Contractor Loses Bid Protest by Asking a Bad Question

Every trial lawyer knows that it is dangerous to ask a question to a witness unless he already knows the answer.  In this bid protest case, a contractor asked a question that was published in the solicitation’s Questions and Answers (“Q&A”) that sunk its contract.  The agency’s answer went beyond the scope of the question and amended the Request for Quotations in a manner adverse to the contractor.  The lesson:  be careful with your questions!

OCS Solutions, Inc. and Nobel Supply and Logistics, Inc. were bidding on a contract to set up a hardware store at Joint Base Pearl Harbor-Hickam for the Navy.  Nobel won the lowest-price, technically acceptable contact.  OCS filed a bid protest arguing that the solicitation at issue contained a requirement that “quoted prices must be substantiated by the GSA catalog commercial benchmarks.” It pointed out that, according to the Navy’s Market Research Memorandum, this requirement ensured the Navy that base prices would be reasonable, because they had been approved by GSA. Nobel’s Market Basket was based on prices that were only later placed on the GSA Schedule. Because proposals that violate material requirements of a solicitation should be rated unacceptable, Allied Technology Group, Inc. v. United States, 94 Fed Cl. 16, 40 (Fed. Cl. 2010), OCS asserted that the award to Noble was irrational and a violation of the Competition in Contracting Act. 41 U.S.C. § 3301 (Supp. V 2011).

The Court of Federal Claims found that the solicitation was amended by the Q&A, in a way that obviated the lack of current GSA Schedule prices in Noble’s Market Basket. OSC asked whether “products offered in Attachment V. . . have to be on GSA schedule contract by the time the offer is submitted.” The ultimate answer was, “The products offered in Attachment V [the Market Basket price list] must be on schedule at the prices proposed by performance of the contract in accordance with the 30 day transistion [sic] period under PWS Paragraph 3.10.”

During oral argument, counsel for OSC indicated that OSC was not concerned, in posing its question, with the circumstances Noble faced, namely, an out of date GSA Schedule price list. Instead, OSC was concerned about the fact that a few of the items listed by the Navy in the Market Basket did not appear on OSC’s GSA Schedule contract. In other words, it would have to make relatively minor adjustments to the GSA Schedule in order to conform to its bid, but only by adding products, not by adjusting prices to previously listed products. The question and the answers to it, however, became part of the solicitation, and the question posed to the court becomes whether the agency was reasonable in allowing Noble to match the prices of its GSA Schedule contract to the Market Basket after the bid was submitted.

As Noble pointed out, the answer appeared to go beyond the question. The answer allows conformance of the GSA Schedule prices to those actually bid so long as all products offered are “on schedule at the prices proposed” within the thirty-day transition period. There was no question that GSA approved Noble’s updated price list within that period of time. The Court found that a literal and natural reading of the answer warranted Noble’s assumption; i.e., that it could bid on the understanding that it had time to revise its GSA Schedule to conform to the prices included in its Market Basket.