Decided: May 18, 2022
Agency: Department of Defense
Disposition: Protest Sustained
Keywords: Key Personnel
This case demonstrates that Key Personnel must be available at start of contract for that specific personnel to be considered as part of the proposal. Here, GAO held that the operative date for consideration of the impact of the key person’s departure is the date contract performance is set to start, not the date an award selection is made. This case also reminds offerors of the importance of promptly notifying an agency of any change of Key Personnel. In the event of a change in availability of Key Personnel, the agency may either evaluate the proposal as submitted in light of the change, or hold discussions to allow for proposal revisions.
Companies should thoroughly evaluate the potential for success with any protest situation. The time, expense, and negative consequences associated with challenging your Government customer warrants a strategic evaluation between your executive leadership, capture, proposal, and legal teams. General Counsel has the experience and drive to assist clients with assessing award decisions, developing legal courses of action, filing either as an unsuccessful bid protestor or the awardee intervenor, litigating the protest, and developing post-decision lessons learned for more effective future business development practices.
Summary of Facts
Sehlke Consulting LLC protests the award of a contract to KPMG LLP under request for proposals (RFP) No. NRO000-21-R-0226, issued by the Department of Defense, National Reconnaissance Office (NRO). The RFP was issued in August 2021 and sought proposals for combined finance support services within NRO’s Business Plans and Operations Directorate, Office of Finance. Performance under the contract was expected to commence on February 1, 2022. Award was to be made on a best-value tradeoff basis considering cost and non-cost factors, including key personnel. The RFP required offerors to provide resumes and letters of commitment for four specific key personnel positions, including the senior financial consultant position.
NRO received three proposals in response to the RFP, including from Sehlke and KPMG. The proposal submitted by KPMG on September 30, identified a candidate for the required senior financial consultant position who was employed by KPMG’s subcontractor. On January 11, 2022, the proposed senior financial consultant notified KPMG’s subcontractor that he was resigning and indicated his last day as January 28. On January 14, the subcontractor notified KPMG of the individual’s resignation. On January 18, KPMG notified the contracting officer’s technical representative (COTR) for the incumbent and follow-on contract that the financial consultant had resigned and would be departing within two weeks.
The source selection authority found that the advantages of KPMG’s proposal, “specifically KPMG’s exceptional response to [the] most important management factor Key Personnel” warranted the associated cost premium and selected KPMG for award.
Basis of Protest
Sehlke argues that the NRO should have evaluated KPMG’s proposal as technically unacceptable when, prior to completing its evaluation of proposals and making its award decision, KPMG advised the agency that its proposed senior financial consultant had submitted a formal notice of resignation, thus putting the agency on notice that one of KPMG’s proposed key personnel was unavailable to perform the contract as KPMG had proposed. NRO argues that despite the individual’s pending departure, the individual technically remained an employee of KPMG’s subcontractor on the date the agency executed the source selection decision.
GAO explained that a fundamental principal of federal procurement law is that “an agency’s evaluation of proposals must reflect a reasonable assessment of each offeror’s ability to successfully perform the contract requirements.” Further, a proposal that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award. GAO also noted “that it is generally improper for an agency to award a contract or task order with the intent to materially alter it at or shortly after award.” Especially relevant here, “when a solicitation requires resumes for—or otherwise requires the identification of–specific personnel, the proposed person forms a material requirement of the solicitation.” GAO explained that “in the event of a change in availability of such staff or resources, the agency may either evaluate the proposal as submitted in light of the change, or hold discussions to allow for proposal revisions.”
Here, the record shows that KPMG’s proposed senior financial consultant submitted a letter of resignation to his employer and provided a firm resignation date predating the RFP’s anticipated February 1 performance commencement date. KPMG notified the government of the individual’s resignation prior to NRO completing its evaluation and award decision, but the agency did not consider the impact of the resignation on KPMG’s proposal or conduct discussions. Thus, GAO determined that NRO had actual notice with KPMG’s pre-award notice that one of its proposed key persons had resigned, and therefore would not be available to perform on the contract as KPMG had proposed. GAO held that with this notice, NRO was required either to evaluate the proposal as submitted in light of the change, or to conduct discussions with offerors.
GAO also concluded that “it was unreasonable for the agency to base its evaluation on KPMG’s offer of a senior financial consultant it had no realistic expectation would perform on the contract.” GAO found that NRO could not reasonably ignore this fact simply because the individual had not yet completed the final two weeks of employment when the agency made its selection decision. GAO held that “the operative date for consideration of the impact of the key person’s departure was February 1 (at the start of contract performance), not the January 25 selection decision date.”
GAO concluded that the agency either needed to evaluate KPMG’s proposal without reliance on this candidate for a required key person position, or open discussions and solicit revised proposals. Since the agency did neither, GAO sustained the protest.
Our Government Contracts Practice Group has extensive experience in government contract law, helping clients solve their government contract problems relating to the award or performance of a federal government contract, including bid protests, contract claims, small business concerns, and teaming and subcontractor relations. If you need more guidance or information, contact Craig Lawless, Senior Counsel in our Government Contracts practice area at General Counsel, P.C., 703-266-1865.