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Protest Filed Before Close of Discussions Premature; GAO B-416890, Celeris Systems Inc.

Protest challenging the agency’s evaluation of proposals is dismissed, where the agency had commenced but not yet completed discussions before the protester filed its challenge.

Celeris Systems Inc. protested the Navy’s award of an engineering and technical support services task order to INDUS Technology Inc., arguing the agency had misevaluated its proposal.

GAO dismissed the protest, as the agency had not yet completed discussions. According to its protest filing, Celeris’ debriefing began on September 24, 2018. Celeris submitted questions to the agency on September 26 and filed its protest on September 28. However, the Navy explained that as of October 2, it had not yet answered the protester’s discussion questions.

Celeris argued that October was the agency’s deadline to respond, and therefore discussions were concluded, regardless of the agency’s response. Further, Celeris argued that the protest should not be dismissed because the incomplete debriefing involved extended debriefing procedures. According to Celeris, the agency’s obligation to answer its discussion questions should not delay its ability to file a protest or obtain a stay in performance.

However, GAO found the protest was premature, because the debriefing process had not concluded.

Celeris Systems Inc. is represented by Bryan B. Arnold of Gordee, Nowicki & Blakeney, LLP. INDUS Technology is represented by Richard B. Oliver, and J. Matthew Carter, Pillsbury Winthrop Shaw Pittman LLP. The government is represented by Robert Jusko, Trenton J. Bowen, and James C. Brent, Department of the Navy. GAO attorneys Paul N. Wengert and Tania Calhoun participated in the preparation of the decision.

Agency Reasonably Declined to Seek Clarifications of Material Omissions; COFC Nos. 18-682C, RX Joint Venture LLC and TISTA Science and Technology Corporation v. United States

Protests challenging the agency’s decision not to seek clarifications or hold discussions are denied, where neither protester demonstrated the material omissions in their proposals could be cured with clarifications and where the agency reasonably decided not to open discussions with up to 80 offerors in light of the small potential benefit of adding one more proposal to the competition. In the first protest, the court found the agency was not required to ask the protester to submit documentation of an approved cost accounting system for one of its JV partners, because there was no indication in the proposal that it intended to do so, and therefore the error was not apparent. In the second case, the protester failed to show the agency had received its full proposal submission, and the court found the lack of an actual proposal to be a material omission that could not be cured by clarifications.

In separate, but consolidated, bid protests, RX Joint Venture LLC and TISTA Science and Technology Corporation argued the General Services Administration improperly evaluated their proposals for an IT services contract. Both argued the CO improperly failed to contact them regarding information missing from their proposals. TISTA argued that GSA lost the documents the CO asserted were not submitted.

The solicitation required offerors to demonstrate they had a cost accounting system certified by a cognizant federal agency. For joint ventures, this certification could be submitted on behalf of the JV itself. Otherwise, each JV member had to submit a certification. In its proposal RXJV claimed points for having a certified CAS. However, the proposal contained documentation and certifying statements for JV member Rothe Development Inc. but not for partner X Technologies. Accordingly, the CO deducted points from RXJV’s self-score. The CO did not seek clarification from RXJV or ask for the information. After award decisions were announced, RXJV was informed that it had failed to submit evidence of X Technologies’ approved CAS. When the protester offered to submit this documentation, the CO declined to consider it.

The agency also received a proposal package from TISTA. However, the package contained only the scoring worksheet and a submission of subcontractor information. GSA asserted that it never received an actual proposal and therefore had removed TISTA from the competition. After the award decisions were announced, TISTA was informed that its proposal was never received. The CO explained that correcting this omission would have required the agency to open discussions. However, the agency never held discussions and TISTA was never informed that its proposal had not been received.

Both offerors protested and their cases were consolidated. Both sought a declaration that the CO’s failure to seek clarifications was improper, an injunction setting aside the awards and ordering a reevaluation of the corrected proposals, and attorneys’ fees.

The court first considered RXJV’s protest, noting that a key factor in considering a CO’s decision to not seek clarification is whether the CO should have discerned that the protestor made an error rather than a deliberate decision. However, the court found the protester failed to show that the CO had any reason to suspect that RXJV inadvertently omitted the missing documents from its proposal. In its proposal, RXJV made no reference to those documents, and in fact listed only Rothe’s CAS materials in the table of contents.

While the protester argued the error was apparent, because the relevant experience portion of its proposal stated that X Technologies was currently performing cost-reimbursement contracts, which require a CAS, the court was unpersuaded. The court noted the CO did not evaluate this portion of RXJV’s proposal once he concluded the protester did not have enough points to be eligible for award. Further, the CO was not obligated to hunt through the proposal in search of information that might lead the CO to believe that seeking clarification was warranted.

Next, the court considered TISTA’s challenge, in which it argued the agency lost its proposal. While the protester submitted affidavits from multiple executives that the proposal was included in the proposal package, GSA argued that TISTA had not rebutted the presumption of regularity that applies to the government’s processing of proposals. GSA noted that the CO was certain the proposal was not received and that TISTA provided inconsistent explanations regarding the contents of the package.

The court found GSA’s explanation of its process for receiving proposals to be credible. The agency attested that the CO stored the package in a locked space, opened the package to review the scoring worksheet, and documented the contents of the package after discovering the proposal DVD was not included. Given these circumstances, the court placed the burden on TISTA to show an irregularity, and found it had failed to do so. While the CO told TISTA that he did not notify the company that it was being removed from competition because TISTA’s proposal DVD might be found in GSA’s possession, the court found that the CO merely acknowledged a hypothetical situation. The CO was not stating his belief that the proposal had been lost. The CO also thought that TISTA’s intent to submit a proposal could be realized if discussions were held.

The court also found TISTA’s uncorroborated affidavits insufficient. While the protester submitted a tracking manifest, the court noted the document stated only that a package was received by the government, without attesting to its contents.

TISTA next argued that the DVD containing its proposal went missing due to GSA’s poor job safeguarding proposals. TISTA argued GSA provided no explanation of its safety procedures in the debriefing and that the CO’s explanation was insufficient. TISTA also noted the undisputed fact that GSA timely received its package. Third, TISTA argued that the loss of the DVD is more than an isolated incident of negligence because the CO opened the proposal box, discarded packing materials, left the package on a shelf, and returned later to inventory the contents of the box.

However, the court found this argument unconvincing. According to the court, to prevail, TISTA must show that (1) the government failed to explain what safeguarding procedures were in place, (2) the evidence suggests that the proposal was received by the government, and (3) the government’s negligent loss of information was not an isolated incident. The court found that TISTA failed to meet the first and third prongs of the test, noting the government did explain its procedures and that TISTA provided no evidence of a systemic failure.

Next, TISTA argued that the government-control exception applies, because there is acceptable evidence that the proposal was received by GSA and was under its control prior to the time set for receipt of proposals. In support, TISTA relied again on the affidavits of its executives and its tracking record for the package. TISTA also asserted that the purpose of the government-control requirement is to prevent modification of proposals after submission and that this objective is satisfied by the stipulated fact that, during its GAO protest, TISTA submitted a complete proposal with metadata reflecting that no changes were made after the deadline for submitting a proposal. However, the court was again unpersuaded, finding that the government-control exception cannot be applied because TISTA failed to show that its proposal was actually received.

Finally, TISTA argued that the agency improperly declined to seek clarifications or open discussions. First, TISTA argued the missing information could have been redressed via clarifications because a clarification would not have materially altered the terms of its proposal and because the mistake was apparent. GSA argued the failure to submit the DVD proposal was a material omission that was not a proper subject for clarifications.

The court agreed with the agency, explaining that a material omission cannot be cured by clarifications. The court found it difficult to fathom how anything could be more material than the omission of the actual proposal submission. While TISTA argued the CO could evaluate the proposal based on the scoring worksheet, the court found this review to be only the first step in a lengthy process. In fact, the CO was required to review the contents of the proposals at every subsequent step of the evaluation process.

TISTA argued that the submission of its proposal documents would not have been a substantial revision, because it could show when the documents were created and last revised. However, the court found this argument beyond the limited nature of clarifications. Under TISTA’s theory, even the most fundamental aspects of a proposal would always be subject to clarification so long as the offeror showed what it intended to submit.

Finally, TISTA challenged the agency’s decision not to hold discussions. GSA argued it had no obligation to open discussions. The court deferred to the agency’s discretion, noting that the solicitation stated that awards could be made without discussions. The court noted that the CO was presented with the choice to reject TISTA’s incomplete submission or to open discussions with as many as 80 offerors. Given the time and resources required, and the small potential benefit of adding one additional proposal to the competition, the CO reasonably decided to forgo discussions.

RX Joint Venture LLC is represented by David F. Barton. Tista Science and Technology Corporation is represented by Ryan S. Spiegel. The government is represented by Lauren S. Moore, Department of Justice.

Long Delay Between Pre-Award Protest and Current Case May Have Upended Plaintiff’s Status as Prospective Offeror; COFC No. 18-1474C, Timberline Helicopters Inc. v. United States

Motion for a temporary restraining order blocking performance of a contract for firefighting and fire suppression services is denied, where the court could not conclude with certainty that the protester had adequately preserved its status as a prospective offeror for the procurement, because it did not file its case with the court until more than 15 months after GAO denied its pre-award protest. The court also found that the protester would not suffer irreparable harm due to a lost opportunity to compete for the services, as it was not a party to any contracts under which the agency could obtain these services, if the contract at issue was temporarily suspended.

Timberline Helicopters Inc. filed a motion for a temporary restraining order and preliminary injunction halting the performance of a contract between the Bureau of Land Management and PJ Helicopters for aerial transportation of personnel in connection with BLM’s firefighting and fire suppression missions.

Timberline did not submit an offer in response to the solicitation because no helicopter could meet the solicitation requirements and comply with applicable FAA regulations regarding the transport of qualified non-crewmembers, and because BLM was unwilling to issue a public aircraft operation declaration to the awardee of the contract. According to Timberline, the PAO would have enabled it to provide the services consistent with FAA regulations.

Timberline filed a pre-award protest with GAO making the same arguments, which was denied. GAO declined to substitute its judgment for the agency’s. GAO noted the agency obtained an FAA opinion letter stating that in some circumstances firefighters could be transported on “restricted category” aircraft so long as the aircraft’s certification contained the special purpose of forest and wildlife conservation.

Thereafter, the FAA (apparently at the request of Timberline) initiated a review of the use of restricted category aircraft under the BLM contract. In a May 2018 memorandum, FAA offered its opinion that the special purpose forest and wildlife conservation certification only authorized the carriage of persons who were “actually participating in the special purpose operation, which is the aerial dispensing of liquid for firefighting” or those who were “essential to that aerial dispensing of liquid.” According to the opinion, the transportation of firefighters for ground firefighting from one location to another is not related to the special purpose for which the aircraft is certified.

Apparently in light of this opinion, BLM provided PJ Helicopters with a PAO, which authorized it to continue transporting firefighters in its aircraft, as required by the contract. Timberline protested, arguing that BLM’s to assure offerors on the solicitation that it would issue a blanket PAO and its subsequent decision to issue a PAO to PJ Helicopters (rather than reopening competition for the contract) violated the Competition in Contracting Act. Timberline asked the order to direct BLM to resolicit offers and award it attorneys’ fees and costs. Timberline also filed this motion for a TRO and preliminary injunction.

However, the court denied the motion, first finding that Timberline had not shown a substantial chance of success on the merits of its case, generally because the court could not conclude it has standing to pursue it. Because Timberline did not submit an offer for the original contract, the court found it was not an actual offeror. While Timberline’s GAO pre-award protest could establish that it was a prospective offeror, the court noted the protester did not file its current case until 15 months after its GAO protest was denied. The lengthy delay caused the court to question whether Timberline had diligently preserved its prospective offeror status.

Further, the request was not intended to disturb, not preserve, the status quo, as the protester sought to enjoin performance of a contract awarded more than a year prior, during which time the awardee had been providing services to the agency. The court also found that Timberline had not established that it would suffer irreparable harm while the protest is pending, absent the relief it sought. While Timberline argued that a TRO would require BLM required to employ the transportation services provided under “other call-when-needed contracts,” the court found no evidence Timberline was party to any such contracts. Thus, the court found that issuing the preliminary relief Timberline requested would not avoid the loss of profits that Timberline identified as the irreparable harm that it will suffer while its protest is pending. Further, the court noted that there is no procurement pending from which Timberline will be precluded from competing absent temporary or preliminary relief.

Finally, the court found the request would inflict harm on the government and the public interest if performance of firefighting and fire suppression services were interrupted. Accordingly, the court denied the motion for relief.

Timberline Helicopters is represented by Theodore P. Watson and Wojciech Z. Kornacki of Watson & Associates, LLC. The government is represented by John S. Groat, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, with whom were Joseph H. Hunt, Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Steven J. Gillingham, Assistant Director, and William B. Blake, Department of the Interior, Of Counsel.

Failure to Justify Direct Labor Rates Deviating From DOL Rates Sinks Protester’s Proposal, COFC No. 18-829C, Technical & Management Resources, Inc. v. United States

Protest challenging the agency’s price evaluation is dismissed, where the protester failed to justify direct labor rates that deviated from an established Department of Labor range and where the agency was not required to document its analysis of a justification that was not provided.

Technical & Management Resources Inc. protested multiple IDIQ contracts awarded by the General Services Administration to eighty-one firms for information technology services, alleging that the agency improperly determined that it did not propose fair and reasonable pricing. After TMR’s GAO protest was dismissed, it brought its challenge to the Court of Federal Claims.

First, TMR argued that GSA failed to document its analysis of TMR’s justification for proposing direct labor rates that were outside of Department of Labor ranges. The solicitation encouraged offerors to propose direct labor rates within an established range that was based on information from DOL, and stated that a direct labor rate found to be either lower or higher than the provided range, could be deemed not fair and reasonable.

In response, GSA argued that it properly concluded TMR failed to justify the direct labor rates falling outside the DOL ranges and that it reasonably did not document an analysis of TMR’s justification because the justification did not exist. The court agreed, finding that TMR’s proposal included no mention of the labor rates falling outside the DOL range.

Second, TMR argued that it adequately justified its pricing. According to TMR, its proposal explained that the direct labor rates were premised on rates approved for its prior government contracts and other relevant information. Specifically, TMR outlined its methodology for determining its rates and provided details on its sources of information.

In response, GSA acknowledged that TMR’s proposal contained an explanation of its pricing methodology and labor and burden rates estimation, but did not satisfy the requirement to supply a clear and convincing rationale for proposing rates outside the DOL ranges. GSA also pointed out that TMR did not acknowledge that its rates were outside of the DOL ranges.

The court agreed that GSA reasonably concluded TMR’s failure to acknowledge the deviations suggested that it was merely meeting the requirement to outline its methodology without justifying its out-of-range rates. The court also rejected TMR’s argument that satisfying the first requirement essentially satisfied both, finding the protester misinterpreted the solicitation requirements.

Finally, TMR argued that GSA’s price evaluation as flawed, because the agency reviewed whether rates were too low, looked at only one element of price, failed to consider that its direct labor rates were maximums that could be discounted, relied on an unstated evaluation criterion, and improperly relied on average pricing proposed by awardees.

In response, GSA argued that the solicitation clearly stated that it would consider whether pricing was too low or too high, that it properly reviewed fully burdened rates as well as direct labor rates, that it was not required to consider potential discounts, and that its chosen method of relying on an average derived from the proposals received was reasonable.

The court reasoned that even if any of TMR’s arguments demonstrated error, the protester was not prejudiced because it did not have a substantial chance of award without a justification for any pricing that deviated from the DOL ranges. Accordingly, the court concluded that TMR failed to demonstrate that GSA erred in its evaluation and findings, and therefore, determined that TMR was not entitled to relief.

Technical & Management Resources, Inc. is represented by Jonathan D. Shaffer. The government is represented by Meen Geu Oh of the United States Department of Justice.

Private Audit Deemed Unacceptable For Solicitation’s CAS Certification Requirement; COFC No. 18-785C, Criterion Systems Inc. v. United States

Protest challenging the agency’s evaluation is dismissed, where the agency reasonably concluded that the protester’s submission of a private audit of its cost accounting system did not meet the requirement for an audit conducted by a government agency, and where the agency had no obligation to clarify or waive the protester’s omission of the required certification documents.

Criterion Systems Inc. protested multiple IDIQ contracts awarded by the General Services Administration to eighty-one firms for information technology services. In its action at the Court of Federal Claims, the protester argued that the agency did not take remedial steps to address its failure to provide the required documentation for an acceptable cost accounting system and that the agency abused its discretion by neither seeking clarification nor waiving the error as an informality and minor irregularity.

GSA required each offeror to demonstrate that it had an acceptable CAS based on a federal agency’s audit and adequacy determination. Offerors were directed to claim points for meeting this requirement and others in a scoring worksheet. GSA found that Criterion claims the points for having an approved CAS but did not submit adequate supporting documents. Criterion complained that GSA should have sought clarification.

In response, GSA argued that Criterion improperly conflated the steps that the agency was required to perform in reviewing each proposal.  GSA explained it was only required to seek clarification regarding discrepancies at the initial screening stage, which was step two of the five-step process. Because Criterion submitted documents that appeared to substantiate its points for CAS certification, there was no discrepancy that it needed to clarify. The court agreed.

Next, Criterion argued that GSA abused its discretion by not seeking clarification regarding the incorrect materials from a private audit. According to the protester, the missing government audit could have been redressed through a clarification. Criterion further argued that the CO was obligated to seek clarification because the discrepancy between the claimed points in the scoring sheet and the supporting materials was apparent.

In response, GSA maintained that Criterion’s failure to provide the supporting materials for an acceptable CAS was not subject to clarification because the error was not apparent. The court agreed and further noted that the protester failed to show GSA had reason to suspect its private audit submission was an error rather than a deliberate choice. The court further concluded that the submission of the private audit instead of the government audit strongly suggested an intentional decision rather than a mistake.

Finally, Criterion argued that GSA should have waived its failure to submit the proper documentation as an informality. Criterion claimed that a waiver was appropriate because the missing government audit did not affect the substance of its accurate representation in the scoring worksheet that it had a DCAA audit. In response, GSA argued that the government audit was a material component of the solicitation that could not be waived.

The court determined that Criterion failed to demonstrate that the CO abused his discretion by not waiving the requirement. The court also reasoned that even if the protester’s submission of the private audit was a minor irregularity, the agency would have undermined its own interest in ensuring that offerors submitted compliant offers.

Moreover, the court found no indication the agency had to means to assess whether Criterion’s private audit was the functional equivalent to the required government audit. To the extent Criterion argued that GSA’s decision to not accept private audits was unreasonable, the court found that challenge to solicitation’s requirements was untimely.

Criterion Systems Inc. is represented by David T. Hickey. The government is represented by Jimmy S. McBirney, United States Department of Justice.

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