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Government Contracts Monitor

Dun & Bradstreet Reports Have Limited Utility When Challenging Responsibility Determinations at the GAO

May 24, 2018

By: Hopewell Darneille

Disappointed bidders seeking to challenge a contracting officer’s affirmative responsibility determination will attempt to rely on any information that appears even arguably relevant. One common source of information to which such offerors turn is the Dun & Bradstreet (D&B) report on the awardee, under the theory that its contents can help demonstrate a lack of financial wherewithal. As the recent protest decision of the Government Accountability Office (GAO) in CASS Professional Services Corp., B-415941; B-415941.2 (April 27, 2018) reveals, however, it would be a mistake to place too much reliance on an D&B report in this context.

The matter involved a total SDVOSB set-aside procurement by the Department of Agriculture, Forest Service for HC-130H aircraft aircrew support. The agency received two proposals, one from CASS Professional Services Corp. (CASS) and one from Cherokee Holdings, LLC (Cherokee). After discussions and the submission of final proposal revisions, the Forest Service evaluated the proposals and performed a tradeoff analysis that resulted in an award to Cherokee. As relevant here, Cherokee’s total evaluated price of $10,028,482 was several million dollars less than that proposed by CASS. After receiving a formal debriefing detailing the basis for the agency’s award decision, CASS protested.

Among other things, CASS argued that the affirmative responsibility determination made by the contracting officer (CO) was unreasonable because it failed to take into consideration certain relevant information. More particularly, CASS claimed that the CO ignored the adequacy of Cherokee’s financial resources. In support of this contention, CASS asserts the CO should have considered a D&B report that estimates Cherokee’s maximum credit limit to be $34,000. According to CASS, the D&B report demonstrated that Cherokee lacked the financial resources to perform a contract valued over $10,000,000.

On its face, this seems like a very strong argument. Unfortunately for CASS, the GAO concluded that the D&B information did not meet the applicable threshold for review in this area and dismissed this protest ground.

Explaining its decision, the GAO first noted that it generally does not review affirmative determinations of responsibility by a contracting officer. There are exceptions to that general rule, however, one of which is where a protest identifies evidence raising serious concerns that, in reaching a particular responsibility determination, the contracting officer unreasonably failed to consider available relevant information.

This exception is intended to apply to protests raising supported allegations that the contracting officer ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible.  According to the GAO, this exception has generally been found to apply when the responsibility determination involved very serious matters such as potential criminal activity, fraud, and significant accounting missteps. In contrast, the GAO made clear here that “[a]llegations pertaining to an estimate of a proposed awardee’s credit limitation … do not rise to the level needed to trigger a review by our Office of a contracting officer’s responsibility determination.”

Saavy contractors will take this GAO guidance to heart. If you want to challenge an affirmative determination of responsibility, you’ll likely need to present more than the information in a D&B report.
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