MULTIPLE COMPETITIVE RANGES
Summary: Multiple competitive ranges within the same procurement are expressly permitted by the Federal Acquisition Regulation (FAR). Procurement decisions involving multiple competitive ranges have been approved by the Comptroller General in GAO Bid Protest decisions, in an Arbitration Panel Decision under the Randolph-Sheppard Act, and impliedly by the United States Court of Appeals for the Federal Circuit.
I. Federal Acquisition Regulation (FAR) provisions concerning competitive range:
FAR 15.306 Exchanges with offerors after receipt of proposals.
“. . . .(c) (3) If the contracting officer, after complying with paragraph (d)(3) of this section [requiring discussions] decides that an offeror’s proposal should no longer be included in the competitive range, the proposal shall be eliminated from consideration for award. Written notice of this decision shall be provided to unsuccessful offerors in accordance with FAR 15.503.”
FAR 15.306 Exchanges with offerors after receipt of proposals.
“. . . .(d) Exchanges with offerors after establishment of the competitive range. Negotiations are exchanges, in either a competitive or sole source environment, between the Government and offerors, that are undertaken with the intent of allowing the offeror to revise its proposal. These negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and positions, give-and-take, and may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract. When negotiations are conducted in a competitive acquisition, they take place after establishment of the competitive range and are called discussions.”
“(5) If, after discussions have begun, an offeror originally in the competitive range is no longer considered to be among the most highly rated offerors being considered for award, that offeror may be eliminated from the competitive range whether or not all material aspects of the proposal have been discussed, or whether or not the offeror has been afforded an opportunity to submit a proposal revision (see 15.307(a) and 15.503(a)(1)).”
FAR 15.306(c)(3) and (d)(5) are express authority for establishing multiple competitive ranges within the same procurement, sometimes referred to as a “second” competitive range or a ‘final” competitive range.
FAR 15.307 Proposal revisions, includes at subparagraph (b) the following sentence: “At the conclusion of discussions, each offeror still in the competitive range shall be given an opportunity to submit a final proposal revision.” The words “still in the competitive range” make it very clear that some offerors may be eliminated after initially being included in the competitive range.
FAR 52.215-1 Instructions to Offerors – Competitive Acquisition.
This FAR clause is included within the government’s Requests for Proposals (RFP) to inform offerors of some ground rules for the procurement. It may either be printed in full in the RFP or “incorporated by reference” by listing the clause number in the RFP.
The clause defines “discussions” as being negotiations that occur after establishment of the competitive range that may, at the Contracting Officer’s discretion, result in the offeror being allowed to revise its proposal. (FAR 52.215-1(a))
It is useful to know that the basic form of this RFP clause states at FAR 52.215-1(f)(4):
“The Government intends to evaluate proposals and award a contract without discussions with offerors (except clarifications as described in FAR 15.306(a)). Therefore, the offeror’s initial proposal should contain the offeror’s best terms from a cost or price and technical standpoint. The Government reserves the right to conduct discussions if the Contracting Officer later determines them to be necessary. If the Contracting Officer determines that the number of proposals that would otherwise be in the competitive range exceeds the number at which an efficient competition can be conducted, the Contracting Officer may limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals.”
Thus, if the RFP includes FAR 52.215-1 in its basic form, the Contracting Officer is communicating that he or she hopes to be able to award a contract without establishing a competitive range and conducting discussions, but reserves the right to do so if necessary.
If the Contracting Officer knows when issuing the RFP that he or she intends to establish a competitive range and conduct discussions, the Alternate I of (f)(4) will be included in the RFP, or incorporated by reference by listing the clause as FAR 52.215-1 (Alt I):
“(f)(4) The Government intends to evaluate proposals and award a contract after conducting discussions with offerors whose proposals have been determined to be within the competitive range. If the Contracting Officer determines that the number of proposals that would otherwise be in the competitive range exceeds the number at which an efficient competition can be conducted, the Contracting Officer may limit the number of proposals in the competitive range to the greatest number that will permit an efficient competition among the most highly rated proposals. Therefore, the offeror’s initial proposal should contain the offeror’s best terms from a price and technical standpoint.”
II. Comptroller General (GAO) Bid Protest Decisions involving multiple competitive ranges:
Agency procurements involving multiple competitive ranges have been upheld time and again by the Comptroller General in GAO Bid Protest decisions. The challenges are from a cross-section of government agencies including not only Department of Defense but also civilian agencies subject to the FAR. There is wide latitude given to agencies to remove offerors from the competitive range where appropriate, even if the result is a competitive range of one or two proposals.
In 2009, the Department of Interior, National Park Service issued a request for proposals for a service-wide Point of Sale system. The agency established an initial competitive range, conducted discussions, and received written responses from offerors. The protester’s proposal and several others were then excluded from the competitive range in a narrowing of the initial competitive range. In the resulting protest, the GAO supported the second competitive range determination, stating “Contracting agencies are not required to retain a proposal in the competitive range where the proposal is not among the most highly rated or where the agency otherwise reasonably concludes that the proposal has no realistic prospect of award.” Matter of: AH Computer Consulting, Inc., B-401204, 2009 CPD P 132 (June 25, 2009).
A 2007 bid protest decision discusses without consequence the fact that the Department of Health & Human Services made multiple competitive range determinations in its “best value” procurement for employee assistance program services. Matter of: Magellan Health Services, B-298912, 2007 CPD 81 (January 5, 2007). Five offerors submitted proposals, and four were determined to be within the competitive range. The agency held discussions. After receiving revised proposals, the agency made a second competitive range comprised of only two proposals.
In 2006, the Comptroller General upheld an agency’s initial competitive range consisting of two proposals, followed by the agency’s subsequent elimination of one of the two from further consideration, reducing the competitive range to a single offeror. Matter of: General Injectables & Vaccines, Inc., B-298590, 2006 CPD 173 (November 15, 2006).
In Matter of: American Government Services, Inc., B-292242, 2003 CPD 163 (August 1, 2003), the Defense Information Technology Contracting Organization made an initial competitive range determination. Following evaluation of responses to discussion questions, a second competitive range determination was made, and one additional proposal was eliminated from the competitive range. The decision was upheld by the Comptroller General.
One of the often-cited cases is Labat-Anderson Incorporated, B-246071, B-246071.4, 92-2 CPD 244 (October 9, 1992). This protest originated when the Agency for International Development determined that Labat-Anderson’s proposal for technical assistance services was no longer in the competitive range. The Labat language frequently quoted in later decisions is:
“If the agency’s evaluation of proposals is reasonable, in accordance with the solicitation criteria, and does not violate law or regulation, there is nothing improper in the agency’s making more than one competitive range determination and removing a firm from further consideration. Labat-Anderson Inc., B-246071.4, Oct. 9, 1992, 92-2 CPD ¶ 244 at 6.”
This language was quoted in 2002 in Matter of: Moreland Corporation, B-291086, 2002 CPD 197 (October 8, 2002), a Department of Veteran’s Affairs procurement for the design, construction, and lease of an outpatient clinic; and in Matter of DuVall Services Company, B-265698, B-265698.2, 86-1 CPD 211 (February 7, 1996), a National Institutes of Health RFP for maintenance and repair services for government-owned instruments.
In a 1998 Army Communications-Electronics Command procurement, the Army properly excluded two proposals from the competitive range when they no longer had a reasonable chance for award. The GAO decision approving the agency action stated, in Matter of: Applied Companies, B-279811, 98-2 CPD 52 (July 24, 1998):
“If the agency’s evaluation is reasonable, there is nothing improper in an agency’s making more than one competitive range determination and dropping a firm from further consideration once it becomes evident that the offeror no longer has a reasonable chance of receiving the award. Este Medical Servs., Inc., B-261845.2, Sept. 29, 1995, 95-2 CPD ¶ 240 at 4; Johnston Communications, B-221346, Feb. 28, 1986, 86-1 CPD ¶ 211 at 4.”
The Army’s elimination from the competitive range of a previously-included proposal for nursing services was upheld by GAO in Matter of: Este Medical Services, Inc., Id. In Matter of Salazar Associates International, Inc., B-245999, B-245999.2, 92-1 CPD 403 (April 29, 1992), the Army successfully eliminated Salazar’s proposal for base support services from the revised competitive range following discussions despite the GAO protest.
The Comptroller General selects very few bid protest decisions for formal publication, but one such case denied a protest by Space Communications Company against the United States Information Agency’s decision to exclude its proposal from further consideration even though it was initially included within the competitive range. The procurement was for a satellite interconnect system to enhance Voice of America’s international broadcasting mission, and the proposal was excluded after discussions when it no longer had a reasonable chance of being selected for award. Matter of: Space Communications Company, 66 Comp. Gen 2, B-223326, 86-2 CPD 377 (October 2, 1986).
Slightly different language was used by the Comptroller General in denying a protest against the Department of Housing and Urban Development’s award of a contract for management and operation of the housing authority for the City of East St. Louis, Illinois in Matter of: Lee J. Kriegsfeld, B-222865, 86-2 CPD 214 (August 22, 1986):
“Moreover, there is nothing improper in an agency’s making more than one competitive range determination. Rather, the essential question in cases such as this is not whether a second competitive range determination is proper, but whether the agency was ultimately justified in excluding the firm in question from further consideration.Information Sys. & Networks Corp., B-220661, Jan. 13, 1986, 86-1 CPD ¶ 30.”
The Comptroller General interpreted the Navy’s action as revising a competitive range in its solicitation for construction and lease of military family housing units in Matter of: Merret Square, Inc., B0220526, 86-1 CPD 259 (March 17, 1986). “Although the Navy has not characterized its action here as a competitive range revision, we believe this is what essentially occurred.”
The Air Force made more than one competitive range determination during its procurement of an automatic entry control system, and GAO did not disturb the agency’s decision to exclude the protester from the competitive range notwithstanding its earlier inclusion. Matter of: BASIX Controls Systems Corporation, B-212668, 84-2 CPD 2 (July 2, 1984):
“There is nothing improper per se in an agency’s making more than one competitive range determination. See SDC Integrated Services, Inc., B-195624, Jan. 15, 1980, 80-1 CPD ¶44. The Air Force’s change in position was premised upon new information about the proposal that was not contained in the proposal as initially evaluated, and upon the relatively poor showing during the demonstration. Thus, there is nothing illogical or inconsistent in the Air Force’s change in position. The determinative question in cases such as this is not whether a second determination was proper, but whether the Air Force was ultimately justified in excluding BASIX. See Cotton & Company, B-210849, Oct. 12, 1983, 83-2 CPD ¶451. Moreover, the determination of the competitive range is primarily a matter of administrative discretion. Consequently, we will not disturb an agency’s decision on competitive range absent a clear showing that it was unreasonable or contrary to the procurement statutes and regulations. Syscon Corporation, B-208882, March 31, 1983, 83-1 CPD ¶335.”
A 2003 Navy case demonstrates the Comptroller General’s approval of multiple competitive ranges where appropriate. In Matter of: Contract Management, Inc., B-292760, 2004 CPD 54 (November 20, 2003), the Naval Facilities Engineering Command received 14 proposals for secure facilities custodial services and initially established a competitive range of 8 firms. Following discussions and revised proposals, a second competitive range with only 2 firms was established. One of the eliminated firms protested, and the GAO upheld the Navy’s conclusion that the protester did not stand a reasonable chance of receiving award.
A 2005 bid protest discusses without consequence the fact that the Air Force established multiple competitive ranges. In this procurement for development of the Smart Triple Ejector Rack bomb rack unit, five proposals were received and evaluated by the Air Force source selection team, and three were included in the initial competitive range. After written discussions with the three offerors, only two were included in the final competitive range. Matter of: EDO Corporation, B-296861, 2005 CPD 196 (September 28, 2005). Similarly, a 2004 GAO decision mentions that “of six proposals received, three were included in the final competitive range” in Lackland Air Force Base’s small-business set-aside RFP for vehicle operations and maintenance. Matter of: DeLeon Technical Services, Inc., B-293783, 2004 CPD 145 (June 4, 2004).
In Matter of: Maryland State Department of Education, B-288501, B-288502, 2001 CPD 143 (August 14, 2001), the Maryland State Department of Education, Division of Rehabilitation Services, challenged the terms of the Air Force RFP for food services at Andrews AFB and Fort George G. Meade. One of the protester’s objections was RFP language stating: “If the SLA [State Licensing Agency] submits a proposal that is included in the final competitive range established by the Contracting Officer, the SLA will receive award of the contract….” Recognizing that this language meant the Air Force would defer a State Licensing Agency’s priority until determination of a final competitive range, rather than an initial one, the Comptroller General nonetheless dismissed the protest, finding that Congress vested in the Secretary of Education the authority to review complaints from state licensing agencies about compliance with the Randolph-Sheppard Act.
III. Arbitration Panel Decision recognizing multiple competitive ranges.
The Maryland State Department of Education decision by the Comptroller General cited in the above paragraph refers to the Secretary of Education’s authority to review complaints from state licensing agencies about compliance with the Randolph-Sheppard Act. Arbitration panels are regularly convened under Department of Education regulations to address complaints about federal agency compliance with the Randolph-Sheppard Act’s priority for the blind in food service contracts.
One such arbitration panel decision under the Randolph-Sheppard Act specifically addressed the question of multiple competitive ranges. A notice published at 62 FR 40509-03 announced a June 11, 1996, decision in the matter of Mississippi Department of Rehabilitation Services v. United States Department of Defense, Department of Air Force. The Keesler Air Force Base contracting officer solicited for food service, and initially found the majority of the 19 offerors (including the State Licensing Agency) to be in the competitive range. Following discussions, a second competitive range was established by the contracting officer, and the SLA proposal was eliminated. The arbitration panel majority concluded that the Air Force process was in accord with all governing laws and regulations, and that the SLA was properly excluded from the final competitive range because its proposal was not competitive in comparison to the numerous proposals offering lower costs.
IV. Federal Court Case challenging RFP scheme with multiple competitive ranges.
One of the earliest federal court challenges to a military food service RFP incorporating the priority of the Randolph-Sheppard Act was Southfork Systems, Inc. v. United States, 141 F.3d 1124 (US Ct App Fed Circuit), April 14, 1998. The Lackland AFB solicitation in question stated, in part:
“If the SLA submits a proposal that is within the final competitive range established by the Contracting Officer, the contract will be awarded to the Texas Commission for the Blind….More than one competitive range determination may be made. The determination as to whether the SLA is in the competitive range for purposes of award may be made as late as immediately prior to the request for best and final offers….”
The incumbent contractor brought an action in the United States Court of Federal Claims challenging the Air Force’s decision to enter into direct negotiations with the Texas Commission for the Blind under the Randolph-Sheppard Act for management and operation of the Air Force cafeteria complex. The Air Force and State of Texas prevailed, and the incumbent contractor appealed to the Court of Appeals for the Federal Circuit. While there were ten specific complaints in the lawsuit about the Air Force’s solicitation language and evaluation procedure, none of the challenges were successful in federal court. The Air Force proceeded to award the contract to the SLA.
V. Final Note Concerning Competitive Range Regulations
The current FAR provisions concerning competitive range differ somewhat from the regulations in effect when many of the earlier cases cited in this memorandum were decided. While the FAR and implementing decisions formerly favored erring on the side of inclusion in the competitive range, the modern trend effectively limits the number of proposals in the competitive range to a more manageable number by establishing a competitive range comprised of “all of the most highly rated proposals” (FAR 15.306(c)(1)). The notion of limiting the number of proposals in the competitive range further to achieve an efficient competition (FAR 15.306(c)(2) is consistent with an approach of establishing multiple or successive competitive ranges where circumstances so indicate.
Having made an initial competitive range determination, once it becomes evident that an offeror no longer has a reasonable chance of receiving the award or is not among the most highly rated proposals, an agency is on solid ground in dropping the offeror from the competitive range and further consideration for award.
© Karen S. Hindson, Hindson & Melton LLC 2011