Protest alleging an OCI and challenging the evaluation of proposals is denied in part and dismissed in part. The protester alleged that the awardee had an impaired objectivity OCI. But the CO thoroughly analyzed the OCI and reasonably found that the any conflict would have negligible impact on the awardee’s performance. The protester also claimed the solicitation obligated the agency to assess the performance risk of the awardee’s low price. GAO, however, found that while the solicitation generally listed performance risk as one of the things the agency would consider when evaluating proposals, a more specific solicitation provision governing price stated that that the agency would only evaluate price for reasonableness and accuracy. The more specific provision controlled; the agency was not obligated to evaluate performance risk. The protester also argued that the agency erred in finding that the awardee was a newly formed entity. GAO, however, found that the solicitation contained a patent ambiguity as to the meaning of a “newly formed entity.” Thus, the protester should have raised the “newly-formed” issue before the proposal deadline. Finally, the protester challenged the agency’s evaluation of key personnel, but those arguments failed.
The Department of Energy published a solicitation seeking services to support the environmental clean-up of the Portsmouth and Paducah Uranium Enrichment sites. Several offerors, including Strategic Management Solutions, LLC (SMSI) and Enterprise Technical Services, Inc. (E-TAS), submitted proposals. DOE awarded the contract to E-TAS. SMSI protested, alleging that E-TAS had a conflict of interest, and that DOE bungled the technical, past performance, and price evaluations.
SMSI first contended that DOE failed to properly evaluate an OCI. E-TAS’s parent company was a subcontractor performing on a deactivation contract at one of the nuclear facilities—Portsmouth—covered by the solicitation. SMSI contended that the parent’s role on the deactivation contract gave rise to an impaired objectivity OCI—i.e., E-TAS, as awardee of the support contract, could end up evaluating the performance of its parent under the deactivation contract.
GAO did not believe DOE mishandled the alleged OCI. The contracting officer thoroughly investigated the OCI. She determined that the work E-TAS’s parent performed on the deactivation contract was very small and concluded that to the extent E-TAS might oversee the parent’s work, it would have negligible impact on the technical support contract. Additionally, the CO found that for the most part, the parent’s work on the deactivation contract consisted of routine, repetitive support tasks and would not impair E-TAS’s ability to provide advice.
What’s more, the CO extensively analyzed E-TAS’s proposed mitigation plan. As part of that plan, E-TAS stated it would recuse itself from all activities involving the parent, and that the parent would terminate its subcontract on the deactivation project if E-TAS received the technical support contract. Given this mitigation plan, the CO determined there was no significant potential for an OCI. GAO found that the CO had exercised common sense, good judgment, and sound discretion in evaluating the OCI.
SMSI also argued that DOE had relaxed PWS requirements for E-TAS to accommodate the purported OCI. In particular, SMSI contended, DOE had offered to self-perform parts of the contract to alleviate potential OCIs. GAO found, however, that this relaxation did not apply to E-TAS alone but to all offerors. What’s more, even if the relaxation was an error, SMSI had not demonstrated prejudice. It had not shown, or even alleged, that it would have proposed differently if it had known DOE would self-perform additional activities to avoid OCIs.
Next, SMSI asserted that DOE did not reasonably assess performance risk associated with E-TAS’s low price. SMSI contended that the following solicitation language obligated DOE to assess performance risk of a low price: “Proposals will be evaluated . . . by assessing the relative significant strengths, strengths, significant weaknesses, weaknesses deficiencies, and price, and performance risks of each Offeror’s proposal . . . .”
GAO found that that this language did not obligated DOE to assess the risk of a low price. This was a general evaluation provision. While “performance risk” was listed as an enumerated item the agency would consider, that provision did not state that DOE would assess every enumerated item against each evaluation factor. Indeed, such an interpretation would be absurd as it require the assessment of strengths and weaknesses to price as well as assessing price to non-price factors.
Importantly, the solicitation contained a specific provision on evaluation of price, which stated that price would only be evaluated for reasonableness and accuracy; it did not include performance risk. Under rules of contract interpretation, when there is a conflict between a general and a specific provision, the specific provision takes precedence over the general.
Indeed, SMSI’s performance risk argument was effectively an argument about price realism. In the absence of an express price realism provision, agencies are neither required nor permitted to conduct a price realism analysis. SMSI argued that its argument was different than a price realism argument. But GAO found that SMSI fundamentally misunderstood what a price realism analysis entails. A realism analysis, after all, assesses the performance risk associated with an offeror’s price.
SMSI further challenged the past performance evaluation of E-TAS, alleging that DOE should not have considered the past performance of E-TAS’s parent company. The solicitation allowed newly formed entities with no record of past performance to submit the past performance of a parent. SMSI argued, however, that E-TAS was not a newly formed entity; it had been formed four years ago.
The solicitation did not define “newly formed entity.” Because the term was subject to multiple interpretations, GAO found that it was ambiguous. What’s more, this ambiguity was obvious—the solicitation had used a term of art without any established meaning. Accordingly, the meaning of “newly formed entity” was a patent ambiguity. As such, SMSI was required to raise concerns about the meaning of that term before the proposal deadline. Because SMSI waited until after contract award to raise this solicitation defect, it was untimely.
SMSI also challenged the evaluation of key personnel, claiming that the assignment of a significant strength to E-TAS’s program director and strengths to its project managers were unreasonable. SMSI noted that in an initial evaluation, DOE had assigned the program director a strength and had not assigned strengths to the project managers.
But GAO noted that the views of an agency may change over time. GAO was unaware of any rule that required the evaluation to document changes in evaluators’ viewpoints. The record reflected that the evaluators considered the proposed individuals’ qualifications and documented in textbook fashion why it assigned strengths. SMSI had not shown why this was unreasonable.
Finally, SMSI alleged that DOE erred in evaluating its own proposed personnel. SMSI contended that its personnel met minimum requirement and some of the preferred qualifications. Moreover, SMSI argued, if E-TAS’s program director and project manager deserved strengths, then SMSI’s similarly qualified personnel also deserved strengths.
GAO found that nothing in the solicitation required that a strength be assigned simply for meeting any of the preferred qualifications. The fact remained, none of the SMSI’s personnel met all the preferred qualifications.
Additionally, contrary to SMSI’s contentions, its proposed personnel were not as qualified as E-TAS’s. For example, E-TAS’s proposed project manager met all the preferred qualifications while SMSI’s did not. Furthermore, SMSI’s comparison only looked at the amount of experience, while DOE considered the type of experience each individual possessed.
SMSI is represented by Kenneth B. Weckstein, Tammy Hopkins, and Andrew C. Crawford of Brown Rudnick LLP. The intervenor, E-TAS, is represented by J. Hunter Bennett, Jason A. Carey, and Andrew R. Guy of Covington & Burling, LLP. The agency is represented by Jared D. Minsk, Harry J. Shearer, and Rachna M. Talwar of the Department of Energy. GAO attorneys Louis A. Chiarella and Peter H. Tran participated in the preparation of the decision.
