United States: March 2018 Bid Protest Roundup

In this roundup of interesting Government Accountability Office (GAO) protests released in March, we take a look at (1) the importance of having an adequate agency record; (2) the effect of asserting no data rights in a proposal; (3) the need for a protester to challenge the correct factors in its initial protest; and (4) an out-of-scope task order.

Mantech Advanced Systems International Inc., B-415497, Jan. 18, 2018: An Insufficient Agency Record

GAO sustained a protest that claimed that the agency's best-value source selection decision was flawed, because the record lacked evidence of an adequate best-value tradeoff consideration.

The Defense Intelligence Agency (DIA or Agency) issued a task order RFP for the development and enhancement of enterprise applications. The RFP stated that the agency would evaluate technical management, program objectives, and price, in descending order of importance. After receiving seven proposals, DIA conducted discussions and accepted final proposals. The awardee received an overall technical/risk rating of acceptable, while Mantech's proposal was rated outstanding. The Source Selection Authority (SSA) determined that although Mantech's technical proposal was superior to the awardee's, it was not worth the almost $75 million price premium, and awardee's proposal clearly demonstrates that they can do the work.

Mantech protested the agency's best-value tradeoff decision, arguing that the SSA improperly converted the best-value procurement into a lowest-price technically acceptable (LPTA) and that the agency failed to explain why Mantech's superior technical approach did not merit the cost premium.

Although a best-value tradeoff does allow an agency to select a lower-price, lower-rated proposal, the agency must explain the trade-off rationale. GAO found that the record failed to provide an explanation for why the protester's significantly higher technical proposal was not worth the price premium, especially when the RFP stated that technical considerations are significantly more important than price. The record also failed to provide a meaningful comparison among the proposals, instead of just reciting the ratings.

Takeaway: This is a classic case of an insufficient agency record resulting in a sustained protest. Disappointed offerors should ensure that the agency record contains sufficient explanation of best-value tradeoff decisions and may want to challenge bald assertions that their better technical proposal is not worth the extra cost.

VT Halter Marine, B-415510.2, et al., Jan. 24, 2018: No Data Rights Assertions Means Unlimited Rights

GAO denied a protest challenging the agency's evaluation of proposals because the evaluation was reasonable and consistent with the terms of the solicitation.1 The protest ground regarding inadequate discussions was also denied because the record showed that the agency conveyed its concerns to the protester during discussions, and the protester failed to address those concerns.

The Department of the Army issued an RFP for the manufacture of maneuver support vessels which contemplated award of a fixed-price IDIQ on a best-value tradeoff basis. The RFP advised offerors that the agency would evaluate proposals based on the following factors in decreasing importance: (1) technical performance, (2) maturity, (3) production readiness, (4) total evaluated cost/price, and (5) small business participation. The agency received a number of proposals, conducted discussions, received final proposal revisions, and determined that award should go to Vigor Works LLC. VT Halter Marine protested.

The protester asserted that the agency unreasonably gave a $39 million price credit to the awardee because the awardee proposed to provide unlimited data rights in the software furnished to the government. The protester argued that it was unreasonable to assume that the awardee intended to provide unlimited data rights based only on the awardee's pricing worksheet because no company would offer its products with unlimited data rights. Instead, the agency does not really know what data rights it will be receiving from the awardee and was unreasonable in failing to appreciate this risk. GAO found no merit in this argument. When an offeror does not put data rights restrictions on its proposal, it is reasonable for the agency to understand that the offeror is offering unlimited rights. The RFP advised offerors that the agency would consider a price credit for the potential value of data rights offered.

GAO declined to consider the protester's challenges to the agency's assessment of individual weaknesses in its proposal due to lack of prejudice. The protester also argued that agency discussions with offerors were unequal. Specifically, while the agency pointed out its primary concern with the protester's model, it pointed out a different concern with the awardee's model that also applied to the protester.

GAO found that it was reasonable for the agency to focus on its primary concern for the risk associated with the proximity of the water jet inlet to the sea floor. There is no reasonable basis to determine that being advised that the distance between the water jet inlets and the sea floor was less than the water jet impeller diameter would have caused protester to change its proposal, especially considering that they did not change it after being repeatedly told about a separate weakness. Agencies are not required to "spoon feed" offerors every weakness that may be improved in their proposal, and protester failed to adequately address those weaknesses that the agency did raise. GAO denied the protest.

Takeaway: Offerors should be aware that by not asserting data rights in a proposal, you may be proposing unlimited data rights. Additionally, an offeror that does not adequately respond to the information it receives in discussions will have difficulty challenging information it did not receive due to lack of prejudice.

Granite State Manufacturing, B-415730; B-415730.3, Feb. 23, 2018: Ensure You Challenge the Discriminating Factors

Allard Nazarian Group d/b/a Granite State Manufacturing (GSM) protested its exclusion from the competitive range established by the Naval Sea Systems Command Program Executive Office for Integrated Warfare Systems (the Agency).

In January 2017, the Agency issued an RFP for anti-submarine warfare combat systems in which it informed potential offerors that award would be based on a best-value tradeoff. GSM was eliminated from the competitive range because its proposal was deemed unacceptable due to an extremely high price. When GSM received its debriefing on November 21, 2017, they were informed by the CO that "[t]he costs/prices proposed by GSM are so significantly high that it cannot reasonably be expected that it can lower its price during negotiations to a degree where it [...] would have a reasonable chance for award."

GSM protested to GAO on November 24, 2017 and supplemented its protest on December 1, 2017. These initial and supplemental filings protested the agency's evaluation of GSM's technical proposal and past performance, but did not challenge the agency's finding that GSM's proposed costs/prices were too high. GSM did not address the issue of price until after the release of the Agency Record, when the Memorandum of Law pointed out that GSM failed to address its exorbitant price. This was too late, according to GAO. GSM knew that its proposal was excluded based on its high price when it was debriefed on November 21, 2017. Therefore, its argument—over a month later—on the issue of price is untimely, and GAO refused to consider it. Furthermore, because the extremely high price was the reason GSM was excluded from the competitive range, GSM could not be competitively prejudiced by any other alleged errors in the procurement, and GAO did not reach these arguments.

Takeaway: Protesters should make sure that they are challenging the discriminating factors for their exclusion from the competition. If a debriefing tells a protester that it lost for reason X, make sure that the protest addresses X.

Western Pilot Service, et al., B-415732 et al., Mar. 6, 2018: Out-of-Scope Task Orders

GAO sustained a pre-award protest brought by several potential offerors that argued that a solicitation for a task order sought services outside the scope of the relevant IDIQ contract. The agency had canceled its original solicitation following two protests because it lacked time to reevaluate proposals and make new award determinations before the 2017 wildfire season.

The Department of the Interior (DoI or Agency) issued a task order RFP for exclusive-use single engine air tanker (SEAT) flight services for all needs during the 2017 wildfire season under the on-call IDIQ contracts. An exclusive-use RFP for these services required the contractor's aircraft and services to be reserved for exclusive use during specific time periods in specific locations. On the other hand, on-call contracts gave contractors the option to accept or decline Agency's request for contractor's aircraft and services. The on-call procurement was considered for "surge capability" during the wildfire season.

Several potential offerors protested the task order RFP for exclusive-use services, arguing that the services required under an exclusive-use contract are beyond the scope of the on-call IDIQ contracts because the services are materially different. Although GAO generally will not hear protests of task orders valued under $10 million, a challenge to the scope of a task order remains within GAO's jurisdiction regardless of value.

GAO examined whether the task order in question is materially different from the contract, which may be found by "reviewing the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued."

GAO found that the task order RFP was materially different from the on-call contracts, in spite of the similarity of the services. Protesters could not have anticipated a task order competition for extended, guaranteed periods of performance when they submitted proposals for the on-call IDIQ contract, and they were not on notice that their on-call pricing would be treated as a ceiling price for a later task order for exclusive-use work. Also, the Agency's own historical procurement record shows that they believed these services to be distinct, as they previously contracted for them separately.

Takeaway: Even a task order for seemingly identical services may be out of scope if the agency has historically distinguished them, or the terms of the services are materially different.

Footnotes

1 MoFo attorneys D. Specht and J. Devecchio represented the intervenor/awardee in this case: Vigor Works LLC.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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