Washington Business Journal by Lee Dougherty, Attorney, General Counsel PC
Date: Friday, October 12, 2012, 1:15pm EDT – Last Modified: Monday, October 15, 2012, 10:17am EDT
When a company’s offer in a contract competition is excluded by an agency, it should ask for a debriefing to see if undisclosed requirements were used by the agency. If so, the company’s chances of winning a protest are good.
Protesting contractors: Orion Technology Inc. Huntsville, Ala.; Chenega Integrated Mission Support LLC, Alexandria
Contracting agency: Department of the Army
Issue: Whether agencies can use undisclosed contract requirements in evaluating the offers made by contractors
Decision: Sustained by the Government Accountability Office, Aug. 22, 2012.
Postmortem: We have all been in the situation where several people wanted something and to settle the dispute a third person said, “I am thinking of a number between one and 10.” That system of resolving differences between two people only works if the third person is unbiased. In the Orion and Chenega case, the Army was acting as the third person with the number in its mind, but the GAO determined that the Army did act not according to contracting rules and sustained the protest.
The two companies protested the award of a contract for installation support services at the Redstone garrison in Alabama to Advanced Technology Logistics Inc.
The Army issued a request for proposals informing potential offerors that it intended to award a combination fixed-price, time-and-materials contract to the lowest-priced technically acceptable offer, or LPTA. The RFP informed offerors that proposals would be evaluated on technical/management and past-performance factors, with numerous subfactors included. Each subfactor would be rated as either acceptable or unacceptable.
The offers of both protestors were determined to be unacceptable under the technical factor because the Army determined that even though both had offered a lower price than the award winner, both failed to offer adequate staffing.
The protestors alleged that the Army “used an undisclosed government estimate to determine whether their respective proposed staffing was adequate.”
The GAO said an agency may use government estimates as a tool to assess reasonableness, but “absolute reliance on estimates can have the effect of arbitrarily and unfairly penalizing an innovative or unusually efficient offeror.”
The Army compared offers with its staffing estimate, and any offer below its undisclosed estimate was determined to be unacceptable. Well, not any offer – the GAO found that the Army “subjected protestors’ proposed staffing to a stricter level of scrutiny” than it did Advanced Technology’s proposal.
The decision went further and said that the record “contains no explanation regarding why the agency reached apparently inconsistent conclusions regarding the adequacy of staffing” when evaluating the protestors’ offer, compared with that of the awardee.
The Army told offerors to pick a number between one and 10, but unbeknown to the offerors the Army was only taking numbers between one and three, except from the awardee. It is difficult to read this opinion and not feel as if the award was rigged in favor of Advanced Technologies from the beginning.
Giving the Army the benefit of the doubt, in LPTA procurements there is a temptation on the part of the government to cut corners to exclude as many offerors as possible. Contractors should always ask for a pre-award debriefing when they are excluded, and if the agency has an undisclosed requirement that it uses as a mechanical rule, a protest would likely be sustained.