Commercial item provisions in Schedule contracts upheld in bid protest appeal

CGI Federal has prevailed in a bid protest fight it took to the U.S. Court of Appeals, and the court’s ruling has implications beyond a single company.

The Professional Services Council filed an amicus brief supporting CGI because the issue dealt with the need for GSA schedules to follow the same commercial item provisions as any other type of government contract.

This sequence of events that raised the issue began in February 2014 when CGI Federal and HealthDataInsights Inc. filed pre-award protests on a Center for Medicaid and Medicare contract to collect overpayment. Both companies were incumbents when CMS released the solicitation for the new contract.

CGI and HealthDataInsights argued that CMS had changed the solicitation in a way that restricts competition and violates current laws and regulations—specifically that it does not follow the commercial practices laid out in part 12 of the Federal Acquisition Regulation.

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Multiple companies protest $1.6 billion Pentagon contract

Several companies have filed bid protests over the Defense Information Systems Agency’s recent $1.6 billion Defense Departmentwide licensing agreement with VMware.

Since Feb. 19, Amazon Web Services, Citrix, Nutanix and Minburn Technology Group, a Microsoft reseller, have filed formal bid protests with the Government Accountability Office on the DISA joint enterprise license agreement with VMware, citing an overly broad agreement that stifles competition.

Based on the contracting language, the bid protesters also contend the contract re-up is an improper sole-source request for cloud services that would give VMware an unfair advantage competing for DOD’s growing cloud demand.

So many vendors responded to the Feb. 9 solicitation that the government requested additional time to respond to questions received Feb. 19, suggesting the feedback received was highly contentious.

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Acquisition 101: When a bargain isn’t a bargain

When my wife and I purchased our first vacuum cleaner, we selected a cheap model. It met all the specs of what we needed, did a minimally acceptable job and lasted little more than a year before it died. Not learning the lesson that buying the first vacuum should have taught us, we immediately bought another cheap vacuum to replace the first one, and it died an early death about 18 months later. We finally did learn our lesson with the third vacuum and paid slightly more for a better vacuum that has lasted six years (and counting).

Much like our predicament with the rotating vacuums, federal contracting professionals are facing increasing pressure to purchase goods and services as cheaply as possible using a method commonly referred to as “lowest price/technically acceptable” (LPTA)—even if it means minimal acceptability.  This push is laudable in theory, but the reality is often higher prices and a smaller pool of quality contractors, while robbing contracting officers of any discretion to choose a solution or product that is more cost-effective in the long term.

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About the authors: Eric Crusius, a partner with Fed Nexus Law, focuses on government contracts, cybersecurity, employment law and complex litigation. Mitchell Bashur, an associate at Fed Nexus Law, also contributed to this column.

Company excluded from competition protests $5 billion Army IT contract

A $5 billion Army contract program for information technology that’s almost two years behind schedule could be delayed even longer, as at least one company excluded from the competition files a protest in a federal court.

MicroTechnologies LLC of Virginia confirmed it filed a protest Jan. 9 in the U.S. Court of Federal Claims against the Army’s decision to exclude the company’s bid for the Information Technology Enterprise Solutions-3 Hardware program, or ITES-3H, to supply the Army commercial IT hardware.

While all documents in the case are sealed, MicroTech General Counsel and Chief Administrative Officer Aaron Drabkin said the grounds mirror those included in its protest filed with the Government Accountability Office (GAO), which was denied in October 2014. The company raised several challenges to the agency’s evaluation of its past performance.

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Navy’s $2.5 billion plan for shipboard networks hits snag after GAO partially upholds protest

The Government Accountability Office has partially sustained a bid protest filed by contractor CGI Federal over a $2.5 billion set of U.S. Navy contracts. GAO’s ruling could further delay Navy’s plans to upgrade the nation’s surface warship fleet.

Navy logoIn August, the Navy awarded the contracts to five companies – BAE Systems Technology Solutions & Services, General Dynamics C4 Systems, Global Technical Systems, Northrop Grumman Systems Corp. and Serco, Inc. However, work ceased Sept. 2 when losing bidders CGI Federal and DRS Laurel Technologies protested the decision.

GAO entirely denied DRS Laurel Technologies’ protest over the Navy’s Consolidated Afloat Networks and Enterprise Services — or CANES — system and portions of CGI Federal’s protest.

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House lawmakers call for OFPP to issue reverse auction guidance

House lawmakers are pressing the Office of Federal Procurement Policy to update the Federal Acquisition Regulations to detail how best agencies should use reverse auctions.

Reps. Jeff Miller (R-Fla.) and Sam Graves (R-Mo.), chairmen of the Veterans Affairs and Small Business committees, respectively, wrote to Anne Rung, OFPP administrator, Dec. 4, asking for a FAR case to be opened immediately to address reverse auctions.

“As you may well know, while our two committees recognize that reverse auctions, when properly used, may deliver savings to the taxpayer, we have long been concerned that some are misusing this tool to evade competition and compliance with other procurement regulations,” Graves and Miller wrote in the letter obtained by Federal News Radio.

Graves and Miller highlight findings from the December 2013 report from Government Accountability Office as well as recent GAO bid protest decisions detailing agency struggles with reverse auctions.

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GAO report reveals bid protests continue to increase

The U.S. Government Accountability Office (GAO) has released its annual report on bid protests filed during the year and their disposition.  The latest report (B-158766, dated November 18, 2014) covers FY 2014.

The report reveals that the number of bid protests continue to be on the upswing while the number of protests ruled to have merit is declining.  In addition, the overall “effectiveness rate” (i.e., where the agency involved grants some type of remedy or corrective action in response to the protest) remains flat.

Statistical details derived from the recent GAO report, compared to reports from the previous four years, can be seen in the chart below.

Bid Protest Statistics - FY 10-14

The number of cases filed in FY 2014 – 2,445 bid protests, 50 cost claims, and 66 requests for reconsideration – were up by 5% compared to FY 2013.  Of the total cases filed, only 556 were decided on their merits, and only 72 (or 13%) were sustained.

The most prevalent reasons for sustaining protests were: failure to follow evaluation criteria, flawed selection decisions, unreasonable technical evaluations, and unequal treatment.

Alternative dispute resolution (ADR) was used in only 96 cases.

The GAO report reveals that while protesters faced a decreased likelihood of success on the merits in a final decision from the GAO, agencies appeared to be slightly more inclined to take corrective action than in years past.  In the end, nearly half of all protesters were afforded some type of relief.

What these data do not specifically address is that the majority of protests do not reach a decision on the merits due to voluntary corrective action.  Corrective action is commonly taken voluntarily by agencies because of flaws in evaluating bids and proposals.  This has implications for both potential protestors and agencies in post-award debriefings.

A copy of the GAO’s latest bid protest report can be downloaded here: GAO Bid Protest Annual Report to Congress – FY 2014

Protests delay implementation of NASA’s SEWP contracts

Four companies have filed bid protests to be included in NASA’s slate of IT solution contracts under the SEWP V program.

The space agency announced 97 contracts in four groups earlier this month, scheduled to go into effect on Nov. 1. With the four protests logged with the Government Accountability Office, implementation of those contract awards has been delayed.

Four companies – UNICOM Government Inc., BahFed Corp., NCS Technologies Inc. and KPaul Properties LLC – submitted protests on Oct. 20. All four protests are under review by the GAO, which must issue decisions by Jan. 28.

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GAO partially upholds bid protest against embattled security clearance contractor

Security clearance contractor USIS suffered another in a series of setbacks Monday when the Government Accountability Office partially upheld a bid protest that removes the company from a contract it was given by the Homeland Security Department.

DHS had awarded a $210 million Field Office Support Services contract to USIS in July after the Office of Personnel Management said it wouldn’t do business with the company anymore.

The OPM decision was prompted by claims by the Justice Department that say the Falls Church, Va.-based security contractor took shortcuts and submitted files to the government that had not undergone a full review.

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Court of Federal Claims rejects attempt to shoehorn what it characterizes as a contract administration matter into a bid protest

Recently, the CFC rejected a bid protest action filed by Kellogg Brown & Root (KBR) with respect to one of the Army’s LOGCAP contracts. The contractor had performed the logistics and civil augmentation contract, under which the Army issued task orders for different years, on a “cost-reimbursement basis.” When the Army tried to change to a firm-fixed price arrangement for the 2013 close-out period, KBR balked and refused to submit a proposal—instead filing a bid protest action. The CFC dismissed the case, ruling that KBR did not properly invoke the court’s bid protest jurisdiction but rather was attempting to litigate a contract administration dispute.

After years of submitting cost-reimbursement proposals under the LOGCAP agreement, it seems reasonable that KBR didn’t want to switch to a firm-fixed price basis for the close-out period, as “there was ‘no way to accurately define the scope or duration of work’ and [the] ‘[l]egal, administrative compliance, audit response, vendor issues, subcontract close-out, and dispute resolution . . . are all unknowns.'”

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