (“FPR”) process. In evaluating the proposals of seven contractors submitted in response to a Navy solicitation for network systems on ships in support of the Consolidated Afloat Networks and Enterprise Services (“CANES”) Program, the agency failed to amend its solicitation when it changed the solicitation’s price evaluation scheme so much that it no longer reasonably reflected the ordering strategy to be used in the execution of the final contract. CGI Federal, Inc., B-410330.2, Dec. 10, 2014.
The CANES RFP provided for award of up to three indefinite delivery/indefinite quantity contracts. During the evaluation of the seven offers, the Navy changed its mind and decided to make award to the five top-ranked offerors. At the same time, the Navy changed its strategy for placing delivery orders with the selected contractors. Instead of placing 3-4 orders of large quantities of CANES units annually as planned in the Request for Proposals (“RFP”), the Navy decided to issue more orders for smaller quantities of CANES units in order to achieve more competition on a per order basis. The Navy believed that this would reduce risk. However, the Navy’s price evaluation of the proposals was based solely on an ordering level of 15 units-which no longer matched the Navy’s actual plans for the contract.
The GAO pointed to two fundamental principles that had been violated in the Navy’s source selection decision:
(1) although an agency must decide on an appropriate and reasonable method for evaluating offerors’ prices, the agency may not use an evaluation method that produces a misleading result.
(2) where an agency’s requirements materially change after a solicitation has been issued, it must issue an amendment to notify offerors of the changed requirements and afford them an opportunity to respond (with an FPR, for example).
GAO sustained CGI’s protest, holding that where “the agency’s ordering intended ordering strategy does not anticipate placing orders at the 15 unit per order level, we fail to see how comparing prices at this level, and using such prices as the basis for a [best value] tradeoff decision [is] reasonable.” The GAO recommended that the solicitation’s price evaluation methodology be amended to reflect the actual ordering needs, that the Navy obtain revised prices, and then make a new source selection decision.
CGI points out how important it is that agencies be transparent in their solicitation especially if their needs are revised after proposals are received. Any change in a strategy that materially affects the source selection must be communicated to all offerors, and they must be allowed to respond.
Multiple BAFOs or FPRs
Although CGI does not i