Saying "More" When "Less" Will Do: Misleading Pre-Award Discussions Support Protest

In Total Home Health (THH), 2019 WL 1953001 (April 26, 2019), the GAO recently sustained a protest on the grounds that the Department of Veterans Affairs (VA) misled an offeror during pre-award price discussions.

The Background

The VA issued an RFP seeking proposals on multiple CLINs to provide home respiratory services and durable equipment for a VA network.  Award was to be made on a “Lowest Price Technically Acceptable” basis.  The VA received six proposals, including that of THH, and all proposals were deemed technically acceptable.  The THH proposal, however, was the fourth lowest and was roughly 30% above the lowest offered price.

The VA conducted pre-award discussions. The CO initially advised TTH that its price proposal was “relatively weak” and gave THH the opportunity to provide revised pricing.  TTH, however, sought more information from the CO – it sought some additional insight into the VA’s thinking on price and/or whether there was a pricing neighborhood that VA was looking for.

The CO responded to THH that the VA “anticipated lower pricing” on its CLINs 5, 11, and 14.  According to the VA, it chose to emphasize these CLINs because THH had priced them more than twice the government’s IGE, but the VA did not provide this explanation to THH. Rather, the Agency’s response led THH to focus on these three CLINs, and it made price reductions solely on these items.  However, THH was still nowhere near the lowest overall price.  In fact, the GAO noted that had THH reduced all three CLIN prices to zero it still would not have been the lowest offeror in line for award.  It was no surprise then that THH did not get the award. It was debriefed and filed this protest.

The Fallout

THH argued that it was misled by the VA during discussions. The GAO agreed.  According to the GAO, the VA could have legally stood upon its initial response, that is, that THH’s overall pricing was “relatively weak,” i.e., too high.  But by responding further and directing THH’s attention to only these three CLINs, the VA improperly suggested that it was only these three CLINs that required attention.

The GAO held that this agency response caused THH to base its final revised proposal on misleading information.  In addition, the GAO credited a Declaration from THH’s president to the effect that had the VA advised that its proposed price was too high in other areas, it could have submitted a more competitive price that could have resulted in the award. Therefore, the GAO concluded that THH was prejudiced by the government’s misleading information.  The protest was sustained.

Lessons Learned

Sometimes saying less is best.  The Agency’s initial, more general response about the need for lower pricing would have passed legal muster.  The Agency sought to do more, but that more was harmful, not helpful.  Agency communications during discussions must be carefully crafted to enhance an offeror’s proposal, increase the chances of award and make the proposal more responsive to the government’s needs.  Regrettably, this did not occur here.