Protest challenging the agency’s corrective action and affirmation of its original award decision is sustained, where the agency allowed the awardee to revise its proposal to address specific issues raised by the protester, including its price proposal, but did not open discussion with the protester or allow it to submit a revised proposal.
Centerra Group LLC protested the Department of Justice’s award of a contract for guard services to Paragon Systems Inc., challenging the agency’s corrective action in response to its initial proposal and alleging the agency engaged in unequal discussions.
Principally, Centerra objected to the agency’s communications with Paragon during the corrective action, which it characterized as discussions. Centerra argued the agency allowed Paragon to revise its proposal to the extent that Centerra’s initial protest grounds were rendered moot, and that it did not provide Centerra the opportunity to revise its proposal.
In response, the government argued that the communications between Paragon and DOJ during the remand were proper because the procurement is a GSA FSS task order RFQ under FAR 8.4. The court agreed that an agency purchasing services through the FSS is not bound to follow FAR Part 15 procedures. However, the court concluded that DOJ had already departed from FAR 8.4 processes when it conducted two rounds of discussions with both offerors during the initial evaluation.
The agency argued that these earlier communications were clarifications, but the court disagreed, finding that both offerors were asked to address weaknesses in their proposals and to materially revise their proposals. After accepting the offerors’ written responses, the agency also required an actual revised proposal from each offeror.
Because the agency had already conducted two rounds of discussions and allowed proposal revisions after each round, the court held that any future discussions must be held in accordance with the fairness principles in FAR Part 15. Once the agency engaged in discussions during its FSS procurement, it was obligated to follow FAR Part 15 standards for negotiated procurements. The agency’s characterization of its communications as merely clarifications did not alter this obligation.
Having concluded the agency had, in fact, held discussions, the court turned to the merits of Centerra’s challenge to the agency’s communications with Paragon during the corrective action. During the corrective action, DOJ allowed Paragon, but not Centerra, to provide clarifications or revisions of its proposal. DOJ argued that it was allowed to conduct discussions only with its putative awardee in response to a bid protest, but the court found no precedent for this interpretation of FAR Part 15.
Further, the court found DOJ punished Centerra by allowing Paragon to redress every flaw in its proposal, so that the award decision could withstand review. The court strenuously objected to this breach of fundamental fairness and competitive principles, finding it patently unfair to Centerra. The court also noted that DOJ’s planned corrective action would have been rejected had the agency made its intentions clear during the earlier proceedings.
DOJ again attempted to characterize its communications with Paragon during the corrective action as clarifications, not discussions, but the court rejected this argument, finding two glaring examples of discussions that provided Paragon to materially revise and modify its proposal. For example, Paragon altered its price in response to Centerra’s argument that its price did not reflect an understanding of the requirements. While its overall price did not change, Paragon revised some line item prices. Paragon also revised its transition plan to address Centerra’s argument that it failed to address delays in processing new employees. According to the court, once these topics were raised with Paragon, discussions occurred.
The government also argued that the FAR permits discussions with only one offeror during a corrective action, if the other remaining competitor’s proposal contains no weaknesses, significant weaknesses or deficiencies. However, the court found this argument unavailing. Once Paragon was given the chance to revise its proposal, the agency was required to provide Centerra the same opportunity to improve its offer. While Centerra may not have required detailed discussions, the agency could properly have limited discussions to an opportunity to submit a revised proposal.
Next, the court determined that Centerra was prejudiced by the unfair discussions. Paragon was allowed to submit a revised price proposal and to clarify areas of its transition plan, which was one of the four technical factors. The agency argued that the evaluators did not alter any of the technical rating scores during the corrective action, but the court found there were significant modifications to the narrative explaining those scores. In other words, though the scores did not change, the underlying rationale for those ratings was fundamentally altered. The court characterized these changes as DOJ’s attempt to justify its award to Paragon in light of the arguments raised by Centerra in this bid protest, and therefore afforded less weight to the portion of the record created during the heat of litigation. Further, the revised TEP report was the product of unfair and improper discussions, and therefore the court declined to consider it seriously when deciding whether Centerra had been prejudiced.
The court held that absent the agency’s errors, Centerra would have had a substantial chance for award. The agency argued that Centerra had not demonstrated that it would have revised its proposal in any meaningful way, but the court noted that the protester possessed enough information about the evaluation of its proposal, its price, Paragon’s technical score advantage, and Paragon’s price, to have revised its proposal in productive ways, had the agency provided it the opportunity.
Centerra Group LLC is represented by Kara L. Daniels, and by Sonia Tabriz and Amanda J. Sherwood, of counsel. The government is represented by Eric P. Bruskin, Senior Trial Counsel, with whom were Chad A. Readler, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, Douglas K. Mickle, Assistant Director, Civil Division, Department of Justice; and by John Caterini and Barry C. Hansen, Office of General Counsel, Department of Justice, of counsel. Paragon Systems Inc. is represented by Katherine S. Nucci, and by Scott F. Lane and Jayna M. Rust, of counsel.