TITLE: B-299936.2, Gonzales-McCaulley Investment Group, Inc., November 5, 2007
BNUMBER: B-299936.2
DATE: November 5, 2007
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B-299936.2, Gonzales-McCaulley Investment Group, Inc., November 5, 2007
Decision
Matter of: Gonzales-McCaulley Investment Group, Inc.
File: B-299936.2
Date: November 5, 2007
Ollie M. McCaulley for the protester.
Steven Simpson, Esq., for Management Concepts, an intervenor.
Jonathan A. Baker, Esq., Department of Health and Human Services, for the
agency.
Nora K. Adkins, Esq., and James Spangenberg, Esq., Office of General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Agency's decision to cancel a solicitation, after a protest was filed,
due to a lack of valid delegated procurement authority, was essentially
pretextual when no other solicitations issued under the invalid delegation
were cancelled.
2. Agency did not have a reasonable basis to rescind the selection of a
vendor for providing training classes under the Government Employees
Training Act based on its belief that the vendor plagiarized certain
material from another vendor and included this material in its quotation,
which the agency found indicated a lack of independent knowledge of the
course material that rendered the quotation unacceptable, where the agency
did not reasonably investigate its concerns, the record contains evidence
that the vendor properly obtained this material from the agency and
reasonably used it in its quotation, and the vendor's quotation contained
information that was not plagiarized that was relevant to its knowledge of
the course material.
DECISION
Gonzales-McCaulley Investment Group, Inc. (GMIG) protests the decision of
the Department of Health and Human Services (HHS) to cancel a solicitation
for quotations for grants management courses to be taught at the Health
and Human Services University (HHS-U), as authorized by the Government
Employees Training Act (GETA), 41 U.S.C. sections 4101-4121 (2000).[1]
HHS-U was established on February 19, 2003, as an organizational unit of
the Human Resources Service within the HHS Program Support Center (PSC) to
develop and manage the Department's training and workforce development. 68
Fed. Reg. 8040 (Feb. 19, 2003). On April 14, 2003, the Deputy Assistant
Secretary for Program Support in charge of PSC delegated to the Director
of the Human Resources Service the authority to approve and acquire
training through HHS-U under the GETA acquisition authority. Agency Report
(AR), Sept. 10, 2007, Tab 3, Memorandum, Deputy Assistant Secretary for
Program Support. [2] HHS-U's training acquisition is administered by a
Center Manager who, among other things, oversees vendor selection.
On May 11, 2007, the protester received from HHS-U the solicitation for
quotations for providing grants management classes for HHS-U's 2008
schedule. In the solicitation, vendors were requested to provide
statements of technical capability/subject matter expertise; a statement
showing the vendor's understanding of the requirements; assurance of
sufficient staff, resources, and instructor knowledge; a list of the
grants management courses for which the vendor presents training,
including a course agenda/content outline and a list of objectives;
itemized costs; and references. This solicitation also listed and
described eight grants management training courses for the 2008 fiscal
year. Initial Protest, July 2, 2007, Tab 1, HHS-U E-mail to GMIG
Requesting Quotation.
GMIG and other vendors submitted quotations prior to the May 31 closing
date. Upon review of the vendors' technical capabilities and prices, HHS-U
selected GMIG, as well as Management Concepts (the incumbent) and one
other vendor, to provide grants management training courses at HHS-U. AR,
July 27, 2007, Tab 1, Center Manager's Statement, at 1. On June 19, GMIG
received from the Center Manager a confirmation of selection to provide
the eight grants management courses at HHS-U. Initial Protest, Tab 6,
HHS-U E-mail to GMIG Confirming Selection.
Prior to the start of classes, the Center Manager states that she was
reviewing the Management Concepts website and noticed "a striking
similarity with the course descriptions, objectives, and topics" in
comparison to GMIG's quotation. AR, July 27, 2007, Tab 1, Center Manager's
Statement, at 1. She thus determined that GMIG had submitted "plagiarized"
material from the Management Concepts website. Id. The record does not
evidence that HHS-U then sought an explanation or response from GMIG in
regard to this issue or that HHS-U delved any further into the similarity
between the two vendors' submissions. On June 27, HHS-U notified GMIG via
e-mail as follows:
It came to our attention today that the grants course information you
included in your proposal is not your own. Therefore, I am withdrawing
the offer letter from HHS University. We will not be contracting with
you for grants management training in FY08.
Initial Protest, Tab 9, Center Manager's E-mail to GMIG, at 1.
After receiving HHS-U's notice, GMIG contacted the agency and requested
that HHS-U review GMIG's course book that it had previously provided
HHS-U, asserting that it was readily apparent that the two vendors had
different curriculums and that it had shown that it can successfully
provide the required courses. GMIG also complained that comparing GMIG's
quotation with another vendor's quotation was improper. Initial Protest,
Tab 10, GMIG E-mail to HHS-U (June 27, 2007); Tab 11, GMIG E-mail to HHS-U
(June 28, 2007).
On June 29, the Center Manager responded, stating "I did review your
binder. However, it wasn't referenced in your proposal. My decision
stands," although she invited GMIG "to resubmit a proposal with
information on courses that GMIG offers. We will be happy to consider it
for future classes." Initial Protest, Tab 12, Center Manager's E-mail to
GMIG, at 1. GMIG then protested to our Office the agency's decision to
rescind the firm's selection to provide grants management courses at
HHS-U.
The agency asserted that the rescission of GMIG's selection was reasonable
because a comparison of the Management Concepts materials (located on its
Internet site) and GMIG's submitted materials confirms that GMIG copied
the Management Concepts course descriptions and learning objectives and
submitted them as their own.[3] As such, HHS-U concluded that there was an
insufficient basis on which to evaluate GMIG's quotation as technically
acceptable because GMIG's plagiarism inspired little confidence in regard
to its independent knowledge of the course material and its ability to
convey appropriate information through its course instruction. AR, July
18, 2007, at 2; AR, July 27, 2007, at 3.
In its comments in response to the agency report on this protest, GMIG
denied the claims of plagiarism with regard to this information (which
GMIG states was "very general by its nature"), and countered by providing
various examples from publicly provided federal government training
catalogs, including that of HHS-U, with course descriptions and learning
objectives that were also virtually identical to the course descriptions
and learning objectives included in GMIG's quotation and on the Management
Concepts website. Initial Protest, at 2; Protester's Comments, July 31,
2007, at 5-9, 14. GMIG asserts that a review of the rest of its quotation
and the course book that it provided to HHS-U reveals that it had the
requisite understanding and ability to provide courses that were
significantly different than those offered by Management Concepts, and
that the agency's rescission of its selection was improper. Initial
Protest, at 2.
Shortly after receiving GMIG's comments, HHS requested dismissal of the
protest based on a discovery that the acquisition had been conducted under
a delegation of GETA authority that was not effective as to HHS-U. As
previously stated, on April 14, 2003, the Deputy Assistant Secretary for
Program Support in charge of PSC delegated to the Director of the Human
Resources Service the authority to approve and acquire training through
HHS-U under the GETA acquisition authority. AR, Sept. 10, 2007, Tab 3,
Memorandum, Deputy Assistant Secretary for Program Support. However, by
notice of November 23, 2001, PSC had ceased to be an OPDIV. 66 Fed. Reg.
58,740 (Nov. 23, 2001). Therefore, according to HHS, because the authority
to redelegate GETA acquisition authority was based on PSC's status as an
OPDIV, the Deputy Assistant Secretary for Program Support did not, in
2003, have the authority to redelegate the approval or acquisition of
training under GETA to the Director of the Human Resources Service. Thus,
the agency asserted that HHS-U lacked the authority to conduct this
acquisition.[4] Because of this, it rescinded the selections and cancelled
this solicitation. On August 7, our Office dismissed GMIG's protest as
academic due to the solicitation's cancellation.
On August 8, GMIG protested that the GETA authority was operational at the
time of GMIG's selection and, alternatively, that the agency's decision to
cancel the solicitation was solely for the purpose of having its protest
dismissed. In response, the agency argued that its decision to cancel was
reasonable because the acquisition was unauthorized as it was conducted
under an invalid delegation of acquisition authority and that the reason
for cancellation was not pretextual.
A contracting agency need only establish a reasonable basis to support a
decision to cancel a request for quotations. SMF Sys. Tech. Corp.,
B-292419.3, Nov. 26, 2003, 2003 CPD para. 203 at 4. So long as there is a
reasonable basis for doing so, an agency may cancel a solicitation, no
matter when the information precipitating the cancellation first arises,
even if it is not until quotations have been submitted and evaluated. Id.
As here, however, where a protester has alleged that the agency's
rationale for cancellation is but a pretext to avoid awarding a "contract"
on a competitive basis or to avoid the resolution of a protest, we will
closely examine the reasonableness of the agency's actions in canceling
the solicitation. Id.; Griffin Servs., Inc., B-237268.2 et al., June 14,
1990, 90-1 CPD para. 558 at 3, aff'd, General Servs. Admin.--Recon.,
B-237268.3 et al., Nov. 7, 1990, 90-2 CPD para. 369. In cases where we
conclude that the agency's rationale for cancellation is merely a pretext,
we will recommend appropriate corrective action. See Griffin Servs., Inc.,
supra, at 3-4; Miller, Davis, Marter & Opper, P.C., B-242933, B-242933.2,
Aug. 8, 1991, 91-2 CPD para. 176 at 4.
Here, it appears from the record that HHS is correct in its assertion that
the GETA acquisition authority had not been validly delegated to HHS-U. We
believe that this lack of authority would ordinarily provide a reasonable
basis to cancel a solicitation. However, based on our review of HHS's
actions here, we conclude that the cancellation of this solicitation was
pretextual. The record shows that this was the only acquisition, out of
the hundreds that had been conducted by HHS-U without properly delegated
authority, that was cancelled when HHS became aware of the lack of
authority, even though a number of the other HHS-U acquisitions were
ongoing. See AR, Oct. 12, 2007, Declaration of HHS Director, Division of
Acquisition Policy, at 5. We recognize that HHS asserted in its response
to our Office's inquiry that it "expect[ed] and intend[ed] that HHS-U
would cancel all outstanding requests for quotations for training
services," but that it apparently had not "adequately communicated [this]
expectation" to HHS-U. Id. However, whether expected or not, this did not
occur. Thus, we find on this record that HHS's cancellation appears to be,
as the protester contends, essentially a pretext to avoid further scrutiny
and review of its protest.
Nevertheless, even where the cancellation of a solicitation was a pretext
to avoid further scrutiny and review of a protest, we will not sustain a
protest of the cancellation on this basis unless the protester was
prejudiced, for example, if its initial protest would have been sustained
but for the cancellation. See Miller, Davis, Marter & Opper, P.C., supra,
at 5.
As indicated above, HHS rescinded the selection of GMIG because it
believed that GMIG had plagiarized from the Management Concepts materials
in preparing its quotation and that the agency, therefore, had an
insufficient basis on which to evaluate GMIG's quotation as technically
acceptable, because GMIG's plagiarism inspired little confidence in regard
to GMIG's independent knowledge of the course material and its ability to
convey appropriate information through its course instruction.
In response, GMIG specifically denies plagiarizing this material from the
Management Concepts website and provides evidence that the course
descriptions and learning objectives that it used were virtually identical
to those in HHS-U's catalog and the catalogs of several other federal
agencies. HHS does not deny that this is the case. Indeed, the general
course descriptions included by GMIG in its quotation were included in
HHS-U's solicitation, so it is not surprising that a vendor offering these
very courses would copy the solicitation's description and refer to the
"learning objectives" already identified by the agency in its catalog for
these courses. We also note that it has not been alleged that GMIG
plagiarized the course syllabus, also included in its quotation, which
contained details regarding GMIG's class instruction, or the course book
that GMIG provided to HHS-U. Indeed, as indicated, the Center Manager was
aware, after reviewing GMIG's course book, that the "binder of materials
appear[ed] to be a viable training option." AR, July 27, 2007, Tab 1,
Center Manager's Statement, at 2. While it may be that there was a reason
that GMIG should not have been selected to provide these courses, the
record here shows that HHS-U's Center Manager did not attempt to
reasonably investigate her suspicions of plagiarism prior to rescinding
GMIG's selection and, on this record, we find the rescission was not
reasonably based.[5]
Given that the agency now has the properly delegated acquisition
authority, we recommend that HHS-U reinstate the solicitation and
reevaluate the quotations, considering all information presented by the
vendors in response to the plagiarism allegations.[6] We also recommend
that GMIG be reimbursed its costs of filing and pursuing the current
protest of the cancellation, as well as its earlier protest of the
rescission of its selection. Bid Protest Regulations 4 C.F.R. sect.
21.6(a)(1) (2007). [7] GMIG should submit its certified claim for costs,
detailing the time expended and costs incurred, directly to the
contracting agency within 60 days after the receipt of this decision. 4
C.F.R. sect. 21.8(f)(1).
The protest is sustained.
Gary L. Kepplinger
General Counsel
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[1] Originally enacted in 1957, GETA provides federal agencies with
general authority for employee training and authorizes the use of
non-governmental training resources to meet identified training needs. 41
U.S.C. sect. 4105.
[2] On March 30, 1995, the HHS Assistant Secretary for Personnel
Administration delegated authority to approve and acquire training,
including the authority to acquire training under GETA, to the heads of
operating divisions (OPDIV), with redelegations permitted. AR, Sept. 10,
2007, Tab 1, HHS Transmittal 95.5. On October 2, 1995, PSC was established
as an OPDIV within HHS, thereby giving PSC the authority to approve,
acquire, and redelegate the authority to acquire training through GETA. 60
Fed. Reg. 51,480 (Oct. 2, 1995).
[3] Our review of the record indicates that the two vendors' course
descriptions and learning objectives were virtually identical.
[4] On September 4, 2007, the Deputy Assistant Secretary for Acquisition
Management and Policy redelegated, under valid authority from a delegation
of the Assistant Secretary for Administration and Management dated July
14, 2006, the authority to acquire training under GETA to the Director of
the Workforce and Career Development Division for HHS-U, with
redelegations allowed. AR, Sept. 10, 2007, Tab 9, Delegation of Training
Acquisition Authority, at 1. Accordingly, HHS-U was provided the requisite
GETA authority to acquire training.
[5] The agency in its report asserts that GMIG was "given an opportunity
to resubmit its quote." AR, July 27, 2007, at 1-2. This is not true. The
record shows that the Center Manager only "invite[d] [GMIG] to resubmit a
proposal with information on courses that GMIG offers. We will be happy to
consider it for future classes." Initial Protest, Tab 12, Center Manager's
E-mail to GMIG, at 1.
[6] Management Concepts asserts that there are copyright concerns
regarding the use of its materials that need to be addressed with regard
to this acquisition. The agency should review these concerns to ascertain
their validity and take appropriate action. We also recognize that an
agency's concerns about plagiarism, if justified, could affect the
determination of the prospective contractor's responsibility.
[7] We do not recommend that GMIG be reimbursed its claimed quotation
preparation costs, since it is being provided an opportunity to compete
for courses under the solicitation.