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Don't Play if You Can't Win
By jack horan and katherine M. John
In a recent Court of Federal Claims (COFC) decision,
an erstwhile awardee was ousted when—following
a post-award protest—the agency determined that
not only did the awardee’s proposal fail to meet
the solicitation’s requirements, but that no offeror
did, or could, do so. The case is noted as Laerdal
Medical Corp. v. United States, No. 13-256C, 2013
WL 4011030 (Fed. Cl. July 29, 2013). This result is
noteworthy in that it provides an example where the
U.S. federal government wrote a solicitation that was
impossible to satisfy, and four contractors competed
for a contract that was impossible to win.
The doomed procurement began on April
23, 2012, when the U.S. Army’s Simulation
Training and Instrumentation Acquisition
Center issued a solicitation for “high-fidelity”
mannequins “to be used to train soldiers ‘to
treat wounds in a combat environment.’”
The solicitation listed 49 numbered requirements, stating that the mannequins “shall
include” such requirements as:
ƒƒ “[A]natomically correct pulse sites,”
ƒƒ “[L]ife-like ears with the capability to
ooze simulated fluids,” and
ƒƒ
Brachial veins “capable of being used
to demonstrate the proper procedure
for inser[ting]…an IV.”
government would weigh each offeror’s
strengths and weaknesses and reject any
proposal with one or more deficiencies.
Copying Federal Acquisition Regulation
15.001, the request for proposals (RFP)
defined deficiency as a “material failure of
a proposal to meet a government requirement or a combination of significant weaknesses in a proposal that increases the risk
of unsuccessful contract performance to an
unacceptable level.” The solicitation defined
weakness as a “flaw in the proposal that
increases the risk of unsuccessful contract
performance.”
Each proposal would receive one of five
adjectival ratings:
ƒƒ “Unacceptable,”
According to the solicitation, the award
would be made to the best value to the
government based on technical evaluation,
performance risk, and price. The technical evaluation scheme provided that the
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Contract Management | October 2013
ƒƒ “Marginal,”
ƒƒ “Acceptable,
ƒƒ “Good,” or
ƒƒ “Outstanding.”
Only offers that received a rating of “acceptable” or higher would be eligible for award.
The technical evaluation would include
evaluation of written proposals, as well as
a “system capability demonstration,” which
would test seven “critical” requirements
identified in the RFP. Regarding the written
proposals:
[The solicitation] cautioned that while
the government will not evaluate every…
requirement…for the purposes of the
source selection evaluation, the awardee
contractor will be required to comply with
the…requirements during delivery order
performance.
The RFP also required offerors to submit a
“transmittal letter” verifying that they were
“able to meet all requirements.”
Four offerors submitted proposals. Two
of the offerors received technical ratings
of “unacceptable,” which rendered them
ineligible for award. A third offeror, CAE, received a rating of “marginal,” and therefore
was also ineligible for award. Laerdal, the
final offeror and eventual awardee, was
rated “acceptable.”
Even though Laerdal received the highest
rating, its mannequin did not perform perfectly. During the technical evaluation, the
U.S. Army evaluators assessed Laerdal with
three weaknesses. One of the weaknesses
involved Laerdal’s mannequin’s failure to
properly respond to a correctly performed
needle decompression during the system
capability demonstration. Overall, how-
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ever, the evaluators found that Laerdal’s
strengths offset its weaknesses. Because
Laerdal was the only offeror who received a
rating high enough to be eligible for award,
the contracting officer determined that
Laerdal represented the best value to the
government and awarded on that basis.
After two rounds of protests by CAE, the
U.S. Army decided to cancel the solicitation.
On April 5, 2013, the U.S. Army advised the
Government Accountability Office of this
decision, stating:
The Army has reviewed the solicitation,
the statement of work, and the proposal
evaluation report in light of [the] protestor’s supplemental protest grounds and has
concluded that this solicitation should be
cancelled because neither the protester’s
mannequin nor Laerdal’s mannequin
satisfied the requirements of the solicitation and statement of work. The Army will
re-evaluate its requirement and the availability of technology in existence to meet
the requirement. It may or may not issue
a new solicitation for mannequins at some
point in the future as need and availability
of technology occur.
Laerdal protested its termination in the
COFC the following day.
In the proceedings before the COFC, the
U.S. Army argued that the initial award to
Laerdal was improper because Laerdal’s
mannequin could not meet all 49 requirements, as required by the solicitation. In
a “Memorandum for Record,” the director
of the Simulation Training and Instrumentation Acquisition Center explained that
the U.S. Army’s decision to take corrective
action and cancel the solicitation “was
based upon the fact that the solicitation
did not permit trade-offs within the technical evaluation factors,” and also because
“the solicitation required that the mannequins meet every one of the 49 required
technical requirements to be considered for
award.” During verbal argument, the U.S.
Army’s lawyer observed that “the genesis
of the problem” was that the U.S. Army’s
evaluators incorrectly classified failures to
meet solicitation requirements as “weak-
nesses” when they should have been classified as “deficiencies.”
The U.S. Army further noted that CAE’s own
proposal admitted that it could not comply
with three of the solicitation requirements
and that Laerdal’s mannequin failed to meet
at least one requirement during the system
capability demonstration. Accordingly, the
U.S. Army determined that since none of
the proposals could meet the solicitation requirements, the most appropriate course of
action was to cancel the award, and revise
and recompete the solicitation.
Laerdal challenged the U.S. Army’s
conclusion that the solicitation required
offerors to comply with all 49 solicitation
requirements. Relying on the following
solicitation language, Laerdal argued that
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the contracting officer had “discretion to
decide which, if any, of the [49] specific
requirements for the…mannequins would
be disqualifying”:
The government may determine, at its
discretion, that an offeror’s proposal is
noncompliant, and therefore, ineligible
for award if the proposal indicates that:
it cannot or will not meet any of the [statement of work]…requirements; provides an
approach that clearly does not meet any
of the [statement of work]…requirements;
or includes data which prompts the
government to question the offeror’s
compliance with any of the [statement of
work]…requirements.
Laerdal also argued that the solicitation’s
use of an adjectival rating scheme was
further evidence that compliance with all
49 requirements was not mandatory, as the
purpose of an adjectival rating system is to
allow strengths and weaknesses to be offset
against each other. Why have an adjectival
rating scheme, Laerdal argued, if “all that
was required was a check-list” for the solicitation’s capability requirements?
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Contract Management | October 2013
The COFC rejected Laerdal’s arguments. First,
the Court explained that “[w]hen interpretthe Court found that “the technical ratings
ing the [solicitation], the document must
set out in the solicitation were defined in
be considered as a whole and interpreted
such a manner than an offeror who did not
so as to harmonize and give reasonable
meet all of the requirements was ineligible
meaning to all of its parts.” The Court
for award.” The Court acknowledged that a
determined that the solicitation provision
“strength” could be weighed against a “weakreferencing a government’s discretion “did
ness,” but noted that “at no point did the
not allow the contracting officer to waive
solicitation suggest that a strength could be
solicitation requirements,” but rather,
weighed against a deficiency, such as a failure “described the contracting officer’s discreto meet [a] solicitation requirement.” Second,
tion to find that a mannequin did not meet
the COFC found that, “[c]onsistent with this
the requirements, making it ineligible for
evaluation framework, the solicitation repeataward, based solely on his evaluation of
edly stressed that offerors were required to
the offeror’s written proposal.”
meet each of the solicitation requirements.”
The solicitation used the phrase “shall include” In sum, the COFC concluded:
and “shall deliver” when referring to the
49 numbered requirements. The court also
[The U.S. Army] did not “fail…to follow the
pointed to the requirement that offerors subterms of its own solicitation” by determit a transmittal letter and the U.S. Army’s
mining that award could not be made to
warning that even though the U.S. Army will
offerors who did not meet each of the sonot evaluate every requirement, the “successlicitation requirements…. Instead, because
ful offeror will be required to comply with all
the solicitation required offerors to meet
aspects of the requirements documents.”
each of the [49] numbered requirements,
the government’s decision to terminate
The COFC also disagreed with Laerdal’s interpretation of the solicitation language. Citing
a familiar precept of contract interpretation,
Laerdal’s contract for convenience owing to
its failure to meet all of the requirements
was “reasonable under the circumstances.”
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The Laerdal case provides useful guidance to
contractors bidding or preparing to bid on
a government contract, as well as government personnel planning acquisitions. This
frustrating and inefficient outcome could
have been avoided if either the government
or any of the bidders had realized that no
bidder could meet the solicitation requirements. The government could have performed more or better market research. The
government at least should have reconsidered its requirements when all but one offeror failed to meet them. The government
also could have avoided this outcome if it
drafted the solicitation to identify a list of
technical goals, and provided the contracting officer with discretion to weigh the need
and value of the technical goals rather than
requiring bidders to meet all.
This outcome also would have been avoided
if the bidders alerted the government—either
informally or through a pre-award bid protest
against unreasonable solicitation requirements—that the solicitation demanded technical requirements that could not be achieved.
Similarly, Laerdal or any of the other bidders
could have clarified prior to the deadline for
submission of proposals whether the solicitation required strict compliance with all 49
requirements, or whether the contracting
officer had discretion to determine which of
the 49 requirements would be disqualifying.
In this era of shrinking government
contracts, it is tempting for contractors
to respond to solicitations by jumping to
prepare the best proposal. Prior to bidding,
however, contractors must evaluate the
solicitation and, at a minimum, answer the
following questions:
ƒƒ
ƒƒ
ƒƒ
Can I perform this work if the
requirements are strictly enforced?
Is the solicitation written to provide
me with a fair chance of winning?
Are there ambiguities or contradictions
in the solicitation?
Without answering these questions, a
contractor runs the risk of submitting a
deficient proposal, losing the award after
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a bid protest (as in this case), or losing the
contract through a termination for default
for failure to meet onerous or impossible
solicitation requirements (as the contractor
faced in Gargoyles, Inc., ASBCA No. 57515
(May 28, 2013), discussed in our August 2013
article). In short, you may begin playing a
game that you cannot win. CM
179-BM-NCMA_JRL-mag
About the Authors
JACK HORAN, JD, is the general counsel for
NCMA. He also practices in the Government
Contracts and White Collar Crime practice
groups at McKenna Long & Aldridge, LLP.
KATHERINE M. JOHN is an associate in the
McKenna Long & Aldridge Government Contracts practice group.
Send comments about this article to
[email protected].
Contract Management | October 2013
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