Protest challenging agency’s corrective action is sustained. Following a previous sustained protest, the agency took corrective to reevaluate proposals. The agency informed offerors, however, that it was changing the evaluation criteria to remove a price realism analysis. Despite this change to the evaluation criteria, offerors were not allowed to submit revised proposals. GAO rejected the agency’s planned corrective action, finding that the removal of the realism analysis was a material change to the solicitation. Whenever an agency makes a material changes to the terms of a solicitation, it is required to amend the proposal and allow offerors to submit revised proposals.
The U.S. Coast Guard awarded a contract for service desk information technology services to Intellect Solutions, LLC. An unsuccessful offeror, Computer World Services Corporation (CWS), protested. GAO sustained the protest, finding that the price evaluation was flawed, and that the Coast Guard had failed to account for differences between Intellects level of effort and labor mix and the level of effort and labor mix used to calculate the government estimate. Indeed, GAO found that the IGE itself was flawed. GAO recommended the agency devise a new methodology for evaluating the realism of proposed labor rates or revise its acquisition strategy.
In light the GAO decision sustaining the protest, the Coast Guard issued a corrective action letter stating that it was revising the evaluation criteria by removing the realism evaluation. The letter stated that the Coast Guard would not issue an amendment reflecting the change. Offerors were instructed to either revalidate their price or withdraw their quotation by March 19, 2020. CWS then filed another protest challenging the Coast Guard’s corrective action.
Before addressing the merits of CWS’s protest, GAO considered a timeliness argument raised by the intervenor/awardee, Intellect. Intellect argued that CWS’s protest was untimely because it was submitted after the deadline established in the corrective action letter. As noted, the letter required offerors to revalidate their price or withdraw their quotes by March 19. Intellect contended that because the corrective action letter made a change to the terms of the solicitation and required some kind of further submission, CWS was required to file its protest before March 19. Instead, CWS protested on March 27.
GAO was unpersuaded. Under GAO’s bid protest regulations, if an impropriety that does not exist in the initial solicitation is subsequently incorporated into the solicitation, then the impropriety must be protested before the next deadline for receipt of proposals. If no further submissions are anticipated, then the error must be protested within 10 days of when the protester learned of the impropriety.
In this case, offerors were not afforded an opportunity to submit revised proposals. Rather, they were given the option of reaffirming or withdrawing by March 19. This is not the type of “further submission” contemplated by GAO’s bid protest regulations. Thus, CWS did not have to protest by March 19. It only had to file a protest within 10 days of the March 17 corrective action letter. CWS’s March 27 protest was within the ten day window.
As to the merits of the protest, CWS argued that the Coast Guard—by dropping the realism analysis—had impermissibly revised the solicitation’s evaluation criteria without allowing offerors to submit revised proposals. GAO agreed. When an agency makes a material change to the terms of a solicitation, it is required to issue an amendment and allow offerors to revise their proposals to give them a fair opportunity to compete on a common basis.
The Coast Guard argued that elimination of the price realism analysis was an immaterial change, but GAO didn’t buy it. In the previous protest, the Coast Guard had determined that both CWS and Intellect had proposed unrealistically low labor rates. In fact, the Coast Guard had conducted discussions with both offerors about their rates, and both had changed their proposed pricing. Moreover, the agency had rejected CWS’s proposal because it found that the company’s revised rates were still unrealistic. As a matter of fact, CWS stated that if it were allowed to revise, it would make further changes to its staffing. It was clear to GAO that the change to the solicitation’s evaluation criteria to eliminate the price realism evaluation had fundamentally altered the procurement.
Aside from the change to the evaluation criteria, CWS objected to the Coast Guard’s plan for the reevaluation of price reasonableness. Instead of using an IGE, the Coast Guard stated that it would use other price reasonableness analysis techniques, such as comparing quotes to one another and to historical data. CWS argued that the Coast Guard should be required to evaluate again a new IGE that accurately reflected the agency’s requirements.
But GAO found this argument premature. The Coast Guard’s proposed method for reevaluation was not itself objectionable; indeed, the agency proposed to use methods contemplated by the FAR. CWS’s real concern was how successful the agency will be in reevaluation. GAO, however, could not review the reevaluation until the Coast Guard actually performed it.
CWS is represented by Jonathan J. Frankel and Karla J. Letsche of Frankel PLLC. The intervenor, Intellect Solutions, is represented by Sharon L. Larkin and James M. Larkin of The Larkin Law Group LLP. The agency is represented by Shandra Kotzum of the Department of Homeland Security. GAO attorneys Scott H. Riback and Tania Calhoun participated in the preparation of the decision.
