A basic tenet of the U.S. federal public procurement system is a fair and competitive bid process. This means federal agencies must provide potential contractors with sufficiently detailed solicitations that are clear and concise so they may compete intelligently and on a relatively equal basis. However, sometimes, issues arise when the solicitation itself contains hidden pitfalls. These are known as latent ambiguities. A latent ambiguity in a bid protest arises when a defect in the solicitation is not initially visible but only becomes apparent with the introduction of additional evidence, such as additional technical specifications, past performance evaluations, or discussions. Latent ambiguities may be differentiated from patent ambiguities, which are apparent solicitation defects or errors evident on the face of the solicitation.
A latent ambiguity may arise due to various reasons, including poorly drafted solicitation provisions, inconsistent or conflicting solicitation language, a lack of adequate clarification or guidance from the agency in response to offeror queries, or just a change in circumstances since the issuance of the solicitation. To demonstrate the presence of a latent ambiguity, the protestor should demonstrate that the ambiguity is not readily resolvable by referencing the solicitation or any applicable regulations. Furthermore, the protestor must prove that the latent ambiguity is genuine and material. To prove materiality, contractors can demonstrate that the latent ambiguity ultimately had a bearing on the source selection decision. The protestor must also show reliance on its reasonable interpretation of the latent ambiguity and competitive prejudice stemming from that reasonable reliance. In other words, the protestor must show that the latent ambiguity could have two or more reasonable interpretations and that the protestor relied on its own reasonable interpretation of the latent ambiguity in drafting its proposal. Finally, the protestor’s reliance on its own reasonable interpretation should have resulted in competitive prejudice.
Let us review a sustained post-award protest decision due to a latent ambiguity in the solicitation. In B-415042; B-415042.2, a Government Accountability Office (GAO) protest involving a Navy construction contract from 2017, a latent ambiguity existed in the solicitation due to its past performance reference requirements being susceptible to two reasonable interpretations. The solicitation at issue involved a construction contract competed on a lowest price technically acceptable (LPTA) basis. To demonstrate experience under the past performance evaluation factor, the request for proposal (RFP) in pertinent parts permitted offerors to “utilize the experience of a subcontractor that will perform major or critical aspects of the requirement to demonstrate construction experience.”
The protestor had proposed the lowest evaluated price. However, its proposal was found technically unacceptable due to its past performance section being assigned an unacceptable rating for airfield construction. The prime contractor had submitted its own past performance reference to demonstrate airfield construction experience. However, in the reference projects, the prime contractor had not performed the airfield construction portion of the work, having delegated it to a subcontractor. On the present project, the prime contractor again did not intend to perform the airfield construction portion of the project, instead delegating that work to a subcontractor. The Navy found the protestor’s proposal unacceptable because it relied on a subcontractor to perform the airfield portion of the work but did not include a past performance reference or a letter of intent from the subcontractor for the airfield portion of the work. The Navy explained that the airfield construction portion of the project was of such importance that the government needed to evaluate the experience of the actual contractor who would be performing that work. In response, the protestor argued that it properly relied on its own interpretation of the RFP requirements, which allowed it to claim credit for its own experience as a prime contractor overseeing but not necessarily performing the airfield construction. Therefore, according to the prime contractor, its proposal was technically compliant because it included three prime contractor past performance references in which it oversaw but did not perform airfield construction work.
Conducting a plain language review, the GAO found that the RFP’s past performance reference requirements were latently ambiguous. The GAO determined that both the protestor and the Navy’s interpretation of the RFP requirements were reasonable. The GAO noted that the RFP did not specify that to receive credit for a past performance reference, the corresponding construction work had to be performed by the contractor or subcontractor whose past performance reference was submitted. Therefore, the protestor was reasonable in submitting its own past performance references where it oversaw but did not perform the airfield construction work, as the RFP did not rule out such an interpretation. The GAO determined that the agency’s narrower interpretation and the protestor’s expansive interpretation of the term “perform” were both reasonable in the context of the RFP’s prior experience factor requirements. GAO further determined that these dual interpretations of the term “perform” were not so glaring or evident as to be considered a patent ambiguity – and thus, a latent ambiguity existed in the solicitation’s terms.
In sustaining the protest, GAO recommended that the agency amend the solicitation to clarify the past performance reference requirement for the airfield construction portion of the work, permitting the protestor to resubmit its proposal based on the redefined requirements. Latent ambiguities can be challenging to identify as they are not readily apparent in a solicitation but only become clear with additional information and context. A good indicator of the existence of such ambiguities is if a solicitation requirement is open to more than one reasonable interpretation. The past performance reference requirements here were an example of such a latent ambiguity that only became apparent after the government’s evaluation. By their very nature, latent ambiguities in a solicitation may trip up even the most experienced contractors. Therefore, prospective contractors suspecting latent ambiguities in solicitations should seek clarifications from the government or counsel as early in the process as possible.
This Bid Protests Insight provides a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.
