This month’s Law360 Bid Protest Roundup focuses on two recent decisions by the U.S. Government Accountability Office (GAO) and one decision from the U.S. Court of Federal Claims (COFC). These decisions involve (1) the consequences of key personnel unavailability that occurs during corrective action following a protest, (2) the government’s exposure to sanctions for failing to produce the complete administrative record in a protest before COFC, and (3) the broad discretion agencies enjoy in setting procurement-related deadlines.
Ashlin Management Group[1]
In Ashlin Management Group, the GAO addressed a situation in which one of the awardee’s quoted key personnel became unavailable during the post-award corrective action period. In sustaining the protest on that ground only, the GAO determined that the awardee, Booz Allen Hamilton, Inc. (BAH), was ineligible for award because it had actual knowledge of the unavailability of one of its key personnel, and that BAH improperly failed to notify the agency of this material change.
The factual history of this protest is worth noting, as the occurrence of a two-touch protest is quite common and played a key role in the outcome of this decision. On September 9, 2020, the Employment and Training Administration of the Department of Labor issued the subject solicitation, seeking quotes for consulting services to support the agency’s Job Corps program. After the agency issued an award to BAH, in January of 2021, ASHLIN Management Group (ASHLIN), the incumbent, timely filed a protest at the GAO. The agency, in turn, filed a notice of corrective action, broadly stating that it would “reconsider some aspects of the evaluation of quotations.” After completing the corrective action, the agency again issued the award to BAH. ASHLIN subsequently filed the instant protest, challenging various aspects of the agency’s evaluation. During the second protest, it came to light that BAH proposed to fill a required key personnel position with an employee who worked for the company prior to the initial award, but who resigned during the agency’s corrective action period. BAH did not notify the agency that this employee resigned.
When a solicitation requires offerors to name key personnel, the GAO treats the pre-award unavailability of a proposed key person to be a material proposal change affecting the proposal’s eligibility for award. Given that offerors must avoid material misrepresentations, the GAO expects offerors to notify agencies of material changes to their proposals, including key personnel unavailability, even after proposals or quotations have been submitted. Notification of the unavailability of key personnel, however, is required only when an offeror gains actual knowledge of a proposed employee’s unavailability prior to contract award. Upon receiving such notification, an agency has two choices, (1) reject the proposal because it no longer meets the solicitation’s key personnel requirements, or (2) (re)open discussions with all offerors to permit proposal revisions.
BAH claimed that it did not have actual knowledge of the unavailability of that quoted key person and that, in any case, it notified the agency of its need to replace that employee shortly after again receiving the award. The GAO found these arguments wholly unpersuasive, concluding that BAH had actual notice of the individual’s unavailability given the resignation letter it received during corrective action. The GAO also determined that, even though the initial award remained in place throughout the corrective action period, the issue was not a matter of contract administration outside of the GAO’s purview, as the agency’s corrective action notice “unequivocally represented that the agency would make a new award decision that would ‘supersede’ the protested prior award decision.” Therefore, the GAO sustained this protest ground.
In terms of outcomes, this decision contrasts with the GAO’s decision in NCI Information Systems.[2] In NCI, the protester similarly alleged that the awardee improperly failed to notify the agency that one of its key personnel became unavailable during the corrective action period, rendering the awardee’s proposal technically unacceptable. Protester based this allegation on publically available information; the individual at issue was not an employee of the awardee. The GAO, however, found that the awardee did not have actual knowledge of the unavailability of the key personnel. In reaching this determination, the GAO quoted a declaration excerpt from one of the awardee’s corporate officials, who attested that none of the company’s proposed key personnel rescinded their letters of intent or otherwise notified the company of their unavailability, and that the company had “no reason to believe any of its proposed key personnel have withdrawn their availability and intent to perform the contract effort.” That information, coupled with the resume of the individual at issue confirming that the person did not work at the company, seemed to resolve any remaining doubt. Interestingly, and unlike in Ashlin, the GAO did not address the agency’s argument that key personnel unavailability was not at issue because the corrective action did not include a reevaluation of key personnel.
Takeaways
When a contractor receives notice that one of its proposed key personnel has resigned or is otherwise unavailable or unable to perform, be it pursuant to a letter of resignation or letter, email, or other communication from that individual, the contractor must notify the procuring agency of this change prior to award (or re-award). Moreover, offerors should note that it will likely be difficult to argue a lack of actual knowledge when the key personnel at issue was an employee at the time of proposal submission. Recognizing that this is a harsh rule, it is important that contractors pay particular attention to the availability of their key personnel, especially where this rule becomes invariably harsher when agencies string out procurements over extended periods of time or the agency reopens evaluations and the award decision as part of its corrective action. Finally, although the GAO left the door slightly cracked on the extent to which the text of the agency’s notice of corrective action can impact its ultimate decision, the decision in Ashlin serves as an important reminder that protesters should always carefully review the agency’s representation of what the corrective action will involve.
Oak Grove Technologies[3]
Oak Grove Technologies provides a comprehensive analysis on the legal parameters of sanctions ordered pursuant to the court’s inherent authority and Rule 11 of the Rules of the Court of Federal Claims (RCFC) as well as the degree of discretion afforded to agencies in determining what documents are relevant to the administrative record (AR) in a bid protest. The court emphasized that parties can face sanctions if they unduly delay the court’s resolution of a case or otherwise waste the court’s or another party’s time and resources, which occurred in this case when the government belatedly produced two key documents and deliberately obfuscated the role of a contested source selection official in the AR. The court also made clear that whether or not a party omits documents in good or bad faith is irrelevant to the RCFC 11 standard and that parties’ filings must respond to all directives in a prior court order.
In the merits opinion that preceded this sanctions decision, the court found that the government’s withholding and delayed production of relevant documents in the AR wasted the court’s and plaintiff’s time and resources. [4] The court further determined that such actions “undermine[d] trust in both the procurement and disputes processes.” Although the court recognized that many of these issues were seemingly caused by the agency, and not by the Department of Justice (DOJ), the court ordered the government to show cause why sanctions should not be imposed pursuant to RCFC 11 and the court’s inherent authority and to address certain concerns “in detail.”
In deciding that RCFC 11 sanctions were warranted, the court first discussed the routine certification submitted by the agency’s contracting officer attesting that the documents filed as the AR included all materials relevant to the plaintiff’s complaint. Given that this certification and the filing of the AR are both subject to RCFC 11, the court found the omission of key documents in the AR dually problematic. The court then chastised the government for failing to respond to the RCFC 11-specific request in its show cause order, finding that the government “cannot escape sanctions by ignoring the applicable Rule 11 standard and pointing only to the heightened standard for imposing sanctions pursuant to a court’s inherent powers.” The court also squarely rejected the notion that sanctions are inappropriate in the absence of bad faith, as RCFC 11 neither requires a finding of bad faith nor excuses a violation based on a showing that the party acted in subjective good faith.
Before addressing the AR documents at issue in this case, the court deemed it necessary to reiterate that an agency is not entitled to subjectively determine what documents are relevant to a plaintiff’s claims for the purposes of compiling the AR. The court then explained its interpretation of “relevant,” as supported by a body of case law, which starkly contrasted with what the court characterized as the government’s “cramped view” of the meaning of that term in the context of a bid protest. In rejecting the government’s arguments, the court discussed, at some length, the fundamental tenet of bid protest procedure that the AR must contain all documents reasonably relevant to the decisions being challenged in the protest.
As to the first excluded document, a DCMA report containing information determinative of another offeror’s eligibility for award, the court acknowledged that while tension and communication issues can sometimes exist between the agency and the DOJ, the government’s initial failure to produce this document was still unacceptable. First, this document was central to plaintiff’s standing argument. Second, the agency produced a heavily redacted version of the DCMA report in a prior GAO protest, demonstrating the agency’s concession of its relevance. The court therefore found that “[t]he most reasonable explanation, if not the only reasonable explanation, is that the Agency selectively omitted a document that was harmful to its position.” Regarding the second document at issue, a letter terminating the source selection official whose role was core to plaintiff’s protest, the court concluded that the government’s belated production of this document effectively served only to further highlight that the government’s failures were sanctionable. Despite the government’s claim that this letter actually supported its position, the court found the reality to be the opposite, especially considering testimony from government witnesses.
Last, the court found that the manner in which the government produced the AR, including its selection of documents, improperly obscured the role of the source selection official who was central to plaintiff’s core argument. The government claimed that a signature block on the second page of the Source Selection Plan and an organization chart depicting the Source Selection Team Structure put both the plaintiff and the court on notice of that individual’s “true role,” and that the plaintiff “presumably could have sought additional documents earlier in the case.” Unsurprisingly, the court summarily rejected both of those arguments. The court then separately found that government undermined its position where its briefs and oral arguments revealed that neither the DOJ nor agency counsel had knowledge of that individual’s role.
For each of these reasons, and pursuant to RCFC 11, the court ordered the government to pay the plaintiff’s legal costs and expenses incurred in relation to the issues identified in the Court’s show cause order.
Takeaways
This decision offers important lessons to bid protest practitioners. First, it underscores the importance that COFC places on fair, efficient, and by-the-book proceedings, and that the court may impose RCFC 11 sanctions to enforce proper procedure. It also serves as a reminder that all parties litigating bid protests—or any other matters—should be careful when certifying that they have complied with court orders, such as those requesting document delivery. Additionally, the decision highlights some of the inherent differences between the document production processes in protests filed at the GAO versus at COFC, where the latter arguably provides the government with less discretion. Last, it underscores the importance for parties to respond to all directives in a court order.
Smiths Detection, Inc.[5]
The GAO’s decision in Smiths Detection, Inc., concerns somewhat unusual pre-award protests challenging the terms of dual solicitations that include identical FAR 52.209-1 qualification requirements involving the agency’s qualified products list (QPL). Specifically, the protester claimed that the solicitations’ January 4, 2022 deadline for offerors to obtain QPL qualification for their checkpoint property screening computed tomography (CT) systems is unduly restrictive of competition. In denying that argument, the GAO found the agency’s undisputed need to address current critical matters of public safety to be reasonable, even where both solicitations expressly recognized the possibility that no offeror would obtain QPL qualification by the deadline.
The Transportation Security Administration issued the sister solicitations on April 2, 2021, requesting proposals for improvements to its existing checkpoint screening systems using two different system configurations. To be eligible for award, offerors’ products must complete qualification testing and be added to the agency’s QPL in accordance with the solicitations’ qualification requirements.
More than a year before publishing the solicitations, the agency issued the relevant QPL for both system configurations, allowing vendors to begin the lengthy six-step qualification process by submitting qualification data packages for their respective systems. Protester submitted qualification data packages for each system in August and September of 2020, which currently remain under review. Due to delays in the QPL process, the agency willingly approved protester’s initial request for a 10-week extension to the solicitations’ qualification deadline, postponing the deadline until January 4, 2022.
Shortly before the proposal submission deadline, the protester again requested an extension due to similar delays, explaining that additional time would allow a greater number of offerors to complete the QPL process, which, in turn, would increase competition. When the agency did not extend the deadline, protester timely filed the instant pre-award protests.
The protester primarily alleged that the solicitations’ qualification deadline was unreasonable because it prevented many offerors, including itself, from attaining the required qualification in time to be eligible for an award. As the GAO repeatedly noted, the protester did not claim that the agency lacked an immediate or reasonable need to upgrade its current systems or otherwise object to the requirement for QPL qualification. In essence, protester simply wanted to delay the proposal submission deadline.
Interestingly, both solicitations acknowledged the possibility that “no proposed products or systems [would be] successfully on the associated QPL” by the deadline, in which case the agency could cancel the solicitations or request approval to continue the process in accordance with FAR 52.209-1, Qualification Requirements. Notwithstanding that provision and the protester’s concerns, the agency stood firm in its position that proceeding with the existing deadlines was necessary to promote the agency’s mission of ensuring safety and security, citing heightened health and safety risks that would only worsen if the agency’s efforts were delayed.
Based on the agency’s explanation, the GAO determined that the requirements of the solicitations were both reasonable and consistent with the agency’s legitimate needs. In denying this protest ground, the GAO explained that the fact “a requirement may be burdensome or even impossible for a particular firm to meet does not make it objectionable if the requirement properly reflects the agency’s needs,” even where the requirements were ostensibly impossible to meet for many of the offerors. The GAO further noted that while a procuring agency’s solicitation must be designed to achieve full and open competition, an agency does not have to delay its own procurements in order to provide offerors with additional time to meet the agency’s requirements.
The GAO dismissed as premature the protester’s remaining allegations, as both contentions were predicated on the state of future occurrences. The first alleged that the agency’s procurement actions may incidentally result in a de facto sole source procurement. The second claimed that the agency failed to discharge its obligations to promptly and fairly administer the QPL qualification process.
Takeaways
This decision affirms the considerable deference consistently afforded to agency decision-making, including to decide or postpone deadlines in a solicitation, particularly where matters of health, safety, and security are at risk. It also reveals the importance of keeping track of solicitation deadlines—if a contractor requests an extension in advance, it is possible the agency will oblige. Last, it shows that an offeror’s request for an agency to extend a deadline is not always futile, but that the decision will often turn on the purpose of the procurement and the agency’s broader mission and needs.
[1] Ashlin Mgmt. Grp., B-419472, 2021 WL 5323743 (Nov. 4, 2021).
[2] NCI Info. Sys., B-417805.5, 2020 CPD ¶ 104 (Mar. 12, 2020).
[3] Oak Grove Techs., LLC v. United States, No. 21-775, 2021 WL 5114707 (Fed. Cl. 2021) (Oak Grove II).
[4] Oak Grove Techs., LLC v. United States, 155 Fed. Cl. 84, 101-02 (2021) (Oak Grove I).
[5] Smiths Detection, Inc., B-420110; B-420111, 2021 U.S. Comp. Gen. LEXIS 311 (Nov. 5, 2021).