March 7, 2022 - Protests & Litigation

February 2022 Bid Protest Roundup: Key Personnel Changes, Agency Computer Glitches, and Ambiguous Solicitations

This month’s roundup considers three recent protests: (1) an important decision by the Court of Federal Claims rejecting controversial precedents of the U.S. Government Accountability Office (GAO) concerning key personnel unavailability; (2) a cautionary tale from the GAO, where an agency computer system prevented an offeror’s timely proposal from being considered; and (3) a protest that the Court of Federal Claims sustained due to a latently ambiguous solicitation after the GAO denied an earlier protest on exactly the same facts.

Key Personnel Unavailability: Golden IT, LLC v. United States[i]

The most interesting protest decision of February was Golden IT, LLC v. United States. There, the Court of Federal Claims considered whether an offeror has a general obligation to notify a procuring agency if it learns, after proposal submission but before award, that one of its proposed key personnel will be unavailable to perform. The court’s answer runs contrary to a longstanding line of decisions at the GAO and sets up a “split” between these two protest fora.

In Golden IT, a request for quotations (RFQ) required offerors to propose various key personnel positions. Spatial Front, Inc., the eventual awardee, proposed one of its own employees, “Mr. JH,” as a key person. The RFQ did not require letters of commitment.

On May 20, 2021, Spatial Front submitted its quotation. At some time that same month, Mr. JH left Spatial Front and took a job with a different company. Spatial Front did not disclose that fact to the agency. Four months later, the agency awarded the order to Spatial Front.

The protester filed a post-award protest at the Court of Federal Claims, challenging the award on various bases. From the procurement record produced in response to the protest, the protester learned the names of Spatial Front’s key personnel, ran them through LinkedIn, and discovered that Mr. JH quit his job at Spatial Front months before award. The protester then alleged the awardee “misrepresented the availability of Mr. [JH] either when it submitted its quote or because it failed to notify the Agency of the material change to its quote when it had knowledge of Mr. [JH]’s unavailability.” The protester concluded that the awardee “should either have received a significant weakness for this issue or it should be ineligible for award.”

Under the GAO’s decisional law, if an offeror gains actual knowledge before award that a proposed key person is no longer available, the offeror must inform the procuring agency of that fact. Once notice occurs, the agency’s only options (according to the GAO) are to reject the proposal as unacceptable because it no longer complies with a material requirement, or (re)open discussions with all offerors in the competitive range and request revised proposals. The GAO treats a failure to disclose pre-award unavailability of key personnel as a material misrepresentation.

The court, however, declined to apply the GAO’s rule.

The court acknowledged that “an offeror may not knowingly misrepresent a material fact in a proposal for the purpose of winning a government contract.” To avoid a misrepresentation, “an offeror must have a reasonable basis for all facts and representations made in its proposal—and may not knowingly or recklessly include false statements of material fact.” Breaking with the GAO, however, the court further held that any assessment of an offeror’s knowledge of facts and representations “is made with respect to the point in time at which the offeror submitted its proposal.” As long as the proposal was accurate as of the time the offeror submitted it, the court held there is no misrepresentation.

The court found no legal basis for the GAO’s rule that offerors must advise agencies of material changes in proposed staffing when the changes are discovered after the final (or only) proposal submission. Particularly when procurements may stretch out over months or even years, the court acknowledged that it was inevitable that some details might change.

The court noted that this RFQ did not require letters of commitment or other assurances of the continued availability of key personnel. Nor did it impose ongoing notification requirements. Had the RFQ contained such specific terms, the court suggested the legal analysis might have been different.

Having declined to “conjure up a rule” requiring offerors to report post-submission changes in key personnel availability, the court examined whether the awardee knew of Mr. JH’s unavailability as of the date it submitted its quotation. The court appeared sympathetic to the protester’s argument that the awardee must have known of the unavailability at quotation submission, as the awardee submitted its quotation on May 20, but LinkedIn stated that Mr. JH began working at a different company that very month. The court observed, though, that the administrative record in a protest is unlikely ever to contain evidence of an awardee’s misrepresentations, and suggested that it might have been willing to grant a motion for limited discovery to obtain such evidence. But because the protester filed no such motion, the court declined to order it sua sponte. Absent evidence in the record that the awardee’s quotation contained a material misrepresentation as of the date of quotation submission, the protester failed to meet its burden of proof.

Takeaways

The court’s holding in Golden IT is a common-sense alternative to the GAO’s much-criticized rule. Although Golden IT is not binding on the GAO or other judges of the court, it may focus attention on the need for reform in this area of law. In the meantime, offerors disqualified from a procurement because of post-submission unavailability may consider filing protests with the Court of Federal Claims to challenge those disqualifications, at least in procurements over which the court has jurisdiction. Companies should promptly raise any pre-award key personnel unavailability with their counsel to determine how best to handle the issue in light of specific solicitation requirements and this evolving area of law.

Government Computer Glitches: AttainX, Inc., B-420313[ii]

Savvy offerors know to submit proposals to the correct location, well before the deadline, and to obtain confirmation that the proposal was received. Failure to take these steps may result in disqualification. In Attain X, the offeror took all of these steps, but its proposal still was excluded from consideration through no fault of its own.

The agency issued an RFQ that required offerors to send quotations electronically to the designated contract specialist’s email address. AttainX submitted its quotation to the specified email address nearly two hours before the deadline. Shortly thereafter, AttainX received the following confirmation of delivery from the government computer system: “Delivery to these recipients or groups is complete, but no delivery notification was sent by the destination server: [XXX]- NOAA Federal ([XXX.XXX]@noaa.gov).” Contrary to the government computer’s statement that delivery to the designated recipient was complete, the system “quarantined” AttainX’s quotation and gave no one any notice of that fact. Not long afterward, the contract specialist quit her job and was replaced. The agency gave offerors no notice of that fact and no new point of contact for the procurement.

Three months later, AttainX began emailing the solicitation’s designated contract specialist for any updates on the status of the procurement. Some emails generated error messages, while others did not, but no one responded. The offeror also tried to call the contract specialist, to no avail.

Eventually, AttainX learned that the former contract specialist had been replaced, and it promptly contacted her replacement about the procurement. The new contract specialist stated she had no record of AttainX’s quotation and volunteered: “I know we have been having issues with emails sometimes being quarantined and we don’t see the quarantined emails.” She also stated that, as a result of these government computer problems, more recent RFQs (but not this one) encouraged offerors to contact the listed specialist to confirm receipt prior to the submission deadline. She informed the company that the order had already been awarded, the former specialist probably never saw AttainX’s quotation, and by now her email account (and AttainX’s quotation) probably had been deleted. The agency said nothing could be done about it and “apologize[d] for the inconvenience.”

In the GAO protest that followed, it emerged that the agency’s computers received AttainX’s quotation on time and the system generated an automatic confirmation of delivery to the intended recipient, as the protester claimed. At that time, just as the new contract specialist suspected, the government system quarantined the email through no fault of AttainX, and without notice to anyone. AttainX did not fail to follow any instructions and showed no lack of diligence. Nevertheless, the GAO denied the protest.

Citing decisions from the early 1990s, the GAO held that, in circumstances where the government loses a proposal:

a protester is not entitled to relief absent evidence of a conscious or deliberate effort by contracting personnel to prevent selection of that firm or when the record demonstrates that the loss was not an isolated incident, but rather, was part of a systemic failure on behalf of the agency such that the procedures in place to receive and safeguard quotations cannot be considered reasonable.

The agency’s computer experienced precisely such systemic failures, which is how the new contract specialist readily guessed the problem, and why the agency had begun warning offerors to get confirmation of receipt from a human being. The GAO nevertheless found there was no conclusive evidence “that this was a known problem at the time the agency received quotations under the solicitation.” (Although the GAO would not order it, one wonders whether some “limited discovery” of the sort the Court of Federal Claims referenced in the Golden IT case might have turned up evidence of systemic problems in the computer system prior to award of the order.) The GAO also noted AttainX’s quotation was the only one quarantined in this procurement, whereas all other offerors’ quotations made it to the contract specialist’s inbox.

Under these facts, and because the awarded order was already two months into performance by the time the protester learned of either the award or the problem, the GAO held that “[t]he agency’s need for an orderly and expeditious fulfillment of its requirements weighs against our Office disturbing the award under these circumstances.” Therefore, it denied the protest.

Takeaways

As the GAO found, AttainX basically did everything right, and its quotation did not receive fair consideration. AttainX nevertheless lost its protest. In hindsight, perhaps it should have contacted the contract specialist to confirm receipt prior to the deadline, notwithstanding the government computer’s message that the quotation was delivered to the designated recipient. Of course, an email requesting confirmation may have ended up in the quarantine, too, and who knows if the contract specialist was answering her phone that afternoon. An exhortation to leave nothing to chance and not to trust automated messages is likely the only actionable takeaway from this protest.

Ambiguous Solicitation Terms: CGS-SPP Security Joint Venture v. United States[iii]

Our final protest is similar to AttainX in that it involves a proposal that was received but not evaluated.  And it is similar to Golden IT in that the Court of Federal Claims and the GAO reached opposite conclusions.

The solicitation at issue in CGS-SPP Security Joint Venture v. United States identified the State Department’s Office of Acquisition Management as the issuer, designated Fabiola Bellevue as the contracting officer, and advised offerors to email Nicholas Cloutier “for information.”

Under a section entitled “Designation of Administrative Contracting Office,” the solicitation provided the contact information for Crystal Sutliff as the “Primary Contracting Officer (CO)” and the contact information for Mr. Cloutier as the “Authorized Department of State Contract Specialist.” Mr. Cloutier was designated as the point of contact for any questions or clarifications.

The solicitation required offerors to submit proposals by email but designated no email address as the required addressee. Instead it cross-referenced another part of the solicitation for the required recipient, and that cross-referenced section provided only a physical mailing address for the agency’s Office of Acquisition Management. The solicitation nowhere identified any specific person as a necessary recipient of proposals or a specific email address to which offerors had to send their proposals.

The protester timely emailed its proposal to both of the contracting officers designated in the solicitation. It also emailed the proposal to a third contracting officer not identified in the solicitation. The cover page of each of proposal volumes additionally named “Nicholas Cloutier, Contracting Officer [sic]” as the intended addressee of the proposal, although the protester did not email a copy of the proposal to him. The subject line of the transmittal email identified the procurement by the correct solicitation number.

Although the solicitation did not say so, the agency intended for offerors to email their proposals to Mr. Cloutier, the contract specialist. Because the protester did not do so, and because none of the contracting officers who received the proposal forwarded it to Mr. Cloutier, the agency did not evaluate the proposal at all. The agency awarded the contract to another offeror, but failed to post public notice of the award to SAM.gov.

Three months later, a commercial site published news of the award, which the protester saw. The protester contacted the agency and was told the agency did not receive or consider the protester’s proposal. According to the agency, the protester was required to submit its proposal to Mr. Cloutier and, because it did not, its proposal was ineligible for award.

The protester first filed a protest with the GAO.[iv] The GAO did not accept the agency’s argument that the solicitation expressly required offerors to submit their proposals to Mr. Cloutier. But it dismissed the protest anyway, finding the solicitation was “defective on its face” because it failed to specify the person who should receive the proposals. Because the protester did not inquire about or protest that defect prior to proposal submission, the GAO dismissed the protest as untimely.

The protester refiled its protest with the Court of Federal Claims. The protester argued that, contrary to the GAO’s view, the solicitation was not defective. Rather, “all [an offeror] had to do to comply with the RFP was to deliver its proposal by email to the government office by the deadline, and no terms of the RFP impose a stricter requirement.” The government, somewhat ironically, took the position that its solicitation was not only defective, but obviously so—and thus contained a patent defect the protester did not timely challenge, as the GAO found.

Citing the Federal Circuit’s seminal decision in Blue & Gold Fleet, L.P. v. United States, the court acknowledged that:

where a government solicitation contains a patent ambiguity, the government contractor has ‘a duty to seek clarification from the government, and its failure to do so precludes acceptance of its interpretation’ in a subsequent action against the government.[v]

The court found both parties’ readings of the solicitation to be reasonable. The plaintiff, for its part, complied with what the solicitation literally required. But the government’s position (that offerors should have guessed that the agency really wanted proposals to be sent to the designated contract specialist) was not unreasonable, either. Thus, the solicitation was ambiguous. Diverging from the GAO’s view, the court found the ambiguity was not so obvious as to be patent:

Either Ms. Sutliff or Mr. Cloutier appears to have been a permissible recipient of a proposal to comply with the terms of the RFP. The ambiguity is apparent now, in hindsight, only because State is arguing that the recipient should have been one official rather than the other, albeit without direct textual support in the RFP. This defense relies on an after-the-fact, unstated requirement not apparent from the face of the RFP.

Thus, the ambiguity was latent (i.e., not plainly apparent). Although the court found the question to be “a close one,” and noted the protester “must bear some degree of fault” for not having inquired whether the agency wanted offerors to send proposals to a particular recipient, “these errors by the plaintiff do not outweigh State’s error in failing to specify in the RFP the lone proper [intended] recipient of proposals.” Therefore, the court sustained the protest and ordered the government to “either recompete the contract or revisit the proposals submitted in response to the original solicitation, to include the plaintiff’s proposal.”

Takeaways

There are three takeaways here. First, if an important part of a solicitation is not clear or seems to lack important information (such as where to email a proposal), it usually is best to ask for clarification before submitting one’s proposal.

Second, when an adverse GAO decision is premised on a legal analysis that may not be universally shared, a follow-on protest at the Court of Federal Claims may achieve a different result. Although “second bite” protests at the court almost always reach the same result that the GAO did, this decision and other recent court cases demonstrate that it is not always so.

Finally, agencies should take more care with their procurements. The agency here had multiple opportunities to avoid this sustained protest and minimize its impact: (1) by not issuing what it claimed was a patently defective solicitation in the first place; (2) by one of the recipients of the proposal simply forwarding the proposal to the contract specialist; and (3) by posting prompt notice of the award on SAM.gov and thereby avoiding a protest several months into contract performance.

[i] Golden IT, LLC v. United States, No. 21-1966C (Feb. 4, 2022).

[ii] AttainX, Inc., B-420313, Jan. 31, 2022, 2022 WL 292947.

[iii] CGS-SPP Security Joint Venture v. United States, No. 21-2049C (Feb. 3, 2022).

[iv] Continuity Glob. Sols.-SPP Sec. Joint Venture, B-419997, Oct. 12, 2021, 2021 CPD ¶ 340.

[v] 492 F.3d 1308, 1381 (Fed. Cir. 2007) (quoting Stratos Mobile Networks USA, LLC v. United States, 213 F.3d 1375, 1381 (Fed. Cir. 2000) (quoting Statistica, Inc. v. Christopher, 102 F.3d 1577, 1582 (Fed. Cir. 1996))).