TWO-PHASE DESIGN-BUILD When Are Discussions Conducted.doc

37 Nash & Cibinic Rep. NL ¶ 39

Nash & Cibinic Report | June 2023

The Nash & Cibinic Report

Competition & Award

Ralph C. Nash

¶ 39. TWO-PHASE DESIGN-BUILD: When Are Discussions Conducted?

In the two-phase design-build source selection process, Federal Acquisition Regulation 36.303-2 clearly states that phase two is to be conducted following FAR Part 15 procedures, importing the discussion rule in FAR 15.306(d) into that phase. But FAR 36.303-1 is silent on whether the discussion rule applies to phase one. This issue was the subject of BC Site Services, LLC, Comp. Gen. Dec. B-420797.4, 2023 CPD ¶ 73, 2023 WL 2648192, 65 GC ¶ 85, where the Government Accountability Office held that it did apply to phase one exchanges.

The crux of this decision was the following solicitation language:

9.1.5 The Government reserves the right to allow proposal revisions in accordance with FAR 15.306(d)(5) Exchanges with Offerors After Receipt of Proposals, if deemed necessary to determine the most highly qualified Offerors.

9.1.6 If the Government decides to hold discussions, a Competitive Range, a subjective determination of the most highly rated proposals, will be established and discussions will be held with only those Offerors in the competitive range. The Government will engage with each Offeror in the competitive range, in accordance with FAR 15.306(d).

9.1.7 Upon conclusion of discussions, those Offerors considered the most highly rated, will be afforded an opportunity to submit Phase One proposal revisions for final evaluation.

In spite of this language the agency argued that the FAR Part 15 discussion rule did not apply to phase one. The GAO rejected this argument, stating:

In asserting that FAR part 15 procedures do not apply to phase one of a procurement conducted under FAR subpart 36.3, the Corps relies on our decision in Linc Government Services, LLC, B-404783.2, B-404783.4, May 23, 2011, 2012 CPD ¶ 128. In that decision, our Office acknowledged that “[t]here is nothing in the regulations concerning Phase [one] of the Design-Build Selection Procedures, FAR § 36.303-1, or the authorizing statute for these procedures, 10 U.S.C. § 2305a, that makes the discussions requirements of FAR part 15 applicable to the first phase of a FAR subpart 36.3 procurement,” and explained that we would “not import these requirements—absent a provision in the solicitation that does so.” Linc, supra at 7.

Here, unlike in Linc, there are multiple provisions in the solicitation that import the procedures of FAR part 15 into the procurement.

This gives us a clear rule— the discussion rule applies to phase one only when the agency decides to make it applicable.

Having reached that conclusion, the GAO then sustained BC Site Services’ protest that it had not been afforded meaningful discussions. That ruling takes some explaining. The procurement was for eight year-long multiple award indefinite-delivery, indefinite-quantity contracts in an unrestricted pool and a small business pool. The agency received 36 phase one proposals and sent nine of these offerors, including the protester, “Evaluation Notices.” Based on the information received, the agency invited 19 offerors to submit phase two proposals. BC Site Services protested that it should have been included in the small business pool.

In sustaining the protest, the GAO first concluded that discussions had been held because one of the recipients of an evaluation notice had been allowed to submit a missing document that contained “essential information necessary for the agency to determine the acceptability of the offeror’s proposal.” (Emphasis added.) See Postscript IX: Clarifications vs. Discussions, 32 NCRNL ¶ 54, for discussion of this “acceptability of the proposal” standard. The GAO rejected the agency’s argument that its evaluation notices were communications” per FAR 15.306(b), stating:

Section 15.306(b)(2) of the FAR permits communications with offerors prior to the establishment of a competitive range that enable the government to obtain information necessary to enhance the government’s understanding of proposals; allow reasonable interpretation of the proposal; or facilitate the government’s evaluation process. This same FAR section also states that such communications may not be used to cure proposal deficiencies or material omissions, materially alter the technical or cost elements of the proposal or otherwise revise the proposal. Id.

Thus, the GAO followed its normal rule that if a discussion is held with one of the offerors in the competitive range, a meaningful discussion must be held with all other offerors that are so situated.

But here no competitive range had been established and BC Site Services had been left out of the pool of small businesses that had been invited to submit phase two proposals. So how are we to interpret this GAO decision? Does it mean that all 36 offerors were entitled to meaningful discussions? Or perhaps only the nine offerors that received evaluation notices were entitled to meaningful discussions. The only explanation in the GAO decision is the following cryptic statement: “Because…the agency conducted discussions, availing itself of negotiated procedures under FAR part 15, the agency was obligated to afford all offerors remaining in the competition an opportunity to engage in meaningful discussions.” (Emphasis added.) Who those offerors were, we know not. RCN

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