This month’s Bid Protest Roundup highlights three recent protests from the U.S. Government Accountability Office. The first protest concerns whether the protester is an interested party; the second involves the adequacy of an agency’s investigation into a potential Procurement Integrity Act violation; and the third addresses an impaired objectivity organizational conflict of interest.
Cask Technologies, B-422437.2, June 20, 2024
In this decision, the Government Accountability Office (GAO) dismissed the protest of Cask Technologies, LLC (“Cask”) after finding that Cask was not an interested party.
The solicitation, issued by the U.S. Department of the Navy for enterprise network cyber defense services, evaluated offerors under three factors: key personnel, organizational experience, and cost. Under the key personnel factor, offerors were required to submit resumes for each key personnel labor category.
After receipt of initial proposals, the evaluators identified two proposals that represented the most likely candidates for award. Cask’s proposal was not considered a most likely candidate for award, in part because its proposal received a lower key personnel rating than the awardee and a third offeror. After the agency’s initial review, Cask notified the contracting officer that one of its proposed key personnel had become unavailable. The agency elected not to enter into discussions with Cask and did not allow for a substitution of the key personnel because it had already determined that Cask’s proposal was not a candidate for award. The agency awarded RMC the task order. Cask protested challenging the agency’s key personnel evaluation.
In response, the agency filed a request for dismissal on the grounds that Cask was not next in line for award and Cask’s proposal was technically unacceptable because its key personnel became unavailable. Cask did not dispute that its proposal became technically unacceptable upon learning that one of its key personnel was unavailable; however, Cask argued that if its protest was sustained, it would be a likely candidate for award and the agency would be required to conduct discussions with Cask to consider its substitute key personnel. Cask further suggested that once its protest was sustained it would be in the competitive range, even though the agency never established a competitive range.
The GAO explained that when a solicitation requires resumes for key personnel, the resumes form a material requirement of the solicitation. And when the agency learns that a key personnel is no longer available, it can either reject the proposal as technically unacceptable for failing to meet a material requirement or it can open discussions to proposal revisions. Here, because the solicitation explicitly contemplated award on the basis of initial proposals and the agency made the award without establishing a competitive range, conducting discussions, or allowing proposal revisions, Cask’s contention that the agency would be required to open discussions if its protest was sustained was plainly incorrect.
The GAO concluded that Cask would not be next in line for award because its proposal would remain technically unacceptable, the agency would not be required to open discussions to permit revision of Cask’s proposal, and the agency had a technically acceptable proposal from another offeror that would be next in line if the award was set aside. As a result, Cask was not an interested party.
Takeaways: This protest serves as an important reminder when considering whether to protest an award. As a protester, you must be able to establish that if the agency sets aside the award, your firm has a reasonable likelihood of award under a corrected evaluation and source selection. If the protester’s proposal is technically unacceptable and properly ineligible for award, and there is no requirement for further discussions or proposal revisions, the protester is not an interested party with standing to protest alleged mistakes in the evaluation of the awardee’s proposal.
Loyal Source Government Services, LLC, B-420959.14, June 7, 2024
This protest involves a solicitation issued in 2022 by the Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP) for medical screening services.
After several rounds of protests and various corrective actions, the agency issued an amendment to the Request For Quotations (RFQ). Loyal Source filed a pre-award protest challenging the terms of the amended RFQ and alleged the agency failed to mitigate procurement integrity violations that competitively prejudiced the protester. The agency took partial corrective action to further amend the RFQ and clarify its requirements, thus rendering that protest ground academic.
Regarding the Procurement Integrity Act (PIA) violation protest ground, however, Loyal Source identified an article that included “non-public information about the evaluation under this Solicitation and disparaging and inaccurate information about Loyal Source’s past performance under the incumbent contract.” As a result, Loyal Source asserted that the agency must cancel the procurement entirely or mitigate the violation.
Loyal Source first raised the potential PIA violations on November 28, 2023, in a letter to the contracting officer citing a Washington Post article, dated November 19, 2023, that confirmed CBP officials violated the PIA by identifying Loyal Source as a finalist for the procurement and disclosing that although the CBP advisory board did not initially recommend Loyal Source for the next round of consideration, that decision was later overruled.
In response to the November 28 communication from Loyal Source, the Head of Contracting Activity (HCA) prepared a memorandum discussing the potential PIA violation, the investigation, and the steps taken to mitigate the violation. The HCA found that the November 19 article involved the unauthorized disclosure of source selection information in violation of the PIA. Accordingly, the HCA referred the matter to CBP’s Office of Professional Responsibility (OPR) for further investigation. The HCA also transferred the procurement from CBP to DHS headquarters, Office of the Chief Procurement Officer with the understanding that the DHS Office of Procurement Operations (OPO) would review and validate the current CBP procurement strategy. OPO appointed a new contracting officer who made changes to the evaluation team to further mitigate the impact of the PIA violation. As a result, no CBP personnel would serve as evaluators or as the designated selection official. The new contracting officer also indicated that any additional PIA violations or acts of misconduct may result in significant solicitation revisions or the cancellation of the solicitation entirely.
Loyal Source challenged the agency’s PIA investigation and the PIA mitigation measures. The GAO, however, determined that the agency’s actions met the requirements set forth in the Federal Acquisition Regulation (FAR).
Loyal Source argued that the agency’s PIA investigation was inadequate because its analysis only focused on the November 19 article and failed to mention the procurement integrity issues in two additional articles dated August 25, 2023, and November 30, 2023, and two congressional letters from the Government Accountability Project (GAP), dated November 30, 2023, and February 16, 2024. The GAO determined that Loyal Source did not provide the agency with sufficient notice of these potential PIA violations. With respect to the additional articles, Loyal Source only referenced the August 25 article once in a footnote of a letter sent to the agency noting that the article “may be improper” and did not establish when or how it raised the November 30 article to the contracting officer. As for the GAP letters, both were issued after the HCA’s memorandum and thus could not have been addressed.
The GAO further determined the agency took the appropriate action after learning of the public disclosure of source selection information. In accordance with FAR 3.104-7(b)[1], the agency properly responded by launching an investigation, referring information to OPR, concluding a violation occurred, and implementing mitigation measures to allow the procurement to continue.
Loyal Source next claimed the agency failed to meet its PIA mitigation obligations. First, Loyal Source argued that the agency’s investigation was insufficient because it had not identified and removed the CBP employees who made the improper disclosures. Second, because the agency’s investigation was insufficient, the only recourse available was to cancel the solicitation. The GAO disagreed. Not only did CBP transfer the procurement to DHS headquarters and replace the original contracting officer, technical evaluators, and source selection officials with individuals from outside CBP, but CBP launched an investigation to identify the employees involved. The GAO found these mitigation efforts sufficient. The GAO also determined that the cancellation of the procurement was not required because Loyal Source could not establish that it was competitively prejudiced as a result of the improper disclosure. Moreover, Loyal Source’s claim that certain disclosures related to its performance under its incumbent contract were negative and misleading is insufficient to establish competitive prejudice because that information is not the type prohibited from release under the PIA.[2] Accordingly, GAO denied the protest.
Takeaways: First, if an offeror suspects a PIA violation has occurred, the offeror should notify the contracting officer immediately. The notice should be clear and contain any supporting documentation. It should not be assumed that the contracting officer will make any inferences or dig for additional information. Second, this protest is a reminder of the agency’s obligations when confronted with a potential PIA violation. An agency has a responsibility to conduct a thorough and complete investigation and take appropriate and reasonable mitigation measures consistent with the requirements of the FAR.
A Square Group, LLC, B421792.2; B-421792.3, June 13, 2024
The GAO sustained the protest of A Square Group on the ground that the Center for Medicare and Medicaid Services (CMS) failed to reasonably consider the awardee’s proposed organizational conflict of interest (OCI) mitigation plan.
The procurement for the subject protest involved a Request for Quotation (RFQ) for operational analytics. After receiving seven quotations, the agency conducted a best-suited vendor determination and eliminated four vendors from consideration. The agency held discussions with the three remaining vendors including Cogent People, Inc. (“Cogent”) and A Square Group (ASG). In reviewing Cogent’s quotation, the technical evaluation panel (TEP) identified a potential OCI concerning one of Cogent’s proposed subcontractors. Cogent’s proposed subcontractor performed data validation under its Federally Facilitated Exchange (FFE) contract. Given the subcontractor’s FFE work, the TEP asked Cogent how it planned to ensure there would be no conflict of interest with the subcontractor supporting the task order. Cogent proposed to implement a firewall to restrict certain individuals from reviewing or validating payment data generated by personnel under the FFE contract and provide strict oversight of the data validation process. The agency determined that Cogent’s response adequately addressed its concerns.
Following a round of corrective action, the agency issued questions to the three vendors and evaluated their revised quotations. Cogent and ASG received nearly identical ratings; however, ASG received a High Confidence rating for the technical factor while Cogent received a Some Confidence rating. Additionally, ASG’s proposed price was almost $7 million more than Cogent’s price. Despite ASG’s better ratings under the non-price factors, which, when combined, were significantly more important than price, the contracting officer determined the quotations were of equal merit and because ASG’s price was higher Cogent was the best-suited vendor.
Following subsequent exchanges with Cogent, the agency determined it had overlooked some concerns under the quality assurance plan/quality surveillance plan factor in Cogent’s second revised quotation. As a result, the TEP assessed a weakness and changed Cogent’s rating from High Confidence to Some Confidence. The agency requested another revised quotation and recommended award of the task order to Cogent. ASG protested.
ASG challenged multiple aspects of the procurement, including the adequacy of Cogent’s OCI mitigation strategy and whether the agency properly considered the impact of the OCI on Cogent’s technical approach.
In response to ASG’s OCI challenge, the contracting officer prepared a memorandum discussing the nature of the OCI and Cogent’s proposed mitigation plan. The contracting officer indicated she reviewed Cogent’s quotation and confirmed the individual proposed for validating payment was a Cogent employee. The contracting officer, however, did not address the fact that the individual proposed for enrollment validation was an employee of the proposed subcontractor.
In this protest, it was clear an impaired objectivity OCI[3] was present, so the question became whether the proposed mitigation plan was sufficient. ASG claimed the mitigation plan was inadequate because Cogent only proposed to firewall the subcontractor from validating payments data, but not from all data prepared by the subcontractor. The agency asserted that the terms “payments data” and “enrollment data” were used interchangeably, meaning the subcontractor would be firewalled from all subcontractor generated data. But GAO disagreed because the Statement of Work did not treat the terms as equivalent and Cogent’s mitigation approach specifically stated that its subcontractor would be firewalled from reviewing or validating payments data. In addition, Cogent’s proposal treated the data differently. For example, Cogent proposed two business analyst leads – one responsible for validating payment data and another responsible for enrollment data. The GAO found that Cogent’s mitigation approach failed to address the complete scope of work giving rise to the OCI, and thus the Cogent did not adequately mitigate the OCI. Accordingly, the GAO sustained this protest ground.
The GAO also considered whether the agency accounted for the impact of Cogent’s mitigation measures on its technical approach. As the GAO has explained, agencies must consider whether the mitigation measures contradict the firm’s technical approach or undermine the agency’s original evaluation of the firm’s approach. Although Cogent proposed to firewall the subcontractor personnel from validating payments data, none of Cogent’s revised quotations reflected the firewall in connection with Cogent’s staffing approach. The contemporaneous record was similarly devoid of any consideration of the impact of the firewall on Cogent’s technical approach. As a result, the GAO sustained this protest ground as well.
Takeaways: Firewalls alone are difficult solutions to impaired objectivity OCIs because they do not eliminate the relevant financial incentive. Here, the firewalled subcontractor approach may have been effective had it covered the complete scope of work at issue. That said, when evaluating and mitigating a potential OCI, it is incumbent upon the offeror to consider all areas of the procurement that the OCI could touch. Additionally, if a contractor intends to implement OCI mitigation efforts, it must ensure the entire proposal, including the technical approach, accounts for any such efforts.
[1] FAR 3.104-7(b) requires the HCA take appropriate action such as “(1) advise the contracting officer to continue with the procurement; (2) begin an investigation; (3) refer the information disclosed to appropriate criminal investigative agencies; (4) conclude that a violation occurred; or (5) recommend that the agency head determine that the contractor, or someone acting for the contractor, has engaged in conduct constituting an offense punishable under 41 U.S.C. 2105, for the purpose of voiding or rescinding the contract.”
[2] 41 U.S.C. § 2102(a)(1) restricts disclosure of “contractor bid or proposal information or source selection information before the award of a Federal Agency procurement contract to which the information relates.”
[3] An impaired objectivity OCI arises where a contractor’s work under one government contract involves evaluating itself or an affiliate such that the contractor’s ability to render impartial advice could be compromised by the contractor’s relationship to the party being evaluated.
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