Protest that the agency improperly based its price evaluation on unstated evaluation criterion is dismissed as untimely, where the protester failed to challenge the agency’s methodology for evaluating price at the time the protester learned of agency’s intent to use this methodology during discussions.
Umicore Optical Materials USA Inc. protested the Defense Logistic Agency’s award of a contract for the storage and rotation of unfinished germanium wafers to 5N Plus Semiconductors LLC, primarily challenging the agency’s evaluation of price.
The agency’s pricing evaluation found that the offerors had proposed prices based on different understandings of the RFP and were not easily comparable to each other. In order to compare pricing, the CO concluded that she needed to see pricing represented as a price per wafer. Consequently, the CO sent each offeror a spreadsheet representing what she believed was each offeror’s pricing, including a price per wafer and total price. After several rounds of clarifications, the CO determined that 5N offered the lower price and awarded it the contract.
In its protest, Umicore argued the agency improperly evaluated offerors’ pricing based on a per wafer price that was not disclosed in the solicitation, and which was inconsistent with the defined pricing evaluation scheme. Umicore also argued that it was unreasonable for the agency to compare offerors’ prices using a per wafer price because the solicitation allowed for offerors to submit wafers of different thicknesses, such that an offeror with a thicker wafer would require fewer wafers to perform the contract, and thus have a higher per wafer price.
In response, the agency argued that the RFP permitted it to evaluate prices on a per wafer basis, and therefore any challenge to the reasonableness of the agency’s use of a price per wafer evaluation scheme is untimely.
GAO concluded that the conflicting interpretations of the solicitation resulted in an ambiguity. According to GAO, the CO’s communications during clarifications conflicted with the plain language of the solicitation, and therefore the ambiguity was patent and should have been challenged prior to the next closing date for proposals.
In this case, the agency informed Umicore that it intended to conduct its price evaluation using a price per wafer comparison during a telephone conversation. Further, this conversation was consistent with the agency’s earlier request that Umicore respond to the agency’s spreadsheet, which was designed to ascertain Umicore’s price per wafer.
To the extent the protester believed this price evaluation scheme was incompatible with the solicitation, Umicore was required to file its protest prior to the next closing time for receipt of proposals. Further, if Umicore believed that an evaluation on a per wafer basis was unreasonable, because the RFP permitted offerors to provide wafers of varying thickness, the protester was also required to raise this protest ground prior to the closing time for receipt of proposals.
Umicore argued these grounds were timely because they were filed within 10 days of its debriefing. However, GAO disagreed, because Umicore knew the basis for its protest prior to the debriefing.
Umicore also argued that the agency improperly allowed the awardee to revise its proposal and that the agency treated the offerors disparately during the exchanges. Notably, the protester complained that the agency did not inform Umicore of its high price.
First, GAO concluded that the agency’s communications, though described as clarification requests, were in fact discussions, because the agency allowed offerors to revise their pricing. Thus, the awardee was permitted to make price revisions. GAO also found no evidence the agency viewed Umicore’s price as unreasonably high. Further, the protested was advised that it could alter its price. Unless an offeror’s proposed price is so high as to be unreasonable or unacceptable, an agency is not required to inform an offeror during discussions that its proposed price is high in comparison to a competitor’s proposed price, even where price is the determinative factor for award.
Umicore Optical Materials USA Inc. is represented by Milton C. Johns and Rachel Leahey of Fluet Huber & Hoang PLLC. 5N Plus Semiconductors LLC is represented by Jessica Abrahams, Dana B. Pashkoff, Thomas F. Rath, and Deborah Norris Rodin of Dentons US LLP. The government is represented by David R. Nolt, and Keric D. Clanahan, Defense Logistics Agency. GAO attorneys Peter D. Verchinski and Amy B. Pereira participated in the preparation of the decision.
