Quest Diagnostics, Inc. v. United States
110 Fed. Cl. 716, 2013 WL 1831460 (2013)
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Rule of Law:
In a negotiated procurement, unless an agency explicitly restricts the scope of revisions when issuing an amendment as part of corrective action, offerors are permitted to revise any aspect of their proposals, not just the portions directly related to the amendment.
Facts:
- The U.S. Army Medical Command (MEDCOM) issued a Request for Proposal (RFP) for clinical reference laboratory services, a contract for which Quest Diagnostics, Inc. was the incumbent provider.
- The RFP specified a 'best value' procurement where technical factors were significantly more important than price.
- MEDCOM received proposals from several offerors, establishing a competitive range consisting only of Quest and Laboratory Corporation of America (LabCorp).
- After an initial evaluation, MEDCOM awarded the contract to Quest in April 2011.
- Following a protest by LabCorp, MEDCOM took corrective action by issuing Amendment 12 to revise its price evaluation methodology and request new price proposals.
- Amendment 12 instructed offerors: 'If any changes identified by this amendment cause a revision to other than the pricing of your proposal, please submit same...'
- In response, LabCorp submitted a new price proposal and also provided updates to its technical proposal, including new information about its progress in developing its Laboratory Information System (LIS).
- While LabCorp explicitly asked if it could update its technical capabilities and was told yes, Quest only asked about the procedural format for submitting changes, not whether substantive, unrelated changes were permissible.
Procedural Posture:
- The Army Medical Command (MEDCOM) awarded the contract to Quest Diagnostics, Inc. on April 14, 2011.
- Laboratory Corporation of America (LabCorp) filed a bid protest at the Government Accountability Office (GAO).
- After GAO indicated the protest would likely be sustained, MEDCOM announced it would take corrective action, and GAO dismissed the protest as academic.
- Following corrective action and resubmission of proposals, MEDCOM awarded the contract to LabCorp on April 2, 2012.
- Quest filed a protest at the GAO. In response, MEDCOM again offered to take corrective action by reevaluating proposals.
- After the second corrective action, MEDCOM again awarded the contract to LabCorp on September 12, 2012.
- Quest filed another protest at the GAO, which was denied on the merits.
- Quest, the plaintiff, then filed the present bid protest action in the United States Court of Federal Claims against the United States, the defendant, with LabCorp joining as an intervenor.
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Issue:
Did the Army Medical Command (MEDCOM) act improperly by allowing an offeror to revise its technical proposal in response to a solicitation amendment that was issued as corrective action and focused on pricing, when the amendment did not explicitly limit the scope of revisions?
Opinions:
Majority - Judge Bruggink
No, MEDCOM did not act improperly. When an agency reopens a solicitation for corrective action, it is a general rule that offerors may revise any aspect of their proposals unless the agency explicitly restricts the scope of those revisions. The court found that Amendment 12 did not contain such an explicit limitation. The language directing offerors to submit revisions 'caused' by the amendment did not prohibit other, unrelated revisions. The rationale for this default rule is to allow offerors to update their capabilities during lengthy procurement processes and to prevent a situation where a protestor could lock in a prior ratings advantage. Furthermore, the court rejected Quest's claim of unequal discussions, reasoning that Quest and LabCorp received different answers because they asked substantively different questions; the agency was not obligated to answer a question Quest never asked. The court also found the agency's technical evaluations and best value tradeoff to be rational and not arbitrary or capricious.
Analysis:
This decision reinforces a crucial default rule in federal procurement law regarding corrective actions. It clarifies that when an agency reopens a competition to fix an error, the competition is broadly reopened, allowing offerors to submit their best and most current proposals unless the agency explicitly says otherwise. This places a significant burden on contracting officers to use clear, restrictive language if they intend to limit the scope of proposal revisions. The ruling serves as a strategic warning to incumbent contractors and initial high-scorers that a successful protest by a competitor can erase a technical advantage, as it gives all parties a chance to improve their entire proposal, not just the part that was protested.
