TITLE: B-299533, Battelle Memorial Institute, May 14, 2007
BNUMBER: B-299533
DATE: May 14, 2007
***************************************************
B-299533, Battelle Memorial Institute, May 14, 2007
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Battelle Memorial Institute
File: B-299533
Date: May 14, 2007
Richard B. Oliver, Esq., and David J. Ginsberg, Esq., McKenna Long &
Aldridge LLP, for the protester.
Scott C. Briles, Esq., and Elise Harris, Esq., Department of Health &
Human Services, for the agency.
Sharon L. Larkin, Esq., Guy. R. Pietrovito, Esq., and James A.
Spangenberg, Esq., Office of the General Counsel, GAO, participated in the
preparation of the decision.
DIGEST
Agency's decision to exclude protester's proposal from competition for
failing to include option year pricing was reasonable, where the
solication required that proposals contain this pricing and provided for
award without discussions; agency was not required to allow protester to
correct mistake because, although the omission was evident on the face of
the proposal, the protester's intended pricing for the option years was
not apparent.
DECISION
Battelle Memorial Institute protests the exclusion of its proposal from
the competition under request for proposal (RFP) No. 2006-N-08556, issued
by the Department of Health and Human Services (HHS) for comprehensive
technical, scientific, research, and public health support for the
National Center on Birth Defects and Developmental Disabilities. Battelle
contends that the agency improperly rejected its proposal for omitting
option year pricing and that the agency should have, instead, allowed the
firm to correct the omission.
We deny the protest.
The RFP provided for either a single award or multiple awards of
fixed-price indefinite-delivery/indefinite-quantity (ID/IQ) contracts with
cost-plus-fixed-fee task orders. RFP at 67-68. Each ID/IQ contract award
was to be for a 12-month base period with nine 1-year options, and the
maximum value for each awarded contract was stated to be $92 million. Id.
at 2-3.
The RFP required offerors to provide two technical proposals: one was to
address the RFP, and the other was in response to a "request for task
order proposal" (RFTP) that was attached to the solicitation. Id. at
70-72; RFTP at 1. In addition to the technical proposals, offerors were
required to submit a "business proposal," that is, a cost proposal, based
on the RFTP. This proposal was to be "supported by detailed cost data" and
was to include, among other things, the "total proposed amount of the
RFTP, including all phases, options or segments." RFP at 66. The RFTP
included a discussion of the base and option period requirements and
required that offerors "identify each labor category, labor hours by
category, indirect cost rates and respective allocation bases, other
direct costs including travel costs for each of the performance periods as
well as a summary for all performance periods," and to provide a "full
budget justification" for costs including cost differences from period to
period." Id., RFTP at 1. The RFP also required that "the estimated cost of
each phase, option or segment of the offered work for the RFTP shall be
itemized." RFP at 66.
The RFP contemplated a "two-step" evaluation process. In the first step,
the agency was to evaluate technical proposals for the RFP (not the RFTP)
and "[a]s a result of the RFP technical proposal evaluation, a competitive
range will be established." In the second step, the agency was to evaluate
RFTP proposals and cost proposals and make award of one or more ID/IQ
contracts and one task order award. Id. at 73.The RFP stated that the
government intended to make award without discussions, but also that the
government reserved the right to conduct discussions with those offerors
in the competitive range "if the Contracting Officer later determines them
to be necessary." Id. at 63, 73.
Battelle and eight other offerors submitted technical and business
proposals by the November 29, 2006 closing date. Battelle's business
proposal omitted the pricing for all of the option years.[1] In early
December, the contracting officer reviewed proposals for compliance with
the RFP and excluded Battelle's proposal from further consideration "due
to noncompliance with the requirements of the RFP," specifically the
requirement to itemize the costs for the option years.[2] Contracting
Officer's Statement at 2; Agency Report, Tab B, Letter from HHS to
Battelle (Jan. 9, 2007), at 1.
After receiving notice from the agency that its proposal was excluded from
the competition, Battelle filed a timely agency-level protest. Battelle
argued that its omission was a "mistake," which Federal Acquisition
Regulation (FAR) permits to be corrected at any time up until award, and
that the agency should have brought this mistake to Battelle's attention
and allowed Battelle to make the correction. Battelle attached to its
agency-level protest 24 pages of detailed spreadsheets itemizing the costs
for the 9 option years, along with additional proposal pages that modified
the narrative portion of the business proposal to include a discussion of
the option years. Agency Report, Tab C, Agency-Level Protest, attach. D.
HHS denied the agency-level protest, and Battelle protested to our
Office.[3]
Battelle argues that the agency improperly rejected its initial proposal
based on Battelle's omission of the option year pricing. Battelle contends
that the agency should have suspected that Battelle had made a "mistake or
clerical error" in its proposal and had a "duty to verify" Battelle's
proposal and conduct "clarifications" to allow Battelle to correct the
omission. Protest at 3-4, 6-8. In support of its argument, Battelle cites
FAR sect. 15.306(a)(2), which permits clarifications to "resolve minor or
clerical errors," and FAR sect. 15.306(b)(3)(i), which permits
communications before the establishment of the competitive range to
address proposal ambiguities such as "errors, omissions, or mistakes."
An offeror bears the burden of submitting and adequately written proposal
that contains all of the information required under a solicitation, Sam
Facility Mgmt, Inc., B-292237, July 22, 2003, 2003 CPD para. 147 at 5, and
an agency may reject a proposal that omits required pricing. Joint Venture
Penauillie Italia S.p.A; Cofathec S.p.A; SEB.CO S.a.s; CO.PEL.S.a.s.,
B-298865, B-298865.2, Jan. 3, 2007, 2007 CPD para. 7 at 6.[4]Although, in
an appropriate case, an agency may allow an offeror to correct a mistake
or clerical error in a cost or price proposal through clarifications (as
opposed to discussions), when it does so, both the existence of the
mistake or error and the amount intended by the offeror must be apparent
from the face of the proposal. Id. at 8. Here, although the existence of
Battelle's error was clear from the face of its proposal, it was not
obvious what pricing Battelle intended to propose for the missing option
years. Although, as Battelle points out, the initial proposal referred to
"inflation adjustment[s]" in the narrative portion of the proposal, these
vague references do not explain Battelle's intended pricing for the option
years. That is, Battelle's option year pricing, as reflected in the 24
pages of pricing spreadsheets and additional narrative that Battelle
provided to the agency in its agency protest, could not be gleaned from
Battelle's references to inflation adjustments in the initial proposal
submission, and did not constitute "minor or clerical errors" as
contemplated by the FAR. Thus, we find that the omission of Battelle's
option year pricing could not be corrected through clarification or
verification. See University of Dayton Research Inst., B-296946.6, June
15, 2006 , 2006 CPD para. 102 at 8.
Regarding Battelle's argument that "errors, omissions, or mistakes" can be
corrected by communications before the establishment of the competitive
range, FAR sect. 15.306(b)(2) specifically provides that communications
under this section "shall not be used to cure proposal deficiencies or
material omissions, materially alter the technical or cost elements of the
proposal, and/or otherwise revise the proposal." See also FAR
sect. 15.306(b)(3) ("communications shall not provide an opportunity for
the offeror to revise its proposal"). Again, we agree with the agency that
Battelle's omission of the option year pricing is material, given the
RFP's requirements to provide detailed option year pricing for evaluation,
and any attempt to cure this omission would necessitate submission of a
revised proposal and would constitute discussions.[5] See Joint Venture
Penauillie, supra, at 8.
Finally, Battelle contends that the agency's decision to eliminate its
proposal from further competition was inconsistent with the RFP. According
to Battelle, since the RFP provides that the competitive range will be
established based only on the evaluation of technical proposals, see RFP
at 73, the elimination of Battelle's proposal based on a cost issue was
premature and its pricing omissions should have been addressed after
establishment of the competitive range and through discussions. However,
unless the agency decides to establish a competitive range, the RFP
provision referenced by Battelle does not apply, and it does not require
the agency to conduct discussions. As noted, the agency has not yet
decided to establish a competitive range and to conduct discussions.
Rather, the agency rejected Battelle's proposal (along with two others),
after inspecting proposals for completeness, for not containing all of the
information required by the RFP, a decision which, as discussed above, was
reasonable. Consistent with the RFP, if the agency makes award based on
initial proposals, then Battelle's proposal cannot be considered for
award. If, on the other hand, the agency decides to conduct discussions,
we expect that the agency then will have to decide whether or not to
include Battelle's proposal in the competitive range. See FAR
sect. 15.306(c)(1).
The protest is denied.
Gary L. Kepplinger
General Counsel
------------------------
[1] Battelle's proposal references "inflation adjustment[s]," but provided
no details that would allow the agency to calculate Battelle's option year
pricing.
[2] Two other offerors' proposals were also excluded for failing to comply
with RFP requirements.
[3] The agency advises that it has not established a competitive range or
held discussions with any of the offerors.
[4] Battelle's attempts to distinguish Joint Venture Penauillie, supra,
are unpersuasive.
[5] Battelle also contends that it should have been permitted to correct
its mistake through a "proposal modification," which FAR sect. 15.001
defines as "a change made to a proposal . . . to correct a mistake at any
time before award." As noted above, we find that the exchanges that would
occur here to allow the correction of Battelle's mistake would constitute
discussions, and such exchanges are governed by FAR sect. 15.306.