8(a) contractor overturns bitterly contested State Department contract

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If at first you don’t succeed, protest, protest again. That’s the twist on the old rhyme one 8(a) contractor used to overturn a bitterly contested contract from the State Department. For lessons learned from a nasty case, Federal Drive with Tom Temin turned to D.C. procurement attorney Joseph Petrillo of Petrillo and Powell.

Interview transcript:

Tom Temin: Joe give us the rundown on this one that is still I guess winding its way through the protests in the courts and everywhere else.

Joe Petrillo: It remains in protest hell. The procurement was under the vehicle called STARS II which is a multiple award, IDIQ umbrella type contract for 8(a) concerns. And under that vehicle, the State Department was trying to place a very large order for IT support, five years worth of it, valued at about $100 million. It was the best value procurement with technical approach personnel and past performance outweighing price. Not unusual for a professional services type.

Tom Temin: Fairly standard stuff sounds like.

Joe Petrillo: Exactly. It had turned out to be very contentious competition and it had two prior protests, each resolved by agency corrective action. So the State Department conducted a reevaluation, but the winners stayed the same. The winner was a new company called Soft Tech Consulting. But the incumbent Business Integra protested, and some other companies also joined in some of the earlier protests. Business Integra protested all three times and the last went to decision. So this is what we’re reporting on now, the GAO decision in the last protest.

Tom Temin: And the first two protests were on what basis that didn’t go anywhere?

Joe Petrillo: They were also protests of the evaluation criteria. We don’t have details of them because they were resolved by corrective action instead of decision.

Tom Temin: So these were pre-award protests?

Joe Petrillo: Post-award, contesting the evaluation and the award to Soft Tech Consulting, the awardee all three times.

Tom Temin: Got it. Alright so now that it has been upheld the protest by the GAO, we do know more about what happened in terms of how the State Department treated this one.

Joe Petrillo: Absolutely. We have GAO’s decision on four important protest issues. The first issue they resolved was the past performance evaluation. This as I mentioned, was a procurement worth almost $100 million over the five years, so the past performance references needed to be relevant in among other things, size. Soft Tech got credit for three contracts it reported in past performance, but their annual values were less than between 2.3 and 3.2 million. So they were considerably less than then 19 million roughly value of this procurement. GAO said that was unreasonable, you just can’t decide that contracts of that size were really equivalent or relevant to a much larger contract. GAO also mentioned that the solicitation was talking about relevance in terms of size as well. So Business Integra won that protest issue and it was important because Soft Tech had along with Business Integra the highest rating for past performance.

Tom Temin: What were some of the other points on which GAO decided to uphold this one?

Joe Petrillo: Sure. This one’s a little bit odd. Business Integra responded to a part of the solicitation that invited but did not require innovative approaches. And Business Integra proposed a couple of things for which they apparently took credit. Since they were the incumbent contractor though, the State Department looked at them and said wait a minute, we think those are our ideas, not your ideas. And they give them a weakness for having proposed or taking credit rather for something that wasn’t really their innovative idea.

Tom Temin: Picky, picky, picky.

Joe Petrillo: GAO didn’t like that. They said if they had true innovative ideas, they were entitled to a strength. They didn’t have any. However, you couldn’t give them a weakness for something that wasn’t required. So they upheld the protest on that ground as well. And again, technical approaches the most important factor, so that was a significant issue. There were two other issues. It didn’t help that the source selection decision included a negative comment about Business Integra that had been removed after a prior technical evaluation. It apparently was an error and it was expunged after one of the prior protests, but it slipped into this source selection decision and the CO said it was a mistake and didn’t affect her decision. But GAO didn’t buy that. And finally, the price evaluation excluded DBA insurance, although it was supposed to include all costs including DBA insurance, and that was an issue as well.

Tom Temin: Yeah. So lots of little things add up to something that was then upheld and GAO did not make the award go to the incumbent. It’s simply now up to the State Department to reevaluate the whole thing.

Joe Petrillo: Right, the protest was sustained, and they’ve need to make another evaluation and State needs to take into account all of these factors, but it looks like Soft Tech is going to be in a weak position, given the changes that are going to be made because of the protest decision.

Tom Temin: Behind all this though, you get the sense that for whatever reasons that we don’t know, State Department people just didn’t want the incumbent back anymore.

Joe Petrillo: It sure looked that way. Either that or they were enamored with Soft Tech for some reason and thought that was the company they wanted to get the award.

Tom Temin: If you put out a competition and you just don’t want the incumbent anymore, is there a shorter way of getting rid of the incumbent and hiring somebody else?

Joe Petrillo: Well, if you don’t like the incumbent, and there are some weaknesses that the incumbent has and they’re relevant to the to the contract, presumably they’re going to be captured in the evaluation criteria. But remember, it’s a comparative process. The company may be weak, but the other folks you’re getting offers from might even weaker.

Tom Temin: It’s like what Henry Ford the second said after he fired Lee Iacocca . Sometimes you just don’t like someone. But I guess that’s not good enough in competitive federal contracts, is it?

Joe Petrillo: Well, it worked out well for Lee Iacocca anyway.

Tom Temin: Yeah. In the long run, everyone does well, it’s best to maybe move on and find some more business. Attorney Joseph Petrillo of Petrillo and Powell. Thanks so much.

Joe Petrillo: Thank you, Tom.

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