WT Business Beat

By Nick Wakeman

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Nick Wakeman

Mistakes sunk CenturyLink's claim of unequal treatment

In the procurement world, one person’s discussion is another person’s clarification. That was the argument at the crux of CenturyLink’s protest involving awards that went to rivals AT&T and Verizon.

AT&T and Verizon won a task order to supply the Commerce Department with telecommunications, networking services and associated support. Among its primary complaints, CenturyLink said that Commerce held unequal discussions with the bidders in awarding the orders through the Enterprise Infrastructure Solutions vehicle.

CenturyLink has lost its protest fight, but the Government Accountability Office decision offers a powerful lesson on how some errors can sink your proposal.

The task orders consolidate several contracts Commerce had in place to provide these kinds of services. Awards were to be based on three factors: technical, past performance and cost/price. The technical factor was most important, followed by past performance. Price was to be the least important factor.

Bidders were to provide a unit price for each line item and there were 60,000 of them.

That’s where the problems arose. Both CenturyLink and Verizon left the pricing blank for some of the line items. There also were some areas where the pricing was higher than what was listed in the original EIS contract.

The agency asked about this and for Verizon, it counted the pricing as zero and substituted the original EIS pricing for the higher pricing. Verizon had told the agency it made a mistake.

But for CenturyLink, the agency rejected the bid saying that it was unacceptable. This is why CenturyLink argued it wasn’t treated equally. In essence, CenturyLink argued that their mistake cost them but the agency let Verizon’s error to slide.

However, GAO ruled that the magnitude of CenturyLink’s pricing mistakes made it reasonable for Commerce to conclude that firm's proposal should be rejected.

In the end, Commerce accepted Verizon’s pricing and rejected CenturyLink’s because Verizon had such a small percentage of problematic line item prices.

Verizon had blank or $0 entries for just 1,072 line items out of 60,000. But CenturyLink had blank or $0 prices for 47,545 line items, or 77 percent of all of the line items in the solicitation.

That’s why Commerce concluded that the CenturyLink’s pricing was defective while Verizon’s was not.

After that, CenturyLink’s argument about unequal treatment and the argument about what is a clarification and what is a discussion fell on deaf ears. Technically, GAO didn’t even consider those arguments.

The takeaway: I can’t help but think that if CenturyLink would have had a stronger case if their pricing errors had been more in-line with Verizon’s. But some mistakes just can’t be overcome.

Posted by Nick Wakeman on Jul 21, 2020 at 1:15 PM

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