One for the Sages

Once again, Lexology provides grist for the procurement law this blawg mills. The particular grist here is an article by lawyers Hunter Bennett and Evan R. Sherwood of the firm Covington and Burling LLP. And, once again, you really must read the material at the links provided, and not rely on me to get it straight or accurate. I tend to omit matter, important matter, inject commentary, and frame or paraphrase, slice, dice and rearrange material, ala Frankenstein. Here, I sort of shuffled the article and the GAO decision together. So read each of them. For your own good.

Turns Out You Really Can Unring a Bell

GAO recently concluded that it was rational of an agency to unring the bell when taking corrective action in a bid protest. That is, take corrective action revisiting the original evaluation.

In Quotient, Inc., B-416473.4, Mar. 12, 2019, 2019 CPD ¶ 106,in response to an RFQ seeking to establish a Blanket Purchase Agreement, the Department of Education (“ED”) established a competitive range and then asked vendors technical questions about their quotations for a Federal Supply Schedule (“FSS”) order. Vendors responded and ultimately provided updated quotations. ED evaluated Quotient's competitor, Reingold, to offer a better quote. After award, Quotient, Inc. (“Quotient”) Filed a protest, one of a litany, essentially alleging that the first Technical Evaluation Panel ("TEP") was biased; it had treated the protester unfairly and had demonstrated an improper preference in its evaluation.

So, in response to Quotient’s protest, the agency advised that it intended to take corrective action by reevaluating all vendors’ technical quotations and making a new source selection decision. ED announced that it would take corrective action by ignoring the vendors’ updated quotes and making a new award decision based solely on the original submissions. To do so it constituted a totally independent Second TEP: it was not informed that its evaluation was based on corrective action following a bid protest. The Second TEP was not informed that there had been a previous evaluation, nor were they made aware of the earlier technical clarification questions or the vendors’ responses. Moreover, the reevaluation of technical quotations did not include consideration of vendors’ responses to the First TEP's technical clarification questions. In short, there was nothing in the record to suggest that, assuming the First TEP was tainted by favoritism (or repulsed by the protestor), there was no likelihood that the Second TEP was infected by the taint.

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. An agency’s corrective action need not address every protest issue, but must render the protest academic. An agency’s discretion when taking corrective action also extends to a decision on the scope of proposal (or quotation) revisions, and there are circumstances where an agency may reasonably decide to limit the revisions offerors or vendors may make to their submissions. 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.

Before the Second TEP completed its evaluation or made a decision on the RFQ, Quotient protested the planned corrective action, this time arguing that ED had irrationally decided to ignore the revised quotations. The protester essentially argued that because its allegations regarding the agency’s technical evaluation are, in its opinion, meritorious, and because the agency’s corrective action here does not remedy these errors, the corrective action is thereby deficient. GAO agreed with the protester that the corrective action was a “quite uncommon” attempt to “unring a bell.” However, GAO found ED’s plan unobjectionable, stating that it could rationally “exclude consideration of” the revised quotes under the circumstances. GAO affords agencies broad discretion to take corrective action. Apparently because the agency had siloed the new evaluation panel, GAO concluded this was “a reasonable means of remedying a reasonable concern[.]”

Quotient also argued that its March 29 quotation was “withdrawn” by its April 30 technical clarification response, and that the agency may not make award based on withdrawn “proposals” (i.e., any attempt by ED to accept an original proposal would be null and void). Critically, this was an FSS (Federal Supply Schedule) procurement, meaning that the updated quotations were not binding “offers”. In FSS procurements vendors submit quotes, not offers. The GAO found that the decisions of its Office on which Quotient relies, for the proposition that the submission of a revised offeror extinguishes an agency’s right to accept an earlier offer, are inapposite here; instead, these decisions demonstrate the protester’s misunderstanding of the difference between a request for quotations and a request for proposals (RFP).

An RFQ, unlike an RFP (or an invitation for bids), does not seek offers that can be accepted by the government to form a contract. Rather, vendor quotations are purely informational. In the context of an RFQ, it is the government that makes the offer, albeit generally based on the information provided by the vendor in its quotation; and, no binding agreement is created until the vendor accepts the offer. A vendor submitting a price quotation therefore could, the next moment, reject an offer from the government at its quoted price. Because vendors in the RFQ context hold the power of acceptance, it simply does not make sense to apply the concept of offer and acceptance from our decisions discussing RFPs. Here, there is frankly no requirement that Quotient, or any other vendor, accept an offer made to it by the agency, whether such offer is based on a “withdrawn” quotation or on a technical quotation which may have incorporated prior clarifications.

GAO's prior decisions have considered the timing of protests challenging the propriety of an agency’s proposed corrective action. In doing so, in those instances where the agency’s proposed corrective action alters or fails to alter the ground rules for the competition (i.e., aspects that apply to all offerors or vendors), GAO has considered a protester’s challenge of such to be analogous to a challenge to the terms of a solicitation, thus providing the basis for protest prior to award. However, in those instances where the agency’s proposed corrective action does not alter the ground rules for the competition, we have considered a protester’s preaward challenge to be premature.

Inasmuch as the agency’s July 30 letter to Quotient made it clear that the technical reevaluation was going to be based on a quotation that Quotient believed withdrawn, GAO found any protest of this alleged impropriety had to be filed within 10 days thereof. Because Quotient did not file its protest challenging the agency’s decision to base its technical evaluation on an allegedly withdrawn quotation until December 3, the protest was untimely, and dismissed.