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March 21, 2019 - Protests & Litigation

Hope(less) Village Finds Hope at the GAO

GAO Bid Protest Statistics for FY 2019

While February is the shortest month of the year, there was certainly no shortage of bid protests at the Government Accountability Office (“GAO”), which is why we decided to supplement our monthly Bid Protest Round-up with a bonus summary.

In Hope Village, Inc., the GAO found itself tasked with deciding a matter that has made its way into the Washington Post on more than one occasion.  In November 2018, the Washington Post reported on the protest filed by Hope Village, a private Washington, D.C. halfway house, on a five-year $60 million contract with the Bureau of Prisons (“BOP” or “Agency”) awarded to CORE DC, a subsidiary of a Florida-based organization.  Hope Village opened in 1978 and, according to a 2019 Washington Post article, “enjoyed a monopoly for more than a decade on housing D.C. men released from prison, winning more than $125 million in federal contracts since 2006.”

The solicitation contemplated a best-value tradeoff considering three factors:  past performance, technical/management, and price.  The technical evaluation factor was divided into six subfactors.  Relevant to this protest was the site location subfactor, which considered, among other elements, site validity and suitability.  The solicitation informed offerors that the agency would consider the validity of the offeror’s right to use the site and the responsiveness to the proximity requirements outlined in the Statement of Work (“SOW”).  Specifically, the RFP requested evidence of the offeror’s right to use its proposed site, supported with “deeds, leases, bills of sale, options to lease, options to buy, contingency leases or contingency deeds.”

The SOW provided further guidance for inmate referral and intake processing, requiring the contractor to accept all inmates, including sex offenders and violent offenders, unless “local and/or state laws or ordinances do not allow for placement of a specific type of referral,” in which case the RFP required the offeror to identify such law or ordinance.

The Agency established a competitive range, including Hope Village and CORE DC.  At that time, the BOP informed Hope Village that its proposal received Unsatisfactory ratings under the site location subfactor for failure to indicate whether it would accept all offenders or otherwise provide proof of law or ordinance prohibiting it from doing so.  The BOP reminded Hope Village of the solicitation requirements and specifically requested its plan for accepting referrals.  However, the Agency’s final discussion notice advised Hope Village that it had not made clear whether it planned to accept all offenders regardless of classification and required an affirmative response or evidence of law or ordinance precluding acceptance in its final proposal revision (“FPR”).  Upon review of the FPRs, the Agency determined that Hope Village still had not satisfied the solicitation requirements and assigned it another unsatisfactory rating for the site validity and suitability element.  As a result, CORE DC was awarded the contract.

Hope Village protested the award on November 1, 2018, contesting the Agency’s evaluation of its proposal and arguing that CORE DC’s proposal failed to provide sufficient proof of its right to use the proposed facility.

Hope Village presented several arguments in support of its improper evaluation claim.  Notably, it alleged that the agency failed to conduct meaningful discussions concerning the acceptance requirement.  After determining that the solicitation unambiguously required offerors to accept all offenders or otherwise identify the legal authority precluding it from doing so, the GAO reviewed the record to determine whether meaningful discussions took place.  GAO found that the Agency repeatedly informed Hope Village, over the course of several discussions, that its proposal failed to address Solicitation requirements and was therefore deficient.

Hope Village’s second claim argued that CORE DC’s proposal failed to address Solicitation requirements.  The solicitation required offerors to submit official documentation demonstrating its right to use its proposed property.  The official documentation was limited to “deeds, bills of sale, options to lease, options to buy, contingency leases, or contingency deeds.”  CORE DC provided a letter of intent to lease signed by both CORE DC and the landlord and a copy of a master lease as proof of its right to use.  The Agency argued that because the letter of intent provided that it was “contingent” on CORE DC winning the contract, the parties actually entered into a contingency lease.  The GAO disagreed.  Aside from the fact that the enumerated list of qualifying documents did not include “letter of intent,” the letter expressly indicates that it is not a lease because a final lease would be negotiated in the future.  Moreover, the letter provides that the lease would become null and void if CORE DC failed to win the award by May 1, 2017 – a date that had come and gone by the day of award.  The GAO held that the agency failed to consider the legality of the instrument, the nature of the interest, or the continued viability of the letter of intent, factors the Agency was required to consider.  As such, the GAO recommended the Agency reopen competition, conduct discussions, and prepare a new source selection decision.

Takeaway:  We have written before about the importance of ensuring compliance with solicitation requirements.  This case is the perfect example of both parties attempting to interpret unambiguous language in a manner best suited for their arguments.  The plain language of the solicitation governs, always.  The case also highlighted another risk (for CORE DC) of an agency taking an extended period of time to actually make an award decision.