Government Contracts Monitor

Liar, Liar: Can You Prove It? Heavy Burden For “Bait & Switch” Protests

August 10, 2015

A frequent issue in bid protests is the allegation that the awardee engaged in a “bait-and-switch” by proposing key or other personnel that the awardee never intended to use, but listed in order to obtain higher evaluation credit. Protestors often point to the awardee’s advertising for such positions after award, and/or the awardee’s hiring of incumbent personnel not included in the awardee’s proposal. A recent decision by the Government Accountability Office (GAO) highlights the high level of proof needed to substantiate a “bait-and-switch” protest, and the insufficiency of circumstantial evidence. Invertix Corp., B-411329.2, July 8, 2015. According to GAO, the protestor must establish that the challenged awardee knowingly or negligently made a misrepresentation as to resources the firm did not expect to furnish during contract performance. Obviously this is a difficult burden, since a protestor normally will not have access to the information necessary to establish knowing or negligent misrepresentation at time it files a protest.

The Invertix protest arose out of a fixed-price task order competition for operation and maintenance of an information technology network for the Army. Award was to be made on a “best value’ basis. The solicitation identified ten key positions, and required offerors to submit individual resumes for each of the proposed key personnel. The solicitation did not require commitment letters from key personnel.

The awardee, Information Management Group (IMG), submitted the necessary resumes. However, at the Post-Award Conference, IMG proposed to replace seven of the ten proposed key personnel: two key incumbent personnel were to remain onboard, and IMG wanted to replace five other proposed key personnel, including its proposed program manager. At the same time IMG was advertising for personnel fitting the description of the key personnel.

One of the disappointed offerors, Invertix, protested, charging IMG with a “bait and switch”. IMG responded that it had intended to use the initially proposed personnel, and submitted a Declaration to this effect by IMG’s president, along with supporting contemporaneous emails between IMG and the various personnel indicating that, prior to proposal submission, IMG verified the necessary qualifications and security clearance information, and requested and received social security numbers, for all ten of the proposed personnel. However, at the time of award – a mere seven weeks after proposal submission – five of the originally proposed personnel reportedly were “unavailable.” As to the job postings, IMG explained the ads were done as “a matter of practice and precaution,” in the event proposed key personnel were not available at the time of task order issuance.

GAO’s decision contains a reaffirmation of several basic points –

“An offeror’s material misrepresentation in its response to a solicitation can provide a basis for disqualification and cancellation of an award”;
“Whenever an agency requests resumes as part of the submission of bids or proposals, there is a reasonable expectation that those individuals for whom resumes have been submitted are the personnel who will perform the contract”; and
“An offeror may not propose to use specific personnel that it does not expect to use during contract performance, as doing so would have an adverse effect on the integrity of the competitive procurement system and generally provides a basis for proposal rejection.”

Nevertheless, GAO denied Invertix’s protest. Why? Because “[t]o establish an improper ‘bait-and-switch,’ a protestor must generally show that the firm in question either knowingly or negligently made a misrepresentation regarding resources that it did not expect to furnish during contract performance, and that the misrepresentation was relied upon by the agency in the evaluation and had a material impact on the evaluation results” and, according to GAO, Invertix failed to establish knowing or negligent misrepresentation.

The fact that IMG recruited incumbent personnel was “neither unusual nor inherently improper,” and “does not establish that the proposed personnel were unavailable to perform the contract work,” said GAO. Further, the high number of key personnel substitutions was not sufficient, by itself, because nothing in the record indicated that IMG proposed personnel it did not actually intend to use. Finally, GAO found “nothing unreasonable” in IMG’s explanation that the job postings were “’a matter of practice and precaution,’ in the event that proposed key personnel were not available.” Interestingly, the decision does not indicate the extent of any pre-proposal efforts by IMG to ascertain the actual availability of its proposed personnel, or why so many of the personnel were “unavailable” by the time of award – a mere seven weeks after the proposal submission.

Obviously, an important consideration here was that the solicitation did not require key personnel commitment letters. Also, GAO relied heavily on the Declaration submitted by IMG and the contemporaneous email communications between IMG and the proposed personnel.

The bottom line is that mere circumstantial evidence, including post-award advertising of positions as well as hiring of incumbent personnel, will not carry the day and win a “bait-and-switch” protest. A protestor must find some evidence indicating knowing or negligent misrepresentation. Conversely, where commitment letters are not required, an offeror should be sure to be able to show a course of pre-proposal communication with proposed key personnel regarding their interest and availability, as well as post-award follow-up. If challenged, the awardee should submit an explanatory declaration, with supporting documentation, in order to defeat a charged “bait-and-switch.”