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. Domain Name Alliance Registry, B-310803.2, Aug. 18, 2008, 2008 CPD para. 168 at 8. As a general matter, the details of a corrective action are within the sound discretion and judgment of the contracting agency. Rockwell Elec. Commerce Corp., B‑286201.6, Aug. 30, 2001, 2001 CPD para. 162 at 4. In this regard, an agency's discretion when taking corrective action extends to a decision on the scope of proposal revisions, and there are circumstances where an agency may reasonably decide to limit the revisions offerors may make to their proposals. See, e.g., Honeywell Tech. Solutions, Inc., B‑400771.6, Nov. 23, 2009, 2009 CPD para. 240 at 4; Domain Name Alliance Registry, supra; Rel-Tek Sys. & Design, Inc.-Modification of Remedy, B‑280463.7, July 1, 1999, 99-2 CPD para. 1 at 3. We generally will not object to the specific corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action. Networks Elec. Corp., B‑290666.3, Sept. 30, 2002, 2002 CPD para. 173 at 3.

Here, the Army's intended corrective action focused not only on the very procurement deficiency (an unreasonable past performance evaluation) that led to GAO's ADR prediction that L‑3's protest would be sustained, but also on the concerns expressed by GAO regarding the adequacy of the evaluation of the performance of the EO/IR sensors as part of the offerors' proposed EMARSS systems. Since the agency's corrective action responded to the areas of concern identified by GAO, and nothing in NGTS's protest demonstrates that the agency's approach was an abuse of discretion, we deny NGTS's protest regarding the scope of the corrective action. Intermarkets Global, B-400660.10; B-400660.11, Feb. 2, 2011, 2011 CPD para. 30 at 3; cf., Lockheed Martin Sys. Integration‑‑Owego; Sikorsky Aircraft Co., B‑299145.5; B‑299145.6, Aug. 30, 2007, 2007 CPD para. 155 at 6 (change in evaluation methodology required opportunity to respond to revised scheme).

NGTS asserts that in reexamining the performance validations for the offerors' EMARSS systems, including considering information learned as a result of the protest process, it is likely that the agency essentially will conduct unequal discussions. We need not now resolve this dispute, since we view NGTS's assertion of unequal discussions as premature, given that an award decision has not yet been made. If NGTS is not selected for award, it may raise whatever evaluation errors it deems appropriate, including unequal discussions, at that time. See Intermarkets Global, supra, at 4-5; American K-9 Detection Servs., Inc., B-400464.6, May 5, 2009, 2009 CPD para. 107 at 5.  (Northrop Grumman Technical Services, Inc., B-404636.11, June 15, 2011)  (pdf)

Northrop requests that we recommend that the agency reinstate the task order previously issued to it. In the alternative, Northrop requests that we recommend that the agency tailor its corrective action and limit it to only that which is necessary to remedy any demonstrable errors in the earlier acquisition. In this regard, Northrop proposes various graduated levels of corrective action, including, for example, a limited reevaluation of the proposals, limited discussions with the offerors, or the issuance of a separate solicitation for some of the agency's requirements while leaving the remainder of the requirement under Northrop's previously issued task order.

As a general rule, agencies have broad discretion to take corrective action where the agency has determined that such action is necessary to ensure fair and impartial competition. Greentree Transp. Co., Inc., B-403556.2, Dec. 10, 2010, 2010 CPD para. 293 at 2. The details of implementing the corrective action are within the sound discretion and judgment of the contracting agency, and we will not object to any particular corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action. Partnership for Response and Recovery, B-298443.4, Dec. 18, 2006, 2007 CPD para. 3 at 3. Additionally, we have recognized that the possibility that a contract may not have been awarded based on a fair determination of 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 will be at a disadvantage in a reopened procurement because its price has been exposed. Id. at 4.

We have recognized a limited exception under which we will object to an agency's corrective action if the record establishes either that there was no impropriety in the original evaluation and award decision, or where there was an actual impropriety, but it was not prejudicial to any of the offerors. Security Consultants Group, Inc., B-293344.2, Mar. 19, 2004, 2004 CPD para. 53 at 2-3. In comparison, where, for example, an agency's proposed corrective action goes beyond what our Office originally may have recommended in connection with sustaining a protest, the agency's decision to pursue such a course of action does not, by itself, provide a basis for protest, absent some showing that the agency's actions are contrary to procurement law or regulation, or otherwise are improper. See C2C Solutions, Inc.; Trust Solutions, LLC, B-401106.6, B-401106.7, June 21, 2010, 2010 CPD para. 145 at 3; see also NavCom Defense Elec., Inc., B-276163.3, Oct. 31, 1997, 97-2 CPD para. 126 at 3.

On the record here, we have no basis to object to GSA's proposed corrective action. The agency explains that it determined from the results of the original competition that its requirements may not have been adequately defined. In this regard, after it issued the original TOR, the agency amended the solicitation to add a significant requirement for optional operations and maintenance (O&M) work to be performed outside of the St. Elizabeth's campus. Specifically, section B of the solicitation was amended to add optional CLINs 004B, 1004B and 2004B (each of these CLINS has several sub-CLINs representing annual requirements for each year of the multi-year periods of performance). While the CLINs included ceiling dollar value amounts (totaling $1,080,000,000), there was no further narrative description of the requirement in this section of the TOR. TOR, at B-4, B-6 and B-8.

Elsewhere in the TOR, there were two brief narrative references to the added services. First, the overview section of the statement of work provided, in relevant part, as follows: "Operations and Maintenance for DHS Headquarters personnel that do not move onto the campus are within the scope of this task order." TOR, at C-3. Second, the service desk section of the statement of work provided:

In addition, on an optional basis the Government may have the contractor support approximately 7,000 DHS HQ employees operating outside of the St. Elizabeth's campus in the National Capitol Region.

TOR, at C-11. The TOR included an additional reference to this added requirement; firms were instructed to submit a performance work statement that was structured around seven broad tasks, and task 4 included a reference to the optional O&M requirement. TOR, at C-15. Aside from these references to the optional O&M requirement, the TOR did not include any specific details concerning the nature of the services, the location where they would be performed, or any other details relating to the operating environments where the services were to be provided.

The lack of detail in this regard resulted in two bidder questions and answers, but the agency's answers did not provide any further specific elaboration concerning the agency's substantive requirements. The first question provided:

Q. The government in amendment 1 added the optional requirements of providing Operations and Maintenance (O&M) support to the residents of DHS that would not be moving to the St. Elizabeth's campus. By doing so they added an additional $1B[illion] in contract ceiling to the TOR. However the government didn't provide any information that would be needed to support those customers such as the locations and number of employees by facility. What their current O&M environments are; additional systems requirements analysis and design for those off campus; installation and testing requirements for those off campus.

A. Government will evaluate the proposed concept of how the O&M requirement will be handled. The ceiling (plug) number to bid to ($1B[illion]) is provided, so that won't affect pricing.

TOR, amend. 6, May 25, 2010, question No. 257. The second question related to how the offerors should bid what the agency described as the $1B ceiling value (and specifically was concerned with what would be required during performance should the ceiling amount be exceeded), but this second question provided no additional discussion concerning the substantive details of the agency's requirements, and again directed firms simply to "bid to the plug number." Id., question No. 261.

The record shows that the offerors diverged widely in their responses to the O&M requirement, and that the agency viewed the responses from three of the five competitors in this area as so deficient as to render their proposals technically unacceptable and, thus, ineligible for further evaluation or award consideration. Specifically, the agency had developed an independent government cost estimate (IGCE) for the O&M requirement which was based on an agency staffing estimate of 22,530,909 labor hours. Using the IGCE staffing estimate as a standard against which to evaluate the offerors' proposals, the agency found three of the proposals unacceptable for having offered inadequate staffing to perform the requirement. One of the three offerors proposed to perform the O&M requirement using [deleted] labor hours; a second offeror proposed [deleted] labor hours; and a third offeror proposed [deleted] labor hours. (In comparison, [deleted]; Northrop proposed [deleted] hours and the other firm proposed [deleted] hours. AR, exh. 5, at 63, 120.) The record shows that, once the agency found the proposals technically unacceptable for failing to offer adequate staffing, it discontinued its evaluation, and did not give consideration to the price proposals of the unacceptable offerors. AR, exh. 7, at 38.

Having found that four of the five competitors submitted technically unacceptable proposals, the agency made award on the basis of initial proposals to Northrop, notwithstanding the fact that its proposed price was [deleted] among the competitors (and exceeded the low price by more than $[deleted] million). In making its award decision, the agency did not perform a cost/technical tradeoff because it had eliminated the other offers from consideration. AR, exh. 7, at 38. The record also shows that, although these four proposals were found technically unacceptable for offering inadequate staffing, they otherwise received relatively high, closely ranked, scores under the evaluation criteria not related to adequacy of proposed staffing. AR, exh. 7, at 17.

We find the agency's decision to take corrective action in these circumstances reasonable. As noted, the proposed levels of effort for the O&M requirement varied significantly from one another, with a low proposed level of effort of [deleted] labor hours ([deleted] percent fewer hours than used for the IGCE); a second proposal of [deleted] labor hours ([deleted] percent fewer hours than used for the IGCE); and a third proposal of [deleted] labor hours ([deleted] percent fewer hours than used for the IGCE). Given the wide divergence in proposed levels of effort for the O&M requirement, as well as the relative lack of detail in the solicitation regarding this work, the agency reasonably concluded that it had failed adequately to convey its requirements to the offerors in a manner that would allow them to compete intelligently, and on a relatively equal basis.

Northrop suggests that it was the offerors' business judgment, rather than a lack of information relating to the agency's requirements, that led them to deviate so dramatically in their proposed staffing for the optional O&M requirement. Northrop maintains that, because the agency included in the solicitation a $1 billion "plug" price for purposes of preparing their proposals, firms were on notice of how the agency wanted to have this requirement staffed. We disagree.

The TOR characterized this and the other pricing information included in section B as ceiling prices, rather than as "plug" prices. TOR, section B. (Each of the CLINs included a ceiling price, not just the optional O&M requirements CLINS). There is nothing in the solicitation that indicated that the agency expected the offerors to submit technical responses based on the maximum level of effort possible under the ceiling prices, or that the ceiling prices were anything other than an upper, not-to-exceed limit on contractor compensation. In fact, the agency specifically described the ceiling prices in a bidder question and answer as follows: "The ceiling price is the maximum that may be paid to the contractor except for any adjustment under other contract clauses providing for equitable adjustment or other revision of the contract price under stated circumstances." TOR, amend. 6, May 25, 2010, question No. 19.

In contrast, insofar as the relationship of the ceiling prices to the optional O&M requirements were concerned, the agency advised offerors (in its answer to a bidders' question) that the "Government will evaluate the proposed concept of how the O&M requirement will be handled." TOR, amend. 6, May 25, 2010, question No. 257. Such an evaluation approach presupposes that different concepts or approaches (including different staffing approaches and levels of effort) to meeting the O&M requirement were anticipated by the agency and would be evaluated. Simply stated, the agency's inclusion of the ceiling prices provided no meaningful information or guidance relating to the agency's desired staffing levels.

In summary, we find that the record provides an adequate basis for the agency to have taken corrective action. As discussed, the record supports the agency's conclusion that three of five competitors may have been eliminated from the competition because the offerors did not have adequate information to compete intelligently and on a relatively equal basis.  (Northrop Grumman Information Technology, Inc., B-404263.6, March 1, 2011)  (pdf)

As an initial matter, IMG asserts that the corrective action is unduly limited, and that the offerors instead should be given the opportunity to generally revise their proposal.

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. Domain Name Alliance Registry, B-310803.2, Aug. 18, 2008, 2008 CPD para. 168 at 8. As a general matter, the details of a corrective action are within the sound discretion and judgment of the contracting agency. Rockwell Elec. Commerce Corp., B‑286201.6, Aug. 30, 2001, 2001 CPD para. 162 at 4. In this regard, an agency's discretion when taking corrective action extends to a decision on the scope of proposal revisions, and there are circumstances where an agency may reasonably decide to limit the revisions offerors may make to their proposals. See, e.g., Honeywell Technology Solutions, Inc., B‑400771.6, Nov. 23, 2009, 2009 CPD para. 240 at 4; Domain Name Alliance Registry; Computer Assocs. Int'l, supra; Rel-Tek Sys. & Design, Inc.-Modification of Remedy, B‑280463.7, July 1, 1999, 99-2 CPD para. 1 at 3. We generally will not object to the specific corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action. Networks Elec. Corp., B‑290666.3, Sept. 30, 2002, 2002 CPD para. 173 at 3.

Here, DLA's corrective action first focused on the very procurement deficiency (an unreasonable price realism evaluation) that led to GAO's ADR prediction that the protests would be sustained, and then turned to the other areas of concern identified during the ADR. In this regard, the agency amended the solicitation to clarify the assumed size of the required warehouse pallets and the force protection requirements, Amend. 26, and then advised offerors that they could submit a final technical proposal revision addressing either or both of these areas, as well as make any price revisions for which the offeror could provide documented evidence showing a direct link between changes in the proposal resulting from the two clarifications and the proposed pricing. DLA Letters to Offerors, Oct. 20, 2010. Since the agency's corrective action responded to the areas of concern identified by GAO, and nothing in IMG's protest demonstrates that the agency's approach was an abuse of discretion, we deny IMG's protest regarding the scope of the corrective action. Cf., Lockheed Martin Sys. Integration‑‑Owego; Sikorsky Aircraft Co., B‑299145.5; B‑299145.6, Aug. 30, 2007, 2007 CPD para. 155 at 6 (change in evaluation methodology required opportunity to respond to revised scheme).  (Intermarkets Global, B-400660.10; B-400660.11, February 2, 2011)  (pdf)
 

McKean argues that the Navy's proposed corrective action goes beyond what is required to address any concern with the cost evaluation, and is therefore unreasonable.[3] Since McKean has hired many of the incumbent personnel at the direction of the Navy, McKean argues that requiring it to submit a revised proposal will harm its chances of award.

Our Office requested that McKean further explain why it is necessary to restrict the Navy's discretion in taking corrective action here. McKean responded that BCI was not prejudiced by any error in the cost realism analysis because McKean's evaluated cost was significantly lower than BCI's. Thus, in McKean's view, the error in the cost realism analysis did not prejudice BCI, while the reopening of discussions will cause significant harm to McKean's competitive position. Accordingly, McKean argues that the Navy must limit its corrective action to a reevaluation of the proposals submitted previously. McKean Response to GAO, Nov. 3, 2009, at 5 (citing Security Consultants Group, Inc., B-293344.2, Mar. 19, 2004, 2004 CPD para. 53). We disagree.

In negotiated procurements, agencies have broad discretion to take corrective action where they determine that such action is necessary to ensure fair and impartial competition. MayaTech Corp., B-400491.4, B‑400491.5, Feb. 25, 2009, 2009 CPD para. 55 at 3. 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. Strand Hunt Constr., Inc., B-292415, Sept. 9, 2003, 2003 CPD para. 167 at 6. 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; where this is the case, reopening the competition after prices have been disclosed does not provide any benefit to the procurement system that would justify compromising the offerors' competitive positions. Security Consultants Group, supra, at 2-3; Hawaii Int'l Movers, Inc., B‑248131, Aug. 3, 1992, 92-2 CPD para. 67 at 6, recon. denied, Gunn Van Lines; Dept. of the Navy--Recon., B-248131.2, B-248131.4, Nov. 10, 1992, 92-2 CPD para. 336.

The Navy advises that it needs to reopen discussions to address potentially significant changes, due to the passage of time, in how the offerors will meet the agency's requirements. In our view, this is a matter where the agency has considerable discretion and we will not substitute our views for the Navy's on how the agency should proceed, absent a showing that this discretion is being abused. We see no such showing here.

Rather than being inconsistent with the rationale of our decision in Security Consultants Group, we view that decision as involving a critical difference. There, after identifying a flaw (the solicitation did not disclose that the past performance factor was nearly three times more significant than either of the other non-price factors), it appeared that none of the offerors had been competitively prejudiced by the incorrect weighting described in the solicitation. Nevertheless, the agency proposed to request revised proposals, but presented no reason to reopen the competition. In contrast, here, the Navy has presented both a flaw requiring corrective action (an error in the cost realism evaluation) and a reasonable basis why reopening the competition is appropriate to achieve a fair competition--i.e., the likelihood that one or both offerors would need to make significant personnel/ resume changes in their initial proposals.

In our view the Navy has shown a reasonable basis for conducting discussions and requesting revised proposals. Doing so is within the discretion of the Navy to determine the scope of corrective action, and therefore we will not substitute our judgment for the agency's.  (McKean Defense Group--Information Technology, B-401702.2, LLC, January 11, 2010) (pdf)
 

The original RFP contained three technical evaluation factors--technical approach, management and staffing, and past performance. When combined, those factors were significantly more important than cost/price. Original RFP at 41. Three offerors, including the awardee and the protester, submitted proposals. The earlier protest followed contract award.

In response to that protest, the agency announced it would take the following corrective action: amend the solicitation to reflect that the combination of the technical factors is approximately equal to (not significantly more important than) price; accept revised proposals; reevaluate; and make a new award decision. The contracting officer asserts that the protest warranted corrective action for two main reasons. The protester complained that it had not been accorded the opportunity to respond to negative past performance information, as required by Federal Acquisition Regulation sect. 15.306. The contracting officer saw reopening the competition to allow the protester to respond as "the only way to remedy the agency error in evaluating adverse past performance information." Contracting Officer's Statement of Facts at 2. The contracting officer also discovered an error in section M of the RFP; contrary to the terms of the original RFP, the agency did not intend for the technical factors to be significantly more important than cost/price. Accordingly, the RFP was amended to state that all evaluation factors other than cost/price, when combined, are approximately equal to cost/price. Id. at 3.

We see no basis to object to the agency's corrective action. The contracting officer states that the original RFP was in error when it identified the combined technical factors as significantly more important than cost/price. Contracting Officer's Statement of Facts at 3. A contracting agency properly may take corrective action in order to rectify an error in the solicitation concerning the basis for award, where there is no evidence that the agency acted in other than good faith. Alfa Consult S.A., B-298164.2, B-298288, Aug. 3, 2006, 2006 CPD para. 127 at 2. Here, the agency reasonably remedied the misstatement of the relative weight of the evaluation factors by amending the solicitation and requesting revised proposals.

The protester argues that the agency in fact acted in bad faith and that its corrective action intentionally favored the prior awardee. See Comments, Sept. 12, 2010 at 7. The protester offers no evidence to support its assertion of agency bias, other than its own bare allegation that the agency's actions improperly favored the awardee. Government procurement officials are presumed to act in good faith, and we will not attribute unfair or prejudicial motives to them on the basis of inference or supposition. Triton Marine Constr. Corp., B-250856, Feb. 23, 1993, 93-1 CPD para. 171 at 6. In the absence of any evidence of bias in the record, we see no merit to this protest allegation.

The protester also asserts, correctly, that the agency's corrective action does not address certain of the protester's original protest grounds. For example, the protester asserted in the underlying protest that the awardee had an unmitigated conflict of interest. There is currently no contract award and, therefore, no alleged violation of procurement regulation or statute to protest. The protester's allegations are premised on the agency making award to the same firm again, and, because they anticipate allegedly improper agency action, they are speculative and premature. Paramount Group, Inc., B-298082, June 15, 2006, 2006 CPD para. 98 at 6-7. Our Office will not assume in advance that an agency will conduct its procurements improperly.  (Training Management Solutions, Inc., B-403461.2, September 29, 2010)  (pdf)

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. Domain Name Alliance Registry, B-310803.2, Aug. 18, 2008, 2008 CPD para. 168 at 8; Computer Assocs. Int'l, B-292077.2, Sept. 4, 2003, 2003 CPD para. 157 at 5. An agency's discretion when taking corrective action also extends to a decision on the scope of proposal revisions, and there are circumstances where an agency may reasonably decide to limit the revisions offerors may make to their proposals. See, e.g., Computer Assocs. Int'l, supra; Rel-Tek Sys. & Design, Inc.--Modification of Remedy, B-280463.7, July 1, 1999, 99-2 CPD para. 1 at 3. In instances where the corrective action does not also include amending the solicitation, we will not question an agency's decision to restrict proposal revisions when taking corrective action so long as it is reasonable in nature and remedies the established or suspected procurement impropriety. See Consolidated Eng'g Servs., Inc., B-293864.2, Oct. 25, 2004, 2004 CPD para. 214 at 3-4; Computer Assocs. Int'l, supra.

As a preliminary matter, the parties agree that NASA's corrective action here does not include amending either the solicitation's substantive requirements or evaluation scheme. Additionally, Honeywell does not dispute that NASA's corrective action remedies the established or suspected procurement impropriety (i.e., the agency's evaluation of ITT's past performance). Rather, the crux of Honeywell's objections is that the agency's corrective action does not go far enough, insofar as offerors should be permitted to submit unlimited proposal revisions.

The agency's decision to limit the scope of its corrective action was reasonable. As noted above, our January 27 decision found that NASA's evaluation of ITT's past performance was improper, but that Honeywell's remaining challenges to the evaluation of offerors' proposals were without merit: in light thereof, our recommendation was limited to remedying the identified problem regarding the past performance evaluation. Further, after the June 25 outcome prediction ADR conference, NASA took corrective action to remedy the problem identified regarding the past performance evaluation and, at the same time, decided to obtain updated information from both offerors in that area. In our view, NASA's decision to update the past performance information from each offeror was a reasonable way to remedy the identified procurement impropriety while not affecting other portions of offerors' proposals and the evaluation thereof. This approach has the added benefit of reducing further cost and delay in the procurement. See Computer Assocs. Int'l, Inc., supra; Serv-Air, Inc., B-258243.4, Mar. 3, 1995, 95-1 CPD para. 125 at 2-3. We therefore conclude that the agency acted within its discretion in limiting the revisions offerors may make to their proposals.  (Honeywell Technology Solutions, Inc., B-400771.6, November 23, 2009) (pdf)

First, Pemco asserts that the agency was obligated to reopen discussions with the offerors in order to obtain additional information prior to performing the price realism and risk analysis required by the solicitation and recommended by our Office, and that its failure to do so rendered the subsequent source selection decision improper.

As a general rule, the details of implementing recommendations of our Office are within the sound discretion and judgment of the contracting agency, and we will not question an agency’s ultimate manner of compliance, so long as it remedies the procurement impropriety that was the basis for our recommendation. See, e. g., Partnership for Response and Recovery, B-298443.4, Dec. 18, 2006, 2006 CPD para. 3 at 3; ST Aerospace Engines Pte, Ltd., B-275725.3, Oct. 17, 1997, 97-2 CPD para. 106 at 5. In this regard, an agency’s discretion generally extends to determining whether it is necessary to reopen discussions and obtain proposal revisions. See SDS Int’l, Inc. B‑291183.4, Apr. 28, 2003, 2003 CPD para. 127 at 6; Computer Assocs. Int’l, B‑292077.2, Sept. 4, 2003, 2003 CPD para. 157 at 5.

Here, our decision sustaining Pemco’s prior protest was based on the absence of any agency documentation reflecting the agency’s judgments regarding price realism and proposal risk in the context of Boeing’s final proposal revisions. Pemco’s assertion that the agency was required to reopen discussions appears to be based on a perception that our Office found Boeing’s proposal to be informationally deficient; we did not. In this regard, it is not the function of our Office to evaluate proposals; rather, we will examine the procurement record created by the agency to determine whether the agency’s evaluation was consistent with the solicitation requirements and applicable statutes and regulations. E.g. Pacific Ship Repair and Fabrications, B‑279793, July 23, 1998, 98-2 CPD para. 29 at 3‑4.

Since our prior decision was based on an informational deficiency in the agency’s evaluation record, it was not unreasonable for the agency to correct that deficiency by performing, and documenting, the required analyses based on the information that was already available. Pemco’s assertion that the agency was obligated to reopen discussions with all of the offerors is without merit. (Pemco Aeroplex, Inc., B-310372.3, June 13, 2008) (pdf)  (See prior decision, Pemco Aeroplex, Inc., B-310372, December 27, 2007)

An agency’s discretion in the area of corrective action extends to deciding the scope of proposal revisions, and there are circumstances where an agency reasonably may decide to limit revisions offerors make to their proposals. See, e.g., Computer Assocs. Int’l, B-292077.2, Sept. 4, 2003, 2003 CPD para. 157 at 5. Where, as here, an agency decides to amend a solicitation after closing and permit offerors to revise their proposals in response, however, we think that offerors should be permitted to revise any aspect of their proposals, including those that were not the subject of the amendment, unless the agency offers evidence that the amendment could not reasonably have any effect on other aspects of proposals, or that allowing such revisions would have a detrimental impact on the competitive process. Unlike in prior cases where we found that agencies could limit the extent to which proposals may be revised, see, e.g., Rel-Tek Sys. & Design, Inc.--Modification of Remedy, supra; ST Aerospace Engines Pte. Ltd., B-275725.3, Oct. 17, 1997, 97-2 CPD para. 106 at 4; System Planning Corp., B-244697.2, June 15, 1992, 92-1 CPD para. 516 at 4, the agency has not made such a showing here. The record does not contain any argument from the Navy that allowing offerors to submit revised proposals would impair the competitive process in any way. With respect to the effect of the amendment on proposals, the Navy argues that it made no revisions to the RFP that would have an impact on scheduling, and thus there is no reason for it to permit offerors to revise their proposed schedules. We disagree. Clearly, amending the solicitation to permit exercise of the options for line items 0003-0007 for up to 365 days after notice to proceed for line item 0001 could have an impact on offerors’ schedules, which were based on exercise of these options 8 months after contract award. Even to the extent that the delay in the performance period could not reasonably be expected to have an impact on the sequencing and duration of the various construction tasks, we agree with the protester that it could be expected to have an impact on schedule-related matters such as the availability of subcontractors and, depending on the time of year at which notice to proceed is issued, accounting for holiday periods. We are also persuaded that where, as here, price revisions are permitted, offerors should be allowed to revise any portions of their technical proposals that could have an impact on their pricing, which clearly would include schedule. In sum, without some rational basis for denying offerors the ability to make revisions to all portions of their proposals, we think the Navy’s decision to limit the scope of revisions to technical proposals was unreasonable. Accordingly, we sustain CMR’s protest against the agency’s failure to permit it to revise its schedule in its final offer. (Cooperativa Muratori Riuniti, B-294980.5, July 27, 2005) (pdf)

As a preliminary matter, although it characterizes its current filing as a request for reconsideration, Envirosolve does not argue that we should not have dismissed its earlier protest because the agencys proposed corrective action did not, in fact, render the protest academic. Compare Saltwater Inc.--Recon. and Costs , B-294121.3, B-294121.4, Feb.8, 2005, 2005 CPD 33. Instead, Envirosolve argues that DEA has failed to take the corrective action promised within the time period promised. A protest, like the one here, that was once academic is not revived by subsequent agency action or inaction. Rather, the subsequent agency conduct gives rise to a new basis for protest even if some of the issues raised by the subsequent action are the same as the issues raised under the earlier protest. See Lackland 21st Century Servs. Consol.--Protest and Costs , B-285938.6, July 13, 2001, 2001 CPD 124 at 4. (Envirosolve LLC, B-294974.4, June 8, 2005)  (pdf)

Four vendors, including CMC and SSG, submitted quotations, which were evaluated by the then-cognizant contracting officer, who alone evaluated their technical qualifications. The contracting officer summarized her adjectival ratings in matrix form and, without identifying the vendors by name, furnished them to the three member technical evaluation panel (TEP) for review. Based on this review, bidder 1 (SSG) was rated technically lower, and had a lower price, than bidder 2 (CMC); the TEP thus recommended award to CMC. After awarding the contract to CMC, the contracting officer left federal service and was replaced by another individual. Thereafter, SSG requested a debriefing, but when the replacement contracting officer reviewed the contracting file, she determined that the evaluation was so flawed that it had to be redone. She notified the vendors and had the TEP review each vendor's quotation, individually score them, and then complete a consensus evaluation. The TEP's consensus evaluation rated CMC's quotation as good under the technical factor and unsatisfactory under the past performance factor, while rating SSG's quotation as outstanding under both factors. Based on SSG's technical ratings and low price, the contracting officer terminated CMC's contract and made award to SSG. Upon learning of the termination of its contract and the new award, CMC filed this protest. Here, the replacement contracting officer's decision to take corrective action was both reasonable and appropriate because the original evaluation and its record were significantly flawed. Specifically, even though the quotations were to be evaluated on the basis of technical qualifications and past performance, there was nothing--no strengths or weaknesses--listed in the evaluation record to support the original contracting officer's adjectival ratings for the vendors. Further, the evaluation matrix was inconsistent with SSG's past performance information. Specifically, one of SSG's past performance questionnaire respondents had indicated that he would do business with SSG again, and the other had indicated that he "maybe" would do business with SSG again. However, the original evaluation matrix indicated that these respondents had answered "maybe" and "no," a significant difference. Moreover, the TEP members, charged with responsibility for evaluating the proposals, had not reviewed either proposal before making their initial award recommendation. Given the agency's reliance on erroneous information, the lack of supporting narrative, and the absence from the record of any information supporting the TEP's award recommendation, the award determination was unsupportable and potentially subject to a successful protest challenge. U.S. Defense Sys., Inc. , supra . Under these circumstances it was within the agency's discretion to reevaluate the quotations and make a new award determination based on a fully documented evaluation record. Since following this course resulted in a determination that SSG's proposal, rather than CMC's, represented the best value, the termination of CMC's contract and issuance of a new contract to SSG were unobjectionable.  (CMC & Maintenance, Inc., B-293803.2, December 2, 2004)  (pdf)

Under the circumstances here, it was reasonable for the agency to limit the vendors’ submissions to revised price quotes. As noted above, USDA determined that its evaluation of CA’s price quote may have been improper, and that the subsequent source selection decision had not been adequately documented. By contrast, the agency found nothing improper in its evaluation of the vendors’ technical quotes and found no merit to CA’s allegation concerning an unstated minimum requirement for an integrated multiple platform software product. The agency also determined that the cost of conducting the initial technical evaluation of quotes--and presumably, the approximate cost for conducting a second technical evaluation of quotes--was more than $42,000. Contracting Officer’s Statement, June 18, 2003, at 1; AR, Tab F, TET Leader Statement, June 20, 2003, at 2-3. In our view, USDA’s limited request for price information from each vendor was a reasonable way to remedy the suspected procurement impropriety while not affecting other portions of vendors’ quotes and the evaluation thereof. This approach has the added benefit of reducing further cost and delay in the procurement. We therefore conclude that the agency acted within its discretion in limiting the revisions vendors may make to their quotes. (Computer Associates International, Inc., B-292077.2, September 4, 2003) (pdf)

To the extent HTI contends that the corrective action had no effect on the competition and merely “glosses over” improprieties in the solicitation, Comments at 3-7, its disagreement with the scope of the corrective action--that the agency’s corrective action did not remedy HTI’s challenge to the agency’s evaluation of PCCI’s proposal and the award decision--does not provide a basis to question the agency’s actions. We think the VA’s decision to solicit and evaluate revised proposals and to make a new best-value determination based on that reevaluation renders academic HTI’s protest of the initial evaluation and award decision. In short, the other alleged deficiencies or improprieties identified in HTI’s earlier protest became moot where the agency’s decision to reopen the competition and make a new best value determination afforded the protester another opportunity to be considered for award.  (Hyperbaric Technologies, Inc., B-293047.2; B-293047.3, February 11, 2004)

The Air Force determined that, despite amendment No. 0001 and the FedBizOpps posting, some offerors had been confused regarding the pricing instructions, and that corrective action was appropriate. On October 23, the Air Force notified PCA of its intended corrective action, and on November 3 the agency rescinded the award. PCA contends that corrective action was unwarranted and “not supported by any credible evidence.” Supplemental Comments at 2. The protester argues that the corrective action would be proper only if AIM “was in fact misled” by the solicitation or by the agency’s letters and amendments aimed at clarifying the pricing. Id. In this regard, PCA argues that “no one was disadvantaged by the omission (on some [September 15] letters) of the ‘critical sentence’,” because all letters advised offerors to refer to amendment No. 0001 and to the FedBizOpps memo, receipt of which AIM acknowledged in its protest. Comments at 2. In negotiated procurements, agencies have broad discretion to take corrective action where they determine that such action is necessary to ensure fair and impartial competition. Patriot Contract Servs., LLC et al., B-278276.11 et al., Sept. 22, 1998, 98‑2 CPD ¶ 77 at 4. Where an agency has reasonable concerns that there were errors in a procurement, the agency may take corrective action, even if it is not certain that a protest of the procurement would be sustained. Main Bldg. Maint., Inc., B‑279191.3, Aug. 5, 1998, 98-2 CPD ¶ 47 at 3. We will not object to proposed corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action. Network Elec. Corp., B-290666.3, Sept. 30, 2002 CPD ¶ 173 at 3. The corrective action here is unobjectionable. The prices received varied dramatically--as noted above, from approximately [DELETED] to [DELETED] for all offerors and from [DELETED] to [DELETED] for competitive range offerors--and the agency concluded that the offerors’ approaches to pricing titanium was the likely cause of the disparity, notwithstanding its efforts to clarify the CAP line item. We have recognized that such dramatic price differentials may reasonably be interpreted to suggest that offerors had dissimilar understandings of the requirements. See Federal Sec. Sys., Inc., B-281745.2, Apr. 29, 1999, 99-1 CPD ¶ 86 at 5. In these circumstances, 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. Thus, notwithstanding the protester’s arguments to the contrary--to the effect that all offerors should have understood titanium pricing under the CAP line item--there was nothing unreasonable in the agency’s determination that corrective action was necessary to ensure both that the competition was fair and that the award would be based on the most advantageous proposal. (PCA Aerospace, Inc., B-293042.3, February 17, 2004)  (pdf)

The agency’s acceptance of Strand’s noncompliant proposal meant that the agency waived these design criteria for Strand, which resulted in an unfair and unequal evaluation. It is a fundamental principle of federal procurement that competition must be conducted on an equal basis; that is, offerors must be treated equally and be provided with a common basis for the preparation of their proposals. SWR, Inc., B-284075, B-284075.2, Feb. 16, 2000, 2000 CPD ¶ 43 at 3. Accordingly, the Corps reasonably determined that it was necessary to terminate Strand’s contract in order to correct the improper award.  (Strand Hunt Construction, Inc., B-292415, September 9, 2003) (pdf)

While, as the protester suggests, a more comprehensive method of implementing our recommendation could have been chosen by the Air Force, including reopening discussions and obtaining revised proposals and reevaluating past performance, the agency has stated a reasonable basis for not performing these actions. Specifically, the record does not show any weaknesses or deficiencies in SDS's proposal that required discussions.  Moreover, SDS has offered no new evidence, not considered in our prior decision, that would indicate that the past performance ratings of SDS and CBD were not reasonable. Finally, it was within the discretion of the agency to consider the mission capability factor as a whole, since our prior decision did not preclude this evaluation and it has offered a reasonable explanation (set forth above) as to why it was necessary.  (SDS International, Inc., B-291183.4; B-291183.5, April 28, 2003)

Considering the actual staffing included in SMI's FPR pricing was consistent with the scope of the reopened discussions.  SMI's explanation that its FPR pricing included an additional risk mitigation allowance of [DELETED] FTEs was responsive to the goal established for the reopened discussions--that SMI demonstrate the realism of its proposed pricing, including demonstrating that it was offering adequate staffing. Indeed, the agency would have failed in its obligation to evaluate the reasonableness of the proposed pricing had it not considered the actual staffing included in SMI's pricing. Also consistent with the limitations established in the reopened solicitation is the fact that the additional staffing was not used to alter the evaluation of SMI's organization and management plans, small business subcontracting plan, and past performance. RFP § M.3.4.2. We conclude that USMC reasonably evaluated SMI's second FPR based on a staffing level of [DELETED] FTEs. J.W. (Holding Group & Associates, Inc., B-285882.11; B-285882.12, October 23, 2002)  (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)

As a general matter, the details of implementing our recommendations for corrective action are within the sound discretion and judgment of the contracting agency. Rel-Tek Sys. & Design, Inc.--Modification of Remedy, B-280463.7, July 1, 1999, 99-2 CPD para. 1 at 3. Such discretion must be exercised reasonably and in a fashion that remedies the procurement impropriety that was the basis for our protest recommendation. The Futures Group Int'l, B-281274.5 et al., Mar. 10, 2000, 2000 CPD para. 148 at 8; CitiWest Properties, Inc., B-274689.4, Nov. 26, 1997, 98-1 CPD para. 3 at 6. Here, the agency did not act reasonably in reopening discussions only with MCI, nor did the agency's remedy resolve all the improprieties that were the basis for our decision sustaining the prior protest.  (Rockwell Electronic Commerce Corporation, B-286201.6, August 30, 2001)  (pdf)

A protest, like the one here, that was once academic is not "revived" by subsequent agency action. Instead, the subsequent action gives rise to a new basis for protest, even if some of the issues raised by the subsequent action are the same as the issues raised under the earlier protest. See Pemco Aeroplex, Inc.-Recon. and Costs, B-275587.5, B-275587.6, Oct. 14, 1997, 97-2 CPD para. 102 at 4-5. With respect to the specific request here, on December 13, the Air Force conceded that its initial decision that it would be more economical to perform base operations support at Lackland in-house, rather than contract out this effort, was improper. Thus, the decision that L-21 would have us consider no longer exists, and any dispute about that decision has been rendered academic by the concession in the Air Force's letter of December 13. QuanTech, Inc.--Costs, B-278380.3, June 17, 1998, 98-1 CPD para. 165 at 2.  (A-76 issue)  (Lackland 21st Century Services Consolidated--Protest and Costs, B-285938.6, July 13, 2001)

Generally, we decline to review the termination of contracts for the convenience of the government because such actions are matters of contract administration. We will review the propriety of the termination where the termination flows from a defect the contracting agency perceived in the award process. In such cases, we examine the award procedures that underlie the termination action for the limited purpose of determining whether the initial award may have been improper and, if so, whether the corrective action taken was appropriate to protect the integrity of the competitive procurement system. GAI, Inc., B-247962, B-247971, July 8, 1992, 92-2 CPD para. 10 at 3. We will not object to an agency's proposed corrective action where the agency concludes that the award, because of perceived flaws in the procurement process, was not necessarily made on the basis most advantageous to the government, so long as the corrective action taken is appropriate to remedy the impropriety. Rockville Mailing Serv., Inc., B-270161.2, Apr. 10, 1996, 96-1 CPD para. 184 at 4. The record contains abundant evidence that this was a flawed procurement resulting in an award not necessarily made on the basis most advantageous to the government, and that the agency's corrective action is appropriate.  (Fisher-Cal Industries, Inc., B-285150.2, July 6, 2000)

Where award of indefinite-delivery, indefinite-quantity contract improperly was made to large business, proposed corrective action is reasonable, and warrants dismissing protest as academic, where agency will (1) allow improperly awarded contract to expire, (2) place no new delivery orders under the contract, but allow delivery orders already issued to be performed pending recompetition and new award, and (3) promptly conduct recompetition, with award to be made within 6 months.  (Landmark Construction Corporation, B-281957.3, October 22, 1999)

Contracting officials in negotiated procurements have broad discretion to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition. Patriot Contract Servs., LLC et al., B-278276.11 et al., Sept. 22, 1998, 98-2 CPD para. 77 at 4; Rockville Mailing Serv., Inc., B-270161.2, Apr. 10, 1996, 96-1 CPD para. 184 at 4. It is not necessary for an agency to conclude that the protest is certain to be sustained before it may take corrective action; where the agency has reasonable concern that there were errors in the procurement, even if the protest could be denied, we view it as within the agency's discretion to take corrective action. Patriot Contract Servs., LLC et al., supra. An agency may amend a solicitation, and request and evaluate another round of BAFOs where the record shows that the agency made the decision to take this action in good faith, without the specific intent of changing a particular offeror's technical ranking or avoiding an award to a particular offeror. See PRC, Inc., B-233561.8, B-233561.9, Sept. 29, 1992, 92-2 CPD para. 215 at 3-4.  (Federal Security Systems, Inc., B-281745.2, April 29, 1999)

1. The Army’s Reliance on the GAO Attorney’s April 20, 2011 Electronic-Mail Message Renders Its Decision to Take Corrective Action Irrational

The first protest ground asserted by plaintiff–that the Army’s decision to take corrective action is arbitrary, capricious, and unreasonable because the decision is based on an electronicmail message from a GAO attorney that is itself unreasonable–raises two threshold issues: was the Army’s decision to take corrective action premised on the GAO attorney’s April 20, 2011 electronic-mail message and, to the extent that it was, is the court empowered to review the electronic-mail message for rationality in the same way it can review a formal decision by the GAO recommending corrective action?

To answer the first question, the court looks to the timeline of events reflected in the administrative record. Kratos lodged its supplemental protest on April 4, 2011. On April 7, 2011, the GAO attorney informed the parties that in light of the supplemental protest, he was interested in whether the Army would continue to oppose the protest or take corrective action. Then, on April 11, 2011, the GAO attorney invited the Army to respond to comments made by Kratos about its initial protest, but specifically requested that the Army not respond to Kratos’s supplemental protest. The Army complied with the request; its response did not address Kratos’s supplemental protest. On April 20, 2011, in the electronic-mail message at issue, the GAO attorney conveyed his impressions of Kratos’s supplemental protest. In a response sent that same day, the Army indicated that it understood the GAO attorney’s position. Then, on April 22, 2011, the Army informed the GAO and the other parties that, after reviewing the supplemental protest, it had decided to take corrective action. The Army’s April 22, 2011 letter constituted its first formal response to Kratos’s supplemental protest.

The timeline suggests two possible scenarios. One possibility is that the Army had been considering how to respond to the supplemental protest for more than two weeks, i.e., from the time that it was first advanced by Kratos, and that its April 22, 2011 letter was the culmination of its deliberations. The fact that the Army did not address the merits of the supplemental protest before April 22, 2011, supports this scenario, as does the Army’s failure to mention the GAO attorney’s electronic-mail message in its letter. The other possibility is that the position taken by the Army in its April 22, 2011 letter was prompted by the GAO attorney’s April 20, 2011 electronic-mail message. The brief period of time—two days—between the message and the letter supports this scenario. Given the ambiguity regarding the true basis of the Army’s decision to take corrective action, the court finds it reasonable to assume that the decision was based, at least in part, on the GAO attorney’s April 20, 2011 electronic-mail message.

Assuming that the Army based its decision to take corrective action on the impressions conveyed by the GAO attorney in his electronic-mail message, the court must next determine whether it can review the message in the same way it reviews a formal GAO decision recommending corrective action. This appears to be an issue of first impression.

There is no question that a court, in deciding the propriety of a procuring agency’s implementation of corrective action recommended by the GAO, may review whether the GAO’s recommendation was itself rational. See Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (“[A] procurement agency’s decision to follow the Comptroller General’s recommendation, even though that recommendation differed from the contracting officer’s initial decision, was proper unless the Comptroller General’s decision itself was irrational.”); Centech Grp., Inc., 79 Fed. Cl. at 563 n.2 (“[I]t is appropriate for this Court to consider the rationality of GAO’s determination where the agency relied upon such determination in taking the corrective action at issue.”). The decisional law reflects, however, that as a general rule, courts have reviewed GAO recommendations only when they were included as part of a formal GAO decision. See John Reiner & Co. v. United States, 325 F.2d 438, 442 (Ct. Cl. 1963) (“[I]t is the usual policy, if not the obligation, of the procuring departments to accommodate themselves to positions formally taken by the [GAO] with respect to competitive bidding.” (emphasis added)); see also Interstate Rock Prods., Inc. v. United States, 50 Fed. Cl. 349, 363 (2001) (citing Honeywell for the proposition that “to the extent that an agency chooses to follow the advice of the GAO, courts should only intervene if the advice the agency receives is ‘irrational,’” and concluding that the prior GAO decisions relied upon by the procuring agency in rejecting a bid as unresponsive were “eminently rational”); see also ManTech Telecomms. & Info. Sys. Corp., 49 Fed. Cl. at 62, 73-80 (analyzing, in a case where the procuring agency’s proposed corrective action was based on the GAO’s suggestion during the alternative dispute resolution process that it would sustain the protest before it, only whether the proposed corrective action was reasonable, and not whether the GAO’s suggestion was rational).

In the present case, there is no formal GAO decision sustaining Kratos’s protest and recommending corrective action. Rather, there are only the informal and nonfinal impressions of the GAO attorney, expressed in an electronic-mail message, indicating that the GAO would likely sustain Kratos’s supplemental protest. Nevertheless, the court has a broad mandate to entertain bid protests and review government procurement decisions. If a procuring agency takes an action that is challenged in this court, this court has the responsibility to examine the basis for the agency’s action, regardless of what that basis might be. In other words, when determining the propriety of a procuring agency’s decision to take corrective action, the court may review the rationality of, as appropriate, the underlying formal GAO decision containing a recommendation that the agency take such action or the underlying informal suggestion by the GAO, or any other entity or individual, that such action might be proper. Thus, the court concludes that because the Army relied upon the GAO attorney’s electronic-mail message in deciding to take corrective action, and only because the Army relied upon the message, it may review the message to determine whether it was rational.

The threshold issues thus resolved, the court turns to the substance of the GAO attorney’s electronic-mail message. In his message, the GAO attorney reaches two conclusions. First, he opines that the GAO “need not resolve the issue of whether . . . the protester timely challenged” the Army’s evaluation of proposals. Second, he indicates that the GAO would likely sustain Kratos’s protest due to deficiencies in the source selection decision. Both of these conclusions are irrational.

The GAO is empowered to entertain protests “concerning an alleged violation of a procurement statute or regulation” so long as the protests are filed in accordance with the governing statutes. 31 U.S.C. § 3552(a) (2006). These statutes require the GAO to establish procedures for the “expeditious” resolution of the protests. Id. § 3555(a). Under this authority, the GAO adopted a regulation providing that the GAO “shall” dismiss a protest that is not timely filed, 4 C.F.R. § 21.5(e) (2011), unless it determines that the protest “raises issues significant to the procurement system” or finds that “good cause” exists to consider the protest, id. § 21.2(c). In other words, except under limited circumstances, the GAO may not entertain untimely protests because they are not filed in accordance with the governing statutes. The GAO’s own decisions support this conclusion. See, e.g., Patricia A. Thompson-Agency Tender Official, B-310910.4, 2009 CPD ¶ 24 (Comp. Gen. Jan. 22, 2009) (“Our Bid Protest Regulations contain strict rules requiring timely submission of protests. . . . [T]he protest is untimely and, therefore, must be dismissed.”); Goel Servs., Inc., B-310822.2, 2008 CPD ¶ 99 (Comp. Gen. May 23, 2008) (“Our timeliness rules reflect the dual requirements of giving parties a fair opportunity to present their cases and resolving protests expeditiously without unduly disrupting or delaying the procurement process. In order to prevent these rules from becoming meaningless, exceptions are strictly construed and rarely used. The ‘good cause’ exception is limited to circumstances where some compelling reason beyond the protester’s control prevents the protester from filing a timely protest. The significant issue exception is limited to untimely protests that raise issues of widespread interest to the procurement community, and which have not been considered on the merits in a prior decision.” (citations omitted)); Cornet, Inc., B-270330 et al., 96-1 CPD ¶ 189 (Comp. Gen. Feb. 28, 1996) (noting that the protest regulations require the dismissal of untimely protests and dismissing supplemental protest grounds as untimely).

Here, the GAO attorney asserted that the GAO “need not” consider the timeliness of Kratos’s supplemental protest, and, although the court cannot completely discount the possibility that the GAO attorney was impliedly invoking one of the exceptions allowing the GAO to consider an untimely protest, there is no indication in the electronic-mail message that an exception to the timeliness rule applied. Thus, the GAO attorney’s statement that the timeliness of Kratos’s protest was irrelevant clearly contravenes the statutory mandate that the GAO not entertain untimely protests. When the GAO acts in violation of the law, the act lacks a rational basis. See SP Sys., Inc. v. United States, 86 Fed. Cl. 1, 13 (2009) (“If the GAO recommendation is . . . plainly contrary to a statutory requirement, that decision is irrational and an agency action is not justifiably based upon it.” (citing Grunley Walsh Int’l, LLC v. United States, 78 Fed. Cl. 35, 44 (2007))); Cal. Marine Cleaning, Inc., 42 Fed. Cl. at 295-96 (holding that the GAO’s misapplication of late bid rule set forth in the FAR was irrational, and therefore the agency’s reliance on the GAO’s decision was improper); see also United States v. Amdahl Corp., 786 F.2d 387, 392-93 (Fed. Cir. 1986) (“Administrative actions taken in violation of statutory authorization or requirement are of no effect.”). The GAO attorney’s statement on timeliness is therefore irrational.

The GAO attorney’s analysis of the Army’s evaluation of proposals suffers the same fate. In the Source Selection Decision Memorandum, the Source Selection Authority reported the findings from the Army’s evaluation and concluded that there were “no meaningful distinctions” among the noncost elements of the proposals. AR 2013. The Source Selection Authority acknowledged, however, that the proposals submitted by Kratos and SA-TECH were not identical: “[T]he main difference between the two offerors is that, as the incumbent, Kratos/WSS has the personnel with the specific TMO experience in their current employment and has proposed these employees for the follow-on ATFS requirement.” Id. at 2014. She then explained how SA-TECH’s proposal mitigated those differences.

[. . .]

Id. In other words, she most assuredly compared the ability of Kratos, as the incumbent contractor, to supply personnel with specific experience with SA-TECH’s proposal to supply personnel with general experience coupled with a plan to mitigate its failure to propose personnel with specific experience. She then concluded that the “price/cost advantages of SA-TECH’s proposal outweigh[ed] the possibility of a learning curve impact.” Id. at 2013. It is readily apparent that the Source Selection Authority, upon comparing the proposals of Kratos and SATECH, clearly determined that the two proposals were not meaningfully distinct in the area of personnel experience and concluded that the benefit to the Army of SA-TECH’s lower price was worth the possibility that some of SA-TECH’s employees would lack specific experience. Her conclusion is entitled to deference.20 See Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 958-59 (Fed. Cir. 1993) (“Effective contracting demands broad discretion. Accordingly, agencies ‘are entrusted with a good deal of discretion in determining which bid is the most advantageous to the Government.’” (citations omitted) (quoting Tidewater Mgmt. Servs., Inc. v. United States, 573 F.2d 65, 73 (Ct. Cl. 1978))); Gen. Offshore Corp., B-251969 et al., 94-1 CPD ¶ 248 (Comp. Gen. Apr. 8, 1994) (“Where an evaluation is challenged, we will examine the agency’s evaluation to ensure that it was reasonable and consistent with the evaluation criteria and applicable statutes and regulations, since the relative merit of competing proposals is primarily a matter of administrative discretion.”), quoted in E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996).

The GAO attorney did not afford the proper deference to the Army’s source selection decision. In fact, his electronic-mail message demonstrates that he completely misread the decision. He wrote:

The source selection fails to acknowledge and appreciate the concerns expressed in the evaluation of the Labor element, which serves as a key discriminator between the proposals. That the two proposals were rated the same for this element is highly irrelevant; regardless of ratings, the source selection must look behind those ratings to consider the distinctions uncovered in the evaluation. This source selection document fails to do that.

Had the agency said, we recognize the value of incumbency and the advantage of the reduced risk in the incumbent’s proposal, but that advantage is not worth the premium over the awardee’s proposal, we would in all likelihood deny a challenge to the best value trade-off. Those are not the facts here. Here, the agency denied that there were proposal discriminators–documented in its evaluation–and there was a trade-off to be made between, on the one hand, an incumbent who guaranteed to deliver an experienced work force, and, on the other, a lower-priced offeror who did not and about whom the agency expressed reservations.

AR 1995. First, contrary to the GAO attorney’s observations, the Source Selection Authority did “acknowledge and appreciate the concerns” of the Technical Evaluation Committee regarding the experience of SA-TECH’s proposed workforce; she set forth those concerns in her decision and explained that SA-TECH had sufficiently mitigated those concerns. The Source Selection Authority also “look[ed] behind [the] ratings to consider the distinctions” identified by the Technical Evaluation Committee; she both described the distinctions and explained why those distinctions were not meaningful. Third, despite the GAO attorney’s representations, the Source Selection Authority “recognize[d] the value of incumbency” and concluded that the value of incumbency was not worth the price premium–in the Source Selection Decision Memorandum she acknowledged that Kratos, as the incumbent contractor, had personnel with specific experience and explained that the cost advantage of SA-TECH’s proposal outweighed the lack of specific experience of its proposed personnel. Fourth, the Source Selection Authority acknowledged the distinctions between the proposals of Kratos and SA-TECH, finding them not to be meaningful; she did not, as the GAO attorney stated, “den[y] that there were proposal discriminators[.]” Finally, contrary to the GAO attorney’s assertion, the Source Selection Authority described both a tradeoff between Kratos’s incumbency and SA-TECH’s mitigation efforts and a tradeoff between the proposed prices and the relative experience levels of the proposed personnel. All of these errors suggest that instead of applying the necessary amount of deference, the GAO attorney was substituting his judgment for that of the Army. He may not do so. Turner Constr. Co., 2011 WL 2714137, at *5 (“When an officer’s decision is reasonable, neither a court nor the GAO may substitute its judgment for that of the agency.”). Accordingly, his analysis of the source selection decision is irrational.

Because the GAO attorney improperly declared that the timeliness of Kratos’s protest was irrelevant and completely misconstrued the Source Selection Decision Memorandum, the contents of the GAO attorney’s April 20, 2011 electronic-mail message are irrational. As a result, to the extent that the Army’s decision to take corrective action is based upon the message, it lacks a rational basis and is therefore arbitrary, capricious, and an abuse of discretion.  (Systems Application & Technologies, Inc. v. U. S. and Madison Research Corporation, No. 11-280C, August 25, 2011)  (pdf)

II. The Agency’s Planned Corrective Action is Unlawful and Irrational.

The Court now turns to whether the agency’s proposed corrective action was improper or otherwise contrary to law. The Court’s limited review of agency decisions is set forth in the Administrative Procedures Act (“APA”). 5 U.S.C. § 706(2)(A). The APA provides that an agency decision may be set aside only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (incorporated by reference in 28 U.S.C. § 1491(b)(4)); Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). Therefore, an agency’s procurement decision may be set aside if it lacked a rational basis or involved a violation of statute or regulation. Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). This standard of review is highly deferential to the agency’s decision. Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir. 2000).

In applying this standard to an agency’s corrective action, contracting officers are provided “broad discretion to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition.” DGS Contract Serv., Inc. v. United States, 43 Fed. Cl. 227, 238 (1999) (quoting Rockville Mailing Serv., Inc., B-270161.2, 96-1 CPD ¶ 184 (Comp. Gen. Apr. 10, 1996)). Nevertheless, the chosen corrective action must be “reasonable under the circumstances.” Id. To be reasonable, the agency’s corrective action must be rationally related to the defect to be corrected. MCII Generator & Elec., 2002 WL 32126244. Furthermore, the reason for the corrective action must be supported by the evidence in the record. Id.

Despite the wide latitude afforded to an agency’s corrective action, the Court finds the evidence lacking in this case. The record is devoid of any justification for the agency’s decision to solicit revised proposals. Defendant asserts that corrective action was necessary to address defects in the procurement raised by JCN in its bid protest. Specifically, Defendant contends that, because of an incorrectly established competitive range, the agency improperly provided Sheridan with disparate treatment. Although the Court will analyze the appropriateness of the corrective action, the issue of whether Sheridan received any disparate treatment is not currently before the Court and will not be addressed in this Opinion.

Defendant contends that the corrective action is necessary because the contracting officer committed an error by not establishing “a competitive range comprised of all of the most highly rated proposals” as required by FAR 15.306(c)(1). Defendant alleges that this error occurred because the contracting officer, in setting the competitive range, incorrectly attributed to Sheridan a past performance rating of “very low risk,” instead of the actual assigned factor of “low risk.” In making this assertion, Defendant cites the April 20, 2010 Memorandum for the Record – Analysis of Proposal Summary, which states “[o]n 12 Mar 10 a Competitive Range was established which consisted of all offerors that were considered to have reasonable and realistic pricing, and received a rating of Very Low Risk.” (AR 519.) Defendant suggests that, had the contracting officer correctly evaluated Sheridan’s risk factor in setting the competitive range, the range would have consisted of the top three offerors instead of only Sheridan. Defendant’s argument is flawed for two reasons: (1) the competitive range was an unnecessary procedural step; and (2) it is unclear from the record that the agency evaluated Sheridan’s past performance risk rating incorrectly.

First, the competitive range described in FAR 15.306(c)(1) is inapplicable where, as here, the agency awards the contract without conducting any offeror discussions. The only error in this case was the agency’s use of the term “competitive range” in the first place. Defendant cites the second sentence of FAR 15.306(c)(1) for the proposition that the competitive range should have consisted of more than just one proposal. The second sentence of FAR 15.306(c)(1) states: “the contracting officer shall establish a competitive range comprised of all of the most highly rated proposals . . . .” However, Defendant consistently ignores the first sentence of FAR 15.306(c)(1) which provides: “[a]gencies shall evaluate all proposals in accordance with 15.305(a), and, if discussions are to be conducted, establish the competitive range.” (emphasis added). The first sentence of FAR 15.306(c)(1) instructs on when to create a competitive range, and the second sentence instructs on how to establish a competitive range.

In this case, the agency did not conduct any discussions with offerors, and stated in the RFP that it did not intend to conduct discussions. (AR 78.) Because of the lack of any discussions with offerors, the agency should not have created a competitive range and should have simply awarded the contract to the highest rated proposal. The concept of a competitive range in this case was entirely meaningless and unnecessary. Accordingly, because the concept of a competitive range was inapplicable to this solicitation, any issue relating to the size of the competitive range was not a defect in need of correction, but simply an unnecessary step that the agency should have ignored in the first place.

Second, Defendant cites an error that caused the contracting officer to limit the “competitive range” only to Sheridan. Allegedly, the contracting officer incorrectly believed that Sheridan was the only proposal to receive a “very low risk” rating. The administrative record at best is ambiguous on whether this error actually occurred as Defendant suggests. Defendant asserts that this error is based on a statement in the agency’s April 20, 2010 memorandum summarizing the procurement that Sheridan was assessed as “very low risk.” (AR 519.) However, it is impossible to conclude that the addition of the word “very” in the April 20, 2010 memorandum was not simply the result of a typographical error or an improper recollection. The record suggests that, at the time the agency selected Sheridan as the best value proposal, it had evaluated Sheridan’s proposal as “low risk.” The Source Selection Document, dated March 19, 2010, states that “the proposal presented by The Sheridan Corporation, which revealed the highest rated Past Performance assessment of all offerors and the only Low-Risk offeror assessed, combined with the second lowest price provides the best overall value to the Government.” (AR 516.) Defendant thus cites a memorandum written over a month after source selection as proof that somehow the agency incorrectly evaluated Sheridan as “very low risk.” The Court, however, finds the contemporaneous statements from the Source Selection Document to be the more persuasive evidence of the agency’s evaluation of Sheridan’s proposal.

A careful review of the administrative record does not reveal any errors that required corrective action. Even if the Court accepts JCN’s assertion that Sheridan received disparate treatment requiring corrective action, the chosen corrective action to resolicit proposals was improper. Defendant has never suggested that Sheridan did not submit the best proposal. Defendant’s counsel has agreed that the actual proposals received by the agency had no flaws. (Oral Arg., Oct. 13, 2010, Tr. 20.) The only potential error acknowledged by the agency is in the evaluation of the proposals. Although the APA grants the Government wide latitude in its decision-making process, this Court has rejected corrective action to resolicit proposals because of a perceived evaluation error. See, e.g., Delaney Constr. Corp., 56 Fed. Cl. at 476; MCII Generator & Elec., 2002 WL 32126244. Simply put, the corrective action must target the identified defect. Here, the agency’s concern related to the evaluation of the proposals. Any corrective action should have been targeted to that issue. Resoliciting new proposals was not a rational corrective action.

The Court finds the circumstances here analogous to Delaney. 56 Fed. Cl. 470. In that case, Delaney, a self-certified small business, submitted the lowest priced, technically acceptable offer. Id. at 472. Tug Hill, a self-certified HUBZone small business contractor, submitted the second lowest priced, technically acceptable proposal. Id. During the debriefing following the agency’s decision to award the contract to Delaney, the agency informed Tug Hill that the agency initially considered applying a ten percent HUBZone price preference required by 15 U.S.C. § 657a to Tug Hill’s price, which would have made Tug Hill’s bid the lowest technically acceptable offeror. However, the agency determined that the preference did not apply when a HUBZone small business competed against another small business, and therefore, the agency awarded the contract to Delaney. Id. Tug Hill initiated a size protest contending that Delaney did not meet the required small business size standards. Id. Shortly thereafter, Delaney notified the contracting officer that it had failed to consider revenues from affiliated companies, and conceded that it no longer met the small business standards. Id. at 473.

Following an unsuccessful agency level protest, Tug Hill submitted a protest to the GAO. Id. Ten days later, the agency requested GAO to dismiss the protest because it intended to take corrective action. Id. As part of the corrective action, the agency elected to reopen the competition and insert a clause regarding the HUBZone ten percent preference. Id. Both Delaney and Tug Hill objected to the proposed corrective action to reopen the competition. Id. at 473-74. The Court held that, because the prices had been disclosed,7 the proposed corrective action to obtain new price proposals “would comprise arbitrary action.” Id. at 476. The Court explained that “[n]o public interest purpose has been established which would support trashing the disclosed proposed prices, obtained on the basis of full and open competition, in favor of obtaining new prices as a result of adding a contract clause which only provides notice of a statutory requirement that existed at all relevant times.” Id.

Similarly, in MCII Generator & Electric, an unsuccessful offeror filed a bid protest with the GAO alleging that the Army had improperly evaluated its price and the awardee’s risk in making its selection. 2002 WL 32126244. The Army proposed to take corrective action by resoliciting proposals. Id. The awardee brought suit seeking injunctive relief to stop the resolicitation because the proposed corrective action lacked a rational connection to any identified defect. Id. The Court in MCII Generator struggled, as this Court does here, to find any defect in the initial procurement selection, let alone a defect that warranted reopening the competition. Id. The Court enjoined the Army’s proposed corrective action finding that “the integrity of the procurement system requires that award decisions not be overturned for no reason or for insubstantial reason.” Id.

The Court finds the MCII Generator case particularly relevant to the present case. In both situations, the “defect” identified by the Government had no relation to the proposed corrective action. The record in both cases suggests that the respective agencies made the correct award decisions, and that if any flaws in the process existed, such flaws occurred during the evaluation of the properly submitted proposals. In such circumstances, a reevaluation of the proposals may be warranted, but a resolicitation of the proposals compromises the integrity of the procurement system, especially where the winning price has been disclosed to the public.

Defendant argues that this case can be distinguished from Delaney, MCII Generator, and other cases because here, the resolicitation is on identical terms. The Court finds this position entirely illogical. Instead, the fact that the agency conducted the resolicitation on identical terms further strengthens Plaintiff’s argument that a resolicitation was improper and unnecessary. Where the terms of the RFP remain unchanged and the initial proposals were properly submitted, there is no rational basis for the agency to resolicit proposals that it already received under a properly conducted solicitation. The only conceivable reason to permit resolicitation would be to allow the unsuccessful offerors an opportunity to beat the now disclosed price of the winning proposal. Such a result is impermissible and would severely damage the integrity of the procurement process.

Finally, Defendant argues that, because of the passage of time in this case, a resolicitation is necessary to ensure that all the proposals are accurate and up-to-date. This argument is unsupported by the administrative record and was raised for the first time during oral argument. See Oral Arg., Oct. 13, 2010, Tr. 25. Any issues resulting from the passage of time were of the Government’s own creation and cannot support the agency’s attempt to resolicit proposals. Furthermore, there are mechanisms in the RFP to adjust the price as necessary to take into account fluctuations in the price of materials as a result of the delay. Therefore, the Court concludes that the proposed corrective action of resoliciting proposals lacks a rational basis and is not supported by the administrative record.  (The Sheridan Corporation v. U. S. and JCN Construction Company, Inc., 10-547C, November 5, 2010)  (pdf)

3. Was GAO’s Corrective Action Reasonable and Lawful?

Having decided that corrective action was necessary, the court must now consider whether the corrective actions GAO took were reasonable and lawful. Following the “outcome prediction” in which the PLCG¹ informed GAO that it intended to sustain plaintiff’s protest with regard to the indemnification clause, GAO reopened the solicitation and requested another round of FPRs. AR 1777–81, 1917, 1921. GAO permitted the offerors unlimited discretion in revising their price proposals, but did not allow them to change their technical proposals. In addition, GAO forced Monster to either remove the unacceptable indemnification clause or face elimination. AR 1918, 1922. GAO’s stated purpose in taking these corrective actions was “to eliminate the indemnification provision in Monster’s proposal and allow the offerors to compete on price alone.” AR 1779.

Plaintiff asserts in its complaint that “[w]hen a negotiated procurement is reopened by an agency for revised offers, it must allow any revision to those offers the offeror may care to make.” Compl. ¶ 26. For this proposition, plaintiff cites FAR 15.206 and FAR 15.307 without any preceding signal. However, these citations do not support plaintiff’s proposition either directly or indirectly. FAR 15.206, titled “Amending the [S]olicitation,” outlines when a contracting officer may amend a solicitation and how such an amendment is issued. FAR 15.307, titled “Proposal [R]evisions,” provides:

(a) If an offeror’s proposal is eliminated or otherwise removed from the competitive range, no further revisions to that offeror’s proposal shall be accepted or considered.

(b) The contracting officer may request or allow proposal revisions to clarify and document understandings reached during negotiations. At the conclusion of discussions, each offeror still in the competitive range shall be given an opportunity to submit a final proposal revision. The contracting officer is required to establish a common cut-off date only for receipt of final proposal revisions. Requests for final proposal revisions shall advise offerors that the final proposal revisions shall be in writing and that the Government intends to make award without obtaining further revisions.

The court finds nothing in these regulations to support plaintiff’s cited proposition. Indeed, this court has recognized that subsequent to an “outcome prediction,” an agency may re-open a solicitation and allow offerors to make only limited revisions to their proposals. See Consol. Eng’g Servs., Inc. v. United States, 64 Fed. Cl. 617, 627–29 (2005) (“[T]he agency’s decision to expand the scope of the corrective action to permit revisions to key personnel and subcontractors was reasonable, as was its decision to limit revisions to those aforementioned areas.”).

This ability to limit proposal revisions derives, in part, from contracting officials’ “broad discretion to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition.” DGS Contract Serv., Inc. v. United States, 43 Fed. Cl. 227, 238 (1999) (quoting Rockville Mailing Serv., Inc., B-270161.2, Apr. 10, 1996, 96-1 CPD ¶ 184 at *4); see also FAR 1.602-2(b) (“Contracting officers shall [e]nsure that contractors receive impartial, fair, and equitable treatment.”). Here, GAO’s corrective action was aimed at ensuring fair and impartial treatment for both plaintiff and Monster. Plaintiff was assured that its competitor would not be advantaged via an unlawful indemnification clause, while Monster was granted the same meaningful discussions that plaintiff enjoyed.

Moreover, this approach recognizes the agency’s interest in preserving its resources and the resources of the parties. Thus, the agency may salvage those portions of the procurement untainted by the problems identified in the protest. See Serv-Air, Inc., B-258243, et al., March 3, 1995, 95-1 CPD ¶ 125 at *2 (holding that agency may take corrective action by limiting offerors’ proposal revisions to cost proposals where PLCG’s prior decision found nothing improper in the agency’s previous evaluation of technical proposals). The only problem that the PLCG recognized in the procurement was the indemnification clause in Monster’s initial FPR. AR 1777–81. Despite plaintiff’s assertions to the contrary, GAO should not be required to scrap its previously upheld technical evaluations, nor should the parties be required to resubmit technical proposals, when a more limited corrective action will remedy the impropriety. Every problem identified in a procurement does not necessitate an entirely new competition. See id.

According to plaintiff, GAO’s corrective action was unfair because Monster’s indemnification clause was a “non-pricing term,” and thus, “Monster was allowed to alter both price and non-price factors while [plaintiff] was limited to price-only changes.” Pl.’s Am. Mem. 33–34; Pl.’s Reply 25–28. However, plaintiff’s counsel appeared to abandon this position at oral argument where he stated, “[W]e would also add that the indemnification clause has a cost aspect to it.” Tr. 75. Regardless of whether the indemnification clause is a pricing term or not, GAO explained in its proposed corrective action that it would permit Monster to remove the indemnification clause. AR 1779. Indeed, the whole purpose of the corrective action was to resolve the indemnification clause problem, thus, it is irrelevant how the clause is characterized. AR 1779. When GAO allowed Monster to remove the indemnification clause, it was simply acting in conformity with the corrective action plan as proposed to the PLCG.

(sections deleted)

After reviewing the record, the court finds that plaintiff enjoyed meaningful discussions prior to the submission of initial FPRs, while Monster did not. Thus, GAO’s corrective action—allowing Monster to remove the offending indemnification clause while limiting any other revisions to price only—was a reasonable and lawful means of ensuring fair and impartial treatment for both competitors.20 This corrective action provided Monster with the benefit of meaningful discussions and remedied the impropriety identified by the PLCG.  (Carahsoft Technology Corporation, v. U. S. and Monster Government Solutions, No 08-646C, Reissued February 12, 2009)

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¹ This is GAO's Procurement Law Contracting Group.