The U.S. Court of Federal Claims recently ruled in favor of a protester who was thrown out of a competition due to a minor discrepancy in their proposal. The court held that the discrepancy was a "minor or clerical error" subject to clarification and that the agency abused its discretion in not allowing correction. This ruling shows that agencies should allow correction for minor clerical errors and that the Court of Federal Claims is the place to go if an agency throws you out for such an error.
37 Nash & Cibinic Rep. NL ¶ 46
Nash & Cibinic Report | July 2023
The Nash & Cibinic Report
Competition & Award
Ralph C. Nash
¶ 46. POSTSCRIPT XI: PERFECTION DEMANDED
In this long-running series we have been identifying cases where offerors have been thrown out of the competition for very minor defects in their proposals. But all of a sudden we have a breath of fresh air from the U.S. Court of Federal Claims in Aspire Therapy Services & Consultants, Inc. v. U.S., ___ Fed. Cl. ___, 2023 WL 3960844 (May 30, 2023).
The Offeror’s Error
The solicitation called for two spreadsheets—a Cost Breakout spreadsheet and a Direct and Indirect Labor Summary spreadsheet. The solicitation contained multiple warnings that the two spreadsheets had to correlate and warned that there might be cases where the same information would be required on both spreadsheets. It also stated that “Proposals that fail to comply with content or format requirements specified in Section L of this solicitation may be rejected without further evaluation.”
The protester entered the number “81” on the Direct and Indirect Labor Summary spreadsheet yielding 2,366 hours of direct labor, However, it entered the number “51” on the Cost Breakout spreadsheet yielding 2,336 hours of direct labor. Had this discrepancy been corrected the protester’s price would have increased by 0.063%.
The agency rejected the protester’s proposal on the basis of this discrepancy and, after a debriefing, this court proceeding followed.
The Decision
The court ruled for the protester following a two-step analysis. First, it held that under Federal Acquisition Regulation 15.306(a), the discrepancy in the spreadsheets was a “minor or clerical error” subject to clarification—citing Galen Medical Associates, Inc. v. U.S., 369 F.3d 1324 (Fed. Cir. 2004), 46 GC ¶ 293, and WaveLink, Inc. v. U.S., 154 Fed. Cl. 245 (2021).
Second, the court addressed a more difficult question—was the agency required to allow correction of the error when FAR 15.306(a) was permissive? The court held in this case that failure to allow correction was an abuse of discretion, stating:
“[T]he permissive language of the clarification provisions in [FAR] Part 15 does not mean that those provisions are not susceptible to judicial enforcement.” BCPeabody Constr. Servs., Inc. v. United States, 112 Fed. Cl. 502, 510 (2013). Although the parties each cite cases supporting their respective positions on whether [the agency] reasonably exercised its discretion, there appears to be no bright line rule or legal test applicable to the Court’s review of this issue. Courts that have reviewed claims involving an agency’s failure to seek clarification employ a highly fact-intensive and case-specific analysis. Nevertheless, several common factors have led courts to conclude that an agency’s decision to forgo clarification was an abuse of discretion.
The court ruled that, in this case, the agency had abused its discretion in not allowing correction, citing Criterion Systems, Inc. v. U.S., 140 Fed. Cl. 29 (2018); Level 3 Communications LLC v. U.S.,129 Fed. Cl. 487 (2016); and Griffy’s Landscape Maintenance, LLC v. U.S., 46 Fed. Cl. 257 (2000), 42 GC ¶ 153.
Our View
This line of cases shows that the Court of Federal Claims is the place to go if an agency throws you out because of a minor clerical error. Agencies should heed this warning and allow correction in these circumstances. RCN
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