Protest alleging that agency failed to properly mitigate the disclosure of incumbent’s pricing information is sustained. The agency inadvertently disclosed some of the incumbent’s pricing as part of a pre-solicitation notice. The agency essentially concluded that the damage had been done, so it did nothing to mitigate the harm of the disclosure; indeed, it just went ahead and published the solicitation as planned. GAO found that the agency erred in not taking additional steps to mitigate harm from the disclosure. The disclosed information revealed the incumbent’s pricing. Contrary to the agency’s allegations, changes in requirements between the incumbent and successor contracts were too insignificant to mitigate the competitive harm resulting from the disclosure.
Inmarsat Government, Inc. had a contract with the Defense Information Systems Agency (DISA) to provide broadband satellite services. Under the contract, Inmarsat provided both bandwidth services—i.e., capacity within the microwave band of the electromagnetic spectrum—and non-bandwidth services—connectivity, monitoring, operations, and the like. Inmarsat provided the bandwidth and non-bandwidth services under various detailed CLINs.
As the term of Inmarsat’s contract was coming to an end, DISA posted a pre-solicitation notice for the successor contract. The announcement included a draft solicitation. The draft solicitation included spreadsheet that listed the sources DISA used to calculate the government estimate for the successor contract. This spreadsheet included tabs that inadvertently included Inmarsat’s pricing on the incumbent contract.
Inmarsat notified DISA about the disclosure of its pricing. DISA removed the draft solicitation from the beta.SAM.gov website. Inmarsat asked DISA to investigate the circumstances of the disclosure and the possibility of competitive harm. DISA essentially determined that there was not much it could do to mitigate the harm. The agency reasoned that third-part aggregators had likely already collected the draft solicitation, so there was no way to limit its circulation. Thus, DISA took no steps to contain the disclosure Inmarsat’s pricing other than removing the draft solicitation.
Shortly thereafter, DISA published the solicitation for the successor contract. The solicitation included a conflict of interest clause, which required offerors to certify that they had not relied on Inmarsat’s inadvertently disclosed pricing data in preparing their proposals. Inmarsat filed a protest arguing that DISA had failed to properly mitigate the harm arising from the inadvertent disclosure.
The disclosure of source selection information during the course of a procurement is improper. If an agency chooses not to cancel a solicitation after such a disclosure, GAO will sustain a protest upon showing that a recipient of the information has received an unfair competitive advantage. An unfair competitive advantage is assumed where an offeror possesses competitively useful information.
Inmarsat alleged that it been harmed by the disclosure of both its non-bandwidth and bandwidth pricing. DISA contended that Inmarsat had not been harmed by the disclosure of its non-bandwidth pricing because the solicitation for the successor contract made changes to the non-bandwidth CLINs that negated the usefulness of Inmarsat’s prices. GAO, however, concluded that these changes were minor and failed to address the competitive harm caused by the disclosure of the pricing.
For instance, DISA claimed that the new solicitation increased the scale of some the requirements in the incumbent contract. But GAO reasoned that the agency had released Inmarsat’s pricing for the quantities of those items purchased under the incumbent contract. Potential offerors could compare the contracts’ statements of work, take Inmarsat’s non-bandwidth pricing, and scale it up proportionally.
DISA contended the new solicitation removed a webtool function from an operational support subCLIN and included it in a separate subCLIN. GAO, however, opined that this did not mitigate the harm caused by the release of Inmarsat’s pricing. There was no substantive difference between having the webtool in a single operational support subCLIN and having it a separate subCLIN. Adding the subCLINs together would still result in the same price.
DISA acknowledged that the non-bandwidth services constituted five to ten percent of total contract value. Given this figure, GAO reasoned that solutions for non-bandwidth services were likely to provide a basis for discriminating between proposals. This indicated that the disclosure of the non-bandwidth pricing resulted in competitive harm to Inmarsat.
Inmarsat also argued that the disclosure of its bandwidth prices had also resulted in competitive harm. GAO was less receptive to this argument. GAO reasoned that the market for bandwidth is competitive and sensitive to the combinations of bandwidth proposed, location, and time. Only some of Inmarsat’s 2018 bandwidth prices had been released. GAO reasoned that the revealed prices likely reflected an amalgamation of market prices and thus were not competitively useful. Moreover, given the activity in the bandwidth market, the 2018 prices were likely stale.
Lastly, Inmarsat alleged that the solicitation improperly failed to evaluate offerors’ past performance. GAO did not find this objectionable. Past performance need not be evaluated if the contracting officer documents the reason why past performance is not an appropriate evaluation factor. Here, DISA had concluded there was no benefit to evaluating past performance due to the oligopolistic nature satellite services industry. In reviewing interested sources, DISA had found that all providers had satisfactory CPAR ratings with no differentiation in performance elements. DISA reasonably concluded that a past performance evaluation would not yield anything significant.
GAO sustained the protest as to the disclosure of Inmarsat’s non-bandwidth prices. GAO recommended that DISA either cancel or revise the solicitation.
Inmarsat is represented by Paul R. Hurst, Caitlin Conroy, Fred Geldon, and John William Toth of Steptoe & Johnson LLP. The agency is represented by Anthony J. Balestreri of the Defense Information Systems Agency. GAO attorneys Stephanie B. Magnell and Evan C. Williams participated in the preparation of the decision.
