Jan 3, 2018

By David Edelstein and Larry Schor

We all know the scenario. The perfect federal contracting opportunity shows up on FedBizOpps. You carefully review the RFP. You work tirelessly on your proposal. You submit it on time. But you make a mistake. Something small, but important: a forgotten piece of information, a missed field on the pricing spreadsheet, a transposed number. You hope that the agency asks for a clarification so you can correct the error. They don’t. You are disqualified as “unacceptable” or “nonresponsive,” and your competitor gets the contract.

Can you file a bid protest? Should you? Recent case law at the Court of Federal Claims (“COFC”) suggests you have a fighting chance.

As background, there is a linguistic quirk in the Federal Acquisition Regulation (“FAR”) that works against your protest in this scenario. In sealed bid procurements, FAR Part 14 requires (by use of the word “shall”) that the contracting officer (“CO”) check for certain errors and allow bidders to correct them. But in negotiated procurements, FAR Part 15 states only that “offerors may be given the opportunity to clarify certain aspects of proposals … or to resolve minor or clerical errors” (emphasis added). Whether or not to seek clarification is squarely in the discretion of the agency and its CO.

As with all discretionary acts, COFC will review the agency’s decision for abuse of discretion. And, in several recent decisions, COFC has shown a willingness to find abuse of discretion where the agency had good reason to seek clarification, but did not do so:

  • In Level 3 Communications, LLC v. United States, 129 Fed. Cl. 487 (2016), the incumbent contractor for a telecommunications cable included only a low-resolution PDF copy of a map required by the solicitation rather than a native format version. The PDF made it look like the cable would enter Iran, contrary to solicitation requirements. Rather than seek clarification, the agency awarded to another offeror, at a price premium of $38.6 million (more than 60%). The Court found this arbitrary and capricious, and ordered the agency to go back and seek clarification from the protestor.
  • In BCPeabody Construction Services, Inc. v. United States, 112 Fed. Cl. 502 (2013), the protestor (whose price was $1,000,000 lower than the awardee) failed to include a “project information sheet” detailing the past performance of one of its subcontractors. The Court found that the agency could have easily corrected this oversight by clarification, and abused its discretion by not doing so.
  • In Dell Federal Systems, L.P. v. United States, 133 Fed. Cl. 92 (2017), several offerors had incorrectly filled out “a confusing Excel spreadsheet” provided as part of the RFP. The agency sought to cancel the procurement and start over. The Court said no, finding that it was “irrational for the [agency] not to seek clarification from all offerors it knew had been directly affected by the ambiguities” in this spreadsheet.

Accordingly, in the right circumstances, COFC will require agencies to allow offerors to correct certain proposal errors. Of course, this type of protest is no sure thing. COFC Judges are not bound by each other’s opinions, and several Judges have been less open to this argument. Correction of errors is limited to minor or clerical errors, and cannot be used to make substantive revisions to the proposal. And, absent the extenuating circumstances that existed in the cases above (an incumbent contractor with a known ability to perform, protestors with significantly lower prices than the awardees, acknowledged ambiguities in the Government’s RFP, etc.), the odds of a successful protest are lower.

This COFC case law also stands in sharp contrast to the other available bid protest forum – the Government Accountability Office (“GAO”). GAO tends to apply the letter of the FAR more mechanically. It typically finds that may” means “may,” and that agencies in Part 15 negotiated procurements have no obligation to seek clarification and correction of proposal errors. To our knowledge, GAO has never sustained a protest on the grounds that the agency should have allowed error correction, but didn’t. In fact, Level 3 (the successful protestor in the recent COFC case discussed above) lost at GAO before taking its fight to COFC.

To sum up: Offerors should not be lulled into believing that there is an automatic right to correct proposal errors. They should continue to use the utmost care to make sure their proposals are complete and error-free when submitted. But, when an error does occur, COFC (but not GAO) has opened the door to protests. If you can demonstrate that the agency’s decision not to seek clarification was an abuse of discretion, you may be able to protest your way back into the competition.

Larry Schor leads ASM’s Government Contracts practice ground, and concentrates his practice on all phases of construction and government contracts law.

David Edelstein is a Partner in the firm’s Construction and Government Contracts practice groups. He has represented government contractors in a variety of industries, including health care, facilities services, architecture, military training, and environmental testing.