Agency Inadvertently Conducted Discussions by Asking Offerors If Their Prices Could Go Any Lower; Academy Leadership, LLC, GAO B-419705.2

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Protest challenging the agency’s conduct of discussions is sustained. After receiving proposals, the agency asked offerors if their prices were the best offer they could provide. GAO found that these communications constituted discussions. Moreover, they were not meaningful discussions. The communications with the awardee led the awardee to the area of its proposal that required revision—namely, its price. The communications with the protester, however, failed to inform the protester about concerns the agency had with its technical approach.

The Department of Homeland Security (DHS) issued a solicitation under the FAR’s simplified acquisition procedures seeking leadership training. DHS received proposals from six offerors, including Academy Leadership, LLC and The Lincoln Leadership Institute. Following an initial award, protest, and corrective action, DHS awarded the contract to Lincoln. The agency determined that Lincoln’s significant superiority under the two most important evaluation factors justified its high price. Academy protested.

Academy alleged the DHS did not conduct meaningful discussions. While evaluating proposals, DHS contacted Lincoln and said, “your pricing was significantly higher than other proposals, Is this the best offer you can provide?” Likewise, the agency contacted Academy and asked if its pricing was the “best offer you can provide.” Academy contended that these communication amounted to discussions and that they were unequal.

DHS attempted to argue that these communications were not discussion but really just a means to ensure the government “was getting the best prices.” GAO disagreed with DHS. At the very least, the communications with Lincoln had the ordinary indicia of discussions. They conveyed information tailored to Lincoln’s proposal—i.e., your price is significantly higher than other offerors—and provided the company with an opportunity to revise.

Even if it had conducted discussions, DHS argued the discussions were fair because each offeror had been asked to reduce their price, but none had been allowed to revise their proposals. GAO, however, found that these discussion were neither meaningful nor fair. Lincoln was informed that its price was the highest. This communication directly led Lincoln to the area of its proposal that required revision.,

Academy on the other hand, was not informed that the agency had concerns with its technical approach. The evaluation had assessed several flaws in Academy’s technical proposal that the agency essentially treated as significant weaknesses. DHS did not point out any of the flaws to Academy during discussion. And it appeared that some of the concerns identified in Academy’s proposal played a role in the source selection.

GAO recommended that DHS reopen the procurement and conduct appropriate discussions with all offerors.

Academy is represented by Joseph R. Berger and Thomas O. Mason of Thompson Hine LLP. The intervenor, Lincoln, is represented by Alan Grayson. The agency is represented by Gabriel E. Kennon of the Department of Homeland Security. GAO attorneys Young H. Cho and Peter H. Tran participated in the preparation of the decision.

GAO - Academy Leadership