Bid Protest Weekly is researched, written and distributed by the attorneys of General Counsel, P.C.. Bid Protest Weekly provides weekly summaries of recent bid protest decisions, highlighting key areas of law, agencies, and analyses of the protest process in general.

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Bid Protest Weekly – December 7, 2011

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1. Beckman Coulter, Inc., B-405452, November 4, 2011

Link: GAO Opinion

Agency: Department of Health and Human Services

Disposition: Protest denied.

Keywords: Technical Requirements

General Counsel P.C. Highlight: Agencies may reasonably rely on the accuracy of information provided by an offeror in its proposal.

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GAO denied the protest of Beckman Coulter, Inc. regarding the issuance of a delivery order, under a request for quotations (RFQ) issued by the Department of Health and Human Services (HHS), Food and Drug Administration (FDA), for a laboratory centrifuge.

Beckman asserts that the awardee’s centrifuge does not satisfy the RFQ’s compatibility and containment requirements where vendors were informed that their centrifuges must be compatible with Beckman’s centrifuge rotors and Beckman’s rotors are unique to its own centrifuges and are not interchangeable. GAO states that a contracting agency has the primary responsibility for determining its legitimate needs and for determining whether an offered item will satisfy those needs, since it is the agency that is most familiar with the conditions under which the supplies or services will be used and that must bear the burden of difficulties incurred by reason of a defective evaluation. In this regard, a procuring agency enjoys a reasonable degree of discretion in determining whether a particular product meets the solicitation’s technical requirement as set forth in the salient characteristics and GAO will not disturb the agency’s determination unless it is shown to be unreasonable. Thus, in reviewing an agency’s technical evaluation under an FSS competitive acquisition, GAO will not reevaluate quotations, but will examine the record to ensure that the agency’s evaluation was reasonable and consistent with the terms of the solicitation and the stated evaluation criteria.

The awardee submitted detailed technical literature which included specifications such as speed, capacity, temperature range, and dimensions, as well as relevant relative centrifugal field (RCF) formulas and calculations. The awardee’s technical literature also assured that its centrifuge was compatible with 90 different models of rotors, including the eight rotors used by the FDA’s Center for Biologics Evaluation and Research (CBER) lab. Moreover, the awardee represented that other parts of HHS had been using Thermo centrifuges, including the model quoted here, with Beckman rotors for years without any problems. Contrary to Beckman’s arguments, the agency could reasonably rely on the awardee’s technical literature and assurances of compatibility in finding that the awardee’s ultracentrifuge met the RFQ’s salient requirements. As a general matter, in evaluating proposals an agency may reasonably rely as accurate upon information provided by an offeror in its proposal. The protest is denied.

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2. Y&K Maintenance, Inc., B-405310.2, August 26, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Experience; past performance; price realism analysis

General Counsel P.C. Highlight: There is nothing unreasonable with establishing different experience evaluation criteria for the prime and sub, and price realism analysis is within the sound exercise of the agency’s discretion.

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Y&K Maintenance, Inc. (Y&K) protests the terms of a request for proposals (RFP), issued by the Department of the Army, for operation and maintenance (O&M) of Medical Command-Korea (MEDDAC-K) facilities in the Republic of Korea.

Y&K complained that requirements under the two experience subfactors are inconsistent, given that proposed key personnel are required to have experience at the Joint Commission (TJC) accredited facilities, while the prime contractor can rely on experience at unaccredited facilities. The protester also contends that the explicit solicitation statement that prime contractors need not show experience at TJC accredited facilities is inconsistent with a number of performance work statement (PWS) requirements. GAO states that a contracting agency has the discretion to determine its needs and the best method to accommodate them. However, those needs must be specified in a manner designed to achieve full and open competition. A protester’s mere disagreement with the agency’s judgment concerning the agency’s needs and how to accommodate them does not show that the agency’s judgment is unreasonable. The fact that a requirement may be burdensome or even impossible for a particular firm to meet does not make it objectionable if the requirement properly reflects the agency’s needs.

GAO finds nothing improper about the agency’s decision to establish different requirements for the prime contractor and key personnel subfactors under the experience evaluation factor. The PWS requires the contractor to provide certain personnel with experience at TJC accredited facilities and to perform the contract work in accordance with TJC standards. The agency reasonably concluded that it could address these requirements with key personnel, while not requiring that the contractor itself have TJC experience.

Y&K next complains that the RFP unreasonably provides for assigning an acceptable past performance rating to an offeror having no relevant record of past performance in violation of FAR sect. 15.305(a)(2)(iv), which provides that under such circumstances an offeror may not be evaluated favorably or unfavorably. GAO states that FAR sect. 15.305(a)(2)(iv) provides that, “In the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance.” This provision embodies the principle that an offeror neither be punished nor rewarded for the lack of relevant past performance. Thus, GAO has found, consistent with this provision, that an evaluation scheme that penalizes an offeror for neutral past performance ratings is improper. Likewise, an offeror should not have its competitive position improved because of a lack of relevant past performance.

Therefore, where award will be made on a lowest-price, technically acceptable basis, assigning an acceptable past performance rating to offerors without relevant past performance will be, effectively, no different than assigning a neutral rating to that offeror’s past performance. Accordingly, GAO finds no basis to object to the RFP’s stated methodology for evaluating past performance.

Finally Y&K complains that the RFP’s warning that certain contract line items (CLINs or subCLINs) may be terminated for the convenience of the government places undue risk upon the contractor. Y&K also complains that the solicitation improperly requires offerors to provide detailed cost information, including their indirect costs, for each CLIN or subCLIN, because offerors cannot predict their indirect costs for each CLIN since “indirect costs do not relate to specific work items.” GAO states that under a fixed-price contract, as contemplated here, the risks associated with performance and cost escalation are borne by the contractor. There is also a unique requirement that the government act in the interest of the society it serves, and so it retains a special power to terminate its contract obligations when such action serves the public interest.

The RFP advises that after two years the agency may in-source certain functional areas, and therefore those CLINs or subCLINs may be subject to termination for convenience. The RFP incorporates the standard FAR “Contract Terms and Conditions–Commercial Items” clause, which reserves the government’s right to terminate the contract, or any part thereof, for the convenience of the government and describes the contractor’s rights under such circumstances. The RFP here requests that offerors propose fixed prices for a number of functional areas (each of which was included as a CLIN or subCLIN) and, in this respect, requires offerors to provide detailed cost information, such as their direct and indirect costs for CLINs, subCLINS, and ELINS, to allow the agency to perform a price realism analysis. An agency may provide for the use of a price realism analysis in a solicitation for the award of a fixed-price contract for the limited purpose of measuring an offeror’s understanding of the requirements or to avoid the risk of poor performance from a contractor who is forced to provide services at little or no profit. The depth of an agency’s price realism analysis is a matter within the sound exercise of the agency’s discretion. The protest is denied.

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3. J&J Maintenance, Inc., B-405310, October 17, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Set-aside; Status of Forces Agreement (SOFA); invited contractor

General Counsel P.C. Highlight: An agency must comply with the terms international agreements in its acquisition.

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GAO denied the protest of J&J Maintenance, Inc., (J&J) based on the terms of a request for proposals (RFP), issued by the Department of the Army, for operation and maintenance (O&M) services for Medical Command-Korea (MEDDAC-K) facilities in the Republic of Korea.

J&J complains that setting aside the RFP for local sources under the Status of Forces Agreement (SOFA) (and not granting invited contractor status to non-local offerors) unnecessarily restricts competition. GAO states that a contracting agency has the discretion to determine its needs and the best method to accommodate them. However, those needs must be specified in a manner designed to achieve full and open competition. Solicitations may include restrictive requirements only to the extent they are necessary to satisfy the agency’s legitimate needs. Where a protester challenges a specification or requirement as unduly restrictive of competition, the procuring agency has the responsibility of establishing that the specification or requirement is reasonably necessary to meet the agency’s needs. GAO will examine the adequacy of the agency’s justification for a restrictive solicitation provision to ensure that it is rational and can withstand logical scrutiny. A protester’s mere disagreement with the agency’s judgment concerning the agency’s needs and how to accommodate them does not show that the agency’s judgment is unreasonable.

The record here establishes that the agency reasonably found from its market research that there were a number of local firms that could perform the operation and maintenance (O&M) services at TJC standards. Specifically, in response to the Army’s sources sought notice, five Korean firms expressed interest in providing the hospital O&M services to the agency, including the protester’s subcontractor on the incumbent contract. The agency also searched the central contractor registration (CCR) and found that there were 24 active Korean firms available to perform hospital O&M services. Prior to conducting its market research, the agency’s MEDDAC-K facilities director began investigating O&M practices of hospitals across South Korea and toured several Korean hospitals to determine the level of service that their O&M staff was providing. The facilities director found that there were number of Korean hospitals that had been accredited by the Joint Commission International (JCI). In this regard, the Army states that, since the requirement for these services was last competed in 2006 (when the protester was granted invited contractor status), ten Korean hospitals have been accredited by the JCI. The Army found that, although there were some differences between the TJC and JCI standards, the two accreditation standards had substantial similarities and, in some regards, were almost identical. Moreover, the agency found that, to the extent that JCI and TJC accreditation standards differed, the agency’s requirements would be satisfied by requiring the contractor to provide experienced key personnel with the specific, working knowledge of TJC standards. In sum, GAO finds that the agency’s decision not to grant invited contractor status to non-local offerors under SOFA is reasonable and that the record adequately justifies the RFP’s restriction to local sources. The protest is denied.

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4. Paragon TEC, Inc., B-405384, October 25, 2011

Link: GAO Opinion

Agency: National Aeronautics and Space Administration

Disposition: Protest denied.

Keywords: Innovations; teaming agreement,

General Counsel P.C. Highlight: Innovations that can be applied immediately along with strong teaming partners and experience will win most contracts.

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Paragon first objects to the agency’s assignment of two significant strengths to the awardee’s proposal for its proposed innovations and its proposed teaming arrangement. Paragon also challenges the assignment of a strength to the awardee for its action tracking system. GAO states that where a protester challenges an agency’s technical evaluation, GAO will review the evaluation record to determine whether the agency’s judgments were reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. A protester’s mere disagreement with an agency’s judgments does not render the evaluation unreasonable.

GAO finds that the agency’s judgment regarding the strengths of the awardee’s proposal was reasonable and did not reflect disparate treatment. With regard to Paragon’s argument concerning the relative merits of the two firms’ proposed innovations, the agency explains that it considered all of Paragon’s proposed innovations, but found that many of them were already being performed and thus did not merit additional credit. In contrast, the agency found that the awardee offered realistic and operational innovations that could be used immediately after the start of the contract. GAO concludes that the protester merely disagrees with the agency’s judgment, which does not demonstrate that the agency’s evaluation was unreasonable. With regard to Paragon’s objection that both firms should have received similar strengths for their proposed teaming arrangements, NASA explains that the awardee was assigned a significant strength because a major subcontractor was the developer of the “Knowledge Now” management collaboration system, which NASA’s Safety Center (NSC) currently uses. Regarding the challenge to the agency’s assessment of a strength under the understanding the requirements subfactor for the awardee’s proposal of an action tracking system, NASA found that, although Paragon also proposed an integrated action tracking system, Paragon failed to provide any detail about its system and had not presented evidence that its system presently existed. In response, Paragon disagrees that it failed to detail its proposed system, but does not challenge the agency’s conclusion that its system does not currently exist. Given this, GAO finds reasonable the agency’s evaluation of the firms’ respective offers of an action tracking system.

Paragon next asserts that NASA improperly credited the awardee for the experience of its subcontractor where the RFP did not provide for the evaluation of the experience and past performance of firms that were not major subcontractors. GAO finds that, although the source evaluation committee considered the subcontractor’s experience and past performance in evaluating the awardee’s proposal, this consideration did not affect the source selection authority’s (SSA) judgment that the awardee’s experience and past performance was superior to Paragon’s. Specifically, the SSA’s contemporaneous selection decision shows that the SSA concluded that the awardee’s own experience and past performance was superior to Paragon’s, because the awardee itself had highly relevant past performance and experience, whereas Paragon’s own experience and past performance was of limited relevance. In making this determination, the SSA specifically credited Paragon for the highly relevant experience of its major subcontractor. Nevertheless, the SSA, concluded that “the directly relevant experience of [the awardee] and [Paragon's] lack of the same is a meaningful discriminator between the offerors because they are the proposed prime contractors and will be responsible for the management of the overall contract work.” Under the circumstances, the record does not show any reasonable possibility that Paragon was prejudiced by the agency’s consideration of the subcontractor’s experience and past performance. Competitive prejudice is an essential element of a viable protest; where the protester fails to demonstrate that, but for the agency’s actions, it would have had a substantial chance of receiving the award, there is no basis for finding prejudice, and GAO will not sustain the protest. The protest is denied.

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5. Kingdomware Technologies, Inc., B-405533.2, November 10, 2011

Link: GAO Opinion

Agency: Department of Education

Disposition: Protest denied.

Keywords: SDVOSB; set-aside; agency report rebuttal

General Counsel P.C. Highlight: An error in the solicitation is likely not prejudicial if there is no vendor question asked regarding it and if a protestor fails to respond to an agency report the GAO will consider those grounds abandonded.

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GAO denies the protest of Kingdomware Technologies, Inc. in reference to the terms of a request for quotations (RFQ), issued to vendors holding General Services Administration (GSA) Federal Supply Schedule (FSS) contracts by the Department of Education, Federal Student Aid (FSA), for an emergency notification subscription service.

Kingdomware, which is a service-disabled, veteran-owned small business (SDVOSB), argues that the agency failed to comply with FAR sect. 19.502-2(b), which generally requires than an agency set aside acquisitions with an anticipated dollar value of more than $150,000 for small businesses where there is a reasonable expectation of receiving fair market prices from at least two small business concerns. GAO states that the regulations that implement small business programs and the GSA FSS program expressly anticipate and exclude FSS purchases from the set-aside requirements in FAR part 19. In particular, FAR sect. 8.404(a) and FAR sect. 38.101(e)–both of which pertain to FSS purchasing–provide that FAR part 19 does not apply to orders placed against FSS contracts. Similarly, FAR sect. 19.502-1(b), which pertains to small business set-aside requirements, also provides that FAR part 19 set-aside requirements do not apply to FSS purchases. In sum, the FAR part 19 regulations on which Kingdomware’s protest is predicated do not impose a requirement on agencies to first evaluate whether a solicitation should be set-aside for small businesses–or SDVOSBs–before purchasing the goods or services through the FSS program. Accordingly, it was not improper for the agency here not to set this requirement aside for SDVOSBs, and Kingdomware’s arguments to the contrary provide no basis on which to sustain the protest.

Kingdomware objects to the solicitation’s reference to the a separate GSA schedule (MOBIS) and to the requirement that the emergency notification service include a capability to notify and receive responses through social media, such as Instant Messenger, Facebook, and Twitter. With respect to the solicitation’s reference to MOBIS, the agency responds that the reference was an error. The agency, however, maintains that the error did not prejudice Kingdomware because the solicitation was sent only to vendors that hold GSA Schedule 70 contracts–including Kingdomware– and because the agency received no vendor questions regarding the reference. With respect to the solicitation’s social media notification capability requirement, the agency responds that the requirement reflects the agency’s need to quickly alert staff as to a potential emergency in a broad range of formats. The social media format is necessary, the agency explains, in the event that problems arise with other communication formats, such as when cellular telephone service is disrupted or overloaded. The agency further explains that the social media notification capability is useful for reaching employees when they are not in the workplace. Where Kingdomware in its comments on the agency report did not rebut the agency’s responses regarding the MOBIS reference or the social media notification capability requirement, GAO considers these protest grounds to be abandoned. The protest is denied.

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Source: General Counsel, P.C.’s Government Contracts Group helps clients solve their government contract problems relating to the award or performance of a federal government contract, including bid protests, contract claims, small business concerns, and teaming and subcontractor relations.

If you have any questions or comments regarding the discussed content, or questions about bid protests, please feel free to contact the attorneys at General Counsel, P.C. at (703) 556-0411 or visit them at www.generalcounsellaw.com

Bid Protest Weekly is researched, written and distributed by the attorneys of General Counsel, P.C.. Bid Protest Weekly provides weekly summaries of recent bid protest decisions, highlighting key areas of law, agencies, and analyses of the protest process in general.

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Bid Protest Weekly – November 30, 2011

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1. Vizada Inc., B-405251; B-405251.2; B-405251.3, October 5, 2011

Link: GAO Opinion

Agency: Department of Homeland Security

Disposition: Protest denied.

Keywords: Price realism analysis; misleading discussions

General Counsel P.C. Highlight: In a fixed price contract it is unobjectionable for a offeror to submit a below cost proposal as the contractor bears the risk and an agency is not required to afford offerors all-encompassing discussions.

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GAO denied the protest of Vizada Inc. where it was denied award of a contract under a request for proposals (RFP), issued by the Department of Homeland Security, United States Coast Guard, for maritime data communications system to support the Coast Guard’s large cutter fleet.

Vizada first asserts that the agency failed to conduct a proper price realism analysis and that the awardee’s price was unrealistically low. GAO stated that where, as here, a fixed-price contract is to be awarded, a solicitation may provide for the use of a price realism analysis to measure an offeror’s understanding of the requirements or to assess the risk inherent in a proposal. As GAO has repeatedly held, the depth of an agency’s price realism analysis is a matter within the agency’s discretion. In reviewing protests challenging price realism evaluations, GAO’s focus is whether the agency’s review was reasonable and consistent with the terms of the solicitation. As a general matter, it is unobjectionable for an offeror to submit a below-cost proposal for a fixed-price contract, since fixed-price contracts generally are not subject to adjustment during performance, and the contractor, not the agency, bears the financial risk of cost overruns.

The RFP stated that offerors’ fixed-priced proposals would be evaluated for price realism to determine if there were proposals that were unrealistic in terms of overall price or reflective of an inherent lack of management and/or technical competence or comprehension of the requirements. The awardee’s proposal was the lowest priced and within 23% of the independent government cost estimate (IGCE). Because the awardee’s price was significantly lower than the prices in the other proposals, an additional review of the price proposal was undertaken to ascertain if it was unrealistically low. The agency concluded that the price was realistic, and reflected an exercise of business judgment, rather than a lack of competence, or a lack of understanding the RFP requirements. Based on GAO’s review of the record, GAO finds that the agency’s analysis of the awardee’s price was reasonable and consistent with the terms of the solicitation.

Vizada challenges the agency’s evaluation of the awardee’s proposal asserting that the agency should have disqualified the awardee as technically unacceptable for its failure to meet the mandatory technical requirements of the solicitation. GAO states that the evaluation of technical proposals is a matter within the agency’s discretion, and GAO will not disturb an agency’s judgments regarding the relative merits of competing proposals absent a showing those judgments are unreasonable or inconsistent with the RFP’s evaluation criteria. In this regard, a protester’s mere disagreement with the agency’s judgments does not render an evaluation unreasonable.

GAO finds that the agency reasonably interpreted and understood the awardee’s explanation “subject to space segment availability” as a realistic statement about the limits of satellite space segment availability. Because the agency did not set a maximum order amount and, at some point, all offerors’ satellites would reach their maximum capacity of available space segments, it would be impossible for any offeror to guarantee, based upon only the satellites proposed, that it could meet the agency’s unlimited demand for bandwidth. Also, Vizada’s assertion that the awardee cannot comply with the 36 Mbps requirement is based upon the assumption that the awardee’s proposal language “maximum of 18 Mbps” in its section 5.3.6 response was meant to limit its total bandwidth capacity to 18 Mbps. The agency, however, did not read and evaluate the awardee’s statement of work (SOW) section 5.3.6 in the same manner as Vizada, particularly given that the awardee’s proposal otherwise demonstrated compliance with the 36 Mbps requirement. Instead, the agency understood this phrase to address the requirements in section 5.1 of the SOW that required the contractor to provide a total of 6 Mbps of Ku-band bandwidth in year one; a total of 12 Mbps of Ku-band bandwidth in year two; and for years three through five a total of 18 Mbps of Ku-band bandwidth. GAO finds the agency’s interpretation to be reasonable.

Vizada also claims that the awardee misrepresented the status and condition of one of the satellites it proposed, and that the agency failed to reasonably find and evaluate this misrepresentation where the satellite has reached its end-of-life status and will not be available to fulfill the requirements of the contract because it is scheduled to be replaced in the third quarter of 2011. GAO states that an offeror’s misrepresentation that materially influences an agency’s consideration of its proposal generally provides a basis for proposal rejection or termination of a contract award based upon the proposal. For a protester to prevail on a claim of material misrepresentation, the record must show that the information at issue is false. However, the record provided no convincing evidence, beyond Vizada’s speculation and innuendo, that the awardee knew or should have known that the satellite would be replaced in the near term. The fact that the satellite will in fact be replaced early in the contract does not show that the agency or the awardee knew or should have known of the replacement prior to contract award.

Finally, Vizada argues that the discussions were misleading because the agency failed to notify it of its two assigned weaknesses under the management approach evaluation factor, and one weakness under the relevant past performance factor. GAO states that the Federal Acquisition Regulation (FAR) requires agencies conducting discussions to inform offerors of deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not had the opportunity to respond. Although discussions must address deficiencies and significant weaknesses identified in proposals, the precise content of discussions is largely a matter of the contracting officer’s judgment. Agencies are not required to “spoon-feed” an offeror during discussions; agencies need only lead offerors into the areas of their proposals that require amplification or revision. An agency is not required to afford offerors all-encompassing discussions, or to discuss every aspect of a proposal that receives less than the maximum score, and is not required to advise an offeror of a minor weakness that is not considered significant, even where the weakness subsequently becomes a determinative factor in choosing between two closely ranked proposals.

The record shows that the agency did not conduct misleading discussions. For example, the record shows that none of the proposal weaknesses referenced in the protest were significant weaknesses. While the protester makes much of the agency’s terminology in its technical evaluation consensus report to the contracting officer, which listed all strengths and weaknesses as “significant discriminators,” GAO does not believe that the weaknesses assigned to Vizada under the management approach or relevant past performance evaluation factors were matters that the FAR required to be brought to Vizada’s attention. The protest is denied.

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2. Vital Link, Inc., B-405123, August 26, 2011

Link: GAO Opinion

Agency: Department of the Air Force

Disposition: Protest denied.

Keywords: Past Performance;

General Counsel P.C. Highlight: Disagreement with an agency’s evaluation of past performance without more to show unreasonableness on the part of the agency is not enough for GAO to disturb an agency decision.

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GAO denies the protest of Vital Link, Inc. under a request for proposals (RFP) issued by the Department of the Air Force for the relocation, and repair/refurbishment of two A/F32T-9 (T-9) noise suppressors and the fabrication and installation of thrust frames and testing systems within each T-9.

Vital Link challenges the Air Force’s evaluation of the awardee’s past performance specifically arguing that the agency’s determination that the awardee’s prior contracts were relevant did not comport with the terms of the solicitation. According to Vital Link, the RFP established two definitions of relevant contracts. First, the solicitation required relevant past performance for relocation (disassembly, remanufacturing/repair, shipping and reassembly) of T-9 noise suppressors or similar jet engine test cells. Second, the solicitation required relevant past performance for the fabrication and installation of thrust frames, monorails, and hoists, specifically for T-9 noise suppressors. GAO states that where a solicitation calls for the evaluation of past performance, it will examine the record to ensure that the evaluation was reasonable and consistent with the terms of the solicitation and procurement statutes and regulations. Additionally, where, as here, a protester and agency disagree over the meaning of solicitation language, GAO will resolve the matter by reading the solicitation as a whole and in a manner that reasonably gives effect to all its provisions. GAO will not read a provision restrictively where it is not clear from the solicitation that such a restrictive interpretation was intended by the agency.

While the RFP did include the language referenced by the protester in support of its position, it also included other provisions that make it clear the agency intended to assess the degree of relevancy of an offeror’s past performance. As noted, the RFP included provisions defining the degree of relevance of an offeror’s past performance ranging from “very relevant” to “not relevant.” If, as asserted by the protester, the agency intended to confine its consideration of an offeror’s past performance exclusively to those contracts that included the specific attributes identified in the language relied on by the protester, these definitions of relevancy would be superfluous. Further, the RFP specified that the agency would consider not only contracts that were the same as the requirements of the RFP, but also those that included work that was similar to the requirements of the RFP. Finally, even the language relied on by the protester is not exclusive; rather, it identifies relevant past performance as “including” the performance attributes listed in the provision, but does not exclude consideration of other performance attributes as relevant. The record also shows that the agency’s evaluators gave careful consideration to the contracts included by the awardee in its proposal for both it and its subcontractor, and specifically compared the relevance of the performance attributes in those contracts to the requirements of the RFP. In sum, the record shows that the agency’s evaluators gave careful consideration to the specific performance attributes reflected in the past performance examples included by the awardee in its proposal, and made reasonable judgments concerning the comparative relevance of those performance attributes to the work required under the RFP. Vital Link has not demonstrated that these judgments were unreasonable, but simply disagrees with the agency’s conclusions by relying on an unreasonably narrow definition of relevance. Such disagreement, without more, is inadequate to show that the agency’s evaluation was unreasonable. The protest is denied.

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3. Outdoor Venture Corporation, B-405423, October 25, 2011

Link: GAO Opinion

Agency: Defense Logistics Agency

Disposition: Protest denied.

Keywords: Sole-Source, industrial mobilization

General Counsel P.C. Highlight: The GAO will not disturb a sole source set aside for maintaining the industrial base unless the agency has abused its discretion.

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Outdoor Venture Corporation (OVC) protests the award of a contract for lightweight maintenance enclosures (LMEs) by the Defense Logistics Agency (DLA), on a sole-source basis. The sole-source award was justified under 10 U.S.C. sect. 2304(c)(3) (2006), which provides for award of a contract to a particular source to maintain the source for a national emergency or to achieve industrial mobilization. GAO denies the protest.

OVC asserts that it was unreasonable for the agency not to have considered OVC for this contract award. GAO states that agencies have authority to conduct procurements using other than full and open competition and may properly award sole-source contracts to a particular concern for purposes of establishing or maintaining industrial mobilization base sources of supply. Where a military agency makes a sole-source award for purposes of maintaining a particular supplier of an item, concern for maximizing competition is secondary to the agency’s industrial mobilization needs. Decisions as to which producers should be included in the mobilization base, and which restrictions are required to meet the needs of industrial mobilization, involve complex judgments that must be left to the discretion of the military agencies. GAO will question those decisions only if the evidence convincingly shows that the agency has abused its discretion.

OVC does not challenge the awardee’s participation in the relevant industrial base or assert that the agency’s analysis of the awardee’s current minimum sustaining rate (MSR) and business condition is unreasonable or incorrect. More importantly, although OVC contends that it also would benefit from the award of a contract, it nonetheless concedes that it is producing at its MSR production capacity. The record establishes that the awardee may cease its operations which, the agency has determined, would seriously jeopardize the industrial base for MIL-SPEC tents. The record also shows that the agency gave specific consideration to whether OVC required additional work in order to maintain its production capability and concluded that it had adequate work at this time to maintain its MSR. GAO concludes that the agency reasonably exercised its discretion in making award to another offeror and in deciding not to make award to OVC. The protest is denied.

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4. Crosstown Courier Service, Inc., B-405492, B-405493, March 29, 2010

Link: GAO Opinion

Agency: Department of Veterans Affairs

Disposition: Protests denied.

Keywords: SDVOSB; Veterans First; sole-source award

General Counsel P.C. Highlight: When the VA awards a sole-source award under Veterans First it is not required to set aside the award for SDVOSBs.

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Crosstown Courier Service, Inc. (Crosstown), a service-disabled veteran-owned small business (SDVOSB) protests the Department of Veterans Affairs’ (VA) decision to award two sole-source contracts for courier services to another offeror under two solicitations.

The protester contends that the sole-source awards are improper because the VA failed to consider other qualified SDVOSBs for award. GAO states that under the Veterans First Contracting Program, the VA has authority to award contracts using other than full and open competition (including set-aside procurements and sole-source awards) in certain circumstances. With regard to setting aside procurements exclusively for veteran-owned small businesses (VOSBs) or SDVOSBs, a contracting officer can award contracts on the basis of competition restricted to VOSBs or SDVOSBs if the contracting officer has a reasonable expectation that two or more VOSBs or SDVOSBs will submit offers and that the award can be made at a fair and reasonable price that offers best value to the government. The VA has authority to award sole-source contracts to SDVOSBs when: (1) such concern is determined to be a responsible source with respect to performance of such contract opportunity; (2) the anticipated award price of the contract (including options) will exceed the simplified acquisition threshold . . . but will not exceed $5,000,000; and (3) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price that offers best value to the United States. Subsection (b) of 38 U.S.C. sect. 8127 provides that, for contracts with SDVOSBs for amounts less than the simplified acquisition threshold, the VA is also authorized to use noncompetitive procedures.

Here, the VA awarded the sole-source contracts to the awardee pursuant to its authority under the Veterans First Contracting Program. The protester’s assertion that the VA should have set aside the procurements for SDVOSBs is without merit because the requirement to set aside certain procurements only applies when the VA does not use its sole-source authority under the Veterans First Contracting Program. Therefore, because the VA used the authority provided in 8127(b) and 8127(c) to award sole‑source contracts to the awardee, the VA was not required to set aside for SDVOSBs these procurements. The record shows that the agency’s decision to award these sole-source contracts to the awardee was in accord with the statute authorizing the award of sole-source contracts to SDVOSBs. The protests are denied.

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5. Serco Inc., B-405280, October 12, 2011

Link: GAO Opinion

Agency: Department of the Army

Disposition: Protest denied.

Keywords: Independent Government Estimate (IGE); meaningful discussions

General Counsel P.C. Highlight: When an agency reviews staffing needs it can look at the historical data to determine whether a proposed staffing plan is the best value to the government.

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GAO denies the protest of Serco Inc. where it was denied award of a contract by the Department of the Army, under a request for proposals (RFP), for personal effects (PE) processing services for the Army Human Resource Command.

Serco contends that the independent government estimate (IGE) prepared by the agency and used in the evaluation of offerors’ proposals was unreasonable because it failed to accurately reflect the level of effort that will be required to process PE cases under the contract. Specifically, the protester argues that the agency’s IGE unreasonably disregarded the staffing levels required by the reach-back order under the incumbent contract. GAO states that the evaluation of an offeror’s proposal is a matter within the agency’s discretion. A protester’s mere disagreement with the agency’s judgment in its determination of the relative merit of competing proposals does not establish that the evaluation was unreasonable. In reviewing a protest against an agency’s evaluation of proposals, GAO will not reevaluate proposals, but instead will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. To resolve this issue, GAO first reviews the staffing-level history under the predecessor contract, the IGE, and the proposals submitted.

Serco was the incumbent contractor for the Joint Personal Effects Depot (JPED) contract. The protester began performing the requirement in July 2008, under a labor-hour contract with a maximum authorized full-time equivalent (FTE) level of 98 FTEs. In August 2010, an Army contracting officer’s representative (COR) prepared a memorandum for the CO concerning a backlog in work at the JPED. The COR noted that Serco had not been providing the full level of 98 FTEs authorized for the JPED contract. The COR recommended that the agency exercise the “reach-back” provisions of the contract, which requires the contractor to provide additional staffing on short notice, in order to address the backlog. On September 30, the Army issued a 10-month reach-back order directing Serco to provide up to 47 additional FTEs to address the backlog of work; this order raised the authorized staffing limit from 98 to 145 FTEs. On November 10, the Army prepared its initial IGE for this RFP, which addressed the estimated costs and staffing levels required to perform the contract. The initial IGE assumed that the work would require 99 FTEs, as well as 47 additional FTEs to perform reach-back work. On January 25, 2011, the agency prepared a revised IGE, which deleted the reach-back order staffing levels, and reduced the non-reach-back staffing levels to 98 FTEs. The Army states that the reach-back staffing was deleted from the IGE because the enhanced levels of performance were not anticipated to be required under the new contract. In this regard, the CO states that part of the increased workload was the result of the backlog created during Serco’s performance, the agency assumed that the reach-back order represented a temporary staffing level that would not be required for the new contract.

Serco’s proposal assumption that the JPED contract will be required to process only 234 PE cases per month also undercuts its challenge to the reasonableness of the IGE, particularly in light of the protester’s performance on the incumbent contract. The data show that for nine of the 30 months before Serco began to experience a backlog and was authorized to increase its FTE levels (January 2008 – June 2010), the company was able to address more PE cases than what its proposal assumes would be required under the current award. Specifically, during the period that Serco was limited to no more than 98 FTEs, the protester met the following levels of performance for processing of PE cases: 272 cases (Jan-08), 289 cases (Feb-08), 320 cases (Apr-08), 245 cases (Jun-08), 291 cases (Jul-08), 307 cases (Sep-09), 264 cases (Oct-09), and 272 cases (Nov-09). In sum, GAO does not think the record supports the protester’s argument that the requirements for the JPED contract, as identified by the workload data set forth in the RFP, could not be performed with the 98 FTEs identified in the IGE or the 105 FTEs proposed by the awardee.

Serco next argues that the Army’s evaluation of its proposal under the staffing plan factor was unreasonable because the agency conducted misleading discussions, and also treated the protester and intervener unequally during evaluations. GAO states that the Federal Acquisition Regulation (FAR) requires agencies to conduct discussions with offerors in the competitive range concerning, “at a minimum . . . deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.” Discussions, when conducted, must be meaningful; that is, they may not mislead offerors and must identify proposal deficiencies and significant weaknesses that could reasonably be addressed in a manner to materially enhance the offeror’s potential for receiving award.

GAO finds that the agency’s discussions were not misleading, as they meaningfully advised the protester of the agency’s concern regarding its proposed staffing, and permitted the protester to revise its proposal in a way that improved its prospect for award. In this regard, the protester’s response to the discussions question resulted in the agency’s elimination of the weakness for the protester’s proposal, and an increase in Serco’s score for staffing plan subfactor from good to excellent. In any event, even if the agency had improperly led the protester into increasing its price, there is no possibility that Serco could have been prejudiced by the agency’s actions. Where, as here, an agency’s discussions are alleged to be misleading as to price or cost, GAO will not sustain the protest where the protester’s and awardee’s proposal were rated equal and the protester’s price or cost would have still remained lower than the awardee’s in the absence of the disputed discussions. Here, any adjustment to this relatively minor element of cost could not affect the result of the competition, in light of the more than a slight difference between the offerors’ proposed prices.

The Army responds that the concern raised in discussions with Serco did not relate to the number of labor categories or the details regarding those categories, as alleged by the protester. Instead, the agency states that the concern related to the designation of personnel, which were lower-paid categories under the Service Contract Act (SCA) wage determination. The protester argues that the agency’s argument is not supported by the record, because the discussion question related to a “limited labor mix,” rather than the designation of personnel under the SCA wage determination. The protester clearly understood that agency’s question related to the classification under different SCA categories; indeed, Serco’s response directly addressed the reclassification of personnel performing these positions. The Army accepted the protester’s response as addressing the concern, removed the weakness from the evaluation, and increased Serco’s rating for the staffing approach subfactor to the highest rating of excellent. On this record, GAO finds no basis to conclude that the agency assessed a weakness based on the number or diversity of labor categories proposed by Serco or that the agency treated the offerors unequally by not assessing a weakness for the awardee based on its proposal of fewer labor categories than Serco. The protest is denied.

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Source: General Counsel, P.C.’s Government Contracts Group helps clients solve their government contract problems relating to the award or performance of a federal government contract, including bid protests, contract claims, small business concerns, and teaming and subcontractor relations.

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