Many solicitations for government contracts provide prospective contractors with the opportunity to ask questions. In some instances, the government’s answers to those questions create additional questions. When that’s the case, it’s crucial to seek clarification early; waiting to see how the procurement unfolds can have drastic consequences, leaving contractors with no recourse. A recently issued bid protest decision from the U.S. Court of Federal Claims—Eagle Hill Consulting, LLC v. United States[1]—highlights this important point.
In Eagle Hill, the Federal Emergency Management Agency (FEMA) issued a solicitation to establish a blanket purchase agreement with a General Services Administration (GSA) Federal Supply Schedule contract holder to provide administrative support services. The solicitation contemplated award on a best value tradeoff basis with price as one of three evaluation factors.
Regarding price, the initial solicitation required prospective contractors to submit their price quotes in an Excel pricing spreadsheet, which included the 11 labor categories the agency sought to acquire. For each labor category, the spreadsheet included blue highlighted columns where prospective contractors were to identify the number of personnel for the labor category, the number of labor hours, hourly labor rates, and number of weeks. The agency was to evaluate the total price, which would be the product of the hourly labor rate proposed and the number of labor hours.
Subsequently, FEMA amended the solicitation. Notably, FEMA did not amend the Excel pricing spreadsheet, which still contained the blue highlighted columns. The amendment explained, however, that “the Government will use the hourly rates, Column D, from the” Excel pricing spreadsheet and “will apply those rates to an estimated number of hours for each labor category.” The amendment also contained a set of questions and answers, with one prospective contractor asking FEMA to “provide estimated hours, a sample task order, or other scope/workload information to allow offerors to submit a price proposal.” FEMA responded by explaining that “[t]he Government has identified the quantity of personnel for each labor category. Based on the entire PWS [performance work statement], you are to complete the estimated level of effort and labor rates.”
Eagle Hill submitted a quote and “filled in all the blue-highlighted columns” in the Excel pricing spreadsheet. However, the awardee “only filled in the hourly rate column (Column D).” During its evaluation, FEMA only utilized the hourly rate information in Column D and multiplied those rates by the estimated number of hours for each labor category. After award, Eagle Hill filed a protest, arguing, among other things, that “the Solicitation required offerors to submit, and the Agency to evaluate, information for all columns of the pricing spreadsheet” and that “the Solicitation included a latent ambiguity regarding the Factor 3 Price spreadsheet.”
The Court held that there were “glaring” inconsistencies regarding “what information offerors should submit in the pricing worksheet” and “what information the Agency would evaluate,” which triggered a requirement that Eagle Hill “seek clarification before it submitted its proposal or before [the agency] made an award.” In the Court’s view, the “glaring” inconsistency came in the form of the amendment, which “advised offerors that the Agency would apply its estimated labor hours to the offerors’ proposed labor rates in Column D of the pricing spreadsheet” but also “instructed offerors to submit the pricing spreadsheet from the original RFQ, which included numerous columns for offerors to provide information beyond just labor rates.” The Court also found the inconsistency was “exemplified in Q&A No. 7, which, on the one hand, advised offerors that the Agency had its own estimate for personnel quantity but on the other instructed offers to provide an estimated level of effort, in addition to labor rates.” “These discrepancies should have put Eagle Hill on notice” of the basis of its challenge prior to submitting its quote, and because Eagle Hill did not seek clarification of the discrepancies prior to quote submission or award, the Court held its post-award “challenge is thus waived and must be dismissed.”
From the perspective of an outside observer, the “inconsistency” does not appear as “glaring” as the Court found it to be. Indeed, the Court’s finding that the “revised criteria specifically advised that FEMA would conduct the price evaluation using its own estimate of labor hours, so necessarily the only relevant input from offerors for purposes of the evaluation would be their proposed labor rates,” appears at odds with the plain language of the amendment, as excerpted in the decision. For instance, that excerpt explained that “the Government will use the hourly rates, Column D,” from the Excel pricing spreadsheet and “will apply those rates to an estimated number of hours for each labor category.” (emphasis added). In fact, the awardee’s bidding strategy, i.e., only submitting hourly rate information, while ultimately successful, seems to have been a risky approach in light of the explicit instruction in questions and answers to “complete the estimated level of effort and labor rates.”
Regardless, the amendment and subsequent questions and answers certainly are not as clear as they could have been regarding the information prospective contractors needed to provide or how the agency would evaluate it, and no prospective contractor should have left that to chance. A clarifying question (or pre-award protest) could have leveled the playing field and may have resulted in a different award decision. The takeaway: it is always a good idea to submit clarifying questions because waiting to challenge an ambiguous solicitation requirement will nearly always result in waiving the challenge. Don’t leave it to chance.
[1] No. 23-2194, 2024 WL 1902442, at *2 (Fed. Cl. Apr. 19, 2024)
