An agency has been caught creating fake source selection documents to pad its file in response to several GAO bid protests.

A recent GAO bid protest decision shows that, after award, the agency created new source selection documents and revised others, then pretended those documents had been part of the contemporaneous source selection file.  And although the agency’s conduct resulted in the cancellation of a major procurement, it’s not clear whether the agency employees who created the fake documents will face any punishment.

The GAO’s decision in EDC Consulting et al., B-414175.10 et al. (June 9, 2017) involved the DHS solicitation for the Flexible Agile Support for the Homeland or “FLASH” procurement.  The solicitation was to result in 8 to 12 IDIQ contracts, with an estimated value of $1.54 billion. The solicitation called for a “best value” tradeoff considering technical merit, staffing, past performance, and price.

DHS made initial award decisions in November 2016, but after several GAO bid protests were filed, the agency elected to perform a reevaluation.  The reevaluation involved a technical evaluation team and price evaluation team, each of which prepared consensus reports.  The TET chair and contracting officer conducted a best value analysis and recommended awards; the ultimate award decisions were made by a source selection authority.

On March 6, 2017, the SSA made award to 11 offerors, all of which had been recommended by the TET chair and contracting officer.  The March 6 source selection decision document stated that the best value decisions were based on the documents in the source selection file.

Nine unsuccessful offerors, including EDC Consulting, LLC, filed protests at the GAO.  During the course of the protest “a question was raised as to whether the documents supporting the agency’s source selection decisions, filed with the agency reports (AR), had been prepared or revised after the March 6 decisions were made.”

The GAO asked the DHS to respond.  On May 1, the DHS’s counsel admitted that the price evaluation report was “incorrect” and that “some of the information provided in the AR . . . was prepared or changed after award.”  These post-award changes involved “the insertion of a multi-page table, as well as the creation of several memoranda regarding the price realism evaluation and findings.”  Additionally, “[a]fter award, the agency revised the Technical Evaluation Report and [the] Best Value Tradeoff Analysis.”

The GAO, obviously, was deeply concerned.  After a series of conference calls, it informed the parties that it intended to conduct a hearing to address various matters, “including the agency’s preparation and submission of the altered documents.”  This, itself, is rather unusual, as most GAO bid protests are resolved without hearings.  (The GAO held hearings in 2.5% of cases in Fiscal Year 2016).

The DHS apparently had no desire to be cross-examined about its conduct.  On May 26, just a few days before the hearing was to occur, the DHS announced that it would terminate all of the awards and cancel the procurement.  In its notice of corrective action, the DHS stated that because documents had been created and revised after award, “DHS has determined that the evaluation process and documents do not meet DHS’ standards for award.”  DHS also said that there were other pieces of the solicitation that needed to be resolved to meet “DHS’ evolving mission needs.”

There must  be something in the water, because this is the second time in less than two months that an agency has been caught creating fake “contemporaneous” documents to defend against a bid protest.  As I wrote in late April, the Court of Federal Claims sharply criticized the U.S. Special Operations Command for creating backdated market research to support a set-aside decision.

Judge Thomas Wheeler’s comments in that case apply equally to DHS’s conduct here.  Judge Wheeler said:

The integrity of the administrative record, upon which nearly every bid protest is resolved, is foundational to a fair and equitable procurement process.  While the Government has accepted responsibility for its misconduct, the importance of preventing a corrupted record cannot be overstated.  The Court encourages USSOCOM to take all reasonable steps to ensure that its contracting office appreciates the necessity of conducting a well-documented, well-reasoned procurement and producing a meticulous and accurate record for review.  The Court will not tolerate agency deception in the creation of the administrative record.

I’ve said it before, and I’ll say it again–in my experience, the vast majority of agency officials are honest, honorable people.  But the integrity of the competitive contracting process is harmed when agency officials don’t live up to those standards.  Indeed, the mere perception that the game might be rigged is extraordinarily harmful–what reason is there for a company to participate in the process if it appears that the agency won’t play fair?

The GAO’s decision doesn’t mention what sanctions, if any, the DHS employees responsible for the misconduct might face.  DHS has a chance to send a strong message by terminating, or otherwise severely punishing, those responsible.  We’ll see what happens.

For now–and I can hardly believe I’m saying this–contractors and their counsel who receive source selection documents as part of a protest might want to check when those documents were created.  Just in case.