GAO spikes the Federal Supply Schedule cross-walk; sellers beware

Jason Bakke, a director at Chaedrol, analyzes a recent GAO bid protest decision that could impact federal contractors on GSA schedule task orders.

The Federal Supply Schedules program manages some of the largest contracts in the world, with nearly $40 billion in sales in fiscal 2021. Yet even with their broad popularity, many buyers and sellers are unclear on the contracts’ history and use. Now, a Government Accountability Office protest decision has thrown a spanner in the works of Schedule task-order competitions for services.

The Schedules are unique in that they are predicated on offerors’ commercial sales practices, allowing an offeror to define each product or labor category and its price, so long as it can support its proposed pricing with a commercial sale. This freeform approach to Schedule offerings creates challenges for agencies buying services, who cannot order using a uniform set of labor categories, because no standard for labor categories exists. In fact, even comparing offeror pricing for the same labor category names may be folly, as each may have different education and experience requirements. An analyst 2 here may be an analyst 3 somewhere else. As a comparison, Alliant II contains 31 labor categories series, with uniform pricing from all contract holders.

The workaround is for ordering agencies to ask offerors to map their labor categories to those contained in the RFQ, at the offeror’s discretion. Where the requirements of the mapped labor categories conflict, the more restrictive requirement wins. That is, where an RFQ requests a project manager with a bachelor’s and five years’ management experience and I map my Schedule’s manager I labor category that requires a bachelor’s and four years’ experience, on award the labor category requirement will be a bachelor’s with five years’ management experience.

GAO reviewed and affirmed this approach in 2018 (Grant Thornton, LLC, B-416733), where the RFQ required each offeror’s labor categories to precisely match its experience and education requirements. GAO recently summarized that in that case it “concluded that FSS labor categories that expressed educational or experience requirements as ‘minimums’ effectively allowed vendors to propose using that labor category, provided that the firm actually identified the use of personnel that met the solicitation’s more stringent educational and experience requirement.” In the Grant decision GAO stated:

Grant Thornton and GSA argue that an FSS contract with a labor category that states that the vendor may provide personnel with “a minimum of 10 years of experience,” “10+ years of experience,” or “at least 10 years of experience,” is within the scope of a requirement for 12 years of experience. We agree.

In the years since, many offerors submitted price quotes with mapped labor categories, which were successfully evaluated and awarded by ordering agencies, and all was right and good.

Now, for something completely different

And then, GAO recently unsealed this: ISHPI Information Technologies, Inc. (B-420718.2; B-420718.3). Here, the Department of Energy sought cybersecurity services under the multiple award schedule. The protester challenged the award contending the agency should have disqualified the winner for noncompliance as its personnel did not meet the minimum education requirements of the RFQ’s labor categories.

The awardee apparently submitted a poor price quote. The RFQ required all labor categories be mapped to one of three categories: program manager, assessment and authorization (A&A) team lead senior and A&A specialist mid. While the awardee mapped certain of its labor categories to these three, others were not mapped at all. Further, an additional mapped labor category from the awardee’s Schedule did not meet the minimum education and experience requirements specified in the RFQ.

It is the last issue that creates alarm. IPSHI argued its quote made an “implicit promise” to honor the RFQ’s labor category requirements because its Schedule descriptions identified the requirements as minimums. GAO was unconvinced, writing (in a footnote), “nothing in Grant Thornton permits a firm to ‘implicitly’ meet a solicitation’s requirements.”

That is clear guidance, if buried in a footnote in a GAO case where few look: be the opposite of implicit. That is, be explicit. It may not be enough to map an offeror’s labor categories to the RFQ without further explanation; so, the offeror should explicitly state how it will meet the minimum RFQ requirements for each labor category. To double-down on compliance, include the governing minimum requirements both in a table and explain them again in the pricing narrative.

I would argue the government could have prevented the IPSHI protest by seeking clarification from the successful offeror of its labor category mappings. Alternately, as a Schedule buy, the government is under no obligation to hold open discussions as defined at FAR § 15.306, with its fertile protest grounds. Instead, the government could have provided each offeror comments on their price volumes and allowed revisions, encouraging offerors to sharpen their pencils and explain all calculations and mappings. This may have nudged the “winner” into compliance.

For source selection officials, this decision highlights an interesting opportunity to remove an offeror from consideration in the streamlined world of Schedule evaluations. A failure in mapping per this new standard creates a quote deficiency or compliance error, which offerors should now know is reason enough for a disqualification. In the world of federal acquisition, however, that does not stop a lawyer from taking a client’s money and protest case to GAO (or the Court of Federal Claims) for the establishment of a new standard laid out in a footnote.

Jason Bakke is a director at Chaedrol LLC, a SBA-certified 8(a) small business that helps federal buyers and sellers navigate acquisition complexity to build win-win relationships while meeting mission requirements. An acquisition practitioner and writer, Jason harmonizes statue, regulation and common law to reduce friction in the system.

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