Government information practices

Army Lawyer, Jan-Feb, 2003

Re-Solicitation of Service Contracts: New Limits on the Release of Unit Prices Under The Freedom of Information Act?

In R & W Flammann GmbH v. United States, (1) the United States Court of Federal Claims (COFC) decided a pre-award bid protest suit partially upon the government's disclosure of previous contract prices under the provisions of the Freedom of Information Act (FOIA). (2) The plaintiff, R & W Flammann GmbH (Flammann), was a German business entity that had contracted with the Army "to provide 'between occupancy maintenance' for the U.S. Government Housing facilities in Heidelberg, Germany". (3) Flammann, the "lowest-priced responsive bidder under a sealed bid solicitation," received the government award. (4) The contract, for one base year with four one-year options, was to run from 1 February 2001 through 31 January 2006; however, "[a]s early as October 2001, [the Army] expressed that it would not exercise the first-year option under the incumbent contract" (5) Instead, the Army intended to issue a new solicitation for a new contract. (6) During the second solicitation, and pursuant to a FOIA request, the government "released plaintiff's unit prices for the current and future [option] years to its competitor," SKE Gmbh (SKE). (7) The plaintiff filed suit on 18 July 2002, after the government dismissed the plaintiff's pre-award bid protest. (8)

The crux of the case was the nature of the government's second solicitation for the between-occupancy maintenance (BOM) services. The first contract followed sealed bid solicitations, but the "new" solicitation used "two-step bidding," (9) in which the government issued an initial Request for Technical Proposals on 5 October 2001, and then issued an Invitation for Bids (IFB) on 2 July 2002. (10) While the court's opinion did not disclose the reason for the government's decision not to exercise the option, (11) it clearly stated that the government "characterizes" the second solicitation for BOM services "as a 'new' solicitation." (12) The government's position was "that the contracts are 'extremely different' due to ... the change in the contract type from a requirement-type to an indefinite-type" and the additional requirement that each work crew include one English speaking person. (13) On the other hand, Flammann "observed by the Statement of Work that the re-solicitation is substantially similar to its incumbent contract." (14) In support of its view, Flammann reported that "some 87.5% of the [contract line item numbers (CLINs)] of the two contracts 'correspond directly.'" (15)

The court agreed that "[t]o the extent that the defendant is in fact soliciting for BOM services for the U.S. Government Housing facilities at Heidelberg, Germany, as was the case in the incumbent contract, the current solicitation is a re-solicitation." (16) The court, however, did not rest its opinion upon "the precise similarities (or differences, for that matter) between the contracts, but rather on the germane issue of fundamental fairness in the procurement process." (17)

The court based its determination of fairness on the administrative record. According to the record, it was "undisputed" that the plaintiff's original contract bid became publicly available upon bid opening, (18) The record also reflects that the government decision not to exercise the option was not due to the plaintiff's performance; that the government invited the plaintiff to participate in the second solicitation; and that Flammann did submit a technical proposal and a subsequent bid. After issuing the Request for Technical Proposals, the government received SKE's FOIA request for a copy of Flammann's present contract. (19) On 20 November 2001, the government provided Flammann with "submitter notice" (20) of SKE's request? (21) While Flammann "warmly objected" (22) to the proposed disclosure, remarkably, it did not file a "reverse FOIA" (23) suit to enjoin the government's release. About five months (24) after providing notice to Flammann, the government released the plaintiff's contract to SKE. (25) Flammann then filed an agency protest, but an independent protest review official affirmed the contracting officer's decision. Flammann then sought injunctive relief from the COFC on 18 July 2002. (26) Shortly thereafter, a third successful step-one offeror, Facilma GmbH (Facilma), informed the government that it would not submit a step-two bid because the government's release of Flammann's contract price to just one bidder "violate[d] all applicable German and European contracting rules as well as the ethics of fair competition." (27)

While "fundamental fairness" appears to be the basis of the court's decision, it is interesting to note that the plaintiff did not raise or pursue the issue of procurement integrity. The court found that the plaintiff "averred a vague inference that there may have been a modicum of bad faith on the part of the defendant in its failure to exercise option year one." (28) Even after the court's inquiry, however, the "plaintiff never developed any argument before the court to overcome the presumption of good faith on the part of the government." (29)