When Do Agency Restrictions on Proposal Revisions during Corrective Action Go Too Far?
January 10, 2017
By: Lindsay Simmons
Contractors often “win” a protest when the agency decides to take corrective action in the form of discussions and revised proposals, only to find that the agency limits the nature of the allowed revisions so that contractors cannot make all the necessary changes to its new proposal. As the recent decision in Deloitte Consulting, LLP, B-412125.6 (November 28, 2016), makes clear, contractors in this situation can protest such restrictions, but they’ll only win if they can show that the limitations prevent revisions to information materially impacted by the corrective action.
The decision involved the second protest by Deloitte Consulting, LLP (Deloitte) challenging the implementation of corrective action by the Defense Health Agency (DHA) in response to a prior Deloitte protest. While DHA’s announced corrective action was to include discussions and final proposal revisions (FPRs), it also placed certain restrictions on the allowable scope of the FPRs. Deloitte argued that those restrictions were unreasonable.
The request for proposal (RFP) sought proposals for project management support services in DHA’s Health Information Technology Directorate. It provided for a best value award based on four factors: Technical; Past Performance; Small Business Plan; and Price. The Technical factor score was to be based on four subfactors: Technical Approach; Staffing Approach; Transition In and Out; and Quality Control Approach. The solicitation also identified nine key personnel positions and the minimum requirements for each, noting that key personnel resumes and commitment letters would be evaluated under the Staffing Approach subfactor.
In addition to alleging unresolved OCI issues, the prior protest argued that the agency had unreasonably evaluated the Staffing Approach subfactor. The Government Accountability Office (GAO) sustained the protest and recommended that DHA reopen discussions with offerors, request new FPRs, and conduct a new evaluation in accordance with the RFP. The agency did so, but limited the FPRs “to past performance and key personnel information.”
In response to the agency’s evaluation notices (ENs) explaining that it could not determine whether certain of Deloitte’s key personnel met the minimum requirements, Deloitte explained that changing its key personnel information in response to the ENs would require changes not only to the Key Personnel portion of the Staffing Approach subfactor (which were allowed under DHA’s stated corrective action limitations) but also changes to other portions of the technical proposal in which the key personnel being replaced had also been identified (which were not allowed). The agency rejected Deloitte’s request to be allowed to update key personnel-related information throughout its proposal.
Deloitte then filed its first protest on this issue, which resulted in another corrective action, this time updating the restrictions on FPRs to allow changes under the Staffing Approach subfactor and changes to other aspects of the technical proposal, “but only to the extent that” the initial proposal referenced key personnel and/or their qualifications. DHA went on to explain that the scope of changes to the Technical Proposal outside of the Staffing Approach Subfactor “is limited to updating the names of key personnel (as necessary) and updating any accompanying qualification descriptions for such new key personnel.” The agency clearly prohibited other updates to an offeror’s technical approach.
In response, Deloitte filed the instant protest, arguing in part that the agency’s updated FPR instructions continue to exclude proposal revisions “inextricably linked” to the key personnel substitutions permitted in response to discussions. The agency argued that Deloitte was trying to “update multiple aspects of its technical approach by using new key personnel to introduce new tools and techniques not presented in its prior proposal, and to alter its transition approach.”
GAO first recognized that agencies may, in the context of discussions and FPRs implementing a corrective action, reasonably limit the scope of revisions. The reasonableness of the limitation turns on whether “the discussions, and permitted revisions in response to discussions, are expected to have a material impact on other areas of the offeror’s proposal.” Based on the record, GAO did not object as a general matter to DHA’s decision to limit proposal revisions to areas in which GAO had previously identified improprieties. But it went on to note that, even where restrictions are justified, an agency may not prohibit revisions of related proposal areas that are materially impacted by, or inextricably linked to, the discussions or permitted revisions in response to the discussions.
Here, GAO found that the corrective action in the form of discussions concerning key personnel “does materially impact the protester’s technical proposal beyond the limited revisions permitted in the agency’s updated FPR instructions letter.” More particularly, GAO concluded that the permitted key personnel substitutions broadly impact Deloitte’s proposal because of their different qualifications, capabilities, and experience, as well as their relative ability to perform the proposal as initially proposed—and that any limitations on such changes are unreasonable. For example, while the initial transition plan did not name specific key personnel, it did reflect the characteristics of the originally proposed key personnel. Because the discussions led to the replacement of certain key personnel and materially impacted the basis for the plan, the agency’s restriction of revisions to areas where the initial proposal named key personnel was unreasonable. In addition, GAO found that limiting revisions to updating the names of key personnel and their corresponding qualifications unreasonably restricted Deloitte from conforming areas of its technical proposal that directly reference key personnel who will be removed. Similarly, differences between the qualifications and experience of key personnel also required updating descriptions of those aspects of their contributions to the overall effort regardless of where they appear in the proposal.
For these reasons, GAO sustained the protest and recommended that DHA, at a minimum, amend its FPR instructions to allow offerors “to revise all aspects of their technical proposals to the extent that the revisions relate to the permitted substitutions of key personnel, and thereafter reevaluate the offerors’ revised technical proposals.”
Offerors frustrated with agency restrictions on proposal revisions during corrective action should assess whether those restrictions are materially impacted by, or inextricably linked to, the discussions or permitted revisions. If they are, a valid protest ground exists.
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