Final Proposal Revision Extinguishes Agency Ability to Accept an Earlier Offer

In a recent protest sustained by the Government Accountability Office (“GAO”), the GAO concluded that once an initial offer has been replaced with the offer contained in a final proposal revision (“FPR”), the agency can no longer accept the initial offer. UNICA-BPA JV, LLC, B-422580.3, Jan 8, 2025.  The issue concerned a System for Award Management (“SAM”) registration requirement that was not in effect at the of the initial offer, but the offeror obtained active registration at the time of FPR. 

The Department of Homeland Security issued a solicitation for dormitory management services.  UNICA was placed in the competitive range, and the agency opened discussions with UNICA, and identified clarifications, verifications or resubmissions necessary. At the close of discussions, UNICA submitted its final proposal revisions.  Homeland Security made award to another vendor, even though UNICA had, prior to submitting its FPR, received its registration in SAM.

The agency alleged that FAR 52.204-7 stated that “an offeror is required to be registered in SAM when submitting an offer.” And UNICA had not SAM registration at the time of its initial offer.  The GAO sustained UNICA’s protest, on the following basis.

The Federal Acquisition Regulation (“FAR”) defines “offer” as a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract.” FAR 2.101.  In the context of a request for proposal  (which this procurement was) the submission of a final proposal revision “demonstrates an offeror’s intent to modify or replace its initial offer, thus extinguishes an agency’s ability to accept the earlier offer.”  Essentially submission of an FPR effectively revokes the offeror’s initial proposal.  When Homeland Security entered into discussions and asked for FPR’s, the submission of its FPR extinguished UNICA’s initial proposal.  And by the time the FPR was submitted, UNICA had been registered in SAM successfully.  The agency’s decision to eliminate UNICA for failing to have an active SAM registration at the time of its initial offer (but not the offer in the FPR) was unreasonable—and UNICA had a substantial chance of receiving award.  In sustaining the protest, GAO recommended that the agency make a new award decision.

Takeaway.  Your initial offer is extinguished if you prepare a submit an FPR in response to the agency’s request.  Any failure in the initial offer (such as not being registered in SAM) can be corrected by the time you submit the FPR.

For other helpful suggestions on government contracting, visit:

Richard D. Lieberman’s FAR Consulting & Training at https://www.richarddlieberman.com/, and Mistakes in Government Contracting at https://richarddlieberman.wixsite.com/mistakes.