GAO Sustained a Post Award Protest: Softrams, LLC, Chags Health Information Technology, LLC

GAO: SOURCE SELECTION DECISION IMPROPERLY BASED UPON A QUOTATION FROM A VENDOR CONFIGURATION ELIMINATED FROM THE COMPETITION: PROTEST SUSTAINED!

In Softrams, LLC, Chags Health Information Technology, LLC, 2022 CPD 57, 2022 WL 494987 (2/7/22), the GAO sustained a post award protest, ruling that the Agency’s source selection decision improperly relied on a quotation from a vendor configuration that had been eliminated from the competition.

The Procurement

The Department of Health & Human Services, Centers for Medicare and Medicaid Services (Agency) issued a solicitation to small business FSS contract holders seeking quotations for IT services to maintain and enhance its “identity management” system. The solicitation contemplated the issuance of a fixed price task order with a base period and options. Award was to be made on a best value basis, considering price and four nonprice factors, the one most pertinent here being Factor 3 – “challenge exercise and communication ability” (hereafter “the Factor 3 Oral Presentation.”) The solicitation established a two-phase evaluation; the oral presentation was scheduled for Phase Two.

Vendor “Omni Fed LLC” (Omni) had submitted its Phase One quotation as a prime contractor, proposing to use a second vendor, Bana, as a subcontractor (Omni-Prime). After the Phase One evaluation, Omni requested permission from the Contracting Officer (CO) to submit its Phase Two quotation as a “Contractor Teaming Arrangement” (CTA) with Bana. The CO gave consent so long as the CTA met GSA’s website requirements. As a result, Omni’s Phase two quotation, including the conduct of the Factor 3 Oral Presentation, was submitted by the CTA, in which Bana was designated as team leader and Omni as team member.

Award and GAO Protest

Based upon the Agency’s evaluation of the Omni-Prime Phase One quotation and the CTA Phase Two quotation (both written and oral), the Source Selection Authority determined that the CTA proposal represented best value and awarded the task order to the CTA.  Following notification of the award, offerors Softrams and C-HIT filed protests with GAO for reasons not relevant here. In response to the protests the Agency proposed corrective action, including reevaluation of quotations and a new source selection decision, and the protests were dismissed.

Agency Corrective Action and Agency Level Protest

After reevaluation of the Phase One quotations, the CO advised Omni-Prime that its quotation was to be eliminated from the competition for reasons not relevant here. Omni contested this action in an agency level protest. The Agency “clarified” that its elimination decision applied not to Omni-Prime but to the CTA. The Agency noted that only those that submitted quotations in Phase One would be eligible to move into Phase Two. The CTA did not quote in Phase One; hence it was ineligible to quote in Phase Two. Omni-Prime remained in the competition and was allowed to submit a revised quotation after discussions, along with the others remaining in the competition.

Notably and inexplicably, during this resubmission and reevaluation period the Agency did not permit any vendor to revise or provide a new Factor 3 Oral Presentation.  However, Omni-Prime had never submitted a Factor 3 oral presentation; the oral presentation was the subject of Phase Two and was made by the CTA (which now was ineligible and was excluded from the competition!) Notwithstanding, the Agency evaluated the CTA oral presentation during this reevaluation process, along with the other evaluation factors identified in the solicitation. Omni-Prime was determined as best value and was selected for award. Following notice of the new source selection decision. Softrams and C-HIT again filed protests at GAO.

The GAO Rules

The protesters argued, among other things, that the Agency improperly relied upon the Factor 3 Oral Presentation of the CTA in selecting Omni-Prime for award. The GAO agreed. The GAO ruled that the new source selection decision was based upon quotations from essentially two different vendors, Omni-Prime and the CTA, the latter which had been excluded from the competition. The Agency improperly relied upon the Factor 3 Oral Presentation of CTA as part of the overall evaluation that led to the selection of Omni-Prime as awardee. Accordingly, GAO sustained the protests. It recommended, among other things, the reopening of competition and a new source selection decision, plus reimbursement of costs and attorney’s fees.

Lessons Learned

Given the novel set of facts involved here, it would not be surprising to see judicial review of the Agency’s final action, particularly if Omni does not receive award in the new source selection decision. At this juncture, this case is a lesson to both government and contractor procurement personnel to obtain sound legal advice before embarking upon a course of action that may result in unnecessary cost and delay, as was the case here.