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Agency’s Failure to Assign Equal Weakness to Awardee’s Quotation Biased Source Selection Decision; GAO B-416734, ManTech Advanced Systems International Inc.

Protest challenging the agency’s evaluation of offerors’ staffing and retention approaches is sustained, where the agency assessed a weakness to the protester’s quotation for failing to propose retention techniques designed specifically for cleared personnel but did not assess a weakness to the awardee’s proposal for the same fault. Because the weakness was a determining factor in the source selection decision, GAO found the protester was prejudiced by the agency’s unequal evaluation.

ManTech Advanced Systems International Inc. protested Immigration and Customs Enforcement’s issuance of a blanket purchase agreement for operations support services to SRA International Inc., challenging the evaluation of proposals.

First, ManTech argued that ICE unreasonably evaluated its quotation as having two weaknesses under the staffing approach factor. ManTech also asserted that the agency unequally evaluated its and the awardee’s quotations under that factor.

ManTech’s quotation was rated as overall acceptable under the staffing approach factor, but the agency noted two weaknesses. The agency noted that ManTech did not provide any retention techniques focused on cleared personnel, and that ManTech’s retention plan for junior analysts would result in CTCEU having fewer experienced analysts.

ManTech argued the first weakness was unreasonable because it discussed retention techniques applicable to cleared personnel in its quotation when summarizing its general retention incentives. However, GAO found that the quotation did not address any specific retention techniques focused on cleared personnel. The quotation shows that ManTech planned to use general, company-wide retention strategies which did not appear to be designed specifically for retaining cleared personnel but rather apply to both cleared and junior personnel, as well as all other ManTech employees. Further, the quotation did not state that these techniques were designed solely to retain cleared personnel or had some other particular benefit, and the agency was not required to infer that these techniques satisfied the evaluation criterion. Regarding the second weakness, GAO found the agency reasonably interpreted ManTech’s retention techniques as potentially leading to a dearth of qualified analysts.

Next, ManTech argued that the agency unequally evaluated vendors’ quotations because SRA’s quotation suffered the same defects but was not assigned identical weaknesses. Specifically, ManTech argued that SRA’s quotation did not include retention techniques focused on cleared personnel yet was not assigned a weakness. In response, the agency asserted that SRA’s quotation included multiple retention incentives specifically geared towards cleared personnel and two retention incentives of general applicability that apply to cleared personnel.

However, GAO agreed with the protester, finding that both quotations lack retention techniques focused on cleared personnel. Nearly identical to ManTech’s quotation, SRA’s quotation proposed to use a competitive salary structure, spot bonuses, continuing education opportunities, training and development programs, and a team-friendly environment as its tools to retain cleared personnel. Thus, both vendors proposed to use what appear to be company-wide benefits as their retention techniques for cleared personnel. Given that neither vendor proposed a retention technique specifically focused on cleared personnel, GAO found the agency evaluated proposals disparately in this area.

ManTech also challenged the source selection decision, arguing that without the error in the evaluation, the two quotations would have been considered essentially equal in the technical factors. Therefore, ManTech argued that its lower-priced quotation would have been selected for award.

The solicitation stated that the agency would evaluate the corporate experience and key personnel factors on a pass or fail basis, and then conduct a tradeoff between the price and staffing approach factors. If two or more quotes were found not to have any substantial differences with respect to the non-price factors, price would be considered more important. The solicitation stated that award could be made to a higher-priced quotation if the agency concluded the proposal was in its best interest.

GAO found that when the agency conducted its tradeoff between ManTech an SRA, it did not identify any substantial differences between the vendors’ staffing approaches. As ManTech argued, this means it should have received award because it was lower-priced. GAO found this interpretation unreasonable, because the RFQ never identified price as the determinative factor under any scenario, including where quotations were evaluated as not having substantial differences. Instead, the RFQ repeatedly described price as becoming more important than the staffing approach factor in those circumstances, and explained that the agency may award to a higher-priced quotation where the quotations have substantial differences. While the solicitation stated price would “become more important,” GAO found this did not mean that price would become “more determinative.”

However, GAO found that ManTech was prejudiced by the error in the evaluation. When making its tradeoff decision, the agency distinguished between the protester’s and awardee’s quotations based on the two weaknesses identified in protester’s quotation. Considering that, GAO noted that the protester’s lack of retention techniques for cleared personnel was a significant factor in finding that the protester’s quotation did not offer the best value, and that the agency characterized the weakness as troubling. Since the agency should have also identified a troubling weakness in SRA’s quotation and because ManTech was lower-priced, GAO could not conclude that the agency would have reached the same source selection decision without the error.

ManTech Advanced Systems International Inc. is represented by Stuart B. Nibley, Amy Conant Hoang, and Erica L. Bakies of K&L Gates LLP. The government is represented by Douglas J. Becker, Department of Homeland Security. GAO attorneys Todd C. Culliton and Tania Calhoun participated in the preparation of the decision.

14

Protester Lacked Standing to Challenge Cancellation of LPTA Because It Was Not Lowest-Priced Offeror; COFC No. 18-981, Veteran Shredding LLC v. United States

Protest challenging the agency’s decision to cancel a solicitation set aside for SDVSOBs and resolicit with less restrictive terms is denied, where the protester was not the lowest-priced, technically acceptable offeror, and therefore did not have a substantial chance at award. Although the protester styled its challenge as a pre-award protest, the court found the agency had evaluated proposals for technical acceptability and price, and therefore the “substantial chance” standard—not the “non-trivial competitive injury” standard—applied.

Veteran Shredding LLC protested the Department of Veteran Affairs’ cancellation of a solicitation for document destruction services, for which Veteran Shredding had submitted a bid. The plaintiff asked the court to void the cancellation, award the contract to plaintiff, and prevent the agency from resoliciting the procurement using a veteran-owned small business set-aside in place of the original service-disabled veteran-owned small business set-aside.

VA originally issued the solicitation as an SDVOSB set-aside on a lowest-priced, technically acceptable basis. During the process, Veteran Shredding expressed concern that the estimated weight of the paper to be shredded seemed unusually low and questioned whether the incumbent was actually serving the amounts identified in the previous solicitation. After submitting its proposal, Veteran Shredding again expressed its concern that the incumbent “grossly underestimated” the paper to be disposed and offered to justify its bid in detail.

After reviewing all proposals, the CO found that all offers were above the IGCE, even though the agency made only minor adjustments to the requirement. Based on the significant difference between the lowest-price offeror and the IGCE, the CO could not determine that prices were fair and reasonable. The agency notified the five bidders that because their quotes were not fair and reasonable, the VA would cancel the solicitation and open it up to additional competition. Notwithstanding the cancellation, the agency rated proposals from Veteran Shredding and two lower-priced offerors to be technically acceptable. Veteran Shredding requested a debriefing and this protest followed.

The government moved to dismiss, arguing Veteran Electric lacked standing, because it was not the lowest-priced bidder and therefore did not have a substantial chance of award. If the court were to overturn the cancellation, two other offerors would be in line for award before Veteran Electric.

In response, Veteran Shredding argued that in a pre-award context, the ‘substantial chance’ test does not apply. Instead, the plaintiff argued it need only show a non-trivial competitive injury which can be redressed by judicial relief. The non-trivial competitive injury it cites is the loss of a federal contract for which it was a prospective bidder submitting a reasonable price. Further, if VA re-solicits without the “service-disabled” qualifier, Veteran Shredding must then re-compete against a larger pool of bidders, whether VOSBs or small-businesses in general.

However, the court held the plaintiff erred in in asserting that the “non-trivial competitive injury” standard governs all pre-award protests. Instead, that standard provides an alternative to the “substantial chance” standard when there is a lack of a bid or other factual basis to evaluate a protestor’s chance at an award. In this case, the agency had evaluated the proposed prices of all offerors, so the court could evaluate whether Veteran Shredding had a substantial chance for award.

While the plaintiff’s proposal was among those rated technically acceptable, it was the highest-priced of the three. Further, its protest focused primarily on VA’s price reasonableness determination, which would affect each of the three technically acceptable proposals equally. Had the VA found Veteran Shredding’s offer fair and reasonable, it would have also found the two lower bids fair and reasonable. Accordingly, the court held that Veteran Shredding lacked a substantial chance at award and denied its protest for lack of standing.

Veteran Shredding LLC is represented by Joseph A. Whitcomb and Mark H. Wilson of Whitcomb, Selinsky, McAuliffe, PC. The government is represented by Igor Helman, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, with whom on the briefs were Joseph H. Hunt, Assistant Attorney General, Civil Division, and Robert E. Kirschman, Jr., Director, and Allison Kidd-Miller, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice. Of counsel was Natica Chapman Neely, Staff Attorney, District Contracting National Practice Group, Office of General Counsel, Department of Veterans Affairs.

Request to Recertify SDVOSB Status at Task Order Level Disadvantaged Incumbent, but Not the Result of Bias; GAO B-416719, The Oryza Group LLC

Protest challenging solicitation amendment that required offerors to recertify their small business status at the task order level is denied, where the recertification requirement was within the agency’s discretion and applied equally to all offerors.

The Oryza Group LLC protested the terms of an Army solicitation for sustainment information systems support. The incumbent objected to the solicitation requirement that firms recertify their status as a service-disabled veteran-owned small business at the time of proposal submission.

The initial solicitation stated that offerors must represent in good faith that at the time of their written representations, they are a SDVOSB in accordance with the NAICS Code and small business size standard applied for the requirement. The solicitation also advised that offers from firms that were not SDVOSBs or small businesses under the relevant NAICS Code size standard would be considered nonresponsive.

Oryza submitted the lowest-priced technically acceptable proposal, but the agency found that the firm was not certified as an SDVOSB in the System for Award Management. Given that the agency intended to issue the order to an SDVOSB, the agency amended the solicitation to clarify that offerors were required to recertify their status as an SDVOSB at the time of the initial task order proposal submission.

Oryza protested the amended solicitation. The protester explained that while it was awarded its VETS 2 contract as an SDVOSB, the firm is no longer a small business and would not be eligible for task order award if it was required to recertify its SDVOSB status at the task order level. As result, Oryza contends that the Army is improperly treating the firm unequally because only Oryza, the apparent awardee, would be disqualified by the imposition of the retroactive recertification requirement.

In response, the agency argued that the solicitation had always required that offerors represent that they were SDVOSBs at the time of proposal submissions, and that the amendment merely clarified this requirement. The agency maintained that the recertification requirement was within in its discretion, and there was never a specific intent to avoid awarding the order to Oryza.

GAO noted that when a firm is awarded an IDIQ contract as an SDVOSB, the firm is generally considered an SDVOSB for the life of the contract and is not required to recertify its size status for each task order. However, agencies have the discretion to request such a recertification.

GAO found nothing objectionable about the agency’s request. As an initial matter, GAO found it did not need to resolve the question of whether the initial solicitation required offerors to recertify their size. Rather, the question was whether it was objectionable for the agency to amend the solicitation and issue evaluation notices to require offerors to recertify their size status. GAO concluded it was not, as the FAR allows a contracting officer to amend a solicitation when the agency’s needs or terms change. In this case, the procurement was always set aside for SDVOSBs, and the CO determined it was necessary to clarify that offerors were required to recertify their status when they submitted their proposals. Accordingly, rather than cancel the solicitation and resolicit the requirement, the agency amended the solicitation. GAO also found the agency reasonably decided not to cancel and reissue the solicitation, as the protester suggested.

Oryza also argued the agency’s decision amounted to unequal treatment, but GAO disagreed. First, GAO noted the requirement applied to all offerors. That Oryza ultimately cannot make the required representations does not establish improper action on the part of the Army, but simply demonstrates that award to Oryza would not support the agency’s SDVOSB contracting goals.

The Oryza Group LLC is represented by Christopher R. Shiplett of Randolph Law, PLLC. The government is represented by CPT Jeremy D. Burkhart, LTC Andrew J. Smith, Scott N. Flesch, Department of the Army. GAO attorneys Noah B. Bleicher and Peter H. Tran participated in the preparation of the decision.

Requiring Vendors’ FSS Labor Categories to Show Exact Years of Experience Required by Solicitation is Unduly Restrictive of Competition; GAO B-416733, Grant Thornton LLC

Protest challenging a solicitation’s requirements for quoting labor categories from vendors’ Federal Supply Schedule contracts is sustained, where the agency unreasonably concluded that the minimum years of experience defined in the FSS labor categories had to exactly match the agency’s requirements. GAO and GSA agreed with the protester that an FSS labor category providing skilled employees with a minimum of 10 years of experience was within the scope of the agency’s requirement for employees with 12 years of experience in the relevant area.

Grant Thornton LLC challenged the terms of a Department of Defense Washington Headquarters Services request for quotations for auditing support services, arguing that the solicitation, which was issued under the Federal Supply Schedule provisions of FAR 8.4, is unduly restrictive of competition because it requires vendors to quote labor categories from their FSS contracts that “align precisely” with the minimum years of experience in the RFQ.

The solicitation’s price evaluation factor required vendors to quote labor categories that “align precisely” with the PWS labor categories, stating that the “price list description of the corresponding FSS labor category must enumerate the qualifications and responsibilities contained in the definition of the PWS labor category. The pricelist description of the vendor’s quoted FSS labor category must align precisely with the requirements of the corresponding PWS-defined labor category.” For example, for a PWS labor category that required 12 years of experience and a Master’s Degree, offerors could not propose a labor category that provided for only 10 years’ experiences and a Master’s Degree, even if the price list description used wording such as “minimum 10 years’ experience.”

The CO explained that he interpreted previous GAO decisions to require agencies to evaluate proposals in this manner. Prior to the deadline for proposals, a prospective offeror suggested the agency alter this requirement to allow offerors to align their proposed employees to their most appropriate GSA labor category, while acknowledging that the proposed individual would meet the agency’s specific qualifications. The agency declined. Grant Thornton filed an agency-level protest, which was denied, and then filed with GAO.

The protester argued that the requirement, as written, is unduly restrictive of competition. While a vendor’s FSS contract may identify a minimum number of years of experience, the protester explained that this did not preclude an offeror from quoting employees with more years of experience, as the agency required.

GAO agreed, finding the agency erroneously relied on two of GAO’s previous protest decisions. In those cases, GAO sustained protests challenging the issuance of task orders for services that were outside the scope of the awardee’s underlying FSS contract or the quoted labor category. GAO explained that when a quoted FSS contract labor category does not “align precisely” with the solicitation requirements, the vendor may not alter the terms of its FSS contract by proposing employees or services to provide PWS requirements that are not within the scope of that contract.

GAO found the agency unduly restricted competition by requiring that the minimum qualifications in offerors’ FSS labor categories exactly match the minimum qualifications of the solicitation labor categories. GAO noted that Grant Thornton did not challenge the types of skills, capabilities, or education required, nor the number of years of experience, but only the requirement that the FSS labor categories align precisely with the solicitation. Rather, the protester argued that the solicitation term would unfairly require vendors to guess at future agency requirements when establishing the labor categories on their FFS contracts. Taken to the extreme, the protester argued that vendors would be required to establish labor categories that encompass the same skills, capabilities, or education, but with multiple years of experience.

GAO agreed that an FSS labor category requiring a minimum 10 years of experience for a certain skill set reasonably encompassed the agency’s requirement for an individual with a minimum of 12 years of experience in that skill.

DoD acknowledged that labor category requirements in solicitations do not always “parrot” FSS contract labor categories, and that agencies must exercise judgement in assessing whether a quoted FSS contract labor category is within the scope of a solicitation requirement. DoD noted that an agency could focus on whether the FSS labor category substantively encompasses a PWS attribute, even if the wording differs. However, the agency contended that years of experience is an objective, inflexible requirement for which no judgment can be exercised. For that reason, the agency argued that there is no difference between a labor category that offered a minimum 10 years of experience or one that offered exactly 10 years of experience.

In response to GAO’s inquiry, GSA agreed with Grant Thornton’s position, stating that the solicitation requirement does not provide vendors a fair opportunity to reasonably align their FSS contract labor categories to the PWS-defined categories. GSA agreed that the stated number of years of experience is material for assessing whether a labor category is within the scope of a solicitation requirement, but explained that a labor category setting a minimum requirement for years of experience did not prevent an offeror from proposing an individual with more years of experience.

GAO sustained the protest and recommended that the agency amend the solicitation and reimburse the protester’s costs.

Grant Thornton LLC is represented by Alexander J. Brittin of Brittin Law Group, PLLC, and by Jonathan D. Shaffer and Mary Pat Buckenmeyer of Smith Pachter McWhorter PLC. The government is represented by Stephan Piel, Department of Defense, and Sarah Park, General Services Administration. GAO attorneys Jonathan L. Kang and Laura Eyester participated in the preparation of the decision.

Randolph-Sheppard Act Regulations Mandate Binding Arbitration, Not GAO Review, for Protests of Covered Procurements; GAO B-416182.2, Georgia Business Enterprise Program-Vocational Rehabilitation Agency

Protest challenging the agency’s exclusion of a proposal from the competitive range is dismissed for lack of jurisdiction, where GAO will not consider a protest by a state licensing agency challenging a procurement issued pursuant to the Randolph-Sheppard Act, because such complaints are resolved through mandatory binding arbitration procedures issued by the Department of Education.

The Georgia Business Enterprise Program-Vocational Rehabilitation Agency protested the Army’s decision to eliminate its proposal from consideration for award of a contract for full food service at various dining facilities located on Fort Benning, Georgia.

The procurement was conducted pursuant to the Randolph-Sheppard Act, which establishes a priority for blind persons represented by state licensing agencies in the award of certain contracts, including those for the operation of cafeterias in federal buildings. Under the RSA’s implementing regulations, if a designated SLA submits an offer found to be within the competitive range for the acquisition, the agency will enter into negotiations solely with the SLA, in an effort to obtain the services at a reasonable cost.

GVRA submitted a proposal, but the agency later notified the protester that its proposal had been excluded from the competitive range because it was not one of the most highly rated proposals and did not have a realistic chance for award. This protest followed.

However, GAO declined to consider the protest merits, finding that it lacked jurisdiction. GAO explained that the regulations implementing the RSA’s requirements include procedures for resolving dispute through binding arbitration. According to GAO, where Congress has vested oversight and final decision-making authority in a particular federal official or entity, it will not consider protests involving issues subject to review by that official or entity.

The protester argued that it challenged the merits of the evaluation, not the agency’s compliance with the RSA, and therefore GAO should find it has jurisdiction. However, GAO found that the resolution of the SLA’s protest of its exclusion from the competitive range has specific consequences set forth in the RSA’s implementing regulations, which provide that if its proposal was included in the competitive range, the agency would enter into negotiations solely with the SLA, in an effort to obtain the services at a reasonable cost. Through its allegation that the Army’s allegedly improper elimination of the SLA’s proposal from the competitive range, GAO found that GVRA’s protest implicates a potential violation of the RSA, which, as stated above, provides for binding arbitration.

Georgia Business Enterprise Program-Vocational Rehabilitation Agency is represented by Aron C. Beezley, Patrick R. Quigley, William R. Purdy, Sarah S. Osborne, and Anna M. Lashley of Bradley Arant Boult Cummings LLP. The government is represented by Scott N. Flesch, Major Felix Mason, and Andrew J. Smith, Department of the Army. GAO attorneys Katherine I. Riback and Amy B. Pereira participated in the preparation of the decision.

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