Protest alleging that the agency failed to adequately consider the impact of a corporate transaction on the awardee is denied. GAO noted that award was based solely on the price. This meant that the protester’s argument necessarily concerned the awardee’s financial capability to perform. This kind of argument, GAO reasoned, is really a challenge to the agency’s responsibility determination. GAO does not consider challenges to a responsibility determination. Moreover, even if the protest had not broached a responsibility determination, GAO would not have found the award problematic because the corporate transaction would not have resulted in a different entity performing the contract.
The Army issued a task order request (TOR) for, among other things, facilities management and warehousing at various Army depots. Award was to be made to the responsible offeror that submitted the lowest evaluated price. Thus, price was the only evaluation factor.
The Army awarded the task order to AECOM Management Services. An unsuccessful offeror, VSE Corporation requested a debriefing. During the debriefing, VSE asked the Army if it had considered the potential impact of AECOM Management’s proposed spinoff from its parent. The Army was unaware of the proposed transaction. Nevertheless, after investigating further, the Army determined that AECOM Management would still be responsible following the proposed spinoff.
VSE filed a protest, alleging that the Army failed to adequately consider the consequences of the AECOM Management’s spinoff. AECOM Management intervened. Around the time that comments on the agency report were due, AECOM Management announced that the spinoff was cancelled. Instead, private equity firms would buy AECOM Management. While noting that much of the protest had been overtaken by events, GAO still considered VSE’s arguments.
As to VSE’s argument that the Army failed to sufficiently consider the impact of the spinoff, GAO noted that VSE attempted to characterize this argument as a challenge to the Army’s evaluation under the TOR’s evaluation criteria. But, GAO reasoned, VSE had not actually challenged the evaluation of AECOM Management or identified any flaw in the company’s proposal. Rather, VSE had effectively challenged AECOM Management’s financial capabilities following the spinoff, which really broached an issue of responsibility. GAO does not consider a protest challenging a responsibility determination unless the protester presents specific evidence that the contracting officer ignored information that could have a strong bearing on responsibility. VSE had not presented any such evidence, so GAO refused to consider its disguised responsibility argument.
Still, VSE argued that the TOR included non-price evaluation criteria that the Army should have considered when evaluating the impact of the AECOM spinoff. But GAO noted that both the TOR’s instructions and its evaluation criteria specifically stated that the only evaluation factor was price. Thus, contrary to VSE’s arguments, there were no non-price factors to consider.
GAO concluded by briefly addressing VSE’s reliance on GAO decisions that considered the effect of corporate transactions. GAO noted that in those decisions, it only found corporate transactions problematic when the awardee divested some portion of its business resulting in the contract being performed by a materially different contractor. In this case, however, it did not appear that a different contractor would actually be performing the contract. AECOM Management was the offeror. Even if the transaction had gone through, and AECOM Management had become a separate company, AECOM Management would still have performed the task order. This case, in other words, only involved a change in ownership, not the more problematic change in the entity that will perform the contract.
VSE is represented by Cameron Hamrick, C. Peter Dungan, and Jason Blindauer, Miles & Stockbridge P.C. The intervenor, AECOM Management, is represented by Kevin P. Connelly, Kelly E. Buroker, and Jeffrey M. Lowry of Vedder Price, P.C. The agency is represented by Jonathan A. Hardage, Amanda C. Gingrich, and Kevin G. Normile of the U.S. Army. GAO attorneys Evan D. Wesser, and Edward Goldstein participated in the preparation of the decision.
