This month's protest spotlight highlights three decisions by the U.S. Government Accountability Office. The decisions feature arguments that unsuccessful offerors often want to make, but that are rarely successful, as well as two arguments that some will be surprised did not succeed.
Matter of: Texas Waste Company LLC shows the nearly insuperable standard a protester must meet to prevail by arguing that it lost a competition due to bias by government officials.
Matter of: Global Alliant Inc. explores an exception to the ordinary rule that opening discussions with one offeror requires an agency to open discussions with, and seek revised proposals from, all offerors in the competitive range.
Matter of: HSV Consulting touches again on allegations of bias and the perennial problem of untimely objections to solicitation terms. It also explains a fairly rare exception to the usual rule that a proposal is unacceptable if it fails to comply with a material solicitation requirement.
Texas Waste: Bias and Bad Faith
Texas Waste involved a procurement for medical waste removal and disposal services, where past performance played a key role in the source selection. The protester, which was the incumbent contractor, contended it would have received the highest possible past-performance rating and been awarded the contract were it not for the contracting officer's bias against it.
The GAO began its analysis by noting the long-standing legal presumption that government officials act in good faith. To overcome that presumption, the GAO said, a protester must provide it with convincing proof of bias or bad faith, and "must not only provide credible evidence clearly demonstrating bias against the protester or in favor of the awardee, but must also show that this bias translated into action that unfairly affected the protester's competitive position." This standard requires hard proof, and not merely inference or supposition.
Precedents at the GAO and the U.S. Court of Federal Claims are littered with attempts to demonstrate that procurement officials engaged in biased evaluations due to personal animosity or favoritism. Protesters almost always lose these arguments given the high evidentiary standard for proving such claims and rebutting the legal presumption of regularity.
Texas Waste argued that the contracting officer disliked it because the contracting officer allegedly was removed from the protester's incumbent contract due to Texas Waste's complaints about his handling of a request for equitable adjustment. The protester contended that the contracting officer's personal grievance drove him to take "petty vengeance on the contractor that caused him to be removed." The record, however, suggested that the contracting officer's supervisor simply took over the resolution of the equitable adjustment but never removed the contracting officer from the contract.
The protester also attempted to support its allegation of bias with internal emails and text messages from another agency employee. These communications were somewhat flippant concerning both the protester and the awardee, but none of them was from the contracting officer, and the employee in question was not an evaluator.
The protester argued that the contracting officer's personal grievance against the protester's owner led to a mediocre evaluation despite the protester's admirable performance of the incumbent contract. The official past-performance record for the incumbent contract, however, showed only satisfactory performance. The protester countered that the mediocrity of its official performance record for the incumbent contract was also due to the contracting officer's bias.
The GAO, however, held that challenges to one's official past-performance record are a matter of contract administration, which the GAO does not review as part of its bid protest function. The GAO also expressed skepticism about the supposed inaccuracy of the "satisfactory" past-performance rating for the incumbent contract, as the protester itself had previously concurred with the assessment, closing with a comment of "Thank you!"
In short, the GAO did not find any solid evidence proving that the contracting officer was biased, much less that any bias affected the procurement. Accordingly, the GAO denied the protest. This outcome is unsurprising given the nearly insurmountable legal standard for demonstrating bias, and the paucity of evidence suggesting anything improper occurred.
Disappointed bidders sometimes feel that they have lost a competition due to bias by procurement officials. Occasionally, they file bid protests making such arguments. These arguments almost always fail, and they certainly do not make the bidder any friends in the agency's contracting shop.
Even if a procurement official really were somehow biased against an offeror, the burden of proof is extraordinarily high — what older cases regularly called a standard of "well-nigh irrefragable proof." Circumstantial evidence and plausible inference are simply not enough. Because allegations of this sort are almost never successful and are likely to make a very poor impression on one's customer, allegations of bias and bad faith are generally best left out of a bid protest.
Global Alliant: Unequal Discussions
In Global Alliant, a protester unsuccessfully challenged various aspects of the evaluation of its quotation. A more interesting aspect of the protest, however, was an allegation of unequal discussions.
The protester, whose pricing was evaluated as noncompliant and unacceptable, discovered during the course of the protest that the agency had engaged in communications with the eventual awardee. The agency then allowed the eventual awardee — and it alone — the opportunity to correct an omission in its pricing volume and reduce certain labor rates.
The protester objected that it was unfair for the agency to engage in discussions with, and solicit a revised quotation from, only one competitor. It argued that, had the agency treated it fairly and opened discussions with it as well, it could have corrected the perceived problems with its price volume and might well have won the competition.
Under the ordinary rules for negotiated procurements that are subject to Federal Acquisition Regulation Part 15, an agency may open discussions with offerors and seek revised proposals. When an agency does this, it must conduct discussions with all offerors in the competitive range and provide them all with an equal opportunity to revise their proposals, in accordance with FAR 15.306(d).
The GAO noted, however, that this was not a negotiated procurement subject to FAR Part 15. Rather, this was a competition for an order under the Federal Supply Schedule program, pursuant to FAR Subpart 8.4. As a result, the discussion regulations in FAR Part 15 were inapplicable.
The request for quotations, moreover, expressly permitted the agency to conduct exchanges only with "the respondent that is the best valued" and permit it alone to address any remaining technical or price matters.
The GAO observed that, at the time the agency conducted exchanges with the eventual awardee, the agency had already determined that the company had submitted the best-value quotation. Thus, under the terms of the request for quotations, the agency was permitted to discuss technical and price matters with that company alone, and allow it to revise its quotation.
The GAO noted that, in prior procurement protests that were not governed by FAR Part 15 and where the solicitations contained similar terms, it found similar exchanges unobjectionable. Although these exchanges would have been contrary to FAR 15.306(d)'s rules for discussions, FAR 15.306(d) does not apply to Federal Supply Schedule procurements under FAR Subpart 8.4.
Under the FAR and the GAO's case precedents, the rules for conducting a procurement differ in some important ways depending on what FAR Part governs the procurement. A competition for a standalone contract under FAR Part 15 will have different rules from a competition for a task order under FAR Subpart 16.5, and both of these will have different rules from a Federal Supply Schedule order competition under FAR Subpart 8.4.
As the Global Alliant decision shows, a key difference is that agencies enjoy significantly greater leeway in communicating with offerors when a procurement falls outside of FAR Part 15.
Exchanges must always be fair, and the principles of FAR Part 15 provide general guidance on fairness. But it is not necessarily unfair outside of FAR Part 15 for an agency to hold discussions with only one offeror and allow it alone to revise its proposal, particularly when a solicitation advises offerors that this might happen.
HSV Consulting: Waived Solicitation Requirements
The solicitation in HSV Consulting sought commercial ship piloting and maneuvering consulting services. The solicitation set forth a number of requirements that offerors were required to meet. The agency received two quotations and awarded the contract to the offeror that submitted the only quotation rated technically acceptable.
The unsuccessful offeror raised a number of protest grounds, including unsupported allegations of bias and nepotism. As in the Texas Waste protest, the GAO quickly disposed of these allegations, citing the presumption that government officials act in good faith and the protester's failure to overcome that presumption with hard evidence.
The protester also complained that the solicitation requirements it failed to meet were unnecessary. The GAO dismissed this complaint as untimely. If the protester objected to the terms of the solicitation, it should have protested them prior to the date set for receipt of quotations — not after it lost the competition.
The protester finally raised what appeared, at first blush, to be a valid protest ground.
The protester's quotation was found unacceptable for failure to meet certain solicitation requirements. The protester observed, however, that the awardee's quotation also failed to meet a mandatory solicitation requirement when it failed to provide required proof of completion of a certain Navy-sponsored training course. If the protester was disqualified for not meeting requirements, why was the awardee not also disqualified?
As there were only two offerors, this would have required that the agency either open discussions and seek revised quotations from both offerors, or resolicit the requirements.
The agency conceded that the awardee's quotation failed to meet the training course requirement. The agency submitted a declaration, however, stating that this particular requirement had been inadvertently included in the solicitation and was not necessary to meet the agency's needs.
The agency's declaration further stated that the agency treated both offerors equally, as it did not evaluate either quotation for compliance with this requirement. The agency had, in essence, waived the requirement, which meant the awardee's quotation remained acceptable, and the protester's quotation remained unacceptable.
This explanation was sufficient to dispose of the protest ground. Unlike requirements set by statute or regulation, which agencies ordinarily may not waive, the GAO's case precedents permit an agency to waive a material requirement of its own creation when the award will meet the agency's actual needs without prejudice to other offerors.
But why was the protester not prejudiced by the waiver, as discussions or a resolicitation would have kept the protester in the running for the award? The GAO explained:
Unfair competitive prejudice from a waiver or relaxation of the terms and conditions of the solicitation for one vendor exists where the protester would have altered its proposal to its competitive advantage, had it been given the opportunity to respond to the altered requirements ... Prejudice does not simply mean that, had the agency failed to waive the requirement, the awardee would have been unsuccessful.
The GAO found that the protester failed to demonstrate how it would have altered its proposal to its advantage if it had known the training course requirement would be waived. As a result, this protest ground, and the protest as a whole, failed.
When a solicitation requires an offeror to demonstrate compliance with a particular requirement, it is the offeror's burden to do so. If an offeror thinks a requirement is somehow improper, it must object to the requirement before the time set for receipt of proposals, or forever hold its peace.
Failure to meet a material solicitation requirement ordinarily renders a proposal ineligible for award. But, as this protest decision shows, it is sometimes possible for an agency to waive or otherwise relax a requirement of its own creation under certain conditions.
Offerors should note, though, that waivers of this sort are almost wholly within an agency's discretion, and the GAO will not find an agency was required to waive a requirement for the benefit of a protester. Nor is such a waiver possible for a requirement set by statute or regulation, unless the statute or regulation itself contains a waiver provision.