Protest alleging that the agency relaxed a mandatory solicitation requirement is sustained in part. The solicitation stated that offerors had to propose labor rates within a certain prescribed range. The agency, however, accepted proposals that proposed rates below that range. The court found that in accepting rates below the range, the government had ignored a mandatory solicitation requirement. To make matters worse, the government’s position in this protest was the exact opposite of a legal position it had asserted in a previous protest arising out of the same solicitation. The government could not exclude offers in a previous a protest for proposing rates outside of a prescribed range but then argue that it could now accept offers that similarly proposed rates outside of a range. The government’s new position in this protest was barred the doctrine of judicial estoppel.
The One Acquisition Solution for Integrated Services Small Business (OASIS SB) is government-wide contract vehicle that provides agencies with a range of professional and technical services. The OASIS SB is a small business set-aside consisting of seven multiple award IDIQ contracts referred to as pools. Each pool covers a different industry or discipline. The General Services Administration administers the OASIS SB.
GSA initially awarded several contracts across OASIS SB’s seven pools in 2014. The OASIS SB RFP allowed GSA to reopen any of the pools to “on-ramp” additional contractors in the future. In 2019, GSA executed those on-ramp provisions to add contractors to Pools 1, 3, and 4. Offerors were permitted to submit proposals for more than one pool.
The RFP required offerors to have relevant experience. Offerors had to demonstrate this experience by providing references to three projects. To be counted as relevant experience, the offeror had to have at least 1 year of performance on each project.
The RFP also required offerors to propose labor rates for over 100 labor categories. The RFP provided offerors with a table to be used in determining whether their proposed labor rates were fair and reasonable. The table provided a range or rates based on the Bureau of Labor Statistics’ National Estimate. Offerors were strongly encourage to propose rates that were within the stated range. For any proposed rates that were not in those ranges, the RFP required offerors to explain their rates. Failure to provide a convincing rationale would result in a determination that the rates proposed were not fair or reasonable.
GSA received 663 proposals for pool 1, 285 proposals for pool 3, and 125 proposals for pool 4. In late 2019 and early 2020, GSA awarded over 100 pool 1 contracts and sent unsuccessful notification letter to offerors that were not eligible for award. GSA eliminated several offerors from pool 1 for proposing labor rates that were outside the RFP’s labor rate range.
Four of the eliminated offerors had proposed labor rates that were lower than the range of rates listed in the solicitation. Some of the offerors that submitted lower rates filed GAO protests, arguing that the RFP required GSA to determine whether their rates were reasonable irrespective of whether those rates were outside the specified range.
GSA moved to dismiss the GAO protests, but GAO denied the request, stating that it would resolve this issue on the merits. GSA then gave notice that it was taking corrective action to reevaluate the labor rates. GSA stated that in reevaluating, it would not consider rater that were below the ranges in the solicitation to be unreasonable. GAO dismissed the protests as academic.
Following the corrective action, GSA awarded pool 1 contracts to 84 offerors, including 12 contract to offers that proposed direct labor rates below the RFP’s labor rate range. GSA also awarded 163 pool 3 contracts , including 18 contracts to offerors with labor rates below the RFP range.
WaveLink, Inc. which had submitted proposals but not been selected for the pool 1 and pool 3 contracts, filed a protest with the Court of Federal Claims. WaveLink alleged that (1) GSA should have allowed the company to update its experience and past performance volumes, (2) GSA violated the FAR in conducting discussions with offerors while not allowing WaveLink to revise its proposal, and (3) GSA erred by not enforcing the RFP requirement to submit labor rates within the specified range. Several awardees intervened.
WaveLink first alleged the GSA acted arbitrarily and capriciously by allowing ten months to lapse after receiving proposals without seeking updated information from offerors. WaveLink asserted that if it had been able to provide updated information, it would have additional contracts on which it had performed more than one year and thus additional relevant experience references.
The court noted that the agency received over 1,000 proposals. Given the scale of the procurement, it was not surprising that GSA took 10 months to evaluate proposals. Because GSA evaluated proposal in a reasonable time period, it was not required to analyze whether offerors experience had become stale during the ten-month period. If an agency were always required to obtain updated information, then the evaluation of complex procurements would never end.
WaveLink argued that federal statutes and FAR provisions afford offerors an opportunity to submit relevant information on past performance. The court, however, reasoned that these provisions concerned past performance information, not the “relevant experience” information that WaveLink primarily complained about. WaveLink received the maximum number of points for its past performance and thus could not have been prejudiced by the failure to update its past performance volume. Rather, what WaveLink really wanted to update was is relevant experience. While WaveLink argued that past performance and relevant expierience were two sides of the same coin, the court reasoned this was mistaken. Offerors submitted distinct volumes addressing those factors and they were separately evaluated. Because the statutes WaveLink relied on related only to past performance, GSA could not have violated them by declining to permit updates of relevant experience.
WaveLink further contended that GSA conducted discussions with some offerors by permitting them to revise different parts of their proposals to make corrections. The court, however, found that while GSA communicated with offerors, these communications were clarifications, not discussions. GSA asked offerors to correct clerical or minor errors or to provide information that was clearly missing from the proposal.
WaveLink also asserted that GSA violated a fundamental principle of procurement by relaxing the solicitation requirements for several offerors. The RFP required offerors to propose labor rates within a certain range or to explain why their rates fell outside of the range. But as part of its corrective action in response to the GAO protest, GSA awarded contracts to offerors who had proposed rates lower than the proposed range and who had not adequately explained why the rates were lower. Thus, WaveLink surmised, GSA had essentially changed a material solicitation requirement for these offerors.
The court found this argument more persuasive. The solicitation’s plain language stated that an offeror would not be found eligible if it failed to provide a convincing rationale for a proposed labor rate that was outside the specified range. Thus, if a proposal did not meet this requirement, the government had three choices: (1) amend the solicitation, (2) negotiate with the offeror to get it to meet the requirements, or (3) reject the proposal. Here, GSA received proposals that did not meet this requirement, but the agency did not choose any of the three permissible options.
The government argued it did not change a material requirement so much as reinterpreted the requirement to prohibit the agency from deeming a proposal unreasonable due to prices that were too low. Price reasonableness, the agency argued, is concerned with prices that are too high. Therefore, it was fine for GSA to interpret the solicitation as not precluding a rate below the stated range us unreasonable.
The court rejected this argument. GSA could have amended the solicitation to remove or revise the language regarding labor rates. Not having done so, the agency was bound to follow the solicitation’s terms as written, not how the agency wished it had written them. While price reasonableness refers to high prices, here GSA operationally defined the term for purposes of his procurement to refer to any price that was acceptably within the RFP’s range or if outside the range, has an accompanying rationale.
The court further found that GSA’s new “interpretation” of the labor rate provision was barred by the doctrine of judicial estoppel. Under that doctrine, when a party assumes a certain position in a legal proceeding and succeeds on that position, it may not thereafter assume a contrary position simply because its interests have changed.
Before this protest, another offeror, that had submitted a proposal in response to the same solicitation, had filed a protest complaining that it had been wrongly eliminated from the competition for not explaining why its profit rate had deviated from a stated range. In response to that protest, the government had argued that the protester’s failure to provide a rationale for its profit rate constituted a material omission that was fatal to its proposal. The government prevailed in that protest. But now the government was clearly arguing for the opposite result—i.e., that it was OK if offerors did not explain why they deviated from a stated rate. The court reasoned that the government cannot have it both ways. It cannot properly excluded= one offeror based on a mandatory solicitation requirement while in this case with almost identical language, it may simply reinterpret the requirement “as if it were a work of modern art.”
The government argued that WaveLink’s argument was really a challenge to the corrective action. The court was unsure of the contours of this argument, but if the government was arguing that its revised reading was entitled to deference because it was undertaken as part of a corrective action, the court rejected that argument. GSA voluntarily decided to take corrective action. GAO did not recommend the corrective action. The court noted that it was unsure why GSA even decided to undertake corrective action. While GAO denied the request for dismissal, it had not ruled against the government. Under the circumstances, the decision to take corrective action was not entitled to any deference.
The court further noted that if the government was arguing that the decision to accept non-compliant proposals was itself entitled to deference, then the court rejected that argument was well. Corrective action is reasonable when it addresses a legitimate procurement defect. In this case, there was no procurement defect in GSA’s initial rejection of non-compliant proposals. The corrective action thus introduced—rather than corrected—a procurement error.
Having found that GSA had violated the solicitation by accepting proposals that proposed labor rates lower than the stated range without providing a rationale for the lower rate, the court analyzed whether WaveLink had been prejudiced by the error. The court concluded that WaveLink had been prejudiced by the error in the pool 3 competition. In pool 3, GSA intended to award 160 contracts unless there was a tie for the last slot, in which case all tied offerors would be awarded a contract. Nineteen unsuccessful offerors were ranked ahead of WaveLink. Eighteen offerors and two unsuccessful offerors did not comply with the direct labor provision. If those offerors were excluded, WaveLink, which had complied with labor rate provision would only be one spot removed from the award. While WaveLink would not necessarily have been next in line for award, it would have been in position for an award, which was sufficient for a finding of prejudice.
But the court found that WaveLink’s pool 1 proposal had not been prejudiced. Even removing ineligible offerors from pool 1, WaveLink would still not come close to an award. If the government had amended the solicitation to change the labor rate language, WaveLink had not shown that it could have submitted a more advantageous proposal that would have given it a better chance at receiving an award.
WaveLink is represented by Christopher L. Lockwood, Jerome S. Gabig, and Richard J.R. Raleigh, Jr. of Wilmer & Lee, P.A. Intervenor Kalman & Company, Inc. is represented by Bryant S. Banes and Sarah P. Harris of Neel, Hooper & Banes, P.C. Intervenor Research & Engineering Development LLC is represented by Frank S. Murray, David T. Ralston, Jr., and Julia Di Vito of
Foley & Lardner LLP. Intervenor Nova Technologies is represented by Katherine B. Burrows, Timothy F. Valley, Camilla J. Hundley, and Anna G. Sullivan of PilieroMazza PLLC. Intervenor ISYS, Inc. is represented by Dawn E. Stern, C. Bradford Jorgensen, and Thomas E. Daley of DLA Piper LLP. Intervenor NetCentric Technology is represented by Damien C. Specht, James A. Tucker, and Rachael K. Plymale of Morrison & Foerster LLP. Intervenor GaN Corp. is represented by Jon D. Levin, W. Brad English, J. Dale Gipson, Emily J. Chancey, and Nicholas P. Greer of Maynard, Cooper & Gale, P.C. Intervenor Boecore, Inc. is represented by Ryan J. Klein of Sherman & Howard LLC. Intervenor DUCOM, Inc. is represented by Joseph L. Katz of Katz Law. The government is represented by Liridona Sinani, Jeffrey Bossert Clark, Robert E. Kirschman, Jr., and Douglas K. Mickle of the Department of Justice as well as Stephen T. O’Neal of the General Services Administration.
