SUBSCRIBE NOW
1. Hostetter, Keach & Cassada Construction, LLC, B-403329, October 15, 2010
Link: GAO Opinion
Agency: Department of Veterans Affairs
Disposition: Protest sustained.
Keywords: Bid Bond; IFB
General Counsel P.C. Highlight: The sufficiency of a bid bond depends on whether the surety is clearly bound by its terms. A bid bond that names a principal different from the bidder is deficient, and the bid must be rejected, unless it can be established that the different names identify the same entity.
Hostetter, Keach & Cassada Construction, LLC (Hostetter) protests the rejection of its bid as nonresponsive under an invitation for bids (IFB) issued by the Department of Veterans Affairs (VA) for a construction project.
The IFB was issued as a service-disabled, veteran-owned small business concerns set-aside and required bids to include a bid guarantee in the amount of 20% of the bid or $3 million, whichever was the lesser amount. The IFB included FAR clause 52.228-1, informing bidders that the failure to furnish a bid guarantee in the proper form and amount may result in the rejection of the bid.
Hostetter submitted the apparent low bid, identifying itself as "Hostetter, Keach & Cassada, LLC" followed by its address and a Data Universal Numbering System (DUNS) number. The bid was signed by the vice president. Hostetter also provided a copy of its Online Representations & Certifications Application (ORCA), which indicated that Hostetter, Keach & Cassada Construction, LLC" was a partnership. Hostetter included a copy of its North Carolina articles of incorporation as a LLC for "Hostetter, Keach & Cassada Construction, LLC." The bid bond submitted by Hostetter identified the principal to be "Hostetter, Keach & Cassada Construction, LLC," located at the same address and signed by the same individual, but identified itself as a corporation.
In reviewing Hostetter's bid, the contracting officer noted a discrepancy in the names of the bidder and bid bond principal, and noted that Hostetter identified itself as a partnership in ORCA, but as a corporation on the bid bond. The contracting officer rejected Hostetter's bid.
GAO states that the sufficiency of a bid guarantee depends on whether the surety is clearly bound by its terms; when the liability of the surety is not clear, the bond is defective. No one incurs a liability to pay the debts or perform the duties of another unless that person has expressly agreed to do so. Thus, generally, a bid bond which names a principal different from the bidder is deficient, and the bid must be rejected unless it can be established that the different names identify the same entity. On the other hand, where the entity that submitted the bid and that is identified as the bid bond principal are exactly the same, any discrepancy between the bidder's and bid bond principal's names is merely a matter of form that does not require rejection of the bid. The question is whether the nominal bidder and bid bond principal are the same entity.
GAO states that Hostetter's bid itself establishes that the bidder and the bid bond principal are the same entity. Although the bid identifies the bidder as "Hostetter, Keach & Cassada, LLC," the bid also includes a DUNS number, ORCA representations and certifications, and certified articles for incorporation that identify the bidder to be "Hostetter, Keach & Cassada Construction, LLC." Also, the address identified for the bidder and bid bond principal is the same, and the bid and bid bond are signed by the same individual, who identified himself as vice-president. The protest is sustained.
2. Medfinity, LLC, B-403366.2, October 28, 2010
Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Brand name or equal
General Counsel P.C. Highlight: It is the vendor's responsibility to include sufficiently detailed information in its proposal to establish that the item offered will meet solicitation requirements, and blanket statements or certifications of full compliance are insufficient.
Medfinity, LLC protests the issuance of a purchase order, under a request for quotations (RFQ), issued by the Department of the Army for dental filmless imaging systems (DFIS).
The RFQ was issued on a brand name or equal basis and solicited quotations for 100 DFISs. The solicitation identified the Dexis DX101 system as the brand name product, listed salient characteristics that had to be satisfied by any product offered as "equal" to the brand name item, and required that vendors submit descriptive literature to demonstrate compliance with those characteristics. The salient characteristics required that the system be composed of a sensor; a Panasonic Toughbook Model laptop or equivalent; imaging software; and bitewing rings, holders and accessories, all contained in a Hardigg case.
Medfinity quoted a system that was a purported equal to the brand name, a Rugged Notebook Eagle model laptop, and a Mil-Standard Waterproof case along with a two-page proposal containing descriptive literature. The awardee quoted the brand name product. The agency determined that Medfinity's product was unacceptable because there was not enough information provided to conclude that the product met all salient characteristics.
GAO states that it is the vendor's responsibility to include sufficiently detailed information in its proposal to establish that the item offered will meet solicitation requirements, and blanket statements or certifications of full compliance are insufficient. Additionally, with respect to a brand name or equal solicitation, a firm offering an equal product must demonstrate that the product conforms to the salient characteristics of the brand name product listed in the solicitation. The contracting agency is responsible for evaluating the data submitted and ascertaining if it provides sufficient information to determine if the vendor's product is acceptable. GAO will review an agency's determination in this regard to ensure it was reasonable.
GAO finds the agency's determination reasonable. The record supports the agency's finding that Medfinity's quotation consisted primarily of blanket statements of compliance, without explanation or elaboration. For example, the proposal states that the equal product "is DICOM compliant" and connects to the laptop "via a USB or PCMCIA Card." Medfinity's proposal did not establish compliance with requirements and failed to address the majority of the salient characteristics detailed by the RFQ. The protest is denied.
3. SML Innovations, B-402667.2, October 28, 2010
Link: GAO Opinion
Agency: Department of the Army
Disposition: Protest denied.
Keywords: Overly restrictive terms; Protest of Terms of the Solicitation
General Counsel P.C. Highlight: Agencies enjoy broad discretion in the selection of evaluation criteria, and GAO will not object to the use of particular evaluation criteria so long as they reasonably relate to the agency's needs in choosing a contractor that will best serve the government's interests.
SML Innovations protests the terms of a request for proposals (RFP) issued as a total small business set-aside by the Department of the Army for Enterprise Resource Planning (ERP) Enterprise Application Services (EAS) in support of the Army Enterprise Systems Integration Program.
The RFP was issued for the purpose of awarding multiple indefinite-delivery/indefinite-quantity (ID/IQ) contracts for EAS services to include analysis, design, development, deployment, fielding, and sustainment of enterprise applications. There were four evaluation factors: technical, past performance, management, and price. Offerors could submit one to three past performance references, but references must be current and relevant. The current work had to be performed in the last three years prior to the date of the RFP and work must be the same or similar in scope, complexity, and magnitude. The annual dollar value must be at least $2 million, held as either a prime or major subcontractor, with performance of at least 12 months.
SML asserts that the dollar requirement will exclude from competition the majority of small businesses and is therefore, unduly restrictive. GAO states that the fact that an aspect of an RFP's evaluation criteria may prevent a number of small firms from obtaining positive past performance ratings in not dispositive of whether the provision is unduly restrictive. Agency's enjoy broad discretion in the selection of evaluation criteria and GAO will not object as long as the criteria reasonably relate to the agency's needs. The determination of a contracting agency's needs and the best method for accommodating them are matters primarily within the agency's discretion.
Here, GAO states that the record supports the agency's position that the $2 million annual minimum for relevant past performance references is reasonably related to it needs. The total amount of all orders placed against all contracts awarded under the RFP may exceed $240 million, with each individual order likely to exceed $2 million. Based on historical records of ERP-EAS requirements, the average task order is expected to be $2.8 million. Given the total amount to be expended under contracts resulting from the RFP, the average amount of individual task orders, and the fact that each awardee will likely be required to perform multiple concurrent task orders, GAO finds that the agency's requirement is unobjectionable. The protest is denied.
4. Ellwood National Forge Company, B-402089.3, October 22, 2010
Link: GAO Opinion
Agency: Department of the Air Force
Disposition: Protest denied.
Keywords: Organizational Conflict of Interest; OCI
General Counsel P.C. Highlight: Where an individual obtains non-public, competitively useful information in connection with a private employment or consulting agreement, an allegation that the information subsequently was shared with a competitor is a dispute between two private parties, and does not give rise to an OCI.
Ellwood National Forge Company (Ellwood) protests the decision by the Department of the Air Force to allow McConway and Torley, LLC (M&T) to compete for a contract to manufacture bomb live unit-113 (BLU-113) case assemblies and pallets under a request for proposals (RFP). Ellwood asserts that M&T has an impermissible organizational conflict of interest (OCI).
The protest centers on an individual who was a long-term employee of, and later a consultant to, Ellwood. The individual served as a consultant to Ellwood through his firm Cherokee Technical Specialists, LLC (CTS). The individual was closely involved in the development and production of BLU-113 warhead casings, and in the fabrication and formulation of HP 9-4-20M steel by Ellwood. Ellwood states that it has been a subcontractor on the massive ordnance penetrator (MOP) program. CTS was employed as a subcontractor by the company performing system engineering and technical assistance in connection with the MOP program.
CTS also entered into a consulting relationship with M&T to assist that firm in qualifying to manufacture the BLU-113 casings. When Ellwood learned of the consulting relationship between CTS and M&T, it wrote to the contracting officer, advising her of its concern that the relationship between the two created a potential unfair access to information OCI on the part of M&T.
The contracting officer investigated Ellwood's concerns and reviewed non-disclosure and professional services agreements between Ellwood and the individual and the individual and M&T. The contracting officer also requested affidavits from all parties in question and contacted the cognizant Air Force engineering team for the BLU-113 requirement to determine whether the team could discern any similarities between the M&T-produced steel and the Ellwood-produced steel that could have resulted from Ellwood's information being provided to M&T. The engineers stated that there were significant differences between the two firms' manufacturing processes; such that there was no basis to conclude that the individual had provided M&T any information regarding Ellwood. The contracting officer concluded that no OCI existed and M&T could compete.
GAO states that Ellwood's assertions are without merit. Ellwood's allegations amount to no more than an assertion that information the individual acquired as an Ellwood employee and consultant was improperly shared with M&T. This is not an OCI scenario; rather, it amounts to an alleged violation of an agreement between private parties that GAO will not consider. Where an individual obtains non-public, competitively useful information in connection with a private employment or consulting agreement, an allegation that the information subsequently was shared with a competitor is a dispute between the parties, and does not give rise to an OCI. The contracting officer conducted an extensive investigation and the effort was sufficient to provide the agency with the information necessary to reach a reasonable judgment as to the potential OCI. The protest is denied.
5. Effective Shareholder Solutions, Inc., B-401796.3, October 26, 2010
Link: GAO Opinion
Agency: Defense Information Systems Agency
Disposition: Protest denied.
Keywords: Proposal evaluation
General Counsel P.C. Highlight: In reviewing a protest against an agency's evaluation, 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 criteria and applicable procurement statutes and regulations.
Effective Shareholder Solutions, Inc. (ESS) protests the evaluation of proposals and award of a contract by the Defense Information Systems Agency, Defense Information Technology Contracting Organization (DITCO), under a request for proposals (RFP).
The RFP anticipated award of a single five-year indefinite-delivery/indefinite-quantity fixed-price contract with a minimum ordering value of $100,000. Award would be made to the offeror whose proposal represented the best value to the government considering: (1) technical/management approach; (2) past performance; and (3) cost/price.
ESS was not awarded the contract, but was given a debriefing, including specific strengths and weaknesses. ESS filed an initial protest, but the agency announced that it was taking corrective action, including amending the solicitation to revise evaluation criteria, requesting revised proposals, conducting discussions, and making a new source selection decision. New proposals were received and evaluated and ESS was not selected.
ESS alleges that the agency improperly evaluated the revised proposals. GAO states that agencies are required to identify the bases upon which offerors' proposals will be evaluated and to evaluate proposals in accordance with the stated evaluation criteria. In reviewing a protest against an agency's evaluation, 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 criteria and applicable procurement statutes and regulations.
The RFP called for offerors to demonstrate recent experience with DoD charge card programs and GAO thinks that the agency properly took into account the protester's admitted lack of DoD-related experience in its evaluation of the protester's proposal. To the extent that the protester argues that the RFP should not have called for offerors to demonstrate DoD-specific experience, the protest is an untimely challenge to the terms of the RFP. ESS knew or should have known that the agency planned to evaluate proposals based on an offeror's experience with DoD charge card program, when ESS received the amended RFP. Under Bid Protest Regulations, to be timely, any challenge to the evaluation scheme had to be filed before the time set for receipt of revised proposals by the RFP amendment. The record indicates that when ESS received this amendment, it already knew certain facts about the initial evaluation of its proposal. In this regard, ESS knew that the agency considered its lack of any direct experience supporting DoD charge card operations to be a weakness under the technical/management approach factor and the past performance factor.
ESS next contends that the color scheme for evaluating proposals was not "an objective rating system." Since the amendment fully disclosed the color scheme and risk assessment ratings that would be used to evaluate proposals, the protester also was required to raise this issue prior to the time set for receipt of revised proposals.
ESS asserts that the agency exhibited bias in favor of the awardee, but fails to point to anything in the record in support of this allegation.
Finally, ESS questions the blue/low risk rating assigned to the awardee's proposal under the ability to retain personnel subfactor of past performance on the basis that the awardee had no prior experience with its subcontractor. GAO states that this allegation is too speculative to state a sufficient legal or factual basis for protest.
In sum, GAO finds that the agency's evaluation of revised proposals was reasonable and consistent with the RFP and there is no basis to question the agency's selection. The protest is denied.
