FAR 15.507:  Protests and debriefings - Disclosure of prices

Comptroller General - Key Excerpts

Northrop Grumman protests DISA’s decision to reopen discussions and permit Pragmatics and Solers to fully revise their proposals. The protester contends that these actions competitively harm Northrop Grumman, because its award price and evaluation ratings were disclosed. Northrop Grumman asserts that DISA’s pre‑corrective action cost realism analysis was substantively correct, and that the alleged error that DISA was trying to correct was, at most, a perceived failure to document the analysis as explicitly as agency counsel would have liked. Northrop Grumman asserts that DISA has not otherwise identified any substantive, prejudicial errors in the cost realism analysis or initial award that required reopening discussions. In this regard, the protester maintains that DISA’s corrective action was unreasonable and disproportionate to the alleged error, and yields no benefits to the procurement process that would outweigh the competitive harm to Northrop Grumman.

DISA readily acknowledges that the disclosure of Northrop Grumman’s winning price puts the protester at a competitive disadvantage, but the agency argues that it reasonably determined that reopening discussions was necessary to correct deficiencies in its cost/price evaluation and to ensure that the new award decision would be based on a fair best‑value determination. As discussed above, DISA contends that its pre-corrective action cost realism analysis and source selection decision were inadequately documented and contained conclusory statements that failed to explain the evaluators’ rationale for finding that such vastly different proposals were realistic. In this regard, DISA maintains that in taking corrective action, the agency could not determine that its cost evaluators’ conclusions and DISA’s earlier best‑value determination were reasonable, and that the other competitive range offerors were not prejudiced. DISA argues that a more accurate and comprehensive realism analysis could have a significant impact on the agency’s best‑value tradeoff decision.

Northrop Grumman responds that DISA had more tailored options to address the alleged evaluation error, such as seeking clarifications, limiting discussions, or restricting Pragmatics and Solers from revising their proposed labor mixes, FTEs, or technical/management approach proposals. Northrop Grumman claims that the evaluation notices that were provided to Pragmatics and Solers had nothing to do with the alleged error, i.e., further documenting DISA’s earlier cost realism analyses. The protester also points out that simply because offerors propose different technical approaches does not necessarily mean that their proposals are unrealistic. Moreover, to the extent that DISA had new concerns during reevaluation about the offerors’ proposed labor categories, key personnel, or past performance projects, Northrop Grumman complains that the agency should have addressed such concerns during its pre-award discussions.

DISA disputes the protester’s assertion that the information needed to perform a proper cost realism analysis could be obtained through clarifications or limited discussions with the offerors. Rather, DISA argues that in order to correct key personnel discrepancies and unrealistic aspects of their cost/price proposals, offerors would have to make corresponding revisions to their technical/management approach proposals. In this respect, DISA asserts that its cost evaluators could not perform a proper realism analysis or recommend cost adjustments without knowing what each proposed labor category would be performing under each CLIN. DISA also maintains that its discussions had to be meaningful and permit the offerors to address new technical deficiencies that were uncovered as part of the agency’s reevaluation. In any event, DISA contends that it properly examined whether its earlier non-price evaluations required further corrective action, because Solers specifically protested the agency’s technical and past performance evaluations.

Based on our review of the record and the parties’ arguments, we find that any competitive harm to Northrop Grumman by the disclosure of its award price, is outweighed by DISA’s reasonable concern that its earlier best‑value determination was tainted by a flawed cost/price evaluation that prejudiced other competitive range offerors. Contracting officers in negotiated procurements have broad discretion to take corrective action where the agency determines that such action is necessary to ensure a fair and impartial competition. The Matthews Group, Inc. t/a TMG Constr. Corp., B-408003.2, B‑408004.2, June 17, 2013, 2013 CPD ¶ 148 at 5; Domain Name Alliance Registry, B‑310803.2, Aug. 18, 2008, 2008 CPD ¶ 168 at 8. As a general matter, the details of a corrective action are within the sound discretion and judgment of the contracting agency. Evergreen Helicopters of Alaska, Inc., B‑409327.3, Apr. 14, 2014, 2014 CPD ¶ 128 at 8. The decision whether to reopen discussions is largely a matter left to the agency’s discretion. King Farm Assocs., LLC; One Largo Metro LLC; Metroview Dev. Holdings, LLC, B‑404896.10 et al., Dec. 5, 2011, 2012 CPD ¶ 6 at 11.

We have repeatedly observed that the possibility that the contract may not have been awarded based on the most advantageous proposal has a more harmful effect on the integrity of the competitive procurement system than does the possibility that the original awardee, whose price has been properly disclosed, will be at a disadvantage in the reopened competition. The Matthews Group, Inc. t/a TMG Constr. Corp., supra at 6, citing Jackson Contractor Group, Inc., B‑402348.2, May 10, 2010, 2010 CPD ¶ 154 at 3; Partnership for Response and Recovery, B‑298443.4, Dec. 18, 2006, 2007 CPD ¶ 3 at 3-4; PCA Aerospace, Inc., B‑293042.3, Feb. 17, 2004, 2004 CPD ¶ 65 at 4. Where the corrective action taken by an agency is otherwise unobjectionable, a request for revised price proposals is not improper merely because the awardee’s price has been exposed. McKean Def. Group--Info. Tech., LLC, B-401702.2, Jan. 11, 2010, 2010 CPD ¶ 257 at 3. While we have recognized a limited exception to that rule where the record establishes that there was no impropriety in the original evaluation and award, or that an actual impropriety did not result in any prejudice to offerors, id., as explained below, DISA has presented both a flaw in its cost/price evaluation requiring corrective action, and a reasonable basis for reopening the competition.

With regard to the error in the agency’s cost realism analysis, the record supports DISA’s assertion that the analysis was insufficient and conclusory. DISA’s concern‑-that the evaluators failed to explain their rationale for finding the vastly different proposals realistic--provided a reasonable basis for the agency to question its best‑value determination. See PCA Aerospace, Inc., supra (dramatic price differentials may reasonably be interpreted to suggest that offerors had dissimilar understandings of the requirements and agencies are not required to ignore the reasonable possibility that the disparate prices received do not accurately reflect the competitive marketplace, and that the award based on those prices may not reflect the most advantageous proposal). Moreover, the record demonstrates that the agency’s cost evaluators overlooked the omission of a number of [DELETED] by all three offerors, including Northrop Grumman.

We also find that DISA reasonably determined that it should reopen discussions and permit the competitive range offerors to submit fully revised FPRs. In our view, DISA was not required to tailor the scope of its corrective action to clarifications or limited discussions. Generally, offerors in response to an agency request that discussions be opened or reopened may revise any aspect of their proposals they see fit--including portions of their proposals which were not the subject of discussions. Partnership for Response and Recovery, supra (agency reasonably believed that limiting price revisions was unworkable because of the difficulty of linking pricing changes to particular discussion questions and in view of the changes in the period of performance that were necessitated by the prior protest). Moreover, as part of its corrective action, an agency can, as here, amend the RFP to add requirements that will require the submission of revised proposals and is not required to limit proposal revisions to only address these changes. Norvar Health Servs.--Protest and Recon., B‑286253.2 et al., Dec. 8, 2000, 2000 CPD ¶ 204 at 4‑6.

As described above, during its reevaluation, DISA discovered that the offerors’ (including the protester’s) FPRs contained deficiencies and discrepancies in their technical, past performance, and/or cost/price volumes. Where an agency identifies new weaknesses in a proposal during a reevaluation of that proposal in an acquisition where discussions have previously occurred, the agency is required to discuss the new weaknesses with the offeror. Lockheed Martin Simulation, Training & Support, B‑292836.8 et al., Nov. 24, 2004, 2005 CPD ¶ 27 at 10. The key fact in these cases is, as here, that the concerns at issue relate to the proposals as they were prior to discussions. Id. Moreover, the disclosure of the earlier awardee’s contract price alone does not provide a compelling basis for the failure to provide for meaningful discussions. American K-9 Detection Servs., Inc., B‑400464.6, May 5, 2009, 2009 CPD ¶ 107 at 9. The possibility that an award may not have been based on the most advantageous proposal because, for example, discussions are not meaningful, has a more harmful effect on the integrity of the competitive procurement system than the fear of an auction; generally the statutory requirements for competition take priority over any possible concern regarding auction techniques. Id.; see Partnership for Response and Recovery, supra.

In short, this is a matter in which the agency has considerable discretion and, absent a showing that this discretion is being abused, we will not substitute our views for DISA’s on how the agency should undertake corrective action. McKean Def. Group‑-Info. Tech., LLC, supra (protest challenging agency’s corrective action, which included opening discussions with all offerors in the competitive range, is denied where the agency reasonably concluded that in addition to correcting the flawed cost realism evaluation, discussions should be opened with the offerors, rather than proceeding with award on the initial proposals); see ZAFER Constr. Co., B‑401871.4, Feb. 1, 2010, 2010 CPD ¶ 66 at 3 (protest challenging agency’s corrective action, which included allowing all offerors whose proposals were in the competitive range to submit a revised proposal, is denied where the agency reasonably concluded that offerors should be given the opportunity to submit completely revised proposals because the time lapse since proposals were first submitted suggests that the original price proposals may no longer accurately reflect the cost of the project).

The protest is denied.  (Northrop Grumman Systems Corporation B-410990.3: Oct 5, 2015)  (pdf)

AMH also complains that the agency refused to disclose other offerors’ prices to AMH, where GSA had disclosed AMH’s price in debriefings provided to its competitors. AMH contends that GSA was required to disclose all offerors’ prices to level the playing field. We find this complaint to be without merit.

Where, as here, the termination of an awardee’s contract and reopening the competition are otherwise proper, prior disclosure of an offeror’s price does not preclude resoliciting or reopening the competition. See Roxco, Ltd., B-277545, Oct. 27, 1997, 97-2 CPD ¶ 117 at 5. Here, in accordance with the post-award debriefing requirements of the Federal Acquisition Regulation (FAR), GSA properly disclosed AMH’s price to disappointed offerors. See FAR § 15.506(d)(2). As a general matter, an agency is not required to equalize the possible competitive advantage flowing to other offerors as a result of the release of information in a post-award setting where the release was not the result of preferential treatment or other improper action on the part of the agency. See Nova Techs., B-403461.3, B-403461.4, Feb. 28, 2011, 2011 CPD ¶ 51 at 4. Moreover, any possible prejudice to the protester is mitigated by a number of factors, including that the agency informed AMH generally of its price standing vis-à-vis other offerors (that is, that its price was mid-range); that the basis for award is best value, and not price alone; and that the amendment of the RFP to include the U.S.-flag vessel requirement and the optional training task will result in different pricing. See Norvar Health Servs.--Protest & Recon., B-286253.2 et al., Dec. 8, 2000, 2000 CPD ¶ 204 at 5, 6.  (American Material Handling, Inc., B-406739, Aug 14, 2012)  (pdf)

Seven offerors submitted proposals and, after the initial evaluation, both OSI's and AMSEA's were included in the competitive range. Prior to conducting discussions, the contracting officer sent an e-mail to each competitive range offeror with a list of discussion items. AMSEA's e-mail included a file with business, insurance, price, past performance, and socioeconomic discussion issues for AMSEA and all other offerors covering all three lots. Of primary relevance here, the file included total price figures for OSI's proposal on Lots 2 and 3 and various discussion items common to all offerors concerning Lot 1. Within minutes of receiving the e-mail, AMSEA's vice-president, the sole recipient, notified the contracting officer and explained that "[i]mmediately upon discovering the content of the attachment and the scope of the error," he had closed the attachment. Letter from AMSEA. According to the vice-president, as directed by the contracting officer--and without further accessing the e-mail--the vice-president deleted the e-mail and its attachments, then emptied the trash folder to ensure deletion of the information. Id.

The contracting officer notified all offerors of the e-mail release, provided copies of the released information pertinent to each, and evaluated the impact of the disclosure. Based on her initial review, the contracting officer concluded that release of the information would not alter the course of discussions, and she proceeded to conduct discussions with AMSEA and the other offerors in the competitive range. Contracting Officer's Memorandum on Inadvertent Disclosure, at 3. After OSI objected and asserted that the recipient of its Lots 2 and 3 pricing could "back into" OSI's Lot 1 price, the contracting officer continued her review, specifically considering OSI's objections. Based on her additional review, the contracting officer again concluded that the released information would not result in an unfair competitive advantage to AMSEA and proceeded to obtain final proposal revisions (FPR). Contracting Officer's Analysis of Procurement Impact of Disclosure, at 2. She specifically required AMSEA to submit a narrative with its FPR explaining any price changes from its initial proposal. Id. Based on her review, the contracting officer concluded that there was no indication in AMSEA's FPR that it had used the information in the e-mail to its competitive advantage. FPR Analysis of Procurement Impact of Disclosure, at 7. While AMSEA lowered various prices, its overall FPR price remained significantly lower than OSI's initial and FPR prices.

(sections deleted)

Disclosure of OSI's Information

OSI asserts that the agency's release of its pricing and all offerors' discussion information to AMSEA was improper and tainted--or gave the appearance of tainting‑‑the competition. In OSI's view, AMSEA's changed FPR prices evidenced possible use of this information and the agency relied on insufficient evidence in concluding that AMSEA had not used this information to its competitive advantage. OSI concludes that the agency's decision to proceed with the competition was unreasonable and asserts that the agency should terminate AMSEA's contract, cancel the RFP, and re-compete its requirements.

The disclosure of source selection information, including an offeror's price, during the course of a procurement is improper and the agency may take remedial steps, including canceling the procurement, if it reasonably determines that the disclosure harmed the integrity of the procurement process. Information Ventures, Inc., B‑241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD para. 583 at 4-5. Where an agency decides that no remedial steps are necessary, we will sustain a protest based on the improper disclosure only where the protester demonstrates that it was in some way competitively prejudiced by the disclosure. Kemron Envtl. Servs., Inc., B-299880, Sept. 7, 2007, 2007 CPD para. 176 at 2.

While OSI makes numerous assertions in support of its claims, the record reflects that the protester was not competitively prejudiced by the release of information. For example, OSI notes that AMSEA lowered its prices in six categories that were the subject of discussion questions asked of all offerors--insurance, support of government personnel on the Marine Corps ship, and four transition rate categories. Each question was asked in terms of the offeror's failure to meet a requirement or confirmation of its understanding of the pricing categories. OSI asserts that these questions would reasonably lead AMSEA to believe that the offerors' initial prices indicated a lack of understanding, and thus lead it to reduce its own prices. OSI Comments at 8. However, as found by the contracting officer, there is nothing in the record to indicate that AMSEA used any of the released information as the basis for changing its pricing, and AMSEA provided a reasonable, detailed explanation for each change. In this regard, based on its decision to absorb more risk, AMSEA [deleted], allowing it to reduce various [deleted] rates. FPR Analysis of Procurement Impact of Disclosure, at 3. AMSEA explained that its [deleted] on the Marine Corps ship was based on RFP amendment 0014, which designated the subsistence for these personnel as a reimbursable expense instead of being included in its fixed-price per diem. Id. at 4. AMSEA explained that its reduction in [deleted] rates was based on its reliance on historical data from previous experience. Id. at 4-6. In accepting AMSEA's explanations for its FPR changes, the contracting officer considered the fact that--with limited exceptions--there was no disclosure of offerors' specific prices in any of the challenged areas, and AMSEA's price position (fourth lowest price) did not change from its initial proposal to its FPR. Id. at 3-6.

Apart from its assertion that AMSEA would more likely have used its historical data to arrive at its initial--rather than final--pricing, OSI provides no basis for questioning AMSEA's explanations. Meanwhile, we think it is significant that AMSEA's FPR price advantage (post-disclosure) over OSI (8.5% lower) was only slightly less than its price advantage in the initial evaluation (8.8% lower); OSI does not explain, and it is not clear to us, why knowledge of a competitor's significantly higher price would lead an offeror to lower its price further. See Health Net Fed. Servs., LLC, B‑401652, Oct. 13, 2009, 2009 CPD para. 213 at 6; Kemron Envtl. Servs., Inc., supra, at 4. We conclude that the agency reasonably determined that AMSEA's price changes were based on its business judgment, changes to the RFP, and its reliance on its own historical data, rather than on the disclosed information. Accordingly, we find that the agency reasonably concluded that disclosure of the information did not result in competitive prejudice to OSI.

OSI asserts that cancellation of the RFP and elimination of AMSEA are required because of the "appearance that the integrity of the procurement process was compromised and unreliable." OSI Comments at 10. However, as indicated, we will sustain a protest based on an inadvertent disclosure of information only where it is shown to have harmed the protester. It is undisputed that the disclosure of OSI's information was inadvertent, and that the agency and AMSEA proceeded appropriately once the disclosure was discovered. Since, as discussed above, we find that OSI was not competitively prejudiced by the disclosure, there is no basis for us to sustain the protest and recommend the suggested corrective action.  (Ocean Ships, Inc., B-401526.4, April 21, 2010)  (pdf)

The agency's decision to limit the scope of its corrective action was reasonable. While our Office had not issued a decision or recommended any corrective action, NARA took corrective action to remedy problems identified by our attorney in the ADR conference regarding the past performance evaluation and, at the same time, decided to obtain updated information in the single area where it appeared reasonably necessary. In this regard, LB&B had attempted to substitute some of its proposed key personnel after it received the original award, and CESI had protested this as a matter of "bait and switch." While this ground of protest did not appear meritorious, in view of the passage of time since the submission of the offerors' last proposal revisions, the contracting officer concluded that it would be beneficial to the agency and fair to all offerors to obtain, and to base the re-evaluation on, updated key personnel and subcontractor information. Agency Report (AR) at 4; Contracting Officer's Statement at 2. We find nothing unreasonable in this determination, since the apparent premises underlying it-that the delay resulting from the protest well may have affected the availability of the originally-proposed key personnel, and that the evaluation should be based on currently-available key personnel to the extent possible--appear valid. The same considerations do not appear to have applied to other areas of the proposals. In this regard, prior to deciding to limit the scope of the corrective action, the contracting officer consulted with the TEP and confirmed that no other aspects of the submitted proposals needed updating. AR at 4; Contracting Officer's Statement at2. The agency's approach to determining the appropriate corrective action here reflected its sensitivity to the fact that LB&B's prices had been revealed when the original award was made. While it may have been within the agency's broad discretion to permit price revisions without regard for creation of an auction, the agency was not precluded from taking this consideration into account; there was nothing improper in the agency's choosing a more limited approach to avoid creating a competitive advantage that unquestionably would inure to the benefit of the protester and other offerors if price revisions were allowed. See Rel-Tek Sys. & Design, Inc.--Modification of Remedy , supra , at 5. (Consolidated Engineering Services, Inc., B-293864.2, October 25, 2004) (pdf)

Where, as here, an agency has improperly conducted discussions with only one offeror after receipt of proposals, reopening the competition and seeking another round of amended proposals is an appropriate way to remedy the underlying deficiency and permit offerors a fair opportunity to compete.  International Res. Group, B-286683, Jan. 31, 2001, 2001 CPD ¶ 35.  The  disclosure of pricing and other information in another offeror's proposal, as here, is permissible because the possibility that the contract may not have been awarded based on a true determination of the most advantageous proposal has a more harmful effect on the integrity of the competitive procurement system than the fear of an auction; the statutory requirements for competition take priority over any possible constraints on auction techniques.  Federal Sec. Sys., Inc., supra, at 4.  Accordingly, the agency's corrective action of disclosure and placing the offerors on an even footing, and providing them with an equal opportunity to compete by submitting new proposals is unobjectionable here.  (Networks Electronic Corporation, B-290666.3, September 30, 2002)  (pdf)

Where agency took corrective action in response to an earlier protest by amending the solicitation and reopening discussions, the prior disclosure of protester's prices and the request for final proposal revisions did not create an improper auction.  (Clearwater Instrumentation, Inc., B-286454.2, September 12, 2001)

Comptroller General - Listing of Decisions

For the Government For the Protester
Northrop Grumman Systems Corporation B-410990.3: Oct 5, 2015  (pdf)  
American Material Handling, Inc., B-406739, Aug 14, 2012  (pdf)  
Ocean Ships, Inc., B-401526.4, April 21, 2010  (pdf)  
Consolidated Engineering Services, Inc., B-293864.2, October 25, 2004 (pdf)  
Networks Electronic Corporation, B-290666.3, September 30, 2002)  (pdf)  
Korrect Optical, Inc., B-288128; B-288128.2, September 21, 2001  
Clearwater Instrumentation, Inc., B-286454.2, September 12, 2001  
RS Information Systems, Inc., B-287185.2; B-287185.3, May 16, 2001  
Norvar Health Services--Protest and Reconsideration, B-286253.2; B-286253.3; B-286253.4, December 8, 2000  
Spectrofuge Corporation of North Carolina, Inc.--Recon, B- 281030.3, April 9, 1999  

U. S. Court of Federal Claims - Key Excerpts

According to this court, “[t]hese decisions make clear that when an unsuccessful offeror lawfully obtains source selection information, such as a competitors prices and technical scores, and the agency subsequently properly reopens negotiations, the agency may disclose similar information to all the competitors to eliminate any competitive advantage.”  DGS Contract Serv. Inc. v. United States, 43 Fed. Cl. 227, 238 (1999).

Turning first to whether Lockheed Martin should obtain ManTech’s price information, the court agrees with ManTech that the pricing information contained in its proposal is fundamentally different from what it received during the debriefing.  (Mantech Telecommunications and Information Systems Corp, v. U.S. and Lockheed Martin Services, Inc., No 00-579C, March 30, 2001)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
  Mantech Telecommunications and Information Systems Corp, v. U.S. and Lockheed Martin Services, Inc., No 00-579C, March 30, 2001  (pdf)


Bona Fide Needs Rule
Public Laws
Courts & Boards

Rules & Tools

Small Business