We often hear that contractors are not entitled to a “second bite from the apple.” As the recent General Accountability Office (“GAO”) decision in Navarre Corporation, B-414962.6; B-414962.7 (October 22, 2018), makes, clear, however, the same cannot be said about procuring agencies. In that bid protest, the GAO once again reinforced the flexibility of agencies to fashion corrective action and define award criteria, this time by amending a solicitation and resoliciting proposals after an award when it was discovered the initial solicitation didn’t reflect the agency’s needs or intent.
The VA issued a Request for Proposals for a fixed-price IDIQ contract for non-emergency wheelchair transportation services, on a lowest-priced technically acceptable basis, and in April 2018 made award to Navarre. Disappointed bidder Owl subsequently challenged the award, contending among other things that the agency failed to conduct a price realism evaluation. GAO dismissed the protest on the basis that Owl was not an interested party to challenge the award, however its dismissal noted that the solicitation did in fact call for a price realism analysis by advising offerors that it would assess whether the proposed prices reflected a clear understanding of the requirements.
Owl persevered by filing a second protest at the Court of Federal Claims, at which point the VA decided to take corrective action. Until it read the GAO’s decision dismissing the protest, VA had not been aware that the solicitation had included a provision for a price realism evaluation. Nor had it performed such an evaluation. VA decided that it would terminate the contract with Navarre for the convenience of the government, amend the solicitation to remove the price realism evaluation, and solicit new proposals.
Navarre protested the corrective action, arguing that resoliciting the requirements was unreasonable now that its price had been disclosed, and that the better course was for the agency to remedy any fault by conducting a price realism evaluation on the proposals that it had already received.
GAO disagreed and denied the protest, siding with the VA, which had “never intended to include a price realism provision in the solicitation” and apparently did not realize that the RFP included such language. Because the solicitation as written did not reflect the agency’s true needs (agencies may impose a price realism evaluation for fixed-price contracts, but are not required to do so) and the proposed corrective action would reasonably address the issue, the GAO upheld the VA’s decision to resolicit.
The decision is a reminder of the high bar contractors face in challenging agency corrective action, even where they believe there is an easier or fairer outcome. It also serves to show that even as the author of the solicitation, agencies can and do get it wrong. And where it can establish that a mistake resulted in an evaluation that didn’t reflect its needs, the agency will be allowed to correct it and given significant discretion in doing so.