Protest challenging the agency’s rejection of a proposal for a task order award is denied, where the agency reasonably concluded that the vendor that submitted the proposal did not hold a contract under the IDIQ at issue. GAO found the agency reasonably determined the proposal was submitted by an offeror in anticipation of the approval of a novation agreement that would have resulted in it holding one of the relevant IDIQs. Because that agreement was rejected, the agency found the offeror was ineligible to compete. While the protester—who did hold a relevant IDIQ—attempted to portray itself as the prime contractor and the offeror as its subcontractor, GAO found the protester was barely referenced in the proposal and was not attached to any of the work to be performed.
Engility Corporation challenged the Army’s rejection of its proposal for contractor logistics sustainment services, arguing that the agency unreasonably concluded that the proposal was submitted by the protester’s proposed subcontractor, rather than by the protester.
The competition was limited to firms holding one of the agency’s Joint Enterprise-Contracted Logistics and Services Support (JE-CLaSS) multiple-award IDIQ contracts in the unrestricted suite of contracts. Engility holds an unrestricted JE-CLaSS contract, and STS International Inc. holds a restricted small business JE-CLaSS contract.
On June 25, STS submitted a request to the Army to novate Engility’s unrestricted contract to STS. On the same date, STS’s vice-president contacted the contracting officer for the JE-CLaSS contract to advise that STS and Engility intended to submit a proposal in response to the solicitation. The STS vice-president advised the contracting officer that Engility would submit the technical proposal and sanitized cost proposal under its cover letter, and STS would present its confidential cost narrative, cost proposal, indirect cost support, and subcontracting plan under its cover letter.
On July 8, Engility filed proposal documents, which consisted of a cover letter, technical volume, and the sanitized cost volume. On the same day, STS filed its proposal documents, which consisted of a cover letter, and the cost and small business participation volumes of the proposal.
On July 25, the Army advised STS that it would not approve the novation request. The agency separately advised STS that because the agency did not approve the novation request, STS’s proposal responding to the TOR would not be considered for award. The agency explained that it viewed the proposal as having been submitted by STS, which does not have an unrestricted JE-CLaSS contract, rather than Engility. This protest followed.
The protester argued that STS was proposed as the subcontractor for the effort, and that Engility should be considered the eligible prime contractor. In response, the Army argued that neither STS nor Engility conveyed in the proposal that STS was going to be the subcontractor for the effort. Based on the documents provided, the Army found it evident that STS submitted the proposal.
The protester argued that the proposal was submitted under Engility’s JE-CLaSS contract, with the anticipation that STS would perform 100 percent of the work. According to the protester, (1) because the agency rejected the novation request, Engility remained an eligible contractor under the unrestricted JE-CLaSS contract; (2) the cover letters submitted by Engility and STS each referred to the “Engility Proposal”; (3) the solicitation permitted subcontractors to submit separate proposal volumes; and (4) neither the JE-CLaSS contract nor the solicitation prohibited offerors from proposing to subcontract 100 percent of the work.
The Army acknowledged that Engility remains the JE-CLaSS unrestricted contractor, but argued that STS was the firm that submitted the proposal. First, the Army argued that there was doubt as to which firm submitted the proposal because both the Engility and STS cover letters referenced the novation request. Although the letters stated that Engility and STS had entered into an “Administrative Subcontract,” neither letter specifically identified which firm was the prime contractor. The agency also noted that the proposal filings did not provide a copy of the referenced subcontracting agreement between STS and Engility.
Second, the agency noted that the technical, cost narrative, and small business participation plan volumes of the proposal each state that they were prepared by STS. In response to the solicitation’s requirement to identify the name and address of offeror and either the DUNS number or the CAGE code for the prime contractor and each subcontractor, the cost narrative proposal identified only STS and provides that firm’s address, CAGE code, and DUNS number. Additionally, the cost proposal identifies the role of STS as the prime contractor. Moreover, all volumes of the proposal addressed how STS and STS’s proposed team members would perform the contract, while none mentioned Engility. According to the agency, the proposal clearly indicated STS would be the prime contractor.
To the extent Engility argued that its proposal anticipated alternative to granting the novation request, wherein Engility would remain the prime contractor and STS would perform 100 percent of the work as the subcontractor, GAO found no evidence in the proposals stating this was the protester’s intended approach. Engility was reference only once in the entire proposal and STS submitted the entirety of the small business subcontracting plan volume directly to the agency. In sum, GAO found the agency reasonably concluded that STS had submitted the proposal, and was therefore ineligible to compete because it did not hold an unrestricted contract.
Engility Corporation is represented by Edward J. Tolchin of Offit Kurman Attorneys at Law. The government is represented by Wade L. Brown and Felix O. Onyango, Department of the Army. GAO attorneys Jonathan L. Kang and Laura Eyester participated in the preparation of the decision.
