TITLE: B-310489; B-310489.2, Superlative Technologies, Inc., January 4, 2008
BNUMBER: B-310489; B-310489.2
DATE: January 4, 2008
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B-310489; B-310489.2, Superlative Technologies, Inc., January 4, 2008
DOCUMENT FOR PUBLIC RELEASE
The decision issued on the date below was subject to a GAO Protective
Order. This redacted version has been approved for public release.
Decision
Matter of: Superlative Technologies, Inc.
File: B-310489; B-310489.2
Date: January 4, 2008
Kenneth D. Brody, Esq., and Thomas K. David, Esq., David, Brody &
Dondershine, LLP, for the protester.
Rafael A. Madan, Esq., and John L. Pensinger, Esq., Department of Justice,
for the agency.
Glenn G. Wolcott, Esq., and Ralph O. White, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
Agency did not have a reasonable basis for canceling solicitation where
agency states that cancellation was necessitated by the agency's
disclosure of source selection information, which the agency believed gave
an "unfair advantage" to at least one offeror, and where the agency
subsequently awarded a sole-source contract to a contracting team that
included the same contractor to whom the source selection information was
disclosed.
DECISION
Superlative Technologies, Inc. (SuperTec) protests the Department of
Justice (DOJ), Office of Justice Programs' (OJP) cancellation of request
for quotations (RFQ) No. 2007Q-025 for services to support the information
security programs of OJP's Office of the Chief Information Officer
(OCIO),[1] and the agency's subsequent sole-source acquisition of those
services from a team comprised of Technical Management Resources, Inc.
(TMR) and ManTech International Corporation (ManTech).
We sustain the protest.
BACKGOUND
On June 21, 2007, OJP issued RFQ No. 2007Q-025[2], "seek[ing] contractors
to provide support for the OCIO Information Technology Security Division
(ITSD)," [3] and stating that "award will be made under the GSA [General
Services Administration] Information Technology Contract Schedule 70."[4]
RFQ 2007Q-025, at 1. The solicitation contemplated award of a contract for
a 12-month base period, with four 12-month option periods, and a total
estimated value of $13.5 million. The solicitation provided for award
based on the proposal "most advantageous to OJP," and established various
technical and cost/price evaluation factors, stating that "technical merit
is more important than cost or price." Id. at A-3.
On July 12, proposals were submitted by three offerors, including SuperTec
and ManTech.[5] Thereafter, the agency determined that, although ManTech's
proposal "came the closest" to meeting the solicitation requirements, none
of the initial proposals met all of the solicitation requirements, and
that discussions were necessary. Contracting Officer's Statement, Nov. 5,
2007, at 2.
On July 23, the agency opened discussions with the offerors, identifying
various aspects of their proposals that required revision. Each offeror
was provided with the agency's evaluation documents related to its
proposal; these documents identified various technical strengths and
weaknesses. Id.
On July 24, the ITSD director, who was also the contracting officer's
technical representative (COTR) and had been involved in developing the
statement of work (SOW) for this solicitation, sent an email to the
contracting officer and the deputy chief information officer stating that
she (the COTR) should be "recused from further proceedings." AR, Tab F.
The email revealed that, prior to submission of proposals, the COTR had
"consulted with ManTech and [the third offeror]" regarding "requirements,
pricing and labor categories," and that her communications "may have
provided an unfair advantage to ManTech and [the third offeror] because
they had an idea what the labor categories might be in advance." Id. She
concluded that she "needed to disclose what [she] had done in order to
protect the reputation of OJP as well as [her own] reputation as Director
of ITSD." Id.[6]
Thereafter, the contracting officer cancelled the solicitation,
summarizing the basis for cancellation as follows:
Prior to receipt of revised proposals, [I] learned of a potential
procurement integrity issue that occurred during market research
activities. The COTR, an OCIO employee, engaged in activity that
appeared to raise concerns about the integrity of the pending
procurement because of the disclosure of information about pricing and
labor categories to the offerors.[[7]] Upon further research and
consultation with the Office of the General Counsel, [I] cancelled the
solicitation due to the tainted procurement.
Contracting Officer's Statement, Nov. 5, 2007, at 2.[8]
On July 25, the contracting officer wrote to SuperTec, stating:
OJP has determined it is in the best interests of the Government to
cancel this procurement. Therefore, RFQ 2007Q-025 is hereby canceled
effective immediately.
OJP intends to issue a new RFQ for the OCIO ISSS [information security
support services] requirement very soon. When it is available, OJP will
send a copy of the forthcoming RFQ to your company.
AR, Tab 2.
In August 2007, the agency states that it "conducted additional market
research in order to identify other schedules and procurement vehicles."
Contracting Officer's Statement, Nov. 5, 2007, at 2. In this regard, the
record contains an email from the COTR to the contracting officer in
which, under the heading of "Contract Vehicles," the COTR lists various
existing contracts--all of which are ManTech contracts.[9] AR, Tab O.
On August 20, the agency states that it "met with [TMR]. . . to discuss
their interest in [the] pending requirement and later forwarded this
vendor the formal RFQ."[10] Contracting Officer's Statement, Nov. 5, 2007,
at 2. On August 24, the agency issued RFQ No. 2007Q-045, which contained a
SOW virtually identical to the SOW contained in the cancelled
solicitation. [11] AR, Tab 1; AR, Tab 9. However, RFQ No. 20007Q-45
contemplated only one 12-month performance period, with an estimated
procurement value of $2.7 million.[12] The new solicitation provided that,
"pending an acceptable proposal," the agency anticipated a sole-source
award to TMR pursuant to its GSA 8(a) STARS GWAC, stating: "Since the
estimated value of this award will not exceed the 8(a) STARS competitive
threshold of $3.5 million for directed 8(a) awards, the resultant award
will be issued to your company on a sole source basis." AR, Tab 9, at 1.
On September 4, TMR submitted a proposal, offering to use ManTech as its
primary subcontractor. The agency expressly acknowledges that TMR
"subcontracted with ManTech to develop [the September 4] proposal."
Contracting Officer's Statement, Nov. 5, 2007, at 2-3. Much of the
ManTech-developed September 4 proposal is virtually identical to the
July 12 proposal ManTech submitted in response to the cancelled
solicitation. AR, Tab B, Mantech Proposal (July 12, 2007); AR, Tab D,
TMR-ManTech Proposal (Sept. 4, 2007).[13] The proposal was evaluated as
"technically exceptional under every evaluation factor."[14] AR, Tab 3,
Memo from COTR to Chief Information Officer, at 6.
On September 19, in response to a request from SuperTec regarding the
status of the procurement, the agency advised SuperTec that the contract
"will be a directed source under the $3.5 M[illion] threshold." Protest
Exh. B. On September 28, SuperTec filed this protest.[15]
DISCUSSION
SuperTec protests, among other things, that the agency's cancellation of
RFQ No. 2007Q-025 was merely a pretext to avoid conducting a competitive
procurement and resolving a potential bid protest. Because we find, based
on the specific facts presented, that the cancellation was improper, we
sustain the protest on this basis.
We recognize that contracting agencies generally enjoy broad discretion in
determining whether to cancel a solicitation, and need only have a
reasonable basis for doing so. See, e.g., Surgi-Textile, B-289370, Feb. 7,
2002, 2002 CPD para. 38 at 2; Encore Management, Inc., B-278903.2, Feb.
12, 1999, 99-1 CPD para. 33. In this regard, a contracting agency's
determination that the integrity of a procurement has been compromised may
form a reasonable basis for cancellation. See Federal Acquisition
Regulation (FAR) sect. 3.104-7. Nonetheless, where a protester has alleged
that an agency's rationale for cancellation is but a pretext, that is, the
agency's actual motivation is to avoid awarding a contract on a
competitive basis or to avoid resolving a protest, we will closely examine
the reasonableness of the agency's actions in canceling the acquisition.
Gonzales-McCaulley Inv. Group, Inc., B-299936.2, Nov. 5, 2007, 2007 CPD
para. 192 at 5; SMF Sys. Tech. Corp., B-292419.3, Nov. 26, 2003, 2003 CPD
para. 203 at 4-6; Miller, Davis, Marter & Oper, P.C., B-242933,
B-242933.2, Aug. 8, 1991, 91-2 CPD para. 176 at 4. Further, in considering
a protest raising that concern, we view an agency's discretion, though
broad, as not unfettered. In that regard, the overarching guidance of the
FAR has direct relevance:
Government business shall be conducted in a manner above reproach and,
except as authorized by statute or regulation, with complete
impartiality and with preferential treatment for none. Transactions
relating to the expenditure of public funds require the highest degree
of public trust and an impeccable standard of conduct. The general rule
is to avoid strictly any conflict of interest or even the appearance of
a conflict of interest in Government-contractor relationships.
FAR sect. 3.101-1.
Based on the record here, we conclude that the agency did not have a
reasonable basis for canceling the RFQ. Specifically, as explained above,
the COTR disclosed information to ManTech that she believed may have
provided ManTech with an "unfair advantage." Thereafter, the agency
cancelled the procurement citing concerns about "the integrity of the
pending procurement," "potential organizational conflicts of interest,"
and "a possible bid protest"--but then awarded a sole-source contract for
the canceled requirements to a contracting team that included ManTech.
Further, the sole-source award was based on a ManTech-developed proposal
that was substantially similar to the earlier ManTech proposal for which
the COTR suggested ManTech had obtained an "unfair advantage."
Nothing in the record indicates that the agency gave any consideration to
whether its contract award to the TMR/ManTech team complied with statutory
or regulatory requirements regarding procurement integrity or OCIs.[16]
See, e.g., 41 U.S.C. sect. 423 (2000)[17]; Federal Acquisition Regulation
(FAR) sect. 3.104[18]; FAR Subpart 9.5[19]. More importantly, in light of
the integrity concerns expressed by the agency itself, the cancellation
and subsequent sole-source award to the TMR/ManTech team did nothing to
address, much less remedy, those concerns. In fact, the events, viewed as
a whole, support the protester's allegation that the solicitation was
cancelled to, in effect, avoid further review of the issues raised. On
this record, the agency did not have a reasonable basis for canceling the
solicitation.[20]
The protest is sustained.
RECOMMENDATION
We recommend that the agency rescind the cancellation notice regarding RFQ
No. 2007Q-025, and document its consideration of the procurement integrity
and/or OCI issues presented by the COTR's disclosure of information, as
contemplated by the procurement integrity provisions of the Office of
Federal Procurement Policy Act, 41 U.S.C. sect. 423, and FAR sect. 3.104,
and the OCI requirements of FAR Subpart 9.5. In this regard, the agency's
actions should include, but not necessarily be limited to, determining
what information was disclosed and to whom, whether ManTech or any other
offeror should be disqualified from the competition, and/or whether a
level playing field can be established by disclosing the information
provided to ManTech to all offerors. Following that consideration, the
agency should conduct a competitive procurement for the requirements under
the original RFQ, if otherwise appropriate. We also recommend that
SuperTec be reimbursed its costs of filing and pursuing its protest,
including reasonable attorneys' fees. SuperTec should submit its certified
claim for costs, detailing the time expended and costs incurred, directly
to the agency within 60 days of receipt of this decision. 4 C.F.R. sect.
21.8(f)(1) (2007).
Gary L. Kepplinger
General Counsel
------------------------
[1] OJP is the primary grant-making bureau of the Department of Justice,
and the OCIO is responsible for providing information security protection
for OJP information.
[2] Although the solicitation identified itself as an "RFQ," the term
"proposal," as opposed to "quotation," appears repeatedly throughout both
the solicitation and the agency's procurement record. As discussed below,
the solicitation contemplated an evaluation and source selection scheme
similar to those used in negotiated procurements. For the sake of
consistency, our decision adopts the terminology used by the solicitation
and the agency record.
[3] Within OCIO, ITSD is responsible for "building and maintaining the OJP
Security Program Framework, Certification and Accreditation of systems,
maintaining an acceptable risk posture, and providing vulnerability
management, monitoring, incident response, contingency planning, and
security engineering services." Agency Report (AR), Tab 1, RFQ 2007Q-025,
at 1.
[4] SuperTec is the incumbent contractor, and has been performing the
requirements at issue under its GSA 8(a) STARS (streamlined technology
acquisition resources services) GWAC (government-wide acquisition
contract). Section 8(a) of the Small Business Act authorizes the Small
Business Administration to enter into contracts with government agencies
and to arrange for performance of the contracts by awarding subcontracts
to socially and economically disadvantaged small businesses. 15 U.S.C.
sect. 637(a) (2000). The 8(a) STARS GWAC is a set-aside contract for small
disadvantaged businesses under which directed-source (that is,
non-competed) task orders valued at less then $3.5 million may be issued.
[5] The proposal submitted by the third offeror is not relevant to
disposition of this protest, and is not further discussed.
[6] The email states:
I am the Director of ITSD for the office of the OCIO. I am handling my
first big procurement and felt that I had enough on the job training to
see my way through the process. Because this is my first big contract, I
have had to rely on information from other staff, contractors and my own
skill set of knowing what was needed to get the job done for OJP. I am
taking the COTR certification course and today is day two. I am learning
many things in the class, which indicated to me that I have made
mistakes.
I was told that I could discuss the procurement before it was let. When
figuring out requirements, pricing and labor categories, I consulted
with Man Tech and [the third offeror]. Because our labor categories were
so restricted and every one failed, but Man Tech came close, I felt that
I may have provided an unfair advantage to ManTech and [the third
offeror] because they had an idea what the labor categories might be in
advance. As I was listening in class today, I also learned that a
protest could happen if the contract was too restrictive. After learning
there are laws with civil penalties associated with them for disclosure
that provides unfair advantage, I felt that I needed to disclose what I
had done in order to protect the reputation of the OJP as well as my
reputation as Director of ITSD. . . . I feel that it is in the best
interest of the government and OJP if I am recused from further
proceedings and to start the procurement over to make sure that the
playing field is level for all parties.
AR, Tab F.
[7] The record does not identify with any specificity the information
"about pricing and labor categories" that the COTR disclosed, nor when
disclosure occurred, or to whom. Agency counsel suggests that the COTR
provided information to all of the offerors. Agency Legal Memorandum, Nov.
29, 2007, at 3. However, the COTR's email states that ManTech and the
third offeror were potentially recipients of an "unfair advantage," which
does not support counsel's suggestion, and, instead, implies an advantage
over a firm that did not receive the information. AR, Tab F.
[8] Agency counsel characterizes the situation as an "organizational
conflict of interest," and also acknowledges that cancellation was
intended to avoid the scrutiny of a bid protest, stating:
The COTR was new to the position and disclosed information about
proposed staffing, pricing, and labor categories to the offerors. After
negotiations concluded, prior to the receipt of revised proposals, the
CO learn[ed] of this potential organizational conflict of interest (OCI)
issue. . . . Upon further research and consultation with the OGC, the
contracting officer cancelled the solicitation due to the tainted
procurement.
* * * * *
Also, this cancellation was a prudent course of action under the
circumstances as . . . the agency was concerned about a possible bid
protest (on the basis of the OCI). . . .
Legal Memorandum, Nov. 5, 2007, at 3, 5.
[9] The COTR's activities in identifying ManTech contracts were performed
notwithstanding her previous statement that she should be "recused from
further proceedings." AR, Tab F.
[10] TMR is a small business 8(a) contractor who holds a GSA 8(a) STARS
contract; as discussed below, TMR subsequently teamed with ManTech to
perform the requirements at issue. The agency has not produced any
documents regarding communications leading up to that meeting, the
substance of that meeting, or the attendees.
[11] The agency agrees that "[t]he requirements remained virtually the
same." Agency Legal Memorandum, Nov. 5, 2007, at 7.
[12] The agency states: "The Government estimate for the Group IT 70
procurement [RFQ No. 2007Q-025] was $13.5 million. Based on a five-year
award, this figure is an average of $2.7 million per year. For the 8(a)
STARS GWAC [RFQ No. 2007Q-045], the CO used this [$2.7 million] figure as
the Government estimate." Agency Legal Memorandum, Nov. 5, 2007, at 3.
[13] References to ManTech in the earlier proposal are replaced with
references to the TMR-ManTech team, and it appears that some of the
personnel initially proposed as ManTech employees are now proposed as
either TMR employees or as "other direct costs" of TMR. AR, Tab B; AR, Tab
D.
[14] Again, this evaluation appears to have been performed by the
COTR--despite the fact that she had previously stated that she should be
"recused from further proceedings." AR, Tab F.
[15] The agency initially argued that SuperTec's protest was not timely
filed, because SuperTec was notified by a September 14 email that the
agency had decided to "make award to another vendor," but did not file its
protest until September 28, more than 10 days thereafter. The agency's
assertion regarding timeliness is without merit. The agency did not advise
SuperTec that it intended to make a sole-source award for the cancelled
requirements until September 19. Further, SuperTec did not learn of the
agency's basis for canceling the prior procurement, or the identity of the
contracting team to which the sole-source award was made, until after its
September 28 protest was filed. On this record, we deny the agency's
request that the protest be dismissed.
[16] In responding to this protest, agency counsel appears to argue that
the procurement integrity and OCI requirements are inapplicable to ManTech
due to its status as a subcontractor. Legal Memorandum, Nov. 29, 2007, at
4. It is well settled that, where a subcontractor's knowledge or interests
create an unfair competitive advantage, that advantage is generally
imputed to the prime contractor. See, e.g., Ktech Corp., B-285330, Aug.
17, 2000, 2002 CPD para. 77 at 4-6. Here, where the award to TMR was
specifically based on the ManTech-developed proposal, the agency's
assertion that ManTech's status as a subcontractor somehow shields the
procurement from scrutiny regarding procurement integrity or OCI issues is
without merit.
[17] The Office of Federal Procurement Policy Act prohibits a government
official from knowingly disclosing contractor bid or proposal information
or source selection information before the award of a Federal agency
procurement contract to which the information relates. 41 U.S.C. sect.
423(a).
[18] Section 3.104 of the FAR contains various procurement integrity
provisions, including section 3.104-7, which provides: "A contracting
officer who receives or obtains information of a violation or potential
violation of [procurement integrity provisions] must determine if the
reported violation or possible violation has any impact on the pending
award or selection of the contractor."
[19] FAR Subpart 9.5 establishes responsibilities, general rules, and
procedures for identifying, evaluating, and resolving organizational
conflicts of interest.
[20] Supertec's protest raises several additional matters regarding the
agency's contract award to the TMR/ManTec team, including TMR/ManTech's
pricing of certain categories of labor as "other direct costs," and argues
that the contract award is outside the scope of TMR's GSA contract. In
light of our decision regarding cancellation of the procurement, we do not
address these matters.