Agency Erred in Issuing BPAs that Exceeded Terms of Vendors’ FSS Contracts; Meridian Knowledge Solutions, LLC, GAO B-420150 et al.

Protest challenging the eligibility of awardees selected for BPAs is sustained. The agency awarded BPAs to holders of FSS contracts. The solicitation stated that the BPAs had a term of 10 years, including option years. Two awardees, however, had FSS contracts that would expire before the 10-year term of the BPA. The FAR requires that a vendor’s FSS contract have sufficient duration to cover the entire period of performance of a BPA, including option years. Here, the awardees’ FSS contracts would not last the duration of the BPA; they were ineligible for award.

Background

The Department of Homeland Security (DHS) issued an RFQ to holders of the GSA’s Federal Supply Schedule contracts for information technology. The RFQ contemplated the issuance of blanket purchase agreement with one base year and nine option years.

After reviewing quotations, DHS awarded three BPAs to Envisage Technologies, The Educe Group, and IBM. An unsuccessful vendor, Meridian Knowledge Solutions, LLC, protested. Meridian argued that Educe and Envisage were ineligible for award because their FSS contracts expired before the end of the BPAs’ ten-year term. Meridian also challenged the price evaluation and conduct of discussions. 

Legal Analysis

• Educe’s and Envisage’s FSS Contracts Expired Before the BPA – Under FAR 8.405-3(d)(3), a vendor’s FSS contract must have sufficient duration to coincide with the entire period of performance, including options. Here, Educe’s and Envisage’s FSS contracts expired before the end of the BPA’s term. 
• DHS Could Not Tailor the BPAs for the Terms Remaining on the FSS Contracts – DHS argued it had satisfied the FAR’s requirements because the solicitation had only stated that the BPAs could have a term of “up to 10 years,” and the agency had tailored Educe’s and Envisage’s BPAs to the time remaining on their FSS contracts. GAO reasoned that while the RFQ advised that the ordering period could be “up to 10 years,” it also stated that the period was one base year with nine option years. The natural reading of the RFQ is that the ordering period was “up to 10 years” because the agency may not exercise every option, not because the agency intended to issue BPAs with different lengths.
• Meridion Was Prejudiced by the Erroneous Awards – GAO further found that the award to ineligible vendors had prejudiced Meridian. Meridian had provided prices for all 10 years. Envisage had provided prices for all ten years while knowing it would not be performing in those final years. This allowed Envisage to price its quotation more attractively than Meridian’s and prejudiced Meridian’s chance of receiving award.
• Meridian’s Other Arguments Lacked Merit – Aside from the terms of the BPAs Meridian challenged the price evaluation, alleging DHS failed to account for the vendors’ differing price assumptions. GAO found the agency accounted for vendors’ assumptions. Meridian also claimed DHS conducted misleading discussions by failing to advise that Meridian’s price was too high. But the agency had found Meridian’s price reasonable; it did not have to advise Meridin that it’s price was high.

Meridian is represented by Lucas T. Hanback, Alexandria Tindall Webb, Eleanor M. Ross, and Deborah Rodin of Rogers Joseph O’Donnell, PC. The intervenor, Envisage Technologies, is represented by Robert K. Tompkins, Hillary J. Freund, Kelsey M. Hayes, and Sean Belanger of Holland & Knight, LLP. The agency is represented by Roger A. Hipp of the Department of Homeland Security. GAO attorneys Michael Willems and Edward Goldstein participated in the preparation of the decision.