The first decision, Kearney & Co. v. U.S., explores the ability of contractors to use labor mapping to bridge differences between an agency's stated needs and a contractor's offerings under its U.S. General Services Administration federal supply schedule contracts.[1]

The second details GAO jurisdiction over a combined competition for cash prizes and a small business innovative research, or SBIR, contract.

The third reaffirms the importance of agencies understanding what a contractor is offering.

Kearney

The COFC granted a permanent injunction to Kearney and Company PC in a National Geospatial-Intelligence Agency procurement for audit services through the GSA federal supply schedule.

This COFC post-award protest was the immediate result of corrective action taken by the agency in response to a GAO protest filed by its competitor.

During a predictive outcome call, the GAO stated that it was likely to sustain the competitor, Deloitte's, protest based on the argument that the awardee's labor category description did not match up exactly with the key personnel position.

As a result, the NGA terminated Kearney's contract for convenience and announced a plan to reassess all bids, resulting in the current protest.[2]

Deloitte's initial GAO protest challenged Kearney's labor category mapping for one key personnel position: senior statistician.

This position required someone with an "[a]dvanced degree in statistics, biostatistics, mathematics, a quantitative social science, or a similar field," who also had "[e]xperience designing statistical samples and using statistical methods to calculate population estimates and sampling errors from a probability sample." The solicitation also said that the key personnel could be mapped to labor categories from each offeror's federal supply schedule contract.

In its proposal, Deloitte mapped the senior statistician position to its risk senior project support III labor category, which requires a bachelor's degree and at least four years of experience, and included a functional responsibility related to serving as an expert.

Alternatively, Kearney mapped the senior statistician position to its senior management analyst labor category, requiring a bachelor's degree and two years of experience, but no mention of statistics or any ability to serve as a subject-matter expert.

The NGA awarded the contract to Kearney, presumably finding that the senior management analyst labor category met the requirements of the senior statistician role, but later took corrective action due to Deloitte's protest.

When examining the GAO's basis for its outcome prediction and the corrective action taken, the COFC had to analyze the NGA's initial decision to accept Kearney's use of the senior management analyst labor category.

First, the COFC rejected the general argument, as it was understood by the government and Kearney in the predictive call[3] that Kearney's labor category did not satisfy the senior statistician position because the solicitation required an exact match between the position, noting that the solicitation had not specified any need for an exact match.

The court instead held that the default rule is that offerors may map their similar, but not identical, labor categories onto the key personnel needs of the solicitation. In the court's view, the NGA's corrective action was unreasonable because it was based on an incorrect contract interpretation by the GAO that an exact match was required.

Second, the COFC rejected the argument that Kearney's proposal could not satisfy the senior statistician position because the description for Kearney's senior management analyst labor category did not mention enough relevant expertise.

The court found Deloitte's argument too narrowly tied to titles and descriptions rather than functional responsibilities. Instead, the COFC applied the standard that the labor category must reasonably encompass the requirements of a key personnel position.

Takeaways

When drafting proposals that require labor mapping, contractors should carefully review the solicitation's requirements to ensure whether an exact match to the requested labor description requirements are needed.

Otherwise, contractors can use the "reasonably encompass" standard for mapping purposes; however, the same contractors should also expect unsuccessful bidders to scrutinize their determination of what is and is not reasonable. Offerors should try to match the requirements as closely as possible to their own labor categories to ensure that this reasonableness standard is met.

ARiA

The GAO determined that it had jurisdiction over ARiA's protest regarding its elimination from a competition that awarded both cash prizes and the right to compete for an SBIR direct to phase II contract award.[4]

In this protest, ARiA's protest arose under a competition announcement posted by the Army xTech program, which "hosts Army prize competitions, connecting businesses with Army and [Department of Defense] experts to build solutions for current problems" and "allows businesses to compete for cash prizes and potential follow-on contracts to accelerate and transition their transformative technology solutions into the Army."

ARiA submitted a concept white paper in the first round of a three-round Army competition to develop "scalable techniques for adversarial [artificial intelligence]."

The eight companies that won in Round 1 would each receive a cash prize and the opportunity to advance to Round 2. The four companies that won in Round 2 would receive another cash prize and the opportunity to advance to Round 3, which was a competition for the SBIR contract. A company had to advance through Rounds 1 and 2 to compete for the SBIR contract in Round 3.

GAO Jurisdiction Over Competition Leading to SBIR Contract

ARiA lost in Round 1 and filed a protest on the same day at the GAO. The Army argued that the GAO had no jurisdiction under the Competition in Contracting Act to hear the protest.

The GAO previously held, in the matter of David Frankel in 2013, that its jurisdiction does not extend to competitions for cash prizes because its protest jurisdiction is limited to matters related to a contract related to the procurement of property or services.

The Army relied on a statutory authorization to hold competitions for cash prizes, independent of the SBIR authority, as its basis for Rounds 1 and 2 of the competition. Because no contract would be awarded in Round 1, the Army argued that Round 1 fell outside the GAO's jurisdiction as a cash- based prize competition.

Given the Small Business Administration's involvement in the competition, the GAO invited the SBA to participate in the protest proceedings.

Although the GAO did not comment on the legality of the Army's competition structure under SBIR regulations, it did rely on the SBA's characterization of the competition to assist in its analysis.

As noted above, the Army argued that each round of the competition was distinctly separate, with Round 3 only being available to those with an invitation. Instead, the SBA argued that the Round 1 and 2 awards were down-selects within a single competition for a SBIR direct to phase II contract, in addition to cash prizes.

The GAO agreed with the SBA's interpretation for purposes of determining jurisdiction, but the GAO did not consider whether the SBA's interpretation of the competition would satisfy the law.

Instead, the GAO found that Round 1 would lead not only to the award of a cash prize, but also to the right to further compete, which could eventually lead to a procurement contract. Therefore, the GAO had jurisdiction. After determining that it had jurisdiction, the GAO rejected ARiA's protest on other grounds.

Takeaways

This decision demonstrates the importance of looking to the ultimate outcome of a competition rather than focusing on the individual down-select rounds. Although bid protest jurisdiction could become murky around the award of cash prizes, the GAO can focus on the ultimate goal — here, an SBIR contract — to establish jurisdiction.

ITility

In this decision, the GAO sustained a protest by ITility LLC and affirmed the proposition that an evaluation is reasonable only if the agency assigns strengths to an offeror for material and actions actually contemplated and clearly outlined in submitted proposals.[5]

ITility was a disappointed bidder for a task order to provide financial and program management support services to the U.S. Department of Homeland Security.

The agency selected Integrated Finance and Accounting Solutions LLC for award, based largely on five strengths in IFAS' proposal.

Indeed, IFAS and ITility received identical adjectival ratings, and ITility's proposal cost $4 million less, but the agency determined that IFAS offered a better value to the government based on these five strengths.

Overall, ITility argued that the agency's evaluation of IFAS' proposal must have been unreasonable as it assessed a positive evaluation based on material that the proposal did not actually contain and failed to recognize two discriminators between the proposals. The GAO agreed.

For example, one assessed strength for IFAS was for a proposal to use an audit command language tool to establish an enterprise risk management program.

The agency's technical evaluation team interpreted this as an offer to establish an enterprise risk management program. The Source Selection Authority highlighted this promise to develop an enterprise risk management program as one of the differentiating factors to justify the award to IFAS despite its more expensive proposal.

As outlined in ITility's supplemental protest, the evaluation documents demonstrated that the agency misunderstood the use of the acronym "ERM" in IFAS' proposal. Rather than enterprise risk management, as the agency wrote in its evaluation, IFAS intended the acronym to stand for enterprise resource management.

In addition, ITility claimed that IFAS had not actually committed to using the audit command language tool to develop the ERM program — the agency doubly misunderstood the proposal. Further, the agency's filings did not substantively address either claim raised in the supplemental proposal, the GAO found, so the agency "effectively conceded that the arguments have merit."

Next, the GAO analyzed the claim for unrecognized discriminators. For example, the GAO faulted the agency's evaluations for failing to acknowledge distinctions in the offeror's proposed transition plans.

ITility, the incumbent contractor, promised to have 100% of staffing needs met on the first day of performance. IFAS, in contrast, would not be fully staffed until day 60 of contract performance.

The agency determined that ITility merely met the requirements in the qualitative evaluation of the transition plan despite the advantage offered. The agency argued that to acknowledge the advantage would improperly favor ITility as the incumbent.

The GAO disagreed, noting that ITility did not seek a benefit solely for being the incumbent; instead, because the solicitation stated that the agency would perform a qualitative evaluation of the transition plan, the agency had to consider the differentiating factor that ITility could have its staff ready earlier. This did not equal any improper favoritism toward an incumbent contractor.

Because the underlying evaluation for each proposal was flawed, the best-value trade-off analysis that led to IFAS' selection was also flawed, the GAO determined. The GAO sustained the protest and recommended that the agency reevaluate proposals and perform a new best‑value trade-off analysis.

Takeaways

Offerors should use clear language in their proposals that easily outlines for the agency what services are being offered.

As seen in this case, offerors must ensure that their bids are clear enough for the government to write a comprehensive and accurate evaluation. Misunderstandings in proposals can become vulnerabilities if an award is protested.

Further, while an agency cannot improperly favor a contractor merely for its status as an incumbent, an incumbent contractor will naturally be able to offer advantages in parts of its proposal that an agency cannot ignore if the solicitation states that they will be evaluated.

Ethan Sterenfeld, a Law Clerk in our Washington, D.C., office, contributed to the writing of this article. .

[1] Kearney & Co. v. United States, Nos. 24-162, 24-201 (Fed. Cl. May 16, 2024).

[2] Deloitte was not satisfied with the corrective action either and filed a second GAO protest. The GAO dismissed Deloitte's second GAO protest after Kearney filed its COFC protest.

[3] As the GAO outcome prediction call could not be transcribed or recorded, the parties presented differing versions of the call. The agency and Kearney understood that the GAO would likely sustain

Deloitte's protest on one narrow issue — that, in the GAO's opinion, the solicitation required an exact match with the Senior Statistician position and any of the offerors' FSS LCAT descriptions. On the other hand, Deloitte represented that the GAO held that "Kearney's proposed LCAT mapping was unreasonable because the services Kearney quoted exceeded the scope of ... its FSS contract."

[4] ARiA, B-422365 et al., May 28, 2024.

[5] ITility, LLC, B-421871.3, B-421871.4, May 3, 2024.

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