Key Case Law Rules for  Contract Formation
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CHAPTER 2
Protest Grounds Based on the Government’s Description of the Requirement

1. AMBIGUITIES IN THE SOLICITATION: PATENT AND LATENT

Overview of This Protest Ground: Protest grounds arguing that a solicitation contained an ambiguity are raised both pre-award and post-award. Ambiguities, if found, are generally either patent or latent. A “patent” ambiguity is one that clearly appears on the face of a document, that is, it arises from the language itself. A “latent” ambiguity, by contrast, is not evident on the face of the document, but rather arises from some other matter and becomes apparent when the terms in question are applied or executed.

In the context of a pre-award protest, both patent and latent ambiguities can be challenged. However, in a post-award protest, allegations based on patent ambiguities in the solicitation must be raised before the date/time set for the receipt of offers. This is true at the COFC as well as the GAO. As the COFC has explained, “[v]endors cannot sit on their rights to challenge what they believe is an unfair solicitation, roll the dice and see if they receive award and then, if unsuccessful, claim the solicitation was infirm.”Argencord Mach. & Equip., Inc. v. United States, 68 Fed. Cl. 167, 175 n.14 (2005).

CAFC’s Key Language

[A] party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection afterwards in a § 1491(b) action [Post-award protest] in the Court of Federal Claims.

Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1315 (Fed. Cir. 2007).

If the ambiguity is patent, it triggers a duty to inquire. A patent ambiguity is one that is “obvious, gross, [or] glaring, so that plaintiff contractor had a duty to inquire about it at the start.” H&M Moving, Inc. v. United States, 499 F.2d 660, 671 (Ct. Cl. 1974). If an ambiguity is obvious and a bidder fails to inquire with regard to the provision, his interpretation will fail. Triax Pac., Inc. v. West, 130 F.3d 1469, 1475 (Fed. Cir. 19971).

NVT Technologies, Inc. v. United States, 370 F.3d 1153, 1162 (Fed. Cir. 2004).

COFC’s Key Language

If the court concludes that ambiguity exists, the court must then determine whether the ambiguity is latent or patent. An ambiguity is latent if it is not apparent on the face of the solicitation and is not discoverable through reasonable or customary care. Under the rule of contra proferentem, a latent ambiguity is resolved against the government as drafter of the solicitation. Contra proferentem, however, is a “rule of last resort.” The rule applies only if there is a genuine ambiguity that remains unresolved after the court examines the entire solicitation and all contemporaneous circumstances.

In contrast to a latent ambiguity, a patent ambiguity in a solicitation is one that is “obvious, gross, [or] glaring.” Such patent ambiguity may take the form of “facially inconsistent provisions” that would “place a reasonable [offeror] on notice” of a conflict or discrepancy…. And the patency of an ambiguity is not determined by an offeror’s actual knowledge, but rather by what a reasonable offeror would have perceived. When a solicitation contains a patent ambiguity, the offeror has “a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation” in a subsequent court action. A patent ambiguity is thus an exception to the general rule of contra proferentem and requires the court to resolve the ambiguity against the offeror, i.e., to adopt the government’s interpretation.

Linc Government Services, LLC v. United States, 96 Fed. Cl. 672 (2010).

GAO’s Key Language

Under our Bid Protest Regulations, a solicitation defect apparent on the face of the solicitation must be protested prior to the time set for receipt of initial proposals or quotations, when it is most practicable to take effective action against such defects. 4 C.F.R. § 21.2(a)(1) (2013). Furthermore, an offeror who chooses to compete under a patently ambiguous solicitation does so at its own peril, and cannot later complain when the agency proceeds in a way inconsistent with one of the possible interpretations.

IBM-U.S. Federal, B-407073.3 et al., June 6, 2013.

Where a solicitation contains a patent ambiguity, an offeror has an affirmative obligation to seek clarification prior to the first due date for responding to the solicitation following introduction of the ambiguity into the solicitation. 4 C.F.R. § 21.2(a)(1). Where a patent ambiguity is not challenged prior to submission of solicitation responses, we will dismiss as untimely any subsequent protest assertion that is based on one of the alternative interpretations as the only permissible interpretation. Here, since any ambiguity was apparent from the face of the RFQ, the protesters may not now assert that the only permissible interpretation of this requirement is their own.

Government Acquisitions, Inc., B-407877.2, B-407877.3, B-407877.4, March 25, 2013.

Where a dispute exists as to the actual meaning of a particular solicitation provision, our Office will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all its provisions; to be reasonable, an interpretation of a solicitation must be consistent with such a reading.

ArmorWorks Enterprises LLC, B-405450, Oct. 28, 2011.

Generally, a contracting agency must provide offerors with sufficient detail in a solicitation to enable them to compete intelligently and on a relatively equal basis. A solicitation ambiguity exists where two or more reasonable interpretations of the terms of the solicitation are possible.

CWTSato Travel, B-404479.2, April 22, 2011.

Where, as here, an RFP provision is unambiguous, an offeror may not rely on oral advice from agency officials that is contrary to the clear terms of the RFP.

B&S Transport, Inc., B-402695, July 9, 2010.

….Because we believe that both the agency’s and protester’s interpretations of the RFP are reasonable, this indicates an ambiguity in the RFP with respect to information that the agency would consider in performing its past performance evaluation. An ambiguity exists where two or more reasonable interpretations of the terms or specifications are possible. A party’s particular interpretation need not be the most reasonable to support a finding of ambiguity; rather, a party need only show that its reading of the solicitation provisions is reasonable and susceptible of the understanding it reached.

With that in mind, we must determine whether the ambiguity is latent or patent since, if patent, it would have had to be protested prior to the closing date for the submission of proposals in order to be considered timely. A patent ambiguity exists where the solicitation contains an obvious, gross, or glaring error (e.g., where the solicitation provisions appear inconsistent on their face), while a latent ambiguity is more subtle. Since [the protester’s] interpretation of the RFP did not directly conflict with any of the other solicitation provisions, and the ambiguity came to light in the context of the agency’s past performance evaluation, we conclude that the ambiguity here was latent rather than patent. [The] protest is thus timely.

Singleton Enterprises, B-298576, Oct. 30, 2006.

Assuming then that both the agency’s and the protester’s interpretations of the provision are reasonable, this indicates an ambiguity in the RFP with respect to the price evaluation of the indefinite-quantity items. Accordingly, we must determine whether the ambiguity is latent or patent since, if patent, it would have had to be protested prior to proposal submission date. A patent ambiguity exists where the solicitation contains an obvious, gross, or glaring error, (e.g., where the solicitation provisions appear inconsistent on their face), while a latent ambiguity is more subtle. Since [the protester’s] interpretation of the solicitation provision did not directly conflict with any of the other solicitation provisions and the ambiguity only came to light in the context of the agency’s price evaluation, we conclude that the ambiguity was latent rather than patent and [the] protest of this issue thus is timely.

Under these circumstances, the appropriate course of action is to clarify the RFP and afford offerors an opportunity to submit proposals based on the clarified solicitation.

Ashe Facility Services, Inc., B-292218.3, B-292218.4, March 31, 2004.

FAR Crosswalk: FAR Part 11, Describing Agency Needs; and FAR § 12.202(b).

Other Relevant Cases: See page 291 in the Index of Representative Cases.

Commentary: A protester’s likelihood of success on the merits of the protest depends in large part on whether the GAO or the COFC deems the ambiguity to be patent or latent. If latent, there is a greater chance that the protest will be sustained. In the post-award context, if the ambiguity is found to be patent, there is a significant chance that the protest ground will be dismissed as untimely.

This is one of those protest grounds that can be frustrating to procuring agencies. Even if the agency (rightfully) believes it has followed every rule and answered every question during the solicitation phase, it remains possible that an offeror will have interpreted a relevant portion of the solicitation in a manner that the agency did not anticipate. If this turns out to be the case, the protest may be sustained if (1) the protester’s interpretation is reasonable and (2) the protester can demonstrate that it was competitively prejudiced as a result.

It is difficult to provide specific advice in this area beyond the general recommendation that the procuring agency read its solicitation closely from the vantage point of an offeror and ensure that the language is as clear and concise as possible. Many agencies have “peer review” systems where one contracting officer unfamiliar with the requirement reviews the language in another contracting officer’s solicitation. Agency attorneys can also play a helpful role in this area by spotting solicitation language that could be interpreted in more than one reasonable way. This process, combined with a close reading of the questions submitted by offerors prior to the date set for the receipt of proposals, provides the agency with the best preventive measures against this vexing area of protest.