Government Contracts Monitor

Surprise: An Agency Can Base Its Specs on Your Competitor’s Product as Long as the Specs Accurately Reflect the Agency’s Needs

August 10, 2017

Given the oft-repeated mantra of “full and open competition”, contractors are understandably alarmed when a procuring agency defines its requirements in a way that essentially tracks another company’s product offerings. The recent Government Accountability Office (GAO) decision in Simplex Aerospace, B-414566.2, (August 8, 2017) reminds us that “full and open competition” does not guarantee a completely level playing field in every situation.

The procurement at issue involved an Air Force solicitation seeking a contractor to design, engineer, develop, manufacture, and install a 3,500 gallon retardant delivery system (RDS) in seven demilitarized Air Force HC-130H aircraft to be used by the U.S. Forest Service. When Simplex Aerospace reviewed the request for proposals (RFP), its personnel detected what they believed to be an improperly close correlation between the RFP specifications and a system designed by Coulson Aviation (USA), Inc., which had previously held a contract for the same requirement that had been terminated for convenience by the Government.

Believing that the Air Force had simply parroted certain of Coulson’s design features in the subject RFP, Simplex timely filed a protest challenging the RFP requirements, arguing, among other things, that the solicitation contains terms that are overly prescriptive and unduly restrictive of competition. More particularly, Simplex contended that the agency’s requirements are improperly patterned after the design of the existing Coulson product.

The GAO disagreed.

In its decision, the GAO first notes that the assertions that the agency favored Coulson’s design, by themselves, do not give rise to a basis to sustain the protest. It then reiterated what it has explained before: “in seeking full and open competition, an agency is not required to construct procurements in a manner that neutralizes the competitive advantages of some potential offerors.” Indeed, “[a] protest that a specification was “written around” design features of a competitor’s product fails to provide a valid basis for protest if the record establishes that the specification is reasonably related to the agency’s needs.

Thus, when a protest contends that the agency’s requirements unduly restrict competition, the procuring agency has the responsibility of establishing that the specification or requirement is reasonably necessary to meet the agency’s needs. But, as the GAO also noted, contracting agencies have the discretion to determine their needs and the best methods to accommodate them. The GAO’s job in this context is simply to examine the adequacy of the agency’s justification. So long as that justification is rational and can withstand logical scrutiny, the allegedly restrictive provision will stand, even if it essentially tracks a competitor’s design.

Here, the GAO found that the agency had provided a detailed rationale for the requirements challenged by the protester and that the record provides no basis to conclude that the specifications do not reflect the needs of the agency. Under these circumstances, Simplex’s protest was dismissed.

Remember, just because an agency’s requirements appear to have been modeled after a competitor’s product, a successful protest is not a sure thing. The agency will have an opportunity to justify its use of those requirements as being reasonably necessary to meet its needs. Protesters pursuing this type of challenge must be ready to demonstrate that the agency’s explanation does not hold water. Otherwise, you will end up in the same place as Simplex: stuck with RFP requirements that stack the deck against you.

Attorneys

Lindsay Simmons