A Blank Rome team represented KPMG LLP in a successful bid protest before the Government Accountability Office (“GAO”), in which KPMG challenged the award decision of the United States Air Force in a procurement for visible accessible understandable linked trusted (“VAULT”) subject matter expert support.
The Government Accountability Office (“GAO”) has released its Annual Report to Congress summarizing bid protest activity for Fiscal Year 2022 (GAO-23-900462). The report mostly shows a continuation of recent trends: the overall number of GAO protests continues to drop, “effectiveness” remains high and stable (51 percent), and there are very few hearings (two for the year). Of note, preaward solicitation challenges were one of the most successful types of protest at GAO, for the first time ever since GAO began reporting the bases for successful protests in 2013. Below we break down what contractors can glean from this latest report.
Overall numbers down
The total number of protests filed at GAO continues to fall. The chart below shows the number of protest actions reported by GAO over the last several years.
The protester alleged that it should have been assigned a strength for its transition plan, which exceeded the Navy’s schedule for workload turnover and would be completed “well in advance of the 60-day requirement.”
The Agency argued that, as GAO has held, it is not required to document determinations of adequacy or explain why a proposal did not receive a strength for a particular item. The Agency represented that it reviewed the protester’s transition plan and did not consider the proposed ability to transition faster than the 60-day requirement to be a strength.
GAO found this insufficient and that the agency “provides no explanation—contemporaneous or otherwise—to support the reasonableness of its evaluation of Tech Marine’s transition plan.”
GAO stated it failed to see, and the Agency failed to explain, why exceeding the transition schedule would not benefit the Agency.
GAO recommended the Agency reevaluate Tech Marine’s proposal and make a new source selection determination.
The protester alleged the Air Force’s best-value tradeoff decision was unreasonable because it consisted of a “mechanical comparison of point scores that did not take into account the underlying bases for those scores” and because the source selection authority only considered the awardee’s proposal and did not compare the merits of the offerors’ proposals.
GAO agreed, noting that the award determination document discusses only the awardee’s proposal, with no reference to R&K’s proposal.
The Agency had argued that the selection authority had relied on the evaluation board’s recommendation and rationale, but GAO found that, even if that were the case, that recommendation was “based entirely on a mechanical evaluation of point scores” without a qualitative comparison of underlying strengths and weaknesses and was therefore unreasonable.
GAO recommended the agency perform and document a proper best-value tradeoff.
Selex ES argued that the solicitation, which sought proposals to replace a tactical air navigation system, was unduly restrictive of competition because it could be interpreted to require offerors meet the navigation system’s flight check qualification and readiness level requirements at the time of proposal submission rather than at the time of award or performance.
GAO found that the solicitation was patently ambiguous regarding whether the requirements are due at time of proposal submission or at time of award and that Selex ES was prejudiced by the ambiguity and GAO sustained the protest on that basis.
GAO declined to address whether it would be unduly restrictive of competition to expect offerors to meet the requirements at the time of proposal submission given the patent ambiguity.
GAO recommended the agency amend the solicitation to clarify when various requirements are due.
Insight Technology challenged a solicitation requirement that offerors possess capability maturity model integration (“CMMI”) level 3 certification at the time of proposal submission.
GAO denied the argument that the certification requirement was unduly restrictive of competition overall but agreed with the protester that requiring the certification at time of proposal submission, rather than at time of award, was unreasonable.
GAO found nothing in the record to support a need for the certification prior to the start of performance, much less before award.
The agency argued earlier certification was necessary to allow it to evaluate offerors, but GAO found no reason the objective determination of whether the offeror possessed the certification would need to be completed until immediately before award, at the earliest.
GAO recommended the agency amend the solicitation to allow certification at time of award or performance.
Understanding the basics of cost realism can help offerors submit more competitive proposals and withstand cost realism challenges to award. The Government Accountability Office (“GAO”) cites cost realism as one of its “most prevalent reasons for sustaining protests” in its Fiscal Year 2021 Bid Protest Report.
What is a cost realism analysis?
A cost realism analysis is a FAR 15.404-1(d)(1)-prescribed proposal analysis technique where the agency determines if the proposed costs are realistic for the work to be performed. In a cost reimbursement contract, an offeror’s proposed costs are not controlling because agencies are responsible for all actual and allowable costs. A cost realism analysis determines if an offeror is proposing unrealistically low costs to secure award. An agency cost realism analysis evaluates each offeror’s proposed cost elements (e.g., direct costs, overhead, G&A, material and subcontracting, etc.) for the unique technical approach proposed to determine the expected cost of performance. If the agency determines a proposed cost element is unrealistic, the agency can adjust the offeror’s evaluated cost, typically upward. The agency uses each offeror’s evaluated cost to select the best value awardee. However, the contract award reflects the awardee’s proposed total cost.
Office Depot challenged GSA’s attempt to use a single blanket purchase agreement to purchase both hardware/industrial supplies and office supplies, arguing that the evaluation scheme was unreasonable because it was predicated on consideration of incomplete historical sales information for the office supplies.
The protester argued that the market basket to be used for evaluation was based on historical sales of hardware and industrial items, to the exclusion of data on office supplies, which resulted in a market basket which didn’t reasonably represent the likely purchases of office supplies.
GAO agreed that the Agency had unreasonably relied on limited historical data regarding office supply sales to predict its future buying needs and that it had no (or virtually no) basis for forecasting estimated quantities of office supplies.
GAO recommended GSA conduct additional market research and revise the solicitation with a reasonable representative sample of estimated hardware/industrial items and office supply purchases.
GAO sustained the protester’s allegation that the Department of Health and Human Services had engaged in unequal discussions.
Once an agency chooses to conduct discussions, it must do so with all offerors in the competitive range under FAR 15.306(d)(1).
Here, the Agency did not dispute that it engaged in discussions with only the awardee, but claimed it had established “a de facto competitive range of one.”
GAO found that the record was devoid of any documentation or support for the Agency’s contention that a competitive range had been established before holding discussions with only one offeror, the awardee.
GAO stated, “[w]here, as here, there is no record or evidence that the agency established a competitive range, we will not infer the existence of a de facto competitive range, in order to validate an agency’s omission of an offeror during its conduct of discussions.”
The Department of Defense (“DoD”) recently issued its final rule amending the Defense Federal Acquisition Regulation Supplement (“DFARS”) to provide offerors enhanced post-award debriefing rights. DoD has provided these enhanced debriefing procedures since 2018 through a FAR Class Deviation, allowing offerors to submit additional questions after receiving the post-award debriefing. Four years later, DoD’s final rule clarifies when the clock for an automatic stay begins in an enhanced debriefing and provides greater transparency by allowing unsuccessful offerors in certain procurements access to the agency’s redacted source selection decision.
We highlight below several key elements of the final rule:
Access to Redacted Source Selection Decision Document
The final rule requires DoD to provide the source selection decision document in certain circumstances, redacted to remove confidential and proprietary information of other offerors. For awards over $100 million, DoD must automatically provide the source selection decision during the debriefing. Small businesses and nontraditional defense contractors on procurements resulting in awards over $10 million and up to $100 million are also entitled to a copy of the decision but must specifically request it—the agency will not automatically provide it to offerors.