Decided: December 27, 2021
Agency: Department of Homeland Security
Disposition: Protest Denied
Keywords: Ambiguity in Solicitation, Services Contract Act; Scope of GAO Review
This protest is notable because it showcases that GAO holds a limited scope of authority. GAO ultimately declined to consider the issue of potential conflicts with the Services Contract Act (SCA), finding that the Department of Labor (DOL) is statutorily charged with interpreting and administering the SCA, and the contracting agency must follow the DOL’s views on the applicability of the SCA unless they are clearly contrary to law. Additionally, GAO provides guidance on protests involving ambiguity in solicitations and given agencies considerable deference on what is objectively confusing information within a solicitation.
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Summary of Facts
Shamrock Marine Towing & Salvage protests the terms of request for quotations (RFQ) No. 70Z08421QBB109300, issued by the Department of Homeland Security, U.S. Coast Guard, for services to support its aviation training program. On April 27, 2021, the agency issued the solicitation as a combined synopsis/solicitation pursuant to FAR part 12 (acquisition of commercial items) and subpart 13.5 (simplified procedures for certain commercial items).
The solicitation provides for award on a lowest-price, technically acceptable basis, considering technical capability and understanding, past performance, and price. The solicitation requires offerors to provide “a unit price for all items” noting: “The unit price for this requirement shall only include the cost for a standard training block. The standard training block will be ONE (1) hour of contract vessel on scene time, not transit time to/from the training site from the contractor’s mooring/docking location.”
Since the solicitation contemplates the award of a services contract, it is subject to the labor standards set forth in the Services Contract Act (SCA) and incorporates the Department of Labor’s (DOL) SCA wage determination 2015-0213, which “sets forth the minimum monetary wages and fringe benefits that must be paid to covered service employees employed on a SCA-covered contract involving tugboats and other coastal vessels.” The agency sought an advisory opinion from the DOL on the applicability of the SCA to this procurement. The DOL “concluded that it is consistent with [the wage determination] and with the SCA’s requirements to convert the daily rates listed on [the wage determination] to hourly rates,” explaining: “ Employees must be paid for all hours worked. The hours worked which are subject to the compensation provisions of the SCA are those in which the employee is engaged in performing work on contracts subject to the SCA, including any time the employee is ‘engaged to wait.’”
The agency received proposals from Management Marine Service Inc. and Shamrock. That same day, prior to the close of business, Shamrock filed this protest.
Basis of Protest
Shamrock argues that the solicitation is unclear, prevents offerors from competing on an equal basis, and conflicts with the SCA. Specifically, Shamrock challenges the terms of the solicitation with respect to the pricing structure and applicability of the SCA.
GAO stated that a contracting agency must provide offerors with sufficient detail in a solicitation to enable them to compete intelligently and on a relatively equal basis. However, “there is no legal requirement that a competition be based on specifications drafted in such detail as to eliminate completely any risk for the contractor or that the procuring agency remove all uncertainty from the mind of every prospective bidder.” GAO explained that “risk is inherent in most types of contracts, especially fixed-price contracts, and firms are expected to allow for that risk, and use their professional expertise and business judgment, in preparing their proposals.”
GAO found that, here, the solicitation provided “sufficiently detailed information to allow offerors to compete intelligently and on a relatively equal basis.” The solicitation provided instructions and examples, specifying that unit prices are to be based on “contract vessel on scene time, not transit time to/from the training site.” The agency also responded to Shamrock’s questions, reiterating that “you would pay the people for the time they worked on scene.”
Shamrock further argues that the phrase “engaged to wait,” in the DOL letter, means that the solicitation should be interpreted to allow for pricing other than “contract vessel on scene time.” Shamrock claims that it has “dedicated a single vessel to perform work for this procurement” so it “must pay SCA wages to its personnel during travel times.” However, GAO also pointed out that “there is no requirement that an agency equalize a competitive advantage or disadvantage an offeror may experience because of its own particular business circumstances, where, as here, that disadvantage does not result from a preference or unfair action by the government.”
While Shamrock argues that the solicitation conflicts with the DOL letter regarding the SCA and the applicable wage determination, GAO concluded that “Shamrock has not established that the terms of the solicitation are contrary to applicable procurement law or regulation.” Shamrock argues that GAO should consider “whether the waiting time is spent predominantly for the employer’s benefit or for the employee’s [benefit].” However, GAO stated that the DOL, not GAO, is statutorily charged with interpreting and administering the SCA, and the contracting agency must follow the DOL’s views on the applicability of the SCA unless they are clearly contrary to law. Thus, GAO declined to further consider this issue. GAO denied the protest.
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