Government Contracts Monitor
In the Absence of a Definition, the Agency's Reasonable Interpretation of Terms Controls
May 3, 2018
It’s essentially impossible to submit a winning proposal if you don’t understand what the procuring agency wants to buy. But understanding what a solicitation is saying is sometimes more difficult than it seems. Offerors pursuing a contract award are sometimes disappointed to learn that their understanding of a word or phrase does not match the meaning the procuring agency intended it to convey. As the decision of the Government Accountability Office in Xenex Disinfection Services, LLC, B-415897, B-415898 (April 17, 2018), reminds us, however, unless the solicitation provides a clear definition of the term(s) in question, offerors are generally left to the mercy of the agency’s reasonable interpretation.
The Xenex matter involved two solicitations issued by the Department of Veterans Affairs (VA) for ultraviolet (UV) disinfection devices to be used in VA hospitals. One of the solicitations was undertaken as a brand name or equal procurement of whole-room UV disinfection systems that identified a Xenex Disinfection Services, LLC (Xenex) UV disinfection systems as the brand name. The other was also for UV disinfection systems. Both solicitations outlined technical features required for the relevant UV disinfection systems, and both provided, in relevant part, that the disinfection system should provide UV disinfection with proven effectiveness against Clostridium difficile (CD), methicillin-resistant Staphylococcus aureus (MRSA), and vancomycin-resistant enterococci (VRE). In addition, both provided that “effectiveness” would be verified by reviewing peer-reviewed journals. Of particular relevance here, the solicitations did not further define the term “effectiveness.”
Both solicitations provided that award would be made using a best value tradeoff and that quotations would be evaluated for: (1) meeting technical requirements; (2) training/delivery schedule; and (3) price. The agency received several quotations in response to each solicitation, including, in both cases, quotations from Xenex and Steriliz, LLC. As part of its proposals, Steriliz submitted a peer-reviewed study that assessed Steriliz’s UV disinfection system as well as another manufacturer’s UV disinfection system and concluded that the two tested systems “effectively reduce patient room contamination with MRSA, VRE, and CD over and above manual cleaning when used sequentially.” In both procurements, the agency conducted a technical review of the quotations and determined that Steriliz represented the best value to the agency.
Xenex protested, alleging that the Steriliz product fails to meet material requirements of the solicitations and that the agency should have found the awardee technically unacceptable. More particularly, Xenex argued in part that “effectiveness” in the medical context has a recognized meaning, and the reports from peer-reviewed studies provided by Steriliz do not indicate that its product is effective in this technical sense. According to Xenex, the medical community distinguishes between “efficacy” and “effectiveness” of products, where “efficacy” describes the ability of a product to produce the expected result under ideal or laboratory conditions, while “effectiveness” instead refers to the ability of a product to produce an effect in “real world” clinical settings. Given this distinction, Xenex claimed that the peer-reviewed studies submitted by Steriliz only show, at best, results in a laboratory setting (i.e. the efficacy of the product), rather than the effectiveness of the awardee’s product as required by the solicitation. Xenex also contended that it was unreasonable for the agency to rely on a definition of the term other than the industry standard meaning.
In response, the agency explained that it applied a reasonable, common-sense definition of the term “effectiveness,” which was not otherwise defined in the solicitations. The agency further contends that the study in question showed that the use of the Steriliz’s product reduced the number of CD, MRSA, and VRE organisms, showed effectiveness even in the technical sense advanced by the protester, and that even the studies relied on by Xenex did not use the terms efficacy and effectiveness in a manner consistent with its suggested definition.
It did not take long for the GAO to side with the agency. The GAO first noted that an agency’s technical evaluation is primarily a matter within the contracting agency’s discretion, since the agency is responsible for defining its needs and the best method of accommodating them. If there is some uncertainty as to the precise meaning of a term used in stating the solicitation’s requirements, the application by agency evaluators of a common sense definition, based upon the agency’s general needs as reflected in the solicitation, is reasonable. Here, according to the GAO, the VA’s application of the ordinary meaning of “effectiveness” was unobjectionable because without a definition in the solicitations, the agency’s view that a product is effective when it reduces the numbers of CD, MRSA, and VRE organisms is reasonable.
The lesson? When preparing a proposal, make sure to look for definitions of key terms. To the extent that such definitions are missing from the solicitation and there is any hint of potential ambiguity, however slight, do whatever is necessary to figure out how the agency interprets the term and proceed accordingly. It’s never a good idea to assume you understand what the agency is trying to say.
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