Link: GAO Opinion
Agency: Internal Revenue Service
Disposition: Protest denied.
General Counsel P.C. Highlight: once an agency has received final offers, it is not legally required to reopen discussions to permit a single offeror to demonstrate the merits of its proposal.
eTouch Federal Systems, LLC (EFS) protests the award of a contract, under a request for proposals (RFP), issued by the Internal Revenue Service (IRS), for the Enterprise Managed Web Portals Program.
The IRS issued the RFP, contemplating the award of an indefinite-delivery/indefinite-quantity (ID/IQ) contract with a five-year base period, plus five one?year options, and a total contract ceiling of $320 million, for the redesign, development, implementation and management of three IRS web portals. According to the RFP, award was to be made to the offeror representing the best value as determined by an integrated assessment and tradeoff between technical and price.
Small business participation was one of four non-price, technical evaluation factors. If the offeror classified itself as a small business, it was exempt from this requirement, and this factor was evaluated as “not applicable.” For the purpose of evaluating the small business participation factor, the RFP instructed large business offerors to include a small business subcontracting plan at Tab A, Volume IV of their proposals. As established by the RFP, the submitted plan was to include the following: small business subcontracting goals for each type of small business, expressed as a percentage of total proposed subcontracting dollars; goals for small business subcontracting dollars, again broken out by type of small business; and a description of the method used to identify the percentage goals. The RFP stated that “[t]he Government will not award a contract to any Offeror with an Unacceptable rating in any factor or subfactor.”
EFS identified itself as a small business and did not include a small business subcontracting plan in its proposal. Ultimately, after conducting discussions with the offerors, receiving revised proposals, and completing its evaluation, the agency made award to EFS. Upon learning of the award to EFS, another offeror filed a size protest with the Small Business Administration (SBA) challenging the size status of EFS; the offeror also filed a protest with GAO. The SBA made a formal size status determination that EFS was “other than small.” Based on the SBA’s size decision, the IRS notified the GAO that it would take corrective action.
The IRS’s corrective action included canceling the award to EFS and reevaluating EFS’s proposal under the small business participation factor, knowing that SBA had found EFS to be other than a small business. Based on this reevaluation, the agency rated EFS unacceptable under the small business participation factor since EFS had not submitted a small business subcontracting plan. The agency conducted a new best-value determination and made contract award to another offeror.
EFS argues that the agency improperly evaluated its proposal as unacceptable under the small business participation factor for failure to submit the required small business subcontracting plan. According to EFS, the agency should have reopened discussions and allowed EFS to revise its proposal to submit a small business contracting plan. In the alternative, EFS asserts that its proposal, as initially awarded, included the relevant subcontracting information, and that the agency unreasonably evaluated its proposal as unacceptable under the small business participation factor. GAO first states that it is well-settled that once an agency has received final offers, it is not legally required to reopen discussions to permit a single offeror to demonstrate the merits of its proposal. In addition, EFS’s contention that its proposal included the relevant subcontracting information is without merit. GAO states that the evaluation of technical proposals is generally a matter within the agency’s discretion, and GAO will not disturb an agency’s judgments regarding the relative merits of competing proposals absent a showing those judgments are unreasonable or inconsistent with the RFP’s evaluation criteria.
EFS represented itself as a small business in its proposal and to the extent this representation ultimately proved to be legally incorrect, as determined by SBA, EFS bore the risk associated with the error, not the agency. As a consequence, the IRS was under no obligation to reopen discussions in order to provide EFS with an opportunity to revise its proposal in accordance with the SBA’s size status ruling.
The record is clear that EFS’ proposal did not include a small business subcontracting plan at Tab A, Volume IV of its proposal, as required. Having failed to submit the small business subcontracting plan, the protester cannot reasonably require the agency to assemble the plan itself from various disparate portions of the proposal. The record simply does not support the protester’s assertion that the required information could have been found in its proposal, if the agency had undertaken the search. The protest is denied.