In Marathon Medical Corp., B-408052 (June 4, 2014), [PDF] the GAO again addressed a popular protest basis—unequal discussions—and sustained the protest because the agency allowed the proposed awardee, but not the protester, to submit information demonstrating its proposal was acceptable.

The solicitation in this procurement included a brand name or equal clause which permitted offerors to propose equal items.  Offerors were required to clearly identify any offered equal items, which were to be evaluated for equality based on information furnished in the offer or other information reasonably available to the agency. The solicitation further provided that an offeror proposing an equal item must furnish as part of his/her bid all descriptive material (such as cuts, illustrations, drawings or other information) necessary for the purchasing activity to, among other things, determine whether the product offered meets the salient characteristics requirement.  In addition, offerors were required to provide samples of certain components.  These samples were to be evaluated to determine whether the offeror provided the right type and number of components from the right manufacturer.  The instructions for submitting samples further informed offerors that any equal products “shall clearly be identified in the proposal and shall fully satisfy the salient characteristics of the items listed by the Government.”

Offerors also were required to identify and furnish references, including contact information, for three customers for which the offeror had provided the custom surgical packs described in the solicitation.

Marathon submitted the lowest priced offer, but its proposal did not include the three required references.  The agency then evaluated Marathon as unacceptable under the reference and past performance factors, and considered it ineligible for award.  The agency nevertheless sent an “evaluation notice” to Marathon which asked whether at least three references had been provided with its proposal. In response, Marathon provided 4 references, and also stated that it had not provided the required references in its initial proposal. The agency determined that Marathon’s proposal was unacceptable since the references had not been submitted with the proposal.

Manus, the second lowest-priced offeror, offered equal items for all requested items. Manus included a brief description of the item, and listed the name of the manufacturer and the relevant part number. According to the agency, Manus supplied the samples required by the solicitation, the company’s proposal was considered “technically acceptable,” and it was initially considered the “apparent awardee.” The agency nevertheless sent Manus an evaluation notice which asked the following:

In order to verify if the proposed components are equal or equivalent to the components listed in the solicitation, would one of the options below be possible?

1. Samples of all equivalent components listed in the proposal either be brought in or sent in to the Denver facility for viewing.

2. If a facility/warehouse is available near Denver and is available for a visit to view the components that were listed in the proposal as “equivalent.”

According to the agency, Manus did provide samples as required by the solicitation. According to the agency, the reason it requested additional sample components was because there were numerous components that were proposed by manufacturers that the technical evaluation team was not familiar with.  By viewing them they were able to make a firm determination that they were in fact “equivalent.”

Marathon filed a protest, alleging that the agency improperly held discussions with Manus, but failed to hold discussions with Marathon. Specifically, Marathon asserts that the agency allowed Manus to provide its components for inspection after the closing date for proposals, which allowed Manus to become acceptable, but did not allow Marathon the same opportunity with respect to its past performance references. The agency, unsurprisingly, argued that it did not hold discussions with Manus because it did not allow Manus to alter its proposal, and instead only requested clarification of its proposal.

The GAO disagreed.  Federal Acquisition Regulation (FAR) § 15.306 describes a range of exchanges that may take place between an agency and an offeror during negotiated procurements. Clarifications are “limited exchanges” between the agency and offerors that may allow offerors to clarify certain aspects of proposals or to resolve minor or clerical mistakes. FAR § 15.306(a)(2). Discussions, on the other hand, occur when an agency indicates to an offeror aspects of its proposal that could be altered or explained to materially enhance the proposal’s potential for award or to obtain information from the offeror that is necessary to determine the proposal’s acceptability. See FAR § 15.306(d)(3).  If a procuring agency holds discussions with one offeror, it must hold discussions with all offerors whose proposals are in the competitive range.  In addition, when holding discussions procuring agencies are not permitted to engage in conduct that favors one offeror over another. FAR § 15.306(e)(1).

Here, the solicitation required that an offeror proposing an equal item furnish all material necessary to determine that the product qualified as “equal”.  According to the evaluation notice sent to Manus, the agency was requesting samples for all proposed equal items “[i]n order to verify if the proposed components are equal or equivalent.”  Since visual inspection of the requested samples was necessary for Manus to meet its obligation of establishing that the proposed equal items were in fact equivalent to the name brand items, the request that Manus bring in the components for a visual inspection amounted to discussions with Manus for the purpose of allowing it to establish the acceptability of its proposal. Accordingly, the agency was required to treat Marathon equally, and allow Marathon a similar opportunity to meet the solicitation’s requirements. In this case that would mean allowing Marathon to provide the references it initially omitted. Since the agency failed to do so the agency engaged in unequal discussions and the GAO sustained the protest.