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Accidental Double-Counting of Strengths Didn’t Impact Source Selection Decision; GAO B-416849, North South Consulting Group LLC

Protest that the agency unreasonably assigned a weakness to the protester’s proposal is denied, where proposal stated the protester would outsource its human resources functions, which the agency reasonably believed included recruiting services. While the protester argued the proposal did not state recruiting services would be outsourced, GAO found it reasonable for the agency to conclude that the outsourced HR services included them. GAO also denied challenges to the best value tradeoff, explaining that the agency was not obligated to consider the protester’s proposal more advantageous merely because it was assessed more strengths. GAO also concluded that the agency’s error in double-counting the awardee’s strengths during the source selection decision process did not prejudice the protester, because correcting the error would not alter the fact the awardee’s proposal was higher rated and lower priced.

North South Consulting Group LLC protested the Army’s award of a contract for child and youth services program support to Dynamic Systems Technology Inc., arguing that the agency misevaluated its proposal and made an unreasonable source selection decision.

First, the protester challenged a weakness assigned to its proposal regarding employee retention. The agency felt the demonstrated retention rate created a risk of instability in the non-program management labor categories. The protester argued the agency failed to consider its explanation for the retention statistics, and that the information contained in its proposal demonstrated that there was no risk of poor performance from employee turnover. According to NSCG, much of its turnover was the result of individuals being promoted to fill other positions under the same contract. NSCG also argued that, with respect to its subcontractor’s attrition rates, the low retention rate was a result of the agency’s actions and not by NSCG’s actions.

In response, the agency said it considered these explanations but concluded the reasons did not negate the concerns about instability. GAO found the agency’s evaluation reasonable and that the protester’s challenge arose from disagreement with the agency’s judgment, which did not provide a basis to sustain a protest.

Next, NSCG raised multiple challenges to the source selection decision. First, NSCG argued that the SSA erroneously concluded that NSCG planned to outsource its recruiting activities, when the proposal did not state this. The agency had assessed a weakness to the proposal for NSCG’s proposed outsourcing of human resource services and the SSA referenced this weakness in the source selection decision. In response to the protest, the agency noted the protester’s proposal did not state which HR functions would be outsourced, nor did the proposal specifically state that the recruiting function would not be conducted by the outsourced HR team. GAO found this reasonable, explaining that it was NSCG’s responsibility to submit a clear, well-written proposal.

NSCG also argued the tradeoff decision was inconsistent with the terms of the solicitation because the agency attached greater importance to the management approach factor than to the technical approach factor—the most important factor. Specifically, the protester argued the SSA unreasonably considered strengths in Dynamic’s proposal under the management approach factor to discount the strengths in NSCG’s proposal under the technical approach factor.

In response, the Army explained that the SSA reviewed the content of the proposals as a whole and concluded that NSCG’s proposal lacked any positive discriminators. For each strength or significant strength found in NSCG’s proposal, the SSA found an equivalent element in Dynamic’s proposal, even though the SSEB had identified some of these features in the management volume of Dynamic’s proposal, rather than the technical volume.

GAO found the evaluation reasonable, concluding that the SSA looked behind the adjectival ratings to meaningfully consider the differences—and similarities—between proposals. While the protester disagreed with the outcome, this disagreement did not render the tradeoff decision unreasonable. GAO also rejected the protester’s argument that its proposal was superior because it had been assessed more strengths under the technical factor.

Finally, the protester argued the SSA treated offerors disparately, because he used features identified in Dynamic’s proposal under the management approach factor to diminish and downplay superior features in NSCG’s proposal under the technical approach factor, but failed to similarly consider these same features from NSCG’s proposal when comparing proposals under the management approach factor. In essence, the protester argued the SSA ‟double-counted” Dynamic’s strengths identified under the management approach factor by also considering them under the technical approach factor.

GAO agreed the evaluation was flawed in this respect, but found the protester was not prejudiced by the error. Because of the significant strengths in Dynamic’s proposal under the management approach factor and its lower price, GAO found no reasonable possibility the award decision would have been different if the agency discounted the strengths already considered under the technical approach factor.

North South Consulting Group LLC is represented by Aron C. Beezley, Patrick R. Quigley, Sarah S. Osborne, and Anna M. Lashley of Bradley Arant Boult Cummings LLP. Dynamic Systems Technology Inc. is represented by Janice Davis of Davis & Steele. The government is represented by Major Felix S. Mason, Department of the Army. GAO attorneys Paula J. Haurilesko and Peter H. Tran participated in the preparation of the decision.

Newly Established Offices Fail to Satisfy Stafford Act Set-Aside Criteria; GAO B-416581.2, Falken USVI LLC

Protest challenging agency’s evaluation of the protester’s eligibility for award under the Stafford Act is denied, where the CO reasonably concluded that the protester had only recently established temporary offices within a disaster-affected area and did not have a permanent presence nor derive at least half of its income from the area during the normal course of its business.

Falken USVI LLC protested the Federal Emergency Management Agency’s award of a contract for security guard services at various U.S. Virgin Island locations to Ranger American of the VI Inc., arguing that FEMA failed to reasonably evaluate quotations in relation to their eligibility for award under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

After a major disaster declaration was issued for the Virgin Islands after Hurricane Maria, FEMA exercised its authority under the Stafford Act to begin offering assistance to the area, including the requirement for armed security guards in contention. Under the Stafford Act, FEMA is obligated to set aside work for local businesses residing in or primarily doing business in the affected areas. In this regard, FEMA conducted an analysis to determine whether offerors for the procurement resided in the area affected by the hurricane, and concluded that Falken dd not meet the criteria.

Falken challenged this determination. While its quotation stated that Falken Industries LLC is located in Virginia, it also noted the firm as offices in St. Croix and St. Thomas and therefore asserted that it is based within the Virgin Islands. Falken also specified that it would hire all guards from within the set-aside area.

However, the CO concluded that Falken did not have a main office in the set-aside area that generated at least half of the offeror’s gross revenues and employed at least half of the offeror’s permanent employees. While Falken had two operating offices in the region, both had been recently established. The CO also noted that Falken’s licenses were not issued until October 2017 after the company’s establishment in the U.S. Virgin Islands on October 13, 2017. The CO also found that Falken’s local business relationships were only recently established and that Falken had not demonstrated that at least half its income was derived from the set-aside area. Moreover, most of this revenue came from a FEMA contract awarded in February 2018. Based on these findings, the CO concluded that Falken was a long-term US-based company that had established a temporary, post-disaster presence in the Virgin Islands.

In contrast, the CO found that Ranger filed its Articles of Incorporation in 1993, which were certified by the Lieutenant Government for the Virgin Islands. The contracting officer also noted that Ranger has two long-standing, permanent offices in the set-aside area, as well as 204 current permanent employees and current, relevant licenses. The CO also noted that Ranger filed its tax returns in the Virgin Islands. Based on this information, the CO concluded Ranger was eligible for award.

GAO found this evaluation reasonable. While the CO initially concluded that neither offeror was eligible, the additional information provided by Ranger confirmed its presence in the Virgin Islands to the CO’s satisfaction. GAO found the evaluation thorough and well-documented, and denied the protest as a general disagreement with the outcome.

Falken also alleged the CO treated the firms unequally, but GAO found the protester failed to support these allegations with proof of disparate treatment.

Falken USVI LLC is represented by Kenneth A. Martin of The Martin Law Firm PLLC. Ranger American of the VI Inc. is represented by Jonathan D. Shaffer, John S. Pachter, Mary Pat Buckenmeyer, and Julia S. Shagovac of Smith Pachter McWhorter PLC. The government is represented by Hillary J. Freund and Rina Martinez, Department of Homeland Security. GAO attorneys Nora K. Adkins and Amy B. Pereira participated in the preparation of the decision.

Awardee Misrepresented Negotiations with Incumbent Staff; GAO B-416811, Sev1Tech Inc.

Protest that the awardee misrepresented the availability of incumbent staff is sustained, where the awardee’s proposal represented that it had already negotiated contingent offers of employment when it had not, and where the awardee did not obtain prior consent from incumbent staff to use resumes in its proposal.

Sev1Tech Inc. protested the Coast Guard’s award of a professional services task order to Solutions Through Innovative Technologies Inc., challenging the evaluation of the awardee’s staffing proposal.

The solicitation directed offerors to submit resumes for 26 positions, of which six were identified as key positions. The protester proposed a team comprised of 95 percent incumbent personnel and provided resumes for 18 incumbent personnel. The protester stated that it had met with the current employees on two occasions and negotiated exclusive letters of commitment.

The awardee provided the names and resumes for 10 of the incumbent staff that Sev1Tech proposed. The awardee’s proposal stated that it had reached out to and negotiated contingent offers of employment with candidates for each position. The awardee also proposed a high level of retention of incumbent personnel. The agency found the proposals were essentially equal and made award to STI-TEC based on its lower price. This protest followed.

Sev1Tech contends that the awardee’s proposal contained a material misrepresentation because STI-TEC proposed personnel for which it did not have a reasonable expectation would be available for performance under the task order. Specifically, the protester argued the awardee did not obtain permission to use the resumes of incumbent personnel in its proposal and did not contact the individuals concerning working on the task order until after the task order was awarded.

In response, the Coast Guard noted that the RFP did not require offerors to provide commitment letters or signed contingent offers of employment. Further, the agency argued that the awardee’s proposal clearly implied that it did not have firm commitments from all the personnel it proposed. Nonetheless, the agency expected STI-TEC to be able to provide the personnel, given its stated commitment to retention of incumbent personnel.

However, GAO found that the awardee received the resumes for the incumbent staff from its proposed subcontractor, which maintained a database that included the resumes of staff who performed under a previous task order. Additionally, STI-TEC admitted that it did not contact incumbent staff until after it was notified of the award.

GAO concluded that the awardee’s proposal contained a material misrepresentation regarding its contact and negotiation with incumbent employees and agreed the awardee did not have permission to use those employees’ resumes in its proposal. While the proposal did not suggest the awardee had a firm commitment from these employees, it clearly stated that STI-TEC had negotiated contingent offers of employment with candidates for each position, when in fact it had not.

STI-TEC explained that the statement in the proposal was copied and pasted from another proposal and was made in error. STI-TEC also argued that it reasonably believed that it would employ the incumbent staff on the contract based on its historical incumbent capture rate. However, GAO explained the awardee had an obligation to ensure the accuracy of its proposal. Further, the awardee’s belief in its ability to capture incumbent personnel did not negate the misrepresentation in its proposal.

GAO found this misrepresentation to be material because the Coast Guard relied on the resumes of incumbent staff that STI-TEC submitted and, as a result, the misrepresentation likely had a significant impact on the evaluation. The Coast Guard identified a strength in STI-TEC’s proposal under the management approach subfactor that relied in part on the large number of incumbent resumes provided in the proposal. In addition, the Coast Guard identified multiple strengths in STITEC’s proposal based on the incumbent resumes under the staffing approach subfactor. On this basis, GAO sustained the protest.

GAO recommended that the Coast Guard reevaluate STI-TEC’s proposal, taking into consideration the awardee’s misrepresentations concerning the resumes that STI-TEC submitted, and make a new selection decision. GAO also recommended the protester be reimbursed its costs.

Sev1Tech Inc. is represented by Stephen P. Ramaley, C. Peter Dungan, and Jason Blindauer, Miles & Stockbridge P.C. Solutions Through Innovative Technologies Inc. is represented by Barbara A. Duncombe, Suzanne Sumner, Erin R. Davis, and Brandon E. Dobyns. The government is represented by Allen Lotz, Department of Homeland Security. Paula J. Haurilesko and Laura Eyester participated in the preparation of the decision.

Agency Reasonably Excluded Proposal Protester Allowed to Expire; GAO B-416344.3, Emagine IT Inc.

Protest challenging the agency’s decision to exclude the protester’s expired proposal from the competition is denied, where the protester failed to respond to the agency’s request for an extension of the proposal and where the protester took no action after the original expiration date to inquire about the status of the proposal or the competition in general.

Emagine IT Inc. challenged the National Institutes of Health’s award of a task order for professional business support services to VMD Systems Integrators Inc., arguing the agency unreasonably excluded its proposal from the competition.

After the agency made its initial decision to award the task order to VMD, Emagine and another offeror protested. When the agency decided to take corrective action, it asked all offerors to extend their proposals, which they did. Later, the agency asked the offerors to (1) confirm whether the key personnel stated in their proposals were still available and committed to serve as key personnel; and (2) extend their proposals again. The CO received a “read receipt” showing that Emagine had received and opened the email. Nonetheless, Emagine did not respond.

The agency opened discussions with the other two offerors, requested and received final proposal revisions, and again made award to VMD. When informed that its proposal had not been considered, Emagine attempted to revive its proposal, arguing that it had already informed the agency that it would extend its offer, which the agency should have taken as its clear intent to participate in the competition. This protest followed.

Emagine argued that it was unreasonable for the agency not to consider its proposal because the protester had effectively communicated its intent to remain in the competition when it filed its initial protest challenging the first award decision to VMD, and subsequently granted an extension of its proposal through September 23. Based on these actions, the protester alleged that the agency could not have reasonably inferred that Emagine’s failure to respond to the request to extend the acceptance period of its proposal or to take any action upon the expiration of the proposal on September 23 was indicative of its intent to no longer participate in the competition. Alternatively, Emagine argued that the agency unreasonably declined to revive its proposal, because doing so would not have compromised the integrity of the procurement.

However, GAO disagreed, finding the agency’s actions reasonable. The agency asked Emagine to extend its proposal and it failed to do so, despite indications that it had received and read the request. Emagine also offered no reason why it failed to respond or suggest that it had not received the email. Therefore, GAO found it reasonable for the agency to infer that Emagine did not intend to extend its proposal.

Further, GAO noted the protester knew that its proposal was due to expire on September 23, yet made no effort to contact the agency after that date regarding the status of the procurement or its offer.

GAO also found no obligation for the agency to revive Emagine’s proposal, because the protester failed to take any actions in this regard until informed of the award decision. Because Emagine failed to reply to the government’s request for an extension, and because other offerors would not be given the opportunity to extend their proposal on an equal basis, GAO found that reviving Emagine’s proposal would compromise procurement integrity and only serve to reward Emagine’s lack of reasonable diligence.

Emagine IT Inc. is represented by Thomas K. David, Kenneth D. Brody, and Katherine A. David of David, Brody & Dondershine, LLP. VMD Systems Integrators Inc. is represented by John R. Tolle, and H. Todd Whay of Baker, Cronogue, Tolle & Werfel, LLP. The government is represented by Anthony E. Marrone, and Tony A. Ross, Department of Health and Human Services. GAO attorneys Evan D. Wesser and Peter H. Tran participated in the preparation of the decision.

Protester Cannot Challenge Award of 8(a) Contract After Graduating from Program, When Underling IDIQ Was Not an 8(a) Set-Aside; GAO B-416917, MIRACORP Inc.

Protest challenging the agency’s evaluation of quotation is denied, where the procurement was set aside entirely for 8(a)-eligible firms and the protester had graduated from the program. While 8(a) participants are eligible to retain their status for the life of an underlying IDIQ, the contract at issue had not been set aside for 8(a) firms and therefore the rule did not apply.

MIRACORP Inc. protested the Department of Energy’s award of a task order for administrative support services to RiVidium Inc., challenging the evaluation of quotations.

DOE issued the solicitation as a set-aside for participants in SBA’s 8(a) business development program who were also holders of a Federal Supply Schedule Professional Services Schedule contract. Incumbent MIRACORP submitted a quotation. While MIRACORP held a PSS contract, it had graduated from the 8(a) program some 18 months prior to the solicitation date. After the award decision was announced, MIRACORP filed this protest.

DOE argued the protester is not an interested party because the solicitation was set aside for 8(a) participants and therefore MIRACORP was ineligible for award. MIRACORP acknowledged these facts, but argued that it retained its status as an 8(a) participant because it was an 8(a) firm at the time it was initially awarded its PSS contract.

GAO invited SBA to comment. According to SBA, because the underlying PSS contract was not initially set aside for 8(a) competition, any order under that contract that is competed exclusively among 8(a) concerns, only can be awarded to a firm that SBA has verified as being an eligible 8(a) concern. SBA explained that to be an eligible 8(a) concern, the firm must be a current 8(a) participant as of the date specified for receipt of offers contained in the request for quotations for the order. SBA also noted the solicitation stated that offers would be accepted only from participants who met the criteria at the time of the submission of their quotation.

Accordingly, SBA maintained that because MIRACORP was not an 8(a) participant on the date specified in the RFQ for receipt of quotations, the protester was not eligible to receive the order, and therefore, not an interested party. GAO agreed with this interpretation of the program’s regulations and dismissed the protest. While the protester correctly argued that an offeror retains its size status for the life of an underlying contract, the PSS contract at issue was not set aside exclusively for 8(a) firms.

MIRACORP Inc. is represented by Thomas K. David, Kenneth Brody, and Katherine David of David, Brody & Dondershine, LLP. RiVidium Inc. is represented by James Y. Boland and Spencer P. Williams of Venable LLP. The government is represented by John L. Bowles and Stephanie B. Young, Department of Energy, and Sam Le, Small Business Administration. GAO attorneys Heather Weiner and Jennifer D. Westfall-McGrail participated in the preparation of the decision.

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