Do Not Be Discouraged: Agency Discretion on Corrective Actions Does Have Limits
Given the broad discretion afforded to agencies when they decide to take corrective action in response to a protest, it sometimes seems like challenges to a corrective action are destined to fail. The Government Accountability Office (GAO) decision in MCR Federal, LLC, B-416654.2; B-416654.3 (December 18, 2018), serves as a reminder that failure is not a foregone conclusion, at least where the procurement is under Federal Acquisition Regulation (FAR) subpart 16.5. In that context, such efforts can succeed if the corrective action’s implementation does not allow the original protester a fair opportunity to compete.
MCR Federal involved a Fair Opportunity Proposal Request (FOPR) issued by the Air Force under FAR subpart 16.5, to offerors holding indefinite-delivery, indefinite-quantity (IDIQ) contracts under the General Services Administration’s One Acquisition Solution for Integrated Services. The FOPR, which sought acquisition, financial, and administrative support services for the Space and Missile Systems Center, provided that award would be made on a best-value tradeoff basis, considering personnel management, technical expertise, and cost/price. The technical expertise factor was significantly more important than the cost/price factor, which was more important than the personnel management factor. Of relevance here, the most important aspect of the technical expertise evaluation factor was the offeror’s approach and understanding of the Performance Work Statement (PWS), which was to be evaluated by analyzing the proposed contractor staffing matrix, including their proposed labor and skill mix, key personnel, experience level, education, certification, technical experience, and expertise.
After “interchanges” (discussions) with the awardee (Tecolote Research, Inc.) and protester (MCR Federal, LLC), the Air Force found that both proposals received acceptable ratings for the personnel management factor because they clearly met the factor’s minimum requirements. On the technical expertise factor, the agency assigned Tecolote’s proposal an outstanding rating, noting that the firm proposed staff with more experience than MCR’s personnel, as well as more expertise in an NSS launch environment. In contrast, the agency assigned MCR’s proposal only an acceptable rating, finding that its staffing was “less representative of high-level, strategic thinking” due to the firm’s personnel having lower average years of experience than Tecolote’s personnel, as well as apparent inexperience in the NSS launch environment. The Air Force described the difference in experience levels between the personnel proposed by Tecolote and MCR as “akin to the difference between a mid-level, field grade military officer experienced with tactical-level operations compared to the value of a military senior officer with broader, seasoned experience who is adept at operating all the way up to the level of strategic thinking.” As a result, the agency concluded that Tecolote’s proposal represented the best value to the agency because Tecolote’s proposal was significantly technically superior and worth the price premium of $26,352,564.
After requesting and receiving a debriefing, MCR filed a protest alleging that (i) the agency’s evaluative preference for personnel with higher levels of experience was improper because it was not reasonably based in the terms of the solicitation; and (ii) the agency held misleading discussions because the interchange notices issued did not fairly alert MCR that the relative lack of experience of the firm’s proposed workforce would be such an important discriminator.
In response to the protest, the Air Force advised that it would take corrective action. The agency announced it would conduct discussions (interchanges) and allow the parties to submit a final proposal revision, then made a new best value award decision after an evaluation of the FPRs. That protest was dismissed as academic by the GAO.
The agency then issued two new notices to MCR, the first making clear that the agency had concluded that only 5 of MCR’s proposed 58.5 full-time equivalents (FTEs) provided the desired level of experience in a relevant NSS launch environment and asking MCR to “revise or confirm that [its] staffing matrix aligns” with the PWS objectives. The second notice described the agency’s concern that a number of the 58.5 proposed FTEs were contingent hires, which the agency felt “present[ed] a risk in that MCR may not be able to fill personnel requirements by the end of the 30-day window.” Then the Air Force dropped a bomb: It stated that FPRs must be filed in two days, on September 12, 2018.
In addition to filing this protest challenging the response deadline, MCR simultaneously responded to the notices by informing the Air Force that, given the short timeframe to respond, MCR would stand by its previous submission. MCR also pointed out that if it were given more time, it could propose candidates with more experience and increase the portion of proposed staff with demonstrated experience in an NSS Launch environment. In response, the agency announced that it would take “voluntary corrective action” and extend the response deadline to September 18th at 5:00 p.m.
When MCR objected to the proposed corrective action on the grounds that offerors should be given at least 30 days to submit a new FPR, the Air Force argued that, despite the significant issues with MCR’s proposal identified in its interchange, MCR had ample time to prepare its FPR because the FOPR put MCR on notice of the importance of the technical expertise factor (which included staffing) by making that factor significantly more important than price. It also argued that MCR had at least 18 days to respond since it received the agency’s notice of corrective action on August 30th. The GAO disagreed, finding that MCR could not be imputed knowledge of the serious impact of the agency’s staffing preferences until the September 10 interchange notice.
In addition, though GAO generally leaves what constitutes a sufficient amount of time for proposal preparation to the contracting officer’s discretion, the enormity of what the interchange required of MCR rendered the agency’s short time frame unreasonable. GAO noted that, in order to be responsive to the agency’s experience concerns, and to remain competitive in the procurement, MCR could not simply confirm its staffing proposal. Instead, it would have had to (i) successfully recruit and negotiate employment agreements in roughly a week’s time with a substantial number of highly-skilled personnel that have senior-level experience in an NSS launch environment; and (ii) propose non-contingent-hire personnel, which would affect the firm’s pricing, or alternatively required substantial revisions to its transition plan. Based on this, GAO found that “the amount of time provided by the agency to respond does not appear to have been calculated to actually allow MCR to submit a proposal responsive to these concerns.” In other words, the time provided to address the agency’s concerns did not allow MCR the “fair opportunity” to improve its proposal, or to maximize the agency’s ability to obtain the best value, required by FAR § 16.505(b).
The moral of the story? Even when you’re facing timing issues left to the contracting officer’s discretion, you may still be able to challenge unreasonably short timeframes that prevent you from addressing issues pointed out in agency discussions.
Contact Eric Whytsell for more information.