United States: November 2016 Protest Roundup

Last Updated: December 20 2016
Article by Cynthia O. Akatugba and Susan Borschel

In November, the Government Accountability Office ("GAO") and the U.S. Court of Federal Claims ("COFC") published a good number of decisions. We address below decisions on the following issues of interest: (1) task orders versus contracts; (2) Government's duty to inquire or clarify; and (3) post-protest Agency action.

Kingdomware Technologies Does Not Hold that Task Orders Are Contracts For All Purposes

Sometimes, it's not you, it's the solicitation. That's perhaps the best summary of Great Southern Engineering v. United States. The protest involved a solicitation issued by NASA, and the protest centered on the question of whether past performance information from performance of multiple task orders under one contract is comparable to past performance information from performance on separate contracts. Protester contended that in the wake of the Supreme Court's decision in Kingdomware Technologies, Inc. v. United States, 136 S.Ct. 1969 (2016), task orders are contracts as a matter of law, so its 10 task orders were equivalent to 10 contracts. The solicitation provided that offerors would be evaluated on six criteria including past performance on similar projects and prior experience from contracts with agencies other than NASA. The agency would assess "10 of the Offerors' most relevant contracts which are currently being performed or have been completed within 10 years." Protester submitted past performance information for 10 task orders, all of which were performed under its single incumbent contract with NASA. Per the solicitation's evaluation scheme, the Agency awarded protester fewer points for performance on its ten task orders than it gave to the awardee's for performance on 10 separate contracts. In an initial protest to the Court of Federal Claims, NASA agreed to reevaluate the proposals but specifically told offerors that "a contract will be considered a single contract regardless of the number of task orders issued under the contract." In response, protester filed an agency-level protest. NASA denied the protest, restating its position and explaining that it considered past performance on different contracts more relevant than past performance on one contract.

Another Court of Federal Claims protest followed in which Judge Wheeler similarly rejected protester's argument. According to the court, the Supreme Court's decision in Kingdomware is limited to the GSA Federal Supply Schedule and the Veterans Benefits, Health Care, and Information Technology Act of 2006. In particular, "Kingdomware does not stand for the general proposition that all task orders are considered contracts as a matter of law." The contract at issue in this case was not an FSS order nor was NASA subject to the Act at issue in Kingdomware. The court went on to hold that NASA's determination that the task orders were of limited relevance was reasonable given the agency's explanation and the fact that half of the protester's past performance reports did indeed come from the same Contracting Officer's Representative and were identical in content. Moreover, NASA had discretion to decide what it considered relevant past performance information.

This case illustrates the importance of requesting explanations from the agency about the terms of a solicitation prior to the time for submitting proposals. While there is no guarantee that a pre-award protest would have changed the ultimate awardee in Great Southern, it's clear that protesters would have been in a better position to attack the assumptions in the solicitation's evaluation scheme or encourage the agency to include more specific requirements. Pre-award, the consideration is really whether the government is treating all offerors fairly. In that light, it would have been more difficult pre-contract award for the agency to rationalize why the protester should be penalized for having only one contract with one agency. Nothing in the decision indicates that protester's past performance on its total of 87 task orders on one contract suggested a risk of inadequate performance on this contract. Once the dispute reached the post-contract award stage, however, the agency's rationale could be supported by protester's actual past performance information and the dispute was governed by the language of the Solicitation.

Government's Duty to Inquire or Clarify is Limited

SSI highlights the important differences between procurements conducted under FAR Part 15 and FAR Part 16. Although agencies will often apply the procedures of FAR Part 15 procurements to task order competitions under FAR Part 16, this is not always the case; FAR Part 16 only requires agencies to provide awardees a fair opportunity to be considered for award; therefore, agencies can eschew some of the procedures of FAR Part 15. Thus, while the principles of fairness applicable to negotiated procurements also apply when the agency uses these procedures for a task order competition, an agency need not follow all the mechanical requirements of FAR Part 15.

In SSI, the protester contended, among other things, that in accordance with FAR 15.307(b), it should have been given the opportunity to submit a written Final Proposal Revision after entering discussions with the agency and submitting oral proposal revisions. Moreover, the protester argued, it was prejudiced by the fact that the agency accepted an additional submission from another offeror after discussions ended. The GAO pointed out that neither FAR 16.605 nor the solicitation nor the parties' course of dealings required the agency to ask for and accept written final proposal revisions after conducting discussions. In addition, FAR 16.505, unlike FAR Part 15, does not require a common cutoff date for receipt of proposals, thus the agency's acceptance of further submissions from one offeror was no basis for sustaining the protest. Finally, given that the agency provided the protester a full opportunity to revise its proposal orally and took into account the protester's revisions in reevaluating the protester's proposal, the GAO concluded that the protester was neither prejudiced nor treated unequally as a result of the agency's decision not to accept written proposal revisions or establish a common cutoff date for discussions.

Agency Post-Protest Corrective Action Can Be Protested

Professional Service Industries ("PSI") is a lesson in what an Agency should not do when taking corrective action following a protest. In PSI, PSI had successfully protested the Federal Highway Administration's ("FHWA") award of an Indefinite Delivery/Indefinite Quantity facility operation support contract with a contract ceiling of $18 million to the only other offeror, Genex Systems, LLC ("Genex"). PSI protested the award of the new contract to Genex on the grounds, among other things, that there was no way that the Genex proposal could be technically acceptable because the proposed Genex program manager (the only identified Key Personnel position) did not satisfy the minimum experience requirements set forth in the solicitation. PSI's proposed program manager had been in that position for 16 years at the FHWA facility. A critical component of the original solicitation dealt with the work requirements and qualifications for the awardee's program manager. Following the protest, FHWA advised GAO it would take corrective action. The FHWA contracting officer directed a re-evaluation of the two proposals and issued a report on how each offeror's program manager would be qualified. Based on the reports, FHWA again awarded the contract to Genex. PSI promptly protested again to GAO, which sustained the protest, finding that the record demonstrated that the proposed Genex program manager did not meet the minimum requirements stated in the solicitation. Not willing to let the award to Genex slip away so easily, FHWA advised GAO that it was going to amend the technical requirements for the key personnel, seek revised proposals from PSI and Genex, and conduct a new source selection process. PSI protested this corrective action as a pre-award protest to the Court of Federal Claims.

In its decision, the Court made it clear that an Agency is within its rights to revise and reissue a solicitation, especially if it is to implement a GAO recommendation. The GAO in the second protest had indeed recommended a revision and reissuance as one of two recommended actions (the other being re-evaluation in light of requirements in the solicitation, in which case PSI presumably would have been awarded the contract). What the Court took issue with was that while FHWA obviously "watered down" the qualifications for the program manager, FHWA did not amend the contract requirements, creating a nonsensical result of a less qualified person having to do the same work that the GAO had already found Genex's unqualified proposed program manager could not perform. The Court recognized that an Agency has a right to water down requirements but cited a string of cases where the modifications were made in good faith, not targeted in favor of a particular offeror or as a means to ensure fair and impartial competition. In PSI, the Court found instead that the modifications were arbitrary and capricious. The Court permanently enjoined FHWA from using the amended solicitation to award a contract.

The lesson for an Agency is that it can modify a solicitation, but in doing so it should not be targeting award to a specific offeror. The lesson for an offeror is to be vigilant in the review of solicitation modification and not be afraid to challenge them, especially when it appears that the modification results in a biased or targeted solicitation.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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Cynthia O. Akatugba
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