Protest challenging the elimination of a proposal is denied. The agency rejected the protester’s proposal because the protester had not provided labor rate components as required by the solicitation. The protester argued that the agency had failed to memorialize its decision in a separate document and thus the decision to eliminate was inadequately documented. Despite the lack of a separate decision document, GAO found that the record still contained sufficient documentation. The agency had identified the problem with the protester’s proposal in a compliance matrix, agency officials had discussed the proposal’s deficiency in emails, and the rejection letter sent to the protester sufficiently explained the rationale for the agency’s decision.
The Army issued a solicitation seeking to award a task order for intelligence support services. The solicitation provided that the Army would perform an initial compliance review of proposals to determine whether they complied with the solicitation’s instructions and conditions. One of the instructions required offerors to identify the components of their labor rates. The solicitation stated that the prime was responsible for providing all the components of each subcontractor’s labor rates.
Leidos, Inc. submitted a proposal. The Army, however, rejected Leidos’s proposal because the company failed to provide the labor rate components for one of its subcontractors. Leidos protested.
Leidos first argued that the Army’s decision to reject its proposal had been inadequately documented because it had not been memorialized in a separate document. GAO acknowledged that an agency record must show the rationale for the agency’s decision, and that the Army had not memorialized its decision in a separate documents. Nevertheless, GAO found that the record contained sufficient documentation. The Army’s compliance matrix showed that the agency had identified the subcontractor rates as incomplete. The record contained emails between agency officials discussing Leidos’s noncompliance. What’s more, the agency effectively memorialized its decision in the notice it sent to Leidos rejecting its proposal. In that notice, the Army explained that Leidos had not complied with the instruction concerning labor rates.
GAO further opined that the rejection of Leidos’s proposal was reasonable. The solicitation instructed offerors to include the components of the labor rates for each subcontractor. Leidos did not include the components for one of its subcontractors. Rather, Leidos only included the fully burdened rates. When a proposal omits information required by the solicitation, the offeror runs the risk that the proposal will be rejected.
Leidos contended that the Army did not need the labor rate components because the company had agreed to be bound by the agency’s minimum direct labor rates. GAO found this argument unpersuasive. Contrary to Leidos’s contentions, the Army needed the labor rate components to evaluate cost realism.
Leidos alleged that it should have been allowed to submit the omitted labor rate components under the solicitation’s proposal modifications procedures. But GAO noted the solicitation proposal modification procedures allowed offerors to correct a mistake, a minor inaccuracy. Here, Leidos did not mistakenly omit the labor rate components for one its subcontractors; instead it had made a deliberate decision to not include them. Leidos was not allowed to avail itself to the proposal modification procedures.
Leidos is represented by Shelly L. Ewald and Emily C. Brown of Watt, Tieder, Hoffar & Fitzgerald, LLP. The agency is represented by Captain Philip L. Aubart of the Army. GAO attorneys Todd C. Culliton and Tania Calhoun participated in the preparation of the decision.GAO - Leidos Inc.