Court of Federal Claims Declines to Adopt GAO’s Rule for Post-Proposal Key Personnel Changes

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Elizabeth N. Jochum and Robyn N. Burrows

For years, the Government Accountability Office (“GAO”) has been moving towards an increasingly draconian position on offerors’ obligations to notify agencies when the availability of proposed personnel changes after proposal submission. A recent decision by the Court of Federal Claims (“COFC”) in Golden IT, LLC v. United States expressly addressing and departing from the GAO precedent may give hope to offerors struggling with GAO’s requirement.

Golden IT, LLC (“Golden”) protested the Department of Commerce’s award of a single blanket purchase agreement to Spatial Front, Inc. (“SFI”). Among its many protest grounds, Golden claimed that SFI’s quote contained a material misrepresentation regarding key personnel because it proposed an employee who had allegedly left SFI after it submitted its bid and before receiving award. Golden claimed that SFI was obligated to notify the agency of the individual’s unavailability after submitting its proposal.

Under GAO case law, “offerors or vendors are obligated to advise agencies of material changes in proposed staffing, even after submission of proposals.” AttainX, Inc., B-419306, 2021 CPD ¶ 21, 2021 WL 228876, at *4 n.4 (Jan. 12, 2021). The court acknowledged this rule but refused to adopt it, noting that it was “untethered from a statute, regulation, or Federal Circuit decision.” In a statement that will ring true to the many contractors who have struggled with GAO’s expectation, the Court noted that, “[a] proposal is submitted at a point in time and is evaluated over what is often a lengthy period.” While an offeror must have a reasonable basis for all facts and representations made in its proposal—and may not knowingly or recklessly include false statements of material fact—the court should assess the offeror’s knowledge of facts and representations “with respect to the point in time at which the offeror submitted its proposal.” Accordingly, the court declined to impose a bright-line rule requiring bidders to update the government about post-proposal key personnel changes.

The court’s holding came with one important caveat: the solicitation language may nevertheless create such a duty to disclose. For example, the solicitation might require offerors to update the agency about the departure of employees proposed as key personnel or require letters of commitment to assure the continued availability of key personnel. In these circumstances, offerors may be obligated to notify the agency of post-proposal changes. Here, however, the court found that the solicitation imposed no such obligation because it required only key personnel descriptions and resumes.

The court noted that Golden would have been entitled to judgment on the merits if SFI proposed a member of its key personnel while knowing that individual planned to depart the company. However, because Golden failed to provide any evidence that SFI had knowledge before submitting its proposal that the employee intended to leave, the court rejected Golden’s claim, adding that Golden should have (but failed) to obtain discovery on that point from SFI.

Takeaways from Golden IT:

      • GAO’s disclosure rule will continue to govern most protests. Although the court’s approach in Golden IT may be welcome news for some, its effect is limited. The opinion is not binding on other judges within the court, who are free to apply GAO’s more restrictive rule. And, because GAO hears the majority of bid protests, GAO’s disclosure rule will continue to govern most protests alleging key personnel “bait and switch.” In other words, relying on the Golden decision in electing not to update an agency on changes in key personnel availability will not necessarily protect an awardee in a protest before other COFC judges or at GAO.
      • Review solicitation language closely. Despite declining to adopt GAO’s rule, the court made clear that the solicitation may nevertheless impose a disclosure obligation. The court indicated that language requiring commitment letters from key personnel, a certification of their future availability, or some other requirement regarding updates on the departure of those proposed as key personnel would likely impose on offerors a post-proposal duty to notify the agency of any changes.
      • The court’s holding does not indicate how agencies should respond to an offeror’s post-proposal notification of key personnel changes. If an offeror notifies the agency after bid submission of key personnel changes, how must the agency respond? Under GAO’s approach (followed by some Court of Federal Claims decisions), the agency must either evaluate the original proposal as submitted (rendering it technically unacceptable), or open discussions to allow for modified proposals. It is unclear whether the court in Golden IT would limit the agency to these same options—or whether the agency would have discretion to proceed with an award based on substituted personnel, and without having to open discussions.

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