Government Contracts Monitor
No Harm, No Foul - Agency’s Violation of the FAR Not Enough to Overturn Award
August 13, 2012
In Omniplex World Services v. United States, No. 12-249 C (Aug. 1, 2012), the Court of Federal Claims denied a bid protest even though the Court determined that the agency violated the Federal Acquisition Regulation (FAR). The Court found that the agency’s violation of the FAR did not prejudice (i.e., harm) the protestor because the protestor would have lost the contract anyway. While the prejudice requirement is nothing new, this case serves as an important reminder that an agency’s improper conduct is not enough to win a protest – a protestor must also be able to demonstrate that it would have had a chance of winning the award absent the agency’s improper actions.
The Procurement
The case involved a solicitation from the Office of Personnel Management’s (OPM) Federal Investigative Services (FIS) seeking proposals for “investigative fieldwork related to a federal background investigation.” OPM contemplated the award of multiple ID/IQ contracts.
The solicitation provided that, following evaluation of the offerors’ proposals, a competitive range determination would be made. OPM received proposals from seven offerors, and established a competitive range of four offerors including the protestor. All four remaining proposals were priced higher than OPM’s approved budget so OPM postponed the evaluation to rework the solicitation.
On July 8, 2011, OPM emailed each of the four remaining offerors attaching a revised solicitation. The email stated that several changes had been made to the solicitation that OPM believed would “significantly lower the overall proposed price of the proposal.” The email also said that the offerors were to review earlier clarifications and incorporate them into a “formal proposal revision” due “no later than 3:00 PM on July 21, 2011” (later extended to July 25). Each offeror received its own email rather than a single email addressed to all four offerors.
OPM received timely proposals from all four offerors. Three of the offerors lowered their prices while the protestor increased its price by $571 million. OPM found the protestor’s revised pricing proposals to be unacceptable and awarded contracts to the other three offerors.
The Protest
In its protest, the protestor argued that OPM violated FAR 15.307(b) by failing to request Final Proposal Revisions (FPRs) from the offerors in the competitive range. FAR 15.307(b) requires the agency to establish a common cut-off date and to inform offerors that the agency intends to make award without further revisions. The Court found that since the July 8 emails were sent to each offeror separately, there was no way for the offerors to know that July 21 was a “common cut-off date.” Also, the July 8 emails did not explicitly state OPM’s intention to make the award without further revisions. Therefore, the Court stated, “[N]either the letter nor the spirit of FAR 15.307(b), in view of the surrounding circumstances, was adhered to in this case.”
However, the Court found that, even if the agency had properly followed FAR 15.307(b), the protestor would not have won a contract. The protestor argued that it could have offered its best and final pricing in a FPR had it been given the opportunity, but the Court rejected that argument. The Court found that the protestor was already given an opportunity to lower its price when the agency revised the solicitation, but instead, the protestor increased its price by $571 million. The Court found that the protestor’s price appeared to be “based exclusively on the company’s business model, ability to leverage and absorb costs, and independent business decisions aimed at reaching internal profitability targets.” Thus, even if the agency had acted properly and the protestor had been allowed to make a FPR, its price would not have been competitive.
Therefore, even though the protestor successfully demonstrated that the agency violated the FAR, it lost the protest. Demonstrating prejudice is equally as important as demonstrating an improper agency conduct.
The entire Court opinion can be found here.
Katie Calogero is the attorney responsible for this article.