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While the agency was evaluating proposals, the awardee disclosed that one of its proposed key persons had resigned. The agency went ahead and awarded the contract to the awardee anyway. The agency reasoned that the key person was still working for the awardee on the date of the award decision (they left a few days later), so they were technically still available. GAO was having none of it. The agency had actual notice that a key person was leaving. It couldn’t disregard this information and take refuge in a technicality.

Sehlke Consulting, LLC, GAO B-420538

Background

DoD’s National Reconnaissance Office issued a solicitation seeking financial support services. The solicitation required offerors to propose four key personnel, including a senior financial consultant.

The agency received proposals from Sehlke Consulting and the incumbent, KPMG. On January 18, 2022, while the agency was evaluating proposals, KPMG informed the agency that the person it had proposed for the key senior financial consultant position had resigned and would leave in a couple of weeks. The disclosure did not make much of an impression. The agency awarded the contract to KPMG anyway. 

Sehlke filed a protest, alleging the agency should have found KPMG’s proposal unacceptable due to the unavailability of key personnel.

Legal Analysis

The agency conceded it had actual notice that KPMG’s proposed senior financial consultant had resigned. Nevertheless, the agency argued that at the time of the award decision, the individual was still technically an employee of KPMG’s subcontractor; he didn’t leave the company until a day after the award was announced. Thus, the agency reasoned, the employee was still available at the time of award.

GAO found that this argument elevated form over substance. The senior financial consultant unambiguously resigned for a position with another company. It was clear the individual would not be available to perform the contract. The agency could not simply ignore this fact when it made its selection decision. While the individual had not yet left at the time the agency made the selection decision, the date of award was not the operative date on which to consider the impact of the key person’s departure. Instead, the agency should have considered the impact from the date of contract performance.

If there is a change in the availability of proposed staff, an agency may either evaluate the proposal as submitted in light of the change, or conduct discussions. Here, the agency had done neither. GAO recommended the agency either evaluate KPMG’s proposal without the key person, or hold discussions with all offerors.

Sehlke is represented by Damien C. Specht and James A. Tucker of Morrison & Foerster LLP. The intervenor KPMG, is represented by Dominique L. Casimir, Michael J. Montalbano, and Robyn N. Burrows of Blank Rome, LLP. The agency is represented by Christopher Van Horne, Tyler E. Merkel, Marci A. Lawson, and Brian A. Young of the Department of Defense. GAO attorneys Evan D. Wesser and Edward Goldstein participated in the preparation of the decision.