This month’s bid protest round up focuses on three recent
decisions from the U.S. Court of Federal Claims and the Government
Accountability Office (GAO). These decisions involve (1) standing
at the Court where protest allegations are speculative; (2) the
rules related to delivery orders issued under Federal Supply
Schedule (FSS) contracts; and (3) conflicts of interest.
ZeroAvia, Inc.1
This decision involves the factual elements required to
establish standing in a bid protest before the U.S. Court of
Federal Claims. In dismissing the protest for lack of standing, the
Court of Federal Claims found that the protester, ZeroAvia, Inc.
(ZeroAvia), failed to allege sufficient facts for its broad
assertions of errors in the procurement.
The solicitation informed offerors that the National Aeronautics
and Space Agency (NASA) would conduct a best value trade-off after
the agency utilized a competitive range to winnow the pool of
competitors based on the most highly rated proposals. After
receiving and evaluating proposals, NASA notified ZeroAvia that it
was not selected for the competitive range.
ZeroAvia protested its exclusion from the competitive range at
the U.S. Court of Federal Claims, alleging unequal treatment,
failure to engage in clarifications, and failure to conduct
meaningful discussions. At the initial status conference, the
government proposed filing its motion to dismiss prior to
submitting the administrative record because ZeroAvia allegedly
lacked standing to pursue to its protest. ZeroAvia objected,
arguing that it required the record to respond
“intelligently” to the government’s motion to
dismiss. The Court agreed with ZeroAvia and ordered the government
to file the administrative record prior to filing its motion to
dismiss.
After the government filed the record, the parties fully briefed
the government’s motion to dismiss and the response thereto.
After holding an oral argument, the Court concluded that ZeroAvia
had failed to carry its burden to establish its standing to pursue
its bid protest. The Court found that each of ZeroAvia’s
challenges was based upon conjecture and insufficient to show that
ZeroAvia “had a substantial chance of winning the
award.”
In particular, the Court noted that, although ZeroAvia
challenged its assessed weaknesses and deficiencies, it did not
“identify any particular weakness or deficiency that was
assessed as a result of an alleged procurement error despite having
access to such information as a result of the debriefing.”
Moreover, ZeroAvia did not reference the solicitation or its
proposal to show that it provided the required information
underlying the weaknesses or deficiencies assessed, or that NASA
employed unstated criteria in evaluating its proposal. Making
matters worse, despite claiming that it needed the administrative
record to respond “intelligently” to the government’s
motion to dismiss, ZeroAvia did not cite to the administrative
record a single time in its response.
Faced with ZeroAvia’s failure to plead its allegations with
sufficient particularly, the Court held dismissal for lack of
standing was the “inevitable outcome.”
Takeaway
ZeroAvia is a cautionary tale for disappointed offerors
hoping to raise speculative allegations to obtain access to the
administrative record underlying a procurement. Because standing is
determined as of the commencement of a suit, a protester cannot
raise completely unsupported allegations with hope of unearthing
better protest allegations based on the administrative record.
Instead, standing must be established in the Complaint itself.
Nevertheless, ZeroAvia is an outlier. Although it is no
doubt true that protesters must plead their allegations with some
grounding in fact, that generally is a low bar to clear,
particularly at the Court. Given this reality, it is notable that,
even after it received the administrative record, ZeroAvia could
not use such information to demonstrate that its complaint was
factually sufficient.
Chicago American Manufacturing, LLC2
Chicago American Manufacturing, LLC concerns a
Department of the Army (Army) Request for Quotations (RFQ) issued
under FSS procedures to holders of General Services Administration
(GSA) Schedule 71 contracts. The Army awarded the deliver order to
Inovo, Inc. (Inovo), and Chicago American Manufacturing, LLC (CAM)
protested the award, alleging, among other things, that Inovo’s
quotation was not technically acceptable because Inovo quoted a
product that was not on its GSA Schedule contract.
The Army’s solicitation stated the Army would issue a
delivery order to the offeror who quoted the lowest price and a
technically acceptable offering. The solicitation provided that
quotations would be technically acceptable if they satisfied the
specifications in the Furniture Item Description (FID) and if the
contractor could complete the work by the specified installation
dates. The FID stated “all required items and features
submitted shall be on current GSA schedule contract.”
The Army received quotations from three offerors and, after
multiple rounds of technical review, the Army evaluated all three
quotations as technically acceptable. After receiving best and
final offers, the Army awarded the delivery order to Inovo.
Following the award, CAM protested, alleging Inovo’s Schedule
Contract included a bed with dimensions of 78 inches by 38 inches,
whereas the solicitation required a bed with dimensions of 80
inches by 38 inches. Although Inovo’s quotation identified a
bed with the correct dimensions, CAM argued that where there is a
discrepancy between a vendor’s FSS Schedule Contract and its
quote, the terms of the Schedule Contract is binding.
The GAO agreed with CAM. The GAO noted that “[t]echnical
specifications for products available under a firm’s FSS
contract are fixed, discrete, specific, contractually binding, and
not subject to alteration,” and that the only relevant inquiry
was whether the Army had properly assessed whether Inovo quoted
items from its Schedule Contract. Because the GAO concluded Inovo
quoted products not on its Schedule Contract, it held the Army
could not properly issue a delivery order to Inovo.
Takeaway
Government contracts is a game of inches, and Inovo lost that
game here because its Schedule Contract included a product that did
not match exactly the specifications in the Army’s
solicitation. Vendors must remember that FSS orders are tied to the
underlying Schedule Contract and not whatever product is identified
in a vendor’s quotation. Vendors should be careful to compete
for only those products that are actually on their Schedule, and
ensure that their quotations ultimately match those products
exactly.
KOAM Engineering Systems, Inc.3
This decision concerns an alleged personal conflict of interest
based on the marriage between an agency contracting official and an
individual proposed as key personnel for the awardee of a
Department of Navy (Navy) contract.
The Navy issued a solicitation for engineering support services.
After receipt and evaluation of proposals, the Navy selected McKean
Defense Group (McKean) for award. KOAM Engineering Systems, Inc.
(KES) protested, alleging the Navy misevaluated proposals and
failed to consider a personal conflict of interest (or the
appearance of such) that tainted the award decision. In response to
the protest, the Navy took corrective action to reevaluate
proposals and investigate the potential conflict. After completing
its reevaluation and concluding no conflict existed, the Navy again
awarded the contract to McKean, prompting KES to again allege,
among other things, that the award was tainted by a personal
conflict of interest.
KES’s conflict of interest protest ground alleged that an
employee of McKean’s who helped prepared the firm’s
proposal for the procurement was married to a Navy Contracting
Officer’s Representative (COR) who worked on the incumbent
contract held by KES and had access to KES’s cost information.
KES contended that – given the individuals’ marriage,
close proximity at home, and common financial interest –
there was a presumption of impropriety that tainted the procurement
and award decision.
Based on the information developed through the Contracting
Officer’s conflict of interest investigation, the GAO concluded
there was no conflict and that, in any event, any conflict could
not have materially prejudiced KES. The GAO noted that KES did not
dispute the Contracting Officer’s finding that the COR was not
involved in the instant procurement or otherwise have access to
associated procurement materials. Moreover, despite KES’s
suggestion that the GAO should assume the COR disclosed
competitively sensitive information to her spouse at McKean, the
GAO refused, noting that the Contracting Officer had collected
signed and sworn declarations attesting to the contrary. Finally,
the GAO noted that even if the COR had disclosed the KES cost
information to which she had access, the Contracting Officer
reasonably concluded such information was unlikely to result in
competitive harm because of the structure of the solicitation.
Thus, the GAO denied KES’s conflict of interest allegation.
Takeaway
KOAM Engineering Systems is another example of the
significant deference contracting officers receive from the GAO
with respect to conflict of interest investigations and the overall
difficulty in alleging successful conflict of interest protest
grounds. As long as the contracting officer has meaningfully
considered a potential conflict and made a reasonable determination
regarding whether a significant conflict exists, or has been
adequately avoided, neutralized, or mitigated (or waived in
accordance with regulations), the GAO will not second-guess the
agency. This includes agency determinations that were made even
during the pendency of a protest.
Footnotes
1. ZeroAvia, Inc. v. United States, No. 21-1991,
2022 WL 2661792 (Fed. Cl. June 7, 2022) (reissued for publication
July 11, 2022).
2. Chicago Am. Mfg. LLC, B-420533 et
al., May 23, 2022, 2022 CPD ¶ ___ (publicly released July
5, 2022).
3. KOAM Eng’g Sys., Inc., B-420157.2, July
6, 2022, 2022 CPD ¶ ___.
Because of the generality of this update, the information
provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
situations.
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