Government Contracts Monitor

Procuring Agencies Can’t Change Horses Mid-Stream, Even If They’re Only Requesting Quotes

July 22, 2014

By: Eric Whytsell

The recent case of AeroSage LLC, B-409627 (Comp Gen. July 2, 2014), provides a useful reminder that the discretion of government procurement personnel is not unlimited: Once the Government chooses a procurement method and notifies offerors of the rules, it cannot then unreasonably impose additional requirements.

The case involved a Federal Bureau of Prisons (BOP) reverse auction procurement for next-day delivery of fuel posted on the FedBid website. Protester AeroSage LLC was the low bidder at the end of bid closing and received an e-mail from FedBid requesting a Bid Validation (confirmation of compliance with specifications) by 5:00 pm the same day. AeroSage provided it Bid Validation by responsive e-mail at 4:36 that afternoon. Nevertheless, it was not awarded the contract.

Instead, the BOP contracting officer awarded the contract to the next lowest bidder because AeroSage failed to respond to his phone calls – at 12:44 and approximately 1:45 -- requesting confirmation of delivery and acceptance of the offer by 2:30. Apparently, the CO had grown concerned about the timing of the delivery and decided he needed confirmation sooner than required by the FedBid system. AeroSage failed to answer his calls because its personnel were out of the office attending to other matters, as they believed they had time to do given the deadline established by FedBid. When he got no response by 2:30, the CO decided that AeroSage had rejected the Government’s offer.

AeroSage protested, arguing that the BOP improperly awarded the contract to the next-lowest-priced vendor because AeroSage had submitted the lowest priced quotation and timely committed to meeting all requirements in the request for quotations, including delivery time, pursuant to the Bid Validation request from FedBid. In response, the agency argued that it had “attempted to award” the contract to AeroSage but that the company had not accepted its offer. More specifically, the BOP claimed the CO was merely asking the supplier to indicate acceptance of the order in accordance with FAR 13.004(b) – and it reasonably interpreted AeroSage’s failure to respond as a rejection of the offer.

While the parties disagreed about the nature of the procurement and whether AeroSage had provided a quote or a bid, the Government Accountability Office (GAO) found that issue to be immaterial. It instead concluded that the BOP had unreasonably imposed an additional requirement on the procurement after the solicitation closed.

As the GAO explained, when FedBid hosted the reverse auction on its website, it was acting as the BOP’s agent. In addition, it conducted the auction pursuant to its Terms of Use, which provide for the issuance of a Bid Validation request after the close of the solicitation. In this case, that request sought confirmation that the fuel delivery would occur at 9:00 am the next day. According to the GAO, when the CO took it upon himself to seek the exact same confirmation in the course of 45 minutes instead of five hours, he acted in a manner that “was not only unstated in the RFQ, but was inconsistent with the instructions set forth in FedBid’s previously-issued Bid Validation request.” The GAO noted that such “actions violate a fundamental premise of government procurements: that offerors must be advised of the bases upon which their proposals will be evaluated.” Here, since the agency chose FedBid to handle the reverse auction, FedBid asked AeroSage for the same confirmation of delivery commitment as the CO, and AeroSage provided that information in accordance with the FedBid request, the CO’s attempt to accelerate the process improperly imposed an additional unstated requirement in the procurement.

Since the contract was performed long before the protest decision was issued, the outcome was ultimately a pyrrhic victory for AeroSage (which only recovered the costs of its protest). Still, disappointed offerors looking for protest grounds should be on the lookout for “horse-changing” antics like those on display in this case.

J. Eric Whytsell is the attorney responsible for the content of this article.

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