July 2020 ended with the Government Accountability Office (GAO) issuing five decisions sustaining protests by government contractors. The most common reasons GAO sustains a protest are unreasonable technical evaluation, inadequate documentation of the record, flawed selection decision, unequal treatment, and unreasonable cost or price evaluation. Two of GAO's recent decisions, discussed in this legal update, are particularly interesting because the protests featured arguments that are less common at GAO.
M.C. Dean, Inc., B-418553, B-418553.2 (June 15, 2020)
In this protest, the protester challenged every aspect of the agency's evaluation. The argument challenging the agency's technical evaluation proved to be successful because the awardee failed to notify the agency when its program manager became unavailable.
The solicitation identified seven key personnel positions, including a program manager. The program manager was required to hold a top secret security clearance. The program manager proposed by the awardee applied for a top secret clearance, but the application was denied after the proposal was submitted and before award. The protester argued that the awardee knew that its proposed program manager became unavailable prior to award and remained unavailable to perform on the contract, and as a result, the awardee's proposal should have been deemed unacceptable. GAO agreed, stating offerors are required to notify agencies of material changes in proposed staffing, even after submission of proposals. GAO explained that this obligation is premised on preventing a contractor from receiving award based on a knowing material misrepresentation in its proposal.
Notably, GAO's holding was not based on finding an impermissible bait-and-switch, which occurs when an awardee identifies as individual in its proposal it did not have a reasonable basis to expect to furnish during contract performance, the agency relies on the misrepresentation, and the agency's reliance on the misrepresentation had a material effect on the evaluation results. Proving a bait-and-switch can be difficult because the protester must prove reliance on the part of the agency and a material effect on the evaluation. Establishing a misrepresentation, as occurred here, does not require the same showing and is often easier to prove. GAO's decision serves as a reminder to government contractors: if an individual proposed for a key personnel position becomes unavailable, the contractor must notify the agency.
Eminent IT, LLC, B-418570, B-418570.2, B-418570.3 (June 23, 2020)
In this pre-award protest, the protester argued the agency impermissibly removed the opportunity from the U.S. Small Business Administration's (SBA) 8(a) Program. Under the Federal Acquisition Regulation and SBA's regulations, when a procurement is awarded as an 8(a) contract, its follow-on contract must remain in the 8(a) program unless SBA agrees to release it for non-8(a) competition.
In the challenged procurement, the agency planned to issue a blanket purchase agreement for the maintenance, operation, and management of PeopleSoft v9.x or later in a production environment using Scaled Agile Framework (SAFe). The agency claimed this was a new requirement, but the agency had previously awarded a task order under which the contractor provided, maintained, operated, and managed PeopleSoft v9.1 to support the development of agency's Global Employment Management System. The protester argued the new requirement was a follow-on to the prior task order, noting the statements of work were nearly identical. The agency contended that the new SAFe procurement was not a follow-on because, among other reasons, the SAFe requirement included additional services and processes.
GAO asked the SBA to weigh in, and SBA opined that the inclusion of additional services and processes was not dispositive because the primary and vital requirements were nearly identical. SBA also noted that the increase in the expected award value did not indicate the SAFe requirement was new because there was no indication that a change in the requirements drove the price increase. GAO accepted SBA's reasoning and sustained the protest. GAO recommended that the agency reconsider whether the solicited requirement was a new requirement, and if it did not qualify as a new requirement, either keep the opportunity in the 8(a) Program or obtain SBA's consent before releasing it from the 8(a) Program.
Eminent IT, LLC, serves as a good example of a government contractor utilizing a pre-award bid protest to change an agency's procurement strategy. In this situation, the procurement will likely remain in the 8(a) Program because of the protest, thereby preserving the opportunity for economically and socially disadvantaged small businesses. Pre-award protests can also be used to challenge evaluation criteria or solicitation requirements.
If you have any questions about this legal update, please reach out to the Government Contracts group.