his month’s bid protest spotlight focuses on one recent U.S.
Court of Federal Claims decision and two U.S. Government Accountability Office decisions.
While all three protests were unsuccessful, each serves as a
different helpful reminder for contractors. The Court of Federal
Claims decision is a reminder for those submitting proposals, while
the two GAO decisions serve as reminders for unsuccessful offerors
hoping to protest terms of a solicitation and award decisions.
The Bionetics Corp.
In The Bionetics Corp. v. U.S., the Court of Federal Claims
denied Bionetics’ protest that the U.S. Air Force impermissibly excluded Bionetics
from competing for a multimillion-dollar contract award due to an
error inBionetics’price proposal.1
The request for proposals, or RFP, required employee wages to
comply with the collective bargaining agreement and the
McNamara-O’Hara Service Contract Act.
The SCA requires contractors to pay service employees prevailing
wages set by the U.S. Department of Labor or a collective
bargaining agreement. For all proposed labor categories included in
the collective bargaining agreement, the RFP required offerors to
propose rates that, at a minimum, met the collective bargaining
agreement requirements and were escalated throughout all years.
The RFP also warned that if an offeror did not entirely fill out
all required portions of the pricing proposal. as required in
Section L of the RFP, the Air Force could reject the proposal and
eliminate the offeror from competition.
Bionetics, the incumbent, submitted a proposal indicating it
would comply with the collective bargaining agreements in effect at
both performance locations. However, although it included proposed
wages for all required labor categories, for two of the collective
bargaining agreement labor categories, Bionetics price proposal
mistakenly proposed wages lower than the collective bargaining
agreement rates.
Despite being able to evaluate Bionetics’ total evaluated
price and determine it was both reasonable and balanced, the Air
Force found Bionetics’ price proposal incomplete due to the
mistakes. Rather than conduct discussions or provide Bionetics with
the opportunity to clarify the errors, the Air Force rejected
Bionetics’ proposal.
Bionetics tried arguing that, notwithstanding the errors, its
price proposal was indeed complete because it proposed wages for
all labor categories.
The Court of Federal Claims rejected this argument, however,
pointing out that the RFP also explicitly required that pricing
submissions comply with Section L requirements to be considered
complete. Because two of the wages were lower than the collective
bargaining agreement rates in violation of the Section L
requirements, the submission was therefore incomplete,
The Court of Federal Claims also rejected Bionetics’ claims
that the Air Force should have either sought clarification from
Bionetics, or assumed that Bionetics intended to propose wages at
the minimum rate, because Bionetics’ proposal stated it
intended to comply with the SCA and the collective bargaining
agreement.
Clarifications are not to be used to correct material errors,
and compliance with the collective bargaining agreement wages,
according to the court, was a material term of the RFP.
Furthermore, the RFP stated that the Air Force reserved its
discretion to conduct discussions as well as consider the so-called
correction potential of proposals.Therefore, it was entirely within
the Air Force’s discretion not to seek clarifications or
conduct discussions with Bionetics regarding the errors in the two
wages.
Moreover, it is the offerors’ burden to submit compliant and
well-written proposals. Thus, the Air Force need not have assumed
Bionetics would propose wages at the minimum rate when its proposal
clearly did not.
Takeaways
Bionetics Corporation serves as the latest reminder -in a long
list of reminders -of how costly clerical errors in proposals can
be for contractors. It is incumbent upon offerors to quadruple
check proposals for compliance with solicitation instructions to
ensure that the business development costs they incurred putting
forth a proposal are not all for naught.
MartinFederal Consulting LLC
In Matter of: MartinFederal Consulting LLC, the GAO dismissed an
incumbent’s protest of the U.S. Department of the Army ‘s award of a
small business set-aside contract to Altus Engineering LLC for
failure to state a valid basis for protest. 2
MartinFederal, the protester, raised three protest grounds, two
of which are discussed here. These two grounds involve similar
themes regarding whether the awardee had the adequate amount of
experience to be considered for award.
MartinFederal first argued that, unlike itself, the awardee had
no experience providing lubricant analysis services within the past
five years, and therefore had to rely on a subcontractor to meet
the solicitation’s past performance requirements.
The solicitation, however, explicitly allowed the offeror to
“demonstrate clearly that it can self-perform, or perform
through its teaming or subcontractor arrangements” The GAO
found that this language permitted offerors to rely on proposed
subcontractors’ experience to meet the past performance
requirements.
Thus, even if the awardee relied entirely on a proposed
subcontractor’s past performance, it would have been consistent
with the solicitation’s requirements.
MartinFederal alternatively argued that, because the awardee
allegedly did not have enough experience, its proposal indicated it
would impermissibly rely on its subcontractor, MRG Laboratories, to
perform more than 50% of the work.
MartinFederal argued that this would violate Federal Acquisition Regulation 52.219-14,
which provides that, for small business set-aside contracts for
services, the small business prime contractor will not pay
similarly situated subcontractors more than 50% of what it is paid
by the government.
A similarly situated entity is one that has the same small
business program status as that which qualified the prime
contractor for the contract award, and is small for the North
American Industry Classification System, or NAICS, code assigned to
the prime contract.
In other words, a small business prime contractor may
subcontract more than 50% of a small business set-aside contract to
an entity that is also small for the NAICS code assigned to the
contract.
Normally, the GAO views protests alleging noncompliance with FAR
52.219-14 as matters of responsibility or contract performance,
both of which the GAO will not review. However, if a protester can
show that a proposal, on its face, indicated an offeror has not
agreed to comply with the limitation on subcontracting, then the
GAO will review whether the agency should have found the offeror
unacceptable.
Here the protester attempted to meet this burden by arguing that
the awardee’s alleged lack of experience, coupled with its
proposed use of MRG Laboratories as its subcontractor, was facially
noncompliant with FAR 52.219-14. The protester, however, made a
critical error in failing to appreciate the similarly situated
entity language of the provision.
The Army pointed out, and the GAO agreed, that because MRG
Laboratories represented in its System for Award Management profile
that it was a small business for the NAICS code assigned to the
solicitation, it was a similarly situated entity.
Therefore, any proposed use of MRG Laboratories could never
violate FAR 52.219-24. Thus, the GAO dismissed similarly dismissed
this protest ground.
Takeaways
An incumbent losing a follow-on contract to an entity it
perceives to be less experienced is often a hard pill to
swallow.
Before raising protest grounds attacking an awardee’s lack
in experience, however, disappointed offerors must carefully review
the terms of the solicitation to determine whether the awardee may
have permissibly relied on its proposed subcontractors’
experience.
Furthermore, when alleging protest grounds regarding the
limitations on subcontracting, it is important to double-check the
System for Award Management profile to verify that a suspected
proposed subcontractor is not a similarly situated entity.
Logmet LLC
Matter of: Logmet LLC was a pre-award protest of an Air Force
RFP for flight operations training and F-15 aircraft maintenance to
support the Republic of Singapore Air Force at Mountain Home Air
Force Base in Idaho.3 The Air Force provides training
support to the Singaporean Air Force through a foreign military
sales program known as Peace Carvin.
This RFP was for the fourth iteration of the contract for
aircraft maintenance and operation support, the first being awarded
in 2008.
Despite the RFP being for the fourth iteration of the contract,
Logmett claimed that the Air Force had improperly bundled
maintenance and operations-training support requirements in the
RFP, in violation of the Small Business Act.
The Small Business Act provides that agencies must, to the
extent practicable, “avoid unnecessary and unjustified
bundling of contract requirements that precludes small business
participation in procurements as prime
contractors.”4
The act defines bundling as “consolidating two or more
procurement requirements for goods or services previously provided
or performed under separate smaller contracts into a solicitation
of offers for a single contract that is likely to be unsuitable for
award to a small business concern.”5
The act further defines “separate smaller contract” as
“a contract that has been performed by one or more small
business concerns or was suitable for award to one or more small
business concerns.”6
Undercutting Logmet’s argument, however, is the Air
Force’s inclusion of both operations training and maintenance
services under the same solicitation from the beginning of the
Peace Carvin program. The GAO held that the requirements,
therefore, did not meet the definition of bundling under the act
because they were not previously performed under separate, smaller
contracts.
The protester also raised several challenges to the RFP’s
terms, claiming they were unduly restrictive. Specifically, Logmet
argued that requiring instructor personnel to have a certain level
of experience with F-15 fighter jets would essentially require
offerors to propose Air Force, Air Force Reserve and Air National
Guard personnel for these positions.
Somewhat dodging the allegation that only former government
officials could meet the qualification requirements, the GAO sided
with the Air Force’s contention that the requirements were
reasonably necessary to meet its needs, because it was allegedly
unlikely that personnel’s experience on other platforms would
be sufficient for them to operate and train others to operate the
F-15 aircraft.
Similarly, Logmet also challenged the RFP’s requirement that
offerors must establish that they contacted these same proposed
personnel two months prior to proposal submission.
The GAO, however, pointed out that the RFP required proposal
submission less than two months after the RFP was issued.
Therefore, claims that the two-month turnaround requirement was too
tight rang hollow.
Moreover, the GAO agreed with the Air Force’s explanation
that the two-month contact requirement was reasonable to minimize
risk that the awardee would be unable to fill the hard-to-fill
positions.
Takeaways
Logmet serves as a reminder to potential small business offerors
that violations of the Small Business Act’s bundling
prohibitions might be a pre-award protest ground where an agency
impermissibly bundles requirements. While the argument was
ultimately unsuccessful in the instant protest, small businesses
should nonetheless keep this argument in mind when reviewing
solicitations for potential issues to raise in a pre-award
protest.
Footnotes
1. Bionetics Corp. v. U.S., — Fed. Cl. —, 2022 WL
1537176 (2022).
2. Matter of: MartinFederal Consulting LLC, B-420626, May
11, 2022.
3. Matter of: Logmet LLC, B-420507, May 6,
2022.
4. 15 U.S.C. § 631(j)(3
5. 15 U.S.C. § 632(o)(2).
6. Id. at § 632(o)(3).
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.
© Morrison & Foerster LLP. All rights reserved
