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September 12, 2022 - Protests & Litigation

August 2022 Bid Protest Roundup: Affiliate Experience, JV Registration

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

In this month’s bid protest roundup, we consider: (1) an exception to the normal rule governing reliance on affiliate experience and past performance; and (2) two different bid protests of very similar solicitation terms that reached opposite conclusions concerning whether a joint venture offeror must be registered in the System for Award Management (SAM). All three protest decisions are timely reminders for offerors to pay close attention to solicitation requirements and restrictions.

KGJJ Engineering Solutions, LLC v. United States: Affiliate Experience and Distinguishing Past Performance

In KGJJ Engineering Solutions, LLC v. United States, the U.S. Court of Federal Claims considered a protest challenging an award on a number of grounds. We will focus on the protester’s successful arguments under the Experience and Past Performance evaluation factors. 

Under the Experience factor, the protester objected that the agency should not have credited the awardee with the experience of its sister companies—that is, other subsidiaries of a common corporate parent. The protester argued that, without the sisters’ experience projects, the awardee on its own would lack the minimum number of relevant experience projects required by the solicitation and would be ineligible for award. The government countered that, as a general rule, an agency may consider the experience or past performance of an offeror’s affiliates if those affiliates (as here) are proposed to have a meaningful role in contract performance. The government further argued that the Past Performance factor expressly permitted consideration of sister company past performance, and the Price factor required information concerning any affiliates (such as sister companies) that would support performance. The government argued this showed that the solicitation contemplated consideration of sister company experience, in accordance with the general allowance for such consideration set forth in case law. 

The court agreed with the government’s articulation of the general rule for affiliate past performance and experience. The court observed, however, that the solicitation here specifically departed from the general rule. The solicitation stated: “The Government will not consider any project submitted for experience that was performed by a firm other than the Offeror.” Although the solicitation immediately provided exceptions for experience from “first-tier small business subcontractors, joint ventures, parent companies, subsidiary companies, predecessor companies, or satellite offices of the offeror,” it included no exception for experience from sister companies. Given the plain language of the solicitation’s prohibition, the procuring agency was not permitted to consider the experience of sister companies.  

The court also rejected the government’s reliance on references to affiliates under other evaluation factors. Although the Past Performance and Experience factors were somewhat similar, they considered different things and, in this solicitation, had different rules for which projects the agency would consider. Thus, the terms of the Past Performance factor shed no light on the rules for the separate Experience factor. Similarly, the fact that an affiliate might support performance and thus have to provide information under the Price factor did not mean that the solicitation permitted that same affiliate’s prior projects to be credited under the Experience factor. Therefore, the court found the agency erred in its evaluation of the awardee’s proposal with respect to Experience. Without the sister companies’ projects, the court found the awardee lacked the minimum number of reference projects required, which meant the awardee’s proposal should have been excluded from the competition.  

The court found a further error in the agency’s consideration of Past Performance. Although the solicitation contained definitions of varying levels of relevance, the protester argued the agency mechanically assigned the same rating of Very Relevant to all submitted projects from all offerors. The protester argued that the record showed offerors submitted projects of widely varying levels of relevance, which the agency irrationally glossed over to the protester’s detriment. The protester also argued the record showed significant variation in the quality of the offerors’ underlying performance records, but the agency assigned all but one offeror the same Substantial Confidence rating. The contemporaneous record did not explain why the agency treated relevance and performance quality as it did. 

The government asked the court to show deference to the agency’s judgment and not dive into the “minutiae” of the evaluation process. The court agreed that deference is ordinarily due to past performance evaluations, but found “[t]here are limits to deference, however, and we draw the line at irrationality.” The court conceded that perhaps there was a rational explanation for why every single project (including apparently less relevant ones) was deemed Very Relevant, and why all but one offeror’s performance history received a Substantial Confidence rating. Because the record did not reveal what that potentially rational explanation was, or whether the agency considered these questions at all, the court found the Past Performance evaluation was prejudicially flawed. The court then entered a permanent injunction against performance of the awarded contract.


  • Agencies generally will, and usually should, consider the experience and past performance of sister companies and other affiliates if those companies are proposed to have a meaningful role in performance. This case is a good reminder that some solicitations rightly or wrongly alter the general rule. Offerors should scrutinize each solicitation’s terms and, if there is a problem or lack of clarity, seek clarifications or object prior to submitting a proposal.
  • This case is also a good reminder that the same solicitation may treat past performance and corporate experience differently, subject to materially different rules. Offerors should be careful to understand those differences and not conflate these distinct evaluation factors. 
  • Under the case law at both the court and the Government Accountability Office (GAO), agencies are entitled to tremendous deference in the ratings they assign for past performance. But, as this case shows, even that deference has its limits if the ratings are irrational, contrary to objective criteria set in the solicitation, or contrary to the underlying record. 

Top Guard, Inc., B-420719: Identity of the Offeror and SAM Registration

This GAO protest involved a State Department procurement for security guard services at the U.S. Embassy to Greece. The solicitation included the standard solicitation provision at FAR 52.204-7 (System for Award Management), which governs registration in the government’s centralized award management database, known as SAM. When included in a solicitation, the SAM provision provides that each “[o]fferor is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance, and through final payment of any contract, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this solicitation.” The solicitation elsewhere similarly warned that “[o]fferors, including any offeror organized as a joint venture, must have an active SAM registration at the time of proposal submission and throughout the procurement process.” (Emphasis added.) 

Top Guard, Inc. formed a joint venture with Mega Guard Services S.A. to submit a propsoal. The joint venture was named T&M Guard. The team’s proposal stated: “Parties hereto have decided to collaborate and participate [i]n said [procurement] as a Joint Venture (hereinafter called the ‘JV’), by submitting a joint offer (hereinafter called the ‘Offer’).” The proposal included a copy of T&M Guard’s joint venture agreement and certified that the offeror was a joint venture, with Top Guard holding majority ownership. The proposal included the unique entity identifiers for both joint venture members (each of which was registered in SAM), but did not include a unique entity identifier for the joint venture itself, which was not registered in SAM. 

The contracting officer determined that T&M Guard, the joint venture offeror, failed to comply with the solicitation’s requirement that each offeror must have an active SAM registration. The agency excluded T&M Guard’s proposal from the competition for this noncompliance. 

In the protest that followed, Top Guard argued that it and not the joint venture was the “official offeror,” and its proposal was compliant because Top Guard was duly registered in SAM. Top Guard pointed to the fact that the joint venture was not a separate corporation or other legal entity and was simply an informal “collaboration” between Top Guard and its Greek partner. The GAO, however, found ample evidence in the proposal to support the contracting officer’s determination that the joint venture itself (and not its managing member) was the real offeror. The GAO also held that, “[t]o the extent that the proposal contained any ambiguity as to the identity of the offeror,” the offeror (not the agency) bore the risk of adverse consequences of that lack of clarity. 

The GAO also rejected the protester’s argument that the SAM registration requirements were not sufficiently clear, as the solicitation included the standard FAR provision and additionally included an express warning that offerors not registered in SAM (specifically including joint venture offerors) would be excluded from the competition. Therefore, the GAO denied the protest. 


  • Offerors should carefully review their proposals for strict compliance with all solicitation requirements—including administrative instructions that may seem trivial. If an offeror has any doubt about what a solicitation requires, it should seek clarification or file an objection prior to submitting a proposal. 
  • Offerors should scrub their proposals to eliminate any ambiguity concerning which entity is the offeror. If a poorly written proposal would confuse a reasonable person as to who the offeror is, the evaluation and any subsequent protest may not go well for the offeror.

G4S Secure Integration LLC, et al., v. United States: SAM Registration

Our final protest decision of the month also involves a State Department procurement of security guard services—this one for the U.S. Embassy to Slovakia. This decision is interesting because the Court of Federal Claims reached a conclusion in this protest that was quite different from the one the GAO reached under the similar solicitation for security guard services in Greece, and different from the conclusion a different judge reached on the same issues in January 2022 with respect to a State Department security guard solicitation for the Embassy to Angola. 

As in our summary of the GAO’s Top Guard decision, the solicitation here incorporated the standard provision at FAR 52.204-7, which requires each “offeror” to have an active SAM registration as of the date of proposal submission. And, as in Top Guard, the solicitation here additionally required “[o]ffer[ors], including any offeror organized as a joint venture, [to] have an active SAM registration at the time of proposal submission and throughout the procurement process” and warned that the State Department would reject a proposal if the offeror was not registered in SAM as of the date of proposal submission. This solicitation, however, also included the following instruction: “If the JV has not formally registered under a single DUNS [in], all JV partners must be registered and provide proof of registration or submission of registration.” (It is not clear whether this provision also existed in the Top Guard solicitation.)

The plaintiffs here, three partners to a single joint venture, were each registered in SAM. But, as in Top Guard, the joint venture offeror itself was not. Although the record showed that the State Department originally considered the proposal to be compliant, the agency documented that it changed its mind following a January 2022 decision of the Court of Federal Claims. In that decision (which is currently on appeal to the Federal Circuit), the court held that an offeror was ineligible for award of a security guard contract in Angola, under a solicitation with similar terms, because the joint venture offeror was not registered in SAM, as FAR 52.204-7 required. Following issuance of the Angola decision, the State Department disqualified the unregistered joint venture’s proposal, just as it did in Top Guard. The joint venture members then filed a bid protest with the court. 

The plaintiffs argued that the State Department materially changed its interpretation of the Slovakia solicitation after proposals had been submitted, due to the decision in the Angola protest. When that change occurred, the plaintiffs argued, FAR 15.206 required the agency to amend the solicitation to give notice of the new interpretation and allow offerors to register their joint ventures in SAM to comply with the new requirement. 

The government argued that the procuring agency did not change anything. Rather, it recognized that it previously misevaluated compliance with an unambiguous solicitation requirement for all joint venture offerors to be registered in SAM, and simply corrected that misevaluation. The terms of the solicitation remained identical, the government argued, and their meaning stayed the same. The government argued that, because FAR 52.204-7 on its face required every offeror to be registered in SAM, the plaintiffs waived any objection to that plain requirement by not protesting or seeking clarification prior to proposal submission. 

The court disagreed. At the outset, it noted that it was not bound by the court’s previous decision in the Angola protest because one Court of Federal Claims judge’s decisions are not binding precedents for other judges of the same court. In any event, the court emphasized, it did not intend to analyze whether the prior decision was correct, but only whether the State Department changed its own interpretation of the solicitation and, if so, whether it was required to advise offerors of the changed interpretation and give them a chance to come into compliance with the new interpretation. 

First, the court observed that, prior to the ruling in the Angola protest, the agency expressly found the plaintiffs’ proposal to be acceptable and compliant with all solicitation instructions. The record suggested the agency’s conclusion at that time rested on the fact that each of the joint venture members was registered in SAM. The court tied this determination to the solicitation’s statement that “[i]f the JV has not formally registered under a single DUNS, all JV partners must be registered and provide proof of registration or submission of registration.” It was not until the competitive range determination that the agency first documented, based upon the recent January 2022 Angola decision, that plaintiffs’ proposal was ineligible for award. The court characterized this “about-face” as “a change in State’s interpretation of the SAM registration requirements.”

Second, the court addressed the government’s argument that FAR 52.204-7 and the solicitation instructions unambiguously required joint venture offerors to be registered in SAM, which the joint venture offeror here plainly was not. The court observed that the solicitation also said that “[i]f the JV has not formally registered under a single DUNS, all JV partners must be registered and provide proof of registration or submission of registration.” It also accepted the plaintiffs’ argument that certain elements of this solicitation referred to a joint venture’s individual members as the “offeror.” Finally, the court noted the plaintiffs’ assertion that, in prior procurements for similar services, the State Department did not require unincorporated joint ventures to be registered in SAM as long as their constituent members were registered. 

Taking all this together, the court attempted to avoid a contradiction within the solicitation by finding that, at least for unincorporated joint ventures in this particular solicitation, “offeror” must refer to the joint venture’s constituent members rather than the joint venture itself. Although the government argued this interpretation was inconsistent with the plain meaning of the word “offeror,” the court observed that the only alternative to this interpretation was that the solicitation was internally contradictory. That is, if “offeror” did not mean the joint venture members, then the solicitation both required joint ventures to register in SAM, but simultaneously allowed joint ventures not to be registered in SAM—since being “formally registered under a single DUNS” number was the only way for an entity to register in SAM. To avoid a contradiction in the solicitation, the court adopted this unusual definition of “offeror.” 

The court found it unnecessary to determine what FAR 52.204-7’s SAM registration admonition means for joint ventures. Rather, the court assumed for the sake of argument that it does require unincorporated joint ventures to be registered in SAM, making the solicitation ambiguous. The court nevertheless found that the plaintiffs were not required “to raise with State prior to proposal submission a potential conflict between the SAM requirements in Section L of the solicitation and the requirements of FAR 52.204-7.”

The court held that any ambiguity was merely “latent” because, in the court’s view, the ambiguity came to light only after the January 2022 decision in the Angola protest. Unlike “patent” (that is, obvious) ambiguities, there is no requirement for an offeror to raise “latent” (that is, less obvious) ambiguities prior to submitting a proposal. The court also noted that the Angola decision included a sophisticated and careful examination of the regulatory history of FAR 52.204-7, which the court found to undercut an argument that the provision’s meaning was clear on its face. 

The court also held that, even if the ambiguity in the solicitation were patent, the plaintiffs still had no duty to seek clarification because seeking clarification “would have been futile” here. The court found that, if the plaintiffs had asked the State Department prior to proposal submission whether unincorporated joint ventures had to be registered in SAM, the record was clear that the agency would have responded that they did not—because, prior to the Angola decision, the agency’s interpretation was the same as the plaintiffs’. 

The court then concluded that, because the agency’s interpretation of its own solicitation had changed in January 2022, after proposals were received, FAR 15.206 required the agency either to amend the solicitation and allow offerors to correct their registrations in light of the changed interpretation, or cancel the solicitation and start over. It was not permitted simply to disqualify the plaintiffs’ proposal. The court issued a permanent injunction and directed the government to proceed in accordance with the decision. 


  • The clearest takeway is that different judges on the Court of Federal Claims can consider materially identical language in similar solicitations and reach very different conclusions both from each other and from the GAO. 
  • It is difficult not to conclude that the terms of this solicitation were internally contradictory and should have been clarified or challenged prior to proposal submission. Failure to do that ordinarily results in waiver of any subsequent protest of those terms. Although the plaintiffs managed to persuade the court to apply an exception to the waiver rule here, a safer approach (and one generating fewer legal fees) would have been for prospective offerors to seek clarification prior to submitting their proposals.