GAO: Absent "Competitive Range" Determination, Agency's Negotiations/Discussions with Only One Offeror Improper: Protest Sustained

In Rice Solutions, LLC, 2022 CPD 102, 2022 WL 1223945 (4/25/22) (Rice), the GAO sustained a post award protest on the grounds that the agency failed to establish a “competitive range” amongst the proposals, which precluded the government from having discussions with only one offeror.

The Procurement and the Protest

The RFP was issued by the Dept. of Health and Human Services, Indian Health Service (Agency), seeking nurse anesthetist services for a rural healthcare facility in South Dakota.  The RFP contemplated the award of a firm-fixed price, IDIQ contract for a base year and four annual options. Award was to be made on a “best value” basis, considering price and other factors identified in the solicitation.

The agency received three proposals, including that of the incumbent Rice and SOPOR, LLC, the ultimate awardee. The agency’s Technical Evaluation Team (TET) reviewed the proposals. The TET’s findings re the Rice proposal were unclear. The TET Summary, Finding One, stated that the Rice proposal should be deemed “Acceptable”. Finding Two stated that the proposal should be considered technically “Unacceptable”. In any event, the TET Summary did not recommend that Rice’s proposal should be eliminated from the competition, nor was Rice ever so advised by the agency. The agency did not make a “competitive range” determination.

Following the evaluation, the agency commenced negotiations/discussions with SOPOR only, the highest rated proposal. The agency requested and obtained a revised proposal from SOPOR, and SOPOR was selected for award. After Rice was notified, it filed this protest with the GAO.

The Contentions of the Parties

Rice contended that the agency failed to establish a “competitive range”, and thus improperly conducted discussions with only one offeror. The agency argued, among other things, that since SOPOR‘s proposal was the only acceptable offer, this created a “De Facto Competitive Range of One”, which allowed the agency to proceed with discussions with SOPOR alone.

The GAO Rules

The GAO agreed with the protester. The GAO questioned whether Rice’s proposal was unacceptable given the ambiguity of the TET findings (see above).  In any event, the agency failed to advise Rice that its proposal was excluded from the competition, in accordance with FAR 15.503(a)(1). It also failed to determine who was included and who was excluded from the competition – there was no “competitive range” established prior to holding discussions in accordance with FAR 15.306(c)(1). Under these circumstances, the agency’s decision to conduct discussions with SOPOR only was improper.

As to whether Rice was prejudiced by the agency’s action, the GAO noted that the issue was whether Rice, if it had been granted the opportunity to have meaningful discussions with the agency, could have submitted a revised proposal that had a substantial chance of obtaining award. The GAO stated that it would resolve any doubts in favor of the protester.

The GAO sustained the protest. It recommended, among other things, that the agency amend the solicitation, allow for revised proposals and make a new source selection decision.