FAR 15.306 describes a spectrum of exchanges that may take place between a contracting agency and an offeror during negotiated procurements. "Clarifications" is one end of the spectrum. Clarifications are limited exchanges, between the government and offerors, that may occur when award without discussion is contemplated. An agency may, but is not required to, engage in clarifications that give offerors an opportunity to clarify certain aspects of proposals or to resolve minor or clerical errors. Agencies have broad discretion as to whether to seek clarifications from offerors, offerors have no automatic right to clarifications regarding proposals, and such communications cannot be used to cure proposal deficiencies or material omissions, materially alter the technical or cost elements of the proposal, and/or otherwise revise the proposal.
The Navy issued a solicitation for construction projects on Guam. The solicitation required offerors to provide a narrative describing the composition and management of the firms proposed as the "team". This narrative was to describe the primary construction firms and primary design firms for the contract and rationale for proposing this arrangement and offerors were to specifically identify one Lead Design Firm for the contract. In addition to the narrative, offerors were required to submit a fully executed true and authentic copy of the legally binding agreement, such as a joint venture agreement, partnership agreement, teaming agreement, approved mentor protege agreement, or letter of commitment for each member of the offerors team. The solicitation stated that an offeror that was rated unacceptable under this factor would not be considered for the next phase of the procurement.
The Navy received a number of proposals for the work including one from Defense Base Services Inc. (DBSI) out of Anchorage. DBSI's proposal however did not include a legally binding teaming agreement between DBSI and its lead design firm but rather, a confidentially agreement dated two years before the solicitation was even issued. Based on that omission, the Navy eliminated the bid from further consideration.
DBSI appealed to the GAO. DBSI argued that it was improper for the Navy to eliminate its proposal because the Navy should have permitted DBSI to correct its clerical mistake by allowing it to submit a teaming agreement during clarifications. The GAO found no merit to DBSI's contention that the Navy was required to seek clarifications. As stated above, the Navy was permitted, but not required, to obtain clarifications from offerors. The GAO also noted that although DBSI viewed its proposal omission to be minor or clerical, correction of this discrepancy would have required the Navy to conduct "discussions". Discussions occur when an Agency communicates with an offeror for the purpose of obtaining information essential to determine the acceptability of a proposal, or provides the offeror with an opportunity to revise or modify its proposal in some material respect.