Protest alleging that awardee took exception to material solicitation requirements is granted. The RFQ required vendors to propose staffing to cover fluctuations in workflow. Instead of proposing staffing to handle fluctuations, the awardee proposed staffing based on historical data and said that if the workflow increased, it would request a contract modification. GAO found that awardee had taken exception to a solicitation requirement and that its proposal should have been rejected as unacceptable. To make matters worse, however, the agency notified the awardee of the offending language and allowed the awardee to revise its proposal without allowing proposal revisions for other vendors. GAO found that this amounted to improper and unequal discussions.
The U.S. Patent and Trademark Office (PTO) issued an RFQ as a small business set aside to vendors holding GSA Information Technology Federal Supply Schedule contract under FAR subpart 8.4. The RFQ sought information technology support desk services. The RFQ contemplated award of blanket purchase agreement on a best-value tradeoff basis.
The PTO received quotes from several vendors, including Innovative Management & Technology Approaches, Inc. (IMTA) and Epsilon, Inc. The PTO found that Epsilon’s lower-priced proposal represented the best value to the government. IMTA protested.
IMTA alleged that the PTO should have found Epsilon’s proposal unacceptable because Epsilon took exception to material solicitation requirements. Specifically, the solicitation required vendors to provide staffing that would cover all contacts coming into the help desk. The RFQ had provided the historical number of contacts but cautioned that the might increase during performance. The RFQ also required vendors to meet or exceed certain call order requirements called service level agreements (SLAs).
In its proposal, Epsilon stated its staffing was based on the historical average in the RFQ. But Epsilon stated, if there was an increase in the volume of contacts, Epsilon would request a contract modification to fund additional staffing. What’s more, Epsilon stated that if the contract modification was not granted, then the company would not be held responsible for any missed SLAs.
GAO found that Epsilon’s proposal took exception to a material solicitation requirement. The solicitation required vendors to propose enough staff to handle contact fluctuations and to not miss SLAs. Instead or proposing enough staff to cover fluctuations in contracts, Epsilon said it would ask for a contract modification, and if that modification was not granted it would not be responsible for missed SLAs. This contravened the solicitation’s requirements.
The PTO argued that instead of taking exception to the solicitation, Epsilon’s proposal had merely acknowledged that it would not be able to perform once the call order had reached the total amount of allocated funds without a modification. GAO found that this argument had no support in Epsilon’s quotation, which made no mention of the maximum allocated funds in its quotation.
The PTO also argued that other parts of Epsilon’s quotation clearly addressed the obligation to meet SLAs, and that these sections mitigated any concerns with Epsilon’s language. GAO, however, found that none of the statements relied on by the agency rescinded or withdrew Epsilon’s assumption about contact fluctuations. In fact, most of them were not even related to the assumption.
Because Epsilon took exception to the solicitation’s requirements, the PTO should have found it unacceptable. But instead of rejecting the proposal, the agency communicated with Epsilon and asked it to remove the offending language. Epsilon revised its quotation accordingly. IMTA alleged that this exchange with Epsilon constituted impermissible and unequal discussions. GAO agreed.
Although the procurement was conducted under FAR subpart 8.4, GAO looks to standards and decision under FAR part 15 for guidance in determined whether exchanges with vendors in in 8.4 procurement were fair and equitable. Applying those standards, GAO found that the exchanges with Epsilon were textbook case of discussions. And because the PTO only held discussions with Epsilon without affording the same opportunity to IMTA, it failed to treat all vendors fairly and equitably. The PTO had conducted unequal discussions.
The PTO attempted to argued that the RFQ permitted it to only have exchanges with Epsilon. The RFQ stated that the agency “reserved the right to communicate with any or all contractors submitting a quote” and that this should not be construed to mean that the agency was holding formal discussions.
GAO, however, found that this language merely stated that the PTO could communicate with offerors, but it did not explain what those communications could entail. The provision did not state that the agency had the right to only engage in discussions with one offeror and allows that offeror to cure an otherwise unacceptable quote.
GAO recommended that the PTO either reopen discussions with both Epsilon and IMTA or terminate the BPA with Epsilon and establish one with IMTA.
IMTA is represented by Richard J. Webber and Travis L. Mullaney of Arent Fox, LLP. The intervenor, Epsilon, is represented by James W. Norment and Hugh R. Overhold of Ward and Smith, PA. The agency is represented by Andrew Squire, Jennifer Seifert, and Cheiko M. Clarke of the Department of Commerce. GAO attorneys John Sorrenti and Christina Sklarew participated in the preparation of the decision.
