Link: GAO Decision
Protestor: Verizon Wireless
Agency: General Services Administration
Disposition: Protest Sustained.
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GAO Digest:
- Protest challenging the terms of a solicitation is timely where the solicitation expressly permitted offerors to take exception to its terms, the agency did not advise the protester that it could not take exception to certain terms until after the receipt of initial quotations, and the protester challenged the disputed terms after the agency rejected these exceptions and prior to the subsequent time for the receipt of revised quotations.
- Protest challenging the terms of a solicitation for commercial products and services contemplating the establishment of blanket purchase agreements with holders of Federal Supply Schedule contracts is sustained where the record does not show that the agency performed adequate market research to demonstrate that the terms were consistent with customary commercial practice, as required by the rules applicable to commercial item procurements set forth in the Federal Acquisition Regulation at Part 12.
General Counsel PC Highlight:
Verizon Wireless protested the terms of an RFQ for commercial wireless telecommunications products and services, which was limited to vendors who have contracts under GSA FSS Schedule No. 70, special item number 132-53. Vendors could take exception to the solicitation requirements, but all deviations, exceptions, or conditional assumptions must be supported by sufficient amplification/rationale to justify further evaluation. Verizon’s quote took exception to several solicitation requirements; the agency informed it that its exceptions to three clauses were unacceptable. Verizon filed an initial protest, arguing that the agency unreasonably refused to permit it to take exception to those three terms. It then filed a supplemental protest when the agency informed it that its proposed approach to the pooling of unused minutes was not acceptable.
The GAO first disagreed with the agency’s assertion that the protest was untimely because it challenges the terms and conditions of the solicitation. It noted that nothing in the RFQ advised vendors that they could not take exception to particular solicitation terms, and that Verizon only learned of the agency’s interpretation of the terms of the RFQ after the initial closing date. The GAO then found that the agency had not demonstrated with adequate market research or otherwise that the protested clauses are consistent with customary commercial practice and were properly included in the solicitation.
The GAO agreed with Verizon that the price maintenance clause was inconsistent with customary commercial practice, despite an argument by the agency that Verizon has already agreed to a similar price maintenance clause in a BPA with the Air Force and a declaration by the wireless FSSI program manager provided as evidence of its market research. It also found that the agency had not demonstrated that the sales leakage clause was customary commercial practice, noting that the information provided by the GSA program manager did not provide specific examples of where this particular clause is in use as a customary commercial practice. The GSA did not respond to Verizon’s argument that requiring the vendor to direct sales from other contract vehicles to the BPA would subject those sales to a 0.75% industrial funding fee.
The GAO then sustained Verizon’s protest of the clause regarding deactivation of international roaming. Although the agency claimed that several companies are performing this requirement for other agencies, the GAO noted that it did not provide relevant details including whether deactivation of international roaming was successfully implemented or whether those firms offered this feature to the government in response to this RFQ. Finally, in light of the agency’s failure to respond to the merits of Verizon’s argument, the GAO sustained its protest that the clause pertaining to pooling or sharing of plan minutes was inconsistent with commercial practice.
In acquisitions for commercial items governed by FAR Part 12, the solicitations and resulting contracts should conform to customary commercial practice to the maximum extent practicable, unless a waiver is approved in accordance with agency procedures. If a vendor takes exception to any of the terms of the solicitation, it should provide sufficient rationale for taking the exception to allow the agency to reasonably evaluate the quotation in light of its deviations.