May 7, 2021 - Protests & Litigation

APRIL 2021 BID PROTEST ROUNDUP (LAW360 SPOTLIGHT)

Protests and LitigationThis installment of our monthly Law360 bid protest spotlight examines three protest decisions addressing (1) mismatches between proposed labor categories and the scope of a vendor’s underlying General Services Administration (GSA) schedule contract; (2) whether an agency improperly used an unstated evaluation criterion; and (3) whether unsuccessful Team Leaders under a GSA co-prime Contractor Team Arrangement (CTA) have standing to protest when they have obtained awards as Team Members.


In Deloitte Consulting, LLP,[i] the GSA sought to modernize cybersecurity and privacy processes, capabilities, and services for more than 200 information systems using an “enterprise wide approach” under a Federal Supply Schedule (FSS) task order (FAR subpart 8.4) solicitation. The agency required five specific services: (1) cybersecurity support project management; (2) security architecture and innovation; (3) governance, risk, and compliance; (4) strategic initiatives; and (5) privacy program support. Vendors were required to submit fixed-price labor rates based on existing FSS contract labor categories. The protester alleged the services reflected in the awardee’s quotation exceeded the scope of the FSS labor categories on which the awardee based its quotation.

The Government Accountability Office (GAO) sustained the protest. The GAO noted that although the FSS program “gives federal agencies a simplified process for obtaining commonly used commercial supplies and services,” this simplified process does not allow an agency to purchase goods or services not contained within an awardee’s underlying FSS contract. To the contrary, “all goods or services quoted must be on the vendor’s schedule contract as a precondition to its receiving the order.”

The GAO concluded the labor categories in the FSS contract could not be reasonably interpreted to include the services quoted by the awardee and required by the agency. For example, the awardee quoted that a “Systems Programmer II” would provide expertise regarding compliance with Housing and Urban Development privacy policies, procedures, or legal statutes. However, the FSS labor category provides only for programming and/or coding activities. Similarly, the awardee asserted that a “Systems Analyst I” would stay “abreast of cybersecurity and privacy developments” and share such knowledge with the project team, but the FSS labor category did not reference such knowledge or expertise.

The GAO therefore recommended that the agency terminate the task order for the convenience and either reopen discussions or issue an order to the vendor next in line, while reimbursing the protester its costs.

Takeaways

Although vendors may be eager to compete for available task orders and contracts, it remains vital that vendors in competitions under the FSS program be careful not to propose labor categories or items they do not offer under their FSS contracts. Doing otherwise could risk the viability of an otherwise well-written proposal.


In Harmonia Holdings, LLC,[ii] an unsuccessful offeror raised a bevy of challenges to the U.S. Department of Agriculture’s (USDA) award of a contract for operations and maintenance support services and help desk support. Of note, the protester alleged the USDA relied on an unstated evaluation criterion when evaluating and comparing the offerors’ past performance. This criterion evaluated the offerors’ “familiarity with or experience with AMS Market News strategic and business objectives along with [its] understanding [of] data collection and reporting requirements.” But for the use of the challenged criterion, the protester would have outscored the incumbent awardee on the non-price evaluation factors, which were “significantly more important than price.”

The U.S. Court of Federal Claims (“COFC”), however, denied the protest because the cited evaluation criterion was implicit in the explicit criteria in the solicitation. Noting that a solicitation “need not identify criteria intrinsic to the stated evaluation factors,” and that agencies “retain great discretion in determining the scope of a given evaluation factor,” the Court stated that the protester had to show that the agency had “used a significantly different basis in evaluating the proposals than was disclosed,” to prevail in the protest. The Court held the protester did not satisfy its burden.

The COFC found the challenged criterion was not “significantly different” from the disclosed criterion evaluating vendors’ past performance with prior contracts consistent in size, scope, and complexity to the performance work statement. The Court reasoned that the agency giving added weight to a competitor’s experience performing “essentially the same work” as described in the performance work statement could not surprise a vendor.

In so holding, the Court also found unpersuasive the protester’s argument that use of this evaluation criterion in a commercial service procurement would circumvent the purpose of maximizing competition. The Court found it reasonable that an agency would favor a vendor with experience with off-the-shelf software and a solid performance record of servicing such software in the particular context the agency sought. The Court therefore found no reason to question the agency’s assignment of an “enormous risk factor” to the protester’s lack of prior, proven experience with Market News, especially given the potentially large economic impact of any interruption of the systems for pricing market commodities.

Takeaways

Agencies may not use unstated evaluation criteria when evaluating proposals, but what is “unstated” is a matter of interpretation. The Court’s decision, which is consistent with the case law at the GAO, shows that much can be said “in between the lines” of a solicitation requirement, and that agencies typically will receive deference for evaluation criteria implicit in a solicitation.


In Sirius Federal, LLC,[iii] the GSA sought to award multiple firm-fixed price Blanket Purchase Agreements (BPA) under GSA Information technology (IT) Schedule 70 for hardware and software commodities, ancillary supplies, and services. The solicitation allowed offerors to compete for award using CTAs designating a Team Lead and supporting Team Members. Although CTAs were to differentiate between the Team Lead and Team Members, the solicitation explicitly advised that, in the event the GSA selected a CTA for award, the CTA Team Members were not subcontractors because each Team Member has privity of contract with the GSA.

Certain unsuccessful offerors, who were Team Members of CTAs that won BPA awards but who were not successful in obtaining a BPA as a Team Leader, protested the GSA’s awards. Following the protests, Defendant-Intervenors moved for dismissal of these protests for lack of standing. Defendant-Intervenors argued the protesters’ status as successful CTA Team Members precluded their standing to protest as an unsuccessful Team Leader.

The COFC disagreed. First, the Court rejected the Defendant-Intervenors’ argument that awardees can never have bid protest standing, noting that the Court’s decision in National Air Cargo Group, Inc. v. United States, 126 Fed. Cl. 281, 295 (2016), expressly held that “status as a contract awardee does not by itself deprive this court of bid protest jurisdiction.” Second, the Court rejected the argument that the Court lacks jurisdiction over cases challenging a protester’s own contract award, distinguishing such cases because they largely arose in the pre-award context and challenged the terms of the procurement. Finally, the Court rejected the argument that the protesters were not “interested parties” with standing to protest because of their BPA awards as CTA Team Members. The Court explained that the protesters possessed a “direct economic interest” in challenging their rejection as CTA Team Leaders due to the “significant differences” between CTA Team Leaders and CTA Team Members, including the right of CTA Team Leaders to add or remove CTA Team Members. The Court also noted that Defendant-Intervenors’ decisions to defend their awards as CTA Team Leaders, when they too were selected as CTA Team Members under a third BPA, undermined their interested party argument. The Court reasoned it was hard to find the Defendant-Intervenors had sufficient interest in defending their awards as CTA Team Leaders, but protesters did not have a similarly sufficient reason to pursue CTA Team Leader awards.

Although the Court found the protesters had standing, the Court ultimately denied the motions for a preliminary injunction, finding the protesters did not establish a likelihood of success on the merits.

Takeaways

This case is a crash course on the differences between GSA CTAs – in which the Team Leader and Team Members serve as co-primes with privity of contract with the Government – and ordinary teaming arrangements, which are either a prime contractor-subcontractor relationship or a joint venture or partnership. Ordinarily, team members (such as subcontractors and individual Joint Venture members) lack standing to protest because they would not have privity of contract with the Government, but this is not the case with the GSA’s CTA.

Given the Court’s reliance, in part, on the National Air Cargo decision to justify this result, this decision also raises a question as to whether the GAO would have decided this case differently. Before the COFC reached its decision in National Air Cargo, the GAO had, in fact, reached the opposite conclusion, holding that where the solicitation contemplates multiple awards, an existing contract awardee is not an interested party to challenge the agency’s decision to award another contract. Thus, this decision is remarkable also because it may reveal another split between COFC and GAO law.


[i] Deloitte Consulting, LLP, B-419508; B-419508.2 Apr. 15, 2021.

[ii] Harmonia Holdings Group, LLC v. United States, No. 21-836C (Fed. Cl., Mar. 19, 2021; reissued Apr. 5, 2021).

[iii] Sirius Federal, LLC (f/k/a Force 3, LLC), CDW Government LLC, Countertrade Products, Inc., and Blue Tech Inc. v. United States, No. 21-1030C, 21-1041C, 21-1043C, 21-1053C (Fed. Cl., Mar. 29, 2021; reissued Apr. 14, 2021).