Protest alleging that solicitation’s terms were unduly restrictive is denied. The protester claimed that the agency’s decision to split the procurement into separate solicitations for software and integration services penalized small businesses. But the court found that the split procurement actually increased competition. The protester alleged that a requirement to demonstrate that proposed software had been implemented with a federal agency in the past was unnecessary. The court that the agency could reasonably require offerors to demonstrate past implementation in lieu of capabilities. The protester also alleged that a requirement have implemented software for an agency with 6,500 users was too restrictive. The protester, however, could not satisfy other solicitation requirements. Thus, if the 6,500 user requirement was too restrictive, the protester was not prejudiced by it.
When the Department of Homeland Security (DHS) was created in 2002, 22 federal agencies were merged into one. At the time, each of those federal agencies had contracts for financial management software with a variety of vendors. For example, Savantage Financial Services provided financial management software to multiple DHS components for several years. Thus for several years, several companies provided financial management software to different DHS components.
DHS wanted a department-wide integrated system. To that end, in 2019 DHS issued a solicitation seeking integrated financial management system software. The solicitation required offerors to demonstrate that their software had been implemented, either currently or in the past, in an agency similar to DHA—i.e., with multiple components—with at 6,500 users. In conjunction with the software solicitation, DHA issued a second, complimentary solicitation for a contract to integrate the software procured under the software solicitation with the agency’s existing computer systems.
Savantage filed a protest with the Court of Federal Claims challenging the terms of the solicitation. Savantage contended that the decision to split the software and integration into two procurements was unduly restrictive of competition. Savantage also claimed that the requirement to have implemented software in an agency with 6,500 users was too restrictive.
The court first addressed the challenge to DHS’s decision to split the procurement. Savantage argued that the separate procurements restricted competition from small businesses. Splitting the competition, Savantage contended, gave an advantage to large software providers that did not provide holistic software and integration services and could rely on a network of systems-integration firms.
The court noted that an agency’s decision regarding the structure of a procurement is subject to rational-basis review. Here, the court found that DHS had presented a rational basis for the split procurement. DHS reasonably determined that having a separate procurement for systems integration allowed independence from the software provider and thus ensured more objective advice. Indeed, the court reasoned, instead of restricting competition, splitting the procurement actually increased competition by providing more opportunities for novel and objective solutions.
Next, Savantage asserted that the requirement that offerors have prior or current experience with implementation of their software at a large federal agency was unduly restrictive. Savantage contended that the agency could instead simply allow offerors to demonstrate their system’s capabilities and scalability without requiring prior implementation.
The court opined that this issue was a close call but decided to defer to the agency’s discretion. It is rational for an agency to demand successful implementation and not a promise to implement. The critical nature of DHS’s functions and the role the integrated software would play in those functions supported the need for an already proven software solution.
Savantage further alleged that even if the requirement to demonstrate implementation at a federal agency was not too restrictive, DHS had prevented Savantage from obtaining this experience. Savantage claimed that while providing financial management software to DHS components, it had proposed on several occasions to integrate its software, but DHA declined. Savantage argued that DHS should not be allowed to establish requirements that it knew Savantage could not satisfy.
The court noted a flaw in the premise of Savantage’s argument. Savantage had, in the past proposed software interfaces. But an interface is different than integration. Thus, DHS had not actually prevented Savantage from gaining experience in integration. In any event, Savantage’s argument implied that DHS had acted in bad faith. A protester must prove the government acted with specific intent to injure to overcome the presumption that the government acts in good faith. Savantage had not shown that the government acted with specific intent to injure.
Finally, Savantage objected to the requirement that offerors had prior implementation experience at an agency with at least 6,500 users. The court was skeptical of the 6,500 requirement. It was not clear why DHS had required a floor of 6,500 users, and the agency did not even seem to know how many users Savantage’s software currently supported at the agency.
Nevertheless, the court found that it did not need to decide whether the 6,500 user requirement was arbitrary. Savantage acknowledged that it could not satisfy the solicitation’s current or prior-implementation requirement. If Savantage could not satisfy one solicitation requirement, then it could not demonstrate that it had been prejudiced by another requirement. Indeed, if the court were to strike the 6,500 user requirement, there was no reason to believe DHS would remove the prior implementation requirement.
Savantage is represented by Stephen M. Ryan and Llewelyn M. Engle of McDermott Will & Emery LLP. The government is represented by William J. Grimaldi of the Department of Justice as well as Rose J. Anderson, Charlene T. Storino, Christine C. Fontenell, and Pavan Mehrotra of the Department of Homeland Security.
