“You Talkin’ to Me?” Exchanges with Awardee Regarding Small Business Subcontracting Plan Did Not Amount to Discussions; Hanford Integrated Infrastructure Services Contractor, LLC, GAO B-418411 et al.

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Protest challenging various aspects of evaluation is denied. The protester argued that the agency should have (1) rejected the awardee’s proposal for failure to follow a small business subcontracting requirement, and (2) should not have conducted discussions to allow the awardee to correct the flaw. GAO found that the flaw in the awardee’s proposal did not relate to a contract requirement and thus did not require rejection of the proposal. Additionally, the problem with the awardee’ subcontracting plan related to a responsibility requirement; exchanges related to responsibility are not discussions. The protester further argued that one of the awardee’s subcontractors had an impaired objectivity OCI. But the agency had analyzed the subcontractor’s work and reasonably found that it would not create an OCI. The protester alleged that other aspects of the technical and past performance evaluations were flawed, by GAO rejected its contentions.

The Department of Energy (DOE) issued a solicitation seeking support for its environmental cleanup mission at the agency’s Hanford site in Washington. Hanford Integrated Infrastructure Services Contractor, LLC (HIISC) and Hanford Mission Integration Solutions, LLC (HMIS) responded to the solicitation. DOE awarded the contract to HMIS, finding that it had a technically superior proposal at a minimal price premium. HIISC filed a protest, challenging various aspects of DOE’s evaluation.

HIISC contended that HMIS’s proposal failed to comply with the solicitation’s subcontracting requirements. The solicitation required awardees to subcontract at least 40 percent of the contract’s value, and 50% of that subcontracted work had to go to small businesses. HMIS’s initial proposal only subcontracted 22% of the work instead of the 40% required by the solicitation. DOE informed HMIS of the subcontracting issue. HMIS responded that it made a clerical error and submitted a revised small business subcontracting plan.

HIISC argued that DOE should have found that HMIS’s failure to comply with the subcontracting requirements made its proposal unacceptable. Moreover, HIISC contended, the agency compounded its error by holding unequal discussions with HMIS, allowing it to correct the error.

GAO found that DOE did not err in failing to reject the proposal. The record showed that the small business contracting plans were evaluated as a matter of responsibility, not as a requirement for evaluation in source selection. Thus, failure to comply with the subcontractor plan was not failure to comply with a solicitation requirement. Additionally, DOE found that the issue with HMIS’s subcontracting plan had resulted from a clerical error. The FAR permits an agency to engage in limited exchanges with offerors to clarify clerical errors.

GAO also found that the communication with HMIS about the subcontracting plan did not constitute discussions. The FAR requirement for an acceptable small business subcontracting plan is applicable to the apparently successful offeror. Exchanges regarding a small business subcontracting plan relate to an offeror’s responsibility and thus are not discussions.

HIISC next argued that HMIS had an unmitigable impaired objectivity OCI. One of HMIS’s proposed subcontractors was already working with DOE to provide small business program support. HIISC contended that working on the Hanford contract would undermine the subcontractor’s ability to provide impartial advice to DOE.

GAO determined there was no OCI. Prior to issuing the solicitation, DOE performed an OCI analysis to assess conflicts that could be created by a company performing other DOE contracts. The agency identified five contracts that created a potential OCI. DOE did not identify the small business support contract that HMIS’s subcontractor was performing as a conflict. What’s more, after HIISC filed its protest, the contracting officer reanalyzed the work scope in the solicitation and compared to the work being performed by HMIS’s subcontractor. The contracting officer determined that the work areas did not overlap.

HIISC also contended that the evaluation failed to document its evaluation of each PWS element. Offerors were required to perform 11 identified PWS elements. HIISC argued that the evaluation should have addressed how each proposal approached each element.

GAO disagreed, noting that nothing in the solicitation required DOE to document each of the 11 PWS elements. The record showed that evaluators considered overall completeness, feasibility, and effectiveness of the offerors’ technical approaches as they related to the 11 elements. The agency had identified strengths and weaknesses related to each of the elements. The source evaluation board explicitly stated that any aspect of a technical proposal not discussed meant that it was found to constitute neither a strength or a weakness.

HIISC further complained that DOE had disparately evaluated proposals. It claimed the agency had identified multiple strengths in HMIS’s technical approach related to several PWS elements while failing to identify similar strengths in HMIS’s proposal.

GAO found that contrary to HIISC’s allegations, DOE did not identify multiple strengths for each PWS element. Instead, it identified one strength that implicated several PWS elements. Additionally, there was no disparate treatment because HIISC’s technical approach was not similar to HMIS’s. HMIS had proposed a feature that HIISC did not.

HIISC argued that HMISs proposal was unacceptable because the cost proposal of one of its proposed subcontractors had expired before award. GAO noted that the expiration of a subcontractor’s proposal does not by itself invalidate a prime contractor’s proposal. Here, HMIS had specifically extended its offer for an additional period. GAO had no basis to conclude that the agency should have rejected the opinion.

Finally, HIISC contended that award to HMIS could not stand because the SEB had updated its evaluation of HMIS’s past performance after the selection decision had been made, and there was no evidence that the SSA had considered this updated evaluation prior to making award.

But GAO found that SSA had been briefed on the updated past performance evaluation before award. What’s more, GAO reasoned, there was no reason for the SSA to have assigned a lower past performance rating to HMIS in light of this new evaluation. While the new evaluation noted adverse past performance information, this information related to contract that was only somewhat relevant and did not really affect HMIS’s overall satisfactory past performance rating.

HIISC is represented by Kenneth B. Weckstein, Shlomo D. Katz, Tammy Hopkins, and Andrew C. Crawford of Brown Rudnick LLP. HMIS is represented by James J. McCullough, Michael J. Anstett, and Katherine L. St. Romain of Fried, Frank, Harris, Shriver & Jacobson LLP, as well as Andrew E. Shipley, Stephen W. Preston, Charles C. Speth, and Philip E. Beshara of Wilmer Cutler Pickering Hale and Dorr LLP. The agency is represented by Marianna Lvovsky, James Jurich, Stephanie Villalta, and Paul Davis of the Department of Energy. GAO attorneys Charmaine A. Stevenson and Laura Eyester participated in the preparation of the decision.

GAO - Hanford Integrated Infrastructure Services Contractor