Link: GAO Opinion
Agency: Department of Air Force
Disposition: Protest denied.
Keywords: Suspension and Reinstatement
General Counsel P.C. Highlight: The FAR prohibits an agency from awarding a contract to a debarred or suspended contractor. But, if the contractor’s suspension ends prior to award, the contracting officer may, but is not required to, consider an offeror’s proposal for award. The CO must exercise this discretion to exclude the offeror following reinstatement reasonably.
Pursuant to a request for proposals (RFP), the Department of the Air Force awarded a contract to Vinnell Brown & Root LLC (VBR) and denied the award to FAS Support Services, LLC (FAS) for base operation and maintenance services at facilities in Turkey and Spain.
The RFP advised offerors that proposals would be evaluated on the basis of three factors: price; technical acceptability; and performance confidence. The RFP also stated that the agency would award the contract to the lowest-priced offeror whose technically-acceptable proposal received a performance confidence score of substantial confidence and if no offeror received this score, the agency would make a “best value award decision.”
Initially, the Air Force received proposals from two offerors, FAS and VBR. FAS, at the time, was a joint venture between two other corporations, one of which was Taos/Agility (Taos). Both initial proposals received the substantial confidence scores. However, VBR received a technical acceptability score of unacceptable following revisions. The Source Selection Authority recommended award to FAS.
On the same day that this determination was made, the Defense Logistics Agency (DLA) announced the contract suspension of a number of companies and their affiliates, including Taos. As Taos was one of the two FAS joint venture partners, the Air Force advised FAS that its proposal was excluded from further consideration. The Air Force then opened discussions with VBR. Following VBR’s final proposal revision, the Agency found VBR’s proposal to be acceptable. VBR had submitted the lowest price of $285 million, compared to FAS’s proposal of $300 million.
Prior to award but after VBR’s reevaluation, FAS informed the contracting officer (CO) that DLA had lifted the suspension based on FAS’s statement that it would divest itself of Taos’ ownership in the joint venture. FAS requested that its proposal be returned to the competition.
The CO denied FAS the chance to be reinstated citing two reasons: (1) reinstatement would cause unacceptable delay to the procurement because FAS would need to “substantially revise” its proposal to explain who would be doing the work Taos had been assigned to do under the previous proposal; and (2) FAS did not have a reasonable chance for award VBR had a significantly price and FAS would have to make substantial revisions to its proposal to make it acceptable.
GAO’s review of the record was in agreement with the Air Force’s determination. The decision whether to reinstate an offeror into a competition following the lifting of a suspension is within the discretion of the CO. GAO found the Air Force’s refusal to reinstate FAS’s proposal reasonable because the record indicated that the removal of Taos as a joint venture partner would require the Air Force to conduct a new evaluation of FAS’s past performance and to determine the extent to which FAS’s technical proposal relied on the resources of Taos. The CO stated that VBR had addressed all of the technical acceptability concerns during discussions while FAS remained suspended and the agency was ready to proceed with the award. The CO further said that negotiating with FAS would take an estimated six months.
As to the argument that the agency abused its discretion in conducting discussions with VBR after FAS was suspended and that the agency treated the offerors unequally by refusing to reopen the competition, the GAO stated that FAS was no longer an interested party to raise these additional issues since the Air Force’s rationale for declining FAS’s reinstatement was reasonable. GAO denied FAS’s protest.