Protest challenging agency’s responsibility determination and evaluation is sustained. GAO found that the responsibility determination was flawed because the contracting officer had ignored the extent to which the awardee was relying on an affiliate that had pleaded guilty to criminal antitrust violations. GAO also found that the agency conducted misleading discussions by telling the protester that its price was too high when the company’s price had actually been the lowest. GAO ruled that the agency failed to properly document its evaluation of offerors’ oral presentations and thus strengths and weaknesses based on those presentations were unsupported. GAO further determined that the agency engaged in disparate treatment by assigning the awardee a strength for a feature of its proposal but not assigning the protester a strength for the same feature.
DoD’s U.S. Transportation Command (TRANSCOM) issued a solicitation for global relocation services—i.e., moving services—for service members, civilians, and Coast Guard members. The solicitation contemplated award of a single IDIQ contract.
Seven offerors submitted proposals, including HomeSafe Alliance, LLC and American Roll-on Roll-off Carrier Group, Inc. (ARC). TRANSCOM awarded the contract to ARC, finding that its proposal represented the best value to the agency.
HomeSafe filed a protest alleging that TRANSCOM had erred in finding ARC a responsible contractor. HomeSafe contended that ARC failed to disclose that is parent, Wallenius Wilhelmsen Logistics AS (WWLAS), had a record of criminal antitrust misconduct. In response to the protest, TRANSCOM took corrective action to reevaluate proposals and make a new award decision.
Following reevaluation, TRANSCOM again awarded the contract to ARC, finding that its high-priced proposal contained “game chang[ing]” benefits that warranted the price premium. As part of the corrective action, TRANSCOM also conducted a second assessment of ARC’s responsibility. ARC acknowleged that WWLAS had pleaded guilty to criminal misconduct and paid a fine. Following the guilty plea, WWLAS restructured and renamed itself Wallenius Wilhelmsen Ocean (WWO). ARC informed the agency that its SAM registration had erroneously identified the WWLAS/WWO entity as its parent. Instead, the two companies—ARC and WWO—were siblings, each owned by another company, Wallenius Wilhemsen Logisitics ASA. ARC avowed that WWO would not have any meaningful involvement in the performance and that its resources would not affect ARC’s performance. The contracting officer found that ARC was responsible because WWO was not ARC’s parent and would not be involved in performance of the contract.
HomeSafe protested challenging TRANSCOM’s responsibility determination. HomeSafe alleged that ARD had misrepresented its reliance on WWO in performing the contract.
GAO agreed. ARC’s proposal stated that it would have access to the resources of the Wallenius Wilhelmsen ASA affiliates. That claim was inconsistent with ARC’s representation during the responsibility determination that WWO would not be involved in performance. Indeed, GAO noted, not only was this representation contradicted by ARC’s proposal, it begged the question as to precisely what Wallenius Wilhelmsen ASA resources would be available to ARC.
HomeSafe also asserted that TRANSCOM failed to consider the ways in which WWO exercises ownership and control over ARC. HomeSafe contended that the CEO and CFO of the parent company, Wallenius Wilhemsen ASA were employed by WWO. Thus, HomeSafe argued, WWO was effectively in control of the contract.
GAO once again agreed with HomeSafe. ARC had not credibly explained how WWO would have no part in the contract performance even though the company employed the CEO and CFO of ARC’s parent. The responsibility determination ignored the appearance of control by WWO employees.
Aside from the responsibility determination, HomeSafe alleged that TRANSCOM conducted misleading discussions when it advised the company that its total evaluated price was high. HomeSafe claimed this was misleading because, in fact, throughout discussions, its price was actually lower than the price of all other offerors.
TRANSCOM argued that the discussions were not problematic. The point of discussions, the agency contended, is to maximize the government’s ability to obtain the best value. Thus, the contracting officer has discretion to inform an offeror that its price is too high so long as there was a basis for that assertion. Here, all the offerors were advised that their prices were too high, so the discussion were equal.
GAO, however, reasoned that maximizing the best value is not necessarily synonymous with achieving lowest possible price, particularly in a procurement where best value is determined with a tradeoff between technical capability and price. Thus, contrary to TRANSCOM’s contentions, informing HomeSafe that its price was too high was not actually an attempt to obtain the best value. Moreover, GAO reasoned, the fact that all the offerors were advised that their prices were too high did not make discussions equal. Under the FAR discussions must be tailored to each proposal. Simply telling every offeror that their price is high does not tailor discussions to each proposal.
HomeSafe also objected to the proposal on the grounds that TRANSCOM failed to maintain adequate records of the offerors’ presentations. As a result, HomeSafe argued, the agency could not demonstrate that it treated offerors fairly in the conduct of discussions following the presentation.
The FAR requires agencies to maintain records of oral presentations to document what the agency relied on in making a source selection. Here, the record contained only two documents, characterized as notes, memorializing the oral presentations. Those notes were sparse and unsigned. They not indicate what the agency asked HomeSafe during the presentation or whether the company’s responses were sufficient. TRANSCOM argued that while the notes may not have documented the presentation, the agency also had evaluation worksheets that did. But GAO found that those worksheets were not contemporaneous records of the presentation. GAO concluded that the record on oral presentations was inadequate. TRANSCOM lacked a reasonable basis for the evaluated strengths and weaknesses based on the presentations.
HomeSafe also challenged the evaluation of ARC’s small subcontracting requirements, but GAO found this protest groundless. For instance, HomeSafe alleged that ARC failed to sign its revised small business subcontracting plan as required by the solicitation. GAO, however, found that while ARC may not have signed the plan, it signed the final contract that incorporated the plan.
HomeSafe further alleged that TRANSCOM had, in various ways, disparately evaluated proposals. Although GAO did not agree with all of the HomeSafe allegations, it did find one instance of disparate treatment. GAO determined that TRANSCOM assigned ARC a strength for a feature but failed to assign HomeSafe a strength for the same feature. TRANSCOM provided no rationale for the disparate treatment.
Lastly, HomeSafe challenged the best value tradeoff, arguing that the source selection authority had properly weighed technical capability and price. GAO saw no basis to sustain this specific challenge, but it did find that given the errors in the underlying evaluation, the tradeoff decision was flawed.
HomeSafe is represented by Craig A. Holman, Stuart W. Turner, Sonia Tabriz, Amanda Sherwood, Thomas A. Petit, and Trevor G. Schmitt of Arnold & Porter Kay Scholer, LLP. The intervenor, ARC, is represented by Kara M. Sacilotto, Tracye Winfrey Howard, Bryan G. Walsh, Samantha S. Lee, Cara L. Lasley, Lindy C. Bathurst, and Adam R. Briscoe of Wiley Rein, LLP. The agency is represented by Erika L. Whelan Retta and Jason Smith of the Air Force. GAO attorneys Kenneth Kilgour and Jennifer D. Westfall-McGrail participated in the preparation of the decision.
