Two recent decisions by the General Accountability Office (GAO) and the ASBCA make it clear that the contractor will be held responsible for incorrect assumptions when they fail to follow up on known inconsistencies or missing information with the government, even when the government is responsible for providing the information.
On February 10, 2014, the Armed Services Board of Contract Appeals (ASBCA) issued its decision in Case No. 58006, an appeal by a contractor of the denial of its claim for equitable adjustment.
The contractor submitted a request for equitable adjustment for increased fringe and health benefits costs because the collective bargaining agreement (CBA) referenced in the solicitation did not contain details of required fringe benefits. The contractor was apparently aware that the CBA lacked the information needed to determine the full wage and fringe benefit amounts, required to comply with Service Contact Act (SCA) and Federal Acquisition Regulation (FAR) requirements, when it submitted its proposal. Instead of going back to the government for the additional information, the contractor submitted its bid based on its assumptions about the wage and fringe benefit amounts.
The ASBCA agreed that the Contracting Officer was responsible for providing a complete CBA; however, it ruled that, since the contractor was aware that the CBA was incomplete when it submitted its bid, there is nothing in the SCA or FAR making the government responsible for the difference between the contractor’s offer and the eventual cost of the fringe benefits. The ASBCA held that the government cannot guarantee the correctness of the contractor’s assumptions when it fails to make an inquiry with the government.
On January 17, 2014, the GAO denied a bid protest filed by another contractor related to a Department of the Interior (DOI), Bureau of Land Management’s (BLM) award under request for proposals (RFP) No. 783465.
The government rejected the contractor’s proposal as unacceptable based on its failure to provide fixed prices for all proposed software. In part, the contractor argued that it relied on BLM’s response to an early offeror question, related to contractor use of BLM currently owned software licenses, to conclude it was not required to submit additional software license pricing because the agency already had access to the software at no cost. Later responses to offerors clearly stated that offerors were expected to include all proposed software license costs in their submissions. The contractor did not seek clarification from the government regarding this apparent inconsistency. Rather, the contractor assumed, since later responses did not indicate BLM was withdrawing the earlier answer, it did not need to submit additional software license pricing.
In its decision, GAO stated:
“In such situations an offeror may not simply make unilateral assumptions regarding the meaning of patently ambiguous terms in the RFP and then expect relief when the agency does not act in the manner assumed. Rather, the offeror must challenge the alleged ambiguity prior to the time set for receipt of initial proposals.”
These decisions illustrate the critical need for government contractors to fully understand the RFP requirements when preparing and updating a proposal. Simply making an assumption when a requirement is unclear or where there is conflicting contracting officer guidance will be at the contractor’s peril! Contractors should not risk losing the contract or losing money on a contract because of an incorrect assumption.
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