Government Contracts Monitor

If the Third Time’s Not the Charm, It’s Reasonable to Start Over from Scratch

November 1, 2013

A recent decision of the Government Accountability Office (GAO) provides a reminder of how protesters can win the battle but still lose the war – through no fault of their own. The case, Strategic Technology Institute, Inc., B-408005.2 (Comp. Gen. Oct. 21, 2013), involves the United States Coast Guard’s cancellation of a solicitation for analytical support services under a very unusual set of facts.

The solicitation, which was issued under the Federal Supply Schedule (FSS) procedures in Federal Acquisition Regulation (FAR) Subpart 8.4, provided for a task order to be issued based on a best value evaluation of price, technical capability, and past performance. The Request for Proposal (RFP) required specific numbers of asset material managers and field terminal operators to support certain product lines and identified those positions as key positions, listing specific duties and location of performance for each.

The Coast Guard received proposals from six offeors, including the protestor, Strategic Technology Institute Inc. (STi). They were evaluated by the agency’s technical evaluation team (TET), which assigned adjectival ratings under each factor and subfactor supported by narratives identifying strengths and weaknesses.

STi’s proposal, which was third lowest priced, received a technical capability rating of “Satisfactory” and a past performance rating of “Confidence”. The TET also identified a number of strengths and weaknesses in STi’s proposal. Ultimately, the TET recommended award to the incumbent contractor, whose proposal was the highest rated and highest priced. The contracting officer (CO), who served as source selection authority for the procurement, disagreed with the TET’s evaluation of STi’s proposal, increasing the technical rating from “Satisfactory” to “Good”. However, the CO also rejected the TET’s award recommendation, instead awarding the task order to another offeror with a higher rating and higher price than STi.

When STi protested the initial award decision to GAO, the agency announced its intent to take corrective action in the form of a reevaluation new source selection decision and GAO dismissed the protest as academic.

When the proposals were reevaluated by the original TET, the results were the same, with the TET again recommending award to the incumbent – and again rating STi’s technical proposal as merely “Satisfactory”. This time around, the CO rejected the TET’s entire reevaluation “because it did not document the evaluations in compliance with the evaluation factors, which directly relate to the SOW.” The CO then established a new TET, which included two members of the original TET.

The third evaluation of proposals resulted in the TET concluding that STi was “Unsatisfactory” under the technical factor because of a significant weakness. According to the new TET, STi had failed to propose qualified personnel for the asset materials manager and field terminal operator positions. The TET then again recommended that an award be made to the incumbent. And the CO again rejected the TET’s recommendation, concluding that the RFP’s “SOW was so deficient that only an incumbent contractor, having performed the services before, would have been able to understand all requirements of the SOW.” Then the CO cancelled the solicitation and announced an intent to resolicit with “a revised [SOW] and refined evaluation criteria.”

STi protested, arguing that the Coast Guard lacked a reasonable basis for the cancellation.

The Coast Guard first argued that STi lacked standing to protest because it was not next in line for award because there are higher rated proposals. GAO rejected that argument, noting that best value procurements involve trade-offs that can result in awards to offerors with lower rated, lower priced proposals, particularly where, as here, earlier trade-offs had been abandoned and/or rejected.

As a result, the agency’s primary argument was that the SOW was so confusing that only an incumbent would have been able to understand all the requirements. Noting that FAR Subpart 8.4 requires only a reasonable basis for cancelling a solicitation, GAO agreed with the Coast Guard and found its basis to be reasonable. While STi argued that the asserted reason for the cancellation was merely a pretext in support of reworking the solicitation to further favor the incumbent, GAO concluded that the agency was sincere in its desire to refine the SOW so that offerors other than the incumbent would have a more meaningful opportunity to compete. GAO considered the fact that the agency itself proved unable to reasonably evaluate the proposals, not once but three times, as ample evidence that the CO had a reasonable basis for the cancellation.

Thus, even though STi’s challenge to the original award decision had merit -- and even though the CO agreed that two different TETs had misevaluated STi’s proposal on a total of three occasions, STi’s protest still didn’t result in an award. While the same can be said in every case where another offeror’s proposal provides best value to the Government, the problem here was different: STi didn’t win because the agency was unable to properly conduct a best value analysis under its existing solicitation. And it’s far from clear that STi could have changed the outcome by doing anything differently.

What’s the take-away from all this? Protesters need to remember the limits of their power to control protest outcomes, especially to the extent they turn on agency actions. Sometimes living to fight another day is the best that can be achieved, but that’s not nothing.

Eric Whytsell is the attorney responsible for the content of this article.