Bid Protest Weekly Newsletter by Bryan R. King, Attorney, General Counsel PC
Date: Thursday, March 20, 2013, 10:59am EST
Pernix-Serka LP, B-407656, B-407656.2, January 18, 2013
In a federal procurement, not all requirements in a solicitation are created equally. There is an important distinction between those requirements that must be met prior to award, and those that do not have to be met until contract performance. In this case, GAO denied the protest because the protester, Pernix-Serka, was on the wrong side of that distinction.
The solicitation in this case was issued by the Department of State, seeking to issue an award for a design-build project at the U.S. embassy compound in Iraq. The solicitation included a contract provision requiring the contractor to warrant that it had obtained all necessary licenses and permits required to perform the services required in the contract. Pernix-Serka argued that the awardee did not have a license to do business in Iraq, and thus failed to meet the requirement.
The issue of whether an offeror has the necessary licenses and permits needed to perform is a performance requirement, and typically does not affect a contract award. To the extent that it does have an effect, it is an issue of the offeror’s responsibility, which is usually left to the discretion of the contracting officer. GAO’s regulations only allow for a review of a contracting officer’s affirmative determination of an offeror’s responsibility where the protester can demonstrate that a “definitive responsibility criterion” in the solicitation was not met.
According to GAO, a “definitive responsibility criterion is a specific and objective standard, qualitative or quantitative, that is established by a contracting agency in a solicitation to measure an offeror’s ability to perform a contract.” Basically, the solicitation provision in question has to give offerors notice that compliance with the criterion is necessary to receive an award. With a license requirement, the solicitation provision must obligate the offeror to possess, or show the ability to possess, the license prior to award.
In this case, GAO noted that the contract provision’s own terms referred to the “contractor,” rather than the offeror, suggesting compliance with the terms could be met after award. As a result, GAO found that the warranty provision did not reasonably inform offerors that they had to possess the license prior to contract award. If the provision does not give offerors such notice, it is not a definitive responsibility criterion, and as demonstrated in this case, is likely not a ground for a successful protest.