Final Proposal Revision

Generally, after the government receives proposals under a FAR Negotiable Procurement1 the agency will conduct discussions (also known as negotiations) with an offeror after receipt of the initial proposal regarding elements of the technical or cost volumes. Following these discussions the agency will provide an opportunity to invite all offerors in the competitive range to submit a Final Revised Proposal (“FRP”)(formerly known as Best and Final Offers (“BAFO”)) based on the negotiations that were conducted between the offeror and the Government. When the agency issues the invitation, it routinely states that all discussions have been concluded and that no other negotiations will be held. Stated differently, the FRP is the last and final opportunity for offerors to change their offer to the Government, if and when applicable, that amends the initial offer by incorporating the response to the proposal elements that were discussed. In other words, the FRP is the last chance for an offeror to submit the winning proposal. This policy seems straightforward.

But what happens when the Government engages in discussions after receipt of the FRP? Is the offeror entitled to a “third bite of the apple” by submitting revisions to their last and final offer? This question was the subject of a decision by the GAO in the matter of CIGNA Government Services, LLC File B-297915.2, dated May 4, 2006.

CIGNA protested the award of a Department of Health and Human Services, Center for Medicare and Medicaid Services, contract for Medicare claims processing services. Specifically, CIGNA protested the conduct of meaningful discussions with the awardee after the receipt of FRPs, and permitting the awardee to materially revise their proposal, without furnishing the same opportunity to CIGNA.

The FAR does not permit an agency2 to obtain clarification of an apparent clerical or arithmetical error, such as correcting a typographical error or mathematical mistake. But what about significant revisions to the proposal?

The GAO stated the “communications between a procuring agency and an offeror that permit the offeror to materially revise or modify its proposal generally constitute discussions.” 3

The GAO went on to state that “communications that permit an offeror to correct a mistake constitute discussions unless the mistake is minor and both the existence of the mistake and what was actually intended are clearly apparent from the face of the proposal.”. Furthermore, “if an agency does conduct discussions with one offeror, it must conduct discussions with all competitive range offerors, and provide all such offerors an opportunity to submit revised proposals.” 4
From the record, the GAO said that it was “clear the agency conducted discussions with the awardee following submission of the FRPs.” The agency relied on the awardee's post FRP discussions regarding its offer. Hence, these communications constituted discussions. Since the awardee engaged in prohibited post-FRP discussion, the protest of CIGNA was sustained.

If you receive a call from the buyer after submission of an FRP, alarm bells should ring. Be careful to determine if the Buyer wants to clarify a mistake, or engage in prohibited discussions. If the agency indicates they want to re-open discussions with you, ascertain from the Contracting Officer if they plan to do likewise with all offerors. There are few things worse in Government procurement than snatching defeat from the jaws of victory if your award is protested by a disappointed offeror and the protest is sustained.

Tom Petruska, Owner
Contracts Unlimited, Incorporated

Footnotes:

1. FAR Part 15

2. FAE 15.304

3. FAR 15.306(d).

4. KPMG Peat Marwick, LLP, B-259479, May 9, 1995

The foregoing is not legal advice nor is it a legal opinion. Please contact your attorney for legal advice

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