An award protest reaffirms: You’ve got to treat all bidders equally

The Government Accountability Office recently upheld the protest of a contract award from the Defense Intelligence Agency. DIA was hiring a small business to co...

The Government Accountability Office recently upheld the protest of a contract award from the Defense Intelligence Agency. DIA was hiring a small business to conduct counterintelligence training. It used a slightly unconventional approach to evaluating bidders. But the source selection authority made a basic mistake. For the details, Federal Drive Host Tom Temin talked with attorney Zach Prince, a partner at Haynes Boone.

Interview Transcript: 

Zach Prince Secure Offense was protesting an award by DIA to a company called DarkStar Intelligence. DIA was purchasing off the [General Services Administration (GSA)] schedule using eBuy, which is honestly a pretty interesting way to be procuring counterintelligence training. But in any case, the agency did this through a two step process where first you submit your proposal and they would do the compliance check to determine if your quote actually satisfies the labor category mapping and security requirements. And then assuming you passed, they would assess you based on technical approach and capability, and price. Two separate buckets. Price was a typical submitted a proposal submission, but for technical approach and capability. They wanted to do this only through oral presentations and that’s it. And they gave you in advance questions that you needed to address, general categories and then specific scenarios. But there is no technical submission beyond this oral presentation you did.

Tom Temin Right. So training and it’s kind of hard to show what you would do technically, I guess, unless it’s presentations or something or simulations. And as far as the price was concerned, that was simply labor hours.

Zach Prince Yeah, that’s right. They were planning to make determinations of certain competencies based on your oral presentation, and then they would assess your price and make it best value tradeoff.

Tom Temin And one of the presentations you had to make as a bitter was, what would happen if 25% of the staff quit and you were down staffing by to the 75% level, how you would continue to carry out the training.

Zach Prince Yeah, that was one of the specific questions. They directed officers to discuss is any mitigation strategies to reduce the risks, the negative impact to the training if you’ve dropped below the 75% level. And that’s an important point, because that was sort of the heart of the prevailing grounds, at least of this protest. A secure fence had argued that the agency irrationally assessed it a lower confidence level because it hadn’t, in its oral presentation, addressed its mitigation strategy. GAO disagreed with that. They said, actually, you didn’t address any mitigation approach for dropping below 75%, but there was disparate treatment. That is, they treated DarkStar and secure offense in a different fashion, because DarkStar, the awardee, also failed to address this point. So it was rational for the agency to ding Secure Offense. They should have done the same to DarkStar, and that mattered a lot to GAO’s analysis.

Tom Temin Because this was a sustainment, which only happens in, what, about 15 or 20% of the protests that are brought.

Zach Prince Yeah, that’s right. It’s not very frequent. And it was an interesting sustain, too, because there are quite a few footnotes, you always see in the GAO decisions, these footnotes that say we actually did see all of your arguments, except we don’t talk about them here. It’s because they’re meritless and we’re dismissing them or whatever it is. Here there are a couple of footnotes where they say either this could have been around for sustain essentially, but we’re not ruling on this. But agency versus sustaining anyway, so really think about this, or the agency didn’t deal with this at all in the protest. So, again, since we’re making the agency go do it again, think about addressing these points and try to make this better next time.

Tom Temin Interesting. So it almost says that when you protest, submit a variety of grounds, hoping that one will stick.

Zach Prince That is absolutely always the GAO strategy, that you throw everything at the wall and frankly, you very rarely win on the initial grounds you go in on, because you’re doing it blind. You don’t get the record until after you submit your protest, and then you have to try to find something there that’s the basis for sustained, particularly at GAO. At the court it’s, I think, a little bit more targeted.

Tom Temin We’re speaking with procurement attorney Zach Prince, a partner at Haynes Boone. And we should also point out that the dark horse initially winning bidder was slightly higher priced than secure offense, not a whole lot more, but half a million dollars or so.

Zach Prince Yeah, that’s right. I mean, it was about 2% of the overall price, so it wasn’t a huge deal, but they were higher priced. Yeah, price was of less value or importance to the agency than technical approach and capability. But it mattered enough that GAO found prejudice in the event that the agency had not made these errors that it could have gone to secure offense.

Tom Temin So it must have had some other reason for liking DarkStar Intelligence and therefore it sort of skipped over, the agency that is, skipped over the idea of looking at the mitigation strategy for a staffing shortfall differently in the two vendors.

Zach Prince Yeah, they had other reasons. They just had other reasons that they gave DarkStar some higher confidence. But GAO also found that those were problematic, or at least one was that the retention of incumbent personnel that was addressed in both oral presentations, DarkStar got credit. GAO noted that Secure Offense didn’t, which is again disparate treatment.

Tom Temin Yeah. So the lesson then would be for the agency to do what the next time?

Zach Prince The agency has got to be very careful that it’s evaluating proposals in an evenhanded way, strictly based on requirements only things that are actually written their, not things the agency had meant to say or thought it was implied. But what it actually says is your evaluation criteria. And make sure that when they’re assigning a risk to one entity for something that is present in the other proposal, that they’re also assigning a risk to that other entity. Another issue that got a little bit screwed up, I think on the agency’s part was they had a technical evaluation finding of a lower confidence due to a factor that was not ultimately in the source selection decision. But GAO thought that mattered enough. It was clearly a problem, that it was disparate treatment and it could have influenced the decision, even though the source selection decision said didn’t. So I think the agency’s just got to be very careful in how it documents why it’s making its decisions.

Tom Temin Right. So the lessons are then if you have something that you are evaluating people in a critical manner on, make sure that you look at them exactly equally and don’t introduce something to favor one or disfavor one that you don’t apply to everybody, kind of basic.

Zach Prince That’s right. And the contractor side, Yeah, it’s the same lesson the contractor should always be taking from these types of decisions. Read the requirements very carefully, make sure you’re actually responding to the agency’s requirements. And if you have questions, ask them in advance because that’s the time to do it. Don’t make assumptions that you know what the agency means. It’s shocking to me how few people can read critically. Maybe it shouldn’t be at this point, but if you have questions, you think it means this, maybe get a second pair of eyes on it, make sure that’s correct.

Tom Temin Well, in oral presentations like this, is there that type of back and forth permitted? And can you say in an oral presentation, what did you precisely mean by this? But then, of course, you’ve already made your bid. Second question is, is it possible to amend your offer after you get clarification in an oral presentation?

Zach Prince It really depends on how the agency structures it. I would think that comes in the Q&A. And that’s before you go to your oral presentation, because effectively that is the bid submission. The agency doesn’t have to let you change your bid. And I don’t get the impression here that the agency was going to let anybody change their bid. You’ve made your presentation. There’s no written submission, you’re resubmitting.

Tom Temin So what’s the purpose of oral then, I wonder?

Zach Prince I’m not sure. I think it was that the agency wanted a chance to probe the offerors and see sort of live. Here’s the scenario, here’s some questions. How are you going to deal with this? And they felt they’d get a better sense for the real life experience that they were likely to have doing it that way.

Tom Temin Which is pretty darn subjective when you think about it.

Zach Prince It is. It absolutely is. But a lot of the process, we try to say that there’s objectivity in a lot of these procurements, but of course it comes down to people and people are making decisions and agencies are staffed with human beings. You need to deal with the contractors in reality for the next year or five.

Tom Temin Sure. And now this protest has been upheld, which means the award can’t go forward.

Zach Prince Yeah, I mean, unless the agency decides to override the seek a stay, which is not going to happen. Realistically, the agency is going to go back and reevaluate the proposals and make sure they’re consistent with RFQ and with GAO’s recommendation here.

Tom Temin And they do have ways of getting what they really want agencies.

Zach Prince Yeah, they do. I wouldn’t be shocked if it goes back to DarkStar anyway. That happens in a lot of cases.

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