SUBSCRIBE NOW
1. KGL Logistics, B-404340, January 26, 2011
Link: GAO Opinion
Agency: Defense Logistics Agency
Disposition: Protest denied.
Keywords: Cancellation of Solicitation
General Counsel P.C. Highlight: A contracting agency has broad discretion in deciding whether to cancel a solicitation and need only establish a reasonable basis for doing so. Moreover, even if an initial justification is unreasonable, that fact is immaterial, provided that another, proper, basis for the cancellation exists.
KGL Logistics (KGL) protests the cancellation of a solicitation, issued by the Department of Defense, Defense Logistics Agency (DLA), for labor, materials, and the use of a contractor-owned, contractor-operated storage and distribution facility in Kuwait.
The solicitation provided for award of a contract, for a base period of one year with three one-year options. After receiving KGL's proposal, the agency notified KGL that it was the sole responsible offeror, and that, because of the lack of price competition, it would be required to provide cost and pricing data in support of its proposal. Ultimately, KGL refused to certify its cost or pricing data because it said that its accounting and proposal development systems were not sufficient allow it to submit certified cost or pricing data. KGL also argued that cost or pricing data is not necessary in this procurement.
The agency canceled the solicitation, explaining that it was necessary due to KGL's unwillingness to certify its cost or pricing data. The agency, in a reply to KGL's assertion that the cancellation was unreasonable, stated that while the question of whether KGL would submit certified cost and pricing data was a concern, a more important factor in the cancellation was the agency's review of various long-term options for distribution support in Kuwait, given the continuing and accelerated troop drawdown in Iraq and the changing needs for distribution services in the region.
KGL asserts that the agency's actual reason for canceling the solicitation is KGL's refusal to provide certified cost and pricing data. GAO states that in a negotiated procurement, a contracting agency has broad discretion in deciding whether to cancel a solicitation and need only establish a reasonable basis for doing so. Moreover, even if an initial justification is unreasonable, that fact is immaterial, provided that another, proper, basis for the cancellation exists.
GAO finds that the uncertainty surrounding the future need for the services provided a reasonable basis upon which to cancel the solicitation. The record includes an affidavit prepared by DLA's Deputy Director of Logistics Operations, which clearly indicates the existence of considerable uncertainty regarding the agency's future needs. Cancellation is appropriate where an agency conducts a reassessment that suggests the solicitation may not reflect its needs, such that the agency is uncertain whether the requirement will exist in the future. In these circumstances, GAO finds no basis to question the agency's decision to cancel the solicitation rather than enter into a new long-term contract. The protest is denied.
2. Noble Supply and Logistics, B-404731, March 4, 2011
Link: GAO Opinion
Agency: Department of the Air Force
Disposition: Protest denied.
Keywords: Late Proposal.
General Counsel P.C. Highlight: Oral advice that would have the effect of altering the written terms of a solicitation, even from the contracting officer, does not operate to amend a solicitation or otherwise legally bind the agency.
___________________________________________________________________________
Noble Supply and Logistics (Noble) protests the rejection of its proposal as late under a request for proposals (RFP), issued by the Department of the Air Force, for operation of the civil engineer supply store at Minot Air Force Base (AFB) in North Dakota.
The RFP set the closing date for receipt of proposals as 4:30 p.m. on December 22, 2010. Noble explains that on December 21, it delivered its proposal package to UPS to be shipped using "Next Day" service, but that when it checked on the status of the delivery the following morning, UPS advised it that severe weather would delay delivery of the package to the 23rd. According to Noble, it then located a UPS store in Minot, North Dakota and spoke with an employee of the store, who advised it that he would be able to print, package, and deliver a copy of the proposal to the base prior to the 4:30 p.m. closing time. However, Noble contacted the contracting officer and explained its situation and, according to Noble, the contracting officer advised that she understood the protester's problem and stated "that if the proposal was delivered on December 23, it would still be evaluated." Nobel was then advised that its proposal had been received after the specified closing time and would not be considered.
Noble argues that its proposal was not late because the contracting officer orally amended the RFP on December 22 to extend the closing date to December 23. In the alternative, Noble argues that even if its proposal was late, the agency should have considered it, because the late delivery was the result of incorrect information furnished by the contracting officer. GAO states that, according to FAR, a contracting officer may provide oral notice of a solicitation amendment "when time is of the essence," but Noble has not alleged that the contracting officer ever in fact advised Noble that she would "amend" the solicitation to extend the closing date until December 23. Rather, Noble essentially argues that it understood the contracting officer's oral assurance that its proposal would be evaluated even if submitted on the 23rd as implying that the RFP would be amended since there would not otherwise have been any basis for the contracting officer to consider its proposal. However, absent an unambiguous statement from the contracting officer conveying her intent to amend the closing date for all offerors, Noble could not reasonably disregard the solicitation's express closing date and instead rely on an implied understanding of the contracting officer's oral assurances, which were otherwise inconsistent with the terms of the RFP. GAO has repeatedly held that oral advice that would have the effect of altering the written terms of a solicitation, even from the contracting officer, does not operate to amend a solicitation or otherwise legally bind the agency.
As for Noble's second argument, GAO states that while it is an offeror's responsibility to deliver its proposal to the proper place at the proper time, and late delivery generally requires rejection of the proposal, a hand-carried proposal that arrives late may be considered if improper government action was the paramount cause of the late submission and consideration of the proposal would not compromise the integrity of the competitive procurement process. Even assuming that the contracting officer did incorrectly advise Noble regarding the acceptability of delivery on the 23rd, this misinformation did not prevent Noble from delivering its proposal on time, and thus was not the paramount cause of the late submission; rather, it was the Noble's decision to rely on the contracting officer's erroneous oral advice. The protest is denied.
3. SelectTech Services Corporation, B-403986, December 23, 2010
Link: GAO Opinion
Agency: General Services Administration
Disposition: Protest denied.
Keywords: Technical Evaluation
General Counsel P.C. Highlight: An agency may properly downgrade an offeror's technical proposal more than once for a the same deficiency as long as the deficiency reasonably relates to more than one evaluation criterion.
___________________________________________________________________________
SelectTech Services Corporation (SelectTech) protests the award of a contract by the General Services Administration (GSA) on behalf of the Air Force Research Laboratory, Air Vehicles Directorate, Structures Division (AFRL/RBS), pursuant to a request for proposals (RFP), for research and development structural test services for the AFRL/RBS.
The RFP was issued as a small business set-aside, and contemplated the award of a hybrid firm fixed-price labor and optional time and material labor hour contract for a base year with four one-year options. The RFP stated that the award would be made on a best value basis, considering price and the following evaluation factors: technical expertise/staffing plan; past performance/capabilities; and technical approach. Under the technical expertise/staffing plan factor, the RFP required offerors to provide a complete staffing approach that identified the personnel resources and skill sets available to fulfill the RFP Performance Work Statement (PWS) requirements. Under the past performance/capabilities factor, the RFP required offerors to describe three past projects with sufficient detail "to determine the relevance of the reference to the subject requirement." Under the technical approach factor, there was a methodology subfactor for which offerors were required to "include a description of how the technical approach and analytical techniques will be applied to accomplish each of the requirements identified in the PWS." The agency found that the awardee's highly acceptable proposal represented superior value to SelectTech's minimally acceptable proposal, and that this outweighed SelectTech's 12% lower price.
SelectTech challenges the agency's evaluation. GAO states that the evaluation of an offeror's proposal is a matter largely within the agency's discretion. In reviewing a protest that challenges an agency's evaluation of proposal, GAO will not reevaluate the proposals, but rather 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. 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.
SelectTech challenges the agency's conclusion that its proposal was significantly deficient under the technical expertise/staffing plan factor because it did not adequately demonstrate how the company intended to provide increased labor on short notice. While SelectTech did name "industry partners" in its proposal, the record shows that it failed to provide any information regarding formal partnering arrangements, and that its proposal lacked detail about the "working relationship" with industry partners that would ensure the provision of necessary labor at short notice. Based on a review of the record, GAO finds that the agency's evaluation conclusions here were reasonably based.
The protester also contests its minimally acceptable rating under the technical approach factor. This rating was primarily based upon the agency's conclusion that SelectTech provided insufficient details in its proposal regarding its technical approach. Based on GAO's review of the record, GAO found that the agency could reasonably reach this conclusion. Under this factor, the agency also downgraded SelectTech's proposal because it failed to identify reach-back capability within its own company's pool of resources and did not formally align itself with an industry partner. GAO states that an agency may properly downgrade an offeror more than once for a single deficiency so long as the deficiency reasonably relate to more than one evaluation criterion. In this case, the identified weakness reasonably relates to the technical expertise/staffing plan factor as well as the technical approach factor. The protest is denied.
4. M. Erdal Kamisli Co. Ltd. (ERKA Co., Ltd.), B-403909.2; B-403909.4, February 14, 2011
Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Contractor Responsibility
General Counsel P.C. Highlight: In making a negative responsibility determination, a contracting officer is vested with a wide degree of discretion and, of necessity, must rely upon his or her business judgment in exercising that discretion. Although the determination must be factually supported and made in good faith, the ultimate decision appropriately is left to the agency, since it must bear the effects of any difficulties experienced in obtaining the required performance.
M. Erdal Kamisli Co. Ltd. (ERKA Co., Ltd.) (ERKA) protests the rejection of its proposal and the award of contracts to five other firms, under a request for proposals (RFP), issued by the Department of the Army, for real property repair, maintenance, construction, and related services.
The RFP provided for multiple awards of indefinite-delivery/indefinite-quantity (ID/IQ), task order contracts for real property repair and maintenance, environmental work, force protection, and construction services. The RFP included detailed specifications and technical requirements for contractors and required contractors to establish and maintain effective quality control systems, comply with safety and occupational health requirements, and adhere to the project schedule. With regard to the experience factor, the RFP instructed offerors to identify up to 10 projects that demonstrate the extent of their relevant experience. The RFP provided that these projects would also be evaluated under the past performance factor. The agency conducted discussions and informed ERKA that, among other things, the agency found an unsatisfactory level of risk arising from the firm's performance of one project that was terminated for default. The agency asked ERKA to provide any information that would mitigate this risk and describe steps taken to address the issues that led to the contract termination. ERKA responded that the contract should not have been terminated for default because of excusable delays that were not attributable to ERKA and that it was only a "junior member" of the joint venture contractor.
The CO established a second competitive range that included the proposals of five offerors but not ERKA's. After an initial protest the agency decided to include ERKA's proposal in the revised competitive range. The agency conducted a second round of discussions and informed ERKA that ERKA was being given another opportunity to address its past performance issues. In response ERKA again stated that its recent past performance, including projects in Africa, Iraq, and Romania, demonstrated its commitment to providing timely, quality work. With respect to the defaulted contract, ERKA submitted the identical explanation it had provided during the first round of discussions. Again, ERKA's response did not change the agency's assessment that the firm's past performance history presented an unsatisfactory performance risk or change its marginal past performance rating.
As part of her source selection decision, the CO evaluated the responsibility of the competitive range offerors. She considered, among other things, the standards for responsible, prospective contractors specified in the Federal Acquisition Regulation (FAR), including whether contractors could comply with the required delivery schedule and had a satisfactory performance record. Based primarily on ERKA's past performance record, the CO determined that ERKA's proposal represented a high performance risk and that the contractor was not responsible, and therefore not eligible to receive award.
ERKA complains that the CO's negative determination of ERKA's responsibility ignored the firm's positive performance history on projects in Romania, Iraq, and Africa. ERKA also argues that it was improper for the agency to consider the default termination of a contract because the matter is currently under appeal to the ASBCA. Moreover, ERKA asserts that it should not be held accountable for this contract, because it was only a junior member of the joint venture holding that contract. GAO states that in making a negative responsibility determination, a contracting officer is vested with a wide degree of discretion and, of necessity, must rely upon his or her business judgment in exercising that discretion. Although the determination must be factually supported and made in good faith, the ultimate decision appropriately is left to the agency, since it must bear the effects of any difficulties experienced in obtaining the required performance. For these reasons, GAO generally will not question a negative determination of responsibility unless the protester can demonstrate bad faith on the part of the agency or a lack of any reasonable basis for the determination. GAO's review is based on the information available to the contracting officer at the time the determination was made.
Here, the CO's negative determination of ERKA's responsibility was reasonable. The record shows the CO's consideration of all ERKA's past performance and supports her determination that ERKA had performance problems under at least four construction contracts for requirements that were similar to those solicited here. With respect to the specified contract that was terminated for default, for example, the contractor's performance was found unsatisfactory with regard to quality control, timeliness, cooperation and responsiveness, resource management, jobsite supervision, non-payment of subcontractors, site cleanup, and compliance with safety standards. The record also shows that with respect to other contracts ERKA was issued numerous non-compliance reports. As described above, the protester had several opportunities to address its performance of the defaulted contract or to explain what efforts the firm would take to mitigate future performance risks. ERKA's responses to the agency's discussions, however, neither demonstrate why it should not be held responsible for the default termination nor provide any statement as to how the firm would mitigate future performance risk to the agency.
With respect to the CO's consideration of the specified contract, GAO disagrees with ERKA that the agency could not properly consider this termination in its responsibility determination because the matter has been appealed to the ASBCA. An agency may properly rely upon its reasonable perception of a contractor's inadequate performance even where the contractor disputes the agency's position. Furthermore, GAO disagrees with ERKA that the agency could not consider the protester's performance as a joint venture. In this regard, the record does not support ERKA's assertion that it was only a junior venture partner. Rather, the firm's joint venture agreement for this project shows that ERKA was a 50% partner at the time of contract award. The protest is denied.
5. Unisys Corporation, B-403054.2, February 8, 2011
Link: GAO Opinion
Agency: Department of Defense
Disposition: Protest denied.
Keywords: Hiring former government workers; personal conflicts of interest
General Counsel P.C. Highlight: Agencies are to avoid even the appearance of impropriety in government procurements. In this regard, where a firm may have gained an unfair competitive advantage through its hiring of a former government official, the firm can be disqualified from a competition based on the appearance of impropriety which is created by this situation, that is, even if no actual impropriety can be shown, so long as the determination of an unfair competitive advantage is based on facts and not mere innuendo or suspicion.
Unisys Corporation (Unisys) protests the issuance of a task order to Science Applications International Corporation (SAIC), by the Defense Information Systems Agency (DISA), Defense Information Technology Contracting Organization (DITCO), under a request for proposals (RFP), for data center operations and technical support activities.
DITCO issued the RFP for a task order under Encore II, a multiple-award task order contract. The Encore II task order at issue contemplated the issuance of fixed-price task order with a base year and four one-year option periods, for Defense Enterprise Computing Services (DECC), Technical and Operations Support. The agency maintains that the Encore II contractor is to perform "industry standard tasks found in most, if not all data centers." While the solicitation estimated that performance of the task order required 156 full-time equivalents (FTEs), it also provided that firms should offer their own selection of labor categories and number of FTEs that would, in the offeror's judgment, provide the best value to the agency. The current task order is a follow-on to a task order issued to Unisys under the prior Encore I multiple award contract.
R.R., an individual, was the Chief of the Technical Support Division at DECC for much of the duration of the Encore I task order. The record reflects that he was one of four Division Chiefs overseeing Unisys's performance. As R.R. was nearing his retirement, the Encore II procurement was still in its planning stages. The record contains evidence that he participated in the planning for Encore II at least through August 2009, and that from May 2009 through June 2009, R.R. was approached by SAIC about possible employment opportunities, and after each contact, R.R. rejected SAIC's advances. Five weeks after R.R.'s retirement, in February 2010, the contracting officer released the draft solicitation for the current task order to the Encore II contract holders. DITCO released the final RFP, which included the evaluation plan as an attachment, on March 15. On March 30, R.R. became a temporary consultant to SAIC. Proposals in response to the RFP were due April 5.
Unisys initially protested the selection of SAIC, alleging that it had obtained an unfair competitive advantage when it employed the former DISA Division Chief, R.R., to assist in its proposal preparation. The agency announced that it would take corrective action, specifically, that it would investigate the facts surrounding R.R.'s employment with SAIC. Based on its internal investigation, the agency concluded that the Division Chief's activities did not provide SAIC with an unfair competitive advantage. In this regard, the report found that R.R.'s knowledge of Unisys's performance of the Encore I task order was limited to Unisys's labor categories and staffing, as it related to his own Division, and that he did not have insight into Unisys's overall labor categories or staffing. The report also found that R.R. did not have access to Unisys's pricing (labor rates) for the Encore I task order and that "even if he had knowledge of the Unisys labor rates, that information was outdated." DISA informed Unisys that the selection of SAIC would not be disturbed.
Unisys alleges that SAIC gained an unfair competitive advantage through R.R.'s access to Unisys's proprietary information, namely, the data contained in the ATAAPS and vacancy reports, as well as his alleged insider knowledge of pending workforce reductions that would affect the number of FTEs needed to perform the Encore II task order. GAO states that contracting agencies are to avoid even the appearance of impropriety in government procurements. In this regard, where a firm may have gained an unfair competitive advantage through its hiring of a former government official, the firm can be disqualified from a competition based on the appearance of impropriety which is created by this situation, that is, even if no actual impropriety can be shown, so long as the determination of an unfair competitive advantage is based on facts and not mere innuendo or suspicion. To resolve this question, GAO typically considers all relevant information, including whether (in cases such as this) the former government employee had access to competitively useful inside information, as well as whether the former government employee's activities with the firm were likely to have resulted in a disclosure of such information. Whether the appearance of impropriety based on an alleged unfair competitive advantage exists depends on the circumstances in each case, and, ultimately, the responsibility for determining whether to continue to allow an offeror to compete in the face of such an alleged impropriety is a matter for the contracting agency, which will not be disturbed unless it is shown to be unreasonable.
As noted above, the agency's investigation of the unfair competitive advantage concluded that R.R. had no knowledge of Unisys's overall staffing, labor categories, or actual labor rates for the Encore I task order. The record, however, reflects, as explained above, that R.R. did in fact have access to this information through the ATAAPS reports, which he received between 2007 and 2008. But, in 2011 GAO finds that the information was outdated, rendering it not competitively useful, and thus its disclosure would not have provided SAIC with any competitive advantage in the Encore II task order competition. As the ATAAPS reports indicate, the agency employed numerous different contractors to support its efforts, Unisys being but one of them. Thus, information regarding how Unisys historically staffed the Encore I task order would have been discernable by regular observation, and GAO would not consider such information proprietary.
Unisys next alleges that R.R. had access to competitively useful inside information concerning the agency's requirements for Encore II, namely, the agency's intent to reduce the number of FTEs available for the performance of the Encore II task order. As an initial matter, there is no evidence in the record that R.R. had access to plans to reduce staffing for the Encore II task order. Given the lack of "hard facts" in this regard, there is no basis on which to find that R.R. afforded SAIC a competitive advantage as Unisys has alleged. Even assuming that R.R. had access to information about the potential for future FTE reductions, the information, by its nature, could not have provided SAIC with an advantage. As DITCO maintains, the information was of such an undefined and indefinite nature that its knowledge could not have been of any meaningful competitive utility. Moreover, the record reflects, as DITCO argues, staffing for the task order was authorized at 156 FTEs, this number was provided as the government's staffing estimate in the solicitation, and there is nothing to indicate that the agency's understanding of this estimate changed at any point up until the time of SAIC's award. Given this record, GAO has no basis to conclude that R.R. had access to non-public information that could have provided SAIC with an unfair competitive advantage. The protest is denied.
