May an agencyreopen discussions after information is released?

A company official asked the following question: Sometimes as the result of a bid protest or for other reasons an agency will decide to reopen discussions in a procurement and request an additional round of best and final offers (BAFOs). On occasion this will occur after a contract award has been made and sometimes even after the losing offerors have been debriefed. In such cases reopening the discussions would seem to be unfair to the offeror who submitted the winning proposal especially if its proposed prices or parts of its technical proposal have been released publicly. Why isn't reopening the competition in those circumstances considered an improper auction or technical leveling? What can an agency do to ensure that the offerors are treated fairly in these circumstances?

Under Federal Acquisition Regulation 15.611 an agency should not reopen discussions and request new BAFOs from the offerors in a negotiated procurement unless it is clearly in the government's best interests to do so. Generally this would include any situation in which the agency believes that the conduct of the procurement has been unfair to one or more of the competitors or potential competitors. In such cases the General Accounting Office has stated repeatedly that an agency's statutory obligation under the Competition in Contracting Act of 1984 to achieve full and open competition outweighs any regulatory provisions of the FAR that otherwise prohibit auction techniques and technical leveling. Pursuant to those precedents agencies frequently attempt to "level the playing field" in ways that might not be appropriate.

In addition as directed in the Federal Acquisition Streamlining Act of 1994 FAR 15.1007 has been amended to recognize the possibility that a protest might be filed after a debriefing in which substantial information on the awardee's proposal may be released. Interestingly however while FASA and the implementing FAR provision seek to ensure that all affected parties receive the same level of information about the original awardee they do nothing to address the potential disadvantage to the awardee vis-à -vis the other offerors.

FAR 15.1007 states that when a protest causes an agency to issue a new solicitation or request a new round of BAFOs the agency shall make available to the actual or prospective offerors: "(1) Information provided in any debriefings conducted on the original award about the successful offeror's proposal and (2) other nonproprietary information provided to the original offerors."

Although FAR 15.1007 does not adequately address the situation discussed herein neither does it repeal the pre-existing case law. In fact GAO has long recognized that "Where the reopening of negotiations is properly required the prior disclosure of an offeror's proposal does not preclude reopening negotiations and reopening does not constitute either improper technical leveling or an improper auction. The possibility that a contract may not be awarded based on true competition on an equal basis has a more harmful effect on the integrity of the competitive procurement system than the fear of an auction the statutory requirements for competition take priority over the regulatory prohibitions of auction techniques and technical leveling." [See Unisys Corp. 67 Comp. Gen. 512 88-2 CPD ¶ 35 (1988).]

These policies do not depend upon the filing of a formal bid protest. In Sperry Corp. 65 Comp. Gen. 715 86-2 CPD ¶ 48 (1986) the Navy found that an error in its treatment of one offeror required it to reopen discussions and request a second round of BAFOs. Because the successful offeror's initial BAFO price had been released the Navy required all offerors to let the Navy release theirs as well.

According to GAO the Navy's actions were a proper method to eliminate the otherwise unfair disadvantage that the original awardee would have suffered as a result of the recompetition.

In KPMG Peat Marwick B-251902.3 Nov. 8 1993 93-2 CPD ¶ 272 the protester received portions of the awardee's technical proposals in response to a Freedom of Information Act request. The protester then filed a bid protest based on the information resulting in an agency decision to reopen the competition. The agency then sought to remove the protester from the reopened procurement in order to eliminate the protester's "competitive advantage." However GAO found the agency's actions to be unreasonable because any competitive advantage that had accrued to the protester was not the result of wrongdoing. Therefore GAO recommended that the agency restore the protester to the competition and level the playing field by releasing analogous information on each offeror to each of the competitors.I

nterestingly when the agency attempted to comply with GAO's recommendation another offeror protested. According to the new protester in negotiating the extent to which information should be released the agency had improperly coerced it to release too much information and had unfairly permitted another offeror to withhold too much of its technical proposal.

However GAO found that the protester had voluntarily agreed to the release of its own information and that the agency had treated the offerors comparably. [See Devres Inc. B-251902.8 March 30 1995 95-1 CPD ¶ 170.]

Many other decisions address this topic under various factual scenarios. However all of them are premised on the central importance of full and open competition even when it might conflict with other important but less significant policies.Peckinpaugh is a member of the government contracts section of the law firm of Winston & Strawn Washington D.C. Readers are encouraged to submit topics by e-mail to carl@carl.com. This column discusses legal topics of general interest only and is not intended to provide legal advice. Should you have a specific question or legal problem consult an attorney.

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