Professional Service Industries (“PSI”) is a lesson in what an Agency should not do when taking corrective action following a protest.  In PSI, PSI had successfully protested the Federal Highway Administration’s (“FHWA”) award of an Indefinite Delivery/Indefinite Quantity facility operation support contract with a contract ceiling of $18 million to the only other offeror, Genex Systems, LLC (“Genex”).  PSI protested the award of the new contract to Genex on the grounds, among other things, that there was no way that the Genex proposal could be technically acceptable because the proposed Genex program manager (the only identified Key Personnel position) did not satisfy the minimum experience requirements set forth in the solicitation.  PSI’s proposed program manager had been in that position for 16 years at the FHWA facility.  A critical component of the original solicitation dealt with the work requirements and qualifications for the awardee’s program manager.  Following the protest, FHWA advised GAO it would take corrective action.  The FHWA contracting officer directed a re-evaluation of the two proposals and issued a report on how each offeror’s program manager would be qualified.  Based on the reports, FHWA again awarded the contract to Genex.  PSI promptly protested again to GAO, which sustained the protest, finding that the record demonstrated that the proposed Genex program manager did not meet the minimum requirements stated in the solicitation.  Not willing to let the award to Genex slip away so easily, FHWA advised GAO that it was going to amend the technical requirements for the key personnel, seek revised proposals from PSI and Genex, and conduct a new source selection process.  PSI protested this corrective action as a pre-award protest to the Court of Federal Claims.

In its decision, the Court made it clear that an Agency is within its rights to revise and reissue a solicitation, especially if it is to implement a GAO recommendation.  The GAO in the second protest had indeed recommended a revision and reissuance as one of two recommended actions (the other being re-evaluation in light of requirements in the solicitation, in which case PSI presumably would have been awarded the contract).  What the Court took issue with was that while FHWA obviously “watered down” the qualifications for the program manager, FHWA did not amend the contract requirements, creating a nonsensical result of a less qualified person having to do the same work that the GAO had already found Genex’s unqualified proposed program manager could not perform.  The Court recognized that an Agency has a right to water down requirements but cited a string of cases where the modifications were made in good faith, not targeted in favor of a particular offeror or as a means to ensure fair and impartial competition.  In PSI, the Court found instead that the modifications were arbitrary and capricious.  The Court permanently enjoined FHWA from using the amended solicitation to award a contract.

The lesson for an Agency is that it can modify a solicitation, but in doing so it should not be targeting award to a specific offeror.  The lesson for an offeror is to be vigilant in the review of solicitation modification and not be afraid to challenge them, especially when it appears that the modification results in a biased or targeted solicitation.