Agencies Also Must Follow the Processes They Make – or Suffer Consequences

By Alan Chvotkin
Executive Vice President and Counsel
The Professional Services Council
There are a few basic principles of the federal bidding system. By and large, agencies get to structure their solicitations to best meet their needs. The Instructions to Offerors in Section L of the solicitation impose requirements on those wishing to bid. Finally, agencies are required to adhere to the rules they make in their solicitations and their deviation from those rules risks significant consequences. Such consequences were reaffirmed by protest decisions involving multiple offerors for two different agencies.

On Feb. 21, the Government Accountability Office issued a decision in Cognosante regarding work proposed under the Veterans Administration’s Transformation Twenty-One Total Technology Next Generation (T4NG) contract. Twenty-eight companies hold a spot on the T4NG contract. VA’s request for a task execution plan (RTEP) was for information technology operations and services, and remediation support services, with an estimated contract value of between $700 million and $1 billion. “It is a fundamental principle of federal procurement law that procuring agencies must condition the award of a contract upon a finding that the contract contains fair and reasonable prices,” GAO noted in its decision. 

The VA received seven bids and set a competitive range of six proposals. GAO disclosed that Cognosante was third lowest in price, was significantly higher than the price offered by the lowest-priced offeror but was significantly below the price of the apparent successful offeror. In its post-award bid protest decision, GAO concluded that the VA: (1) failed to demonstrate that it evaluated all offerors final prices for “price reasonableness;” (2) awarded a strength to the apparent successful offeror that did not reasonably relate to the elements described in the solicitation; and (3) conducted an unequal evaluation of proposals using different levels of scrutiny. GAO recommended that the VA reevaluate all offerors’ prices for reasonableness, reevaluate the technical proposals using a consistent standard, and then make a new source selection decision. While that review is still underway, the end-users who were expecting to receive the benefits of this VA procurement must wait even longer for the benefits.

On March 25, the U.S. Court of Federal Claims released their decision in Citizant, Inc, another post-award protest, challenging the General Services Administration’s (GSA’s) evaluation of proposals under the government-wide, multiple-award, ID/IQ Alliant 2 Small Business (A2SB) information technology contract. A2SB is another in the family of recent GSA (and other agencies) use of a self-scoring worksheet by offerors for meeting specific criteria spelled out in the solicitation and then, according to the Instructions to Offerors, providing supporting documentation in their proposal to substantiate the points claimed on the worksheet. GSA said in their A2SB solicitation that it would “strictly enforce all of the proposal submission requirements.” 

More than 450 companies responded to the solicitation and, in February 2018, GSA made an initial selection of 81 proposals. Citizant filed its post-award protest challenging its own evaluation by GSA as well as how GSA evaluated other offerors. After lengthy discovery and briefings, the Court found that GSA did not strictly enforce the submission requirements it said it would. In at least 21 of the proposals received, GSA failed to verify the points the offerors claimed based on having an approved cost accounting system. At least five offerors were found to have improperly submitted “fair and reasonable” pricing. The Court thus directed GSA to reevaluate all the proposals received by addressing the errors the court identified, and then make a new source selection decision. I hope GSA doesn’t limit its review to just the cost accounting and pricing issues raised by the protest. Now, a year after GSA’s initial source selection action, GSA is back to square one in conducting the evaluations of all proposals and then making new source selections. 

For the court to find these agency mistakes in GSA’s source selection evaluation is troubling for all the small business vendors who invested a lot of time and money in the preparation and submission of their offers. And Federal agencies who were anticipating using the A2SB contract to help meet their information technology needs and their small business goals, they’ll have to look elsewhere for options.   

Beyond the specific holdings in these two protest decisions, it is clear that the protest process served the important function of holding agencies accountable to following the procedures and evaluation factors that they themselves established. In addition, both of these cases show almost “rookie mistakes” by well-seasoned acquisition professionals in these two agencies that could have been – and should have been – easily avoided.  

While neither Cognosante or Citizant are PSC member companies, both Pillsbury Winthrop Shaw Pittman, LLP, who served as counsel for Cognosante, and Arnall, Golden, Gregory, LLP, who served as counsel for Citizant, are PSC member companies. 
This article appeared on Govconwire.com on April 11, 2019.