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April 05, 2019 - Protests & Litigation

March 2019 Bid Protest Roundup

GAO Bid Protest Statistics for FY 2019

This month’s bid protest round-up includes decisions from the Court of Federal Claims and the Government Accountability Office regarding the Competition in Contracting Act (CICA) automatic stay, agency responsibility and discretion, and the importance of complying with solicitation requirements.

Technica LLC v. United States and Aviation Security Management LLC, No. 18-2003C, February 22, 2019.

Technica LLC involved the United States Department of Homeland Security, Transportation Security Administration’s (the “Agency”) decision to override the automatic stay of contract performance required by the Competition in Contracting Act (“CICA”).  Technica LLC (“Technica”) alleged that the Agency’s override decision was arbitrary and capricious and asked the Court of Federal Claims (“COFC”) to enjoin the Agency and awardee from performing.

When the TSA authorized the override of the automatic stay of performance, the contracting officer cited “urgent and compelling circumstances” and supported its decision using the four‑part test established in Reilly’s Wholesale Produce v. United States.  73 Fed. Cl. 705, 711 (2006).  The test provides relevant factors the Agency should consider when asserting urgent and compelling circumstances:

(1) “whether significant and adverse consequences will necessarily occur if the stay is not overridden”;

(2) “whether reasonable alternatives to the override exist”;

(3) “how the potential cost of proceeding with the override, including the costs associated with the potential that the GAO might sustain the protest, compare[s] to the benefits associated with the approach being considered for addressing the agency’s needs”; and

(4) the impact of the override on competition and the integrity of the procurement system, as reflected in CICA.

Nortel Gov’t Sols., Inc. v. United States, 84 Fed. Cl. 243, 247 (2008) (citing Reilly’s Wholesale, 73 Fed. Cl. at 711).  Although the Agency is not required to apply the Reilly factors, the COFC has often used them to determine whether an override was arbitrary and capricious.  Here, the Agency urged the COFC to simply make a finding rather than analyzing the factors, arguing that the factors were not dispositive.  Instead, the COFC looked to the Agency’s substantive use of the Reilly factors and deemed it logical to evaluate its decision using the same analytical framework.  The COFC’s evaluation revealed that none of the factors weighed in favor of the override.

To preserve the integrity of the competitive procurement process, Technica’s motion for preliminary injunction was granted and stayed contract performance.

Takeaway:  The agency has a rather hefty burden to overcome in terms of circumventing a statutorily prescribed process geared toward maintaining a fair procurement.  The decision to override a CICA stay is not one the Agency should take lightly, and while it is not required to use the Reilly factors, the COFC has historically applied the analytical framework to determine whether the majority weighs in favor of the override and will likely continue to do so.

OGSystems LLC, B-417026, January 22, 2019

We are often reminded of the vast discretion the agency retains in selecting an awardee.  With that discretion, however, comes a responsibility to, at the very least, support the basis for its determination.

OGSystems, LLC (“OGS”) protested the award of a support services task order on several grounds.  Of relevance to this article was the allegation that the agency unreasonably evaluated the awardee’s technical proposal.  The GAO agreed.

Under a fair opportunity proposal request (“FOPR”), the National Geospatial-Intelligence Agency (the “Agency”) issued a solicitation to firms holding one of its multiple-award indefinite-delivery, indefinite-quantity (“IDIQ”) contracts for support for day-to-day operations at an Agency campus.  Proposals would be evaluated using two factors:  technical and price.  The technical evaluation was divided into three equally weighted subfactors:  (1) east operations division support, (2) space and interiors division support, and (3) property division support.  The Solicitation provided the technical factor was “significantly more important than price.”

Upon receipt and review of the first final proposal revisions (“FPR”) from two offerors, OGS and Higgins, Hermansen, Banikas, LLC (“HHB”), the Agency concluded the Performance Work Statement (“PWS”) needed revision.  The Agency issued a revised PWS and requested a second FPR.  The Agency assigned the following ratings for each element of the technical subfactors:  significant benefit, major benefit, minor benefit, meets the standard, minor risk, major risk, or significant risk.  OGS received a “major benefit” rating for all twelve elements of the evaluation subfactors, and HHB received two “major benefit” ratings, five “minor benefit” ratings, and five “meets the standard” ratings.  In selecting HHB for award, the source selection authority (“SSA”) concluded that HHB’s proposal provided the best overall value to the Government, and the added value of the OGS’s experience was not worth the 20% price premium.  OGS protested shortly thereafter.

In its review of the Agency Record, OGS discovered that HHB’s first FPR received concerning ratings, including six major risks, one minor risk, and one significant risk.  OGS argued that the Agency failed to adequately address any of the risks assigned to HHB’s first FPR or how they were resolved.  The Agency simply suggested that it considered the revisions made to the first FPR reflected in the second and employed the Agency’s broadened understanding of the terms “risk” and “benefit,” as used in the FOPR.

The contemporaneous record, however, does not address the rating revisions or the evolved understanding of the terms.  The Agency attempted to explain the revisions by citing to a statement from the technical evaluation team (“TET”), where it suggested HHB’s revised proposal “met all PWS requirements and was in accord with the historical staffing levels” referenced in the PWS.  The TET’s explanation of the broadened view of risk and benefit, which the Agency relied upon, was equally vague and suggested that it was fair because it applied the new view to both proposals.

The GAO found that the Agency’s general explanations failed to provide any meaningful detail, even at the protest stage.  At no point did the Agency adequately address which risks or aspects of the risks identified in HHB’s initial proposal were resolved through revisions or the alternative understanding of the terms.   In fact, the GAO repeatedly concluded that the agency’s evaluation of HBB’s FPR “did not explain the basis for concluding that this major weakness had been resolved.”  As such, it was unable to find that the Agency’s determination was reasonable and thus justified selection of a less expensive, but also presumably less capable, awardee.

Takeaway:  The Agency is required to at least support its findings, especially when an offeror’s ratings drastically change between revisions.  The Agency wields a lot of power, but it may not sleep on its responsibilities.

People, Technology & Processes LLC, B-417208, March 21, 2019

There is a fine line between agency obligation and agency discretion.  For some, that line may become blurred when the agency disagrees with what one might consider obviously obligatory.

In this protest, People, Technology & Processes, LLC (“PTP”) challenged its exclusion from the competitive range.  The United States Special Operations Command (the “Agency”) issued a solicitation contemplating award of a single contract to provide intelligence services.  The proposals would be evaluated on a best-value trade-off basis considering five evaluation factors:  (1) qualifying criteria, (2) transition plan, (3) management plan, key personnel, and oral presentations, (4) past performance, and (5) price.  Factor 1, qualifying criteria, would be evaluated on a pass/fail basis.  The Agency would then conduct a trade-off analysis with the remaining factors.

The Agency informed offerors that it would establish a competitive range including those proposals that received the highest ratings after the initial evaluation.  The source selection evaluation board (“SSEB”) conducted the initial evaluation and submitted a report to the source selection authority (“SSA”) summarizing each proposal and recommending a competitive range.  The SSEB did not include PTP’s proposal in its competitive range, and the SSA accepted the SSEB’s recommendations.

PTP argued that the Agency abused its discretion by not seeking clarification on PTP’s proposal before excluding it from the competitive range.  The key personnel subfactor required offerors to submit resumes for three key personnel positions.  The SSEB would review the resumes against the required and desired qualifications in the statement of work, and then assess how similar the prior experience or position listed in the resume was to the contract requirements.  In reviewing PTP’s submitted resumes, the SSEB could not determine the experience of the proposed program manager and deputy program manager.  As a result, PTP received a significant weakness under the key personnel subfactor because the submitted resumes “inadequately demonstrated experience managing personnel on an effort of this magnitude.”

PTP challenged the Agency’s decision, suggesting its omission could have been corrected had the Agency sought clarification.  The Agency argued that it was not required to seek clarifications and the significant weakness could not have been resolved through clarifications.  The GAO has held previously that an agency may “but is not required to engage in clarifications that give offerors an “opportunity to clarify certain aspects of proposals . . .  or to resolve minor or clerical errors.”  FAR § 15.306(a)(2); Valkyrie Entr., LLC, B-414516, June 30, 2017, 2017 CPD ¶ 212 at 5.  The only required communication pertains to offerors whose past performance is the determining factor in its exclusion from the competitive range, which did not apply to PTP.  FAR § 15.306(b)(1)(i).  As such, PTP was not entitled to or guaranteed an opportunity to clarify.

Takeaway:  The agency is only required to engage in clarification communications when an offeror’s past performance is the determining factor in its exclusion from the competitive range.  When this is not the case, the agency maintains its discretion to request clarifications.

Graham Technologies LLC, B-413104.25, February 25, 2019

We have written before about the importance of responding to solicitation requirements; however, it seems to be a recurring protest theme.

Here, the Department of Health and Human Services, National Institute of Health (the “Agency”) issued a request for proposals (“RFP”) for information technology supplies and services.  The solicitation provided that the Agency would evaluate the proposals in two phases.  Phase 1 evaluated proposals under four go/no-go requirements: (1) compliant proposal, (2) verification of an adequate accounting system, (3) IT services for biomedical research, health sciences, and healthcare, and (4) domain-specific capability in a health-related mission.  If the proposal was found unacceptable in any of these requirements, it would be ineligible for further consideration.  Those proposals found acceptable would then move on to Phase 2.  Phase 2 consisted of a best-value trade-off methodology in which the Agency considered price and three additional factors.

Graham Technologies, LLC (“Graham”) submitted a proposal, which the Agency rated Unacceptable in Phase 1 under the verification of an adequate accounting system subfactor, and thus eliminated it from further consideration.  Graham protested the Agency’s decision, arguing that its proposal did, in fact, comply with the solicitation.

Graham cites to the following solicitation language in defense of its protest:

As such, the Offeror must provide in its proposal a contact name and contact information . . . of its representative at its cognizant DCAA [Defense Contract Auditing Agency], DCMA [Defense Contract Management Agency], federal civilian audit agency, or third party accounting firm and submit, if available, a copy of the Pre-Award Survey of Prospective Contracting Accounting System (SF 1408), provisional billing rates, and/or forward pricing rate agreements.

Graham argues that this language meant the verification requirement would be satisfied by providing contact information for the offeror’s representative of the cognizant federal audit agency and no additional information was necessary.  The Agency, however, argued that the solicitation required more than just contact information.  The Agency cited to additional language in the solicitation requiring “evidence that the [o]fferor . . . ha[s] an adequate accounting system” and failure to provide verification will result in an unacceptable rating.

Additionally, and potentially most importantly, the Agency specifically addressed questions regarding the accounting verification requirement during the question and answer period.  It reminded offerors that “[v]erification of an adequate accounting system is required to be submitted with the proposal.”

As such, the GAO concluded that when reading the solicitation as a whole, and taking into consideration the Agency’s prior warning, the Agency’s interpretation of the verification requirement was reasonable.

Takeaway:  When the Agency specifically responds to questions regarding a solicitation requirement, it is in the contractor’s best interest to heed the Agency’s advice and ensure compliance with solicitation requirements.