Government Contracts Monitor

Changing Key Personnel After Proposal Submission? Not So Fast....

February 6, 2019

As the GAO recently determined, and the Court of Federal Claims affirmed, an offeror who finds itself in a position of having to modify key personnel specified in its proposal, after the deadline for proposal submission, may end up with an unacceptable proposal. If an agency notified offerors that it might award without discussions, an offeror will not be able to "re-open" the proposal process to modify key personnel identified in its proposal, absent such discussions -- even where the unavailability of the specified key personnel is wholly outside the offeror's control, such as in the event of serious illness. This was the case in Chenega Health Care Services, LLC (January 11, 2019) [here].

Chenega involved a contract for support services at the Department of Energy's (DOE’s) National Training Center. The solicitation had a closing date for receipt of proposals of August 16, 2017. As set forth in the Request for Proposals (RFP), any modification of a proposal received after August 16, 2017, would be deemed “late” and would not be considered by DOE. DOE further informed offerors that it intended to award the contract without discussions.

Offerors were required to submit, as part of their proposals, the resume and letter of commitment for the individual proposed as the General Manager for the Training Center. The agency was clear, as set forth in the RFP, that "FAILURE TO SUBMIT A LETTER OF COMMITMENT MAY RESULT IN THE OFFEROR’S PROPOSAL BEING ELIMINATED FROM FURTHER CONSIDERATION FOR AWARD FOR FAILURE TO SUBMIT A RESPONSIVE, COMPLETE AND ACCEPTABLE PROPOSAL".

Chenega proposed Mark Russell as its General Manager. Russell was serving in that capacity for the incumbent contractor. As required, Chenega included Russell’s resume and letter of commitment in its proposal. Subsequently, after the due date for submission of proposals and while the agency was reviewing the proposals it had received, Russell developed a medical condition. Chenega notified DOE, and stated that it would replace Russell with Mark Miller. Specifically, Chenega informed DOE that it “intended to substitute” Miller for Russell in its proposal. DOE responded by asking Chenega whether Russell’s commitment letter was still valid for Chenega’s proposal, at which time Chenega replied that Russell’s letter of commitment was no longer valid. The agency found that the absence of a valid letter of commitment for Russell -- the individual proposed by Chenega for the key personnel position of General Manager -- rendered Chenega’s technical proposal unsatisfactory.

Chenega protested to the General Accountability Office (GAO). GAO found that DOE was not obliged to enter into discussions with Chenega regarding the proposed substitution of Miller for Russell and, accordingly, denied Chenega's protest. Chenega then filed suit in the Court of Federal Claims (COFC).

Citing to GAO's decision, the Court repeated that when an offeror is required to change any key personnel included in its proposal, after proposal submission (and after the deadline for proposals submission), the agency has a choice: it can evaluate the original proposal, as submitted, or it can open discussions to allow for modified proposals. Thus, the Court found that DOE did not abuse its discretion when it refused to hold discussions and thereby prevented Chenega from modifying its proposal to substitute a new General Manager. Chenega conceded that an agency “is permitted to potentially award the contract without discussions,” on the basis of the proposals that were timely submitted by the offerors, but argued that an agency’s discretion to not open discussions to address a proposed key personnel substitution is limited, especially in a best value procurement. The Court disagreed.

The COFC specifically found that it is not an abuse of discretion for an agency to award without discussions where the intent to award without discussions is noticed in the solicitation, even where a lower-cost proposal might be rendered superior to the awardee’s proposal if the offeror were given the opportunity to substitute key personnel. Why? Because the offerors were on notice that the letter of commitment could be determinative, and that the agency planned to award without discussions. Thus, “any post-submission key personnel change ran the risk of rendering the offeror’s proposal unacceptable, with no opportunity to cure the defect during discussions.” This risk applied to all offerors, equally, and thus it was not an abuse of discretion for the contracting officer to treat all offerors the same in this regard.

As argued by Chenega, it seems unfair to punish an offeror for an event wholly outside its control such as the one here, particularly when Chenega's proposal, if it had been permitted to change the General Manager, would have been the superior, lower cost, proposal (that is, the best value). That said, an agency must treat all offerors the same and is not required to re-open a procurement -- by holding discussions or otherwise. In the end, it was entirely up to the agency which option to choose. It chose to stick with the plan: no discussions. As a result, Chenega simply was out of luck.

Attorneys

Lindsay Simmons