Link: GAO Decision
Protestor: Sevatec, Inc.
Agency: Defense Security Service
Disposition: Protest Denied.
An agency was not required to attribute the experience of an incumbent firm to the protester where the protester acquired the rights and responsibilities of the incumbent contract under a novation agreement.
General Counsel PC Highlight:
Sevatec, Inc., protested the exclusion of its proposal from competition under an RFP for IT support services. The solicitation was issued to vendors holding contracts under the 8(a) STARS contract. Vendors were informed that the agency was consolidating requirements that had previously been procured under two separate contracts, including an IT support services contract being performed by Nova Datacom, Inc. (NDC). Evaluations would be conducted in two phases: in the first phase, proposals would be evaluated under experience, past performance, and price. Offerors were required to submit at least one, but no more than five, contracts demonstrating relevant experience within the last 5 years. While the agency would consider the experience of significant subcontractors, the prime contractor’s own experience would be considered more relevant.
Two days after the RFP was issued, the SBA placed NDC on the excluded parties list and proposed the firm for debarment. Sevatec approached the agency about novating NDC’s predecessor contract to Sevatec. The agency supported the novation, and the agreement provided that Sevatec was “entitled to all rights, titles and interests of [NDC] in and to the contract as if [Sevatec] were the original party to the contract.” After the novation, Sevatec informed the agency that it was no longer proposing to use NDC as a subcontractor. In its evaluation, the agency assigned several weaknesses to Sevatec under the experience factor. After an agency level protest failed to get the agency to credit Sevatec with NDC’s experience under the novated contract, this protest followed.
The GAO found no basis to conclude that the evaluation of the protestor’s experience was not reasonable or not in accordance with the solicitation’s experience factor. It disagreed with Sevatec that the terms of the novation agreement provided for the legal fiction that Sevatec was entitled to claim as its own the experience of another unrelated entity. It also pointed out that the RFP did not provide for the consideration of personnel experience under that factor, barring the agency from considering the experience of NDC employees hired by Sevatec.
While novating a contract may allow a company to begin performing in a new area, thereby gaining additional experience, they cannot claim to acquire the experience of the predecessor contractor through the novation. Hiring the predecessor’s employees may expand the pool of experience a company has access to, but agencies are not required to consider the experience of personnel unless the RFP so provides. If the prime contractor lacks the experience to succeed under the RFP, it should compile a team of experienced and eligible subcontractors to improve its evaluation under the experience factor.