Link: GAO Opinion
Agency: Department of State
Disposition: Protests sustained.
The Omnibus Diplomatic Security and Antiterrorism Act of 1986, 22 U.S.C. § 4852 (2000), established statutory qualification requirements for construction firms seeking to build a U.S. embassy, including a requirement that an entity seeking contracts for diplomatic construction projects over $10 million must have performed construction services “similar in complexity, type of construction, and value to the project being bid.” Agency’s determination that vendor satisfied this requirement is unreasonable where vendor’s projects were not similar in complexity or value.
General Counsel P.C. Highlight:
The Security Act requires that, where adequate competition exists, only United States persons and qualified joint venture persons may bid on a diplomatic construction or design project with an estimated value of excess of $10 million. Caddell argues that Framaco is not a United States person in that: (a) Framaco has not achieved a total business volume equal to or greater than the estimated value of any of the projects in three of the five-year period before the issuance date of the proposal; (b) Framaco does not have experience building any projects that are similar in size or complexity to any of the three projects; and (c) Framaco does not have the existing technical and financial resources to perform the projects. Additionally, Caddell argues that the agency’s decision to pre-qualify Framaco was based on an incomplete record that did not contain the information needed to determine whether Framaco satisfied the Security Act requirements. GAO states that the ordinary and common meaning of the words in the Security Act statute is that eligible offerors will have achieved a business volume equal to or greater than the value of the project in each of three years within the five-year period. Because GAO concludes that Framaco is ineligible to participate in these procurements for other reasons, GAO will not reach the issue in this decision.
As a preliminary matter, GAO notes that the agency report contains no documentation of any review associated with pre-qualifying offerors for the 2009 projects. Instead, the agency accepted as qualified any contractor that was pre-qualified for 2008. In GAO’s view, the agency’s failure to perform any type of evaluation contradicts both the letter and spirit of the Security Act, as well as the sources-sought announcement published in FedBizOps. At a minimum, the five-year period of review anticipated by the Security Act, by definition, changes each year. It appears from the record that Framaco submitted only a letter of interest for the 2009 projects. Moreover, while Framaco indicated in its letter that no changes had occurred in Framaco’s or [DELETED] (its partner) structure or size status, Framaco did indicate that it was adding another firm to its team. Thus, GAO believes that some type of evaluation was necessary to ensure that even previously qualified offerors remained in compliance with the requirements of the Security Act. Turning to the analysis that was performed, GAO does not think the aggregated list of projects provided by Framaco in its 2008 pre-qualification submission could form the basis for a reasonable conclusion that Framaco has shown the requisite experience performing services similar in complexity, type of construction and value to the project being bid, as required by 22 U.S.C. sect. 4852(c)(2)(D). In GAO’s view, the Security Act’s experience requirements anticipate a demonstration that an offeror has completed at least one construction project of similar complexity, size, and value as the 2009 embassy construction projects. Considering simply the value of Framaco’s projects, Framaco did not identify a single completed project that reaches even half the value of the low end of the estimated range for the Bujumbura construction project (i.e., a $41.7 million project offered to show a comparable value for a project estimated between $85 and 105 million); moreover, its largest identified project ($41.7 million) is less than one-third of the estimated value of the Dakar project ($135 – $150 million). Since Framaco’s experience consists of contracts of relatively low dollar values compared to the estimated dollar values of the 2009 projects, we see no basis for the agency’s conclusion that Framaco has the requisite experience based on contract values.
In addition, GAO finds Framaco’s argument that the total value of its list of smaller value projects equals the value of the 2009 embassy construction projects ignores the fact that combining the values of a list of projects does not demonstrate the necessary skills to complete and manage an entire embassy construction project, as anticipated by the Security Act. The identified projects mostly involved office or building construction projects; none of them involved the construction of an embassy (other than an interim renovation for the embassy in Baghdad). In short, GAO concludes that the agency has not provided a reasonable basis for its decision to pre-qualify Framaco. The protests are sustained.