Source: http://www.wifcon.com/pdcg21_14a.htm
Timestamp: 2017-09-19 22:50:22
Document Index: 433407627

Matched Legal Cases: ['§ 12', '§ 21', '§ 21', '§ 21', 'art 6', 'art 6', 'art 6', 'art 9']

4 CFR 21.14 (a): Request for reconsideration
New In requesting reconsideration, SCB argues that, in dismissing its protest as academic, we failed to consider the consequences of the VA’s termination and that the VA’s decision to take corrective action enabled the agency to avoid resolution of the protest. In this regard, SCB contends, citing to Saltwater, Inc.-Recon. & Costs, B-294121.3, B-294121.4, Feb. 8, 2005, 2005 CPD ¶ 33, that the protest is not academic where, as here, the corrective action provides no meaningful remedy. Recon. Request at 3. SCB further contends that, by terminating XTec’s contract for the convenience of the government after XTec produced all of the PIV cards, FAR § 12.403(d) permits the VA to receive the PIV cards and pay XTec 100 percent of the contract price, thus circumventing GAO’s protest process. Id. at 2.
Under our Bid Protest Regulations, to obtain reconsideration the requesting party must set out the factual and legal grounds upon which reversal or modification of the decision is deemed warranted, specifying any errors of law made or information not previously considered. 4 C.F.R. § 21.14(a). We have held that information not previously considered means information that was not available during the earlier protest. Norfolk Dredging Co.,--Recon., B-236259.2, Oct. 31, 1989, 89-2 CPD ¶ 405 at 2. SCB’s request meets this standard for reconsideration.
Subsequent to the filing of SCB’s request for reconsideration, we learned that on September 23--the same day we notified the VA of SCB’s protest--the VA modified XTec’s contract to require one bulk delivery of the 400,000 PIV cards. We also learned that the VA did not direct XTec to stay performance until two days after receiving notice of the protest. VA E-mail to GAO, Jan. 20, 2015; VA Response to Recon. Request at 2. We further learned that the VA had no need to resolicit the requirement after terminating the contract for the convenience of the government because it had sufficient stock of the cards after accepting delivery of, and paying XTec for, the full quantity of 400,000 cards. VA E-mail to GAO, Jan. 22, 2015.
In light of this new information, together with reconsideration of the conclusions reached by our Office, we agree with SCB that, as in Saltwater, Inc.--Recon. & Costs, supra, the VA’s corrective action did not remedy the concern raised in the protest. The VA’s decision to terminate the contract after modifying the contract to accelerate delivery, and after the awardee substantially performed (and where the agency had no intention of resoliciting for its requirements) is not the commonly-understood meaning of an agency’s representation that it is terminating the underlying contract. As a result, we grant SCB’s request that we reconsider our decision to dismiss its protest as academic.
We now turn to the merits of SCB’s protest. SCB contended, in its earlier protest, that the VA erred in determining that SCB’s PIV cards did not meet the requirements of the RFQ. SCB argued that the VA’s evaluation methodology was faulty because the solicitation did not contain the information needed for the cards to pass the testing process described in the agency’s report. Comments at 4.
As a general rule, a procuring agency must provide sufficient information in a solicitation so that offerors can compete intelligently and on a relatively equal basis. IBM Global Business Servs., B-404498, B-404498.2, Feb. 23, 2011, 2012 CPD ¶ 36 at 8; Meridian Mgmt. Corp., B‑285127, July 19, 2000, 2000 CPD ¶ 121 at 6. Based on the record before our Office, we find that the RFQ did not reasonably provide offerors adequate information to compete intelligently. Specifically, the VA acknowledges that the RFQ “did not set forth what is required in order for a smart card to perform in the current VA PIV System.” VA E-mail, Jan. 22, 2015. Further, this solicitation deficiency was latent--that is, the deficiency was not apparent until the VA submitted its agency report showing that the evaluation methodology required offerors to rely on information that the agency never provided. Finally, we find that this latent solicitation deficiency resulted in competitive prejudice to SCB because it resulted in the elimination of SCB’s quote, which was otherwise in line for award, from the competition. Accordingly, we sustain SCB’s protest.
Because this delivery order has been fully performed and the agency does not plan to resolicit for its requirements, we recommend that SCB be reimbursed the costs of preparing its quotation, as well as the reasonable costs of filing and pursuing its protest and its request for reconsideration. 4 C.F.R. §§ 21.8(b), (d). SCB should submit its certified claim for costs, detailing the time expended and costs incurred, directly to the agency within 60 days of receiving this decision. 4 C.F.R. § 21.8(f)(1).
The request for reconsideration is granted; the protest is sustained. (SCB Solutions, Inc.--Reconsideration B-410450.2: Aug 12, 2015) (pdf)
In its request for reconsideration, the Army argues that we erred in citing to our decision in Laidlaw Envtl. Servs. (GS), Inc.; International Tech. Corp.--Claim for Costs, B-249452, B-250377.2, Nov. 23, 1992, 92-2 CPD para. 366 at 4, to support our conclusion that the exercise of an unevaluated contract extension amounted to a sole-source extension beyond the scope of the contract, and in determining that the option to extend DAV's contract had not been evaluated as part of the initial competition.
To prevail on a request for reconsideration, the requesting party must either show that our decision contains errors of fact or law, or present information not previously considered that warrants the decision's reversal or modification. 4 C.F.R. sect. 21.14(a) (2009); Department of Housing and Urban Dev.--Recon., B-279575.2, Nov. 4, 1998, 98-2 CPD para. 105 at 2; Department of the Army--Recon., B-271492.2, Nov. 27, 1996, 96-2 CPD para. 203 at 5. A request for reconsideration that reiterates arguments made previously and merely expresses disagreement with the prior decision does not meet the standard for granting reconsideration. Gordon R.A. Fishman--Recon., B-257634.4, Sept. 9, 1996, 96‑2 CPD para. 110 at 2-3. Here, the Army does not show that our decision contains material errors of law or fact that warrant modification or reversal or our prior decision.
The Army argues that we erred in citing to the Laidlaw decision, because that case is factually distinguishable from the facts presented in MCS's protest. Specifically, in Laidlaw the option to extend the contract was added to the contract at time of award, whereas in this case the option to extend the contract clause was included in the solicitation under which the offerors competed for the initial award.
We agree that Laidlaw is factually distinguishable from this case. That factual distinction, however, does not demonstrate error, given that our decision was based upon the FAR requirements for exercising options. As explained in our prior decision, FAR sect. 17.207(f) requires that a contracting officer, before exercising an option, make a written determination that the exercise of the option is in accordance with the terms of the option and the requirements of FAR sect. 17.207 and FAR Part 6. FAR sect. 17.207(f) further states that to meet the requirements of FAR Part 6 regarding full and open competition, the option must (1) have been evaluated as part of the initial competition, and (2) be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract. Both in Laidlaw and under the facts presented here, the agency exercised an option that had not been evaluated as part of the initial competition. We found that the Army had not evaluated the option to extend the contract as part of the initial competition, and concluded that, in accordance with FAR sect. 17.207(f), the agency was required to (but did not) reasonably justify the extension of the contract in accordance with FAR sect. 6.303.
The Army does not contend that it evaluated the option to extend the contract as part of the initial competition, but instead argues that it "basically conducted the equivalent of such an evaluation, to the extent practicable, when the Army evaluated the base year and option year prices, which are the predicates upon which the price of an extension period would be based, depending upon when the extension was exercised." Recon. Request at 7. The Army also contends that the option to extend the contract "essentially is self-executing because, when the contracting officer decides to exercise the extension, the clause causes the limits and rates specified in the contract to be the applicable limits and rates, with no upward or downward adjustment in rates permitted" except as a result of revisions to prevailing labor rates. Id.
We find no merit to the Army's arguments, which would render meaningless the specific language of FAR sect. 17.207(f) that requires that an option be evaluated as part of the initial competition. The Army's interpretation of this clause would either ignore the first requirement under FAR sect. 17.207(f) or deem it to be satisfied when the second requirement is met--that is, render one of the two parts of the clause meaningless. Such an interpretation would be inconsistent with the fundamental principle that statutes and regulations must be read and interpreted as a whole, thereby giving effect to all provisions. See Sea Box, Inc., B‑291056, Oct. 31, 2002, 2002 CPD para. 181 at 3. In this regard, the agency cites to no legal authority or any other authority that would support its argument that an "equivalent" evaluation satisfies this unambiguous regulatory requirement.
The purpose of the contract clause at FAR sect. 52.217‑8 is merely to reserve for the agency a right to seek from the contractor--without further negotiation--an additional period of performance beyond the end of a contract period where exigent circumstances create the need for continued performance. See FAR sect. 37.111; Akal Security, Inc., B‑244386, Oct. 16, 1991, 91-2 CPD para. 336 at 5. With respect to the agency's argument that the option to extend the contract clause was "self-executing," the fact that the clause reserves this right for the procuring agency does not mean that it relieves the agency of its obligation to comply with the requirements in the FAR. The Army's contention that, as a practical matter, an option to extend under FAR 52.217‑8 would never be evaluated as part of the initial competition does not create an exception to the requirements of FAR sect. 17.207(f). Rather, it simply means that where, as here, the agency exercises an option to extend the contract that does not satisfy the FAR sect. 17.207(f) requirements, the agency should have a reasonable justification for its extension in accordance with FAR Part 6.
The request for reconsideration is denied. (Department of the Army--Reconsideration, B-401472.2, December 7, 2009) (pdf) (For original case, see Major Contracting Services, Inc., B-401472, September 14, 2009)
EPA’S REQUEST FOR RECONSIDERATION
In its request for reconsideration, the agency asks that we rescind or modify our June 4, 2007 decision sustaining IBM’s protest, based on events that took place after we issued our decision and based on information not previously considered by our Office. In making its request, EPA relies on an “Interim Agreement,” dated April 3, 2008, between it and IBM, pursuant to which IBM, on April 4, 2008, withdrew its proposal from further consideration for award during the agency’s implementation of our recommendation for corrective action and agreed to reimburse the agency for the costs paid by the agency to the firm in accordance with the above-described recommendation for corrective action.
Under our Bid Protest Regulations, to obtain reconsideration, the requesting party must set out the factual and legal grounds upon which reversal or modification of the decision is deemed warranted, specifying any errors of law made or information not previously considered. 4 C.F.R. sect. 21.14(a) (2008). Here, we conclude that the standard for reconsideration has not been satisfied.
As stated above, in requesting reconsideration, the agency relies on events that took place after we issued our June 4, 2007 decision sustaining IBM’s protest. In this regard, on March 27, 2008, the agency suspended IBM from receiving federal contracts based on information developed during the course of a federal investigation into activities related to IBM’s proposal and negotiations in this procurement. According to the record, as documented in the requests for reconsideration (not in the record as developed during our review of IBM’s original protest), the agency’s debarring official determined that there was adequate evidence to support allegations that IBM employees obtained protected source selection information relevant to this procurement from an EPA employee--information which IBM officials knew was improperly acquired--and that IBM used this information during its negotiations to improve its chance of winning a contract, in violation of federal procurement procedures and the procurement integrity provisions of the Office of Federal Procurement Policy Act. Interim Agreement, Apr. 3, 2008. The agency’s suspension of IBM was issued as a temporary action pending completion of the investigation and other possible proceedings, including debarment action. Suspension Notice, Mar. 27, 2008.
Following IBM’s receipt of the suspension notice, IBM acknowledged the apparent violations by its employees and agreed to withdraw its proposal from further consideration for award in this procurement; IBM also agreed to refund to the agency all costs paid to IBM in connection with the underlying protest and to take other steps, such as conducting a full examination of the firm’s federal compliance program and cooperating with EPA investigators and other federal officials, to promptly and appropriately conclude the matter. In return, the agency agreed to immediately terminate the temporary suspension and to remove IBM’s name from the Excluded Parties List, subject to specific terms and conditions. Interim Agreement, supra. IBM formally withdrew its proposal on April 4, 2008.
In requesting rescission or modification of our decision sustaining IBM’s protest, the agency states that it “recognize[s] the public interest in providing the federal acquisition community and other interested parties with the results of [our Office’s] thorough analysis in this matter,” but maintains that “there are countervailing considerations when an offeror’s efforts to secure a federal contract have been tainted by improper conduct,” and it asks that we “recognize these circumstances in [our] final disposition of the protests.” EPA Request for Reconsideration at 2. However, we conclude that the agency has failed to provide any basis warranting our rescission or modification of the underlying decision sustaining IBM’s protest.
In this regard, the agency has cited no legal authority to support its request and it has not, for example, demonstrated any error or injury that results from the decision as written; moreover, the agency has neither alleged nor shown any nexus between the alleged improper use of proprietary information by IBM employees and our finding with respect to the agency’s improper adjustment of fixed-price elements in IBM’s proposal. In short, the agency has not pointed out any procedural or substantive flaw in the underlying decision resulting from subsequent events and from information that was not previously disclosed during the development of the protest record or at the time the decision was issued which would necessitate some sort of correction of that decision in light of the newly-disclosed information.
While we are not aware of any instance in which our Office has been asked to rescind a published protest decision, the United States Civilian Board of Contract Appeals recently addressed a request that the Board vacate one of its decisions. See Hedlund Constr., Inc. v. Dep’t of Agriculture, CBCA 105-R, Civilian B.C.A., June 5, 2008 (citing U.S. Bancorp Mortgage Co. v. Bonner Mall P’ship, 513 U.S. 18, 29 (1994), in which the Supreme Court explained its view that settlement of a dispute by the parties after the issuance of a decision does not justify vacatur of an issued decision). See also ROI Invs. v. GSA, GSBCA 14402-R, 99-1 BCA para. 30,353 (absent some extraordinary circumstance, the public interest would not be served by rescinding a published decision).
In our view, published decisions provide valuable information to the procurement community in terms of, for example, analyzing violations of procurement statutes and regulations and explaining why such violations provide a basis for sustaining a protest. To the extent that EPA asks that we “recognize [the] circumstances” regarding the subsequently disclosed investigation and the agreement between it and IBM, the discussion in this decision denying the agency’s request for reconsideration effectively does so. In this connection, we note that our recommendation for corrective action was valid under the facts as they existed during our Office’s review of IBM’s original protest, and we expect no further action with regard to that recommendation based on subsequent events.
CGI’S REQUEST FOR RECONSIDERATION
CGI requests that we vacate the underlying decision sustaining IBM’s protest on two grounds--first, that IBM was not an interested party and, therefore, lacked standing for purposes of filing a protest in light of its acknowledged procurement integrity violations resulting in its suspension from receiving federal contracts and, second, that “profound factual uncertainties undercut the factual conclusions on which the GAO decision was premised.” CGI Request for Reconsideration at 1.
Regarding its first argument, CGI points out that a “non-responsible bidder” has no interest in the outcome of a procurement--suggesting that a suspended offeror would similarly lack the requisite interest for filing a protest--thereby implying that IBM’s suspension and subsequent agreement to withdraw its proposal from consideration for award in this procurement should, in essence, void the published decision. Id. at 2. We do not find this argument persuasive.
More specifically, it is clear from the record that when IBM filed its protest on February 26, 2007, it was not a suspended contractor. We issued our decision sustaining IBM’s protest on June 4, 2007. The agency issued its notice of suspension on March 27, 2008, and the Interim Agreement between the agency and IBM was signed on April 3, 2008. The agency’s suspension notice stated, “effective immediately, I [EPA’s debarring official] have suspended [IBM] from participating in Federal procurement and nonprocurement activities.” Suspension Notice, supra, at 1. Thus, the suspension notice makes clear that the suspension was to have an immediate, as opposed to a retroactive, effect.[3] Therefore, since IBM had not been suspended from competing for federal contracts at the time the protest was filed, during the development of the protest record, and when the decision sustaining the protest was issued, the firm was eligible to compete under the RFP and had the status of an interested party to challenge the agency’s evaluation of proposals and award decision.
Moreover, Federal Acquisition Regulation (FAR) Subpart 9.4, which the agency cited in its suspension notice as authority for its actions, makes clear that suspension and debarment do not have a retroactive effect. For example, FAR sect. 9.405-1(a) provides that “[n]otwithstanding the debarment, suspension, or proposed debarment of a contractor, agencies may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, or proposed for debarment unless the agency head directs otherwise.” Therefore, contrary to CGI’s suggestion, we have no basis to conclude that the suspension and Interim Agreement between the agency and IBM should retroactively affect the interested party status or standing to protest that IBM had at the time it filed its protest since, as stated above, at that time, IBM was not a suspended contractor. In other words, until the suspension was imposed and IBM was notified (see FAR sect. 9.407-3(c) (requires that a contractor be immediately advised when it is suspended)), IBM was “an actual . . . offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract,” satisfying our regulatory definition of an interested party with standing to file and pursue its protest. 4 C.F.R. sect. 21.0(a)(1). On this record, we find no merit in CGI’s argument that IBM’s status as an interested party should be viewed from the vantage point of the subsequent events, as set forth above, which would involve the complete disregard of the facts as they existed from the point at which the protest was filed until the decision sustaining IBM’s protest was issued.
Regarding its second argument, we similarly find no merit to CGI’s allegation that “factual uncertainties,” which purportedly cannot now be resolved, were the foundation for our decision, thereby compromising the precedential value of that decision. As discussed above, no error or injury has been demonstrated that would result from the decision as written, nor has any nexus between the alleged improper use of proprietary information by IBM employees and our finding with respect to the agency’s improper adjustment of fixed-price elements in IBM’s proposal been alleged or shown. The value of the underlying decision sustaining IBM’s protest derives from the legal conclusions that were drawn in the context of the existing and known facts. While a subsequent change in facts could lead to a different legal conclusion, the facts that emerged based on subsequent events do nothing under the circumstances here to alter the validity of the original decision, which applied the law to the facts as presented during our Office’s review of IBM’s original protest.
The requests for reconsideration are denied. (Environmental Protection Agency; CGI Federal, Inc.--Reconsiderations, B-299504.3; B-299504.4, July 23, 2008) (pdf)
Environmental Protection Agency; CGI Federal, Inc.--Reconsiderations, B-299504.3; B-299504.4, July 23, 2008 (pdf) New SCB Solutions, Inc.--Reconsideration B-410450.2: Aug 12, 2015 (pdf)
Department of the Army--Reconsideration, B-401472.2, December 7, 2009 (pdf) (For original case, see Major Contracting Services, Inc., B-401472, September 14, 2009)