Protester Ignored Warnings That Failing to Verify Accounting System Would Render Proposal Unacceptable; GAO B-413104.25, Graham Technologies LLC

Protest challenging the exclusion of the protester’s proposal from consideration for award is denied, where the solicitation and pre-submission communications from the agency clearly stated that offerors must provide verification of an adequate accounting system, not merely contact information for the cognizant auditors. GAO found the protester’s interpretation of the solicitation would render significant portions of the solicitation instructions superfluous.

Graham Technologies LLC protested the National Institutes of Health (NIH)’s exclusion of its proposal from further consideration for award of one of multiple IT supplies and services contracts, arguing that its proposal complied with the solicitation’s instructions.

The solicitation established a two-phase evaluation process. During the first phase, the agency would review proposals for four criteria on a pass/fail basis. The four criteria were compliant proposal; verification of an adequate accounting system; IT services for biomedical research, health sciences, and healthcare; and domain-specific capability in a health-related mission. The agency failed Graham’s proposal for not demonstrating an adequate accounting system and excluded it from further consideration.

In its protest, Graham argued that its proposal complied with the solicitation. Specifically, the solicitation required offerors to provide the contact name and contact information of its representative at its cognizant DCAA, DCMA, federal civilian audit agency, or third-party accounting firm and submit, if available, a copy of the Pre-Award Survey of Prospective Contracting Accounting System (SF 1408), provisional billing rates, and/or forward pricing rate agreements.

Graham explained that it provided the contact name and information for its DCAA representative and therefore satisfied the requirement. According to the protester, the solicitation’s use of the term “if available” indicated that additional information was not necessary to satisfy the solicitation’s requirements and therefore it was not reasonable for the agency to eliminate its proposal for failing to provide a DCAA audit report.

In response, the agency argued the solicitation did not permit offerors to essentially self-certify the adequacy of their accounting systems. Rather, by requiring offerors to provide verification from cognizant audit agencies, NIH would obtain independent verification that offerors’ accounting systems had been audited and determined adequate. Id.

GAO found the protester’s interpretation unreasonable. The solicitation stated that the agency would evaluate the offeror’s evidence of an adequate accounting system and warned that failing to furnish verification would result in the rejection of a proposal as unacceptable during phase 1. Further, the solicitation provided instructions on how an offeror could verify its accounting system. Read as a whole, GAO found the agency’s interpretation of the solicitation to be reasonable. Graham’s interpretation, in contrast, would render sections of the solicitation instructions meaningless.

Further, during the solicitation question and answer period, NIH specifically addressed questions regarding the accounting verification requirement. GAO found that Graham ignored the agency’s repeated statements that offerors must submit verification of an adequate accounting system. Finally, GAO found the agency’s conclusion itself reasonable and in accordance with the solicitation.

Graham Technologies LLC is represented by Eden Brown Gaines of Brown Gaines, LLC. The government is represented by Christine Simpson, Department of Health and Humans Services. GAO attorneys Young H. Cho and Peter H. Tran participated in the preparation of the decision.