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Protest challenging cost realism evaluation and alleging an improper bait and switch is denied. While the agency had upwardly adjusted the awardee’s proposed costs, the protester alleged that adjustment was insufficient. GAO, however, found that based on the information available, the adjustment was reasonable. The protester alleged the awardee had proposed a bait and switch with members of a scientific advisory board. The protester alleged that letters of commitment for the board members were inadequate, but GAO found the letters were sufficient. The protester also alleged that one of the proposed members was barred by a criminal statute from serving on the board. GAO reasoned that it had no authority to interpret a criminal statute and thus had no basis to question the availability of the proposed board member.

The Department of Health and Human Services (HHS) posted an RFP seeking administrative support services. The incumbent contactor, CDIC, Inc., and another company, Council Rock Consulting, submitted proposals. In evaluating cost realism, HHS upwardly adjusted Council Rock’s overhead and administrative costs. Even with the adjustment, Council Rock had a lower price than CDIC. HHS awarded the contract to Council Rock. CDIC protested.

CDIC first claimed that Council Rock’s proposed rates were unrealistic and that HHS had not sufficiently adjusted them. In adjusting Council Rock’s rates, HHS had used rates from a contract between that National Institutes of Health and another contractor. CDIC contended that the HHS erred in relying on that contract because the rates were form 2011 and had not been recently audited.

GAO, however, found that agency’s reliance on rates from this other contract reasonable, especially because there was a dearth of other cost information available. HHS had relied on a contract that, like the one in this case, was with a small business providing consulting and management services. Neither CDIC nor Council Rock had negotiated rate agreements with other agencies. HHS had received some historical rate information from Council Rock, but was not satisfied that those rates were realistic. Under the circumstances, the cost realism evaluation and resulting adjustment of Council Rock’s rates was unobjectionable.

CDIC also claimed that Council Rock had engaged in a bait and switch by proposing members of a scientific advisory board that it did not expect to provide during performance. CDIC based this on argument on the letters of commitment submitted for the proposed board members. CDIC complained that the letters just contained boilerplate language and lacked a firm commitment.

GAO found that the letters of commitment were adequate. The letters invited the board members to continue to serve on the board and asked them to sign the letter to indicate intent to accept.

CDIC further contended that Council Rock engaged a bait and switch by proposing an ineligible government official as a board member. CIDC contended that while in the government, this official had directed the program for which services would be provided under the contract. This individual had retired from the government in 2018, but CIDC argued that was barred by 18 U.S.C. § 207 and agency ethics policies from serving on the advisory board.

GAO noted that 18 U.S.C § 207 is a criminal statute. The interpretation of criminal statutes is a matter for the Department of Justice, not GAO. Because GAO lacked authority to interpret the statute, it had no basis to conclude that the former official role on the advisory board violated the statute. As a result, GAO was unable to conclude that Council Rock engaged in a bait and switch—i.e., lacked a reasonable expectation that the former official would be ineligible for a role on the advisory board.

CDIC is represented by Jonathan T. Cain and Justin Nahama of Fisher Boyles, LLP. The intervenor, Council Rock, is represented by Jonathan D. Perrone of Whitcomb Selinsky, P.C. The agency is represented by Anthony E. Marrone and Kevin Misener of the Department of Health and Human Services. GAO attorneys Alexander O. Levine and Jennifer D. Westfall-McGrail participated in the preparation of the decision.