The following is an installment in Crowell & Moring's 2023 Bid Protest Sustain of the Month Series. All through 2023, Crowell's Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month. Below, Crowell Partner Cherie Owen discusses GAO's decision sustaining the protest of BC Site Services, LLC, (BCSS) in which GAO found that an agency's exchanges with offerors – even though not labeled as such – constituted discussions.

In BC Site Services, the Army Corps of Engineers sought to acquire horizontal construction in the Corps's Galveston District and Southwestern Division. The agency conducted the procurement as a two-phase design/build procurement under FAR subpart 36.3 – in phase one, offerors submitted proposals addressing their past performance; construction execution approach; and organization/ management team. After evaluating the phase one proposals, the agency sent Evaluation Notices to 9 of the 36 offerors, resulting in exchanges between those offerors and the agency with respect to various aspects of their proposals. The agency ultimately selected 19 of the most highly rated offerors to proceed to phase two of the procurement. BCSS' proposal was not among these 19, and it was eliminated from the competition.

BCSS protested its elimination arguing, among other things, that the agency's exchanges with offerors constituted discussions and, having opened discussions, the agency was required to conduct meaningful discussions with all offerors. In responding to the protest, the agency argued that FAR part 15 procedures (including the provisions regarding the conduct of discussions) do not apply to the first phase of FAR subpart 36.3 procurements. GAO, however, noted that, while it would not "import" the FAR part 15 discussions requirements absent a provision in the solicitation that does so, the solicitation here included multiple provisions importing the procedures of FAR part 15 into the procurement. Therefore, GAO considered the agency's exchanges with offerors under the FAR part 15 standards.

In assessing the agency's interactions with offerors during phase one, GAO stressed that it is the substance of the interactions – not the label given to them – that determines whether an exchange constitutes discussions. Here, the agency's exchanges permitted offerors to submit information that remedied proposal deficiencies. As GAO noted:

[T]he agency asked a[n] . . . offeror to provide essential information necessary for the agency to determine the acceptability of the offeror's proposal . . . [C]ertain offerors were provided with an opportunity to revise proposals by submitting additional material information for inclusion in their proposals in order to make their proposals acceptable.

Although the agency had labeled the exchanges as "Clarifications," GAO concluded that the substance of the communications demonstrated that they were actually discussions. And, having opened discussions, the agency was obligated to afford all offerors remaining in the competition an opportunity to engage in meaningful discussions and submit revised proposals. In sustaining the protest, GAO recommended that the agency essentially "turn back the clock" and engage in meaningful discussions (and provide an opportunity for proposals revisions) with all phase one offerors.

GAO's decision in BC Site Services serves as a useful reminder of GAO's longstanding position that the label an agency uses is not determinative of whether exchanges constitute discussions.

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