In solicitations that require the submission of key personnel resumes, the resumes are considered a material solicitation requirement. Thus, offerors have a duty to notify the procuring agency if one or more of their proposed key personnel become unavailable to perform. The procuring agency may proceed in one of two ways once it receives notification of the unavailability of a key employee from an offeror. It can either evaluate the offeror’s proposal as submitted and reject the proposal as technically unacceptable for failing to meet a material requirement, or the agency may open discussions with all remaining offerors to permit proposal revisions. An offeror must notify the agency of a key employee’s unavailability even when the employee signs a letter of commitment before proposal submission but subsequently resigns or retires during the evaluation period. Alternatively, in addition to the letter of commitment, the offeror must be prepared to present evidence of the employee’s reaffirmation of availability or willingness to return to the offeror’s employment. In this regard, the primary consideration is whether the offeror has actual knowledge of the key employee’s unavailability because the duty to notify the agency is not triggered otherwise. Notably, despite the employee’s resignation or retirement, the Government Accountability Office (GAO) will not find an offeror to have actual knowledge of a key employee’s unavailability if the offeror can advance a credible basis to deny such actual knowledge.

Contractors may sometimes encounter unforeseen conditions that make a government contract commercially impracticable because performance would cause extreme and unreasonable difficulty, expense, injury, or loss. Unless the contractor has assumed the risk of the unforeseen condition, a finding of commercial impracticability excuses the contractor from performing. In other situations, commercial impracticability may be treated as a constructive change, warranting an equitable adjustment due to the substantial, unforeseen costs imposed upon the contractor. Whether the performance of a contract would be commercially impracticable is a question of fact to be resolved on a case-by-case basis. Therefore, adjudicative forums have consistently declined to adopt a bright-line rule providing that a certain percentage of cost overrun automatically constitutes commercial impracticability. However, due to the potential for abuse, the standard for establishing commercial impracticability is challenging to meet, and contractors are not entitled to relief merely because they are unable to sustain their profit margins.

In Armed Services Board of Contract Appeals (ASBCA) No. 63615, a decision issued on May 19, 2025, the Board granted the agency summary judgment on the issue of commercial impracticability when the contractor suffered a 37% cost overrun on a construction contract. The U.S. Army Corps of Engineers (USACE) issued the underlying contract for construction work at Placement Area No. 10 in the Corpus Christi Ship Channel. The total adjusted contract price following all modifications was $11,046,369.04. During performance, the contractor encountered excessive erosion on the south side of the placement area. Subsequently, the work to address the erosion was added to the contract via two bilateral contract modifications addressing the inland and shoreline sides of the placement area, totaling $909,332.04. However, even after the modifications, the contractor continued to incur costs and expend additional resources. A year after the contract was deemed substantially complete, the contractor submitted certified claims asserting entitlement to roughly $3,560,723.65 in cost overruns for work associated with the first modification and $447,522.64 in cost overruns for the second modification. These claims were denied by the contracting officer (CO) in their entirety.

Past performance evaluations play an important role in determining the strength and viability of competing offerors’ proposals. It is generally within the procuring agency’s discretion to determine the scope of the past performance history to be considered during evaluation, provided all proposals are evaluated on the same basis and the evaluation is consistent with the terms of the solicitation. While procuring agencies are typically permitted to limit their evaluations to only consider past performance information submitted in response to the solicitation, under certain limited circumstances, outside information not submitted with the offerors’ proposals must also be considered. Under such circumstances, the procuring agency is required to consider outside information as part of its past performance evaluation when the information is determined to be “too close at hand” to require competing offerors to bear the inequities that would arise from the agency’s failure to obtain and consider the information. Notably, the “too close at hand” principle is narrowly interpreted and is only applied to information related to the offerors’ past performance.

In B-275554, the Government Accountability Office (GAO) sustained a bid protest challenging the procuring agency’s past performance evaluation by applying the “too close at hand” principle. In that procurement, the Department of Veterans Affairs (VA) intended to acquire a replacement telephone system for the VA Medical Center in Wilkes-Barre, Pennsylvania. In evaluating the protester’s past performance, the contracting officer (CO), as the source selection authority, identified two directly relevant past performance references but only considered one reference, as an agency official did not complete a required form with respect to the protester’s other past performance reference. Notably, the contract whose reference was not considered involved the same agency, the same CO, and virtually the same services as the solicitation at hand. Furthermore, the CO conducting the procurement not only had the first-hand knowledge of the prior contract but also described the protester’s performance as “exemplary” in a letter provided to the Small Business Administration (SBA) on an unrelated matter. In applying the “too close at hand” principle, the GAO sustained the protest and concluded that it was unreasonable for the CO not to consider the protester’s past performance information on the earlier contract under these circumstances.

Unbalanced pricing exists when despite an acceptable total evaluated price, the price of one or more line items is significantly over- or understated. Federal Acquisition Regulation (FAR) 15.404-1(g)(2) instructs contracting officers (COs) to analyze offers with separately priced line items or subline items to determine whether the prices are unbalanced. If unbalanced pricing is detected, the FAR requires that the CO consider the risks to the government in making the award decision and whether the contract award will result in paying unreasonably high prices for contract performance. If the performance or pricing risks associated with unbalanced pricing rise to unacceptable levels, the procuring agency may reject the offer containing the unbalanced pricing. Alternatively, the agency may accept the offer with unbalanced pricing if, after conducting a risk assessment, it determines that the offer does not pose an unacceptable performance risk and that the government is unlikely to pay unreasonably high prices. The methodology and scope of an agency’s cost or price analysis are matters within the agency’s discretion, and the GAO only reviews the record to ensure that the evaluation is reasonable and consistent with the terms of the solicitation and the applicable law.