On April 25, 2022, the Government Accountability Office (GAO) sustained a protest filed by Rice Solutions LLC, challenging the award of a Department of Health and Human Services Indian Health Service (IHS) contract to SOPOR LLC. Rice Solutions alleged that IHS improperly engaged in discussions with only SOPOR, and not the other offerors, as required by the Federal Acquisition Regulations (FAR). The GAO agreed with Rice Solutions, finding that IHS had improperly engaged only the awardee in discussions and sustained the protest, recommending that the agency take corrective action. This decision serves a reminder that an agency may not engage in unequal discussions, and if it does so, the procurement may be overturned by the GAO, if it is challenged.

Background

On Dec. 10, 2021, IHS issued a solicitation for certified registered nurse anesthetist services at the Pine Ridge Service Unit health care facility in South Dakota, under FAR Part 12 procedures. The solicitation contemplated the award of a contract that would consist of a one-year base period and four one-year options. The solicitation provided that award would be made to the responsible offeror whose offer was considered to be most advantageous to the government, with price and other factors being considered.

The technical evaluation factors were listed as: problem and approach; past performance; and key personnel. However, the solicitation contained conflicting descriptions of the weight that IHS would give to the technical factors. As well, the solicitation was silent regarding the importance of price relative to the technical factors. Finally, the solicitation informed offerors that IHS intended to award the contract without conducting discussions, but that the agency reserved the right to conduct discussions.

The significant dates and events leading up to the filing of the protest were as follows:

  • Rice Solutions, SOPOR, and one other company timely submitted proposals in response to the solicitation.
  • On Jan. 6, 2022, IHS’ technical evaluation team determined that Rice Solutions was the second highest rated proposal and was its second choice for the award. Importantly, IHS evaluators determined that both Rice Solutions and the third offeror had technically unacceptable proposals.
  • IHS evaluators did not eliminate Rice Solutions from the competition, and they did not establish a competitive range.
  • On Jan. 6, 2022, IHS entered into discussions only with SOPOR.
  • On Jan. 11, 2022, IHS requested a final proposal revision only from SOPOR, and SOPOR provided this to the agency on that same day.
  • On Jan. 12, 2022, the IHS contracting officer selected SOPOR for award.

After Rice Solutions received notice that it was an unsuccessful offeror, it filed the instant protest arguing that IHS unfairly conducted discussions with only SOPOR, thereby denying Rice Solutions an opportunity to also submit a revised proposal.

The GAO’s findings

The GAO first concluded that the agency’s assertion that Rice Solutions’ proposal was technically unacceptable was not supported by the record, which indicated that the evaluators had differing opinions regarding the strength of the offeror’s technical approach. The GAO determined that it was unclear whether Rice Solutions’ proposal should have ultimately been found technically unacceptable in the first place, particularly in light of the conflicting solicitation provisions related to the relative weight of the price and non-price factors.

But the GAO ultimately sustained the protest specifically on the grounds that IHS had failed to properly establish a competitive range of offerors that it wished to enter into discussions with. The GAO opined that even though an agency has broad discretion in establishing a competitive range and is not required to memorialize its competitive range determination expressly in a formal document, it is required to provide sufficient information to adequately support its rationale. The GAO noted in this case that the contemporaneous record did not contain any documentation or support for IHS’ contention that a competitive range had been established before entering into discussions with SOPOR.

In fact, the GAO noted that the record indicated the opposite, because in response to the GAO’s request for additional information during the protest, IHS provided a declaration from the technical evaluation team chair, in which he admitted that prior to the protest, he was unfamiliar with the terms ‘competitive range’ and ‘competitive range determination’ and had only come to understand what those terms meant through this protest process. This admission, via this declaration, for the GAO confirmed that IHS had not established, or even intended to establish, a competitive range before the agency entered into discussions with SOPOR. The GAO concluded that once the agency chose to conduct discussions, it was required to so with all offerors in the competitive range, and that because no competitive range had been established, the agency was required to conduct discussions with all offerors.

Takeaways

  • An agency, if it decides to conduct discussions, must establish a competitive range and conduct discussions with all offerors in the competitive range. If it fails to do this, the GAO will sustain a protest challenge based upon this conduct.
  • Further, an agency may not engage in discussions with any offerors when a competitive range has not been established. The GAO has opined that a de facto competitive range of one is not created when an agency finds all offerors except for one technically unacceptable.