In a prior alert, we highlighted the unusual remedy ordered in Caddell Construction Co. v. U.S., in which the Court of Federal Claims nullified the award of a construction contract and ordered the agency to reopen discussions with only one firm. The court explained that the unusual remedy was appropriate because misleading discussions had impacted only that firm, and “a broad reopening of discussions is unnecessary to cure the procurement error and would cause more harm than good.”
Recently, for the first time, GAO also departed from the rule that discussions must include all offerors in the competitive range, and approved one-sided discussions as corrective action in response to a protest. In Sevenson Envtl. Servs., Inc., B-416166.5, Apr. 1, 2019, at 1 (unpublished decision) and Environmental Chem. Corp., B-416166.3 et al., June 12, 2019, each protester challenged the Army’s decision not to award it a contract for environmental remediation support services. In response to Sevenson’s protest, the Army discovered that it had not advised that firm during discussions of a weakness concerning Sevenson’s key personnel, and elected to take corrective action consisting of “limited discussions with Sevenson to provide it an opportunity to address the weakness.”
Environmental Chemical Corporation (ECC) protested the corrective action on the basis that the Army was not permitted to engage in discussions with only Sevenson, and was required to reopen discussions with all offerors in the competitive range, citing Rockwell Electronic Commerce Corp., B‑286201.6, Aug. 30, 2001 (if discussions are reopened with one offeror after receipt of final revised proposals, they must be reopened with all offerors whose proposals are in the competitive range, even where the discussions are corrective action on improper awards). GAO disagreed. Mirroring the reasoning in Caddell, GAO concluded that under the unique circumstances, only Sevenson suffered from the procurement error, and so one-sided discussions were appropriate to place Sevenson in the same competitive position that the other offerors, including ECC, were in following their receipt of meaningful discussions.
Accordingly, under Environmental Chem. Corp., an Agency’s discretion to limit the scope of proposal revisions during corrective action extends to the discretion to engage in discussions with only one firm, so long as that action is reasonable under the circumstances and remedies the procurement impropriety. In light of this decision, potential protesters take note: if your firm was prejudiced by inadequate discussions, one-sided discussions may be a desirable result. However, in a multi-protester scenario, it is not guaranteed that corrective action on another protester’s discussions challenge will result in new discussions with all firms in the competitive range.