The following is an installment in Crowell & Moring’s 2023 Bid Protest Sustain of the Month Series.  All through 2023, Crowell’s Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month.  Below, Government Contracts Partner Cherie Owen and Summer Associate Olivia Venus discuss a U.S. Government Accountability Office (“GAO”) sustain decision involving the conduct of discussions.

In Life Science Logistics, LLC(“LSL”) GSA sought proposals for services to support disaster relief efforts.  Among other things, proposals were to include blueprint drawings for a proposed warehouse.  After receiving and evaluating initial proposals, GSA conducted discussions with both offerors.  GSA made award to Integrated Quality Solutions LLC (IQS), and LSL protested. 

In response to LSL’s initial protest of the award to IQS, the Agency took voluntary corrective action. It amended the solicitation to specify its blueprint requirements and conducted a reevaluation of each technical proposal. In the initial evaluation, LSL received slightly lower ratings than IQS, but achieved “good” ratings overall. Upon reevaluation, however, the Agency assigned several significant weaknesses to LSL’s technical proposal and assigned a rating of “not acceptable.”  

LSL filed a protest of the reaward to IQS arguing, among other things, that GSA failed to engage in meaningful discussions because it had never raised with LSL the concerns that served as the basis for downgrading LSL’s proposal.  The Agency argued that the downgraded rating and newly assigned weaknesses were in response to materially different information contained in LSL’s amended proposal, and that GSA had no obligation to reopen discussions to address these new concerns.

GAO rejected this argument, finding that the content giving rise to the significant weaknesses was present in both proposals but overlooked in the prior evaluation.  As a result, GAO found that the Agency did not conduct meaningful discussions because it had failed to disclose its concerns regarding information contained in LSL’s initial proposal.  GAO provided a clear standard for situations in which an agency identifies weaknesses during a reevaluation: “when an agency seeks revised proposals, its reevaluation may identify flaws in a materially-unchanged proposal that the agency would have been required to discuss with the offeror, had the flaws been identified when the proposal was initially evaluated. In that situation, the agency must reopen discussions in order to disclose its concerns, thereby giving all offerors similar opportunities to revise their proposals.” The Agency failed to meet this standard here.

GSA attempted argue that it had no obligation to reopen discussions because it had intended its corrective action to “restart” the procurement and result in a “de novo” evaluation.  However, GAO rejected this creative attempt to evade the requirement to conduct meaningful discussions, noting that, even if the agency intended to restart the competition entirely anew, this was not conveyed to the offerors.   In sustaining the protest, GAO recommended that the Agency reopen the procurement and engage in meaningful discussions regarding both proposals.

GAO’s decision in Life Science Logistics, LLCserves as a useful reminder that an agency’s decision to take corrective action does not eliminate its obligation to ensure that discussions are meaningful.  As GAO has noted, the FAR requires that, in order to be meaningful, discussions must raise – at a minimum – all significant weaknesses, deficiencies, and negative past performance to which the contractor has not previously had an opportunity to respond.  And an agency’s decision to take corrective action in the midst of a procurement does not eliminate that requirement.