GAO will frequently dismiss protest grounds based on its strict timeliness rules, as we’ve written about before on the blog. Generally, GAO’s bid protest regulations require a contractor to file a protest within “10 days after the basis of protest is known or should have been known.”
But sometimes knowing when a protest ground is untimely can be difficult. For instance, where a protester should have known the basis for protest based on an inference from a debriefing response and its incumbent knowledge, does that debriefing start the 10-day protest clock running? A recent GAO decision answers that question in the affirmative.
In CDO Technologies, Inc., B-416989 (2018), GAO considered a case involving a solicitation under the NETCENTS-2 Small Business Pool NetOps indefinite-delivery, indefinite-quantity contract. CDO Technologies protested the award of the requirement to Atlantic CommTech Corporation (ACT).
The Air Force sought communications engineering and installation program support for the U.S. Air Force Central Command for various countries. Award was based on the basis of a best-value tradeoff, considering technical, past performance, and price.
The Air Force would evaluate proposed prices for reasonableness, realism, and balance. Offerors were supposed to use plug numbers for certain pricing, meaning “offerors only provided independent prices for the fixed-price CLINs for transition and core labor.”
The Air Force notified CDO that its proposal was not selected for award. ACT’s evaluated price was $89,995,770 and CDO’s evaluated price was $106,178,945. CDO received a debriefing and submitted additional questions, to which the Air Force responded in writing on September 5.
CDO asked a number of questions pertaining to the price realism evaluation.
First, CDO inquired whether it was the government’s intent for offerors to propose a total of 40 full-time equivalents (FTE) for the core labor CLIN, and if offerors were allowed to propose less than the 40 FTE. The Air Force confirmed that it was the agency’s intention for offerors to propose 40 FTEs for the core labor CLIN, and that no offeror took exception to the requirement.
In addition, “the protester, whose team includes the incumbent, argued that it appeared that the awardee’s total proposed price was unrealistically low and would likely result in significant compensation reductions for incumbent personnel.” CDO specifically asked:
We know actual salaries and benefits required (being paid today) to maintain the current staff in country and with our [general and administrative (G&A)] and fee we were at $42.5M while [ACT] appears to have proposed $26.4M when all plug numbers are removed. That is a difference of $16.1M or $3.2M a year in salaries on a [fixed-price CLIN]. . . . . If you take away any G&A and fee/profit from [ACT] their actual salaries drop even farther. . . . Based on these numbers and knowing forty (40) FTE are required how can they possibly execute other than reducing staff to Thirty-Five (35) FTE which equates to approximately $3M a year? Does the government not see these salary numbers as a Risk/Weakness that puts your program at risk? This clearly shows the current staff will take a significant decrease in pay and benefits most likely leading to staff quickly departing the program and returning to the states.
The Air Force responded that it could not disclose the awardee’s technical and pricing strategies to CDO and “confirmed that it had conducted a price realism analysis in accordance with the FOPR and determined that ACT’s labor rates and total evaluated price did not pose an unacceptable risk.”
CDO did not file a protest within 10 days of when the debriefing closed.
“On October 2, or approximately one month after the debriefing was closed, CDO alleges that ACT contacted several incumbent personnel regarding employment on the follow-on contract. The protester alleges that some of ACT’s offers represented a decrease in compensation of nearly 25 percent as compared to the affected employees’ compensation on the incumbent contract.”
CDO then filed its protest on October 10.
The Air Force sought dismissal of the protest, arguing that “CDO knew or reasonably should have known of its basis of protest, namely that ACT’s low overall proposed price was unrealistic and presented a flawed and risky technical approach, at the time the agency disclosed ACT’s total evaluated price.” Because CDO was the incumbent,” the Air Force said, “the protester knew or reasonably should have known that the material difference between the offerors’ total proposed prices had to be related to the core labor CLIN.”
CDO argued that it could not have known the basis for its protest based on ACT’s total evaluated price because “it would have had to have speculated regarding the basis for the difference in the proposed prices” and it did not know the basis for the difference in price “until incumbent personnel received allegedly low proposed compensation packages from ACT.”
GAO rejected CDO’s argument and held that the protester should have known of the price issues based on the debriefing responses, because “CDO’s debriefing questions unequivocally demonstrate that it was aware that the likely difference in the proposals’ respective prices related to the offerors’ proposed compensation for core labor.” While GAO “will not consider purely speculative protest arguments, that does not mean that our Office will not consider–and a protester should not timely allege–protest grounds that are based on reasonable and credible inferences based on the information available to the protester.”
GAO concluded that “CDO’s protest is based on a comparative assessment of the awardee’s price to its own–information which CDO knew from the award notice.”
GAO noted that “CDO’s debriefing questions unequivocally demonstrate that it was aware that the likely difference in the proposals’ respective prices related to the offerors’ proposed compensation for core labor. CDO specifically suggested to the agency that ACT’s likely lower proposed compensation would present staffing and related performance risks.”
GAO concluded that the protest was untimely and dismissed it.
This decision is another reminder that, when a protester knows (or should know) of the basis for a protest ground, even if some of the information is based on the protester’s knowledge as an incumbent, it should err on the side of caution and file its protest in line with the timeliness regulations. The GAO’s strict timeliness rules do not allow for a protester to wait to be absolutely sure of all protest grounds before filing.