Decided: December 13, 2021
Agency: Department of Homeland Security
Disposition: Protest Sustained
This protest is notable because it showcases that, although the GAO is highly deferential to agency evaluations, the GAO will sustain a protest if it finds an award was inconsistent with the terms of the solicitation. Additionally, the decision emphasizes the importance of knowing that offerors have the sufficient performance period remaining on existing schedule contracts required by a blanket purchase agreement (BPA). Here, GAO found the agency’s interpretation of the solicitation terms was unreasonable when the solicitation terms were read as a whole, indicating awardees were ineligible because they only had eight remaining years of performance and the solicitation required ten years. In instances where an agency and protester disagree about the meaning of solicitation terms, GAO will read the solicitation as a whole and determine the interpretation that is most reasonable and gives effect to all the provisions. If you were involved in a bid and feel the agency similarly made an award inconsistent with the terms of the solicitation, you may have similar grounds for a protest. GCPC can help you evaluate the merits of your case and navigate the bid protest process.
Summary of Facts
Meridian Knowledge Solutions, LLC, (“Meridian”) protests the issuance of three BPAs to The Educe Group, Inc., Envisage Technologies, LLC, and IBM Corporation, by the Department of Homeland Security under request for quotations (RFQ) No. 70RTAC20Q00000081 pursuant to the General Services Administration’s (GSA) Federal Supply Schedule (FSS), Information Technology program (Legacy Schedule 70), for information technology support services.
The agency issued the RFQ on September 4, 2020. The solicitation contemplated the issuance of at least two BPAs with ordering periods of “up to ten years from award to consist of a one-year base and nine, one-year option periods.” With regard to price, the RFQ provided that quotations would be evaluated on the basis of a total evaluated price and vendors were required to provide a breakdown of their price to include labor categories, rates, and hours. The three awardees were collectively the highest-rated vendors, and all were significantly lower priced than Meridian and, thus, the agency did not perform a best-value tradeoff with respect to Meridian. Of note, Envisage and Educe Group, submitted quotations based on FSS contracts that would expire in 2022 and 2030, respectively. On August 31, 2021, the agency issued BPAs with varying periods of performance tailored to the time remaining on each awardee’s FSS contract: a BPA to Envisage with a period of performance extending to October of 2022; a BPA to Educe with a period of performance extending to August of 2030; and a BPA to IBM for the full 10-year period of performance. Meridian filed this protest.
Basis of Protest
Meridian argues Envisage and Educe were not eligible for award because their FSS contracts would not permit them to perform a BPA for the full 10-year period of performance contemplated by the RFQ. Additionally, Meridian challenges the agency’s price analysis and technical evaluation, as well as alleges the agency engaged in misleading discussions.
GAO noted that “an FSS BPA is not established with the contractor directly, but rather is established under the contractor’s FSS contract, such that the FSS BPA orders ultimately are to be placed against the successful vendor’s FSS contract.” When an agency intends to place an order under an FSS BPA, the vendor must have a valid FSS contract in place, because that contract is the means by which the agency satisfies the competition requirements of the Competition in Contracting Act. In this regard, Federal Acquisition Regulation (“FAR”) section 8.405-3(d)(3) requires a vendor’s FSS contract to have sufficient duration, including potential options, to coincide with the entire potential period of performance for the resulting BPA.
Meridian argues the 10-year period of performance was a material requirement of the solicitation and that Envisage and Educe should have been ineligible for award. Additionally, Meridian contends the agency erred by issuing BPAs for less than the full 10-year period of performance contemplated by the RFQ. The agency argues that it satisfied the FAR requirements because each vendor’s BPA was tailored to the time remaining on its FSS contract, so no vendor received a BPA that extended beyond its FSS contract. The agency argues that this was consistent with the terms of the solicitation because the solicitation advised that the BPAs would have terms of “up to” ten years.
GAO explained that when “a protester and agency disagree over the meaning of solicitation language, we will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all of its provisions; to be reasonable, and therefore valid, an interpretation must be consistent with the solicitation when read as a whole and in a reasonable manner.” Here, GAO found that the agency’s reading of the solicitation “is unreasonable because the provisions relied on by the agency are not rationally susceptible to the meaning the agency gives them when read in the context of the solicitation as a whole.”
GAO considered that the solicitation provided the period of performance for the BPAs would be “established with an ordering period of up to ten years from award to consist of a one-year base and nine, one-year option periods.” GAO explained that the agency’s reading is inconsistent with the portion of the sentence explaining that the period “consists of” a base year and nine option years, and GAO found the agency offered no explanation of how that text should be given effect in its reading of the solicitation. GAO noted that “a more natural reading of the relevant language is that the BPA ordering period would be “up to” ten years because the agency may or may not exercise some of the awarded options, not because the agency intended to issue BPAs of varying lengths to different vendors.”
GAO also found that other portions of the solicitation reinforce the fact that the agency’s reading of this language is unreasonable, including that the statement of work provides that the “anticipated ordering period for each BPA is ten years consisting of one, twelve-month base period with nine, twelve-month option periods.” Additionally, the solicitation required all vendors to price the base year and all nine option years, notwithstanding that several vendors would be ineligible to perform the latter option years. Ultimately, GAO concluded that the solicitation clearly contemplated the issuance of two or more 10-year BPAs, not BPAs of varying lengths. GAO also explained that “the term of performance is generally a material requirement of a solicitation, to which failure to conform renders a vendor ineligible for award.” Since Educe and Envisage were ineligible for the BPAs, GAO determined the agency’s decision to issue BPAs of varying lengths rather than 10-year BPAs to these vendors was inconsistent with the terms of the solicitation.
The agency next argues that even if it erred in this regard, Meridian failed to demonstrate competitive prejudice. GAO has previously held that “an agency may, in some circumstances, waive a material solicitation requirement if there is no prejudice to the other competitors and the quotations or proposals will meet the agency’s needs.” In these circumstances, GAO will not sustain a protest unless the protester can demonstrate that it was prejudiced by the waiver. GAO explained that “prejudice does not mean that, had the agency failed to waive the requirement, the awardee would have been unsuccessful, but rather that prejudice is assessed based on whether the protester would have submitted a different proposal or could have done something else to improve its chances for award had it known that the agency would waive the requirement.”
GAO found here that comparing all vendors on the basis of ten years of pricing when several vendors knew they would be unable to perform all ten years was clearly irrational, and this may have worked to the competitive prejudice of Meridian. GAO noted that it resolves doubts regarding prejudice in favor of the protester and that a reasonable possibility of prejudice is sufficient to sustain a protest. Thus, GAO sustained the protest. GAO recommended that the agency either reevaluate quotations consistent with the terms of the solicitation or revise the solicitation to better reflect the agency’s needs.
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