Link: GAO Opinion
Agency: National Aeronautics and Space Administration
Disposition: Protest denied in part, dismissed in part.
Keywords: Corrective Action
General Counsel P.C. Highlight: Protest of an agency’s corrective action, taken in response to a prior protest, must be made within 10 days of learning of the allegedly offending parts of the corrective action.
Earth Resources Technology, Inc. (ERT) protests the award of a contract under a request for proposals (RFP), issued by the National Aeronautics and Space Administration (NASA), for software engineering support services.
NASA issued the RFP as a competitive section 8(a) small business set?aside in order to obtain software engineering support services for the design, development, test, and deployment of software, data, and information systems that support NASA’s aerospace missions. The RFP contemplated award of an indefinite-delivery/ indefinite?quantity (ID/IQ) cost-plus-award-fee contract with a five-year ordering period and a maximum ordering value of $250 million. The RFP advised that proposals would be evaluated on the basis of three factors: (1) mission suitability; (2) cost; and (3) past performance.
The mission suitability factor was comprised of the following subfactors: (A) understanding the requirements of the statement of work (SOW); (B) technical approach to sample problem representative task order (RTO); (C) management plan; and (D) safety and health. As described in the RFP, these subfactors were to be evaluated using adjectival ratings, with a corresponding percentage score, and numerical scores on a 1000 point scale.
The RFP also indicated that the agency intended to make award based on initial proposals and advised offerors that their initial proposals should contain their best terms from a technical and cost standpoint. The agency, however, reserved the right to conduct discussions if it deemed necessary.
Following the decision to award the contract to another offeror, a protest was filed by a company separate from ERT and in response, the agency decided to take corrective action by: (1) rescinding the decision to establish a competitive range and conduct discussions; (2) rescinding the June 4 competitive range determination letters sent out; and (3) awarding the contract to the protester.
First, ERT argues that NASA’s decision not to establish a competitive range and not to hold discussions was improper. Second, ERT challenges various aspects of NASA’s evaluation of proposals.
GAO states that NASA did not eliminate ERT from the competitive range. Rather, in response to the protest filed by the other bidder, NASA decided that it would not reopen the competition for the purpose of holding discussions, as it had previously indicated, and would instead reinstate its original selection decision. Because NASA was not conducting discussions, the establishment of a competitive range was not necessary, and it therefore rescinded the letters to ERT and the other bidder advising them that they were included in the competitive range for the purpose of holding discussions. ERT’s challenge of the agency’s actions is a challenge of the agency’s corrective action, which is untimely.
NASA advised ERT’s counsel on June 25 of the agency’s intended corrective action in response to the protest filed by the other bidder and expressly advised that NASA was not going to open discussions with offerors. It was unreasonable for ERT to wait until July 11, after having received its debriefing regarding the award decision, to protest NASA’s decision. Because ERT knew or should have known of this basis of protest as a consequence of ERT’s counsel receiving the June 25 letter, ERT should have, at the latest, protested the agency’s decision not to hold to discussions within 10 days of receiving the June 25 letter.
ERT also alleged errors concerning the agency’s technical and cost evaluations. GAO states that the evaluation of an offeror’s proposal is a matter within the agency’s discretion. In reviewing a protest against an agency’s evaluation of proposals, GAO will not reevaluate proposals but instead will examine the record to determine whether the agency’s judgment was reasonable and consistent with the stated evaluation criteria and applicable procurement statutes and regulations. An offeror’s mere disagreement with the agency’s evaluation does not render the evaluation unreasonable.
GAO finds that ERT abandoned many of the evaluation issues raised in the initial protest it filed with GAO. Where an agency provides a detailed response to a protester’s assertions and the protester either does not respond to the agency’s position or provides a response that merely references or restates the original allegation without substantively rebutting the agency’s position, GAO deems the initially-raised arguments abandoned. Here, the record reflects that while the agency thoroughly addressed each protest allegation raised by ERT with a detailed factual discussion and legal analysis, ERT, in most instances, either failed entirely to provide a response, or merely reiterated verbatim its original protest allegations, and, at times, mischaracterized the agency report as having failed to respond to its protest allegations, or as having admitted error.
ERT also alleges that NASA: (1) improperly adjusted ERT’s proposed costs for its significant subcontractors in excess of their proposed cost ceilings; (2) improperly made an upward adjustment to ERT’s cost proposal to account for facilities costs where those costs were properly accounted for in ERT’s cost proposal; and (3) unreasonably escalated ERT’s direct labor rates. NASA responded to each of these issues and admitted fault with respect to the second issue, noting that it made an improper upward cost adjustment to ERT’s proposal in the amount of $466,000, but asserted that ERT was not prejudiced as a result of the error since Columbus remains the highest rated and lowest cost offeror.
Regarding the first issue, NASA explained that it properly upwardly adjusted ERT’s significant subcontractor costs in excess of their proposed cost ceilings because NASA could not reasonably rely on these ceilings because the agency has no privity of contract with the subcontractors, and could not legally enforce the ceiling rates. NASA further explained that even if it had evaluated ERT’s significant subcontractor costs using the ceiling rates, ERT’s total adjusted cost, including the $466,000 noted above, would be reduced by $625,000, which is still not enough to overcome the other bidder’s cost advantage. Regarding the third issue, NASA explained that it escalated ERT’s labor rates to match the actual incumbent labor rates where both firms proposed to capture large percentages of the incumbent workforce. ERT did not address any of the agency’s arguments regarding these issues, and instead mischaracterized the agency as having admitted a $625,000 error in its evaluation of ERT’s costs. GAO deems these matters abandoned.
GAO states that ERT was not prejudiced by its error in calculating it’s facility costs since, accounting for this mistake, ERT’s total evaluated cost would still be more than $2 million higher than the other bidder’s total cost, and the other bidder was considered technically superior to ERT. Prejudice is an essential element of every viable protest; GAO will not sustain a protest unless the protester demonstrates a reasonable possibility that it was prejudiced by the agency’s actions. The protest is dismissed in part and denied in part.