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Proposal Eliminated Based on Improper Eligibility Standard

The disqualification of a task order proposal for healthcare information management and information technology support services was arbitrary and capricious, according to the Court of Federal Claims, because the government imposed an eligibility requirement that differed materially from the one in the solicitation. The solicitation contemplated the award of a one-year bridge contract against a General Services Multiple-Award Schedule contract. There would be a 1.5-month phase-in period, a 3-month base period, and a 9-month option period, and award was to be made to the lowest price, technically acceptable offeror that conformed to the solicitation. The solicitation also stated "[i]n order to be eligible for award the [c]ontractor's GSA Schedule contract has to still be in an active period by the time the option to extend the term of the proposed contract [t]ask [o]rder will be exercised." The protester was the incumbent, and it submitted the LPTA offer. However, the government found the protester did not comply with the solicitation because its schedule contract expired before the start date of the option period and no extension was expected prior to contract award.

Latent Ambiguity

After the Government Accountability Office denied its protest ( 27 CGEN 113,620), the protester filed suit in the CFC, which found both parties offered reasonable interpretations of the provision and the provision was ambiguous. The ambiguity was latent because there was no glaring or obvious inconsistency that gave rise to a patent ambiguity. Since the eligibility requirement contained a latent ambiguity, the general rule of contra proferentem applied and the ambiguity was construed against the government.

Higher Standard Imposed

Under the CFC's interpretation, an offeror was required to have a GSA schedule contract with an option period that covered the period of performance of the task order, and there could be no indication the option period of the schedule contract would not be exercised. The protester's schedule contract included an option period of adequate length, and there was no indication GSA would not exercise that option, so the protester should not have been eliminated from the competition. By requiring an offeror to have a schedule contract that did not expire prior to the start date of the option term, or to have, as of the date of contract award, an executed modification of the expiration date, the government imposed a higher standard. The court found all the factors for permanent injunctive relief were present and enjoined further performance of the contract. ( HP Enterprise Services, LLC v. U.S., FedCl, 56 CCF 79,787)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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