Offeror Fails To Timely Disclose Denial Of Security Clearance – Protest Granted!

In M.C. Dean, Inc., B-418553 (6/15/2020), the GAO recently granted a post award protest on the grounds that an offeror/awardee had actual knowledge, prior to award, that its proposed program manager had been denied a security clearance necessary for performance, but failed to timely notify the agency.

The Solicitation

The National Security Agency (NSA) issued an RFP to provide maintenance, installation and distribution services for the agency’s physical security system.  The solicitation provided for award based upon a best value tradeoff considering the following general evaluation factors – management, technical, and price. The RFP also identified seven key personnel categories, including program manager (PM). The PM was to be responsible for monitoring cost, schedule and performance. The RFP also provided that the PM would have access to classified information and was required to have a top security clearance with a full scope polygraph at the time of award.

Proposals, Award and Protest

Three offerors, including Dean, submitted proposals under the RFP. NSA then requested final proposal revisions, which were submitted in November 2019.  In its FPR, offeror PTSI proposed a specific PM and explained how this person would enhance performance under the contract.  However, shortly thereafter and prior to award, PTSI’s proposed PM was denied a security clearance and thus could no longer perform the PM function under the contract. PTSI had actual knowledge of this denial at or about the time it occurred but failed to advise the Agency. Subsequently, PTSI received the award. Dean was debriefed, and then filed a timely protest with the GAO.

Insofar as pertinent Dean contended, based upon GAO precedent, that since PTSI had actual knowledge of the denial of the security clearance and the PM’s unavailability to perform the PM function, it was obligated to notify the Agency of this unavailability prior to award. The Agency took the position that since the PM had a right to appeal the denial through a period ending after award, the awardee did not actually “know” that he would be unable to perform. The GAO was not persuaded.  It stated that the fact that the proposed PM “could” appeal (he never did) did not excuse PTSI’s actual knowledge of his unavailability.  Next, the Agency argued that it was irrelevant that the PM was unavailable because the government’s reliance on his resume was not material to the overall evaluation.  The GAO disagreed; regardless of the extent of reliance, the fact remained that PTSI had a legal obligation to timely advise the Agency of the PM’s unavailability to perform, and it failed to do so.  GAO granted the protest.

Lessons Learned

This successful protest action reminds us that an offeror’s job is not over when it submits its final proposal to the government.  An offeror has a continuing obligation to keep the Agency informed of material changes to its proposal prior to award.  The awardee here learned this lesson the hard way.