Protest challenging offeror’s elimination from the competition is denied. The solicitation required offerors to have a verified accounting to demonstrate responsibility. The protester did not have a verified system but alleged that the agency could assess its responsibility from its audited financial statements instead. The FAA’s Office of Dispute Resolution for Acquisition (ODRA) didn’t buy the protester’s argument. The protester had failed to satisfy an express solicitation requirement. The protester’s financial statements did not satisfy the verification requirement, and the protester had no basis to assume they would. ODRA also found the FAA properly declined to waive the verification requirement.
The FAA issued a solicitation for the design and development of a beacon replacement system. The solicitation required offerors to show that they had an accounting system verified by DCAA, DCMA, or a CPA that was acceptable for a cost reimbursement contract. Offerors had to have a verified system to demonstrate responsibility.
Selex ES, Inc. did not have a verified accounting system. Nevertheless, it submitted a proposal in response to the FAA solicitation. Selex acknowledged its lack of verified accounting system in its proposal, stating that in lieu of a verified system, it was submitting audited financial statements. This did not sit well with the FAA; it eliminated Selex from the competition. Selex filed a protest with the FAA’s Office of Dispute Resolution for Acquisition, challenging its elimination.
Selex objected to the timing of its elimination. It noted that the FAA’s Acquisition Management System Guidance counsels that a responsibility determination is to be made at the time of award. Because the verified accounting system concerned offerors’ responsibility, Selex argued, the FAA should not have eliminated the company before proposal evaluation. ODRA, however, held that neither the acquisition guidance nor ODRA cases preclude contracting officials from making a responsibility determination at the early stages of the evaluation process.
Selex next argued that its audited financial statements provided a basis for a minimum determination of responsibility and that the FAA could have audited its proposal with those statements. But ODRA noted that Selex never confirmed this supposition with the FAA. What’s more, the solicitation expressly required the submission of third party verification. Since Selex knowingly chose to not provide information from a third party, it assumed the risk of not being considered for award.
Finally, Selex contended that the FAA should have waived the verification requirement as a minor irregularity because only 2% of the contract was cost reimbursement. ODRA rejected this argument, reasoning it would violate the principal that procurements must be conducted on a fair and equal basis. If the FAA had waived this requirement for Selex, it could have prejudiced other potential offerors who opted not to compete due to the verification requirement.
Selex is represented by Sharon L. Larkin of Larkin LLP. The FAA is represented by Caroline Schleh and Amrana Ali.
