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Introduction
General Counsel, P.C.'s Government Contracts Practice Group is pleased to provide you with the Bid Protest Weekly. Researched, written and distributed by the attorneys of General Counsel, P.C., the Bid Protest Weekly allows the Government Contract community to stay on top of the latest developments involving bid protests by providing weekly summaries of recent bid protest decisions, highlighting key areas of law, agencies, and analyses of the protest process in general.
General Counsel, P.C.'s Government Contracts Group has over eighty years of combined government contract law experience (both as in-house and outside legal counsel), helping 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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1. Trace Systems, Inc., B-404811.4; B-404811.7, June 2, 2011
Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Performance Based Standards
General Counsel P.C. Highlight: Under a performance-based contracting arrangement, such as here, performance metrics are more than mere proposal evaluation tools. Rather, the metrics become the standards used to assess the contractor during performance, and to determine the application of contractor-proposed performance incentives and disincentives.
Trace Systems, Inc., a small business, protests the elimination of its proposal from consideration for award under a request for proposals (RFP), issued by the Department of the Army for information technology services.
The RFP was issued as a total set-aside for small business, to establish a multiple award indefinite-delivery/indefinite-quantity (ID/IQ) contract for a range of services and solutions necessary to implement the agency's enterprise infrastructure and infostructure goals. To achieve this end, the RFP sought to enter into "performance-based" arrangements with successful offerors. The RFP noted that establishing performance based arrangements introduced several changes from traditional procurement approaches, including the use of a statement of objectives (SOO) rather than a statement of work (SOW). Under a SOO, the government describes its requirements in terms of desired objectives, and offerors are free to propose solutions that they believe will best meet or exceed those objectives. After award, the agency monitors and evaluates contractor performance using performance metrics established by the contract. These metrics gauge a contractor's level of success in meeting the stated objectives, and provide for performance-related incentives and disincentives. The RFP also advised that the agency contemplated making award without discussions.
According to the RFP, the awards would be made to offerors with proposals determined to be the most beneficial, considering three evaluation factors: mission support, performance risk, and price. The mission support factor consisted of three subfactors: corporate capability, management approach, and quality control programs. Pursuant to the RFP, under the management approach subfactor, offerors were to identify performance metrics for each objective identified in the SOO using "Table 1 - Performance Metrics." These metrics consisted of "Measures and Metrics; Acceptable Level of Quality (ALQ); and the contract level Incentives (non-monetary)/Disincentives."
After another offeror received the award, Trace learned that its proposal had received a red/unacceptable rating under the management approach subfactor, which resulted in a red/unacceptable rating for the entire mission support evaluation factor, and a determination that Trace's proposal was unacceptable overall. Specifically, the agency determined that Trace had improperly modified metric 3.c and ALQ 3.c of Table 1 in a manner that materially altered the performance metric's meaning and failed to conform to the RFP.
Trace asserts that the deficiency was improper because the agency misapplied the evaluation factors, unreasonably applied the evaluation factors according undue weight to one deficiency, unreasonably applied undue weight to the management approach subfactor, introduced an unstated evaluation factor, and mechanically applied the evaluation factors under the mission support subfactor. GAO states that clearly stated RFP requirements are considered material to the needs of the government, and a proposal that fails to conform to such material terms is unacceptable and may not form the basis for award.
Here, the government-specified performance metrics were material requirements of the RFP and the agency reasonably determined that Trace improperly modified the performance metrics in a manner that did not conform to the terms of the RFP. Under a performance-based contracting arrangement, such as here, performance metrics are more than mere proposal evaluation tools. Rather, the metrics become the standards used to assess the contractor during performance, and to determine the application of contractor-proposed performance incentives and disincentives. Indeed, the measures, metrics, ALQ, and incentives/disincentives serve to establish the performance levels that are required to meet the objectives specified by the SOO. In this case, the agency provided certain government-specified performance metrics reflecting the level of performance that the government required, and repeatedly cautioned the offerors' that they were not to be revised. Such clearly stated RFP terms, which establish the obligations of the parties during contract performance, are undoubtedly material to the needs of the government; failure to conform to these terms rendered this proposal unacceptable. Based on a review of the record, it is apparent that through its modifications to the government-specified metric at 3.c of Table 1, and the corresponding ALQ, Trace materially changed the fundamental nature of the performance metric established by the agency in the RFP. Instead of following the RFP's clear directive not to alter the metric and ALQ for 3.c., Trace revised the proposed metric to read, "[p]ercentage of pricing obtained competitively by Trace from its subcontractors, vendors and suppliers," and the corresponding ALQ to state, "100% obtained competitively." Under Trace's proposed metric and ALQ, Trace would be entitled to any proposed performance incentives merely by competitively obtaining its subcontractor's prices, and would also thereby avoid the imposition of performance based disincentives even in the event that it sought upward price adjustments during task order performance. Since the deviations introduced by Trace altered the fundamental legal relationship of the parties with respect to contract performance requirements, the agency reasonably determined that Trace's proposed deviations constituted deficiencies, which rendered its proposal unacceptable. The protest is denied.
2. Technatomy Corporation, B-405130, June 14, 2011
Link: GAO Opinion
Agency: Department of Defense
Disposition: Request for dismissal denied.
Keywords: Task Order Protest
General Counsel P.C. Highlight: GAO's jurisdiction to hear protests concerning task or delivery orders under ID/IQ contracts valued in excess of $10 million was authorized under 41 U.S.C. § 253j, but that this authority expired on May 27, 2011, when a sunset provision in section 253j(e)(3) took effect.
Technatomy Corporation protests the issuance of a task order to under a solicitation by the Department of Defense, Defense Information Systems Agency (DISA), for support of the U.S. Army Information Technology Agency.
The order was issued under a multiple-award indefinite-delivery/indefinite-quantity (ID/IQ) contract awarded by the General Services Administration (GSA). This decision addresses DISA's request that GAO dismiss the protest. The agency argues that because this protest concerns a challenge to a task order issued under an ID/IQ contract authorized under Title 41 of the U.S. Code, the Government Accountability Office (GAO) does not have jurisdiction to hear the protest. DISA argues that GAO's jurisdiction to hear protests concerning task or delivery orders under ID/IQ contracts valued in excess of $10 million was authorized under 41 U.S.C. § 253j(e)(1) (2006 & Supp. III 2009), but that this authority expired on May 27, 2011, when a sunset provision in section 253j(e)(3) took effect.
GAO first examines the legislative history of its jurisdiction. The Competition in Contracting Act of 1984 (CICA) established GAO's statutory authority to hear bid protests concerning challenges to the terms of solicitations and the award or proposed award of contracts. Prior to 1994, the statutory authority of GAO under CICA did not distinguish between protests of contract awards and protests of task or delivery orders, as discussed more fully below. Then, in 1994, Congress enacted the Federal Acquisition Streamlining Act (FASA), which, as relevant here, provided statutory guidance for the award of ID/IQ contracts. FASA also amended CICA by limiting the jurisdiction of GAO with respect to protests of task or delivery orders placed under ID/IQ contracts under both Title 10 and Title 41 of the U.S. Code. After 1994, under FASA, protests over task or delivery orders were barred unless these protests alleged that the order increased the scope, period, or maximum value of the underlying contract through which the orders were issued.
In 2008, NDAA amended FASA and, in essence, expanded the jurisdiction of GAO under FASA to include protests of task or delivery orders valued in excess of $10 million. GAO stated that the sunset provision in 41 U.S.C. § 253j(e)(3) applies to the entirety of subsection 253j(e). As a result, the entirety of subsection 253j(e) has no effect--including both the bar on task order protests under FASA, and the exceptions to that bar under FASA, and the 2008 NDAA. Accordingly, GAO's jurisdiction reverts to that originally provided in CICA. Here, the plain meaning of the sunset provision unambiguously refers to the whole of subsection 253j(e). As a result of the sunset of 41 U.S.C. § 253j(e), the jurisdiction of GAO over protests of task or delivery orders has, effectively, reverted to the jurisdiction GAO had under CICA, prior to its amendment by FASA. Prior to FASA, GAO's statutory authority under CICA to hear protests did not distinguish between protests of contracts, and protests of task or delivery orders. Consistent with this authority, GAO heard protests prior to the passage of FASA concerning the issuance of task or delivery orders, including challenges to orders that exceeded the scope of the underlying ID/IQ contract, as well as protests that did not involve challenges to scope. In sum, the plain meaning of 41 U.S.C. § 253j(e)(3) eliminates any bar to GAO's jurisdiction to hear and issue decisions concerning bid protests arising from task or delivery orders of any value. For this reason, GAO concludes that it has jurisdiction over the task order protest here. GAO concludes that it has jurisdiction to complete its review of protests concerning the issuance of task orders that were filed prior to May 27, 2011, including the order challenged here by Technatomy. The request for dismissal is denied.
3. Mission1st Group, Inc., B-404811.3; B-404811.6, June 2, 2011
Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Labor Rate Pricing; Deficient Price Proposal
General Counsel P.C. Highlight: It is an offeror's responsibility to submit a well-written proposal, which clearly demonstrates compliance with the solicitation.
Mission1st Group, Inc. (M1), a small business, protests the elimination of its proposal from consideration for award under a request for proposals (RFP), issued by the Department of the Army, for information technology services.
The RFP was issued as a total set-aside for small business, to establish a multiple award indefinite-delivery/indefinite-quantity (ID/IQ) contract for a range of services and solutions necessary to implement the agency's enterprise infrastructure and infostructure goals. According to the RFP, the awards would be made to offerors with proposals determined to be the most beneficial, considering three evaluation factors: mission support, performance risk, and price.
The mission support factor consisted of three subfactors: corporate capability, management approach, and quality control programs. Pursuant to the RFP, under the management approach subfactor, offerors were to identify performance metrics for each objective identified in the SOO using "Table 1 - Performance Metrics." Table 1 contained a space for each objective, and spaces for corresponding sets of performance metrics consisting of "Measures and Metrics; Acceptable Level of Quality (ALQ); and the contract level Incentives (non-monetary)/Disincentives." In each case, the objectives were pre‑printed within the table. Additionally, for three of the objectives, the RFP set forth government-specified measures, metrics, and ALQ, also pre-printed within the table.
Under the price evaluation factor, the RFP required offerors to complete a "master labor rate table" as well as a "price model spreadsheet." To complete the price model spreadsheet, offerors were instructed to select the highest-proposed fully-loaded labor rate for each category from the master labor rate table, whether subcontractor or prime, and enter that rate into the price model. The RFP further stated that each offeror "shall provide fully loaded labor rates for the price model categories and provide personnel for the proposed rates that meet the requirements of each labor category. . . ."
After the agency chose another offeror M1 learned that its proposal had received a red/unacceptable rating under the management approach subfactor, which resulted in a red/unacceptable rating for the entire mission support evaluation factor. M1 also learned that the agency considered its price proposal to be deficient. More specifically, the agency determined that M1 had improperly modified objective 1.c of Table 1 by omitting the phrase "small business." The agency determined that this omission materially altered the objective, and therefore failed to conform to a material term of the RFP. With regard to M1's price proposal, the agency concluded that it was unable to calculate M1's evaluated price because M1 had neglected to propose rates for certain labor categories required by the RFP.
M1 protests that the agency's assessment of a deficiency under the mission support subfactor was improper because, in its view, its inadvertent omission of two words from objective 1.c of Table 1 did not constitute a material omission from its proposal. M1 additionally contends that the agency's assessment of a deficiency under the price evaluation was improper because M1 did, in fact, propose rates for all labor categories required by the RFP. M1 claims that the agency misinterpreted its proposal, and argues that its proposal offered certain labor categories at no cost. GAO states that clearly stated RFP requirements are considered material to the needs of the government, and a proposal that fails to conform to material terms is unacceptable and may not form the basis for award. It is a fundamental principle in a negotiated procurement that a proposal that fails to conform to a material solicitation requirement is unacceptable. Here, GAO concludes that the objectives set forth in Table 1 were material requirements of the RFP, and that the agency reasonably determined that M1 improperly modified an objective in a manner that did not conform to the terms of the RFP. Under a performance-based contracting arrangement, such as here, performance metrics are more than mere proposal evaluation tools. Rather, the metrics become the standards used to assess the contractor during performance, and to determine the application of contractor-proposed performance incentives and disincentives. Indeed, the objectives, measures, metrics, ALQ, and incentives/disincentives serve to establish the performance levels that are required to meet the needs of the agency, as specified in the SOO, and are critical aspects of the resulting performance-based contract. In this case, the agency pre‑printed Table 1 - Performance Metrics with statements of its objectives, and repeatedly cautioned offerors that these objectives were not to be revised. Such clearly stated RFP terms, which establish the obligations of the parties during performance, are undoubtedly material to the needs of the government; failure to conform to these terms rendered this proposal unacceptable.
Here, the objective, "[i]ncrease use of small business subcontractors and teaming partners to bring expert talent and ingenuity to the varied work under ITS-SB," was clearly focused on increasing the use of small business subcontractors and teaming partners, rather than subcontractors and teaming partners generally. In contrast, the modified objective proposed by M1, "[i]ncrease use of subcontractors and teaming partners to bring expert talent and ingenuity to the varied work under ITS-SB," makes no reference to small business, and thus entirely fails to reflect the import of the agency's objective. This failure to reflect the agency's objective is even more clear when one considers M1's proposed measure, metric and ALQ for objective 1.c. As its measure for objective 1.c, M1 proposed an "[i]ncrease in the amount of work shared with M1 partners." As its metric, M1 proposed "total M1 direct labor performed by subcontractors compared to the total direct labor." GAO's review of M1's proposal leads to the conclusion that none of these performance metrics conform to the agency's objective of increasing the use of small businesses.
With regard to the price evaluation, M1 contends that the agency misinterpreted its proposal when it determined that M1 had neglected to provide rates for certain required labor categories. M1 argues that, in fact, it exercised its business judgment when it offered certain labor categories at no cost to the government--a rate of "$0.00"--where M1 considered it unlikely that the labor category would be heavily utilized. M1 states that this approach to the price proposal was not prohibited by the RFP, and has been upheld in prior decisions by GAO. Based on a review of the record, as explained below, GAO finds that the agency reasonably concluded that M1 failed to offer certain required labor categories.
On the first page of its price proposal, M1 states, "Mission1st Group, Inc. has exercised best management practices, business judgment and corporate experience in electing to decline to provide pricing rates for certain proposed labor categories (e.g. Associate Program Manager)." According to M1, this language was not intended to indicate that M1 was declining to offer certain required labor categories, but that M1 was declining to price those labor categories and was offering those labor categories at no cost. This contention, however, is not supported by the price model and master labor rate table submitted with M1's proposal.
The price model and master labor rate table both identified specific labor categories, and for each category there were corresponding entry blanks where offerors were required to identify the team members offering to provide that category and a labor rate. For certain labor categories on the master rate table, M1 entered the name of its proposed team members followed by a single dash mark in the blank provided for the corresponding labor rate. These entries support M1's contention that it was offering the labor category at no cost. For other labor categories on the master rate table, M1 entered "N/A" rather than the name of a team member, followed by a single dash for the labor rate. This latter practice continued in the price model. In fact, for 10 of the 77 required labor categories in the price model, M1 entered "N/A" rather than the name of a team member offering the labor category, and "$0.00" as the labor rate.
M1's failure to specify the name of a team member and a labor rate, together with its statement that it was declining "to provide pricing rates for certain proposed labor categories," provided the agency with a reasonable basis to conclude that M1 failed to offer certain required labor categories, that its price proposal was therefore deficient, and its proposal unacceptable. It is an offeror's responsibility to submit a well-written proposal, which clearly demonstrates compliance with the solicitation. The protest is denied.
