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FAR 16.505(b):  Indefinite-quantity contracts - Orders under multiple-award contracts, fair opportunity, pricing

Comptroller General - Key Excerpts

The protester argues that the requirements of FAR § 15.307(b) are mandatory, and, as such, the agency “was not permitted to conduct discussions orally in lieu of offering the offerors an opportunity to submit a written FPR.” Consolidated Protest at 17-18. Had it been permitted to do so, SSI asserts that it would have lowered its price in its FPR submission due to salary revisions, and because the firm typically reduces its price in submitting a FPR. Id. at 17; Protester’s Comments at 9-11, enclosure 1. SSI also asserts that the agency’s failure to establish a common cutoff date for receipt of proposal revisions resulted in prejudicial disparate treatment, because YSG’s proposal was not fully compliant after oral discussions, and should have been found to be ineligible for award. Protester’s Comments at 12-14.

In reviewing protests challenging an agency’s evaluation of proposals in a task order competition, our Office does not reevaluate proposals, but examines the record to determine whether the agency’s judgment was reasonable and in accord with the stated evaluation criteria and applicable procurement laws and regulations. Trandes Corp., B-411742 et al., Oct. 13, 2015, 2015 CPD ¶ 317 at 6. Task order competitions are subject to the provisions of FAR § 16.505, which does not establish specific requirements for conducting discussions. See Companion Data Servs., LLC, B-410022, B‑410022.2, Oct. 9, 2014, 2014 CPD ¶ 300 at 12. However, where an agency conducts a task order competition as a negotiated procurement, our analysis regarding fairness will, in large part, reflect the standards applicable to negotiated procurements. See, e.g., Technatomy Corp., B‑411583, Sept. 4, 2015, 2015 CPD ¶ 282 at 5. For instance, in conducting exchanges with offerors, agencies may not engage in what amounts to disparate treatment of the competing offerors. Front Line Apparel Grp., B-295989, June 1, 2005, 2005 CPD ¶ 116 at 3-4.

Section 16.505 of the FAR requires agencies to provide awardees of a multiple-award contract a fair opportunity to be considered for each order, but specifically states that “the policies in [FAR] Subpart 15.3 do not apply to the ordering process.” FAR § 16.505(b)(1)(ii). Thus, FAR § 16.505 explicitly holds inapplicable the requirements of FAR § 15.307(b). FAR § 16.505 does require agencies to develop placement procedures tailored to each acquisition that will provide each awardee a fair opportunity to be considered for each order, and to include such procedures in the solicitation and the contract. Id. However, SSI has not identified any language in the solicitation or SSI’s contract, and our review discloses none, that would mandate the agency to solicit written FPRs after conducting discussions, or any language regarding procedures for the receipt of FPRs.

On the issue of discussions and proposal revisions, the RFP only states, “[t]he Government intends to award without discussions. The Government reserves the right to enter into discussions. Offerors shall provide their best terms from a cost or price and technical standpoint as the Government does not anticipate an opportunity to revise proposals.” RFP, Section M, at 5. The ordering provisions of SSI’s contract provide only that the firm be given a fair opportunity to compete, which includes that, upon receipt of proposals the contracting officer may open discussions or negotiate with all or some contractors providing proposals, issue a task order based upon the original proposal furnished, reject the proposal, or cancel the requirement. AR, exh. 27, SSI Contract, at 11-12. There is no requirement in the contract that the agency solicit and accept written FPRs after conducting discussions.

Finally, there is no indication in the record that the agency conveyed or suggested through its course of dealings with offerors that it intended to solicit written FPRs after the close of discussions. In this regard, the record shows that the agency notified offerors in writing of its concerns with each firm’s proposal and gave each an opportunity to provide oral responses and discuss the government’s concerns at established meetings. AR, exh. 16, SSI Discussion Email, at 1; exh. 17, YSG Discussion Email, at 1. The record also shows that the agency held meetings with each offeror, received oral proposal revisions, and evaluated these revisions prior to making an award decision.

We are not persuaded that, as a matter of fairness, the agency was required to solicit and accept written FPRs after conducting discussions with, and receiving oral proposal revisions from offerors, as the protester alleges. As our Office has held, the fundamental purpose of discussions is to afford offerors the opportunity to improve their proposals to maximize the government’s ability to obtain the best value, based on the requirement and the evaluation factors set forth in the solicitation. AT&T Gov’t Solutions, Inc., B-406926 et al., Oct. 2, 2012, 2013 CPD ¶ 88 at 17. We can discern no requirement fundamental to the conduct of fair discussions that would necessitate giving offerors the opportunity to submit written FPRs after accepting oral proposal revisions. We see nothing unreasonable or unfair about the agency’s decision not to request written FPR’s, as would be the case in the context of a negotiated procurement conducted under FAR part 15.

Likewise, we are provided no basis to object to the agency’s decision to accept written information from certain offerors after conducting oral discussions, including accepting an additional key personnel resume from YSG. As mentioned, in the context of a task order competition, as here, we look to whether the agency’s actions were reasonable and in accord with the stated evaluation criteria and applicable procurement laws and regulations. Task order competitions are subject to the provisions of FAR § 16.505, which does not establish specific requirements for conducting discussions. This includes any specific requirement for establishing a common cutoff date for receipt of proposals, as would be required under FAR § 15.307(b) for negotiated procurements. Moreover, as there are no specific requirements on this subject in SSI’s contract or the solicitation, we are left to determine whether offerors were treated fairly. We conclude they were.  (SSI B-413486, B-413486.2: Nov 3, 2016)

NARA’s [National Archives and Record Administration] Price Reasonableness Evaluation

Finally, DLT argues that NARA failed to evaluate whether InfoReliance’s proposed price was unreasonably high. Here, too, the record provides no basis to question the agency’s judgment.

As discussed above, the RFP stated that the agency would follow the competition procedures at FAR § 16.505(b)(1)(iv). RFP at 2. The ordering provisions of FAR subpart 16.5 require ordering agencies to establish prices for orders consistent with the policies and methods of FAR subpart 15.4 unless the IDIQ contact itself establishes the price for the supply or service. FAR § 16.505(b)(3). Here, the [Chief Information Officer Commodities and Solutions (CIO-CS) Government Wide Agency Contract (GWAC)] CIO‑CS GWAC established rates for the requested PaaS [Platform-as-a-Service] and IaaS [Infrastructure-as-a-Service] services. Moreover, the offerors’ CIO-CS GWAC rates were determined by the agency administering the GWAC, NITAAC [National Institutes of Health Information Technology Acquisition and Assessment Center], to be reasonable based on adequate price competition and market research. AR, Tab 24, NITAAC Email (citing FAR § 15.404-1(b)(2)(i), (vi)). DLT does not challenge NITAAC’s determination in this respect nor contend that InfoReliance’s CIO-CS GWAC rates were unreasonable.

The RFP issued by NARA required offerors to provide a spreadsheet containing their full listing of IaaS and PaaS services, with rates, available under the CIO-CS. RFP at 4-6, 63-64; Tab 8, Amendment 002, at 3 (Response to Question 3). The RFP also required offerors to submit fixed-unit pricing based on, i.e., equal to or discounted from, their current CIO-CS GWAC rates for the services listed in Appendix A. See RFP at 4-5, 63-64; Tab 8, Amendment 002, at 3 (Response to Question 3) and 5‑6 (Response to Question 14) (offerors must use GWAC listings to quote prices for services in Appendix A). Accordingly, because an offeror’s rates submitted in response to NARA’s RFP were based on rates established under the CIO-CS GWAC, we conclude that NARA properly determined InfoReliance’s prices, submitted in response to the RFP, to be reasonable.

In the agency report, NARA contends that we should apply the policies and methods of FAR subpart 8.4, by analogy, to the current scenario. AR (Dec. 7, 2015) at 6 n.5 (citing Perot Sys. Gov’t Servs., Inc., B‑402138, Jan. 21, 2010, 2010 CPD ¶ 64). NARA contends that its reliance on NITAAC’s predetermination was reasonable because it is analogous to an agency’s reliance on determinations made by the General Services Administration (GSA) when considering the reasonableness of prices prior to issuing an order against a Federal Supply Schedule (FSS) contract, which our Office has previously held to be consistent with the requirements of FAR subpart 8.4. In Perot, we held that “[b]ecause prices in FSS contracts already have been determined by GSA to be fair and reasonable, ordering activities are not required to make a separate determination of fair and reasonable pricing prior to issuing an order against an FSS contract.” Perot Sys. Gov’t Servs., Inc., supra, at 2-3 (citing FAR § 8.404(d)).

DLT does not object to the agency’s analogy. DLT’s Supp. Comments (Dec. 10, 2015) at 7‑8. DLT contends, however, that if the analogy is to be employed in this context, NARA also must consider the level of effort and labor mix in assessing reasonableness. Id. at 7 (citing FAR 8.405‑2(d)). DLT is correct that, if FAR subpart 8.4 were fully applicable here, NARA must “consider the level of effort and the mix of labor proposed to perform the task being ordered” when evaluating price reasonableness. See US Info. Tech. Corp., B-404357, B-404357.2, Feb. 2, 2011, 2011 CPD ¶ 74 at 6-7 (citing FAR § 8.405-2(d), (e)). As we explained above, however, we find the pricing methods in FAR § 16.505(b)(3) to be the most appropriate in the current scenario. Moreover, the requirement to consider the level of effort and labor mix does not clearly apply here because the solicitation provided fixed quantity/usage data and required offerors to assign fixed-unit pricing for those services based on--but not to exceed--their GWAC pricing.[18] AR, Tab 8, Revised Appendix A.

Finally, in its protest, DLT contends that NARA ignored the difference between InfoReliance’s proposed price and the agency’s IGCE [independent government cost estimate]. Second Supp. Protest (B‑412237.3) at 9. Even if true, the IGCE is largely irrelevant to the agency’s evaluation of price reasonableness in this context because the CIO-CS GWAC established rates for the services sought here. In any event, the record demonstrates that NARA did not ignore the difference between InfoReliance’s proposed price and the agency’s IGCE. Instead, the SSA explicitly acknowledged the difference but determined, nevertheless, that InfoReliance’s price was reasonable and that its proposal was “well worth” the higher price. AR, Tab 25, Vendor Selection Report, at 13.

The protest is denied.  (DLT Solutions, Inc. B-412237, B-412237.2, B-412237.3: Jan 11, 2016)  (pdf)
 


The statutory and regulatory framework also contemplates that, where an agency is issuing task or delivery orders using a multiple-award IDIQ contract program, it is not required to engage in full and open competition, and may instead confine its competition to firms that have been awarded an underlying multiple-award IDIQ contract. 41 U.S.C. § 4106; FAR § 16.505(b). However, those same provisions require agencies to give each contractor that has been awarded a contract a “fair opportunity” to be considered for each task or delivery order in excess of $3,500, and to provide for “enhanced competition” for orders in excess of $5.5 million. Id.

(sentence deleted)

Harris’s Challenge to the Delivery Orders

Harris first argues that the RFPs impermissibly call for the issuance of what amounts to IDIQ instruments to the successful contractor for a 5-year period. The protester maintains that the RFPs effectively remove the agency’s requirements from further competition for an extended period and amount to an impermissible “downselect” to a single vendor. Harris maintains that this is inconsistent with the terms of the underlying [Department of Homeland Security’s tactical communications (TacCom) IDIQ multiple award contracts program] TacCom contracts, as well as applicable statutes and regulations which, the protester maintains, require the FBI to permit all of the eligible TacCom vendors to compete for every delivery order that the FBI may issue to meet its requirements.

The agency disputes Harris’s characterization of its anticipated approach, and argues that each RFP properly contemplates the award of a single delivery order. According to the FBI, FAR § 16.505(b(1)(ii) affords its contracting officer broad discretion in determining the procedures used to place a particular delivery order. The agency maintains that, because its requirements vary at each of its 57 possible locations, the delivery orders to be awarded here contemplate “defining separate delivery specifications throughout the delivery order base period.” Legal Memorandum at 4. The FBI also notes that the solicitations specify estimated quantities for each type of equipment being purchased during the base period of the delivery orders, which the agency characterizes as “the maximum amount that could be required for delivery during the base period.” Id. The agency further states that the RFPs provide for meeting the FBI’s ongoing future requirements by including four option periods which also include estimated quantities that, again, the agency characterizes as the maximum amounts potentially to be delivered during the option periods.

The FBI explains that it elected to take this approach to meet its ongoing and future, geographically diverse, requirements in the most streamlined manner possible. According to the agency, its approach will allow it to avoid individually having to compete potentially dozens of delivery orders for varying quantities of equipment over a 5-year period. According to the agency, the latter approach--competing potentially dozens of separate delivery orders--“would place an enormous administrative burden on the FBI.” Legal Memorandum at 5. The agency states that its approach will result in substantial savings of both time and money over the contemplated 5-year period of the delivery orders.

As set forth below, we conclude that the FBI’s solicitations contemplate the award of what, in effect, would amount to single, multi-year, second-tier IDIQ instruments that are not permitted under the requirements discussed above.

We first address the FBI’s position that it properly is issuing single delivery orders under these RFPs that contemplate the subsequent issuance of “separate delivery specifications.” The terms “delivery order contract” and “task order contract” are defined by statute as follows:

(1) Delivery order contract.--The term “delivery order contract” means a contract for property that--

(A) does not procure or specify a firm quantity of property (other than a minimum or maximum quantity); and

(B) provides for the issuance of orders for the delivery of property during the period of the contract.

41 U.S.C § 4101(1).

Although the RFPs here do not expressly contemplate the award of stand-alone IDIQ or delivery order contracts, they unequivocally are solicitations for undefined--or IDIQ-type--delivery order instruments, against which the FBI plans to place multiple, subsequent delivery orders over the next five years. See also, FAR § 16.501-2 (describing the central features of IDIQ type contracts). The solicitations include only estimated quantities of equipment, and therefore do not identify a specific quantity of property to be acquired. RFPs, Section B (Schedule of Supplies and Services). In addition, the RFPs both expressly provide for the separate, periodic, issuance of orders for the delivery of property during the period of the contract. Both RFPs include identical delivery clauses that state as follows:

Delivery Requirements:

Delivery locations shall include the FBI’s 56 field office locations and FBI Academy, Quantico, VA. All delivery locations shall be designated in each delivery order issued. All deliveries shall be designated on individual delivery orders and shall be considered Free on-Board (F.O.B.) Destination.

Deliverables and Delivery Schedule:

The total period of performance will be five years with a one year base year and four one-year option periods of performance. Exercise of any option year period is at the discretion of the Government. The anticipated delivery of all components order[ed] is 90 days after receipt of order. The Contractor may request that it be permitted to make delivery within a longer period of time for extremely large orders, orders requiring engineering, and orders with diverse delivery locations. The decision to permit or negotiate a longer period of time for delivery rests exclusively with the Government.

RFP 81 at 11; RFP 68 at 11.

Both solicitations therefore clearly contemplate the award or issuance of an instrument that the agency terms a delivery order, but which, in essence, is a single-award, second-tier IDIQ instrument.

In light of our conclusion--that the FBI’s RFPs, in fact, contemplate the award of single-award, second-tier IDIQ instruments--we next consider whether the FBI properly may issue such solicitations under the statutes and regulations governing competitive acquisitions conducted among the holders of previously-awarded multiple-award IDIQ contracts. As noted, the FBI takes the position that FAR § 16.505(b)(1)(ii) provides it considerable discretion to determine the procedures to be used to place a particular order, and that this discretion allows it to issue RFPs that contemplate issuance of second-tier IDIQ instruments.[9] A review of that provision, however, does not support the agency’s position.

FAR § 16.505(b) generally describes the agency’s obligation to use order placement procedures that afford each multiple-award IDIQ contract holder a fair opportunity to compete for the agency’s requirements. That provision begins by describing the agency’s broad obligation as follows:

The contracting officer must provide each awardee a fair opportunity to be considered for each order exceeding $3,500 issued under multiple delivery-order contracts or multiple task-order contracts, except as provided for in paragraph (b)(2) of this section.

FAR § 16.505(b)(1)(i). This broad direction is self-explanatory and requires agencies to afford each multiple-award IDIQ contract holder a fair opportunity to be considered for each delivery order exceeding $3,500.

FAR § 16.505(b) also describes the discretion that contracting officers have to tailor order placement procedures under multiple-award IDIQ contracts as follows:

The contracting officer may exercise broad discretion in developing appropriate order placement procedures. The contracting officer should keep submission requirements to a minimum. Contracting officers may use streamlined procedures, including oral presentations.

FAR § 16.505(b)(1)(ii). This same section goes on to note that, although the competition requirements of FAR part 6 and the policies outlined in FAR part 15.3 do not apply to the ordering process, id., agencies must nonetheless develop order placement procedures that will provide each awardee a fair opportunity to be considered for each order above the $3,500 order value threshold. FAR § 16.505 (b)(1)(ii)(A).

Read as a whole, we agree that this provision of the FAR affords agencies broad discretion to tailor the ordering procedures to be used in awarding a given delivery or task order. For example, agencies may elect to keep submission requirements to a minimum and use streamlined procedures, including oral presentations. Alternatively, agencies may elect to use negotiated-type acquisition procedures similar to those described in FAR part 15.3. Or agencies may elect to use sealed bid procedures similar to those described in FAR part 14. However, there is nothing in FAR § 16.505(b) that provides agencies discretion to use a contract vehicle or instrument different from a “delivery order” as that term is defined under the FAR.

In this latter connection FAR § 16.505(a)(7) expressly describes the information that must be contained in every task or delivery order placed under an IDIQ contract as follows:

Orders placed under indefinite-delivery contracts must contain the following information:

(i) Date of order.

(ii) Contract number and order number.

(iii) For supplies and services, contract item number and description, quantity, and unit price or estimated cost or fee.

(iv) Delivery or performance schedule.

(v) Place of delivery or performance (including consignee).

(vi) Any packaging, packing, and shipping instructions.

(vii) Accounting and appropriation data.

(viii) Method of payment and payment office, if not specified in the contract (see 32.1110(e)).

Here, each of the agency’s RFPs contemplates awarding a single, second-tier IDIQ instrument that lacks several of these enumerated requirements. First, the quantity to be acquired is not specified. While the RFPs include estimated quantities, they do not include specific quantities, as required by the FAR. In fact, although the agency describes the RFPs estimated quantities as “maximum” quantities, we see no provision in the RFPs that actually characterizes the quantities as maximum quantities. In effect, there is nothing under the express terms of the RFPs that would preclude the FBI from placing orders in excess of the estimated quantities specified. Moreover, because of the lack of specific quantities, the agency also is unable to determine the full cost or price of the solicited requirements. In this latter connection, FAR § 16.505(a)(2) requires individual orders to clearly describe all supplies to be delivered so the full cost or price of performance can be established when the order is placed.

Second, the RFPs lack a delivery schedule. As noted, both RFPs expressly provide that the items are to be delivered, generally, within 90 days after receipt by the contractor of a particular order. RFP 81 at 11; RFP 68 at 11. Both RFPs also contemplate that different performance periods may be negotiated, depending upon the size and complexity of the agency’s subsequently-placed delivery order. Id.

Finally, both RFPs fail to identify the place of delivery or performance, as required. As noted, both RFPs specify only that delivery locations will be identified in the individual delivery orders to be issued after award of the second-tier IDIQ instruments. RFP 81 at 11; RFP 68 at 11.

In addition to these considerations, we also point out that the FBI has described its use of option years under the RFPs as a means to address the agency’s future, ongoing requirements. The option quantities suffer from the same deficiency as the second-tier IDIQ instruments suffer from, namely, that the agency’s option requirements are not defined regarding quantity, place of delivery, or schedule, as required under the FAR.

In sum, while the agency has significant discretion to tailor the procedures that it will use in placing delivery orders, it does not have discretion to use instruments that do not satisfy the requirements of FAR § 16.505(a)(7). The FBI’s contemplated award of a 5-year second-tier IDIQ instrument to a single contractor is inconsistent with the requirements of the applicable statutes and FAR provisions regarding what constitutes a “delivery order.” Those requirements are, at a minimum, that the delivery order be defined as to quantity, place of delivery and schedule. In essence, the two orders contemplated under these RFPs will deprive all the other TacCom contractors of a fair opportunity to compete for each of the delivery orders that will be issued in the future, despite their aggregate value of approximately $335 million. We therefore sustain this aspect of Harris’s protest.  (Harris IT Services Corporation B-411699, B-411796: Oct 2, 2015)  (pdf)


HGMI’s argument is without merit. Even where a solicitation specifically states an intention to award multiple contracts, it does not impose on the agency a legal obligation to make more than one award. The METEC Group, B‑290073, B-290073.2, May 20, 2002, 2002 CPD para. 86 at 2; Allied-Signal Aerospace Co., B-240938.2, Jan. 18, 1991, 91-1 CPD para. 58 at 2. Rather, an agency’s expression of intent merely demonstrates its expectation that it will make multiple awards. Canadian Commercial Corp./Liftking Indus., Inc., B-282334 et al., June 30, 1999, 99-2 CPD para. 11 at 6. Therefore, the mere fact that the RFP here stated that the agency intended to make multiple awards did not require it to make separate awards for the set-aside and unrestricted portions of the requirement.  (Hawkeye Glove Manufacturing, Inc., B-299741, August 2, 2007).  (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
New SSI B-413486, B-413486.2: Nov 3, 2016 Harris IT Services Corporation B-411699, B-411796: Oct 2, 2015  (pdf)
DLT Solutions, Inc. B-412237, B-412237.2, B-412237.3: Jan 11, 2016  (pdf)  
Hawkeye Glove Manufacturing, Inc., B-299741, August 2, 2007.  (pdf)  

U. S. Court of Federal Claims - Key Excerpts

The Navy was to make its award “to the responsible offeror who submits the lowest total price, technically acceptable offer with acceptable or neutral past performance.” The RFP incorporated by reference FAR § 52.212-1, “Instructions to Offerors-Commercial Items,” which includes the following clause:

(h) Multiple awards. The Government may accept any item or group of items of an offer, unless the offeror qualifies the offer by specific limitations. Unless otherwise provided in the Schedule, offers may not be submitted for quantities less than those specified. The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit price offered, unless the offeror specifies otherwise in the offer.

FAR § 52.212-1. The final paragraph of the RFP quoted the following NAVSUP clause:
Single Award For All Items (JAN 1999) (NAVSUP):

Due to the interrelationship of supplies and/or services to be provided hereunder, the Government reserves the right to make a single award to the offeror whose offer is considered in the best interest of the Government, price and other factors considered. Therefore, offerors proposing less than the entire requirement may be determined to be unacceptable.

(sections deleted)

B. Did the RFP Authorize Split Awards?

The basic issue in this case is relatively straightforward – did the RFP authorize the Navy to make a split award here – or not? Plaintiff asserts that the RFP unambiguously indicates that the award will be made to a single offeror for all four ports. It argues that the Navy deviated from the RFP’s terms when it made the split award. Defendant, however, contends that the RFP provided the Navy with an option – allowing it to make either an award to a single offeror or to split the award, depending on which was in the best interests of the Navy. Defendant argues that while the Navy originally intended to issue a single contract, it changed its mind – as it was permitted to do under the RFP – based on the CO’s recognition that considerable savings could be realized by splitting the award. The latter approach, defendant asseverates, did not vary from the terms of the RFP.

“It is hornbook law that agencies must evaluate proposals and make awards based on the criteria stated in the solicitation.” Banknote Corp., 56 Fed. Cl. at 386; see also NEQ, 88 Fed. Cl. at 47; PGBA, LLC v. United States, 60 Fed. Cl. 196, 207, aff’d, 389 F.3d 1219 (Fed. Cir. 2004). This requirement is rooted in the Competition in Contracting Act (CICA) and the FAR, both of which indicate that an agency shall evaluate proposals and assess their qualities solely based on the factors and subfactors specified in the solicitation. See 10 U.S.C. §§ 2305(a)(2)(A)-(3)(A); 48 C.F.R. §§ 15.303(b), 15.305(a); see also NEQ, 88 Fed. Cl. at 47; ManTech Telecomms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 66 (2001), aff’d, 30 Fed. Appx. 995 (Fed. Cir. 2002). If the agency changes any evaluation criterion after issuing the solicitation, it must amend the solicitation and notify the offerors of the changed requirement. See 48 C.F.R. § 15.206(a); see also id. § 15.206(d); Elec. Data Sys., LLC v. United States, 93 Fed. Cl. 416, 430 (2010); SP Sys., Inc. v. United States, 86 Fed. Cl. 1, 18 (2009). Consistent with these precepts, in a case such as this, a protestor must show that: (i) the procuring agency used a significantly different basis in evaluating the proposal than was disclosed; and (ii) the protestor was prejudiced as a result – that it had a substantial chance to receive the contract award but for that error. Elec. Data Sys., 93 Fed. Cl. at 430; Banknote Corp., 56 Fed. Cl. at 386-87.

So what does the RFP here disclose about the number of contracts to be awarded? We begin, as we must, with the RFP’s plain language. Banknote Corp., 365 F.3d at 1353; see also Coast Fed. Bank, FSB v. United States, 323 F.3d 1035, 1038 (Fed. Cir. 2003) (en banc). “If the provisions of the [RFP] are clear and unambiguous,” the Federal Circuit has stated, “they must be given their plain and ordinary meaning; we may not resort to extrinsic evidence to interpret them.” Banknote Corp., 365 F.3d at 1353. In addition, a RFP should be interpreted in a manner that harmonizes and gives reasonable meaning to all its parts. Id. “Provisions of a contract must be so construed as to effectuate its spirit and purpose.” Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991); see also Metric Constructors, Inc. v. NASA, 169 F.3d 747, 752 (Fed. Cir. 1999). An interpretation that gives a reasonable meaning to all provisions of a solicitation thus is preferable to one that leaves a portion of it useless or inexplicable. Gould, Inc., 935 F.2d at 1274; see also Fulcra Worldwide, LLC v. United States, 2011 WL 286250, at *15 (Fed. Cl. Jan. 31, 2011); Linc Gov’t Servs., LLC v. United States, 2010 WL 4484021, at *32 (Fed. Cl. Nov. 5, 2010). Context thus defines the meaning of any given term or provision in a government solicitation. Linc Gov’t Servs., 2010 WL 4484021, at *32 (citing Metric Constructors, 169 F.3d at 752); see also Fulcra Worldwide, 2011 WL 286250, at *15.

In the court’s view, the plain language of the RFP demonstrates that defendant reserved the right to award either a single contract covering all four ports, or multiple contracts covering one to three ports. In particular, the RFP included the clause found at FAR § 52.212-1, Instructions to Offerors – Commercial Items, which provides in relevant part:

(h) Multiple awards. The Government may accept any item or group of items of an offer, unless the offeror qualifies the offer by specific limitation. Unless provided otherwise in the Schedule, offers may not be submitted for quantities less than those specified. The Government reserves the right to make an award on any item for a quantity less than the quantity offered, at the unit prices offered, unless the offeror specifies otherwise.

Numerous cases have held that this clause authorizes an agency to award either a single contract or multiple contracts.

Principal among these decisions is Emeco Indus., Inc. v. United States, 485 F.2d 652 (Ct. Cl. 1973). There, the solicitation sought a contractor to manufacture 31,896 boxes. Id. at 654. Upon receiving an award to manufacture 2,713 boxes, the plaintiff assumed that it had won the contract and that this was the first of many box orders. Id. Later, however, it found that another contractor had received a contract to manufacture the remaining 29,183 boxes. Id. The plaintiff filed suit in the Court of Claims, asserting that the solicitation, as written, obliged the defendant to purchase the entire quantity of boxes from a single contractor and did not authorize a split award. This court’s predecessor rejected this argument, finding that “[a] careful reading” of the clause quoted above permitted a split award. Id. at 655. It focused, in particular, on that portion of the clause in which the Government “‘reserves the right to make an award . . . for a quantity less than the quantity offered . . . unless the offeror specified otherwise in his offer.” It noted that the “plaintiff placed no conditions on its bid,” and that, as a result, the award of only 2,713 boxes, rather than the entire quantity of 31,896, was proper. Id. A phalanx of cases has construed the multiple awards clause of FAR § 52.212-1 (or like-worded predecessor provisions) to similar effect.

Plaintiff attempts to bring this case outside this line of authority by citing several cases that have held that the mere presence of FAR § 52.212-1(h) does not authorize a split award where a solicitation otherwise anticipates an aggregate award. See Int’l Code Servs., Inc., 97-1 C.P.D. ¶ 216 (1997); Knoxville Glove Co., 93-1 C.P.D. ¶ 339 (1993); Gen. Aero Prods. Corp., 78-2 C.P.D. ¶ 70 (1978). It bravely insists that the latter is the case here, centering its claim on the evaluation mechanism in the RFP. In this regard, plaintiff trumpets that portion of the RFP which states that “the Government will award a contract resulting from the solicitation to the responsible offeror who submits the lowest total price, technically acceptable offer with acceptable or neutral past performance.” It asserts that there can only be one “lowest total price” under the RFP, a price that must necessarily correspond to all four of the ports in question.

But, this interpretation of the “total price” clause makes no sense. For one thing, it would render the multiple awards clause an absurdity, because the Navy could not sensibly make an award under that clause of “less than the quantity offered,” i.e., an award for one to three ports, if that decision had to be based upon the “total price” for all four ports. Any reliance on the latter approach would almost certainly run afoul of the CICA and FAR provisions that require agencies to include price as an evaluation factor, all of which, one would hope, require the agency to evaluate the price of what it is buying, as opposed to the “price of tea in China.”6 See 41 U.S.C. § 253a(c)(1)(B); FAR § 15.304(c)(1); see also Serco, Inc. v. United States, 81 Fed. Cl. 463, 491 (2008). It makes far more sense to read the “total price” clause as authorizing multiple awards, provided each award meets the evaluation criteria – that is, the award must go to the otherwise qualified contractor which submits the lowest total price for the lot in question.  This approach, unlike plaintiff’s strained reading, preserves the integrity of both the “multiple awards” and “total price” provisions, a result consistent with familiar canons of construction. See Gould, 935 F.2d at 1274 (“an interpretation which gives a reasonable meaning to all of its parts will be preferred to one which leaves a portion of it useless, inexplicable, inoperative, void, insignificant, meaningless, superfluous, or achieves a weird and whimsical result.” (quoting Arizona v. United States, 575 F.2d 855, 863 (1978))); see also Spectrum Sciences & Software, Inc. v. United States, 84 Fed. Cl. 716, 735 (2008). Indeed, in analogous circumstances, several cases have held that the presence of “total price” clause in a RFP or solicitation does not prevent an agency from awarding multiple contracts. See Gichner Mobile Sys., 85-1 C.P.D. ¶ 534 (1985); Granite State Mach., 80-2 C.P.D. ¶ 396; see also SKS Group, Ltd., 82-1 C.P.D. ¶ 574 (1982).

That the Navy had the option of awarding more than one contract accords with two other provisions in the RFP. The first of these is found in the PWS, which stated that “[t]he contract is sub-divided into Lots. Lots may be for individual ports or they may include several ports under one Lot.” This language, which provides for the variable grouping of ports, makes sense only if the Navy could award more than one contract under the RFP, i.e., could “sub-divide[]” the work; it makes utterly no sense if the Navy could award only a single contract. That the RFP envisioned the former, and not the latter situation, is suggested by yet another clause in the RFP, to wit –

SINGLE AWARD FOR ALL ITEMS (JAN 1999) (NAVSUP)
Due to the interrelationship of supplies and/or services to be provided hereunder, the Government reserves the right to make a single award to the offeror whose offer is considered in the best interest of the Government, price and other factors considered. Therefore, offerors proposing less than the entire effort specified herein may be determined to be unacceptable.

Of course, it would be passing odd to “reserve the right to make a single award” if, as plaintiff contends, the RFP only authorized the agency to make a single award. Given the common understanding of the word “reserve,” it makes eminent sense to read this provision as preserving the Navy’s option to award a single contract in the face of other RFP provisions authorizing the award of multiple contracts Viewing the RFP as affording the Navy this flexibility accords with Congress’ expectation, manifested in the CICA, that agencies will award contracts to “the responsible source whose proposal is most advantageous to the United States, considering only cost or price and the other factors included in the solicitation.” 10 U.S.C. § 2305(b)(4)(C); see also Lockheed Missiles & Space Co., Inc. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); Friend v. Lee, 221 F.2d 96, 100 (D.C. Cir. 1955). Various cases have interpreted this legislative command to mean that “if multiple awards will be most advantageous to the Government, and they are not prohibited by the solicitation, multiple awards should be made.” Rocky Mountain Trading Co., 87-2 B.C.A. ¶ 19,725. Here, of course, the multiple awards were advantageous to the Navy in yielding the lowest cost for the husbanding services in question. And those awards were not prohibited by the RFP.  (Glenn Defense Marine (Asia), PTE, LTD v. U. S., No. 10-852c, March 1, 2011)  (pdf)

U. S. Court of Federal Claims - Listing of Decisions

For the Government For the Protester
Glenn Defense Marine (Asia), PTE, LTD v. U. S., No. 10-852c, March 1, 2011  (pdf)  

U. S. Court of Appeals for the Federal Circuit - Key Excerpts

 

U. S. Court of Appeals for the Federal Circuit - Listing of Decisions

For the Government For the Protester
Glenn Defense Marine (Asia), PTE, LTD v. U. S., No. 11-852c, February 6, 2012 (pdf)  
   
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