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FAR 11:  Describing agency needs - Latent ambiguity

Comptroller General

RELI argues that the evaluation of its proposal under the relevant experience factor was unreasonable and inconsistent with the terms of the RFP. Protest at 8-11. Specifically, RELI contends that the agency’s determination not to consider [deleted]’s experience with DME support was based on a misinterpretation of the RFP’s instructions. While FDA construed the instructions to permit only one reference to show a subcontractor’s relevant experience, and to require that two of the references be for the prime contractor, RELI contends that the solicitation permitted two of the three required experience submissions to be for contracts performed by the subcontractor(s), and required one to be for the prime contractor. In response, FDA argues that, to the extent the RFP requirement could be read in the manner RELI suggests, it is based on a patent ambiguity and therefore should be dismissed as untimely. Memorandum of Law at 5-8.

An ambiguity exists where two or more reasonable interpretations of the terms or specifications of the solicitation are possible. A party’s particular interpretation need not be the most reasonable to support a finding of ambiguity; rather, a party need only show that its reading of the solicitation provisions is reasonable and susceptible of the understanding that it reached. See Ashe Facility Servs., B‑292218.3, B-292218.4, Mar. 31, 2004, 2004 CPD ¶ 80 at 10.

A patent ambiguity exists where the solicitation contains an obvious, gross, or glaring error, while a latent ambiguity is more subtle. Id. Assuming an ambiguity exists, then our Office must determine whether the ambiguity is patent or latent in order to determine whether the protest was timely filed. In this regard, a patent ambiguity, which is considered to be apparent from the face of the solicitation, must be protested prior to the closing date for submission of proposals to be considered timely. 4 C.F.R. § 21.2(a)(1).

Here, the lack of guidance in the RFP with respect to the meaning of “prime” and “subcontractor” permitted the solicitation to be interpreted in at least two reasonable ways. In addition to the question set forth above--the number of contracts that were required to show experience by a prime and a subcontractor--there is a question as to whether the terms “prime contractor” and “subcontractor” refer to (1) the position for which the entity in issue was being proposed in the submitted proposal, or (2) the position in which it performed under the contract identified to show relevant experience or past performance. Below, we discuss how this ambiguity informs the parties’ interpretation of the RFP.

The requirement for relevant experience information described in RFP section 5.4.3 (Factor 3: Relevant Experience) reasonably may be understood to require an offeror to submit at least two examples of relevant contracts performed as a prime contractor (“at least 2 out of the 3 projects the offeror must be the prime”). RFP at 41. The requirement for past performance references, in RFP section 5.8 (Past Performance Questionnaire), allowed a maximum of 2 of 3 past performance references to be for the subcontractor, with only one being required for the prime contractor. As stated above, the solicitation required the past performance questionnaires to be from the sources the offeror identified to show relevant experience. Reading the above two RFP sections together, RELI interpreted the language to mean that two of three examples of relevant experience submitted could be ones that were performed (in the role of prime) by an entity now being proposed as a subcontractor on the main offeror’s team. AR, Tab 5, August 4, 2015, E-mail from RELI to the agency. We think that RELI’s interpretation is reasonable. The agency’s interpretation, which arguably is also reasonable, was that the word “prime” in the parenthetical quoted above referred to the main offeror, and not to the role of the entity in performing the prior contract.

While FDA recognizes that the RFP, as amended, included unclear instructions in this regard, the agency argues that the unclear instructions presented a patent ambiguity, and that the protest is therefore untimely. We disagree, as explained below.

Assuming that both the agency’s and the protester’s interpretations of the experience factor instructions are reasonable, we find the RFP ambiguous with respect to the evaluation of the relevant experience factor and past performance risk assessment. As noted above, despite being advised of RELI’s interpretation of these two clauses through a question RELI submitted, FDA only realized that the RFP’s instructions were unclear during the course of evaluations that took place more than a month after proposals had been submitted. When the technical evaluation team raised this issue, the contract specialist expressly acknowledged in a memo to the evaluation team that the RFP instruction was ambiguous. See AR, Tab 6, Interpretation of Unclear Instructions in RFP. Since the ambiguity only came to light in the context of the agency’s evaluation of relevant experience, we conclude that the ambiguity was not obvious or glaring--in short, it was latent rather than patent and RELI’s protest of this issue thus is timely.

Where there is a latent ambiguity, the appropriate course of action for an agency is to clarify the requirement and afford offerors an opportunity to submit proposals based on the clarified requirement. Colt Def., LLC, B-406696. July 24, 2012, 2012 CPD ¶ 302 at 8. When dealing with latent ambiguities, we will sustain a protest where a latent ambiguity prevented the offerors from competing intelligently on a relatively equal basis. Coastal Int’l Security, Inc., B-411756, B-411756.2, Oct. 19, 2015, 2015 CPD ¶ 340 at 8.

Here, as noted above, when the agency discovered that an ambiguity existed, it affirmatively decided not to amend the RFP, but instead chose to continue as if no ambiguity existed, applying one possible interpretation of the RFP’s terms. CO Statement at 3. In so doing, the agency refused to consider information RELI had submitted concerning experience performing DME support work--a critical aspect of this requirement. The agency evaluated RELI’s proposal as lacking this experience, and rated the proposal as marginal under the relevant experience factor.

Although RELI’s price was slightly higher than that of DSFederal (approximately one-half of one percent), RELI did receive a higher technical rating under factor 1--the most important technical factor. As a result of the ambiguity here, and the agency’s failure to clarify the requirement, offerors were effectively precluded from competing intelligently and on a relatively equal basis. Under these circumstances, we find RELI was competitively prejudiced by the agency’s actions. Colt Def., LLC, supra; Coastal Int’l Security, Inc., supra. Accordingly, we sustain the protest.  (RELI Group, Inc. B-412380: Jan 28, 2016)  (pdf)


Miracle Systems protests the rejection of its proposal, arguing that the agency’s interpretation of the RFP’s pricing provisions is unreasonable and reflects, at best, a latent ambiguity in the solicitation. Protest at 8. In the protester’s view, the RFP’s escalation provision can reasonably be read to permit escalation at the beginning of the option period, based, among other things, on the provisions’ use of the plural “contract year periods” and “ordering periods.” Id. at 5 (emphasis added). According to Miracle Systems, the RFP’s answers to offerors’ questions regarding price escalation failed to clarify whether the RFP provided for one 10-year performance period or two 5-year performance periods. Id. at 6.

Where a protester and agency disagree over the meaning of solicitation language, we will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all of its provisions; to be reasonable, and therefore valid, an interpretation must be consistent with the solicitation when read as a whole and in a reasonable manner. See Raytheon Co., B-404998, July 25, 2011, 2011 CPD ¶ 232 at 17; Alluviam LLC, B-297280, Dec. 15, 2005, 2005 CPD ¶ 223 at 2. An ambiguity exists if a specification is susceptible to more than one reasonable interpretation that is consistent with the solicitation, when read as a whole. Poly-Pacific Techs., Inc., B-293925.3, May 16, 2005, 2005 CPD ¶ 100 at 3.

Reading the solicitation language as a whole, including the RFP’s questions and answers, we agree with the SEC here that the solicitation unambiguously restricts the proposal of escalating labor rates, regardless of performance period. Notwithstanding the protester’s interpretation, the RFP’s non-escalation provision plainly states that labor rates are fixed for all contract year periods, and are not subject to any escalation through the course of the ordering periods. RFP attach. 7 at 1 (emphasis added). In our view, any alleged ambiguity that may exist in that regard was resolved by the SEC’s responses to offerors’ questions, particularly, that the agency required “ceiling” rates for each labor category “to cover the entire 10-year performance period,” and that the agency would not consider escalating labor rates.

The protest is denied.  (Miracle Systems, LLC, B-408947, Dec 24, 2013)  (pdf)


Alleged Latent Ambiguity

IAP asserts that the RFP, as amended, contained a latent ambiguity regarding how offerors should prepare their price proposals. In particular, the RFP instructed offerors as follows:

B.11 UNIT PRICE ADJUSTMENTS IN OPTION PERIODS

This contract incorporates Davis Bacon Wage Determinations, Service Contract Acts (SCAs), and Collective Bargaining Agreements (CBAs) from the previous service provider. In accordance with subparagraph (b) of the Fair Labor Standards and Service Contract Act—Price Adjustment Clause, FAR 52.222-43 and subparagraph (b) of the Davis-Bacon Act—Price Adjustment Clause, FAR 52.222-32 offerors shall not include escalation of wage and fringe benefit rates for Service Contract Act covered employees and/or Davis-Bacon Act covered employees in the option periods of performance. Wage and fringe benefit rates used for the base performance period will be used in pricing labor costs for all periods of performance in the option years. In accordance with the referenced clauses, the contractor may be entitled to an adjustment in contract price only when a new SCA or DBA wage determination is modified into the contract and it affects wages and fringe benefits of covered employees.

RFP at 19. Amendment No. 14 to the solicitation, which was issued prior to the submission of FPRs incorporated a new collective bargaining agreement (CBA), effective from July 2011 through June 2014, between IAP (the current incumbent contractor) and the cognizant labor union. This new CBA included escalated wage rates through 2014.

In preparing its FPR, IAP used the escalated wage rates to calculate its price for the option years. The record shows, however, that all of the remaining firms, consistent with the terms of the original RFP, did not use escalated rates for the option years. IAP maintains that the terms of amendment No. 14 introduced a latent ambiguity into the solicitation that led it to price its proposal in a manner that differed from the other offerors.

Where a protester and agency disagree over the meaning of solicitation language, we will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all of its provisions; to be reasonable, and therefore valid, an interpretation must be consistent with the solicitation when read as a whole and in a reasonable manner. Alluviam LLC, B-297280, Dec. 15, 2005, 2005 CPD ¶ 223 at 2; Fox Dev. Corp., B-287118.2, Aug. 3, 2001, 2001 CPD ¶ 140 at 2.

We find the protester’s reading of the solicitation unreasonable. As quoted above, the RFP instructions to offerors were unequivocal, expressly instructing the offerors not to escalate their proposed wage rates for SCA wage rate employees for the option years of the contract (all of the employees covered by the CBA issued with amendment No. 14 are SCA wage rate covered employees). Furthermore, the RFP also incorporated the terms of Federal Acquisition Regulation (FAR) § 52.222-43 which specifically requires the contractor to warrant that it has not included any amount in its price to cover contingencies for which increased costs would be allowable pursuant to an equitable adjustment under that provision: “b) The Contractor warrants that the prices in this contract do not include any allowance for any contingency to cover increased costs for which adjustment is provided under this clause.” FAR §52.222-43(b).

Amendment No. 14 did nothing to alter or modify the express instructions to the offerors (or the applicable FAR provision); it simply provided an updated CBA, without further elaboration. It follows that the instructions in the RFP remained in full force and continued to direct offerors to use only base year rates in calculating their prices.

To the extent that it appeared to IAP that the terms of amendment 14 somehow altered or modified the earlier proposal preparation instructions, this would have been a patent ambiguity inasmuch as the two provisions would directly be in conflict. The earlier instructions directed offerors not to escalate prices to account for increases in wages during the option years, but, according to IAP, the CBA required offerors to increase prices to account for escalation of wages in the option years. Since the RFP presented what appeared to IAP to be a direct conflict between its provisions, this amounted to a patent ambiguity rather than a latent ambiguity. LS3, Inc., B-401948.11, July 21, 2010, 2010 CPD ¶ 168 at 3. As such, any objection to the terms of the RFP, to be timely, had to be filed prior to the closing date for FPRs. Id.  (IAP-Hill, LLC, B-406289, B-406289.2, B-406289.3, Apr 4, 2012)  (pdf)


Singleton argues that the agency “did not properly evaluate Singleton’s past performance by failing to take into account past performance information regarding Singleton’s subcontractor who would perform major or critical aspects of the solicitation’s requirements.” Protest at 4. In this regard, the protester points out that Federal Acquisition Regulation (FAR) sect. 15.305(a)(2)(iii) states that a past performance “evaluation should take into account past performance information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the instant acquisition.” The protester also points out that the RFP did not state that the agency would not consider the past performance of proposed subcontractors in evaluating past performance, and that our Office has previously found that the past performance of a proposed subcontractor may be considered in determining whether an offeror meets experience or past performance requirements in a solicitation where the solicitation does not expressly prohibit its consideration. Protester’s Comments at 1, 3; see The Paintworks, Inc., B‑292982; B‑292982.2, Dec. 23, 2003, 2003 CPD para. 234 at 3.  The agency responds by pointing out that it “never stated in the RFP that the past performance of other than the offeror would be considered,” and that the RFP did not specifically “request that the offerors submit past performance information for proposed major subcontractors.” Contracting Officer’s Statement at 7; see AR at 4. The agency notes that our Office has recognized that FAR sect. 15.305(a)(2)(iii), cited by the protester, does not mandate that agencies consider the past performance of subcontractors, but only states that agencies “should” consider such information. AR at 6, citing MW-All Star Joint Venture, B-291170.4, Aug. 4, 2003, 2004 CPD para. 98 at 4 and TyeCom, Inc., B‑287321.3, B-287321.4, Apr. 29, 2002, 2002 CPD para. 101 at 6. The agency thus concludes that “the only reasonable construction of the [RFP’s] past performance evaluation clause is that only prime contractor past performance information would be considered by GSA in evaluating offers,” and that Singleton’s protest is an untimely challenge of an alleged impropriety apparent from the solicitation. AR at 5; see Bid Protest Regulations, 4 C.F.R. sect. 21.2(a)(1) (2006). We agree with the protester that FAR sect. 15.305(a)(2)(iii) suggests, as evidenced by the word “should,” that agencies consider in their evaluations the past performance of proposed “subcontractors that will perform major or critical aspects of the requirement.” In addition, as correctly noted by the protester, our Office has found an agency’s consideration of a proposed subcontractor’s past performance when evaluating an offeror’s proposal under a past performance factor permissible in the same circumstances as here, that is, where the solicitation neither prohibited nor mentioned the evaluation of such information. AC Techs., Inc., B‑293013, B‑293013.2, Jan. 14, 2004, 2004 CPD para. 26 at 3; The Paintworks, Inc., supra. To put it another way, our Office, based upon applicable caselaw, statute, and regulation, would have found it unobjectionable had the agency chosen to consider the past performance of Singleton’s subcontractor when evaluating Singleton’s proposal.

The fact remains, however, that the solicitation referred to the agency’s evaluation of the “offeror’s” past performance and did not specifically request information on the past performance of subcontractors. Additionally, the agency is correct in pointing out that the consideration of subcontractor past performance, as set forth in FAR sect. 15.305(a)(2)(iii), is not mandatory. MW-All Star Joint Venture, supra; TyeCom, Inc., supra; see Olympus Bldg. Servs., Inc., B-282887, Aug. 31, 1999, 99-2 CPD para. 49 at 3-4 (RFP’s past performance evaluation factor providing that key personnel past performance would not be considered was found to be reasonably based and not prohibited by regulation).  Although in the agency’s view the solicitation provided that the agency would consider only the corporate past performance information of the “offeror,” and the agency report makes it clear that the agency intended such a reading, we also, for the reasons stated above, find the protester’s interpretation of the solicitation that it would also permit the evaluation of subcontractor past performance to be reasonable. Because we believe that both the agency’s and protester’s interpretations of the RFP are reasonable, this indicates an ambiguity in the RFP with respect to information that the agency would consider in performing its past performance evaluation. An ambiguity exists where two or more reasonable interpretations of the terms or specifications are possible. A party’s particular interpretation need not be the most reasonable to support a finding of ambiguity; rather, a party need only show that its reading of the solicitation provisions is reasonable and susceptible of the understanding it reached. DynCorp Int’l LLC, B‑289863; B-289863.2, May 13, 2002, 2002 CPD para. 83 at 8; Aerospace Design & Fabrication, Inc., B-278896.2 et al., May 4, 1998, 98-1 CPD para. 139 at 13.  (Singleton Enterprises, B-298576, October 30, 2006) (pdf)


Here, we find that Deco's interpretation of the RFP was not reasonable. The Taft and Hamilton buildings that Deco believed were to be served by the "desk" have different addresses and, more tellingly, have different postal zip codes. Although, as Deco suggests, it is possible that two buildings might share a common access point, such a possibility is unlikely where the buildings are on different streets, and less likely still where the buildings have different zip codes. Moreover, both of the buildings were on public streets within the city of Cincinnati, Ohio, and it would have been a simple matter for Deco to ascertain whether the two buildings were proximately located to confirm whether its interpretation was correct. Indeed, an on-site inspection, consultation of a map, or a simple inquiry through a public website would have informed Deco that the two buildings are more than 6 miles apart. Because Deco's interpretation of the SOW as requiring only a single security desk for two buildings located six miles apart was not reasonable, that interpretation provides no support for its contention that the solicitation contained a latent ambiguity. See Input Solutions, Inc. , B-294123, Aug. 31, 2004, 2004 CPD 185 at 3. Even if we were to find that Deco's interpretation was reasonable, it would at best indicate a patent ambiguity, i.e. , one that is obvious from the face of the solicitation. In this regard, there is an apparent conflict in the RFP between the singular term "desk" and the requirement that the desk serve two buildings that are at different addresses in different zip codes. Where a solicitation contains a patent ambiguity, an offeror is obligated to seek clarification prior to the time for submission of proposals. Dix Corp. , B-293964, July 13, 2004, 2004 CPD 143 at 3. Where, as here, a patent ambiguity is not challenged prior to submission of proposals, we will dismiss as untimely any subsequent protest assertion that is based on an alternative interpretation. Bid Protest Regulations, 4 C.F.R. 21.2(a)(1) (2004); U.S. Facilities, Inc. , B-293029, B-293029.2, Jan. 16, 2004, 2004 CPD 17 at 10. Any protest based on an alleged ambiguity arising from the term "desk" therefore should have been filed prior to the time for receipt of proposals. (Deco Security Services, B-294516, November 1, 2004) (pdf)


With respect to ISIs argument that the COs e-mail message provided explicit direction to incorporate the terms of ISIs earlier contract here, our reading of the email communication, as a whole, is that it indicates only that the CO thinks ISI should be familiar with the nature of the work and, as the incumbent, should have sufficient information to understand the type of work and submit a competitive quotation. While, as quoted above, the COs message stated that the image deliverables should be based on how you previously provided clear, readable images for the Library, there is nothing in this general language that imports requirements from ISIs predecessor contract into this solicitation. Since ISIs interpretation of the COs e-mail is unreasonable, it provides no support for ISIs contention that the message created a latent ambiguity about the work required under the RFQ. See Ruska Instrument Corp. , B-235247, Aug 7, 1989, 89-2 CPD 111 at 3. (Input Solutions, Inc., B-294123, August 31, 2004) (pdf)


Assuming then that both the agency’s and the protester’s interpretations of the provision are reasonable, this indicates an ambiguity in the RFP with respect to the price evaluation of the indefinite-quantity items. Accordingly, we must determine whether the ambiguity is latent or patent since, if patent, it would have had to be protested prior to proposal submission date. The Arora Group, Inc., B-288127, Sept. 14, 2001, 2001 CPD ¶ 154 at 7 n.5. A patent ambiguity exists where the solicitation contains an obvious, gross, or glaring error, (e.g., where the solicitation provisions appear inconsistent on their face), while a latent ambiguity is more subtle. See Brickwood Contractors, Inc., B-292171, June 3, 2003, 2003 CPD ¶ 120 at 6 (explaining a patent ambiguity as one which is obvious on its face); Bank of Am, B-287608, B-287608.2, July 26, 2001, 2001 CPD ¶ 137 at 10 (finding patent ambiguity where solicitation terms were in direct conflict). Since Ashe’s interpretation of the solicitation provision did not directly conflict with any of the other solicitation provisions and the ambiguity only came to light in the context of the agency’s price evaluation, we conclude that the ambiguity was latent rather than patent and Ashe’s protest of this issue thus is timely.  (Ashe Facility Services, Inc., B-292218.3; B-292218.4, March 31, 2004) (pdf)


Ashland essentially alleges that, either the purchase description did not require that the bartacks be sewn through all plies after the material was turned, or the requirement is latently ambiguous with Ashland's interpretation representing one of two reasonable interpretations. We disagree. The requirement unambiguously stated that the bartacks had to go through all plies without qualification. Since Ashland's PDM is constructed with two plies of outer shell fabric at the location of the bartacks and the bartacks go through only one of them, Ashland's PDM does not comply with the requirement.  In any event, the defect in Ashland's PDM is minor. It did not raise any material concern with the agency because it is easily corrected during production.  In fact, all of the PDM defects for all offerors considered for award were similarly minor in nature. The SSA recognized this and considered these PDMs to be very close; although Ashland maintained a slight evaluated advantage, it was not significant and did not translate into value to the government for purposes of awarding at a higher price. Tr. at 11-13, 16 (SSA); Agency Report, Tab 15, Source Selection Decision, at 5. We find reasonable the SSA's assessment of the evaluated PDM differences between these proposals.  (Ashland Sales and Service Company, B-291206, December 5, 2002, (sustained on another issue) (pdf) 


We have reviewed the entire solicitation, including the website containing the Guide Plates, and conclude that the RFP contained a latent ambiguity that materially affected how offerors prepared their proposals, and resulted in an unequal competition. An ambiguity exists where two or more reasonable interpretations of the terms or specifications of the solicitation are possible. Moreover, a party's particular interpretation need not be the most reasonable to support a finding of ambiguity; rather, a party need only show that its reading of the solicitation provisions is reasonable and susceptible of the understanding that it reached.  There are two levels of ambiguity at issue here: first, whether the Guide Plates are mandatory or merely discretionary; and second, what the Guide Plates require, if they are mandatory.  (The Arora Group, Inc., B-288127, September 14, 2001) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
Miracle Systems, LLC, B-408947, Dec 24, 2013  (pdf) RELI Group, Inc. B-412380: Jan 28, 2016  (pdf)
IAP-Hill, LLC, B-406289, B-406289.2, B-406289.3, Apr 4, 2012  (pdf) Singleton Enterprises, B-298576, October 30, 2006 (pdf)
Deco Security Services, B-294516, November 1, 2004 (pdf) Ashe Facility Services, Inc., B-292218.3; B-292218.4, March 31, 2004 (pdf)
 Input Solutions, Inc., B-294123, August 31, 2004 (pdf) Ashland Sales and Service Company, B-291206, December 5, 2002 (pdf) (sustained on another issue)
  The Arora Group, Inc., B-288127, September 14, 2001 (pdf)

U. S. Court of Federal Claims

A latent ambiguity “is not apparent on the face of the solicitation and is not discoverable through reasonable or customary care.” Guzar Mirbachakot Transp., 104 Fed. Cl. at 65. A patent ambiguity is “present when the contract contains facially inconsistent provisions that would place a reasonable contractor on notice and prompt the contractor to rectify the inconsistency by inquiring of the appropriate parties.” Stratos Mobile Networks USA, LLC v. United States, 213 F.3d 1375, 1381 (Fed. Cir. 2000). Subtle inconsistencies do not put a reasonable contractor on notice; rather, a patent ambiguity is one that is “‘obvious, gross, [or] glaring.’” Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 997 (Fed. Cir. 1996) (alteration in original) (quoting H & M Moving, Inc. v. United States, 204 Ct. Cl. 696, 716 (1974); see also Guzar Mirbachakot Transp., 104 Fed. Cl. at 65. If the ambiguity is patent, a “government contractor has ‘a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation.’” Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007) (quoting Stratos Mobile Networks, 213 F.3d at 1381). In other words, “a party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest.” Id.

In this instance, the government’s waiver argument is without merit. Before the close of Solicitation II, JCN did not have access to any of the documents indicating specific work Rogan had performed work under Contract I. See Hr’g Tr. 25:16-26:17. Solicitation II did not contain any obvious discrepancies or ambiguities regarding the work to be performed. Contrary to the government’s suggestion, Blue & Gold does not require offerors to second guess the plain language of a solicitation and inquire about the veracity or accuracy of every assertion set out in a solicitation.

Regarding phasing, the government nonetheless argues that a patent ambiguity does exist in the text of Solicitation II. Def.’s Cross-Mot. at 18-19. In support of this position, it points to several sections of text within Solicitation II. First, the solicitation says that “[c]ontractors may also submit an ‘alternate’ proposal with a revised performance time, shorter or longer, with associated costs. The [Postal Service] may negotiate changes to any alternate proposals and may accept if determined to be in the best interest of the Postal Service or reject.” AR 52-1178. Second, the summary of work states that “[t]he Contractor shall phase and coordinate his work with the [Postal Service] to minimize the disruption to the facility’s normal operation.” AR 52- 1268. Third, the summary states “[t]here will be no work [performed] at the facility between the dates of November 15 and January 5.” Id. The government argues that this language patently conflicts with the phasing plan set forth in the Solicitation II drawings that is split into six-week increments, a strict reading of which would require work to continue until November 24. Def.’s Cross-Mot. at 19.

Again, the administrative record negates the government’s contention that a patent ambiguity existed in Solicitation II. The inconsistencies in describing the phasing requirements are not gross, glaring, or obvious, such that a reasonable offeror would identify them and inquire about the inconsistency. The only actual conflict to which the government points concerns the work schedule that runs into the third week of November 2012, and the provision that prohibits work from November 15 to January 5. However, the schedule itself does not mention November. Determining that the plan would require work through November 24 requires a contractor to infer dates that are not apparent on the face of the solicitation. The resulting latent ambiguity did not require JCN to raise it before the close of Solicitation II. There is no waiver.  (J.C.N. Construction, Inc., v U. S., No. 12-353C, November 6, 2012)  (pdf)


Was the Solicitation Ambiguous Regarding Whether Zipped Files Could Be Used?

When interpreting a solicitation, this Court applies well-settled principles of contract interpretation. Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1353 (Fed. Cir. 2004). It is well established that a solicitation contains an ambiguity if it is susceptible to more than one reasonable interpretation. See LAI Servs., Inc. v. Gates, 573 F.3d 1306, 1314 (Fed. Cir. 2009); Metric Constructors, Inc. v. Nat’l Aeronautics and Space Admin., 169 F.3d 747, 751 (Fed. Cir. 1999); Canal 66 P’ship v. United States, 87 Fed. Cl. 722, 725 (2009); Alliant Techsystems, Inc. v. United States, 74 Fed. Cl. 566, 576 (2007) (noting that interpretations must fall within a “zone of reasonableness” in order to constitute ambiguity).

The solicitation allowed offerors to submit their proposals via electronic means, but did not elaborate on the requirements for electronic transmission. While the solicitation reminded offerors that internet and e-mail availability was intermittent in the operating environment in Afghanistan, and that file size should not exceed five MB, the solicitation did not inform offerors of any other restrictions in the Government’s server or architecture for receiving e-mailed proposals.

The solicitation’s lone sentence containing the requirement for electronic submission provided: “if the proposal is submitted via electronic means, files shall be ‘Microsoft Office 2003 (Word and/or Excel) or PDF format only.’” AR 1132.

The parties attribute different meanings to the term “format,” and dispute whether a zip file is itself a format or something else -- a utility, protocol or transmission feature. GMT claims that a zip file is a file compression utility and analogizes a zip file to packaging that is separate from the underlying file format such as Microsoft Office Word or Excel. Thus, in Plaintiff’s view, the solicitation permitted e-mail transmission of PDF and Word files packaged in compressed or zipped files -- because zip files are not a “format.”

The Army claims that the solicitation prohibited the use of compressed or zipped files because they are a type of file format, and the solicitation restricted formats to Microsoft Office 2003 (Word or Excel) or PDF format. The Army posits that the “format” of a file “refers to the manner in which the information in the file can be accessed by the operating system,” and that formats are identified by three-letter suffixes after the file name, such as “.xls” or “.doc” or “.pdf.” Because a zip file has its own three-letter suffix, “.zip” and because zip compression is sometimes described as a zip format, the Army viewed the “zip format” as being prohibited by the solicitation’s requirement that proposal files were to be submitted in “Microsoft Office 2003 (Word or Excel) or PDF format only.”

Here, neither party’s interpretation of the solicitation is unreasonable. The different perspectives of the parties and the loose usage of the term “format” in both technical and common parlance contributed to the differing interpretations. As the experts acknowledged, a zip file can be referred to as a “format,” and zip files bear a suffix (.zip), just as Word, Excel and PDF formats do. In sum, there is this legitimate debate about the nature of zip files, which calls into question the meaning of the term “format” in the solicitation, thereby rendering the solicitation ambiguous.

Having concluded that an ambiguity exists here, the Court must determine whether the ambiguity is latent or patent. Metric Constructors, 169 F.3d at 751. An ambiguity is latent if it is not apparent on the face of the solicitation and is not discoverable through reasonable or customary care. Linc Gov’t Servs. v. United States, 96 Fed. Cl. 672, 708 (2010) (citing Input/Output Tech., Inc. v. United States, 44 Fed. Cl. 65, 72 n.10 (1999)). Under the rule of contra proferentem, a latent ambiguity is resolved against the Government as drafter of the solicitation. Id. at 708-09; see also Triax Pac., Inc. v. West, 130 F.3d 1469, 1475 (Fed. Cir. 1997) (reh’g denied) (“More subtle ambiguities are deemed latent and are accorded an interpretation favorable to the contractor under the doctrine of contra proferentem.”). A patent ambiguity, in contrast, is one that is obvious, gross, or glaring. NVT Techs., Inc. v. United States, 54 Fed. Cl. 330, 336 (2002) (citation omitted). When a solicitation contains a patent ambiguity, the offeror has a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation. Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007).

For the purpose of distinguishing between patent and latent ambiguities, the United States Court of Appeals for the Federal Circuit has explained:

When determining whether contract language is patently ambiguous, the language must be placed at a point along a spectrum of ambiguity. There is a grey area between the point along this spectrum at which a document requires more exacting language and that at which additional detail will add nothing but worthless surplusage.

Fort Vancouver Plywood Co. v. United States, 860 F.2d 409, 414 (Fed. Cir. 1988) (internal citations omitted). When contract language falls within this “grey area,” it cannot be patently ambiguous. Id.; ITT Fed. Servs. Corp. v. United States, 45 Fed. Cl. 174, 189 (1999).

The ambiguity here -- the varying interpretations of the requirement that electronic files be “Microsoft Office 2003 (Word and/or Excel) or PDF format only” -- falls within the grey zone of ambiguity. As the parties’ interpretations have evidenced, the term “format” is susceptible to different meanings in technical parlance and in the context of transmitting e-mail files. Format can, as Plaintiff contends, refer to Word, Excel, or PDF files and not to a zip utility, or, using the term format more broadly as Defendant does, a zip file can be described as a zip format. Because the ambiguity here arises from the technical interpretation of a single term and not an apparent conflict on the face of the solicitation, the ambiguity is latent -- not so glaring or obvious that it would give rise to a duty to inquire.

Where a contract has a latent ambiguity, under the rule of contra proferentem, the contract is construed against its drafter if the interpretation advanced by the nondrafter is reasonable. Metric Constructors, 169 F.3d at 751; Oenga v. United States, 96 Fed. Cl. 479, 511 (2010); Fort Vancouver Plywood, 860 F.2d at 414; Linc Gov’t Servs., 96 Fed. Cl. at 708-09.

Here, Plaintiff’s interpretation is eminently reasonable. Because the solicitation restricted proposal files to the Microsoft Office 2003 (Word and/or Excel) or PDF format, and the use of zipped files would not have changed the format of the proposal files, it was reasonable for GMT to assume that it could submit its proposal in PDF or Word format attached to an e-mail using zip files. The parties’ experts agreed that the use of zipped files did not alter the format of the documents placed into the files. Tr. 15-16, 44, 86-87. Rather, when a computer user compresses files, the files maintain their Excel or PDF character. Professor Gill analogized the compression process to folding of a piece of paper. He stated:

[I]f this page were the solicitation, essentially what a compression utility would be doing is folding it up. So if I fold it up, then it can go into a smaller envelope. Now, I can’t read this, and so this is compressed, and it is part of a means of transmission for the electronic information. If then somebody uncompresses it, it is analogous to unfolding it.

Defendant’s expert agreed. Mr. Perez stated:

It’s like the doctor said, I do agree with him, it’s like folding. I usually tell the guys that I talk to . . . . it’s like an envelope. The envelope has a limitation, so you’ve got to take the envelope and fold your letters to fit inside the envelope, then you seal it and send it off. . . .

Tr. 86-87.

GMT’s interpretation of the solicitation also comported with common trade practice and usage. The use of zip files is extremely common in the world of electronic communications and is a common feature of modern desktop environments. Tr. 17-18, 63. The Questions and Answers in the solicitation recommended that electronic submissions not exceed five megabytes. AR 1132. Zipped files are commonly used in the commercial marketplace to reduce the size of large file transfers. Tr. 18-19. As such, GMT reasonably used zipped files as a common commercial tool to shrink its proposal files.

The Army argues that GMT’s interpretation is unreasonable in light of the Army’s internal policy restricting the e-mailing of zip files. Def.’s Reply 15-16. However, this policy has never been published to the public or to offerors. Tr. 82, 120. In 2006, the Army issued a NETCOM TECHCON Implementation Memorandum (“email security policy”), providing a list of attachment types that were to be filtered from e-mail due to the risk of computer viruses and malware. AR 2694-99. This security policy required that e-mail traffic originating outside of the Army’s network be scanned and stripped of a list of over 50 attachment types, including .zip attachments. AR 2696-98.

The Army states that because the policy has been in place for over five years and is “representative of the type of policy that a reasonable contractor doing business with the Army would be aware of,” the burden is on the offerors to know that policy. Def.’s Proposed Findings 17–18. The Army’s application of this policy would impose far too heavy a burden on offerors. It is fundamental that compliance with a policy that was not disclosed in the solicitation cannot be imposed as a solicitation requirement. “Making offerors aware of the rules of the game in which they seek to participate is fundamental to fairness and open competition.” Gentex Corp. v. United States, 58 Fed. Cl. 634, 652 (2003) (quoting Dubinsky v. United States, 43 Fed. Cl. 243, 259 (1999)). While offerors were warned in the solicitation that due to “current operating environment in Afghanistan . . . internet and e-mail availability is intermittent,” this did not put offerors on notice that the Army was going to strip compressed file attachments from e-mailed proposals. “[Contractors] are not expected to exercise clairvoyance in spotting hidden ambiguities in the bid documents.” States Roofing Corp. v. Winter, 587 F.3d 1364, 1372 (Fed. Cir. 2009) (quoting Blount Bros. Const. Co. v. United States, 346 F.2d 962, 973 (Ct. Cl. 1965)).

Because GMT reasonably interpreted the solicitation to permit submitting its proposal files via e-mail and PDF or Word documents packaged in zip files, the Army’s rejection of that transmission and last minute insistence on a mechanism that delayed GMT’s submission was arbitrary and capricious.

The Army’s wholesale abandonment of the solicitation’s responsiveness criteria before evaluating proposals heightens the arbitrariness of the treatment GMT received. The Army permitted offerors to depart from what had been stated in the solicitation as mandatory responsiveness evaluation criteria.

The solicitation expressly stated that the contracting officer, prior to evaluation by the SSEB, would “verify that each proposal meets the requirements of the solicitation for the purpose of determining responsiveness.” AR 1143 (emphasis added). The first listed requirement was verification that the offeror’s proposal was not late. Id. Thus, the solicitation clearly made timely submission of proposals part of its mandatory threshold responsiveness determination. The Army decided to waive all responsiveness criteria for all offerors and memorialized this determination in formal memoranda signed by the contracting officer, SSEB Chairperson, and an Assistant Command Judge Advocate. AR 3049-57. Although the Army waived the solicitation’s stated responsiveness criteria for other offerors, the Army refused to waive one of the solicitation’s stated “responsiveness” criterion, timeliness, for GMT. This unequal treatment was quintessentially arbitrary and capricious.  (Guzar Mirbachakot Transportation v U. S., No. 11-519C, March 29, 2012)  (pdf)


The fact that neither Stratos nor the Navy raised the issue -- although it clearly would have been in their respective interests to do so -- convinces the court that what we are dealing with here is a latent ambiguity in the language of the solicitation. Plainly put, Stratos never read the solicitation's words as expansively as the Navy intended them to be read; the Navy, in turn, never saw its words to be as limiting as Stratos took them to be. In short, the solicitation harbored a defect in language that resulted in the submission of two offers each premised on a different view of how the Navy intended to proceed with the matter of price evaluation, and that prevented the Navy, as a consequence, from conducting a fair and effective competition.  (Stratos Mobile Networks USA, LLC, v. U.S. and Comsat Corporation, No. 99-402C, September 29, 1999 (See reversal Stratos Mobile Networks v. U.S., Docket No. 00-5023)
U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
  J.C.N. Construction, Inc., v U. S., No. 12-353C, November 6, 2012  (pdf)
  Guzar Mirbachakot Transportation v U. S., No. 11-519C, March 29, 2012  (pdf)
  Stratos Mobile Networks USA, LLC, v. U.S. and Comsat Corporation, No. 99-402C, September 29, 1999 (See reversal  Stratos Mobile Networks v. U.S., Docket No. 00-5023)
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