explaining that one of the purposes of the 1997 amendments was to “[s]upport[ ] more open exchanges between the Government and industry, allowing industry to better understand the requirement [sic] and the Government to better understand industry proposals” (alteration in original) (quoting Federal Acquisition Regulation; Part 15 Rewrite; Contracting by Negotiation and Competitive Range Determination, 62 Fed. Reg. 51224 , 51225 (Sept. 30, 1997))
How later courts described this case
- explaining that one of the purposes of the 1997 amendments was to “[s]upport[ ] more open exchanges between the Government and industry, allowing industry to better understand the requirement [sic] and the Government to better understand industry proposals” (alteration in original) (quoting Federal Acquisition Regulation; Part 15 Rewrite; Contracting by Negotiation and Competitive Range Determination, 62 Fed. Reg. 51224 , 51225 (Sept. 30, 1997))
- explaining that “[a]ny meaningful clarification would require the provision of information,” that “the example of a clarification given in the regulation, ‘the relevance of an offeror’s past performance information,’ requires the provision of information,” and that “[t]here is no requirement in the regulation that a clarification not be essential for evaluation of the proposal” (emphasis added) (quoting FAR 15.306(a)(2))
- explaining plaintiff must show that it is an “ ‘actual or prospective bidder[ ] or offeror[ ] whose direct economic interest would be affected by the award of the contract or by failure to award the contract,’ ie., that [it is] an interested party, prejudiced by the award ----” (quoting Am. Fed’n of Gov’t Employees, 258 F.3d at 1302 (first and second alteration in original))
- holding that, to establish prejudice, a plaintiff must only demonstrate that its “chance of securing the award must not have been insubstantial,” and that a plaintiff demonstrates prejudice where the agency “improperly failed to conduct ‘discussions’ . . . [and] if it had, [the plaintiff] would have been able to cure deficiencies in its bid”
Written by the judges who cited it.
The opinion
PAULINE NEWMAN, Circuit Judge,
dissenting.
I agree with the panel majority that the 1997 amendment to section 15 of the Federal Acquisition Regulations was intended to liberalize the protocol governing exchanges between federal acquirers and bidders during the procurement process. Section 15 was designed to enhance convenience, but without diminution in fairness. The amended regulation does not exonerate the agency’s unusual procedure in this case, however generously it may be construed. Whatever the distinction between “clarifications” and “discussions” in 48 C.F.R. § 15.306 , the procedure by which the Air Force implemented its “independent cost evaluation” without informing ITAC of the agency’s action when advised that the labor hours of all bids were too low, does not meet any reasonable definition of “clarification.”
“Clarifications” are defined as “limited exchanges, between the Government and offerors, that may occur when award without discussions is contemplated.” 48 C.F.R. § 15.306 (a)(1) (2001). The agency’s unilateral increase of the labor hours of two of the three offerors, without disclosure to the third of the agency’s concern, cannot be rationalized as mere “clarification.” It is surely not the type of individual interchange that was intended to be authorized by the amendment to section 15.
ITAC states that had it been told that its labor hours were too low, it would have explained the economies that it expected to *1325 achieve through certain new cost-saving technologies. ITAC was no stranger to this contract; it was the incumbent contractor and it must be assumed to have known, as well as anyone, the labor needed to perform the contract. ITAC was not offered the same opportunity of a revised proposal as were the other bidders. Instead, the Air Force simply refused to perform a “most probable cost analysis” on the ITAC proposal, thereby precluding the award to ITAC. While the labor hours of the other offerors were unilaterally increased by the evaluation team, by ten percent for one offeror and thirty percent for the other, ITAC was simply disqualified.
The purpose of the section 15 amendment was to “support[ ] more open exchanges between the government and industry, allowing industry to better understand the requirements and the government to better understand industry proposals.” 62 Fed. Reg. at 51,224. It was not intended to authorize agencies to act without regard to fundamentals of fair procurement. From my colleagues’ blanket ratification of a procurement that was seriously flawed, I respectfully dissent.