United States Government Accountability Office

Washington, DC 20548

Comptroller General

of the United States

 

Decision

Matter of: Commandeer Construction Company LLC 

File: B-405771

Date: December 29, 2011

Audra J. Zarlenga, Esq., and Kyle G. Baker, Esq., Thompson Hine LLP, for the 

protester.

Lisa Marie Clark, Esq., Department of Veterans Affairs, for the agency.

Paul E. Jordan, Esq., and David A. Ashen, Esq., Office of the General Counsel, GAO, 

participated in the preparation of the decision.

DIGEST

Protest alleging that agency improperly rejected protester’s bid in violation of a 

solicitation clause is sustained where the clause contained a latent ambiguity, the

protester reasonably concluded that the clause at issue allowed for an expedited 

verification review of “the apparently successful offeror’s” status for inclusion in the

Department of Veterans Affairs Vendor Information Pages database of eligible 

service-disabled veteran-owned small business concerns, and the protester had no 

basis to be aware of the agency’s contrary interpretation of the clause. 

DECISION

Commandeer Construction Company LLC (CCC), of Twinsburg, Ohio, protests the 

rejection of its bid under Department of Veterans Affairs (VA) invitation for bids 

(IFB) No. VA-250-11-IB-0191, issued as a set-aside for service-disabled veteran-owned 

small businesses (SDVOSB), for renovation of an existing medical facility in 

Chillicothe, Ohio. CCC asserts that the VA improperly rejected its bid on the basis 

that the firm was not listed as an SDVOSB in the agency’s Vendor Information Pages 

(VIP).

We sustain the protest.

BACKGROUND

The Veterans Benefits, Health Care, and Information Technology Act of 2006, 

Pub. L. No. 109-461, provides the VA with independent authority to restrict 

competition to SDVOSB concerns under certain circumstances. 38 U.S.C. § 8127(d) 
Page 2 B-405771 

(2006 & Supp. 2011). In this regard, 38 U.S.C. § 8127(e) states that a small business 

concern may be awarded a contract under an SDVOSB set-aside only if the concern 

and the veteran owner of the concern are listed in a database of veteran-owned small 

businesses (VOSB), which the Act requires the Secretary to maintain. The VA has 

designated the VIP as the database of businesses approved to participate in the VA’s 

VOSB program, and www.VetBiz.gov as the web portal that hosts the VIP. See 38 

C.F.R. § 74.1 (2011). 

In implementing the Act, the agency promulgated VA Acquisition Regulation (VAAR)

§ 804.1102, which provides that prior to January 1, 2012, all VOSB and SDVOSB 

concerns must be “listed” (but not necessarily verified) in the VIP database to 

receive contract awards, and after December 31, 2011, all VOSB and SDVOSB 

concerns must be “listed as verified” in the VIP database in order to receive new 

contract awards under the Veterans First program. Initially, a firm could self-certify 

its status as a VOSB or SDVOSB to be listed in the VIP database (and therefore be

eligible for award). Memorandum from VA Acting Associate Deputy Assistant 

Secretary for Procurement Policy, Systems and Oversight and Accompanying Class 

Deviation from VA Acquisition Regulation (VAAR) § 804.1102 (VA Memorandum), 

at 1-3. 

Due to instances of fraud in some firms misrepresenting their status, selfcertification is no longer accepted. Id. Instead, to meet VA’s statutory requirement 

to verify a firm’s VOSB or SDVOSB status before the firm can be listed in the VIP 

database and receive a set-aside award, 38 U.S.C. § 8127(f)(4), the agency issued a 

“class deviation” from VAAR § 804.1102 requiring that the VA’s Center for Veterans 

Enterprise (CVE) verify the status of any “apparently successful offeror” if that 

offeror is not already listed as verified. VA Memorandum, at 3. 

This deviation also requires that all solicitations issued under the Veterans First

program on or after October 1, 2010, include a provision outlining an expedited 

verification process for these firms.1 Id. at 4. In pertinent part, this solicitation 

clause provided that:

(a) the apparently successful offeror, unless currently listed as verified 

in the Vendor Information Pages (VIP) at: www.vetbiz.gov database, 

shall submit to Department of Veteran Affairs’ (VA) Center for 

Veterans Enterprise (CVE) within five business days of receipt of 

written notice of its status as the apparently successful offeror, a 

 1

As of September 15, 2011, all remaining self-certified companies listed in the VIP 

were either verified or denied SDVOSB status. Supplemental Agency Report at 3 n.3. 

Since the deviation has now been discontinued, id., fast track verification only 

applies to apparent successful offerors under solicitations that contain the deviation 

clause. 
Page 3 B-405771 

verification application in accordance with 38 Code of Federal 

Regulations (CFR) Part 74 with such reasonably adequate 

documentary material, as necessary, establishing [that veteran status, 

ownership, and control requirements are met]. 

(b) CVE will examine the business documents to determine if they 

establish appropriate ownership and control of the business from 

which an offer has been received. Within 21 business days, CVE shall 

determine whether the firm can or cannot be verified as a SDVOSB or 

VOSB, as appropriate, and issue its decision thereon to the vendor in 

accordance with 38 CFR 74.11(e) and to the CO. The CO will use 

CVE’s decision in making the source selection decision. 

VAAR § 804.1102, Verification Of Status Of Apparently Successful Offeror 

(Oct. 2010) (Deviation). 2

At issue in this protest is the application of the phrase “apparently successful offeror, 

unless currently listed as verified in the [VIP],” in determining eligibility for the fast 

track verification process. The VA later issued a clarification of the deviation which 

provides in part that “[i]f a company is not visible [listed] in the VIP database, it is 

not eligible for either award or Fast Track Verification. Companies in this category 

must undergo normal verification procedures.” VA Acquisition Policy Flash.

 

The VA issued the IFB on July 14, 2011, as an SDVOSB set-aside and provided that 

any award would be made to an SDVOSB concern that had “been verified for 

ownership and control and [was] so listed in the [VIP] database.” IFB at 35. The IFB 

also included the class deviation clause discussed above. IFB at 12. However, 

neither the VA Memorandum accompanying the deviation when issued, nor the 

above subsequent clarification of the deviation was included in the IFB here. 

Prior to submitting its bid, on August 8, 2011, CCC submitted an application to the 

CVE for inclusion in the database. On August 30, CCC submitted its bid, which, at 

$9,151,000, was the lowest received. Since CCC was not listed in the VIP, the 

contract specialist began taking steps to notify the firm about its need to submit a 

verification application under the expedited verification provisions of the deviation 

clause. Email from Contract Specialist, Aug. 31, 2011. However, before doing so, she 

“came across” the clarification and sought guidance from another VA official who 

advised that CCC was “ineligible” to submit an offer or receive awards because it 

was not verified and not in “public view.” Id.

 2

VA regulations otherwise provide 60 days, “when practicable,” for the CVE to 

process an application for verified status. 38 C.F.R. § 74.11(a). If the application is 

approved, a firm’s status must be verified on a yearly basis for the firm to remain 

listed in the VIP database. See 38 C.F.R. § 74.15(a).

; Email from Mr. E, Aug. 31, 2011. 
Page 4 B-405771 

By letter of August 31, the contracting officer advised CCC that it was not eligible 

because it was not visible in the VIP database; however, CCC did not receive the 

letter until it was later forwarded on September 13. In the meantime, by email of 

September 1, CVE notified the protester that the firm had provided “sufficient 

supporting documentation” and was “currently in the examination stage of the 

process” for determining whether it would be verified. CVE Email, Sept. 1, 2011. 

After receiving the agency’s bid rejection notice, CCC filed this protest. VA has 

stayed the award, pending this decision.

DISCUSSION

CCC asserts that the agency improperly rejected its bid without reviewing its 

SDVOSB status under the fast track verification process set forth in the deviation 

clause included in the solicitation. In addition, CCC contends that it was misled into 

participating in this procurement by the solicitation clause, which indicates, in CCC’s 

view, that any apparent successful offeror--even those not currently listed in the VIP 

database--would be eligible for fast track verification of its status. 

The VA disagrees, arguing that it issued additional guidance about its solicitation 

clause to address this issue. Specifically, the VA argues that the deviation clause was 

not intended to apply to firms not already listed in the VIP database. Thus, 

according to the agency, CCC is ineligible for fast track verification. We conclude 

that the agency’s position is inconsistent with the terms of the solicitation. 

Although procuring agencies have broad discretion regarding selection of the 

evaluation criteria to be applied, they are required to disclose all evaluation factors 

and significant subfactors in order for offerors to meaningfully compete on an equal 

basis. An agency may not induce offerors to prepare and submit proposals based on 

one premise, then make source selection decisions based on another. See Hattal & 

Assocs., B-243357, B-243357.2, July 25, 1991, 91-2 CPD ¶ 90 at 7.

Here, the solicitation’s deviation clause provided an opportunity for “the apparent 

successful offeror, unless currently listed as verified in the [VIP],” to have its 

SDVOSB status reviewed under the fast track process. While the agency asserts that 

this language was only intended to apply to firms already listed in the VIP, but not 

yet verified, the solicitation clause does not, on its face, indicate that qualification. 

Indeed, as discussed above, based on the language of the clause, even the contract 

specialist was prepared to include CCC in the fast track process.

3

 3

We also see no other solicitation provisions that support the agency’s 

interpretation. For example, the agency notes that the IFB included VAAR § 852.219-

10 (VA Notice of Total SDVOSB Set-Aside), which defines an SDVOSB as a firm that 

“has been verified for ownership and control and is so listed in the [VIP] database.” 

 

(continued...)
Page 5 B-405771 

We agree with CCC’s contention that the language “unless currently listed as 

verified” could mean either: (1) firms that are listed, but not verified; or (2) firms

that are not listed at all. Thus, under the solicitation clause, either of these types of 

firms is entitled to a fast track verification review. Since CCC is not yet listed as 

verified, and since CCC is the low bidder here (i.e., is “the apparently successful 

offeror,” in the terms of the clause), CCC is entitled to the expedited verification 

review. Accordingly, we find the agency’s refusal to consider CCC’s bid under the 

fast track process to be inconsistent with the IFB’s evaluation criteria, and we 

sustain the protest on this basis.

As a final matter, we disagree with the VA’s contention that this outcome is 

inconsistent with our decision in FedCon RKR JV LLC, B-405257, Oct. 4, 2011, 2011 

CPD ¶ 205. While we acknowledge that the situation here and the situation 

addressed in FedCon are similar, we think the posture of these two protesters is 

slightly different. FedCon argued in its filing that it was advised by VA 

representatives that it was listed in the VIP database, and that the contracting officer 

was ignoring its listing and improperly refusing to provide the company an expedited 

review. FedCon, supra at 3, and 4 n.7. As a result, our decision addressed the 

factual dispute, concluded that FedCon was not listed in the VIP database, and 

applied the clause as the VA argued it was intended to be applied, an interpretation 

to which FedCon did not object.

In contrast, CCC acknowledges that it is not yet listed, that its application is 

complete but pending, and that it reads the solicitation clause to provide for an 

expedited verification review, so long as it is “the apparently successful offeror.” We 

think CCC has proffered a reasonable reading of the clause, and that the VA has not 

shown how the bidders here could have known of the agency’s different reading. In 

this regard, we are concluding that the clause contained a latent ambiguity about 

how the agency would treat bidders who were not currently listed as verified. See

Ashe Facility Servs., Inc., B-292218.3, B-292218.4, Mar. 31, 2004, 2004 CPD ¶ 80 

at 10-12. We are also concluding that CCC’s view is as reasonable as the agency’s 

interpretation, and is not contradicted by other provisions of the solicitation. 

For the record, we note that the problem arising from this ambiguity in the 

solicitation’s deviation clause will be short-lived. As mentioned above, after 

December 31, 2011, all VOSB and SDVOSB concerns must be “listed as verified” in 

 

(...continued)

In the agency’s view, the references to “verified” and “listed” make clear that both 

elements are required of an apparently successful offeror. However, the purpose of 

the solicitation’s deviation clause was to address the situation where firms cannot be 

viewed as listed and verified. This decision addresses only the meaning of the 

solicitation clause. 
Page 6 B-405771 

the VIP database to receive awards under the Veterans First program. VAAR 

§ 804.1102. As also mentioned above, all remaining self-certified companies listed in 

the VIP database were either verified or denied SDVOSB status as of September 15, 

2011. Supp. Agency Report at 3 n.3. In addition, the VA advises that it stopped using 

the solicitation deviation clause at issue in this case as of September 15. Id.

RECOMMENDATION

We recommend that the agency review CCC’s SDVOSB status to determine whether 

the company can be verified. If the protester is properly verified at the end of this 

review, and if the protester is otherwise found to be responsible, the agency, 

consistent with the terms of the solicitation clause, should award it the contract. We 

also recommend that the protester be reimbursed its costs of filing and pursuing the 

protest, including reasonable attorneys’ fees. 4 C.F.R. § 21.8(d)(1). The protester 

should submit its certified claim, detailing the time expended and costs incurred, 

directly to the contracting agency within 60 days of receiving this decision. 4 C.F.R. 

§ 21.8(f)(1).

The protest is sustained. 

Lynn H. Gibson

General Counsel