Government Contracts Monitor

GAO Sustains Ambiguous Specification Challenge After Agency Refused to Clarify

November 16, 2015

A recent Government Accountability Office (GAO) decision emphasizes a point that we have often urged – namely, that if you are unclear what an agency requires as set out in its solicitation (1) you need to seek clarification from the agency, and (2) if the agency refuses or fails to provide adequate clarification, you need to protest before the next solicitation closing date. The problem with simply going ahead and bidding to the requirement as stated, is that other bidders may interpret the requirement differently, and thereby obtain a bidding advantage. By the time you learn you have lost, it will be too late to complain, as protests challenging solicitation terms must be filed before bids are due. Alternatively, should you win, you may be buying a future fight with the agency if it interprets the requirement differently. Therefore, if you want to ensure a level playing field – that all bidders are competing on a common basis – and avoid potential post-award fights, seek clarification during the question and answer process, and be ready to timely protest if the agency fails to respond or provide sufficient clarification.

Specifically, in Global Technical Systems [GTS], B-411230.2, Sept. 9, 2015, the Department of Navy (Agency) issued a solicitation (RFP) for certain hardware and engineering services. The RFP anticipated award of a fixed-price, indefinite-delivery/indefinite-quantity contract, for a base year and four one-year options. Award was to be made on a lowest-priced, technically acceptable (LPTA) basis.

The RFP required offerors to describe their ability to provide “complex engineering services including[] detailed technical documentation and/or troubling shooting [the subject hardware],” and propose prices for 20,000 hours of engineering services per year. Section C described the required engineering services as follows;

If ordered, the Contractor shall provide engineering services (ES), conduct engineering studies, provide engineering analysis and trade-off studies, and/or support engineering changes as directed by the Government. Contractor shall provide any travel, incidental material consumed, and/or subcontractor effort necessary in the performance of the required ES. The specific tasks shall be defined in each Delivery Order.

The RFP required offerors to “propose a labor mix with supporting rationale for engineering services as described in Section C [above, and] provide job descriptions for each proposed labor category.” Moreover, the proposed man-hour rates were to include all travel, incidental material consumed, other direct costs (ODCs) and/or any associated subcontractor effort.

Offerors raised a number of questions seeking clarification as to this requirement, including as to “which labor categories are desired” and requesting “additional details on what tasks are required for Engineering Services.” The Agency did not provide any additional information, and instead simply responded that “Offerors shall propose the labor categories necessary to succes[s]ful[ly] complete the tasks iden[ti]fied for the statement of [the ES contract line item numbers (CLINs)].” However, the cited CLINs described the requirement only as “Engineering Services,” and contained references to a “note” informing offerors that “[l]abor hours for each task shall be established through negotiation in each delivery order via a Government-provided Statement of Work (SOW).” Another question asked how offerors could provide a composite rate and establish a fixed fee when the labor mix would not be known until receipt of a task order SOW. The Agency responded simply that “[t]he Offeror is responsible for providing a labor mix that will perform the required efforts detailed in Section C [above].”

GTS timely protested, arguing that the RFP was impermissibly vague and ambiguous, and thus prevented offerors from competing on a common basis. GTS noted that, while requiring offerors to propose a labor mix, the RFP did not include information essential for offerors to formulate an acceptable labor mix or labor rates, forcing offerors to make “wild guesses.” GPS argued that this was particularly problematic here in view of the LPTA nature of the procurement, which encouraged offerors to propose unrealistic labor mixes to achieve the lowest possible price and disadvantage offerors unwilling to “play the lowball pricing game.”

GAO sustained the protest, stating that, “[a]s a general rule, a solicitation must be drafted in a fashion that enables offerors to intelligently prepare their proposals and must be sufficiently free from ambiguity so that offerors may compete on a common basis.” GAO was critical of the Agency’s Q&R responses, and held that the RFP did not meet the foregoing standard. GAO stated that “the RFP’s vague description of the engineering services required did not provide offerors with a sufficient description of the work to be performed or the results to be achieved on which to base their proposed labor mix.” GAO described the requirement “to provide analysis, conduct studies and/or support engineering changes” as “vague,” and not constituting the description of the type of work to be performed or goals to be achieved that offerors needed to intelligently formulate their proposed labor mix, level of effort and rates.

GAO recommended that the Agency amend the RFP to provide an adequate description of the required engineering services or otherwise allow offerors to compete on a common basis.

This decision reaffirms that offerors who find a solicitation unclear as to what is required should submit clarification inquiries during the Q&A process. If the agency’s responses are insufficient, offerors should consider elevating the issue to GAO. Otherwise, you could find, as GTS feared here, that you lose out to another offeror that is willing to cut corners and “play the lowball pricing game.”