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April 01, 2024 - Protests & Litigation

March 2024 Bid Protest Roundup: “Each Procurement Stands on Its Own”; Responsibility Determinations; Trade Agreement Act Compliance

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

In our bid protest roundup for March, we consider three recent decisions of the Government Accountability Office (GAO).  The first explains why similar proposals for similar requirements under similar evaluation criteria may legitimately receive very different ratings from one procurement to the next.  The second decision illustrates the risk an agency assumes when its corrective action ignores a protester’s plausible allegations and when the documented procurement record does not support the agency’s litigation position.  The final decision examines how a protester can be right about an awardee’s prospective noncompliance with requirements but still lose the protest.

Royal Bridge, Inc., B-422263

Royal Bridge was a single-issue protest addressing a question that proposal teams frequently ask.  If the same agency has previously run a similar procurement for the same requirements, using the same evaluation criteria, and an offeror submits a materially identical proposal for each procurement, shouldn’t the offeror end up, more or less, with the same adjectival ratings in both competitions?  The answer is: not necessarily.

The protester submitted a proposal to the Army Corps of Engineers for the rehabilitation of certain flood gates at a dam in Arkansas.  For the Technical Approach and Organization evaluation factors, the agency rated the protester’s proposal as Acceptable.  It rated the eventual awardee’s proposal as Acceptable and Outstanding for these same factors.  After consideration of the other evaluation factors, the agency chose not to award the contract to the protester.

The protester argued its proposal deserved ratings higher than Acceptable for the Technical Approach and Organization factors.  Four years earlier, the protester submitted a similar proposal to the same agency for similar rehabilitation services at another dam in Arkansas and received higher than Acceptable ratings in that competition.  The protester argued:

A reasonable and consistent evaluation would not have resulted in such a variance in evaluation ratings in such a short period of time when the differences in the requirements of the two projects were so minimal, and the Protester’s capabilities were identical for each project.

The agency argued that the earlier proposal and procurement were somewhat different, but the GAO found it unnecessary to resolve that question.  Even if the proposals and requirements had been identical in the two procurements, the protester would not prevail.  Under GAO decisional law, “as a general matter, it is not unusual for individual evaluators to reach different conclusions and assign different scores or ratings when evaluating proposals, since both objective and subjective judgments are involved.”  As a result, “evaluation ratings under another solicitation are not probative of the alleged unreasonableness of the evaluation ratings under the solicitation at issue, given that each procurement stands on its own.”

Because of this rule, a prior evaluation outcome in an earlier procurement is not “precedential” for subsequent procurements.  If the evaluators in the first procurement rated the protester’s proposal as Outstanding, that does not mean that evaluators in a later procurement for the same requirements must do the same, even if the proposals and solicitations are essentially the same.  As the GAO noted, although there are certain objective aspects to most evaluations, they are usually mingled with a strong dose of subjective judgment.

If the evaluators’ judgments are reasonable, considering only the current procurement, and are consistent with the terms of the solicitation and governing regulations, the GAO generally will not second-guess the evaluators’ adequately documented judgments.  This has more to do with the reasonableness of the process than with the outcome of that process.  The fact that reasonable minds may disagree with the outcome—or even that they did disagree in an earlier procurement—is not a basis for sustaining a protest.

Takeaway: As a practical matter, proposal teams often use past competitions to inform their strategies for similar competitions conducted by the same agency.  This may be a sensible proposal strategy but does not guarantee a predictable result.  Each procurement stands on its own, and no offeror is guaranteed the same agency will make the same discretionary evaluation choices in a future procurement, even if a company proposed the same thing both times.

MVM, Inc., B-421788.3, B-421788.4

MVM involved a General Services Administration (GSA) procurement of transportation services for the Department of Health and Human Services.  After an initial award to Acuity International, LLC, MVM, Inc. filed a protest.  MVM alleged, among other things, that GSA’s responsibility analysis failed to consider that one of Acuity’s affiliates recently settled a False Claims Act (FCA) matter with the Department of Justice.

GSA fought the protest.  After briefing was complete, the assigned GAO attorney conducted outcome prediction and advised the parties that multiple aspects of the GSA evaluation appeared to be unreasonable or inadequately documented, rendering the award unsupportable.  The GAO did not identify the FCA-related ground as clearly meritorious, as the contracting officer did not appear to have any knowledge of that issue before award.  GSA, after learning it likely would lose the protest, took voluntary corrective action and thereby mooted the protest.

Following corrective action, GSA again awarded the task order to Acuity, and MVM again protested.  The updated procurement record evidenced no consideration of the FCA issue MVM had brought to GSA’s attention in the prior protest.  Although the contracting officer may have been unaware of the issue at the time of the initial award, GSA now had actual notice of the issue as a result of the prior protest.  Recent settlement of a potential fraud would be expected to have a strong bearing on whether the awardee should be found responsible.  MVM argued that, under these facts, it was unreasonable for GSA to ignore this issue during corrective action.  Rather than take voluntary corrective action again, GSA fought the protest.

The GAO found that not only was the record inexplicably silent about the FCA matter, but even the contracting officer’s litigation response ignored it.  Although GSA’s attorney asserted that consideration of the matter “would not change” GSA’s favorable view of the awardee’s responsibility, the GAO disregarded this assertion as an after-the-fact conclusion first developed in the heat of litigation.  The documented record provided no basis for the GAO to find that the GSA had reasonably evaluated the awardee’s responsibility.

MVM also challenged the awardee’s candidate for the lead project director position.  The protester argued that the awardee’s proposal failed to demonstrate that its candidate for this key personnel position had five years of management experience with advanced levels of financial responsibility, which the solicitation required.  GSA responded with a conclusory assertion that the candidate “clearly met all requirements of the solicitation.”

The GAO found the record did not support GSA’s assertion.  Although the evaluator worksheets all stated verbatim that there was “[n]o doubt that this offeror’s key personnel hold the appropriate credentials and have sufficient experience to oversee the project,” nothing in the record supported that bare conclusion.  GSA argued that the candidate’s resume showed he met the requirements because he held positions as “a director for an Indian Tribe wellness center and as an interim director for a county public health and social services department.”  The GAO was unpersuaded, however, because the record showed the awardee’s candidate held these positions for only 26 months—far short of the five-year requirement that GSA claimed he met.  Therefore, the GAO sustained the protest on this basis, as well.

Takeaway: It is difficult to succeed in challenging an agency’s affirmative responsibility determinations, and the GAO generally will not even consider such allegations.  Protesters may succeed when, as here, an agency unreasonably ignored available information that, by its nature, might be expected to have a strong bearing on whether a company is responsible.  It is puzzling why GSA’s corrective action failed to address this issue, which the initial protest placed squarely before it.  This protest also highlights the importance of making sure that one’s proposal plainly demonstrates how each key person meets minimum requirements, as well as the folly of an agency’s fighting a protest where the record is inconsistent with the agency’s litigation position.

W&K Container, Inc., B-422234.2

This month’s final case involves compliance with the Trade Agreements Act (TAA).  The Defense Logistics Agency (DLA) sought transoceanic shipping containers compliant with the TAA, in accordance with Defense Federal Acquisition Regulation Supplement (DFARS) 252.225-7021.  This TAA provision mandates, among other things, that end products delivered to the government (here, the containers) be produced only in the United States (U.S.), qualifying countries, or designated countries.  As relevant here, the Republic of Korea is a designated country, and China is not.  The solicitation cautioned offerors that it might reject any proposal offering end products that were not TAA-compliant.

After receiving proposals, DLA awarded the contract to Intrepid Eagle Logistics, Inc. at a price of $8,602,000 for the first lot of containers.  Intrepid’s proposal listed the Republic of Korea as the place of manufacture of its end products.  W&K Container, Inc.’s offer, priced at $9,530,400 for the first lot, was unsuccessful.  W&K’s proposal identified its containers as also manufactured in Korea.  Following a debriefing, W&K protested the award.  W&K alleged that the awardee’s proposed containers were not TAA-compliant.  The protester argued that Intrepid’s low price was due to proposing Chinese-manufactured container kits, which might subsequently be assembled (but not substantially transformed) in a TAA-designated country like Korea, in violation of the TAA.  W&K noted it raised this same concern about Intrepid in an agency-level protest to DLA under an earlier procurement.

On the same day W&K’s post-award debriefing concluded, DLA asked Intrepid where exactly the awardee’s container components originated, and where and how those components were transformed into the final end products.  The awardee’s answers led DLA to conclude Intrepid’s containers would not be TAA-compliant.  DLA found that Intrepid’s containers would be the products of a non-designated country, and that their subsequent assembly in a designated country would not “substantially transform” them into end products of that designated country.

While W&K’s protest was pending, DLA issued a cure notice to Intrepid.  Intrepid responded with a corrective action plan and a certification that its corrected product and processes would comply with the TAA.

Although the protester was correct about the awardee’s noncompliance with the TAA, the GAO nonetheless denied the protest.

The GAO found that nothing on the face of Intrepid’s proposal put DLA on notice of the noncompliance: the proposal contained the required TAA certification and identified the end products’ place of manufacture as a TAA-designated country.  The GAO cited its rule that an agency generally may rely on an offeror’s representations and certification of TAA compliance without further investigation, unless the agency has reason to believe before award that the offeror will not supply a compliant product.  Absent such a reason, an offeror’s intended compliance or noncompliance is a matter of contract administration, which is outside the scope of the GAO’s bid protest function.

The protester countered that DLA had reasons to doubt Intrepid’s compliance.  First, W&K raised identical concerns about Intrepid’s TAA compliance with this very agency just two years earlier.  The GAO found this argument unconvincing because “each procurement stands on its own,” and W&K’s earlier protest was legally irrelevant.  The GAO also noted that the contracting officer for the prior procurement was different from the one assigned here.

The GAO also rejected the protester’s argument that Intrepid’s “very low price” should have tipped off DLA that Intrepid would supply cheap and noncompliant Chinese goods.  In a fixed-price procurement such as this, without price realism provisions, the contracting officer correctly declined to draw adverse conclusions from an offeror’s low proposed price.

Finally, the GAO rejected the protester’s complaint about DLA’s post-award exchanges, which allowed the awardee to cure its noncompliance with the TAA.  The GAO found that these post-award exchanges were, under these facts, unobjectionable matters of contract administration and not matters for a bid protest.

Takeaway: Although the protester correctly deduced that its rival’s approach would not comply with the TAA, the protest nevertheless failed because a GAO protest generally will not consider matters of contract administration.  Some agencies might have taken voluntary corrective action under these facts.  But, by fighting and winning, DLA will get TAA-compliant containers at a made-in-China price, making it perhaps the only winner in this protest.