United States: What is Required for Discussions to Be Meaningful?

Editor's note: This is the second post in a series of posts focused on protest allegations related to discussions with offerors. The first post addressed differences between clarifications and discussions. Planned future posts will cover what qualifies as misleading discussions, what constitutes unequal discussions, and a round up of recent protests involving discussions.

A common bid protest allegation made by disappointed offerors is that the agency failed to engage in meaningful discussions. It's basic procurement law that, when an agency engages in discussions with offerors under FAR Part 15, the discussions must be meaningful. But what is required for discussions to be does "meaningful"? Because protesters frequently raise the meaningful discussions protest ground, contractors and their counsel should be familiar with agencies' discussions-related obligations and how GAO and the CFC approach protests challenges to the adequacy of discussions.

FAR 15.306, which provides for exchanges with offerors after receipt of proposals, does not specifically define "meaningful" in the context of discussions. Instead, the FAR states that an agency must discuss "deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond." GAO and the CFC have based their analyses of what discussions qualify as meaningful on this FAR provision. Issues that arise with respect to whether discussions were sufficiently meaningful include:

  • When is a weakness significant?
  • Do weaknesses that are discriminators have to be discussed?
  • How specific does the agency need to be?
  • Does an agency need to discuss a weakness if it first appears in an offeror's FPR?

Is the Weakness Significant?

Protesters often argue that the agency's failure to raise an issue identified during the evaluation of initial proposals violates the FAR. As noted above, the FAR only requires that deficiencies and significant weaknesses be discussed. Because there is no obligation to discuss garden-variety weaknesses within a proposal, a protest ground regarding the failure to discuss such issues (absent an unequal discussions issue) would be dead on arrival.

The FAR (15.001) defines a "weakness" as "a flaw in the proposal that increases the risk of unsuccessful contract performance." A weakness is "significant" when the concern "in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance." So the distinction between a weakness and a significant weakness turns on the judgment of whether there is an "appreciable" effect on the risk of unsuccessful contract performance.

As a general matter, the CFC and GAO will give deference to evaluators' determinations of whether a weakness is significant. That said, protesters can overcome the deference given to the agency—and GAO and the CFC will not accept the evaluator's characterizations—when the weakness had a clear impact on the rating being challenged.

Although convincing the CFC or GAO that an evaluator mischaracterized a concern with an appreciable impact as a garden-variety weakness isn't easy, it can be done. For example, in Trammel Crow Company, the protester asserted that the GSA's discussions were not meaningful because the offeror had not been informed that one of its proposed key personnel lacked the required years of experience and another lacked experience in federal buildings of a certain minimum size. Although the agency argued that discussions were not required because the weaknesses had not been deemed "significant," GAO sustained the protest because "it [was] clear that, under the agency's evaluation methodology for this subfactor, the weaknesses in fact were significant."

What about when a garden-variety weakness becomes a discriminator?

There are numerous bid protests in which offerors' proposals are closely matched and a weakness that was not discussed (or group of such weaknesses) becomes the discriminator. Substantial precedent makes clear that the fact that a weakness eventually becomes the deciding factor does not create an obligation to conduct discussions. For instance, in Gracon Corp., GAO explained:

An agency is not required to afford offerors all-encompassing discussions, or to discuss every aspect of a proposal that receives less than the maximum score, and is not required to advise an offeror of a minor weakness that is not considered significant, even where the weakness subsequently becomes a determinative factor in choosing between two closely ranked proposals. We review the discussions provided only to determine whether the agency pointed out weaknesses that, unless corrected, would prevent an offeror from having a reasonable chance for award.

Gracon had been rated "high quality" under the relevant subfactors and factor, but the awardee's proposal was better-rated—in part because of seven weakness assessed against Gracon. GAO disagreed that Gracon's weaknesses which became discriminators should have been discussed, finding that none of the problems constituted a significant weakness or deficiency—and the fact that they ultimately made the proposal less competitive was beside the point.

How much explanation is required from the Agency?

In cases in which there is no dispute about the significance of a weakness, the parties may disagree over whether the discussions directed the offeror to the area of its proposal needing improvement. The boilerplate legal concepts applied by the CFC and GAO are clear. An agency is not required to "spoon feed" offerors during discussions; instead, the agency is merely required to lead offerors into the areas of their proposals requiring amplification or correction. Consistent application of these rules can be tricky.

For example, in Omniplex World Services Corp., the protester argued that the three pricing-related communications it received from the agency did not meaningfully inform the offeror that its price was unreasonably high or unacceptable. In the communications, the agency informed Omniplex that the solicitation was revised in ways that should have significantly reduced the proposal price and directed the company to the changed solicitation areas. The CFC found that the agency adequately conveyed that it found Omniplex's proposed pricing to be a deficiency or significant weakness. The court acknowledged that the agency's "communications with Omniplex certainly could have been more forthcoming—especially given Omniplex's request for further guidance regarding its pricing proposal." But the protest was denied nonetheless because the agency had sufficiently informed the offeror of the proposal area in which problems were found.

GAO reached the opposite conclusion in a case involving similar communications with the offeror. During discussions in Sentrillion Corp., the agency informed the offeror that its proposal was deficient because it did not submit proof of a license or an application for a license, and it had submitted some expired licenses. But the agency failed to address the fact that the business licenses it submitted with its initial proposal were incomplete and not notarized. GAO sustained the protest, acknowledging that although an agency is not required to "spoon feed" an offeror and had addressed the licenses (and thus arguably led the offeror into the area), the discussions were inadequate because the agency failed to identify every significant weakness or deficiency.

What about proposal problems that result from changes introduced in the FPR?

A final "when are discussions required" issue arises at the end of the negotiations, when protesters sometimes allege that an agency should have reopened discussions to address a significant weakness or deficiency found by the evaluators late in the process, i.e., after submission of the FPR. In Geo Marine, Inc./Burns & McDonnell Engineering, Inc., the protester argued that the agency should have reopened discussions when the agency changed what had been a weakness to a significant weakness during the evaluation of its FPR. During discussions, the agency had raised the issue (location of wind turbine generators), and the offeror had made the decision to not change the location but instead to provide additional explanation of its design choice. The FPR explanation made matters worse, and GAO denied the protest, ruling that an agency is not required to reopen discussions when a significant weakness or deficiency is first introduced in a FPR. Numerous CFC and GAO decisions support this rule.

* * *

In sum, although the failure to engage in meaningful discussions is a common protest ground, there are nuances in the law that may add complexity to what seems like a familiar argument. Government contractors and their counsel should be aware of the requirements agencies are subject to and how the CFC and GAO approach issues related to meaningful discussions.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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