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This month’s bid protest roundup focuses on two recent
decisions by the U.S. Government Accountability Office (GAO) and
one decision from the U.S. Court of Federal Claims
(“Court”). These decisions involve (1) the consequences
of failing to scrutinize the terms of an indefinite-delivery
indefinite-quantity (IDIQ) solicitation when challenging the terms
of a task order solicitation, (2) the distinction between ancillary
work and the principal purpose of an information technology (IT)
centric solicitation when claiming that a task order solicitation
is outside the scope of the underlying IDIQ contract, and (3) in
the context of a challenge to the override of a Competition in
Contracting Act (CICA) stay, the Court’s rejection of the
argument that the status quo involved the continued performance of
the incumbent contract and suspension of the contested bridge
contract award.
Enterprise Resource Performance,
Inc.1
This decision involves an untimely protest of the evaluation
methodology in a Department of Veterans Affairs’ (VA) task
order solicitation. In denying the protest, the GAO found that the
underlying IDIQ solicitation explicitly set forth the very tiered
set-aside and best value trade-off evaluation methodology that the
protester now challenged as unreasonable. The GAO also pointed out
that the VA previously awarded the protester an IDIQ contract and a
task order award using the same evaluation methodology.
In 2016, the VA issued the underlying IDIQ set-aside
solicitation for supply chain and logistics support services. The
solicitation contemplated the award of approximately ten IDIQ
contracts for each of the six identified “service groups”
on a best value basis, using a three-tiered evaluation methodology
for use in all subsequent task order competitions.
The solicitation further specified that, over the life of the
procurement, offerors that became large would either be off-ramped
or evaluated in Tier 3 for the balance of the contract ordering
period. The VA also explained that the tiered evaluation approach
“may result in awards to only Tier 1 offerors,” as the
solicitation directed the VA to first evaluate and make awards to
Tier 1 offerors and then evaluate Tier 2 offerors only if the VA
needed to make additional awards; Tier 3 offerors would be
evaluated last.
In 2017, the VA awarded Enterprise Resource Performance, Inc.
(“Enterprise”), an IDIQ contract award as a Tier 1
offeror. And in 2019, Enterprise won a task order 19 award (TO 19)
as a Tier 1 offeror. Sometime thereafter, Enterprise became other
than small, placing it in Tier 3 for all remaining task order
competitions.
On April 1, 2022, the VA issued the task order 88 (TO 88)
solicitation at issue in this protest, a follow-on requirement to
TO 19. The TO 88 solicitation included the mandatory tiered
set-aside evaluation methodology from the IDIQ solicitation.
Prior to the proposal submission deadline, Enterprise filed a
protest challenging the best value trade-off aspect of the tiered
set‑aside evaluation approach, which Enterprise claimed the
VA introduced for the first time in the TO 88 solicitation.
Specifically, Enterprise argued that the tiered set-aside
evaluation approach was irrational in the context of a best value
trade-off award methodology, as it restricted the VA from
evaluating all proposals. Enterprise further claimed it did not
know the VA would use this approach to evaluate future task order
proposals.
The GAO dismissed the protest as untimely. First, the GAO
rejected Enterprise’s allegation that the VA first introduced
the best value trade-off methodology in TO 88, finding that the VA
not only used that approach in making IDIQ contract awards, but
that it used the same approach when evaluating TO 19 proposals.
Enterprise won IDIQ and TO 19 awards, so the protester clearly knew
the agency might employ this methodology in future task order
competitions. In reaching this conclusion, the GAO emphasized that
the “integrity of the protest process does not permit a
protester to espouse one position during the procurement, and then
argue during a protest that the position is unreasonable or
otherwise improper.”
Next, the GAO determined that irrespective of whether the VA
employed a best value trade-off or some other type of evaluation
methodology (e.g., lowest-price, technically acceptable), the IDIQ
solicitation clearly stated that the mandatory tiered evaluation
approach would be used in all future task order solicitations.
Enterprise therefore had notice of this requirement in 2016 and, if
it disagreed, should have objected at that time.
Finally, the GAO found that, even if Enterprise had timely
objected, there is “nothing inherently irrational” about
basing a best-value tradeoff on a tiered evaluation, particularly
where the FAR expressly affords contracting officers the discretion
to limit task order competitions by using small business
set-asides.
Takeaways
This decision serves as a reminder that offerors must carefully
review the terms of an IDIQ solicitation and questions submitted by
other offerors to determine whether any terms might impact future
task order competitions. It also emphasizes that the GAO will
strike down what are essentially glass house arguments, where a
protester waits until its circumstances change to object to the
terms of a solicitation that no longer benefit it.
Plateau Software, Inc.2
In Plateau Software, Inc., the GAO addressed
considerations surrounding the boundary line between a solicitation
that seeks ancillary IT services and a
solicitation that is principally for IT services
in the context of a General Services Administration (GSA) One
Acquisition Solution for Integrated Services (OASIS) procurement.
Plateau Software, Inc. (“Plateau”), argued that a task
order solicitation sought IT services outside the scope of the
OASIS unrestricted pool 1 contract (“OASIS contract”),
which limited the procurement of IT services to ancillary services
“integral and necessary” to meet certain professional
service requirements and also confined the scope of task orders to
a singular principal purpose. Employing a fact-based analysis, the
GAO rejected each of the protester’s arguments, finding that
the contested services were ancillary and within the scope of the
underlying contract and that the task order had only one principal
purpose.
On February 4, 2022, GSA issued the task order solicitation to
OASIS unrestricted pool 1 contract holders, seeking occupational
health, management, data analysis, and IT support services. Plateau
timely filed a pre-award protest, alleging the task order
solicitation was outside the scope of the OASIS contract and that,
as a result, GSA had to compete the procurement in accordance with
CICA, opening the solicitation to companies (such as Plateau)
without an OASIS contract.
First, Plateau claimed that the principal purpose of the task
order solicitation was for IT services, consisting of IT operations
and engineering support services for the Department of Defense
Force Risk Reduction (FR2) system. Plateau pointed to the various,
interspersed requirements for data analytics work throughout the
Performance Work Statement as supporting evidence, emphasizing that
such work required experience and expertise in the FR2
infrastructure.
In addition, Plateau argued that the solicitation identified two
principal purposes in violation of the single principal purpose
restriction in the OASIS contract—”one for
IT‑related services to operate, maintain, and modernize the
FR2 system[,] and another for safety and occupational health
initiatives.”
The GAO disagreed with each of these arguments and denied the
protest.
In reaching its determination, and in finding that the GSA
already satisfied CICA’s competition requirements by competing
the underlying IDIQ contract through full and open competition, the
GAO conducted a fact-intensive, comparative evaluation to assess
whether the task order was materially different from the original
contract. This involved a “review[] [of] the circumstances
attending the original procurement” based on a variety of
factors, including “changes in the type of work, performance
period, and costs between the contract as awarded and the task
order solicitation.” The GAO also evaluated whether the terms
of the original contract solicitation advised offerors of the
potential for the type of task orders issued.
Based on its comparative evaluation of the terms of each
solicitation, the GAO concluded that the principal purpose of the
solicitation was for integrated professional engineering services
with ancillary IT components (such as the data analytics work). It
found that such services are encompassed by the broad range of
professional services in the OASIS contract and therefore within
scope.
The GAO also rejected protester’s argument that historical
labor data included in the task order solicitation showed that the
principal purpose was for IT services, where two-thirds of the
relevant historical labor was allegedly IT-related. Rather, the GAO
explained that there is no correlation between the scope of work
and the labor mix/breakdown, per the OASIS contract. Moreover,
after excluding the data-related labor categories, the portion of
ancillary out-of-scope IT services was only approximately 32 to 39
percent.
Finally, the GAO also rejected Plateau’s argument that the
OASIS contract precluded task order solicitations from having
multiple objectives, noting that it was not inconsistent for the
task order solicitation to contain multiple objectives where the
OASIS contract called for an integrated solution.
Takeaways
This decision shows that, although IT services can be integral
to the performance of a task order (or contract), that does not by
itself mean that the principal purpose of the procurement is for IT
services. Rather, offerors must pay heed to both the degree of
importance and differences among the varying requirements of a
solicitation when protesting any terms.
For protesters, this case illustrates the factors that the GAO
will consider when analyzing whether a task order is out of scope
of its underlying IDIQ contract. And, as this case also
demonstrates, if the solicitation for the underlying contract
contains a broad scope of requirements, an out‑of‑scope
challenge to a task order solicitation will likely fail.
Yahya Technologies, LLC d/b/a Y-Tech, LLC v. United
States3
In Yahya Technologies, LLC, the latest of a string
of CICA stay override decisions by Judge Campbell-Smith over the
past several years, the Court denied the plaintiff’s motion for
a preliminary injunction or application for a temporary restraining
order.
In July 2021, the agency notified Yahya Technologies, LLC d/b/a
Y-Tech, LLC (Y-Tech), that it would not exercise any additional
option periods under a contract that Y-Tech was performing.
Approximately five months later, the agency issued a new
solicitation, the terms of which Y-Tech protested at the GAO as
being improperly restrictive. In response, the agency elected to
take corrective action by cancelling the solicitation and issuing a
new one, resulting in dismissal of the protest.
Prior to issuing a new solicitation, the agency awarded a sole
source bridge contract to another contractor for the various IT
services that Y-Tech had been performing under the incumbent
contract. Y‑Tech, in turn, promptly filed a new protest at
the GAO, claiming that the agency failed to take corrective action
and awarded the bridge contract in bad faith. This protest
triggered an automatic CICA stay of performance of the bridge
contract. Five days later, the agency notified Y-Tech of its
intention to override the CICA stay, as continued performance of
the bridge contract was “in the best interests of the United
States.”
Plaintiff Y-Tech filed suit with the Court and argued that
reinstating the CICA stay was necessary to preserve the status quo,
which, in its view, was the continued performance of its incumbent
contract and a suspension of the bridge contract award. The
plaintiff further alleged that absent an injunction of the CICA
stay override, it would go out of business and therefore would not
be able to compete for the award once the agency issued the new
solicitation.
In its written justification for overriding the CICA stay, the
agency articulated the reasons why continued performance of the
bridge contract was “in the best interests of the United
States.” The agency began by detailing a variety of recent
performance issues with the plaintiff, including three service
outages within the preceding six-month period and the
identification of “significant security vulnerabilities”
within its IT systems that the plaintiff failed to resolve for
nearly five months, all of which posed a risk to the agency’s
infrastructure and core mission.
The justification also highlighted the increased attacks on the
United States by entities in foreign states, such as Russian
Advanced Persistent Threat groups, through the exploitation of
common vulnerabilities and exposures. Comparing those threats to
the severe risks resulting from the plaintiff’s performance
failures, the agency determined a stay override was
appropriate.
In denying plaintiff’s motion, the Court interestingly
latched onto the status quo analysis, without analyzing the
rationale provided in the agency’s written justification.
Instead, the Court focused on the fact that since July 2021, the
plaintiff knew the agency would not exercise any options in its
contract and that the plaintiff would have to compete for the new
contract.
The Court also held that the agency did not have an obligation
to extend the incumbent’s performance during the ongoing
re-competition process. In a final point, the Court noted that the
underlying GAO protest did not “redefine the status quo,”
as that protest’s outcome “simply does not dictate whether
plaintiff would continue its performance” beyond the
expiration date of its incumbent contract. The Court accordingly
dismissed the plaintiff’s complaint as moot, as the Court could
not fashion any meaningful relief given the status quo and limited
scope of the issues before it.
Takeaways
The primary takeaway in this case is that the Court does not
consider the continued performance of the incumbent contract to be
the status quo where the underlying protest is based on an
agency’s bridge contract award. Also underpinning this decision
is the key distinction that a recently awarded bridge contract is
separate and distinct from an incumbent contract.
On a related point, this decision—among others, including
decisions by Judge Campbell-Smith4—signals the
Court’s continued reliance on at least some of the principles
articulated in Reilly’s Wholesale Produce v. United
States5 in the wake of the Federal
Circuit’s December 2019 decision in Safeguard Base
Operations, LLC v. United States.6 In that
case, the Federal Circuit noted that
the Reilly factors for evaluating an override
determination “do not even bind the Claims Court, let alone
comprise an indispensable aspect of agency rational
basis.”7 Nevertheless, and although not
specifically addressed in Yahya Technologies, the
Court will seemingly continue to use
the Reilly factors as useful guideposts.
Footnotes
1 Enter. Res. Performance, Inc., B-420714,
2022 U.S. Comp. Gen. LEXIS 123 (Comp. Gen. June 7,
2022).
2 Plateau Software, Inc., B-420579, 2022
U.S. Comp. Gen. LEXIS 131 (Comp. Gen. June 14, 2022).
3 Yahya Technologies, LLC d/b/a Y-Tech, LLC v.
United States, No. 22-585, 2022 U.S. Claims LEXIS 1347 (Fed.
Cl. June 27, 2022).
4 See generally C&E Servs. v.
United States, No. 22-366, 2022 U.S. Claims LEXIS 982 (Fed.
Cl. May 23, 2022); see also Comprehensive
Health Servs., LLC v. United States, 151 Fed. Cl. 200 (2020)
(decision by Judge Tapp).
5 Reilly’s Wholesale Produce v. United
States, 73 Fed. Cl. 705, 710 (2006).
6 Safeguard Base Operations, LLC v. United
States, 792 Fed. App’x 945 (Fed. Cir. 2019).
7 Id. at 948–49 (internal
citations omitted).
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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