Bid protest win continues to show fragility of multiple-award contracts

Right now, 81 small businesses are wondering why?

Why their ticket to a potential $15 billion lottery has been lost.

Why after waiting a year to begin marketing and promoting task orders through the Alliant 2 small business contract they may have to be even more patient and wait potentially another 12 months?

And why another multiple award small business contract is mired in a bid protest?

These, and probably a host of eye rolls, sighs of frustration and shakes of the head, came fast and furious last week when the General Services Administration announced it was rescinding all 81 awards made in February 2018 under the Alliant 2 Small Business governmentwide acquisition contract (GWAC).

And it left one small business thinking, “We told you so.”

GSA withdrew the awards after the Court of Federal Claims ruled in favor of Citizant in its protest of being excluded from Alliant 2 SB awards.

The judge found GSA erred in evaluating proposals, specifically around having a qualified cost accounting system and price reasonableness.

“The court presumes that Citizant was prejudiced because the record reflects multiple instances of the contracting officer evaluating proposals in an arbitrary, capricious, or irrational manner,” the court states. “Simply stated, the court finds that Citizant has shown that it had a substantial chance of receiving a contract if the contracting officer did not make the aforementioned errors.”

The judge told GSA to re-evaluate all bidders to address the errors Citizant pointed out.

GSA made the initial Alliant 2 awards in 2017 for the unrestricted track and February 2018 for the small business track.

Procurement experts say while GSA doesn’t have to necessarily start over, the re-evaluation could take six months and then the procurement would take another six months to get through the expected protests.

“The problem here is multi layered. It goes back to the issue of GSA’s self-scoring system and this whole idea of trying to make it easier for agencies to go through the proposal process and take the next step in the procurement,” said Tony Franco, a partner with the law firm PilieroMazza, which specializes in small business procurements. “The reason why GSA has to go back and fix this is because it looks like the agency messed up on the front end with regard to that first step of the evaluation process, self scoring. It resulted in a number of contractors thrown into the equation that maybe should’ve been disqualified earlier.”

Another federal procurement attorney familiar with the case, who requested anonymity because the sensitive nature of the proceedings, said the judge expected GSA to hold everyone to the same requirements and during the discovery part of the case, it became clear the contracting officer didn’t do that.

“I can’t imagine GSA will re-evaluate all 500-plus proposals,” the attorney said. “I think GSA will redo the self-scoring checklist, and they may just throw out those companies that shouldn’t have been qualified in the first place. And that could cause more protests. This is the song that doesn’t have an end. That’s the problem with large procurements, they are so important and valuable to vendors that they are willing to protest.”

A spokesman for Citizant declined to comment on the judge’s decision.

Alliant’s faced more than 40 protests

Alliant 2 SB remains under protest even with the Citizant decision.

Three more cases from RX Joint Venture LLC, TISTA Science and Technology Corp. and Metrica Team Venture are before the appeals court.

So far over the last three years, the Alliant GWAC process has faced more than 40 protests.

“Whenever agencies trying to create these multiple award contracts with so many different companies, it will be very hard for them to treat everyone consistently the way they are supposed to,” Franco said. “With complicated proposals and solicitations, and multiple offerors, procurement shops with limited resources struggle, and it will inevitably lead to protests like this where you can always find some flaw in procurement.”

Franco said as GSA and other agencies continue to develop these large multiple award contracts, agencies will create problems that these types of contracts were trying to avoid in the first place.

“This makes me question whether agencies should be using these MACs with so many offerors. Wouldn’t it make more sense to issue separate solicitations or go through the schedules?” he said. “Why create these complicated procurements that at the end of the day are designed to make the source selection process easier downstream when on the front end you may spend years figuring out who are the right contractors? There is so much potential for fallibility when you have humans involved and issues fall through cracks.”

Foreshadowing problems for other MACs?

The Alliant 2 small business experience is the perfect precursor to what is likely to happen to several procurements that are just getting off the ground.

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GSA and the Air Force’s 2GIT multiple award contract with a ceiling of $5.5 billion is just getting started and could face a pre-award protest right off the bat. Industry sources say vendors are concerned about violations of the Small Business Act of 2010.

Then there is GSA’s Center of Excellence Discovery blanket purchase agreement, which is entered the second phase of the acquisition process. Last week, the Federal Acquisition Service posted seven challenge questions for each of the areas with a due date of April 1.

In no more than 1,500 words, FAS wants vendors to outline their approach to determine where things stand now, the path forward for implementation and how they will ensure modernization efforts continue beyond implementation.

Both of these procurements as well as the others that are coming over to GSA schedules as blanket purchase agreements, including those MACs from the FBI and the Homeland Security Department, have the strong potential to face protests from unsuccessful bidders. And like the Alliant 2 small business GWAC, it’s to ask if all the time and resources that go into these contracts is worth it. Maybe it’s time to think of another way like having Congress modernize the GSA schedules so this need to create BPAs on top of the schedules or standalone GWACs can go away. This would be a huge step toward getting agencies and vendors alike out of this protest merry-go-round.

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