DISA’s two-track IT procurement gave extra information to some bidders

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A recent court case showed why, when an agency is dividing work between unrestricted contractors and small businesses the latter might want to bid on both sides. How come? They get to go to the debriefings. For more on the practical effect of this strategy, Federal Drive with Tom Temin turned to procurement attorney Joseph Petrillo.

Interview transcript:

Tom Temin: Joe, I guess in this case, a contractor that lost out on the small business portion of a major deal sued, protested on the basis that this company had not had access to information from the debriefings that competitors had had. Tell us what happened.

Joe Petrillo: Sure this case arose from a procurement by DISA, the Defense Information Systems Agency of IT services, it’s an umbrella contract under which they were ordering multiple contracts, and then issuing and usually competing task orders under those contracts. To achieve some small business competition, they had two tracks on this competition. One was restricted to small business, the other was unreal restricted and open to large businesses as well. Some of the small business competitors, however, also competed in the unrestricted portion. Some of them submitted their own bids. Others participated as part of a team with other companies. And what happened in this particular situation was an artifact of the way it developed. They proceeded, DISA proceeded to make awards on the unrestricted portion well before it was ready to award the small business portion. And in fact, over seven months elapsed between the unrestricted awards and the final proposal revision submitted in the small business track. One of the effects of that though was that the losing offerors in the unrestricted track got a debriefing. And in that debriefing, they got price information about the winners in the unrestricted portion, and they also got some information about how DISA evaluated proposals and in particular evaluated price.

Tom Temin: And just a quick clarification, so they had not yet been submitted bids for the small business portion, because that was months later.

Joe Petrillo: Well, the initial offers I think had been submitted, but they were in negotiations and final proposal revisions, as you say, were months later in terms of the awards.

Tom Temin: So the implication is they could use the information they heard in the debriefings for the unrestricted in the negotiations and final bids for the small business side.

Joe Petrillo: Good point. That’s exactly what the issue was. And that became the main issue in the Inserso protest, which went to the court of federal claims.

Tom Temin: Inserso is a small business that only bid on the small business side and lost.

Joe Petrillo: Exactly. And they say, well we were disadvantaged, we didn’t have this information. And that was a violation of two regulations. One was the organizational conflict of interest regulation, which requires that offerors not have nonpublic information that they could use to their advantage in a procurement. Another was a regulation that generally speaks to the need to treat offerors equally. In the court of federal claims, the court found that they had a good case, they had it complained of a violation of law, but engaged in some speculation about whether that would have actually changed the result in the procurement, and the court felt it probably wouldn’t have. Inserso therefore filed an appeal with the Federal Circuit, and the Federal Circuit looked at the case, and they also seem to think that a violation of law had occurred, and they were more sanguine about the possibility of a prejudice accruing to Inserso. They thought that maybe it really had affected their ability to win the contract in a significant way. But the Court of Appeals for the Federal Circuit denied the protest on a separate issue. There’s this doctrine that arises from the blue and gold case in which a protester can lose its right to protest, in essence, waive its right to protest by waiting too long. And in the blue and gold case, the issue was can you protest something wrong with the solicitation after you’ve submitted your proposal? The answer is no. The Court of Appeals for the Federal Circuit long ago decided that meant you waived your right. They extended that doctrine in this case to cover the situation. They basically said that Inserso should have seen the possibility that this would have happened in the solicitation. It certainly knew about that possibility after the awards have been made in the unrestricted portion, and it definitely should have known about that when GAO denied some protests that had been filed on the unrestricted portion, and those decisions mentioned the debriefings,

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Tom Temin: Let me ask you a question, debriefing information or recordings or transcripts of debriefings or attendance at the briefings, are those limited to only the people that were involved in bidding or can anyone attend one?

Joe Petrillo: No, it’s absolutely true that only those submitting an offer are entitled to a debriefing and debriefing frequently talk about aspects of the losing bid or proposal. So it’s not going to be information that’s going to be publicly available. What DISA could have done here, I think, is to release the general portions of the debriefing, dealing with the prices and the evaluations, methodologies, and release those to all the offerors. But in this case, it didn’t do that. Inserso felt it had been disadvantage,

Tom Temin: And yet two courts found that yeah violations of law had occurred, but even though the affect might not have been different, that seems like a strange thing for a court to say, because if there was a violation of law, how can the courts speculate that Inserso might have won or lost otherwise.

Joe Petrillo: Well, that was something that troubled the Federal Circuit. They mentioned the doctrine that once there is such a violation, there is a presumption that it prejudices the procurement. And the government in essence has to prove really fairly significantly that it really wasn’t the issue that caused the loss of the contract.

Tom Temin: And it was not a unanimous decision either was it at the circuit level?

Joe Petrillo: No, there was an interesting issue raised by one of the judges, and it was based upon a Supreme Court decision on a procedural matter involving how courts look at the ability to bring cases in a recent Supreme Court decision on the timeliness of patent infringement suits. The Supreme Court held that the statute of limitations provided for by Congress is really the only important limitation on the ability to bring a suit that it doctrines live by waiver or latches as it’s sometimes called are not going to bar the ability to bring a suit, at least in the in the patent infringement area. Although, as the dissenter recognized delay in bringing the case might affect the remedy that’s available. In other words, you might not be able to get the award decisions overturned. You might have to have other relief instead.

Tom Temin: So Inserso I guess basically was told in many different ways it should have done more homework, and now that’s the end of the road.

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Joe Petrillo: Basically, that’s right. I mean, these decisions place a pretty heavy burden on offerors that they need to act promptly to determine what their rights are and then need to act very promptly in terms of vindicating those rights.

Tom Temin: I guess in government, they call those lessons learned. Joseph Petrillo is a procurement attorney with Petrillo and pal. As always, thanks so much.

Joe Petrillo: Thank you Tom.

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