Proposal Error Affecting Price Can Be Resolved By Clarification
Proposal Error Affecting Price Can Be Resolved By Clarification
A federal agency acted arbitrarily and capriciously when it disqualified a proponent for a minor clerical error and abused its discretion when it failed to request a clarification from the proponent, according to the U.S. Court of Federal Claims.
The agency disqualified the proponent due to an inconsistency between two parts of the proposal related to the amount of hours that certain services would require. Where in one part of the proposal it indicated that a service would require 2,366 hours, in another part it indicated that the same service would require 2,336 hours, a difference of 30 hours or 1.3%.
After the pre-award written debrief, the agency explained that the error was not a minor clerical error and thus could not be corrected as a clarification under FAR 15.306(a)(2).
Afterwards, the proponent filed a complaint seeking an order against the agency to allow the proponent to clarify the minor or clerical error and compete for the award.
The government sought dismissal of the complaint, based on two reasons. First, it argued that the error was a violation of a material term of the solicitation, and thus could not be corrected through a clarification as a clerical or minor error. The government based such argument in that the solicitation repeated three times that labor hours numbers had to be consistent throughout the proposal.
However, the court rejected this argument because the solicitation only indicated that it “may” reject proposals that failed to comply with format or content requirements. In fact, such permissive language was read by the court as support for the view that the requirement was not substantive in nature, which meant that it could be corrected through a clarification.
Second, the government argued that the error had to be material because it affected the proposal price. However, the court concluded that an error that affects a proposal’s price does not necessarily mean that the error is not clerical or minor. Given the slight impact that the correction of the error would have on the price (0.063%), and that it would increase the price instead of decreasing it, the court found that such change was a correction, and not a revision of a proposal which would require the agency to hold discussions.
The court recognized that the fact that the agency could have allowed a clarification does not necessarily meant that it had to. However, under these specific circumstances, the court found that failure to allow the correction was an abuse of discretion, since (1) the error was minor and could have been easily corrected; (2) the error was obvious; (3) the offeror’s price was competitive, and (4) the proposal had information elsewhere that could correct or clarify the error.
As a result, the court set aside the agency’s decision disqualifying the proponent and ordered that the proponent be allowed to resolve the error through a clarification and compete for the award.