Protest that agency improperly awarded a sole-source contract to provide property management services is denied, where the agency reasonably justified the urgency of its requirement and its conclusion that only the awardee could provide the services on short notice. GAO also determined that the agency’s focus on obtaining satisfactory performance from the incumbent, instead of abandoning performance and focusing on a new procurement, did not amount to a lack of planning on the agency’s part, even though the incumbent’s contract was not extended past the base year.
CWIS LCC protested the Department of Housing and Urban Development’s award of a sole-source purchase order for property management services to P.K. Management Group Inc., arguing that HUD lacked a valid basis to award a sole-source contract due to unusual and compelling urgency, and that the urgent circumstances were invalidated by the agency’s lack of reasonable planning.
The requirement was originally awarded to another contractor, whose unsatisfactory performance resulted in the agency deciding not to extend its contract past the base year. The incumbent contract ended on May 31, 2018, and the agency required new services to begin immediately on June 1. Due to the immediacy of the requirement, HUD decided to award a purchase order on a sole-source basis to PKMG. In its sole-source justification, HUD noted that a full and open competition would likely take 10 months to complete. HUD also explained the urgent requirement for the services and noted that PKMG could begin performance without a significant transition period, as it possessed vetted staff and sufficient resources. PKMG also had been the contractor for this geographic area prior to award to the incumbent.
After HUD posted the notice of award, CWIS protested. HUD asked GAO to dismiss the challenge, arguing that CWIS failed to provide a sufficient factual and legal basis to challenge the sole-source award. Specifically, HUD noted that the protest listed the wrong contract number, attached an irrelevant exhibit (a sole-source justification for areas 4S and 6S, rather than area 3A), and incorrectly labeled the services at issue as cleaning services, rather than property management services.
GAO declined the request to dismiss, finding that the protest as a whole made it reasonably apparent CWIS challenged the sole-source award to PKMG for this geographic area.
On the merits, CWIS argued that the sole-source justification was defective. Specifically, CWIS argued that the circumstances did not constitute unusual and compelling urgency; that the urgency is invalidated by the agency’s failure to plan; that the 12-month term of the order is longer than justifiable; and that even if the circumstances supported a valid justification for limiting competition, HUD nevertheless should have solicited a competing proposal from CWIS given its ongoing performance as an incumbent contractor in multiple other HUD service areas.
GAO disagreed. While CWIS argued HUD should have begun planning a new procurement once it determined that the incumbent contractor’s performance was unsatisfactory, GAO found HUD reasonably directed its efforts to obtaining satisfactory performance from the incumbent, as the contractor selected through competition. HUD’s effort to administer that contract to obtain acceptable performance was reasonable, and does not reflect a lack of adequate planning under these circumstances.
GAO also found HUD’s justification of the urgency of the requirement to be reasonable. HUD explained that a lack of services would increase the chance government properties would be damaged by theft and vandalism, as well as incidents of adverse occupancy. Those incidents would in turn slow the marketing of properties, decrease their values, increase cost and time for repairs, and adversely affect the surrounding neighborhoods and communities. GAO agreed that those effects were likely and serious enough to support a sole-source award.
CWIS also argued that the 1-year term of the contract with PKMG exceeded the time needed for HUD to hold a competition for the requirement. HUD’s previous experience showed that such a competition would take 10 to 12 months to complete, including time to transition in a new awardee. Thus, GAO found awarding a 1-year contract to PKMG was reasonable.
Finally, although CWIS argued that HUD should at least have held a limited competition, GAO found no basis to question HUD’s conclusion that only PKMG could meet the requirement on an urgent basis. CWIS did not demonstrate that it could have met HUD’s requirements to begin full performance on June 1, and instead only theorized that PKMG might not have met the agency’s requirements.
CWIS LLC is represented by Rene B. Ugarte and Andrew Newell of Whitcomb, Selinsky, McAuliffe PC. P.K. Management Group Inc. is represented by Les Sternberg. The government is represented by Audrey Roh and Julie K. Cannatti, Department of Housing and Urban Development. GAO attorneys Paul N. Wengert and Tania Calhoun participated in the preparation of the decision.