The GAO recently resolved a challenge to a procurement of the Army Corps of Engineers for an aquatic herbicide by drawing lots among three of four offers with identical proposed unit prices.  In Vetcorp, Inc., B-402519 (May 14, 2010), the GAO approved the agency's reliance on FAR 14.408-6, Equal Low Bids, and rejected the protester's contention that it should have received a HUBZone evaluation preference.  In this unusual case, the agency contended that the solicitation was a sealed bid acquisition under FAR Part 14 to justify its reliance on FAR 14.408-6.  The GAO, noting that the solicitation inclu ded some typical commercial item clauses and that the agency did not open the offers in public as is required in a sealed bid acquisition, found instead that the solicitation was a form of commercial item acquisition under FAR Part 12.   The GAO went on to find that an agency may use procedures in FAR Parts 13 ("Simplified Acquisition Procedures"), 14 ("Sealed Bidding") or 15 ("Contracting By Negotiation") in a commercial item acquisition. 

In this case, the GAO said that the Corps was allowed to use the equal low bids rule at FAR 14.408-6, which gave a preference, in order, to small business concerns in labor surplus areas, and then to other small business concerns.  If this order of precedence does not resolve the tie, FAR 14.408-6 requires that the agency award the contract by drawing lots in front of three witnesses, which the agency did in this case.  The protester also contended that it should have received an evaluation preference of 10% based on the HUBZone rules at FAR 19.1307(a).  After consulting with the Small Business Administration, however, the GAO concluded that the HUBZone evaluation preference could not be used to favor one small business concern over another. 

Contractors should be aware of the differences between sealed bids and proposals, and recognize that when contracting for commercial items under FAR Part 12, the government may use simplified acquisition procedures, sealed bidding procedures or negotiated acquisition procedures.  A careful review of the solicitation, including the synopsis, the evaluation criteria, and other key elements is often necessary to ensure a contractor understands how its response will be evaluated.

For additional information, please contact Jeff Eckland at (612) 236-0160 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  The GAO decision is available at http://www.wifcon.com/cgen/402519.pdf.