GAO: Solicitations Must Be Sufficiently Detailed So Offerors Can Bid Intelligently
Recent Government Accountability Office ("GAO") bid protest decision reiterates the rule that agencies must provide enough information in a solicitation so offerors can bid intelligently. Where a protester challenges a solicitation that lacks sufficient detail and runs afoul of this rule (and others), GAO will likely sustain the protest.
The protest of ASRC Federal Data Network Technologies, LLC; Ekagra Partners, LLC, B-418085.4; B-418085.5; B-418085.7, May 5, 2020 involved a pre-award challenge to the U.S. Army’s solicitation for on-site technical, computer, network and information systems support for its Combat Capabilities Development Command Aviation and Missile Center ("CCDC AvMC") in Huntsville, Alabama.
The solicitation was issued to holders of the Chief Information Officer-Solutions and Partners 3 ("CIO-SP3") small business governmentwide acquisition contract. The solicitation provided for the award of a hybrid task order with both fixed-price and time-and-material ("T&M") elements tied to performance work statement ("PWS") tasks and subtasks. The solicitation required offerors to "trace labor category and hour information to PWS tasks and subtasks within their management plans."
Generally, the fixed price portion of the PWS was "comprised of functional areas, [information technology] support requirements, identified throughout the PWS, as applied to the operating environment contained within Appendix A [to the PWS]; the support of this operating environment is considered ‘baseline support.'" [1] On the other hand, the T&M portion of the PWS was reserved for "above baseline support." In other words, services for baseline operations would be provided on a fixed-price basis, while services above baseline operations would be provided on a T&M basis. Notably, the PWS included a variety of tasks and subtasks that were designated as both fixed-price and T&M.
Following a protest of an initial award decision, the agency took corrective action and notified offerors that it would provide them with interchange notices ("INs") and would allow them to submit written questions in response to the INs. The agency's notice also contained a "notional labor mix" that "contain[ed] the agency’s estimate of the overall fixed-price and T&M portions of the effort broken down by labor category."
Prior to the proposal deadline, ASRC and Ekagra filed protests challenging the terms of the solicitation.
Generally, both protesters argued that the solicitation, the PWS, Appendix A, and the notional labor mix did not provide enough information to adequately understand the required level of effort and how that level of effort would be allocated between fixed-price and T&M task areas. The protesters also challenged the agency's explanation (during discussions) of the fixed-price efforts under the solicitation. [2] Specifically, the agency informed both offerors that their labor approaches were deficient, “both regarding overall total labor required to meet the [fixed-price] requirements and in multiple specific labor categories.”
The agency provided the following explanation:
Based on its own technical judgment, and applying the specific [fixed-price] tasks to the operating environment described in Appendix A, the Government projects that an appropriate labor mix for the [fixed-price] effort would utilize approximately 163 FTE personnel for a full year of performance. At a summary level, the IGCE (163 FTEs) is based upon the level of effort required to maintain current operations (~122 FTEs), plus the level of effort expected to resolve current performance gaps due to changes in the [information technology] regulatory environment, technical landscapes, and emerging/evolving mission requirements, as well as to support the organizational transformation objectives (~41 FTEs). The level of effort estimated to address these areas are disbursed across all performance areas and requirements. Each area is expected to meet mission requirements, respond to emerging changes, and support transformation (i.e., the IGCE was not based upon a separate “transformation” group or team). This estimate also considered the delineation between [fixed-price] and T&M support.
The protesters argued that the explanation reflects an expectation that offerors will propose fixed-price staffing "beyond the current level of operations," and is based on vague concepts like "changes in the technical landscape, or changes to emerging/evolving mission requirements." The protesters also argued that the agency refused to not only define these terms but also failed to "provide[] any meaningful indication of the level of effort associated with these requirements."
While the agency generally argued that the protester's argument was premature (i.e., protesting discussion items prior to award) and that the solicitation provided ample information for offerors to bid intelligently, GAO nonetheless sustained the protests. In so doing, GAO reiterated an important rule regarding solicitation clarity:
Our Office has concluded that there is no legal requirement that a solicitation be drafted so as to eliminate all performance uncertainties; the mere presence of risk does not render a solicitation improper. [CITE] Instead, offerors have the responsibility, in submitting a proposal on a fixed-price contract, to project costs and to include in their proposed fixed prices a factor covering any projected increase in costs; risk is inherent in most types of contracts and offerors are expected to allow for that risk in computing their offers. [CITE] However, a contracting agency must provide offerors with sufficient detail in a solicitation to enable them to compete intelligently and on a relatively equal basis. [CITE] That is, the agency’s description of its needs must be free from ambiguity and describe the agency’s minimum needs accurately. [CITE]
In sustaining the protests, GAO reasoned that "the agency’s view of this work involves elements beyond maintaining the current level of operations, for example, addressing 'emerging/evolving mission requirements.'" GAO noted that while the agency provided the total combined staffing associated with these elements (41 FTEs), it nonetheless failed to define or provide enough detail about them to enable offerors to account for these elements in their proposed staffing approach. GAO found this particularly problematic in light of the solicitation's requirement that offerors identify their staffing for distinct tasks and subtasks. [3]
Lastly, GAO also determined that the solicitation failed to adequately detail the scope of the fixed-price tasks for supporting the agency’s transformation objectives and responding to changes beyond the current operations level. In GAO's view, the requirements for what constitutes a fixed-price versus a T&M change to agency’s mission requirements were "unbounded and amorphous." Without providing a detailed scope of the fixed-price tasks and subtasks, and distinguishing those tasks from the T&M tasks, offerors were not provided with a common basis to compete.
Takeaway
This decision provides an interesting discussion on solicitation requirements that lack details. As GAO reiterated, agency solicitations not only must provide offerors with "sufficient detail [] to enable them to compete intelligently and on a relatively equal basis" but also they must be "free from ambiguity and describe the agency’s minimum needs accurately." Where an agency's solicitation runs afoul of these rules (or others), protesters will likely find some form of relief (sustain or corrective action).
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[1] Appendix A contained information on the CCDC AvMC operating environment, including for example, information on: personnel, help desk staffing locations, facilities; help desk ticket information; server and operating system environments; and software and hardware environments.
[2] Where an agency provides an interpretation of a solicitation during discussions that creates an ambiguity, or otherwise reveals a defect in the solicitation's terms, GAO has concluded that the protester must challenge that interpretation prior to the deadline for the receipt of proposals. See AAR Airlift Grp., Inc., B‑414690 et al., Aug. 22, 2017, 2017 CPD ¶ 273 at 7.
[3] During the protest, GAO also held a telephonic hearing to better understand the parties' positions and to further develop the record. The hearing solidified GAO's position that offerors were unable to bid intelligently because, among other things,
"[T]he agency was unable to provide a concrete delineation of the scope of those emerging/evolving mission requirements included within the fixed-price portion of the requirement. Instead, the agency’s technical evaluation board member provided only a very broad explanation, testifying that an emerging or evolving requirement would fall under the fixed-price portion of the task order if, in the agency’s assessment, the change was the type of change that could be accounted for within the agency’s existing capabilities."
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