Protest challenging the agency’s decision to award a sole source contract to the incumbent is denied where the incumbent had institutional knowledge of an ongoing project and changing contractors would result in substantial duplication of cost and effort.
In 2014, the International Trade Administration issued a task order to The MIL Corporation to provide application development support for an IT modernization project. Before the 2014 order expired, ITA realized that it was going to need ongoing support to finish the modernization project. The agency conducted market research and found that several vendors could complete the complete, but eventually determined that MIL was uniquely qualified to provide the needed development services, given its experience supporting the project. ITA concluded that it should issue a new order to MIL on a sole source basis.
To confirm its market research, ITA sought capabilities statements from industry. Harmonia Holdings Group was the only contractor to provide a statement. After reviewing Harmonia’s statement, ITA issued a limited sources justification, stating that it intended to issue a sole source order to MIL. ITA opined that MIL’s institutional knowledge was valuable and necessary to the project. The agency further stated that Harmonia lacked experience with the agency’s customized applications, and the company had not demonstrated experience taking over an in-progress development project.
Harmonia filed a protest with GAO, arguing that the decision to issue a sole source order unreasonable because ITA relied on supposition regarding the expected economy and efficiency of a sole source award.
GAO, however, found that the award to MIL was reasonable. The agency’s position was simple and well-documented. Changing contractors in the middle of a complex project would pose unnecessary risk to the project schedule and cost. Rehiring the incumbent, which was already immersed in the project and possessed the requisite institutional knowledge, would conserve time and energy. The agency’s desire to avoid the duplication of efforts and costs associated with onboarding a new contractor justified the award to MIL.
Harmonia argued that ITA had failed to adequately verify and quantify the benefits of sticking with MIL. But GAO found that the FAR provisions governing the Federal Supply Schedules did not require an agency to quantify the efficiency benefits of a follow-on order.
Harmonia also contended the ITA was biased in favor of MIL and that it had structured its market research to favor an incumbent with institutional knowledge. GAO found that far from demonstrating bias, the agency’s desire to have a contractor with institutional knowledge represented a logical consideration for an ongoing, complex modernization project.
Finally, Harmonia argued that ITA’s concern about schedule delays were overblown because Harmonia intended to hire much of the incumbent workforce. But Harmonia’s plan to hire the incumbent workforce assumed that those workers were independent contractors or subcontractors. The record showed that most the incumbent staff were employees of MIL and would not be so easily hired.
GAO denied the protest.
Harmonia Holdings Group LLC is represented by Emily J, Chancey, W. Brad English, J. Andrew Watson, III, J. Dale Gibson, and Michael W. Rich of Maynard Cooper & Gale, PC. The MIL Corporation, is represented by Paul F. Khoury, Samantha S. Lee, and Lindy C. Bathurst of Wiley Rein, LLP. The government is represented by Jonathan Baker of the Department of Commerce.
