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March 23, 2018 - Protests & Litigation

Bait-And-Switch And Unavailable Key Personnel (Post-Award Protest Primer #14)

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

The bait-and-switch in the salesman’s world involves enticing a prospective customer with an unbelievably good deal, only to switch it at the last moment with a bargain that is considerably less attractive to the buyer, and far more profitable for the seller.

A version of the bait-and-switch exists in the world of bid protests, too.  In its classic form, it goes like this.  An offeror proposes to use specific, wonderful personnel.  The agency is impressed, giving the offeror credit for this proposal—perhaps in the form of high technical ratings, which contribute to its winning the contract.  After the contract is awarded, the contractor informs the agency of something it knew all along:  that the named personnel sadly won’t be able to participate, and that bargain-brand personnel will take their place.  This unscrupulous practice—which, in our experience, is rare—is a kissing cousin of fraud and could give a successful offeror more than a protest to worry about.

The GAO has outlined the elements of a bait-and-switch protest ground:

In order to establish an impermissible “bait-and-switch,” a protester must show:  (1) that the awardee either knowingly or negligently represented that it would rely on specific personnel that it did not have a reasonable basis to expect to furnish during contract performance, (2) that the misrepresentation was relied on by the agency, and (3) that the agency’s reliance on the misrepresentation had a material effect on the evaluation results.

Patricio Enterprises Inc., B-412738; B-412738.2, May 26, 2016, 2016 CPD ¶ 145 at 4.  That’s what a bait-and-switch protest ground is.

Now for what it isn’t.  If the offeror intended or hoped to use particular personnel, but did not represent in its proposal that it would, that is not a bait-and-switch—because there is no “baiting.”  Computers Universal, Inc., B-292794, Nov. 18, 2003, 2003 CPD ¶ 201 at 3 (“Here, the RFQ did not require offerors to include the name or resume of the individual proposed, and [the awardee] did not provide that information.  Accordingly, there could be no improper ‘bait and switch.’”).  Nor are mere attempts to recruit incumbent personnel signs of a bait-and-switch, without evidence that the offeror additionally did not intend to provide the key personnel identified in its proposal.  See Apptis Inc., B-403249; B-403249.3, Sept. 30, 2010, 2010 CPD ¶ 237 at 8-9.

Finally, it sometimes happens that, despite an offeror’s reasonable expectations, key personnel proposed for certain tasks become unavailable through no fault of the offeror.  This unexpected unavailability is not a misrepresentation, and consequently is not bait-and-switch—because what the offeror stated was not a knowing or negligent falsehood.  If the offeror learned of the unavailability only after contract award, the matter will be treated as contract administration, which the GAO will not review.  If, however, the offeror becomes aware of the unavailability of proposed key personnel before award, it is required to inform the agency of that fact, even if proposals already have been submitted.  See Greenleaf Constr. Co., Inc., B-293105.18, B‑293105.19, Jan. 17, 2006, 2006 CPD ¶ 19 at 10.  And, once the agency is aware that one of the offeror’s proposed key personnel is unavailable, the agency is required either to reject the offeror’s proposal as unacceptable or open discussions with all offerors (thereby allowing the offeror to propose a replacement for the unavailable key personnel).  Gen. Revenue Corp. et al., B-414220.2 et al., Mar. 27, 2017, 2017 CPD ¶ 106 at 22.  If the offeror doesn’t tell, or if the agency doesn’t open discussions or reject the proposal once it finds out about the pre-award unavailability, an award to that offeror is impermissible.  This protest ground is not about bait‑and-switch, but rather about an awardee’s proposal being unacceptable.

Bait-and-switch protest grounds are not frequently sustained, probably because most offerors in the real world do not set out to deceive the Government.  Often, what initially looks like a bait‑and-switch to an outside observer turns out to be missing one of the essential elements when all the facts come to light.  Pre-award unavailability of key personnel occurs more frequently, which is why it is usually a good idea for offerors to require signed letters of commitment from people proposed to fill key positions.