Chewing on recent GAO rulings leaves bitter taste

Two recent decisions leave me scratching my head. One of them concerns Dual Inc.
(B-280719, Nov. 12, 1998), in which GAO sustained a protest.

In the case, the Air Force was procuring a training system. Camber Corp. submitted its
timely proposal at an unspecified date, probably in March or April 1998. It proposed using
its Flight Simulation Division to perform the contract. At the time, it was negotiating
the sale of that division.

The Air Force selected Camber for award on June 25. Three days later, Camber signed the
sale agreement. The contract award actually took place on July 15.

Dual, a disappointed bidder, protested that Camber should have disclosed the sale of
its division. GAO agreed, stating, “Camber had an obligation to advise the agency of
the sale, at the very latest on June 28,” the date of the agreement.

The GAO opinion does not say whether the contract would revert to the acquiring party
or whether performance would be subcontracted to the sold division.

The first problem with GAO’s ruling is the lack of a mechanism for such
notification. Changing the method of performance is clearly a modification of the
proposal. But a standard solicitation provision, with some narrow exceptions, makes such
modifications untimely if submitted after proposals are due.

GAO claimed its opinion was consistent with two earlier protest rulings on the
availability of key personnel. It describes the 1992 cases as requiring disclosure of
changes in availability that occur “after proposals were submitted, but before
award.” In both cases, the rulings turned on information available to the bidders
before they submitted their best-and-final offers. The bidders missed a clear and timely
opportunity to revise their proposals in a proper way. Not so for Camber.

Also, the requirement to notify the agency of the sale by the date of the agreement
“at the very latest” is curious. Before there is a binding agreement, there is
no sale to disclose.

If GAO means that a bidder must disclose that it is in negotiations for a sale, the
decision doesn’t say so explicitly. Such an obligation could compromise the
confidentiality of delicate negotiations and be misleading because negotiations don’t
always result in a sale.

GAO trips over the flaw in its decision when it discusses the proper remedy. In
GAO’s view, the Air Force cannot re-evaluate offers but must instead recompete the

As GAO points out, “Since the information concerning Camber came to light after
the award, this information cannot be considered in any re-evaluation without this
information being submitted as a part of a revised proposal.”

GAO observes that, if Camber can revise its proposal, the other bidders should have the
same opportunity. GAO ignores the fact that the same reasoning means that Camber could not
notify the Air Force about the sale of its division after the submission of its proposal.

The other baffling decision by GAO came in the case of Du & Associates Inc.
(B-280283.3, Dec. 22, 1998). There, GAO denied Du’s protest against being eliminated
from the competitive range in a Housing and Urban Development Department procurement after
one round of discussions and revisions.

According to the agency, the bidder had not provided enough details about the
experience of its key personnel.

The protest gave GAO the opportunity to rule on the extensive revisions to the Federal
Acquisition Regulation Part 15, the rules for conducting a negotiated procurement. At
issue was a provision stating that the contracting officer shall discuss with each bidder
“aspects of its proposal ... that could, in the opinion of the contracting officer,
be altered or explained to enhance materially the proposal’s potential for

GAO’s startling conclusion was that the new language has no effect at all on what
the contracting officer negotiates and how he or she does it. GAO held that oral
discussions about a written question regarding the adequacy of proposed costs had led the
protester into the area of the specific experience of its staff. That being sufficient,
the protest was denied.

The Du opinion seems to ignore the new language in the FAR. A regulation does not
necessarily mean what it plainly says, but what GAO thinks it was meant to say.  

Joseph J. Petrillo is an attorney with the Washington law firm of Petrillo &
Powell, PLLC. E-mail him at

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