Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

Brad is a partner in Morrison Foerster’s Litigation Department, Managing Partner of the Austin office, and Chair of the firm’s Israel practice. He is the former Co-Chair of the firm’s Global Litigation Practice and the Government Contracts + Public Procurement Practice.

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James A. Tucker

New DFARS Regulation on Small Business Affiliate Past Performance

Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

Other Transaction (OT) Bid Protests: A Call for Clarity and Consistency

SBA Proposes to Require the Rule of Two for Most Task and Delivery Order Competitions

DoD Dusts Off Other Transactions (OT) Regulations

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This month’s Bid Protest Roundup highlights three recent protests: one from the U.S. Government Accountability Office and two from the Court of Federal Claims. The first protest concerns an agency using unstated evaluation criteria; the second involves the adequacy of an agency’s investigation into its own data rights; and the third addresses an unequal access to information organizational conflict of interest.Hometown Veterans Medical, LLC, B-422751, B-422751.2, October 11, 2024In this pre-award protest, the GAO held an agency improperly rejected Hometown Veterans Medical’s (“Hometown”) proposal because the agency (1) evaluated Hometown’s proposal using a cursory review, which was not described in the solicitation, and (2) required copies of two representations, even though the solicitation did not expressly require them.On April 29, 2024, the Department of Veterans Affairs (VA) issued a Request for Proposals (RFP) for commercial home oxygen services. The RFP included the standard solicitation provisions for commercial items and an addendum to the instructions at FAR 52.212-1. Specifically, paragraph “C” of the addendum stated proposals that did not include all required documentation and all criteria would not be considered.The RFP included FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment. Although the provision includes two representations, it contains instructions stating the offeror shall not complete the representations if it does not provide or use “covered telecommunications equipment.”Hometown posted completed online representations on SAM.gov, but because Hometown responded “does not” to the representations regarding using or providing covered telecommunications equipment, Hometown’s representations did not include FAR 52.204-24.The VA received eight proposals, including Hometown’s, and conducted an “initial cursory review” of each proposal. The Contracting Officer looked at each offeror’s SAM.gov records and looked for whether each offeror had attached completed responses to FAR 52.209-7 and 52.204-24 to their proposals. Four offerors did not include those representations in their proposals (including Hometown), so the VA rejected them. Hometown challenged the rejection, arguing it was based on unstated criteria.The GAO determined the VA’s removal of the four proposals was unreasonable. First, the GAO noted the VA’s initial cursory review was not consistent with the RFP. Second, the GAO disagreed that the solicitation’s requirement that “ALL documentation requested” meant offerors needed to include the specific representations at issue because the RFP instructed offerors to submit specific documentation (such as a table of contents, experience narrative, pricing schedule, etc.). Third, the GAO noted the VA’s argument is at odds with one of the basic purposes of SAM.gov: to be an electronic repository of offeror’s responses to FAR provisions. The GAO specifically distinguished this case from Futron, Inc., B-420703, July 25, 2022, 2022 CPD ¶ 189. There, the GAO rejected a protester’s argument that SAM.gov representations were an adequate response to an RFP requirement to submit a copy of the representation at FAR 52.204-24. GAO noted in Futron that the RFP explicitly required the provisions be attached to the cover letter. Here, the language was not so explicit, as the solicitation did not state offerors were required to provide copies of their SAM.gov representations. Therefore, GAO decided not to extend Futron’s holding and sustained the protest.Takeaway: GAO clarified its holding in Futron. Specifically, when an RFP does not have clear and explicit language indicating that representations must be attached to the responses, the Agency cannot simply reject the proposal as unacceptable if the proposal does not include them. Offerors should also be alert to the fact that sometimes more may be needed than their SAM.gov representations. Although the GAO ultimately decided the VA was unreasonable here, offerors should watch out for language requiring specific representations to be appended to their proposals.Rotair Aerospace Corporation v. United StatesIn this post-award protest, the Court of Federal Claims found the Defense Logistics Agency (DLA) conducted an adequate review of the government’s data rights by reviewing technical certificates provided by the Army.The Army Aviation and Missile Command (AMCOM) procures spare parts for the Apache combat helicopter. AMCOM provides instruction manuals known as “technical data packages” (TDPs), which include specifications and instructions on the manufacturing process for each part. AMCOM provides contractors with TDPs, however, the government does not necessarily have the same data rights in the underlying drawings, parts lists, and specifications as it does in the TDP itself, thereby limiting the usefulness of the TDPs. Further, some of AMCOM’s spare parts are identified as “critical safety items” that must be purchased from an approved source. A manufacturer can become an approved source through the Source Approval Request (SAR) process, which is managed by the Army. To complete the SAR process, a manufacturer must provide a complete and current copy of the TDP required for the part.On September 16, 2022, the DLA issued a pre-solicitation notice, after issuing a sources-sought synopsis. On September 20, 2022, the DLA executed a Justification and Approval (J&A) to use a sole source procurement to acquire arm assemblies and bell cranks from Boeing. For the J&A, the Contracting Officer (CO) stated the government did not have the necessary data rights to purchase from any additional sources besides Boeing, and Boeing was the only known source able to furnish the supplies. DLA issued a solicitation for the arm assemblies and bell cranks on September 30, 2022.On May 9, 2023, Rotair filed a bid protest with the Court. Rotair argued the DLA unreasonably prevented it from competing in the September 30th solicitation. Specifically, Rotair argued the DLA wrongly assumed Boeing maintained the data rights to the arm assembly and bell cranks, and because of this, DLA wrongly determined it could not share those specifications with other sources. Rotair argued the government was required to conduct a reasonable investigation into its data rights prior to making a sole source decision.Here, the Court determined the justification did meet the requirements of Competition in Contracting Act and DLA’s decision was rational. The Competition in Contracting Act allows an agency to use non-competitive procedures when the agency determines that its needs are only available from one responsible source and no other good will satisfy the agency’s need. Here, the government needed to review its own data rights. The Court found the government reasonably investigated its data rights. AMCOM provided a TDP list (“TDPL”) for each part to DLA. The TDPL for the arm assembly contained a “Technical Certification for Proposed Other than Full & Open Competitive Acquisition of Spare Parts,” which stated the data needed was not available. The TDPL for the bell crank contained the same certification and stated the government did not have the rights in the underlying data and could not be purchased. Both certifications concluded by stating there was a reasonable technical basis to conclude the items were only available from Boeing.The DLA used these certifications in the J&A. DLA stated the data was not available and could not be developed to allow full and open competition.Further, the Court clarified its broader holding in Chromalloy.<a href="#_ftn1" target="_self">[1]</a> The Court stated its holding in Chromalloy was to ensure an agency’s investigation was reasonable, not whether the agency took all possible investigatory steps to ascertain its rights. Here, Rotair argued DLA’s investigation was unreasonable because there was no evidence DLA, or the Army, reviewed any of its prior contracting history to determine its data rights. However, the Court disagreed and stated that the technical certifications provided showed that each part had undergone a full screening and that this was enough. Takeaway: This is another case that emphasizes the importance of understanding intellectual property rights. Further, the Court’s decision elaborates on what is considered a reasonable investigation into the government’s data rights. It seems clear that, so long as the government conducts a rather baseline review of the technical documentation for a specific part, that is good enough. Here, DLA simply relied on a certificate from the Army and the Court determined this to be adequate. Potential offerors should note that this decision inherently protects those offerors that use proprietary data to deliver goods or services to the government.ITellect, LLC v. United StatesIn this post-award protest the Court of Federal Claims determined the Defense Information Systems Agency (DISA) reasonably awarded LightGrid, LLC (LightGrid) the protested contract even though LightGrid did not disclose its president was married to a DISA Contracting Officer (CO).ITellect, LLC (ITellect) was the incumbent contractor providing Enterprise Voice Services (EVS) to DISA. DISA issued a solicitation to continue the EVS contract. Four offerors, including ITellect and LightGrid, submitted proposals. DISA awarded the contract to LightGrid on April 24, 2024.After LightGrid was awarded the contract, ITellect learned the president of LightGrid was married to a DISA CO who served as CO to ITellect’s incumbent EVS contract for two months in 2022 (Mrs. Smith). This was not disclosed on LightGrid’s proposal. LightGrid did not identify any current or potential organizational conflicts of interest (OCIs) and it did not mention a personal relationship between any of its employees and any DISA employees.ITellect protested, specifically claiming LightGrid did not disclose all its potential or actual OCIs and therefore made a material misrepresentation. After ITellect protested, the DISA CO who managed the procurement initiated an investigation to determine whether any OCI existed. ITellect made two main arguments. Specifically, DISA acted arbitrarily and capriciously by (1) not disqualifying LightGrid’s proposal for making a material misrepresentation and failing to comply with the solicitation’s requirement mandating disclosure of actual or potential OCIs, and (2) not disqualifying LightGrid for violating the FAR’s OCI provisions. ITellect also made an additional argument claiming DISA should have disqualified LightGrid due to the appearance of an OCI.The CO determined the only type of OCI that could have been applicable was unequal access to information. As part of the CO’s investigation, she reviewed communications between Mrs. Smith and LightGrid, Mrs. Smith’s sworn statement, and the Mrs. Smith’s Office of Government Ethics Form 450, in which Mrs. Smith had disclosed her relationship to the president of LightGrid. The CO also looked at Mrs. Smith’s roles in both the prior contract and current solicitation. The CO determined no OCI existed, which was consistent with the representations made by LightGrid.The Court first determined LightGrid did not make a material misrepresentation because DISA did not rely on, and nor was it influenced by LightGrid’s “omission.” The Court specifically noted Mrs. Smith did not play any role in the current solicitation. Second, the Court stated even if LightGrid did fail in disclosing the relationship between the president and Mrs. Smith, it was within the CO’s power to waive the irregularity and not disqualify LightGrid.Finally, the Court reviewed whether there was any appearance of OCI. The Court determined there was not. The Court distinguished this case from Asia Resource Partners, where the GAO found the Air Force was reasonable when it excluded an offeror because its owner was married to an Air Force CO.<a href="#_ftn2" target="_self">[2]</a> The Court noted in that case the CO and the owner hypothetically had access to nonpublic information. Here, however, Mrs. Smith did not have access to any relevant information regarding the instant procurement. Further, the Court stated, the simple existence of a family relationship did not create an appearance of an OCI.The Court concluded that the CO’s investigation was rational and entitled to deference.Takeaway: Although there was no OCI in the above case, that was not the issue. The issue was the appearance of an OCI. The Court noted LightGrid should have disclosed the relationship. LightGrid could have likely evaded this time consuming and expensive litigation had it simply disclosed the relationship between its president and the contracting officer from the start. Offerors should be thoughtful about what they do not disclose, especially with regard to OCIs, as it’s not just whether there is an actual or potential OCI but also whether the lack of disclosure might trigger or prolong an unnecessary protest.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a> Chromalloy San Diego Corp. v. United States, 145 Fed. Cl. 708 (2019).<a href="#_ftnref2" target="_self">[2]</a> Asia Resource Partners, B-400552, Nov. 5, 2008, 2008 CPD ¶ 201.

Associate

Liam Bowers is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Liam M. Bowers

Liam Bowers

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Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

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This month’s Bid Protest Roundup highlights three recent protests: one from the U.S. Government Accountability Office and two from the Court of Federal Claims.

In a recent contribution to BRIEFING PAPERS, “Other Transaction (OT) Bid Protests: A Call for Clarity and Consistency,” Locke Bell answers common questions and offers practical guidance on whether and where to protest OT awards. Read the <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltbc1e8244cb5ff3ac/672cdb404ef1041efae54f0f/241107-other-transaction-ot-bid-protests.pdf" target="_blank">full article</a>.

Locke Bell is a partner in the firm’s Government Contracts & Public Procurement practice.

Locke Bell

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Other Transaction (OT) Bid Protests: A Call for Clarity and Consistency

New DCMA Defective Pricing Pilot Team Will Possess Audit Resolution Authority

For decades, bid protests were filed in federal district courts across the United States. This led to inconsistent rulings, which in turn inspired forum shopping and “the fragmentation of Government contract law.”

This article is part of a monthly column that provides takeaways from recent bid protest cases. In this installment, we highlight decisions from the U.S. Court of Appeals for the Federal Circuit, the U.S. Government Accountability Office and the U.S. Court of Federal Claims.In its decision in Oak Grove Technologies LLC v. U.S., the U.S. Court of Appeals for the Federal Circuit clarifies the deadline by which an offeror may challenge an agency's decision not to conduct discussions in certain procurements.The U.S. Government Accountability Office decision in Matter of Ecology Mir Group LLC illustrates a common trap for the unwary with respect to the timeliness of protests of U.S. General Services Administration Federal Supply Schedule procurements subject to Federal Acquisition Regulation Subpart 8.4.The U.S. Court of Federal Claims decision in RTD Middleburg Heights LLC v. U.S., addresses the importance of contemporaneous documentation to the court's ability to find a price evaluation rational.Oak Grove TechnologiesThe Federal Circuit's Sept. 11 decision in Oak Grove Technologies reversed the Court of Federal Claims on multiple grounds. The decision is interesting for various reasons, including the fact that it upheld sanctions that the lower court imposed on the government for a defective record production. Of interest here, though, is the Federal Circuit's holding on the timelines applicable to an offeror's challenge of an agency's decision not to hold discussions.The procurement at issue had a ceiling value of $245 million and was for training services for special forces. In response to a protest, in 2021 the Court of Federal Claims found that DFARS 215.306(c)(1) creates a presumption in favor of discussions in covered procurements. Specifically, for Defense Department procurements conducted under FAR Part 15, DFARS 215.306(c)(1) provides that for "acquisitions with an estimated value of $100 million or more, contracting officers should conduct discussions."In the lower court's view, DOD agencies electing not to conduct discussions in such circumstances must document a sufficient basis for deviating from the general rule. The lower court found that the procurement record failed to provide a sufficient reason for foregoing discussions. Had there been discussions, the protester could have corrected the errors found in its own proposal.The court sustained the protest on that basis, among others, and enjoined the award. The government and the awardee appealed.On appeal, the Federal Circuit did not disagree with the protester's or the lower court's view on the meaning of DFARS 215.306(c)(1). Nor did it reverse the lower court's holding that this regulation creates a presumption in favor of discussions in covered procurements.Without addressing those merits, however, the court of appeals noted that the solicitation expressly provided that the government did not intend to hold discussions, although it reserved the right to do so. The court further observed that the solicitation incorporated the provision at FAR 52.215-1(f)(1). This provision states that an agency intends to award a contract without conducting discussions.In light of these solicitation provisions, the court held that it was obvious to prospective offerors that the agency did not intend to hold discussions. But no offeror objected until after the award was announced.Under the precedent of the 2007 Federal Circuit decision in Blue & Gold LP v. U.S., any prospective offeror aggrieved by the agency's obvious intent waived its right to complain if it did not protest before the receipt of proposals.Because the protester here saved its objection until after award, the Federal Circuit found that the protester had waived its right to challenge the lack of discussions in this procurement. Thus, even if the agency violated DFARS 215.306(c)(1), that was irrelevant to the protest.The Federal Circuit also rejected the various other protest grounds that the Court of Federal Claims had found meritorious and vacated the lower court's judgment and injunction. The appeals court did, however, affirm the lower court's imposition of sanctions on the government for defects in its production of the administrative record.TakeawaysIn the years since the Court of Federal Claims decided the Oak Grove protest in 2021, more than one decision of the Court of Federal Claims has allowed post-award protests of a lack of discussions in solicitations that provided discussions might not occur. The Federal Circuit's new decision establishes a different rule.Going forward, if a solicitation states that an agency reserves the right not to conduct discussions, and a prospective offeror thinks discussions should be held, its protest is due by the time set for proposal submission. A company is not permitted to sit on its rights and wait to object only after learning that it has not been awarded the contract.This has been the GAO's rule all along. The Federal Circuit has now essentially aligned the court's rule with the GAO's. Prospective offerors should read solicitations for large Defense Department acquisitions carefully, and consider whether to object promptly if a covered solicitation appears inconsistent with DFARS 215.306(c)(1).Ecology Mir GroupThe GAO's Sept. 12 decision in Ecology Mir Group addresses a trap for the unwary in GSA Federal Supply Schedule, or FSS, procurements subject to FAR Subpart 8.4. It is a hazard that occurs frequently due to widespread confusion within the industry and agencies about the rules governing FSS orders.On Aug. 16, the U.S. Department of the Navy informed Ecology Mir Group that it was unsuccessful in a competition conducted under FAR Subpart 8.4. The notice stated that the vendor's quotation was technically unacceptable. The vendor tried multiple times to learn the reason for this rating, but the agency refused to provide any further information.In its final attempt to pry information from the reticent agency, the vendor threatened to bring in its attorneys. It told the agency that it thought the agency was delaying further information until the new order had begun performance to frustrate a bid protest. The vendor was probably right about that, as the agency kept its silence and watched the clock.On Aug. 29, the vendor filed a protest with the GAO. Knowing nothing about the basis for its unacceptable rating, the vendor simply asserted that the rating was unreasonable. Three business days later, the agency requested summary dismissal of the protest as untimely.The GAO agreed with the agency: Because the protester knew the entire basis of its protest, such as it was, by Aug. 16, its protest was due by 10 calendar days later — Aug. 26. Because the vendor missed its protest window by three days, the GAO dismissed the protest outright.Readers may be surprised that the vendor's protest clock began running even though it had not received a debriefing. But this award was an FSS order under FAR Subpart 8.4. Under FAR Subpart 8.4, no vendor debriefings are required. The anemic "brief explanation" the agency provided was all that the law required.Was the vendor's quotation rated unacceptable for a valid reason? It may never find out.The agency's lack of transparency was poor procurement practice, but it was not illegal. And it did succeed in running out the GAO protest clock.The frustrated protester might consider refiling its protest with the Court of Federal Claims, where there are no 10-day clocks and agencies have a more difficult time hiding information. But agencies are surely aware that most FSS vendors will not be interested in paying lawyers to file a bid protest at the Court of Federal Claims over an order that may have a relatively low value.TakeawaysPay close attention to which FAR authorities an agency is using to run a procurement. The rules governing FAR Subpart 8.4 FSS acquisitions differ in significant ways from other procurement authorities.For protest purposes, the most salient differences are the lack of true debriefing rights and the absence of the GAO's debriefing exception to the ordinary protest deadlines. FSS vendors frustrated by uncommunicative agencies may wish to consider the Court of Federal Claims as an attractive alternative to the GAO in appropriate cases.RTD Middleburg HeightsIn RTD Middleburg Heights, the Court of Federal Claims considered whether the GSA's price evaluation was arbitrary and capricious for a lease procurement. Although the solicitation was released in 2019, the GSA did not award the lease until 2023. Then followed a series of protests and multiple rounds of corrective action — all centering on the GSA's repeatedly unsuccessful attempts to conduct a reasonable price evaluation.In response to the latest protest, on Aug. 16 the Court of Federal Claims found that the price evaluation was not flawed in the way that the protester claimed. This holding rested in part on the court's recognition that an agency's cost/price estimate does not have to be calculated with "impeccable rigor." Courts recognize that agencies enjoy relatively broad discretion in conducting a cost or price analysis.The court nevertheless found that the protester prevailed because the court was unable to determine how GSA determined the awardee's price. The protester demonstrated various apparent inconsistencies in the figures, where the price evaluation's connections to the awardee's proposal were not always apparent, and at times appeared to be in error or missing.The court also noted that the record failed to include native Excel versions of the evaluation worksheets, which prevented the court itself from discerning how the awardee's price was calculated.The government attempted to explain everything during oral arguments, but the court was "left to work out the math on its own," and the numbers did not appear to add up. Because the contemporaneous record was inadequate, the court found it necessary to remand the case for corrective action.The court also found that the inadequate evaluation record prevented it from ruling on the protester's claims that GSA evaluated offerors' prices disparately. Because this too prevented effective adjudication of the case, the court remanded this protest ground for corrective action as well.TakeawaysEvaluations of cost and price can be tedious to challenge, particularly when an agency's contemporaneous record is poorly documented and the agency has already had multiple opportunities to correct its errors. This decision is a useful example of how a protester can use an incomplete record to its advantage. And it is a warning to agencies that they should contemporaneously document everything and make sure their math adds up.

Jim Tucker is of counsel in Morrison & Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.
Jim’s practice runs the gamut of litiga

Bid Protest Spotlight: Debriefings, Timeliness, Documentation

This article is part of a monthly column that provides takeaways from recent bid protest cases. This installment highlights three decisions from the U.S. Government Accountability Office.Each of this month's decisions addresses a different type of challenge: a solicitation challenge during the course of corrective action, a post-award bid protest and a protester's request for recommended costs. From the "rule of two," to the Trade Agreements Act, to a recommendation for protest costs, each of these GAO decisions offers distinct, helpful reminders for both contractors submitting proposals and unsuccessful offerors looking to file protests.Knudsen SystemsKnudsen Systems Inc. involves the rule of two, and the market research that agencies must perform when setting aside contracts for small businesses.<a href="#_ftn1" target="_self">[1]</a>Specifically, under Section 19.502-2(b) of the Federal Acquisition Regulation, agencies are required to set a procurement aside for small businesses where the procurement is valued over the simplified acquisition threshold, and there is a reasonable expectation that at least two responsible small business concerns will submit offers and that award will be made at a fair market price.This is commonly known as the "rule of two." When setting aside a procurement for small businesses, agencies are required to perform adequate market research to ensure the rule of two is met.In Knudsen Systems, the U.S. Department of the Navy, Naval Undersea Warfare Center issued a solicitation for sonar sounding sets as a small business set-aside under North American Industry Classification System, or NAICS, code 334511, which is a manufacturing NAICS code.When a set-aside solicitation is assigned a manufacturing code, an offeror must either be a small business that manufactures the item being procured or qualify as a small business nonmanufacturer.To qualify as a small business nonmanufacturer, the offeror must, among other requirements, supply an end item of a small business manufacturer in the U.S., or obtain a waiver of such requirement.When the Navy initially issued the solicitation, it indicated that the Small Business Administration had issued a class waiver for the NAICS code. However, after the submission of proposals and after the Navy completed its evaluation of those proposals, it discovered that the SBA had not in fact issued a class waiver. The Navy therefore notified Knudsen Systems that it was ineligible for the award because it had proposed supplying the end product of a company from Canada, not from a U.S. small business.Knudsen Systems subsequently protested that decision, and the Navy took corrective action, and stated it would amend the solicitation to implement the correct nonmanufacturer rule status and conduct discussions to enable offerors to revise their proposals.After the Navy implemented the amendment to the solicitation, Knudsen Systems filed another protest, this time challenging the terms of the amendment.Specifically, Knudsen Systems challenged the Navy's decision to continue to set aside the procurement for small businesses in light of the amended terms of the solicitation removing the class waiver.Knudsen Systems argued that the Navy could not have performed adequate market research to find that the rule of two was still satisfied if there was no class waiver, and offerors had to either manufacture the end products themselves or supply end products manufactured by U.S. small businesses.In an Aug. 9 decision, the GAO agreed with Knudsen Systems, explaining that GAO precedent provides that where the nonmanufacturer rule applies to a solicitation, and the agency's market research fails to consider whether the firms identified in the market research can comply with the rule, the market research is unreasonable.Because the Navy's market research for the initial solicitation included an incorrect assumption that the class waiver applied, it did not consider whether small businesses could provide end products of U.S. small businesses. Therefore, the Navy could not rely on its initial market research to support its decision to continue to set aside the procurement after issuing the amendment.TakeawaysThis case is not only a reminder to agencies to ensure that they conduct adequate market research when setting aside a contract, but also a reminder to potential offerors that there is an avenue at the GAO to challenge an agency's decision to set aside a contract for small businesses.Offerors that may not qualify as small for a particular set-aside solicitation should monitor amendments to the solicitation for potential additional opportunities to make such a challenge.HPI FederalIn HPI Federal LLC, the GAO addressed whether the U.S. Air Force's acceptance of an awardee's representation of TAA compliance in a task order proposal was reasonable. The awardee's task order proposal was in response to an Air Force request for quotations, or RFQ, for the provision of certain information technology products.<a href="#_ftn2" target="_self">[2]</a>The Air Force issued the RFQ to holders of Client Computing Solutions III Blanket Purchase Agreements, which were issued pursuant to the holders' respective General Services Administration federal supply schedule contracts.The TAA requires that products be wholly made either in the U.S. or in a designated country, or substantially transformed in form, fit, or function in the U.S. or in a designated country.The RFQ required offerors to "provide a confirmation that the [quoted] end product for each product category is [TAA] compliant under the terms of this solicitation as required by [the offeror's] GSA schedule contract."Each offeror's blanket purchase agreement established a requirement that products must comply with the TAA. In addition, the blanket purchase agreements required, in accordance with Defense Federal Acquisition Regulation Supplement 252.225-7021 on trade agreements, that offerors provide a trade-agreements certificate pursuant to DFARS 252.225-7020 for each product offered in response to any solicitation issued under the blanket purchase agreement.The awardee, Transource Services Corp., provided a certification that certain LG monitors in its proposal were "assembled [in] Mexico, a TAA compliant country."However, HPI Federal LLC argued in its bid protest that it was unreasonable for the Air Force to accept this certification because it only related to assembly of the product. It did not specifically certify that the end product is an end product of Mexico.Agreeing with the protester, the GAO's Aug. 9 decision found that the Air Force could not rely on the certification because a product is not necessarily an end product of the country in which it was assembled, as assembly alone may not constitute substantial transformation.To constitute a reasonable determination, the Air Force was required to further investigate whether assembly in Mexico was, in effect, a confirmation that the monitors were the end product of Mexico.Because the Air Force did not determine that assembly of the proposed monitors in Mexico amounted to a substantial transformation of the monitors, the GAO found that the Air Force unreasonably determined that Transource had provided confirmation of TAA compliance.Thus, the GAO sustained the protest on this ground.<a href="#_ftn3" target="_self">[3]</a>TakeawaysThis case serves as a reminder for both offerors and protesters. Offerors should be mindful that if a solicitation requires certifications of TAA compliance, the language of such certifications should clearly address the TAA's requirements. Protesters should remember that TAA certification compliance is a potential protest ground to raise in such situations.NextStep TechnologyNextStep Technology Inc. is a case about a protester's submission of a request for recommended costs.<a href="#_ftn4" target="_self">[4]</a>If an agency takes corrective action in response to a protest, the GAO may recommend that the agency reimburse the protester for the cost of filing and pursuing the protest, including reasonable attorney fees, consultant fees and expert witness fees, and bid and proposal preparation costs.NextStep Technology Inc., a small business, protested the U.S. Army's award of a task order for programmatic support services to Gemini Industries Inc. The GAO subsequently conducted an outcome prediction conference call, during which the GAO indicated it would likely sustain NextStep's protest.As a result of the outcome prediction, the Army notified the GAO that it intended to take corrective action by terminating the award to Gemini, canceling the RFP and reviewing the agency's current requirements. It also asked the GAO to dismiss the protest as academic.NextStep objected to the dismissal request and asked the GAO to include a recommendation for the Army to pay NextStep its reasonable costs of filing and pursuing its protest.On Sept. 5, 2023, the GAO declined to issue a recommendation for the Army to pay NextStep's reasonable costs of filing and pursuing the protest and granted the Army's request for dismissal as academic.The GAO also notified NextStep that if there was a dispute about whether the agency would agree to reimburse NextStep, it could file a request for recommendation in accordance with Title 4 of the Code of Federal Regulations, Section 21.8.Under that regulation, a request for recommendation is due within 15 days after the date on which the protester learned — or should have learned, if earlier — that the GAO had closed the protest based on the agency's decision to take corrective action.Almost two months later, on Oct. 27, 2023, NextStep submitted a letter directly to the Army requesting reimbursement in accordance with Section 21.8(e).NextStep and the Army argued over the request for several months, until the Army issued a final determination on April 5, 2023, denying NextStep's request. Ten days later, on April 15, NextStep filed a request with the GAO seeking a recommendation for the reimbursement of costs.The Army corresponded with NextStep for several months regarding NextStep's Oct. 27, 2023, request, thus leading NextStep to believe it had followed the proper procedure. However, in an Aug. 16 decision, the GAO applied its regulations' strict timeliness rules. The GAO found that because NextStep did not file its request with the GAO within 15 days of the GAO dismissing the protest as a result of the agency taking corrective action, the request was considered to be untimely.TakeawaysThis case is an example of a hard lesson learned regarding strict adherence to where and when a protester can file a request for a recommendation to pay reasonable costs of filing and pursuing a protest.To avoid making the same mistake as NextStep, successful protesters should remember to file such requests with the GAO within 15 days of a protest being dismissed due to an agency's taking corrective action.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a>Knudsen Systems Inc., B-422433.2, Aug. 9, 2024, 2024 EL 3916166.<a href="#_ftnref2" target="_self">[2]</a>HPI Federal LLC, B-422583, Aug. 9, 2024, 2024 WL 3823852.<a href="#_ftnref3" target="_self">[3]</a>The protester raised an additional protest ground regarding the RFQ's requirement to certify countries of origin for certain component parts of proposed end products. However, the GAO denied this protest ground, finding that the awardee's certification was sufficient.<a href="#_ftnref4" target="_self">[4]</a>NextStep Tech. Inc. - Costs, B-421743.2, Aug. 16, 2024, 2024 WL 3876124.

Bid Protest Spotlight: Rule Of Two, Post Award, Cost Request

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Ali Young is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Alissandra Young McCann

Ali Young is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Alissandra McCann

Bid Protest Spotlight: Rule Of Two, Post Award, Cost Request

This article is part of a monthly column that provides takeaways from recent bid protest cases. This installment highlights three decisions from the U.S. Government Accountability Office.

This month’s bid protest roundup summarizes three protest decisions released in July. The first discusses an agency’s ability to ignore information that an offeror does not place in the correct part of its proposal. The second addresses an agency’s duty to document why a proposal’s technical superiority is (or is not) worth a particular price premium. And the third decision explores the degree of adverse attention an agency may give to a small business protégé’s lack of experience in a mentor-protégé joint venture.Crittenton Consulting Group, Inc., B-422503, July 10, 2024In Crittenton Consulting Group, Inc., a disappointed offeror challenged weaknesses assigned to its quotation under corporate experience and technical expertise evaluation factors.Under the corporate experience factor, the Request for Quotations (RFQ) required offerors to submit a “Prior Similar Experience Information Sheet” with up to three recent contract references demonstrating experience performing work similar to the work being procured. The evaluators found, among other things, that the offeror’s information sheet failed to demonstrate experience in the disposition and conversion of outdated media—two tasks that would be required under the new task order. The offeror disputed the resulting weaknesses, contending that it “conspicuously and granularly” detailed its disposition and conversion processes on six pages of its quotation. The six pages of detail, however, did not appear in the information sheet or in the 15 pages of narrative permitted for the corporate experience factor, but rather in narrative within a separate part of the quotation addressing a different evaluation factor. The agency explained that it evaluated each factor using only the information appearing in the specific quotation pages dedicated to a particular factor.Similarly, the evaluators assigned deficiencies to the quotation under the technical expertise factor for a failure to address two performance work statement sections that the RFQ required offerors to address. The protester argued that it included the allegedly missing information in its corporate experience information sheet and narrative addressing the staffing and management evaluation factor. The protester pointed out that the information was not difficult to find, as the quotation’s table of contents should have led any reasonable reader directly to the information. The agency again countered that, for each evaluation factor, the evaluators did not consider any information except what appeared in the section of the quotation addressing that particular factor.The GAO agreed with the agency. The GAO noted its longstanding rule that “it is a vendor’s responsibility to submit a well-written quotation, with adequately detailed information, which clearly demonstrates compliance with the solicitation requirements and allows a meaningful review by the procuring agency.” In this regard, “[c]ontracting agencies evaluating one section of a quotation are not required to go in search of additional information that a vendor has omitted or failed to adequately present.” An offeror risks an adverse evaluation when it fails to provide necessary information within the proposal section dedicated to the relevant factor. That is especially true when a solicitation requires offerors to organize a proposal or quotation in a particular way, with factor-specific page limits.Takeaway: Although evaluators generally are permitted to consider any information known to them, they are almost never required to do so—even when they know the information because they read it in some other part of an offeror’s proposal. Offerors should be thoughtful in the organization of their proposals and take care to provide the requested information in the specific proposal sections where the solicitation provides it should appear.AccelGov, LLC v. United StatesAccelGov, LLC v. United States is the latest decision from the Court of Federal Claims in a bid protest saga that has gone on for more than a year. The court noted that its docket reflected more than 100 filings and orders, three rounds of motions for judgment on the administrative record, and “[t]wo parties have even swapped positions — from plaintiff to defendant-intervenor and vice-versa — since the inception of this case.” Our roundup focuses on a single aspect of the new decision: How much analysis is sufficient to justify an agency’s tradeoff between technical merit and price?The solicitation for construction management technical support services established a typical best-value tradeoff evaluation and source-selection methodology. The solicitation established three evaluation factors, with the technical and past performance factors of equal importance to each other and, when combined, “more important than” the price factor.The agency evaluated proposals and found that the eventual awardee had a superior technical rating and a list of strengths, which the agency found was worth paying a price premium. The public court decision redacts the specific amount of the premium. The court quoted the agency’s documented tradeoff rationale:ISI Markon’s proposal has an exceptional approach and understanding of the technical requirements and presents an exceptional approach to manage, staff, and ensure successful delivery of each task order to accomplish WHS’[s] mission, which is worth the price premium over AccelGov’s proposal . . . because ISI Markon’s proposal is technically superior, and I have substantial confidence in ISI-Markon’s ability to successfully perform the requirements.The agency continued that ISI-Markon offered a “higher advantage to the Government overall because [of] its offered strengths,” and concluded that “it is in the best interest of the Government” to pay the price premium to get the higher advantage.The court observed that “this says nothing more than that ISI-Markon’s price premium is worth it because of its technical superiority,” which is essentially meaningless because “an agency never pays a price premium for a technically inferior proposal.” The government pointed to the record’s list of the awardee’s strengths as evidence of a rational tradeoff decision. The court rejected that argument, noting that “merely reciting a proposal’s strengths or referencing its technical superiority is insufficient. In a best value procurement, the government can no more select without explanation a technically superior proposal at any cost (merely because it is better) than it can select a low-priced technically acceptable proposal (merely because it offers savings).” The court cited regulations and case precedents for the principle that tradeoff documentation must provide “an explanation of why the government has decided to pay more for technical superiority (or why the savings justifies a lower-rated proposal).”The court acknowledged that “an agency need not quantify each benefit of a contract” as part of its tradeoff analysis. An agency is, however, required to document how the benefits of a more expensive proposal merit paying a price premium—or why the benefits of the technically superior proposal are not worth an associated premium. Quoting another case, the court observed that, if “merely reciting that a higher-priced proposal was rated technically superior to a lower-priced proposal,” then the requirement to document a tradeoff would be “truly a waste of good paper.”Because the agency’s tradeoff analysis was inadequate, the court remanded the matter to the agency to consider these issues and come up with a better best-value determination. That new determination may or may not result in a different awardee.Takeaway: Subject to the terms of individual solicitations, agencies enjoy broad discretion in determining best value and trading off technical merit against price. That discretion is not unfettered, however, and an agency must document a rational basis for the choice it makes. A mere recitation of a list of strengths and adjectival ratings, with a conclusory assertion that the strengths justify (or do not justify) paying a price premium, does not pass muster. AccelGov, LLC v. United States is a useful reminder to agencies of that fact.Tygrove Technologies, RLLP, B-422448, June 24, 2024Companies that form joint ventures under the Small Business Administration’s (SBA) mentor-protégé program will be interested in the protest of Tygrove Technologies, RLLP. The procurement was a task order competition limited to holders of the General Services Administration’s 8(a) Streamlined Technology Acquisition Resources for Services (STARS) III multiple-award contracts. The protester—Tygrove—was a joint venture between a Section 8(a) small business protégé and its SBA-approved large business mentor.In this multi-phase competition, the first phase considered an offeror’s past performance, experience, and team structure. The procuring agency assigned Tygrove a marginal rating for this phase and determined that its proposal did not rate highly enough to progress to the second phase of the competition.Tygrove’s marginal rating stemmed in large part from the agency’s assessment of a significant risk that the offeror lacked the capability or experience to perform the work. The agency found that only the large business mentor “has demonstrated the capability to perform this work successfully,” whereas the protégé did not show it was capable of assuming the minimum 40% workshare that SBA regulations required of it. The evaluators also found insufficient evidence that the managing venturer was capable of managing the task order, particularly in light of the roles the proposal assigned to it. The agency found an additional risk in the “very low blending” of venturers within the task areas, with a “significant imbalance of work performance.” The agency determined that the protégé “brings very little to this proposal other than its 8(a) status.”The protester objected that the agency’s determinations violated the SBA regulations governing 8(a) and other small business joint ventures. Those regulations require, in relevant part: “When evaluating the capabilities, past performance, experience, business systems, and certifications of an entity submitting an offer for an 8(a) contract as a joint venture established pursuant to this section, a procuring activity must consider work done and qualifications held individually by each partner to the joint venture as well as any work done by the joint venture itself previously.” 13 C.F.R. § 124.513(f); see also 13 C.F.R. § 125.8(e). The protester also objected to the agency’s consideration of the fact that the regulations require the small business protégé in a mentor-protégé joint venture to perform at least 40% of the work performed by the joint venture itself.The GAO noted there was no dispute over the fact that SBA regulations require an agency to consider the experience of each joint venture member, as well as any experience of the joint venture itself. The GAO also observed that it previously has held that SBA regulations do not impose any particular degree of “consideration” that evaluators must give to each venturer, and that agencies may not ignore SBA regulations when conducting a procurement. As a result, the GAO found that the agency documented a rational and permissible concern with the managing venturer’s lack of relevant experience. This concern was reasonable in light of the protégé’s regulatory duty to manage overall contract performance and perform at least 40% of the work performed by the joint venture as a whole.The GAO sought SBA’s view, and SBA agreed that “[a]n agency may require a protégé firm to demonstrate some past performance and experience. Such a requirement is reasonable to ensure the protégé can meet its required 40 percent performance of work requirement.” SBA stated that its regulations permit an agency to “apply reasonable evaluation or responsibility criteria to the protégé managing venturer to ensure that it has the necessary experience and capacity to perform the work, as long as such criteria are not the same as those required of other offerors generally.” As SBA has previously argued before the GAO, its regulations require a protégé firm to “bring something to the table other than its size or socioeconomic status.” SBA opined that nothing in the record before it suggested that the procuring agency had violated the regulations governing mentor-protégé joint ventures.The GAO, therefore, denied this protest ground. Although SBA suggested the adverse evaluation might constitute a responsibility matter that should have been referred to SBA for a certificate of competency, the GAO disregarded that question because the protester had not made that argument.Takeaway: This is the latest in a growing body of decisions addressing agencies’ evaluations of the experience and capabilities of mentor-protégé joint ventures. Contrary to some popular misconceptions, the governing regulations do not envision that large business mentors will provide all the experience and capabilities, while the small business protégés simply supply the socioeconomic ticket to the competition. In light of Tygrove and similar decisions, a joint venture offeror should consider highlighting in its proposals the valuable experience, capabilities, and other contributions that its small business protégé venturer brings to the table.

Bid Protest Spotlight: Misplaced Information, Conclusory Tradeoffs, and Inexperienced Protégés

Bid Protest Spotlight: Misplaced Information, Conclusory Tradeoffs, and Inexperienced Protégés

This month’s bid protest roundup summarizes three protest decisions released in July. The first discusses an agency’s ability to ignore information that an offeror does not place in the correct part of its proposal.

This month’s Bid Protest Roundup highlights three recent protests from the U.S. Government Accountability Office. The first protest concerns whether the protester is an interested party; the second involves the adequacy of an agency’s investigation into a potential Procurement Integrity Act violation; and the third addresses an impaired objectivity organizational conflict of interest.Cask Technologies, B-422437.2, June 20, 2024In this decision, the Government Accountability Office (GAO) dismissed the protest of Cask Technologies, LLC (“Cask”) after finding that Cask was not an interested party.The solicitation, issued by the U.S. Department of the Navy for enterprise network cyber defense services, evaluated offerors under three factors: key personnel, organizational experience, and cost. Under the key personnel factor, offerors were required to submit resumes for each key personnel labor category. After receipt of initial proposals, the evaluators identified two proposals that represented the most likely candidates for award. Cask’s proposal was not considered a most likely candidate for award, in part because its proposal received a lower key personnel rating than the awardee and a third offeror. After the agency’s initial review, Cask notified the contracting officer that one of its proposed key personnel had become unavailable. The agency elected not to enter into discussions with Cask and did not allow for a substitution of the key personnel because it had already determined that Cask’s proposal was not a candidate for award. The agency awarded RMC the task order. Cask protested challenging the agency’s key personnel evaluation.In response, the agency filed a request for dismissal on the grounds that Cask was not next in line for award and Cask’s proposal was technically unacceptable because its key personnel became unavailable. Cask did not dispute that its proposal became technically unacceptable upon learning that one of its key personnel was unavailable; however, Cask argued that if its protest was sustained, it would be a likely candidate for award and the agency would be required to conduct discussions with Cask to consider its substitute key personnel. Cask further suggested that once its protest was sustained it would be in the competitive range, even though the agency never established a competitive range.The GAO explained that when a solicitation requires resumes for key personnel, the resumes form a material requirement of the solicitation. And when the agency learns that a key personnel is no longer available, it can either reject the proposal as technically unacceptable for failing to meet a material requirement or it can open discussions to proposal revisions. Here, because the solicitation explicitly contemplated award on the basis of initial proposals and the agency made the award without establishing a competitive range, conducting discussions, or allowing proposal revisions, Cask’s contention that the agency would be required to open discussions if its protest was sustained was plainly incorrect.The GAO concluded that Cask would not be next in line for award because its proposal would remain technically unacceptable, the agency would not be required to open discussions to permit revision of Cask’s proposal, and the agency had a technically acceptable proposal from another offeror that would be next in line if the award was set aside. As a result, Cask was not an interested party.Takeaways: This protest serves as an important reminder when considering whether to protest an award. As a protester, you must be able to establish that if the agency sets aside the award, your firm has a reasonable likelihood of award under a corrected evaluation and source selection. If the protester’s proposal is technically unacceptable and properly ineligible for award, and there is no requirement for further discussions or proposal revisions, the protester is not an interested party with standing to protest alleged mistakes in the evaluation of the awardee’s proposal.Loyal Source Government Services, LLC, B-420959.14, June 7, 2024This protest involves a solicitation issued in 2022 by the Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP) for medical screening services. After several rounds of protests and various corrective actions, the agency issued an amendment to the Request For Quotations (RFQ). Loyal Source filed a pre-award protest challenging the terms of the amended RFQ and alleged the agency failed to mitigate procurement integrity violations that competitively prejudiced the protester. The agency took partial corrective action to further amend the RFQ and clarify its requirements, thus rendering that protest ground academic. Regarding the Procurement Integrity Act (PIA) violation protest ground, however, Loyal Source identified an article that included “non-public information about the evaluation under this Solicitation and disparaging and inaccurate information about Loyal Source’s past performance under the incumbent contract.” As a result, Loyal Source asserted that the agency must cancel the procurement entirely or mitigate the violation. Loyal Source first raised the potential PIA violations on November 28, 2023, in a letter to the contracting officer citing a Washington Post article, dated November 19, 2023, that confirmed CBP officials violated the PIA by identifying Loyal Source as a finalist for the procurement and disclosing that although the CBP advisory board did not initially recommend Loyal Source for the next round of consideration, that decision was later overruled.In response to the November 28 communication from Loyal Source, the Head of Contracting Activity (HCA) prepared a memorandum discussing the potential PIA violation, the investigation, and the steps taken to mitigate the violation. The HCA found that the November 19 article involved the unauthorized disclosure of source selection information in violation of the PIA. Accordingly, the HCA referred the matter to CBP’s Office of Professional Responsibility (OPR) for further investigation. The HCA also transferred the procurement from CBP to DHS headquarters, Office of the Chief Procurement Officer with the understanding that the DHS Office of Procurement Operations (OPO) would review and validate the current CBP procurement strategy. OPO appointed a new contracting officer who made changes to the evaluation team to further mitigate the impact of the PIA violation. As a result, no CBP personnel would serve as evaluators or as the designated selection official. The new contracting officer also indicated that any additional PIA violations or acts of misconduct may result in significant solicitation revisions or the cancellation of the solicitation entirely.Loyal Source challenged the agency’s PIA investigation and the PIA mitigation measures. The GAO, however, determined that the agency’s actions met the requirements set forth in the Federal Acquisition Regulation (FAR).Loyal Source argued that the agency’s PIA investigation was inadequate because its analysis only focused on the November 19 article and failed to mention the procurement integrity issues in two additional articles dated August 25, 2023, and November 30, 2023, and two congressional letters from the Government Accountability Project (GAP), dated November 30, 2023, and February 16, 2024. The GAO determined that Loyal Source did not provide the agency with sufficient notice of these potential PIA violations. With respect to the additional articles, Loyal Source only referenced the August 25 article once in a footnote of a letter sent to the agency noting that the article “may be improper” and did not establish when or how it raised the November 30 article to the contracting officer. As for the GAP letters, both were issued after the HCA’s memorandum and thus could not have been addressed. The GAO further determined the agency took the appropriate action after learning of the public disclosure of source selection information. In accordance with FAR 3.104-7(b)[1], the agency properly responded by launching an investigation, referring information to OPR, concluding a violation occurred, and implementing mitigation measures to allow the procurement to continue.Loyal Source next claimed the agency failed to meet its PIA mitigation obligations. First, Loyal Source argued that the agency’s investigation was insufficient because it had not identified and removed the CBP employees who made the improper disclosures. Second, because the agency’s investigation was insufficient, the only recourse available was to cancel the solicitation. The GAO disagreed. Not only did CBP transfer the procurement to DHS headquarters and replace the original contracting officer, technical evaluators, and source selection officials with individuals from outside CBP, but CBP launched an investigation to identify the employees involved. The GAO found these mitigation efforts sufficient. The GAO also determined that the cancellation of the procurement was not required because Loyal Source could not establish that it was competitively prejudiced as a result of the improper disclosure. Moreover, Loyal Source’s claim that certain disclosures related to its performance under its incumbent contract were negative and misleading is insufficient to establish competitive prejudice because that information is not the type prohibited from release under the PIA.[2] Accordingly, GAO denied the protest.Takeaways: First, if an offeror suspects a PIA violation has occurred, the offeror should notify the contracting officer immediately. The notice should be clear and contain any supporting documentation. It should not be assumed that the contracting officer will make any inferences or dig for additional information. Second, this protest is a reminder of the agency’s obligations when confronted with a potential PIA violation. An agency has a responsibility to conduct a thorough and complete investigation and take appropriate and reasonable mitigation measures consistent with the requirements of the FAR. A Square Group, LLC, B421792.2; B-421792.3, June 13, 2024The GAO sustained the protest of A Square Group on the ground that the Center for Medicare and Medicaid Services (CMS) failed to reasonably consider the awardee’s proposed organizational conflict of interest (OCI) mitigation plan.The procurement for the subject protest involved a Request for Quotation (RFQ) for operational analytics. After receiving seven quotations, the agency conducted a best-suited vendor determination and eliminated four vendors from consideration. The agency held discussions with the three remaining vendors including Cogent People, Inc. (“Cogent”) and A Square Group (ASG). In reviewing Cogent’s quotation, the technical evaluation panel (TEP) identified a potential OCI concerning one of Cogent’s proposed subcontractors. Cogent’s proposed subcontractor performed data validation under its Federally Facilitated Exchange (FFE) contract. Given the subcontractor’s FFE work, the TEP asked Cogent how it planned to ensure there would be no conflict of interest with the subcontractor supporting the task order. Cogent proposed to implement a firewall to restrict certain individuals from reviewing or validating payment data generated by personnel under the FFE contract and provide strict oversight of the data validation process. The agency determined that Cogent’s response adequately addressed its concerns.Following a round of corrective action, the agency issued questions to the three vendors and evaluated their revised quotations. Cogent and ASG received nearly identical ratings; however, ASG received a High Confidence rating for the technical factor while Cogent received a Some Confidence rating. Additionally, ASG’s proposed price was almost $7 million more than Cogent’s price. Despite ASG’s better ratings under the non-price factors, which, when combined, were significantly more important than price, the contracting officer determined the quotations were of equal merit and because ASG’s price was higher Cogent was the best-suited vendor. Following subsequent exchanges with Cogent, the agency determined it had overlooked some concerns under the quality assurance plan/quality surveillance plan factor in Cogent’s second revised quotation. As a result, the TEP assessed a weakness and changed Cogent’s rating from High Confidence to Some Confidence. The agency requested another revised quotation and recommended award of the task order to Cogent. ASG protested.ASG challenged multiple aspects of the procurement, including the adequacy of Cogent’s OCI mitigation strategy and whether the agency properly considered the impact of the OCI on Cogent’s technical approach. In response to ASG’s OCI challenge, the contracting officer prepared a memorandum discussing the nature of the OCI and Cogent’s proposed mitigation plan. The contracting officer indicated she reviewed Cogent’s quotation and confirmed the individual proposed for validating payment was a Cogent employee. The contracting officer, however, did not address the fact that the individual proposed for enrollment validation was an employee of the proposed subcontractor. In this protest, it was clear an impaired objectivity OCI[3] was present, so the question became whether the proposed mitigation plan was sufficient. ASG claimed the mitigation plan was inadequate because Cogent only proposed to firewall the subcontractor from validating payments data, but not from all data prepared by the subcontractor. The agency asserted that the terms “payments data” and “enrollment data” were used interchangeably, meaning the subcontractor would be firewalled from all subcontractor generated data. But GAO disagreed because the Statement of Work did not treat the terms as equivalent and Cogent’s mitigation approach specifically stated that its subcontractor would be firewalled from reviewing or validating payments data. In addition, Cogent’s proposal treated the data differently. For example, Cogent proposed two business analyst leads – one responsible for validating payment data and another responsible for enrollment data. The GAO found that Cogent’s mitigation approach failed to address the complete scope of work giving rise to the OCI, and thus the Cogent did not adequately mitigate the OCI. Accordingly, the GAO sustained this protest ground.The GAO also considered whether the agency accounted for the impact of Cogent’s mitigation measures on its technical approach. As the GAO has explained, agencies must consider whether the mitigation measures contradict the firm’s technical approach or undermine the agency’s original evaluation of the firm’s approach. Although Cogent proposed to firewall the subcontractor personnel from validating payments data, none of Cogent’s revised quotations reflected the firewall in connection with Cogent’s staffing approach. The contemporaneous record was similarly devoid of any consideration of the impact of the firewall on Cogent’s technical approach. As a result, the GAO sustained this protest ground as well.Takeaways: Firewalls alone are difficult solutions to impaired objectivity OCIs because they do not eliminate the relevant financial incentive. Here, the firewalled subcontractor approach may have been effective had it covered the complete scope of work at issue. That said, when evaluating and mitigating a potential OCI, it is incumbent upon the offeror to consider all areas of the procurement that the OCI could touch. Additionally, if a contractor intends to implement OCI mitigation efforts, it must ensure the entire proposal, including the technical approach, accounts for any such efforts.<hr class="divider">[1] FAR 3.104-7(b) requires the HCA take appropriate action such as “(1) advise the contracting officer to continue with the procurement; (2) begin an investigation; (3) refer the information disclosed to appropriate criminal investigative agencies; (4) conclude that a violation occurred; or (5) recommend that the agency head determine that the contractor, or someone acting for the contractor, has engaged in conduct constituting an offense punishable under 41 U.S.C. 2105, for the purpose of voiding or rescinding the contract.”[2] 41 U.S.C. § 2102(a)(1) restricts disclosure of “contractor bid or proposal information or source selection information before the award of a Federal Agency procurement contract to which the information relates.”[3] An impaired objectivity OCI arises where a contractor’s work under one government contract involves evaluating itself or an affiliate such that the contractor’s ability to render impartial advice could be compromised by the contractor’s relationship to the party being evaluated.

 June 2024 Bid Protest Roundup

Caitlin Crujido is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Caitlin A. Crujido

Caitlin Crujido

June 2024 Bid Protest Roundup

This month’s Bid Protest Roundup highlights three recent protests from the U.S. Government Accountability Office. 

June 2024 Bid Protest Roundup

A recent decision, <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv0160-37-0" target="_blank">Independent Rough Terrain Center, LLC v. United States</a> (“IRTC”),<a href="#_ftn1" target="_self">[1]</a> confirms the U.S. Court of Federal Claims has jurisdiction over bid protests related to follow-on production contracts arising out of other transaction (“OTs”) for Department of Defense prototype projects. The court’s holding in this respect is consistent with past cases and relatively unremarkable. But the legal framework the court adopts is quite noteworthy and may even chart a path for expanded jurisdiction over protests of initial prototype OT solicitations and awards. First, a brief introduction (or reminder) on OTs. Most federally funded agreements in the United States take one of three forms: a procurement contract, where the government is acquiring goods or services for its direct benefit or use, or a grant or cooperative agreement, where the government provides funding (or something else of value) to carry out some public purpose. Congress has further authorized some agencies to enter into other types of agreements in certain circumstances. For DoD, this includes the award of OTs to carry out prototype projects that meet the statutory criteria set forth in 10 U.S.C. § 4022, and the award of sole source follow-on production OTs or contracts upon their successful completion. In many ways, DoD’s prototype OTs look and feel and act a lot like a procurement contract – they are, after all, contracts for prototypes or prototyping services – but they are, by design, not subject to most procurement laws and regulations, including the Competition in Contracting Act (CICA), the Federal Acquisition Regulation (FAR), or the DoD FAR Supplement (DFARS). This affords greater flexibility and speed in the acquisition process. It also raises questions around traditional means of oversight, including the availability of independent review through bid protests.A general rule has emerged in federal courts: If a prototype OT solicitation or award contemplates follow-on production, the Court of Federal Claims has exclusive jurisdiction to hear related bid protests. If, on the other hand, the prototype OT stands independent from any future production award, then any protest must be brought in a federal district court of general jurisdiction. We have discussed this rule in greater detail elsewhere: e.g., <a href="https://govcon.mofo.com/topics/another-piece-to-the-puzzle-court-of-federal-claims-has-jurisdiction-over-bid-protest-where-the-disputed-other-transaction-could-lead-to-a-follow-on-production-contract?_gl=1*re7ds*_ga*MTkyMTA2Mzg1OC4xNzE3MDEzODc5*_ga_3HVRG7GH76*MTcxNzUxNjI3OS40LjEuMTcxNzUxNjMwNC4wLjAuMA.." target="_blank">Another Piece to the Puzzle: Court of Federal Claims Has Jurisdiction over Bid Protest Where the Disputed Other Transaction Could Lead to a Follow-on Production Contract</a> and <a href="https://govcon.mofo.com/topics/where-can-you-protest-an-other-transaction-award-insights-from-kinemetrics" target="_blank">Where Can You Protest an Other Transaction Award? Insights from Kinemetrics</a>.<a href="#_ftn2" target="_self">[2]</a>Through this lens, the court’s decision to take jurisdiction in IRTC makes perfect sense: not only did the solicitation at issue contemplate follow-on production, it was for follow-on production. Specifically, the protester challenged actions of the U.S. Army Materiel Command in connection with determining which of two prototype OT recipients would receive a follow-on production contract. That the Court of Federal Claims has jurisdiction over such protests is a natural application of the court’s jurisdictional mandate, DoD’s OT statute, and past case law. More interesting, though, is how the court reached its conclusion. Yes, the court acknowledged the prior cases and rule, noting the Court of Federal Claims has claimed jurisdiction when a prototype OT award “initiated an acquisition process that led to, or at least contemplated, the eventual award of a follow-on production contract.” But before reaching those cases, the court pinpointed a different, higher-level question guiding its analysis. According to IRTC, “the relevant inquiry requires the Court to look at what the Government is seeking through the solicitation of proposals.” If the purpose is “acquiring property or services,” then the solicitation is a “procurement” properly within the court’s jurisdiction.<a href="#_ftn3" target="_self">[3]</a> Because in IRTC “the Solicitation at issue [was] to acquire for the benefit of the Army the goods and services proposed” by the prototype OT performers, exclusive jurisdiction properly sat with the Court of Federal Claims.The court distinguished this from its prior decision in Space Exploration Technologies Corp. v. United States (“SpaceX”),<a href="#_ftn4" target="_self">[4]</a> where it transferred a prototype OT bid protest to the Central District of California because the government had no intent to award direct follow-on production contracts. In that case, the U.S. Air Force issued prototype OTs as investments in developing the commercial space launch industry, from which the Government would procure services in the future through full-and-open commercial services competitions that were “separate and distinct” from the OTs. Thus, the OTs were not a procurement because, according to the court, they “did not involve the procurement of any goods or services” by the agency. The court concluded that, “[i]n this way, a solicitation for a follow-on production contract is materially distinguishable from a solicitation issued during the OT prototype phase.”That may arguably be true for the OTs at issue in SpaceX, but it is too broad a stroke to apply to all prototype OTs. In fact, one could reasonable estimate that most prototype OTs involve the acquisition of property or services in some form or another, whether through the delivery of prototype hardware or software or related design documents, or provision of R&D or prototyping services. Indeed, DoD has even admitted, in historical (and admittedly outdated) versions of its Other Transactions Guide, that prototype OTs are “acquisition instruments” that are “intended to provide DoD a direct benefit.”<a href="#_ftn5" target="_self">[5]</a> In that case, it seems logical to extend the court’s definition of a “procurement,” and its holding in IRTC, to give it jurisdiction over OT bid protests even where the initial prototype OT solicitation does not contemplate a follow-on production award, but nevertheless involves the acquisition of prototypes or prototyping services.There is a good public policy rationale to support this result. Keep in mind the alternative if the Court of Federal Claims declines jurisdiction: it is not a total bar to judicial review, but rather jurisdiction in one of the man federal district courts of general jurisdiction, before a judge who is unlikely to be as familiar with bid protests or government contracting as the specialized judges at the Court of Federal Claims.We will watch with interest to see whether IRTC is in fact a harbinger of expanded OT bid protest jurisdiction at the Court of Federal Claims, much like we are watching to see if GAO will expand its own jurisdiction over OT bid protests involving follow-on production awards, as we wrote about recently in <a href="https://govcon.mofo.com/topics/gao-opens-the-door-to-certain-other-transaction-bid-protests" target="_blank">Has The GAO Opened the Door to Certain Other Transaction (OT) Bid Protests?</a>. <hr class="divider"><a href="#_ftnref1" target="_self">[1]</a> No. 24-160 (Fed. Cl. July 1, 2024).<a href="#_ftnref2" target="_self">[2]</a> For discussions of GAO’s OT jurisdiction, see, e.g., <a href="https://govcon.mofo.com/topics/gao-opens-the-door-to-certain-other-transaction-bid-protests" target="_blank">Has The GAO Opened the Door to Certain Other Transaction (OT) Bid Protests?</a> and <a href="https://govcon.mofo.com/topics/gao-sharpening-its-blade-strategies-on-ota-review" target="_blank">GAO Sharpening Its Blade [Strategies] on OTA Review</a><a href="#_ftnref3" target="_self">[3]</a> Ironically, this definition, based in Federal Circuit precedent, is pulled from 41 U.S.C. § 111, a section of the U.S. Code comprising the very procurement laws from which OTs have been exempted. <a href="#_ftnref4" target="_self">[4]</a> 144 Fed. Cl. 433 (2019).<a href="#_ftnref5" target="_self">[5]</a> Dep’t of Def., Other Transactions Guide for Prototype Projects, Version 1.2.0 at 1-2 (Jan. 2017); see also USD (AT&L), “Other Transactions” (OT) Guide for Prototype Projects § C1.6 (Dec. 21, 2000) (“OT prototype authority may be used only to carry out prototype projects that are directly relevant to weapons or weapon systems proposed to be acquired or developed by the Department. As such, any resulting OT awards are acquisition instruments since the government is acquiring something for its direct benefit.”).

Court of Federal Claims Potentially Expands Its Other Transaction (OT) Bid Protest Jurisdiction

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Court of Federal Claims Potentially Expands Its Other Transaction (OT) Bid Protest Jurisdiction

A recent decision, Independent Rough Terrain Center, LLC v. United States (“IRTC”),[1] confirms the U.S. Court of Federal Claims has jurisdiction over bid protests related to follow-on production contracts arising out of other transaction (“OTs”) for Department of Defense prototype projects. 

The first decision, Kearney & Co. v. U.S., explores the ability of contractors to use labor mapping to bridge differences between an agency's stated needs and a contractor's offerings under its U.S. General Services Administration federal supply schedule contracts.[1]The second details GAO jurisdiction over a combined competition for cash prizes and a small business innovative research, or SBIR, contract.The third reaffirms the importance of agencies understanding what a contractor is offering.<a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv0162-35-0" target="_blank">Kearney</a>The COFC granted a permanent injunction to Kearney and Company PC in a National Geospatial-Intelligence Agency procurement for audit services through the GSA federal supply schedule.This COFC post-award protest was the immediate result of corrective action taken by the agency in response to a GAO protest filed by its competitor.During a predictive outcome call, the GAO stated that it was likely to sustain the competitor, Deloitte's, protest based on the argument that the awardee's labor category description did not match up exactly with the key personnel position.As a result, the NGA terminated Kearney's contract for convenience and announced a plan to reassess all bids, resulting in the current protest.[2]Deloitte's initial GAO protest challenged Kearney's labor category mapping for one key personnel position: senior statistician.This position required someone with an "[a]dvanced degree in statistics, biostatistics, mathematics, a quantitative social science, or a similar field," who also had "[e]xperience designing statistical samples and using statistical methods to calculate population estimates and sampling errors from a probability sample." The solicitation also said that the key personnel could be mapped to labor categories from each offeror's federal supply schedule contract.In its proposal, Deloitte mapped the senior statistician position to its risk senior project support III labor category, which requires a bachelor's degree and at least four years of experience, and included a functional responsibility related to serving as an expert.Alternatively, Kearney mapped the senior statistician position to its senior management analyst labor category, requiring a bachelor's degree and two years of experience, but no mention of statistics or any ability to serve as a subject-matter expert.The NGA awarded the contract to Kearney, presumably finding that the senior management analyst labor category met the requirements of the senior statistician role, but later took corrective action due to Deloitte's protest.When examining the GAO's basis for its outcome prediction and the corrective action taken, the COFC had to analyze the NGA's initial decision to accept Kearney's use of the senior management analyst labor category.First, the COFC rejected the general argument, as it was understood by the government and Kearney in the predictive call[3] that Kearney's labor category did not satisfy the senior statistician position because the solicitation required an exact match between the position, noting that the solicitation had not specified any need for an exact match.The court instead held that the default rule is that offerors may map their similar, but not identical, labor categories onto the key personnel needs of the solicitation. In the court's view, the NGA's corrective action was unreasonable because it was based on an incorrect contract interpretation by the GAO that an exact match was required.Second, the COFC rejected the argument that Kearney's proposal could not satisfy the senior statistician position because the description for Kearney's senior management analyst labor category did not mention enough relevant expertise.The court found Deloitte's argument too narrowly tied to titles and descriptions rather than functional responsibilities. Instead, the COFC applied the standard that the labor category must reasonably encompass the requirements of a key personnel position.TakeawaysWhen drafting proposals that require labor mapping, contractors should carefully review the solicitation's requirements to ensure whether an exact match to the requested labor description requirements are needed.Otherwise, contractors can use the "reasonably encompass" standard for mapping purposes; however, the same contractors should also expect unsuccessful bidders to scrutinize their determination of what is and is not reasonable. Offerors should try to match the requirements as closely as possible to their own labor categories to ensure that this reasonableness standard is met.<a href="https://www.gao.gov/assets/870/868647.pdf" target="_blank">ARiA</a>The GAO determined that it had jurisdiction over ARiA's protest regarding its elimination from a competition that awarded both cash prizes and the right to compete for an SBIR direct to phase II contract award.[4]In this protest, ARiA's protest arose under a competition announcement posted by the Army xTech program, which "hosts Army prize competitions, connecting businesses with Army and [Department of Defense] experts to build solutions for current problems" and "allows businesses to compete for cash prizes and potential follow-on contracts to accelerate and transition their transformative technology solutions into the Army."ARiA submitted a concept white paper in the first round of a three-round Army competition to develop "scalable techniques for adversarial [artificial intelligence]."The eight companies that won in Round 1 would each receive a cash prize and the opportunity to advance to Round 2. The four companies that won in Round 2 would receive another cash prize and the opportunity to advance to Round 3, which was a competition for the SBIR contract. A company had to advance through Rounds 1 and 2 to compete for the SBIR contract in Round 3.GAO Jurisdiction Over Competition Leading to SBIR ContractARiA lost in Round 1 and filed a protest on the same day at the GAO. The Army argued that the GAO had no jurisdiction under the Competition in Contracting Act to hear the protest.The GAO previously held, in the matter of David Frankel in 2013, that its jurisdiction does not extend to competitions for cash prizes because its protest jurisdiction is limited to matters related to a contract related to the procurement of property or services.The Army relied on a statutory authorization to hold competitions for cash prizes, independent of the SBIR authority, as its basis for Rounds 1 and 2 of the competition. Because no contract would be awarded in Round 1, the Army argued that Round 1 fell outside the GAO's jurisdiction as a cash- based prize competition.Given the Small Business Administration's involvement in the competition, the GAO invited the SBA to participate in the protest proceedings.Although the GAO did not comment on the legality of the Army's competition structure under SBIR regulations, it did rely on the SBA's characterization of the competition to assist in its analysis.As noted above, the Army argued that each round of the competition was distinctly separate, with Round 3 only being available to those with an invitation. Instead, the SBA argued that the Round 1 and 2 awards were down-selects within a single competition for a SBIR direct to phase II contract, in addition to cash prizes.The GAO agreed with the SBA's interpretation for purposes of determining jurisdiction, but the GAO did not consider whether the SBA's interpretation of the competition would satisfy the law.Instead, the GAO found that Round 1 would lead not only to the award of a cash prize, but also to the right to further compete, which could eventually lead to a procurement contract. Therefore, the GAO had jurisdiction. After determining that it had jurisdiction, the GAO rejected ARiA's protest on other grounds.TakeawaysThis decision demonstrates the importance of looking to the ultimate outcome of a competition rather than focusing on the individual down-select rounds. Although bid protest jurisdiction could become murky around the award of cash prizes, the GAO can focus on the ultimate goal — here, an SBIR contract — to establish jurisdiction.<a href="https://www.gao.gov/assets/870/868203.pdf" target="_blank">ITility</a>In this decision, the GAO sustained a protest by ITility LLC and affirmed the proposition that an evaluation is reasonable only if the agency assigns strengths to an offeror for material and actions actually contemplated and clearly outlined in submitted proposals.[5]ITility was a disappointed bidder for a task order to provide financial and program management support services to the U.S. Department of Homeland Security.The agency selected Integrated Finance and Accounting Solutions LLC for award, based largely on five strengths in IFAS' proposal.Indeed, IFAS and ITility received identical adjectival ratings, and ITility's proposal cost $4 million less, but the agency determined that IFAS offered a better value to the government based on these five strengths.Overall, ITility argued that the agency's evaluation of IFAS' proposal must have been unreasonable as it assessed a positive evaluation based on material that the proposal did not actually contain and failed to recognize two discriminators between the proposals. The GAO agreed.For example, one assessed strength for IFAS was for a proposal to use an audit command language tool to establish an enterprise risk management program.The agency's technical evaluation team interpreted this as an offer to establish an enterprise risk management program. The Source Selection Authority highlighted this promise to develop an enterprise risk management program as one of the differentiating factors to justify the award to IFAS despite its more expensive proposal.As outlined in ITility's supplemental protest, the evaluation documents demonstrated that the agency misunderstood the use of the acronym "ERM" in IFAS' proposal. Rather than enterprise risk management, as the agency wrote in its evaluation, IFAS intended the acronym to stand for enterprise resource management.In addition, ITility claimed that IFAS had not actually committed to using the audit command language tool to develop the ERM program — the agency doubly misunderstood the proposal. Further, the agency's filings did not substantively address either claim raised in the supplemental proposal, the GAO found, so the agency "effectively conceded that the arguments have merit."Next, the GAO analyzed the claim for unrecognized discriminators. For example, the GAO faulted the agency's evaluations for failing to acknowledge distinctions in the offeror's proposed transition plans.ITility, the incumbent contractor, promised to have 100% of staffing needs met on the first day of performance. IFAS, in contrast, would not be fully staffed until day 60 of contract performance.The agency determined that ITility merely met the requirements in the qualitative evaluation of the transition plan despite the advantage offered. The agency argued that to acknowledge the advantage would improperly favor ITility as the incumbent.The GAO disagreed, noting that ITility did not seek a benefit solely for being the incumbent; instead, because the solicitation stated that the agency would perform a qualitative evaluation of the transition plan, the agency had to consider the differentiating factor that ITility could have its staff ready earlier. This did not equal any improper favoritism toward an incumbent contractor.Because the underlying evaluation for each proposal was flawed, the best-value trade-off analysis that led to IFAS' selection was also flawed, the GAO determined. The GAO sustained the protest and recommended that the agency reevaluate proposals and perform a new best‑value trade-off analysis.TakeawaysOfferors should use clear language in their proposals that easily outlines for the agency what services are being offered.As seen in this case, offerors must ensure that their bids are clear enough for the government to write a comprehensive and accurate evaluation. Misunderstandings in proposals can become vulnerabilities if an award is protested.Further, while an agency cannot improperly favor a contractor merely for its status as an incumbent, an incumbent contractor will naturally be able to offer advantages in parts of its proposal that an agency cannot ignore if the solicitation states that they will be evaluated.Ethan Sterenfeld, a Law Clerk in our Washington, D.C., office, contributed to the writing of this article. [1] Kearney & Co. v. United States, Nos. 24-162, 24-201 (Fed. Cl. May 16, 2024).[2] Deloitte was not satisfied with the corrective action either and filed a second GAO protest. The GAO dismissed Deloitte's second GAO protest after Kearney filed its COFC protest.[3] As the GAO outcome prediction call could not be transcribed or recorded, the parties presented differing versions of the call. The agency and Kearney understood that the GAO would likely sustain Deloitte's protest on one narrow issue — that, in the GAO's opinion, the solicitation required an exact match with the Senior Statistician position and any of the offerors' FSS LCAT descriptions. On the other hand, Deloitte represented that the GAO held that "Kearney's proposed LCAT mapping was unreasonable because the services Kearney quoted exceeded the scope of ... its FSS contract."[4] ARiA, B-422365 et al., May 28, 2024.[5] ITility, LLC, B-421871.3, B-421871.4, May 3, 2024.

Nicole Giles is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Nicole Giles

Nicole E. Giles

The first decision, Kearney & Co. v. U.S., explores the ability of contractors to use labor mapping to bridge differences between an agency's stated needs and a contractor's offerings under its U.S. General Services Administration federal supply schedule contracts.

Bid Protest Spotlight: Mapping, Jurisdiction, Incumbency

Bid protests of other transaction agreements, also known as “OTs” or “OTAs,” are a common topic for this blog. These federal agreements differ from your everyday procurement contracts in that they are not subject to the Competition in Contracting Act (CICA), Federal Acquisition Regulation (FAR), Department of Defense (DoD) FAR Supplement (DFARS), or other common procurement laws and regulations. Although they are not a particularly new phenomenon, the number and size of OT awards has increased exponentially in the last ten years, driven chiefly by a revised statutory authority and increased popularity at DoD.<a href="#_ftn1" target="_self">[1]</a> So, too, come the bid protests. But, being subject to different legal frameworks, an OT bid protest is not a garden-variety bid protest challenging a solicitation or award of a procurement contract. Thorny questions abound, particularly on jurisdiction and appropriate forum between the Government Accountability Office (GAO), the Court of Federal Claims, and other federal courts of general jurisdiction. We have discussed these questions at length in other posts (see <a href="https://govcon.mofo.com/topics/another-piece-to-the-puzzle-court-of-federal-claims-has-jurisdiction-over-bid-protest-where-the-disputed-other-transaction-could-lead-to-a-follow-on-production-contract?_gl=1*re7ds*_ga*MTkyMTA2Mzg1OC4xNzE3MDEzODc5*_ga_3HVRG7GH76*MTcxNzUxNjI3OS40LjEuMTcxNzUxNjMwNC4wLjAuMA.." target="_self">Another Piece to the Puzzle: Court of Federal Claims Has Jurisdiction over Bid Protest Where the Disputed Other Transaction Could Lead to a Follow-on Production Contract</a>, <a href="https://govcon.mofo.com/topics/where-can-you-protest-an-other-transaction-award-insights-from-kinemetrics" target="_self">Where Can You Protest an Other Transaction Award? Insights from Kinemetrics</a>, and <a href="https://govcon.mofo.com/topics/gao-sharpening-its-blade-strategies-on-ota-review" target="_self">GAO Sharpening Its Blade [Strategies] on OTA Review</a>, for a few). One rule that seemed clearcut (until recently) was that GAO will not hear post-award bid protests challenging the outcome of an OT competition. After all, GAO’s Bid Protest Regulations say as much outright, at 4 C.F.R. § 21.5(m): “GAO generally does not review protests of awards, or solicitations for awards, of agreements other than procurement contracts,” with some exceptions not relevant to OTs.<a href="#_ftn2" target="_self">[2]</a>Then, last week, GAO issued its decision in <a href="https://www.gao.gov/assets/870/868647.pdf" target="_blank">ARiA, B-422365 et al. (May 28, 2024)</a>, finding the Office has jurisdiction over protests challenging the award of non-procurement instruments – like OTs – if the awards are “necessary to identify the only entities eligible to submit a proposal” for a future procurement contract. Under the rule set out in ARiA, where a competitive award does not independently fall within GAO’s jurisdiction but operates “similar to a down-select or competitive range process” eliminating offerors from consideration through “successive rounds [that] ultimately may result in a [procurement] contract award,” the award decision is subject to GAO’s bid protest review. There are a couple caveats. For one, the award at issue in ARiA was a cash prize<a href="#_ftn3" target="_self">[3]</a> rather than an OT. However, GAO’s decision is not based on the nature of the intermediate award, but instead hinges on that award’s operation to limit the competitive field for a larger competition that “ultimately may result” in a procurement contract. It is common nowadays for OTs to serve a similar “down-select” role, especially under DoD’s specific authority to award OTs for prototyping projects and issue follow-on production contracts.<a href="#_ftn4" target="_self">[4]</a> Using that authority as part of a multi-phase procurement strategy, DoD will competitively award OTs to multiple offerors to develop prototypes that are then tested and competitively evaluated in one or more down-selects until the last one standing is awarded a procurement contract for production.Compare this to the multi-phase procurement in ARiA. In the first round, the Army received 133 concept white papers for its xTechScalabe Artificial Intelligence (AI) competition and selected eight cash prize winners to receive $10,000 each and advance to the second round. From those eight, the Army would select four to receive an additional cash prize and advance to a third and final round, where a “separate announcement” would invite them to submit proposals for a procurement contract of up to $2 million each. According to GAO, one cannot isolate only the prize competition at issue when considering jurisdiction, as that would wrongly “view the first round in a vacuum, separate from the entire procurement contemplated by the competition announcement.” Carrying this analogy forward, is the award of a set of prototype OTs that will establish the competitive range for a future production contract any less a part of “the entire procurement” contemplated by the agency?A second caveat: the procurement contract contemplated in ARiA is a Small Business Innovation Research (SBIR) “direct to phase II” contract award. In a footnote, GAO discusses the “intricacies of the SBIR program” and the Small Business Administration’s view that the prize competition announcement could “only be properly read as one whole procurement,” lest the Army have violated statutory prohibitions on using invitations, pre-screening, or pre-selection to determine eligibility for phase II awards. One might argue that this discussion limits GAO’s decision to its facts, and other multiple-award down-select competitions should not be viewed as so intertwined into “one whole procurement.” But that is not what GAO says; GAO raises the point only in a footnote declining to say whether the competition announcement complied with applicable SBIR laws, not to justify its holding. Such an argument also overlooks the Army’s intent to issue a separate solicitation for the phase II contract, which GAO held was not sufficient to segregate the cash prizes from the remainder of the procurement process. Many OTs will not contemplate even a separate solicitation for final down-select to production (although some do). Moreover, at least in the case of many DoD prototype OTs, the ultimate procurement contract and initial prototype OT are similarly linked by statute, such that the authority for the procurement award depends inextricably on award of the prototype OT.<a href="#_ftn5" target="_self">[5]</a>All told, GAO’s decision in ARiA appears to support a revised rule: GAO will not review post-award protests challenging outcome of an OT competition (or other non-procurement instrument) unless that outcome limits the competitive range of offerors eligible for award of a subsequent procurement contract.<a href="#_ftn6" target="_self">[6]</a>This mirrors a similar forum-selection rule that appears to be developing in the federal courts, although there are only a small handful of cases to date and no binding precedent. The cases appear to be coalescing around a framework whereby the Court of Federal Claims – the forum specifically designed to hear federal bid protests (among other things) – has exclusive jurisdiction over OT bid protests only where the agency contemplates follow-on procurement contracts with limited competition. On the other hand, only federal district courts of general jurisdiction will review challenges to OTs with no direct connection to a future procurement contract. See <a href="https://govcon.mofo.com/topics/another-piece-to-the-puzzle-court-of-federal-claims-has-jurisdiction-over-bid-protest-where-the-disputed-other-transaction-could-lead-to-a-follow-on-production-contract?_gl=1*re7ds*_ga*MTkyMTA2Mzg1OC4xNzE3MDEzODc5*_ga_3HVRG7GH76*MTcxNzUxNjI3OS40LjEuMTcxNzUxNjMwNC4wLjAuMA.." target="_self">Another Piece to the Puzzle: Court of Federal Claims Has Jurisdiction over Bid Protest Where the Disputed Other Transaction Could Lead to a Follow-on Production Contract</a> and <a href="https://govcon.mofo.com/topics/where-can-you-protest-an-other-transaction-award-insights-from-kinemetrics" target="_self">Where Can You Protest an Other Transaction Award? Insights from Kinemetrics</a> for more discussion of the relevant decisions.Much more to come, no doubt, as GAO and the courts face a rising tide of OT bid protests. None of the decisions or opinions to date are precedentially binding on any individual GAO attorney or judge at the Court of Federal Claims, making any attempt to state a clearcut or definite rule a risky endeavor. One need look no further than GAO’s decision in ARiA for evidence of that.  <a href="#_ftnref1" target="_self">[1]</a> See 10 U.S.C. § 4022.<a href="#_ftnref2" target="_self">[2]</a> GAO will review – and has reviewed – protests alleging an agency is improperly using a non-procurement instrument (e.g., an OT) to procure goods or services. 4 C.F.R. § 21.5(m); see, e.g., Rocketplane Kistler, B-310741, Jan. 28, 2008, 2008 CPD ¶ 22. It also will review protests challenging DoD’s award of an OT beyond its statutory authority. See Oracle Am., Inc., B-416061, May 31, 2018, 2018 CPD ¶ 180. <a href="#_ftnref3" target="_self">[3]</a> Pursuant to a prize challenge under the authority of 10 U.S.C. § 4025.<a href="#_ftnref4" target="_self">[4]</a> See 10 U.S.C. § 4022(f). <a href="#_ftnref5" target="_self">[5]</a> See 10 U.S.C. § 4022(f)(2).<a href="#_ftnref6" target="_self">[6]</a> Query whether this general rule may apply in the specific case of a competitive range of one, i.e., to give GAO jurisdiction over any single-award prototype OT that establishes eligibility for award of a future procurement contract, as is expressly contemplated in most DoD prototype OTs and, in any case, is true as a matter of law. See 10 U.S.C. § 4022(f)(2).

Has the GAO Opened the Door to Certain Other Transaction (OT) Bid Protests?

Has the GAO Opened the Door to Certain Other Transaction (OT) Bid Protests?

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

Bid protests of other transaction agreements, also known as “OTs” or “OTAs,” are a common topic for this blog. 

This month’s Bid Protest Roundup highlights two Procurement Integrity Act (PIA) decisions from the U.S. Court of Federal Claims and one solicitation interpretation decision from the U.S. Government Accountability Office (GAO).Associated Energy Group v. U.S.In Associated Energy Group, the Court of Federal Claims rejected a disappointed bidder’s challenge to an agency’s handling of an inadvertent disclosure of source selection information as a PIA violation.Relevant FactsIn June 2021, the Defense Logistics Agency (DLA) issued a solicitation for a three-year, firm fixed price contract to provide credit cards to military services for purchase of commercial aviation fuel and related items. The solicitation contemplated award based on one preliminary evaluation factor—whether an offeror’s proposal was at no cost to the agency and a best-value tradeoff considering several factors, including technical approach, management approach, past performance, and price.Associated Energy Group, LLC (AEG) and Kropp Holdings, Inc. (KHI) submitted proposals, and in June 2022, DLA awarded the contract to AEG. KHI protested the award, and the agency took corrective action. After multiple rounds of corrective action and protest, DLA allowed offerors to make unrestricted revisions to their proposals in August 2023.In September 2023, AEG requested updated historical sales data from DLA, arguing that KHI as the incumbent had an unfair competitive advantage because it had access to more current purchasing data. The contracting officer approved the request and prepared a memorandum of record of her reasoning (Amendment 15 Memorandum), but mistakenly sent the memorandum to KHI. The agency never shared the memorandum with AEG. KHI corporate executives read the memorandum and shared it with their legal counsel. Although KHI admitted that both its executives and legal counsel had opened and viewed the memorandum, it confirmed that legal counsel and KHI executives had deleted the memorandum.DLA investigated the unauthorized disclosure in accordance with FAR 3.104-7 and found that the memorandum contained general information that provided no competitive advantage. The agency also found that the disclosure was not made knowingly or intentionally. Thus, the inadvertent, unauthorized disclosure had no impact on the procurement.AEG ultimately filed a protest at GAO alleging: (1) that the disclosure violated the PIA; and (2) DLA and KHI failed to sufficiently mitigate the disclosure. GAO denied the protest, rejecting AEG’s PIA allegation because of the lack of evidence that the disclosure was knowing or intentional. AEG later sought an injunction at the Court of Federal Claims to prevent DLA from proceeding with the procurement.Court’s AnalysisAt the court, AEG argued that DLA made an unauthorized disclosure of competitively useful information and failed to properly mitigate the effects of the unauthorized disclosure, resulting in competitive prejudice. Specifically, AEG alleged the disclosure, when combined with earlier debriefing information revealing AEG’s pricing from the initial award, gave KHI an unfair competitive advantage.The court systematically analyzed four pieces of information from the Amendment 15 Memorandum that AEG considered competitively useful source selection information, finding DLA reasonably concluded none of it was competitively useful, either separately or combined with the earlier pricing disclosure:<ul><li>Disclosure of historical sales data: The fact that AEG used historical sales data to develop its pricing was expected and directed by the RFP. It did not reveal specifics of AEG’s pricing approach.</li><li>Disclosure of AEG’s request for updated sales data: AEG’s request for updated sales data did not alert KHI to any of AEG’s potential pricing previsions.</li><li>Disclosure of DLA’s internal decision-making methodology: DLA’s rationale for releasing the updated data was already apparent and logical.</li><li>Disclosure of AEG and KHI as the only remaining offerors: AEG and KHI remaining as the only offerors was already known or discernable to the parties.</li></ul>The court emphasized the disclosed information contained no competitively useful information, and that AEG’s arguments relied on improper speculation.The court then rejected AEG’s demand for further mitigation beyond deletion, finding it was based on the faulty premise that the disclosure provided KHI an unfair advantage when DLA reasonably determined it did not. Having failed on the merits, the court denied AEG’s request for injunctive relief.TakeawayAssociated Energy Group reinforces agencies’ discretion in handling inadvertent disclosures and assessing competitive impact under the PIA. Contactors should become familiar with the types of information protected under the PIA and remember that disclosure alone is not enough to create a PIA violation.Additionally, contractors should consider the impact of inadvertent disclosure before pursing a bid protest. Even if an agency does inadvertently disclose confidential information and another party sees it, there must be some sort of competitive harm to be considered a PIA violation.Clean Team Janitorial Service, Inc. v. U.S.In Clean Team Janitorial Service, Inc., the Court of Federal Claims addressed the required timeliness for reporting alleged PIA violations and the adequacy of an agency’s investigation into such allegations. The court denied the protest, finding that the protestor timely reported the alleged violations, but the agency’s investigation was sufficient.Relevant FactsClean Team Janitorial Service, the incumbent contractor, protested the award of a follow-on janitorial services contract for a federal law enforcement training facility operated by the U.S. Secret Service (Secret Service). Clean Team alleged that over the course of several months, a contracting agency representative engaged in several inappropriate interactions with its staff:<ul><li>During the week of May 30, 2022, the representative approached Clean Team contract supervisor—a janitorial shift supervisor—and inquired about the number of employees on-site. The representative mentioned that he needed to provide the information to a new company taking over the contract.</li><li>On June 2, 2022, the representative asked the supervisor about her salary. When the supervisor declined to disclose the information, the representative returned with a piece of paper he claimed was part of a new contract being prepared and asked if the number was close to her salary. Later, the supervisor expressed her discomfort and suggested that the representative contact Clean Team headquarters.</li><li>On July 4, 2022, the representative approached additional Clean Team staff members and requested salary information.</li><li>Agency engineering staff initiated several inappropriate conversations with Clean Team staff members regarding contract matters.</li></ul>On August 9, 2022, Clean Team reported the alleged PIA violations to the contracting officer, requesting an investigation and the agency representative’s recusal. The Secret Service procurement division opened an internal investigation, during which the representative admitted to inquiring about the Clean Team supervisor’s salary and mentioning a new contract. The investigation concluded that although the representative engaged in inappropriate market research, his actions did not appear to have been for improper purposes.Follow-On ProcurementOn August 16, 2022, Secret Service reached out to several janitorial services companies in search of potential SBA 8(a) contractors for the follow-on procurement. ICMC Alliance (ICMC) immediately submitted its Capability Statement, and the agency ultimately awarded the contract to ICMC.Clean Team protested the award three times before the GAO, challenging the sole source nature of the follow-on procurement and the completeness of the agency’s investigation into the alleged PIA violations. In response, the agency took corrective action, and the protests were dismissed as academic. On September 15, 2023, the Secret Service again awarded the follow-on contract to ICMC. Clean Team filed protest at the Court of Federal Claims, alleging, in part, the prior PIA violations.Court’s AnalysisThe court first addressed the timeliness of Clean Team’s reporting of the alleged PIA violations. Under statute, a person may not file a protest against the award or proposed award of an agency alleging a PIA violation, and the GAO may not consider that allegation unless the person, “no later than 14 days after the person first discovered the possible violation, reported to the Federal agency responsible for the procurement the information that the person believed constitutes evidence of the offense.”<a href="#_ftn1" target="_self">[1]</a> Clean Team argued that its corporate leadership became aware of the potential violations on July 28, 2022 when janitorial staff first reported the agency representative’s inappropriate inquiries. Under this premise, the company’s August 9, 2022 reporting was timely. In response, the government argued that the 14-day clock began when the interactions between the representative and employees took place, between May 30 and July 4, 2022. The court applied the Federal Circuit’s vicarious liability rule, finding that the timeline began when Clean Team’s headquarters learned of the concerns. The court noted the Federal Circuit’s vicarious liability rule, which states that corporations act through their employees, and an agent’s knowledge is imputed to the principal when employees are acting within the scope of their authority or employment, absent special circumstances. With this rule in mind, it would be inappropriate to impute to a private employer the random musings or questions a government procurement official directs to an on-site member of the janitorial staff. The record did not indicate that the contract supervisor possessed any authority to take official actions on behalf of Clean Team. Thus, the timeline began when Clean Team’s headquarters learned of the concerns. The court reasoned that imputing knowledge of the government official’s inquiries to Clean Team based on the supervisor’s knowledge would force companies to “owlishly monitor on-site employees at every facility or require daily debriefings to mitigate risk, drastically increasing contract prices.”<a href="#_ftn2" target="_self">[2]</a>Next, the court considered the adequacy of the agency’s investigation into the PIA violation allegations. The court found the investigation to be more than sufficient, noting that two sets of federal law enforcement officials reviewed the allegations and interviewed the agency representative on two separate occasions. The court determined that there was no basis in law or fact to find the investigations inadequate.Finally, the court dismissed Clean Team’s allegations that the agency manipulated its estimated contract value to circumvent competition requirements and that the awardee was not an actual SBA 8(a) participant. The court held that despite errors and corrections to the estimate, the agency reasonably concluded that the anticipated award would fall below the regulatory threshold for competitive bidding.TakeawaysClean Team Janitorial Service highlights the importance of timely reporting alleged PIA violations and the deference courts give to agencies in investigating such allegations.Contractors should also ensure that they use clear internal procedures for employees to report suspected PIA violations. Timely reporting is crucial, as a PIA allegation may not be considered in bid protest if the protestor did not report the alleged violation to the agency within 14 days of discovering it.Southern Hog Control, LLCSouthern Hog Control, LLC serves as a reminder about an agency’s capacity to broadly interpret its own solicitation terms.Southern Hog, the protestor, argued – unsuccessfully – that the Department of Veterans Affairs (VA) unreasonably evaluated the awardee’s quotation for wildlife management services because it did not specifically have feral hog experience.Southern Hog’s ProtestIn Southern Hog Control, the VA issued a request for quotations (RFQ) for wildlife management services at Fort Mitchell National Cemetery in Fort Mitchell, Alabama. The agency primarily sought services to address sanitation issues and damage caused by feral hogs, requiring the vendor to trap, reduce, and control the feral hog population using methods delineated in the RFQ.Bidders were to propose a site manager with at least five years of experience performing all tasks in the scope of work and manage employees. The award would be made to the vendor offering the best value, considering technical capability, past performance, and price.The technical capability factor included two subfactors: (1) experience and training of personnel and technical services and (2) understanding of work requirement and performance work plan. Past performance was to be evaluated based on the vendor’s submission of at least three past performance references on projects performed within the last three years that were similar in size, scope, pricing, and vendor’s record of meeting contract requirements and reputation for quality work.The agency selected 3 Squared after evaluating the proposals. In its evaluation, the agency assigned strengths to 3 Squared under the technical capability factor based on its understanding of feral hog control and its current tracking and euthanasia methods and the capabilities of its site manager’s qualifications. It also assigned strengths under the past performance factor for submitting three relevant past performance references—one for feral hog control services.Southern Hog protested, claiming 3 Squared could not meet the technical capability and past performance requirements because it was not a feral hog control company, lacked feral hog control experience, and allegedly planned a “bait and switch” by contacting other firms to hire subcontractors. The agency countered that the RFQ did not require specific feral hog control experience, but rather a site manager with five years of wildlife management and employee supervision experience, and the awardee’s manager met this requirement. On this point, the GAO concurred, finding the RFQ did not require firms to have feral hog control experience, but instead required a site manager to have at least five years of experience with wildlife management and supervisory experience. 3 Squared demonstrated that it met these requirements, therefore the GAO found that the agency reasonably determined that it met the technical requirements.Southern Hog also contended that 3 Squared lacked the necessary feral hog control experience within the last three years to satisfy the past performance requirements. However, the GAO determined that the RFQ did not require past performance references to be specifically related to feral hog control, but rather similar in scope to the broader wildlife management work emphasized in the solicitation. 3 Squared’s quotation included three past performance references that met this standard.GAO also found Southern Hog’s “bait and switch” argument unavailing; the protestor had failed to show that the awardee either knowingly or negligently represented that it would rely on specific personnel without reasonable basis, that the misrepresentation was relied on by the agency, and that the agency’s reliance on the misrepresentation had a material effect on the evaluation results.TakeawayAlthough Southern Hog, seems straightforward on its face, there are a few takeaways that bidders should keep in mind when considering a solicitation.<ul><li>Read solicitation requirements carefully: The solicitation’s exact wording is crucial. In Southern Hog, the RFQ did not require the firm itself to have feral hog control experience, but rather the site manager to have wildlife management and employee supervision experience.</li><li>“Bait and switch” allegations are rarely successful at the GAO unless the protestor can show: (1) that the awardee either knowingly or negligently represented that it would rely on specific personnel that it did not have a reasonable basis to expect to furnish during contract performance; (2) that the misrepresentation was relied on by the agency; and (3) that the agency’s reliance on the misrepresentation had a material effect on the evaluation results. Thus, speculation that the awardee may not be able to support the contract is not enough to adequately assert a bait and switch.</li></ul> <a href="#_ftnref1" target="_self">[1]</a> 41 U.S.C. § 2106.<a href="#_ftnref2" target="_self">[2]</a> Clean Team Janitorial Service, Inc. v. United States, No. 23-1754C, 2024, 2024 WL 1399789 at 9.

Bid Protest Spotlight: Unwitting Disclosure, Agency Deference

Roke Iko is an associate in the Litigation Department in Morrison & Foerster’s Washington, D.C. office.
Roke assists clients in the full range of government contracts litigation and compliance matters

Roke Iko

Bid Protest Spotlight: Unwitting Disclosure, Agency Deference

This month’s Bid Protest Roundup highlights two Procurement Integrity Act (PIA) decisions from the U.S. Court of Federal Claims and one solicitation interpretation decision from the U.S. Government Accountability Office (GAO).