Tiger Natural Gas, Inc.

DOCUMENT FOR PUBLIC RELEASE

The decision issued on the date below was subject to a GAO Protective Order. This version has been approved for public release.

Decision

Matter of: Tiger Natural Gas, Inc.

File: B-423744; B-423744.2; B-423744.3

Date: December 10, 2025

David S. Black, Esq., John M. McAdams III, Esq., and Tanner N. Slaughter, Esq., Holland & Knight LLP, for the protester.
Daniel Douglass, Esq., and Toni Steptoe, Esq., Defense Logistics Agency, for the agency.
Charmaine A. Stevenson, Esq., and John Sorrenti, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. Protest challenging the agency's rating of awardees as technically acceptable is sustained where the record produced by the agency fails to demonstrate that the agency's evaluation was reasonable and consistent with the terms of the solicitation.

2. Protest that the agency improperly engaged in discussions regarding technical proposals where the agency intended to conduct a reverse auction is denied where the solicitation did not prohibit the agency from both having discussions with offerors and conducting a reverse auction for final price submissions.

3. Protest that discussions were not meaningful because the agency did not discuss the protester's initial price is denied where the protester has not shown that the agency was required to advise the protester its price was high prior to conducting a reverse auction.

DECISION

Tiger Natural Gas, Inc., a small business of Tulsa, Oklahoma, protests the award of contracts to Penn Oak Services, LLC, a small business of Coatesville, Pennsylvania, and NRG Business Marketing, LLC, a small business of Houston, Texas, under request for proposals (RFP) No. SPE604-25-R-0401 by the Defense Logistics Agency (DLA) for the supply of natural gas to Department of Defense and federal civilian installations in California. The protester contends that neither Penn Oak nor NRG should have been found by the agency to be technically acceptable, and the evaluation is unreasonable. The protester also argues that the agency engaged in improper and misleading discussions.

We sustain the protest in part and deny it in part.

BACKGROUND

The agency issued the RFP on February 18, 2025, using Federal Acquisition Regulation (FAR) part 15 procedures, and anticipated the award of multiple indefinite-delivery, indefinite-quantity contracts with a 2-year period of performance to supply natural gas in the DLA Energy western region (Arizona, California, Nevada, New Mexico, Utah, and Washington). Contracting Officer's Statement and Memorandum of Law (COS/MOL) at 2; Agency Report (AR), Tab 1, RFP at 3, 27. Offerors could propose performance for some or all 17 contract line item numbers (CLINs) for natural gas requirements at various locations, however, some CLINs were standalone and other CLINs were combined so that they would be awarded together to a single contractor. RFP at 3; AR, Tab 5, RFP Attachment IV – Solicitation Schedule at 1-2. This protest relates only to CLIN 15 and combined CLINs 16 and 17 for the supply of natural gas to customers in California. For some CLINs, the awardees would work through local distribution companies (LDCs), which are the local public utility operating in the area that transports gas over its own distribution lines. RFP at 10.

The RFP identified three evaluation criteria: technical compliance, past performance, and price. RFP at 38. For each CLIN or combined CLINs, award was to be made to the responsible offeror with the lowest price whose proposal was rated as acceptable under the non-price factors.[1] Id. at 37. As relevant here, under the technical compliance factor, the solicitation stated that for those customers served through an LDC, an offeror “must possess a minimum of 12 months of experience (within the past two years) providing supply and transportation (firm and/or interruptible) of natural gas to retail customers served by a LDC within the state for which it is interested in proposing and shall provide evidence that it is authorized to conduct business on proposed LDCs.” Id. at 38.

The RFP further indicated that the contracting officer “may utilize reverse auctioning to conduct price discussions[,]” and that if a reverse auction was not conducted, “award may be made on initial offers or following discussions.” Id. at 33; see also id. (“The contracting officer may use reverse auction as the pricing technique during discussions to receive the final offered prices from each offeror.”).

The RFP also permitted contractor team arrangements. Id. at 34 (“The Government will consider offers, conforming to the solicitation, from responsible sources, including contractor team arrangements or, if applicable, [General Services Administration (GSA)] schedule contractor team arrangements.”). The RFP required that proposals be submitted in seven sections, including as relevant to the protest allegations, section II, area of supply interest and technical compliance and section III, past performance – experience with end users. Id. at 35. To this end, the RFP included attachments for these sections that provided templates for offerors to complete and submit with their proposals. Id. at 32; AR, Tab 2, RFP attachment 1 – Area of Supply Interest and Technical Compliance; Tab 3, RFP attachment 2 – Past Performance – Experience with End Users.

The agency received seven proposals, including proposals from Tiger, Penn Oak, and NRG. AR, Tab 22c, Source Selection Decision Document (SSDD) at 1. On April 24, the agency notified Tiger that it would engage in oral discussions with Tiger on April 29 and included price on the list of 10 topics to be discussed. AR, Tab 35, Tiger Discussion Letter at 1. On May 21, the agency informed Tiger that discussions would be closed on May 23 and that final price revisions would be submitted during a live auction to occur on May 28 via reverse auction. AR, Tab 36, Tiger Discussions Closing Letter.

On June 30, the agency notified Tiger that Penn Oak was selected for CLIN 15, and NRG was selected for combined CLINs 16 and 17. Protest, exh. A, Tiger Unsuccessful Offeror Notice. Tiger received a debriefing, and this protest followed.

DISCUSSION

The protester challenges the agency's evaluation of the proposals submitted by Penn Oak and NRG and argues that they should have been rated technically unacceptable. The protester also argues that the agency engaged in improper discussions with Penn Oak, and that its discussions with Tiger were not meaningful. As discussed below, we sustain the challenges to the agency's technical evaluation but deny the arguments regarding the agency's discussions.

Technical Evaluation

Evaluation of Penn Oak

The protester argues the agency unreasonably found Penn Oak technically acceptable because Penn Oak is not authorized to operate through Pacific Gas & Electric (PG&E), the LDC in CLIN 15, and cannot demonstrate the minimum 12 months of experience required by the RFP. Tiger also contends that Penn Oak does not have any relevant past performance. Protest at 9-14. The agency argues that its evaluation was reasonable and consistent with the solicitation. The agency avers that Penn Oak entered into a contractor teaming arrangement (CTA) with Mercuria Energy America, LLC, which is authorized to operate through PG&E and possesses the required experience and past performance such that the agency's finding of Penn Oak as technically acceptable was reasonable. COS/MOL at 12-18.

Here, as noted, the RFP required that proposals include a section II (area of supply interest and technical compliance) and section III (past performance – experience with end users). RFP at 35. The record shows that “Pennoak Services, LLC/Mercuria LLC (subcontractor)” is named as the offeror in the completed RFP attachment I template submitted as section II of Penn Oak's proposal; however, the agency redacted all other information Penn Oak included in the template. AR, Tab 18b, Penn Oak RFP Attachment I at 1-2. Similarly, for section III of its offer, “Penn Oak Services, LLC/Mercuria Energy America, LLC” is named as the offeror in the RFP attachment II template, but again, any information provided by Penn Oak to demonstrate its experience and past performance is redacted. The record also includes a document that the agency identified as the teaming agreement between Penn Oak Services and “Mercuria Energy America, LLC (“Subcontractor”),” however, the eight-page document is completely redacted except to indicate that DLA issued the solicitation and the parties “wish to establish a teaming agreement.” AR, Tab 18g, Penn Oak Mercuria Teaming Arrangement at 1.

As for the agency's evaluation, the record includes a document that is virtually identical to the RFP attachment I template submitted as section II of Penn Oak's proposal. The only material difference between the documents are: (1) the offeror is identified as “Penn Oak Services, LLC”; and (2) a column was added on the second page titled “Technical Compliance Rating for this Line Item or Tied Group (Acceptable/ Unacceptable)” and indicates that Penn Oak was rated acceptable for CLIN 15. AR, Tab 20c, Penn Oak Technical Compliance Enclosure at 1-2. The past performance evaluation indicates that Penn Oak received a rating of acceptable but includes no discussion or analysis for how this conclusion was reached. AR, Tab 19, Past Performance Report at 2.

In response to the protest, the agency also produced a declaration from the technical evaluator of Penn Oak's proposal which states: “Per the information provided, Penn Oak Services, LLC was found to be Certified, Licensed, or Otherwise Authorized to do Business on this LDC/Pipeline [PG&E]. Penn Oak Services, LLC has a Teaming Agreement with Mercuria Energy America, LLC.” AR, Tab 30, Decl. of Penn Oak Technical Evaluator at 1. The evaluator also states that Mercuria was found to have the required 12 months of technical experience, and information related to Mercuria's technical acceptability was verified via website and telephone call. Id. at 2. The evaluator further states: “In reviewing Penn Oak Services, LLC offer, and verifying the teaming agreement information via email, I concluded that there was sufficient evidence to support that the information provided by Penn Oak Services, LLC was not fraudulent,” and that Penn Oak was correctly evaluated as technically acceptable. Id.

The evaluation of an offeror's proposal is a matter within the agency's discretion. National Gov't Servs., Inc., B-401063.2 et al., Jan. 30, 2012, 2012 CPD ¶ 59 at 5. An offeror's disagreement with the agency's judgment, without more, is insufficient to establish that the agency acted unreasonably.  STG, Inc., B-405101.3 et al., Jan. 12, 2012, 2012 CPD ¶ 48 at 7. While we will not substitute our judgment for that of the agency, we will question the agency's conclusions where they are inconsistent with the solicitation criteria and applicable procurement statutes and regulations, undocumented, or not reasonably based.  Public Commc'ns Servs., Inc., B-400058, B-400058.3, July 18, 2008, 2009 CPD ¶ 154 at 17.

Based on our review, the record produced by the agency is insufficient for us to conclude that the agency's evaluation was reasonable. The documents produced by the agency are heavily redacted and provide little to no information for us to review the reasonableness of the agency's evaluation. Some documents are so heavily redacted that nothing more than their mere existence can be gleaned.[2] Despite this, the agency argues:

DLA Energy provided all evaluation material that was produced in order to support the agency's rationale for all awards. Tiger was provided the non-redacted copies of the Source Selection Document, Price Analysis, and Final Technical Evaluation Findings. Tiger is not entitled to a fishing expedition in order to gain information about its competitors. The Government promotes competition in the natural gas utility market. Tiger's quest to gain all possible information about its competitors is being done in opposition to [] having fair competition in the market.

DLA has provided all the information submitted from both Penn Oak and NRG that was used to reasonably determine each offeror met the required evaluation criteria of the solicitation for technical compliance and past performance of the RFP.

Supp. COS/MOL at 2. In this regard, we note that the record contains two documents identified as the SSDD, one of these documents produced in the agency's report contains redactions while the other, which the agency provided as part of its request for dismissal, is unredacted.[3] AR, Tab 22c, SSDD Redacted; Req. for Dismissal, encl. 4, SSDD.

As an initial matter, our Office issued a protective order for this protest. A protective order allows counsel for the protester and intervenors to review “proprietary, confidential, and source-selection-sensitive material the release of which could result in a competitive advantage to one or more firms.” 4 C.F.R. § 21.4(a). The agency's position ignores that the redacted information could have been produced under the protective order issued by our Office in this protest. The protective order process is essential to the proper functioning of GAO's bid protest process. The terms of our protective order limit “disclosure of certain material and information submitted in the . . . protest, so that no party obtaining access to protected material under this order will gain a competitive advantage as a result of the disclosure.” B-423744 Protective Order, July 25, 2025, at 1. The protective order “applies to all material that is identified by any party as protected, unless [GAO] specifically provides otherwise,” and strictly limits access to protected material only to those persons admitted under the order. Id. at 1-3. In short, the protective order here prohibited outside counsel admitted to the protective order from providing protected information to their client, unless or until such information was approved for release from the order.

In addition, when reviewing an agency's procurement actions, we do not limit our consideration to contemporaneously documented evidence, but instead consider all the information provided, including the parties' arguments, explanations, and any hearing testimony. See AllWorld Language Consultants, Inc., B-414244, B-414244.2, Apr. 3, 2017, 2017 CPD ¶ 111 at 4 n.3. Our Office will accord lesser weight to post hoc arguments or analyses because judgments made “in the heat of an adversarial process” may not represent the fair and considered judgment of the agency, which is a prerequisite of a rational evaluation and source selection process. Conti Fed. Servs., LLC, B-422162 et al., Feb. 1, 2024, 2024 CPD ¶ 31 at 6. While we accord greater weight to contemporaneous materials as opposed to judgments made in response to protest contentions, post-protest explanations that provide a detailed rationale for contemporaneous conclusions, and simply fill in previously unrecorded details, will generally be considered in our review of the rationality of selection decisions--so long as those explanations are credible and consistent with the contemporaneous record. Id.

Contrary to the agency's position, as discussed, the record does not include the proposal information submitted by Penn Oak. In this regard, all proposal information concerning the agency's evaluation of Penn Oak is redacted from the agency's evaluation documents, which indicate only the conclusion that Penn Oak was rated acceptable. Likewise, neither of the SSDDs include detailed proposal or evaluation information and simply conclude that all seven proposals were rated as technically acceptable and identify the offerors selected following the reverse auction. Req. for Dismissal, encl. 4, SSDD at 1-2; AR, Tab 22c, SSDD at 1-2.

The evaluator's declaration also does not provide sufficient information to demonstrate DLA's evaluation was reasonable. The website link provided in the declaration indicates that Mercuria is listed as a natural gas service provider on PG&E's website. See https://www.pge.com/pipeline/en/reference-library/industrylinks/mkrlist…. However, the declaration does not explain how the evaluator determined that Mercuria had the required 12 months of experience or provide any detail about the “telephone call” used to verify Mercuria's technical acceptability, such as who was called or what was said. See generally AR, Tab 30, Decl. of Penn Oak Evaluator. Other than confirm that the agency rated Penn Oak technically acceptable, the declaration provides little further explanation of the agency's contemporaneous evaluation conclusions or fill in any previously unrecorded details for us to conclude that the evaluation was reasonable. To the extent that the agency seeks to use the declaration as a substitute for its contemporaneous record, we afford little weight to the evaluator's post-protest assurances that Penn Oak was properly found to be technically acceptable. On this record, we are unable to conclude that the agency's evaluation of Penn Oak was reasonable and therefore sustain the protester's allegation that the agency unreasonably evaluated Penn Oak's technical acceptability.[4]

Evaluation of NRG

The protester also argues that NRG should have been found technically unacceptable because it is not authorized to operate through Southwest Gas, one of three LDCs within the performance area for CLINs 16 and 17. Protest at 12-13. In support of this allegation, the protester states it confirmed with Southwest Gas that NRG was not authorized to operate through Southwest Gas and provides a document on Southwest Gas letterhead titled “Natural Gas Supply Agency Contact List” that “includes nearly twenty suppliers, including Tiger, as well as energy giants BP and Shell,” but not NRG. Id. at 13; id., exh. N., Natural Gas Supply Agency Contact List. Tiger states that it is the incumbent contractor for the requirements reflected in CLINs 16 and 17. Id. at 4.

The agency argues that NRG included all required information in its proposal to reasonably conclude that it was authorized to operate behind Southwest Gas. COS/MOL at 17. The agency argues that “sales in the Southwest Gas territory are wholesale sales, i.e., non-core,” and that “in having authorization in Southern California Gas, as the backbone supplier to Southwest Gas territory, NRG has the authorization necessary to meet the requirements under the solicitation.” Id.; see also id. at 7 (CLIN 0017 comprises noncore customers.
. . . ‘Southwest Gas' southern division are wholesale customers of [Southern California Gas], i.e. they receive deliveries of gas from [Southern California Gas] and in turn deliver that gas to their own customers.' https://www.cpuc.ca.gov/industries-and-topics/natural-gas/natural-gas-a….”).

Here, the record shows that regarding its authorization to operate through Southwest Gas, the NRG proposal stated:

Please note that Southwest Gas Corp does not publish a list of registered natural gas suppliers. However, we confirm we are registered as a natural gas supplier on this pipeline. Please see Section II: Area of Supply Interest and Technical Compliance of our response for a completed copy of Attachment I: Area of Supply Interest and Technical Compliance. This form includes a point of contact for Southwest Gas Corp.

AR, Tab 17a, NRG Proposal at 77. The referenced section of NRG's proposal was redacted by the agency. Id. at 20-21. The agency did produce a declaration from the technical evaluator of NRG's proposal which states that all information relating to technical acceptability was verified via website and email. AR, Tab 31, Decl. of NRG Technical Evaluator at 2. In addition, the evaluator states:

In reviewing NRG's offer and verifying the information via the Southern California Gas website (https://www.socalgas.com/business/energy-market-services/gas-suppliers-…), and by my awareness that NRG was a supplier/agent in the State of California, I concluded that there was sufficient evidence to support that the information provided by NRG was not fraudulent. Southwest Gas (SWG) serves behind Southern California Gas. Additionally, on July 2, 2025, I confirmed with SWG that SWG does not authorize marketers or prequalify them to supply transportation customers on their system: as long as the customer is licensed in California, a supplier can operate on the SWG California system. Based on the information provided and verification process taken, I believe NRG was correctly evaluated as technically acceptable.

Id.

Based on our review, the record provides an insufficient basis for us to conclude that the agency's evaluation was reasonable. Once again, information relevant to our review of the agency's evaluation is redacted from the record, and the declaration produced fails to provide sufficient explanation or detail for us to conclude that the agency's evaluation was reasonable. Specifically, the evaluator does not explain how they verified NRG's technical acceptability by website or what was included in any information provided via email. The agency asserts that Southwest Gas operates through Southern California Gas, yet cites a website, which states only that “Southwest Gas' southern division are wholesale customers of [Southern California Gas].” COS/MOL at 7 (emphasis added). Nor does the agency explain why it was acceptable for NRG to be authorized through Southern California Gas when Southwest Gas was identified as the LDC in the solicitation, or the discrepancy with NRG's proposal where it stated it was registered as a supplier with Southwest Gas and not Southern California Gas. In addition, the agency provides no rebuttal to Tiger's assertion as an incumbent contractor for the requirements that it was provided with a list of authorized suppliers by Southwest Gas, even if not published, that does not include NRG.

Simply, the record as produced does not include sufficient information to establish that the agency's judgment was reasonable, sufficiently documented, or that the proposals submitted by Penn Oak and NRG were otherwise technically acceptable. Based on the lack of documentation and analysis in the record, including the little weight we accord the agency's post-protest submissions, we are unable to determine that the agency reasonably concluded that Penn Oak and NRG were technically acceptable. See Ohio KePRO, Inc., B-417836, B-417836.2, Nov. 18, 2019, 2020 CPD ¶ 47 at 13-14 (sustaining protest where the agency failed to adequately document the basis for its conclusion that the awardee's proposal demonstrated the required experience.). Therefore, we sustain these allegations.[5]

Discussions

The protester argues that DLA' s discussions were improper, not meaningful, and contrary to the RFP. Tiger argues that the agency improperly engaged in discussions with Penn Oak regarding its technical acceptability because it was prohibited from doing so once the agency decided to conduct a reverse auction for price negotiations. Supp. Protest at 4-7. The protester also argues that the discussions the agency held with Tiger were not meaningful because the agency failed to advise that it considered Tiger's price to be unreasonably high. Id. at 7-9.

The agency argues that its decision to hold a reverse auction did not preclude it from also holding discussions with offerors regarding their non-price proposals. Supp. COS/MOL at 9-11. The agency also argues that Tiger's challenges to its discussions are untimely and should have been filed within 10 days of the conclusion of discussions, and that it otherwise used the reverse auction to conduct price negotiations with all offerors, including Tiger. Id. at 11-12.

It is a fundamental principle of negotiated procurements that discussions, when conducted, must be meaningful; that is, the discussions must be sufficiently detailed and identify the deficiencies and significant weaknesses found in an offeror's proposal that could reasonably be addressed so as to materially enhance the offeror's potential for receiving award. FAR 15.306(d)(3); General Dynamics Info. Tech., Inc., B-417616.2 et al., Mar. 31, 2020, 2020 CPD ¶ 132 at 11. Regarding the adequacy of discussions involving price, an agency generally does not have an obligation to tell an offeror that its price is high unless the agency finds the offeror's price to be unreasonable or unacceptable. Facility Healthcare Servs., Inc., B-418743.2, B-418743.3, Sept. 2, 2021, 2021 CPD ¶ 313 at 6.

Here, the agency first opened discussions with offerors to address a variety of issues, including some related to the technical proposals. Supp. COS/MOL at 6-7; see also AR, Tab 35, Tiger Discussions Letter at 1-2. After those discussions closed, the agency informed offerors that it would conduct a reverse auction where offerors were allowed to submit final price revisions. AR, Tab 36, Tiger Discussion Closing Letter; Supp. COS/MOL at 7. As noted, the RFP stated the contracting officer “may utilize reverse auctioning to conduct price discussions,” and that if a reverse auction was not conducted, “award may be made on initial offers or following discussions.” RFP at 33; see also id. (“The contracting officer may use reverse auction as the pricing technique during discussions to receive the final offered prices from each offeror.”). There were no other limitations placed on the use of discussions in the solicitation. Thus, nothing in the RFP expressly limited discussions to matters of price, or conversely precluded the agency from using discussions to address non-price issues. Instead, the solicitation simply gave the agency the option to use a reverse auction as a way to conduct discussions with respect to price.

On this record, we agree with the agency that the RFP permitted it to engage in discussions with offerors regarding their non-price proposals, and that DLA was not prohibited from discussing Penn Oak's technical acceptability simply because it would also conduct a reverse auction. Accordingly, we deny the allegation that the agency engaged in improper discussions with Penn Oak.[6]

Regarding the agency's discussions with Tiger, as noted, in its discussions letter the agency included price as one of 10 items it would discuss. According to Tiger, its discussions occurred as follows: “DLA held discussions with Tiger on April 29, 2025 at 1 PM EST via Microsoft Teams. During discussions, DLA did not identify any deficiencies, weaknesses, or significant weaknesses or provide any other substantive feedback on Tiger's proposal. The conversation lasted less than five minutes.” Supp. Protest, exh. P, Declaration of Tiger President at 1. In response, the agency states:

During the discussions with Tiger on April 29, 2025, the [contracting officer] went over identified weaknesses and deficiencies of Tiger's proposal such as missing documentation and expiration of Tiger's [System for Award Management] registration. . . . The [contracting officer] made sure to cover pricing in regard to pricing structure, price conversions, and the reverse auction. The [contracting officer] did not discuss any offerors initial pricing because the reverse auction would be utilized per pricing negotiations.

Supp. COS/MOL at 10-11. According to the agency, Tiger had the same opportunity as all offerors to submit a final price during the reverse auction. Id. at 11.

On this record, we find that the agency's discussions were meaningful and deny this protest ground. While Tiger contends that the agency initially found its price to be unreasonable it has not identified any support for this argument in the record.[7] While the discussions letter sent to Tiger identified price as a topic of discussions, it did not state that Tiger's price was found to be unreasonable. Accordingly, Tiger has not shown that the agency was required to raise Tiger's price during discussions, and the protest challenging the discussions as not meaningful is denied.[8] See Facility Healthcare Servs., Inc., supra.

RECOMMENDATION

We recommend that the agency reevaluate the proposals, reopen discussions consistent with the solicitation if necessary, and make a new source selection decision. If, on the basis of its reevaluation, the agency determines that the proposals from Penn Oak and NRG do not represent the best value to the government, the agency should terminate those contracts for the convenience of the government and make new awards, if otherwise proper. Finally, we recommend that the agency reimburse Tiger the costs associated with filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. § 21.8(d)(1). The protester should submit its certified claim for costs directly to the contracting agency within 60 days after receipt of this decision. 4 C.F.R. § 21.8(f)(1).

The protest is sustained in part and denied in part.

Edda Emmanuelli Perez
General Counsel

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