By Bruce Jervis
The Sheridan Corporation v. United States
The U.S. Court of Federal Claims has ruled that an agency attempted to auction off a contract in a misguided response to a bid protest. The agency should not have reopened competition after exposing the awardee’s price.
The U.S. National Guard Bureau issued a request for proposals for construction of an aircraft hangar in Bangor, Maine. The RFP listed a number of “past performance” evaluation factors and said an offeror’s past performance rating would be equal in importance to price. The RFP stated that contract award would be based on initial proposals. There would be no discussions with offerors.
The agency awarded the contract to The Sheridan Corporation. The contract price was public information. A competing offeror, JCN Construction Co. Inc., protested to the Government Accountability Office that past performance had been evaluated in a disparate, unfair fashion. In response to the protest, the agency announced it was suspending performance of Sheridan’s contract and taking corrective action.
The agency said it considered three offerors to be within the competitive range: Sheridan, JCN and Nauset Construction Co. Inc. The three were invited to submit revised proposals on the original scope of work. The agency would then conduct a new evaluation of the revised proposals and announce contract award.
Sheridan filed suit in the Court of Federal Claims, seeking declaratory and injunctive relief. Sheridan contended the agency violated procurement regulations by conducting an auction. Two unsuccessful offerors were being given a second chance for contract award, knowing the price they had to beat.
The court agreed with Sheridan. When an agency conducts discussions with offerors, revised proposals are then appropriate. When an agency alters its work requirements, revised proposals are appropriate. But, when there have been no discussions and no revision of the contract requirements, revised proposals are inappropriate.
“Although revised proposals are often appropriate where an agency has modified its solicitation requirements, or where the agency has engaged in discussions or negotiations before inviting offerors to submit final proposal revisions, the Court cannot see any lawful or rational basis for the corrective action here.”
The court said the establishment of a “competitive range” had been an artifice. “Simply stated, an agency has no need to establish a competitive range where award will be made on the basis of initial proposals.” And, the court agreed with Sheridan’s characterization of the agency’s actions as an auction.
“The agency disclosed Sheridan’s winning price before requesting revised proposals and thus has authorized an impermissible auction to occur…. The integrity of the procurement process would not be preserved if an agency were permitted to disclose offeror prices, request revised proposals for unchanged work, and base corrective action on an irrelevant and inapplicable ‘competitive range’ determination.”
The court granted Sheridan a preliminary injunction and said it would later issue a final ruling on Sheridan’s request for a permanent injunction and declaratory relief.
Based on this opinion, there is little doubt regarding the final ruling. Procuring agencies frequently create problems for themselves when they freelance “corrective action.” The agencies seek to avoid the expense and delay of a resolicitation, not realizing that their “solution” runs afoul of the Federal Acquisition Regulation.
September 13, 2010
Court: U.S. Court of Federal Claims
Participants: For The Sheridan Corporation: Michael A. Gordon, Washington, D.C.For JCN Construction Co., Inc.: Robert J. Symon, Washington, D.C.For the National Guard Bureau: Cameron Cohick, Washington, D.C.
Before: Judge Thomas C. Wheeler
Opinion by: Judge Wheeler
Outcome: Plaintiff’s request for a preliminary injunction granted.