Government contracts for construction projects typically include a Differing Site Conditions clause to account for the risk that the contractor may encounter unanticipated subsurface or otherwise latent physical conditions. The purpose of this clause is to discourage contractors from inflating their pricing on account of unexpected physical conditions that may or may not arise. The clause contemplates two types of differing site conditions. In a type I condition, the contractor encounters physical conditions materially different from those specified in the contract. Meanwhile, a type II condition is unknown, unusual, and materially different from that ordinarily encountered. To successfully recover under a type I differing site conditions claim, the contractor must establish five elements by a preponderance of the evidence. The contractor must establish that: (1) a reasonable contractor reading the contract as a whole would interpret it as making a representation as to the site conditions; (2) the actual site conditions were not reasonably foreseeable to the contractor with the information available to it outside the contract documents; (3) the contractor in fact relied on the contract representation; (4) the conditions differed materially from those represented; and (5) the contractor suffered damages as a result.

In negotiated procurements set aside for small businesses, agencies are required to provide a pre-award notice of award to all offerors stating the name and address of the apparently successful offeror to permit size protests with the Small Business Administration (SBA). Upon receiving the pre-award notice, unsuccessful offerors have five business days to file a size protest with the contracting officer (CO), who must then forward it to the SBA Government Contracting Area office in the area where the successful offeror is headquartered. The relevant SBA Area office typically makes a size determination within 15 business days of receiving the protest. However, if the CO fails to provide a pre-award notice of award, the size protest must still be submitted to the CO within five business days of the oral notification or other public announcements regarding the identity of the apparently successful offeror. The Government Accountability Office (GAO) will not consider an award improper due to procedural deficiencies, such as a lack of pre-award notice, unless a timely post-award size protest is filed and the awardee is found to be other than small.

In B-419149.3, a decision issued on January 4, 2021, the GAO found the award proper, notwithstanding the agency’s lack of pre-award notice to offerors due to the protester’s failure to file a timely post-award size protest with the SBA. The Navy issued the underlying request for proposals (RFP) for transportation management and logistics support services at the Anderson Air Force Base in Guam. The agency received proposals from five offerors before the closing date, with the protester and the awardee both submitting revised final proposals following the seventh amendment. During the best-value evaluation, the source selection evaluation board assigned identical adjectival ratings to the protester and the awardee on all non-price factors. Eventually, the awardee was selected for the award due to its proposed price of $22.3 million, which was roughly $5 million less than the protester’s. Notably, the Navy failed to provide a pre-award notice to the protester, who only learned the awardee’s identity following the award. Among other arguments in its GAO protest, the protester argued that the Navy violated FAR 15.403(a)(2) by failing to provide it a pre-award notice regarding the agency’s intent to award the contract to the awardee.

Upon being awarded federal contracts, contractors sometimes find that they made a mistake in their bid or proposal regarding the level of effort required for performance. In such situations, contractors may seek relief in the form of a pricing adjustment or change in performance requirements under the theory of unilateral mistake. To obtain recovery for a unilateral mistake, contractors must present evidence establishing that: (1) a mistake in fact occurred prior to contract award; (2) the mistake was a clear-cut, clerical or mathematical error or a misreading of the specifications and not a judgmental error; (3) prior to award the government knew, or should have known, that a mistake had been made and, therefore, should have requested bid verification; (4) the government did not request bid verification or its request for bid verification was inadequate; and (5) proof of the intended bid is established. Contractors must meet all five elements with clear and convincing evidence. If contractors can satisfy these elements with the required burden of proof, the contract may be reformed to reflect the correction, and relief may be obtained either through a pricing adjustment or a change in performance requirements.

In sealed bidding procurements, an invitation for bid (IFB) provides all non-price terms and conditions of the prospective contract. Bidders responding to IFBs must acknowledge its terms, including all amendments. Failure to acknowledge an amendment may result in the bid being found nonresponsive if the amendment is deemed material to the IFB. An amendment is considered material if it imposes legal obligations on the bidders that were not contained in the original solicitation. Furthermore, an amendment is material if it has more than a negligible impact on price, quality, or delivery. If a bidder fails to acknowledge a non-material amendment, the procuring agency may waive the lack of acknowledgment as a minor informality. Alternatively, if it is more advantageous to the agency, the bidder may be given an opportunity to cure the deficiency and acknowledge the non-material amendment. However, a lack of acknowledgment of a material amendment is not waivable because, without the acknowledgment, the bidder is not legally obligated to meet the government’s needs even after the government accepts its bid. Thus, an awardee’s failure to acknowledge a material amendment is a protestable issue post-award. Notably, whether an amendment is material is a fact-specific inquiry resolved based on the circumstances of each case.