GAO to Incumbents: You Still Have to Submit a “Well-Written Proposal”

XTec, Inc decision shows that the GAO is rejecting “incumbent-itis” .

In XTec, Inc., B-418619 (July 2, 2020), the GAO rejected the incumbent contractor’s assertion that the Department of State erred in assessing technical weaknesses that were at odds with the agency’s purported familiarity with XTec’s solution given its performance of the incumbent contract. The GAO decision is a reminder for federal contractors suffering from “incumbent-itis” that agency knowledge of the contractor is no substitute for compliance with solicitation requirements and a well drafted proposal.

The Solicitation

The solicitation in XTec related to the development, deployment and operation of an identity and credential management system (IDMS). Currently, the agency employs “One Badge” as its IDMS, which, among other elements, uses personal identity verification (PIV) cards issued to agency employees. These cards contain cryptographic information that are used to control physical access to facilities. The creation and management of PIV cards requires specialized software and hardware that are termed an IDMS.

After a rigorous and multi-phase selection process, the agency ultimately awarded the contract to Guidehouse LLP, finding their proposal both technically superior and less costly. Per the GAO’s description, “XTec challenged the agency’s evaluation in almost every respect.” The GAO found all of XTec’s objections without merit.

With respect to technical evaluation, the GAO noted the XTec challenged many of the agency’s identified weaknesses and concerns as unwarranted given the agency’s familiarity with XTec’s solution from the incumbent contract. For example, the agency expressed confusion as to whether a certain card processing workflow was already implemented or was being proposed as an enhancement. XTec countered that the agency should have understood it was in fact an enhancement given their knowledge of XTec’s existing workflow.

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The Decision

Rejecting XTec’s position, the GAO conceded that in certain contexts past performance information in an agency’s possession can be “too close at hand” to ignore. However, the GAO clarified that this “too close at hand” principle had not been extended to an agency’s evaluation of an offeror’s technical proposal. Rather, the GAO clarified that a “technical evaluation is dependent on the information furnished” in the bidder’s proposal. Thus, despite State’s purported familiarity with XTec’s solution, it remained the company’s responsibility to “submit a well-written proposal, with adequately detailed information” to demonstrate compliance with the solicitation and permit a meaningful review by the procuring agency. Thus, to the extent XTec sought to rely on State’s familiarity with its incumbent solution, its objections to the technical evaluation were without merit.

So, Incumbents beware.

When it comes to your technical proposals for follow-on work – “If it isn’t in the proposal; it isn’t getting evaluated” – even if the relevant information might already be known by your customer.