his month's bid protest spotlight focuses on one recent U.S. Court of Federal Claims decision and two U.S. Government Accountability Office decisions. While all three protests were unsuccessful, each serves as a different helpful reminder for contractors. The Court of Federal Claims decision is a reminder for those submitting proposals, while the two GAO decisions serve as reminders for unsuccessful offerors hoping to protest terms of a solicitation and award decisions.
The Bionetics Corp.
In The Bionetics Corp. v. U.S., the Court of Federal Claims denied Bionetics' protest that the U.S. Air Force impermissibly excluded Bionetics from competing for a multimillion-dollar contract award due to an error in Bionetics' price proposal.
The request for proposals, or RFP, required employee wages to comply with the collective bargaining agreement and the McNamara-O'Hara Service Contract Act.
The SCA requires contractors to pay service employees prevailing wages set by the U.S. Department of Labor or a collective bargaining agreement. For all proposed labor categories included in the collective bargaining agreement, the RFP required offerors to propose rates that, at a minimum, met the collective bargaining agreement requirements and were escalated throughout all years.
The RFP also warned that if an offeror did not entirely fill out all required portions of the pricing proposal. as required in Section L of the RFP, the Air Force could reject the proposal and eliminate the offeror from competition.
Bionetics, the incumbent, submitted a proposal indicating it would comply with the collective bargaining agreements in effect at both performance locations. However, although it included proposed wages for all required labor categories, for two of the collective bargaining agreement labor categories, Bionetics price proposal mistakenly proposed wages lower than the collective bargaining agreement rates.
Despite being able to evaluate Bionetics' total evaluated price and determine it was both reasonable and balanced, the Air Force found Bionetics' price proposal incomplete due to the mistakes. Rather than conduct discussions or provide Bionetics with the opportunity to clarify the errors, the Air Force rejected Bionetics' proposal.
Bionetics tried arguing that, notwithstanding the errors, its price proposal was indeed complete because it proposed wages for all labor categories.
The Court of Federal Claims rejected this argument, however, pointing out that the RFP also explicitly required that pricing submissions comply with Section L requirements to be considered complete. Because two of the wages were lower than the collective bargaining agreement rates in violation of the Section L requirements, the submission was therefore incomplete,
The Court of Federal Claims also rejected Bionetics' claims that the Air Force should have either sought clarification from Bionetics, or assumed that Bionetics intended to propose wages at the minimum rate, because Bionetics' proposal stated it intended to comply with the SCA and the collective bargaining agreement.
Clarifications are not to be used to correct material errors, and compliance with the collective bargaining agreement wages, according to the court, was a material term of the RFP.
Furthermore, the RFP stated that the Air Force reserved its discretion to conduct discussions as well as consider the so-called correction potential of proposals. Therefore, it was entirely within the Air Force's discretion not to seek clarifications or conduct discussions with Bionetics regarding the errors in the two wages.
Moreover, it is the offerors' burden to submit compliant and well-written proposals. Thus, the Air Force need not have assumed Bionetics would propose wages at the minimum rate when its proposal clearly did not.
Bionetics Corporation serves as the latest reminder — in a long list of reminders — of how costly clerical errors in proposals can be for contractors. It is incumbent upon offerors to quadruple check proposals for compliance with solicitation instructions to ensure that the business development costs they incurred putting forth a proposal are not all for naught.
MartinFederal Consulting LLC
In Matter of: MartinFederal Consulting LLC, the GAO dismissed an incumbent's protest of the U.S. Department of the Army's award of a small business set-aside contract to Altus Engineering LLC for failure to state a valid basis for protest.
MartinFederal, the protester, raised three protest grounds, two of which are discussed here. These two grounds involve similar themes regarding whether the awardee had the adequate amount of experience to be considered for award.
MartinFederal first argued that, unlike itself, the awardee had no experience providing lubricant analysis services within the past five years, and therefore had to rely on a subcontractor to meet the solicitation's past performance requirements.
The solicitation, however, explicitly allowed the offeror to "demonstrate clearly that it can self-perform, or perform through its teaming or subcontractor arrangements" The GAO found that this language permitted offerors to rely on proposed subcontractors' experience to meet the past performance requirements.
Thus, even if the awardee relied entirely on a proposed subcontractor's past performance, it would have been consistent with the solicitation's requirements.
MartinFederal alternatively argued that, because the awardee allegedly did not have enough experience, its proposal indicated it would impermissibly rely on its subcontractor, MRG Laboratories, to perform more than 50% of the work.
MartinFederal argued that this would violate Federal Acquisition Regulation 52.219-14, which provides that, for small business set-aside contracts for services, the small business prime contractor will not pay similarly situated subcontractors more than 50% of what it is paid by the government.
A similarly situated entity is one that has the same small business program status as that which qualified the prime contractor for the contract award, and is small for the North American Industry Classification System, or NAICS, code assigned to the prime contract.
In other words, a small business prime contractor may subcontract more than 50% of a small business set-aside contract to an entity that is also small for the NAICS code assigned to the contract.
Normally, the GAO views protests alleging noncompliance with FAR 52.219-14 as matters of responsibility or contract performance, both of which the GAO will not review. However, if a protester can show that a proposal, on its face, indicated an offeror has not agreed to comply with the limitation on subcontracting, then the GAO will review whether the agency should have found the offeror unacceptable.
Here the protester attempted to meet this burden by arguing that the awardee's alleged lack of experience, coupled with its proposed use of MRG Laboratories as its subcontractor, was facially noncompliant with FAR 52.219-14. The protester, however, made a critical error in failing to appreciate the similarly situated entity language of the provision.
The Army pointed out, and the GAO agreed, that because MRG Laboratories represented in its System for Award Management profile that it was a small business for the NAICS code assigned to the solicitation, it was a similarly situated entity.
Therefore, any proposed use of MRG Laboratories could never violate FAR 52.219-24. Thus, the GAO dismissed similarly dismissed this protest ground.
An incumbent losing a follow-on contract to an entity it perceives to be less experienced is often a hard pill to swallow.
Before raising protest grounds attacking an awardee's lack in experience, however, disappointed offerors must carefully review the terms of the solicitation to determine whether the awardee may have permissibly relied on its proposed subcontractors' experience.
Furthermore, when alleging protest grounds regarding the limitations on subcontracting, it is important to double-check the System for Award Management profile to verify that a suspected proposed subcontractor is not a similarly situated entity.
Matter of: Logmet LLC was a pre-award protest of an Air Force RFP for flight operations training and F-15 aircraft maintenance to support the Republic of Singapore Air Force at Mountain Home Air Force Base in Idaho. The Air Force provides training support to the Singaporean Air Force through a foreign military sales program known as Peace Carvin.
This RFP was for the fourth iteration of the contract for aircraft maintenance and operation support, the first being awarded in 2008.
Despite the RFP being for the fourth iteration of the contract, Logmett claimed that the Air Force had improperly bundled maintenance and operations-training support requirements in the RFP, in violation of the Small Business Act.
The Small Business Act provides that agencies must, to the extent practicable, "avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors."
The act defines bundling as "consolidating two or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small business concern."
The act further defines "separate smaller contract" as "a contract that has been performed by one or more small business concerns or was suitable for award to one or more small business concerns."
Undercutting Logmet's argument, however, is the Air Force's inclusion of both operations training and maintenance services under the same solicitation from the beginning of the Peace Carvin program. The GAO held that the requirements, therefore, did not meet the definition of bundling under the act because they were not previously performed under separate, smaller contracts.
The protester also raised several challenges to the RFP's terms, claiming they were unduly restrictive. Specifically, Logmet argued that requiring instructor personnel to have a certain level of experience with F-15 fighter jets would essentially require offerors to propose Air Force, Air Force Reserve and Air National Guard personnel for these positions.
Somewhat dodging the allegation that only former government officials could meet the qualification requirements, the GAO sided with the Air Force's contention that the requirements were reasonably necessary to meet its needs, because it was allegedly unlikely that personnel's experience on other platforms would be sufficient for them to operate and train others to operate the F-15 aircraft.
Similarly, Logmet also challenged the RFP's requirement that offerors must establish that they contacted these same proposed personnel two months prior to proposal submission.
The GAO, however, pointed out that the RFP required proposal submission less than two months after the RFP was issued. Therefore, claims that the two-month turnaround requirement was too tight rang hollow.
Moreover, the GAO agreed with the Air Force's explanation that the two‑month contact requirement was reasonable to minimize risk that the awardee would be unable to fill the hard-to-fill positions.
Logmet serves as a reminder to potential small business offerors that violations of the Small Business Act's bundling prohibitions might be a pre-award protest ground where an agency impermissibly bundles requirements. While the argument was ultimately unsuccessful in the instant protest, small businesses should nonetheless keep this argument in mind when reviewing solicitations for potential issues to raise in a pre-award protest.