Matter of: Castro & Company, LLC
Agency: Department of Homeland Security, Transportation Security Administration
Disposition: Protest Sustained
Decided: February 13, 2018
General Counsel P.C. Highlight: Agencies may not limit offerors to a single area of revision where related areas of an offeror’s quotation are materially impacted.
Summary of Facts
In March of 2017, the Department of Homeland Security, Transportation Security Administration (TSA) issued a Request for Quotations (RFQ) seeking professional services in the area of Finance and Performance Audits under Special Item Number (SIN) 520-7. The original RFQ specified two required tasks, internal control support services and financial statement audit support. The RFQ also include two optional tasks, including new guidance surge support and financial services replacement surge support. According to the RFQ, offerors were instructed to price each task as separate contract line item numbers (CLINs) in a fixed price basis.
Relevant to the discussion here, task three, new guidance surge support, called for surge support not to exceed three full time equivalents (FTEs). Castro & Company, LLC (Castro) was one of seven who submitted quotations by the May 9 submission date. On August 11, the agency issued an amendment, removing task four, financial services replacement surge support, from the statement of work. Revised quotations were received and evaluated, and the award of the task order went to TFC Consulting for $14,672, 135.
Castro and one other vendor filed a protest. In response, the agency issued a corrective action seeking to clarify the agency’s requirements for task three. TSA revised the language, clarifying quoters must provide the agency three full time employees to perform the scope of tasks required in task three. In light of the corrective action, the protest was dismissed on November 1, 2017.
However, the agency’s amendment deleted the “NTE three FTEs” language and modified the CLIN to read “3 full time individuals.” Offerors were instructed to update quotations in light of this change in requirements. However, offerors were specifically prohibited from modifying any portion of the quotation beyond task three.
Basis for Protest
Castro protests, arguing the restriction is inherently prejudicial against offerors whose proposals utilized staffing strategies taking advantage of “perceived efficiencies in tasks one and two, to address the potential needs of task three.” Additionally, Castro argues the requirement of three full time staff on task three should allow offerors to make corresponding adjustments to the rest of the overall staffing strategy.
The agency responded the amendment did not have any impact on other aspects of the quotation, as the amendment merely clarified an ambiguity. Further, the agency points out task three was identified as optional, thus “inherently severable from the rest of the scope of work.” Since offerors could not presume the option would be exercised, they cannot assume proposed efficiencies based on the optional task.
As a general premise, contracting officials have broad discretion in taking corrective action. However, the action must be appropriate to remedy the concern. Agencies may not prevent offerors from revising related areas of their quotation that are materially impacted by the corrective action. The GAO reviewed the Castro quotation, finding Castro’s strategy for task three did, indeed, include using personnel and labor hours across all three tasks. Additionally, when optional task 4 was deleted, Castro revised labor hours for personnel proposed for the other tasks, thus supporting Castro’s position.
Based on the record before them, the GAO found the amendment materially impacted certain aspects of the Castro quotation, beyond the areas where the agency allowed modification. Because agencies are not allowed to prohibit offerors from revising related areas of a quotation materially impacted, the GAO found the agency’s action precluding offerors from revising related areas was improper.
Recommend the TAS amend the solicitation to allow revision of all aspects of quotations related to the amendment of the optional task three.