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 must show that the ambiguity is reasonably apparent on the face of the solicitation but is not readily resolvable by referencing the solicitation or any applicable regulations. The protestor must show that the latent ambiguity is genuine and material to the solicitation at issue. To prove materiality, contractors should demonstrate that the latent ambiguity could ultimately have a bearing on the source selection decision.
Furthermore, the protestor must show its reliance on and competitive prejudice due to the latent ambiguity. That is, the protestor must show that while the latent ambiguity could have two or more reasonable interpretations, it relied on its own reasonable interpretation of the latent ambiguity in drafting its proposal. Finally, the protestor must also show that its reliance on its own reasonable interpretation, which was different from the Government’s interpretation, resulted in competitive prejudice. For instance, the protestor could show that had it known the agency’s intended meaning of the ambiguous term or provision, it would have submitted a different proposal.
Let us review a sustained post-award protest decision demonstrating why it is vital for solicitation requirements to be unambiguous. 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.” Furthermore, if the prime contractor relied on a subcontractor’s past performance reference to demonstrate experience, it had to provide a letter of commitment and an explanation of the meaningful involvement that the subcontractor would have in the performance.
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 protestor submitted its own past performance reference to demonstrate airfield construction experience. However, it did not intend to perform the airfield portion of the contract, 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 had not submitted a letter of intent from the subcontractor per the RFP requirements. 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 in the airfield construction section regardless of whether it was delegating that work to a subcontractor.
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 who submitted the reference. Therefore, the protestor was reasonable in submitting its own past performance reference without a subcontractor letter of intent for the airfield construction portion of the work while delegating the performance of that work to the subcontractor because 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 requirement for performance of reference contracts, allowing the protestor to resubmit its proposal based on the defined requirement.
Latent ambiguities are not apparent in a solicitation but only become clear with further information, like the Government’s past performance evaluation in this case. In contrast, patent ambiguities are obvious errors or defects that must be protested during the pre-award stage. By their very nature, latent ambiguities in a solicitation often trip up even the most experienced contractors. Therefore, prospective contractors suspecting latent ambiguities in their solicitations must seek clarifications 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.
