Link: GAO Opinion
Agency: Department of Health and Human Services
Disposition: Protest sustained.
Keywords: Late Proposal
General Counsel P.C. Highlight: A proposal that does not provide all items required by the solicitation may not be automatically rejected if the proposal information received by the deadline is sufficient to constitute an acceptable proposal.
SafeGuard Services, LLC (SGS) protests the rejection of its proposal as late by the Department of Health & Human Services, Centers for Medicaid and Medicare Services (CMS) under a request for proposals (RFP) for the award of a Zone Program Integrity Contract (ZPIC) to support CMS’s audit, oversight, and anti-fraud, waste and abuse efforts in geographic zone 6.
The RFP contemplated the award of a single indefinite-delivery/indefinite-quantity (ID/IQ) contract. Task orders under the contract could be issued on a cost reimbursement or fixed-price basis. Each offeror’s proposal was to consist of three volumes: a business proposal, technical proposal, and a conflict of interest and compliance program volume. The solicitation included detailed instructions regarding the preparation and submission of each of these volumes. As part of their business proposal submission, offerors and each of their subcontractors were required to submit a business proposal spreadsheet for two cost reimbursement task orders complete with the following categories of cost information: labor, travel, other direct costs, subcontracts, indirect rates, fee, and a summary rollup of all costs. The RFP provided that all volumes of each proposal had to be delivered in an electronic format on compact discs (CD) by 1 p.m., July 20, 2009, to the CMS Building in Baltimore, Maryland. The RFP also stated that “all proposed subcontractors shall submit a separate and complete business proposal spreadsheet in the same format as the Offeror’s business proposal spreadsheet no matter the dollar amount.” The solicitation stated that if a proposal was late, it would be deemed unacceptable.
SGS’s proposal was included in the competitive range and discussions were conducted. As part of the discussions with SGS, CMS raised some questions about the proposed costs of one of SGS’s proposed subcontractors. The agency sent SGS a request for final proposal revisions (FPR). The revised technical proposal, which was to include only the revised sections, was due via e-mail on February 24. Offerors were required to submit a “complete revised business proposal” in electronic format by February 28, and provided that “any subcontractor business proposals shall also be received by the February 28, 2011 deadline.” On March 4, offerors were to submit one hard copy and four CDs of their technical, business, and OCI submissions, as well as “subcontractor business proposal sealed packages as necessary.” SGS submitted its FPR by the stated deadlines. However, a minor subcontractor of SGS failed to submit its revised business proposal in electronic format by the February 28 deadline. As a result of the late delivery of the subcontractor’s revised business proposal, the contracting officer rejected SGS’s proposal as late.
SGS asserts that the agency’s rejection of its FPR due to the late submission of its subcontractor was improper because, according to SGS, even without the subcontractor’s proposal, SGS’s proposal was complete. GAO states that offerors are responsible for submitting proposals, and any modifications to them, so as to reach the government office designated in the solicitation by the time specified in the solicitation. Proposals, and modifications to them, that are received in the designated government office after the exact time specified are “late,” and will be considered only if received before award, and if the circumstances meet the specific requirements of the provision at FAR sect. 52.215-1. Portions of proposals that are submitted late may not be considered by the agency, and if the proposal is unacceptable as timely submitted, it should be rejected as late. On the other hand, a proposal which does not provide all items required by the solicitation may not be automatically rejected if the proposal information received by the deadline is sufficient to constitute an acceptable proposal.
Here, the record reflects that the agency did not consider whether SGS’s FPR was acceptable without the subcontractor’s revised business proposal spreadsheets. However, as discussed above, SGS asserts that its FPR was complete and acceptable because it contained all of necessary costs. GAO’s review confirms SGS’s assertion that the information included in its revised business spreadsheet was reflected in SGS’s business proposal. Thus, the subcontractor’s submission could appropriately be viewed as backup supporting material for SGS’s proposed costs. In circumstances like these, where an agency finds that an offeror’s proposed costs on a cost reimbursement contract are not reasonably supported, an agency, as part of the cost realism analysis, can adjust the proposed costs to account for this lack of supporting information. In sum, GAO concludes that the agency improperly rejected SGS’s entire FPR as late without considering whether the proposal was acceptable without the subcontractor’s revised business proposal, and the protest is sustained on this basis.
GAO recommends, consistent with this decision, that the agency consider whether SGS’s FPR was acceptable. If SGS’s FPR is determined to be acceptable, GAO recommends that it be reinstated in the competition.