Bare-Bones Organizational Chart Sinks Proposal

When a procuring agency asks for details, an offeror better provide those details–or run the risk of exclusion from the competition.

Recently, the GAO has confirmed that offerors must provide sufficient detail or run the risk of being eliminated from a competition. First, came Res Rei Development, Inc., B-410466.7 (Comp. Gen. Oct. 16, 2015), where GAO held that an agency can find a proposal technically unacceptable when it essentially parrots the terms of the solicitation. Now comes LOTOS S.r.l., B-411717.5 (Comp. Gen. Nov. 19, 2015), where GAO found that the agency had reasonably excluded an offeror from the competition based in part on the offeror’s failure to provide a detailed organizational chart.

The LOTOS case involved a solicitation issued by the Department of the Navy, Naval Facilities Engineering Command. The solicitation called for the award of approximately five IDIQ contracts, under which the awardees would provide design-build and design-bid-build construction services in Sigonella, Italty. The solicitation provided that award would be made on a best value basis, considering price and several non-price factors, including technical approach.

Under the technical approach factor, the solicitation stated that NAVFAC would evaluate the composition and management of the firms proposed as the design-build team. As part of this requirement, offerors were to include a narrative describing the proposed primary construction and design firms, the rationale for the proposed arrangement, and the roles, responsibilities, and contractual relationships between the firms.  Each offeror was also to submit an organizational chart that clearly defined the lines of authority between the firms.

NAVFAC received 14 proposals in response to the solicitation. LOTOS, S.r.l. submitted one of those proposals.

In evaluating LOTOS’s proposal, NAVFAC determined that LOTOS had failed to include the narrative describing the roles and responsibilities of the prime contractor and subcontractors.  Additionally, NAVFAC found that LOTOS’s organizational chart did not provide sufficient detail regarding the lines of authority.  The organizational chart consisted of a diagram with the heading “Prime Contractor,” followed by LOTOS’s name, a line, the section symbol (§), another line, the heading “Subcontractor,” and the name of the company acting as subcontractor. (Take a look at the GAO’s decision for a graphical representation of the organizational chart).  NAVFAC assigned deficiencies to LOTOS’s proposal and excluded LOTOS from the competitive range.

LOTOS filed a GAO bid protest challenging the exclusion. With respect to the narrative, LOTOS argued that the information the Navy sought was actually in the proposal, but LOTOS failed to identify where in the proposal the information could be found. Reviewing the proposal, the GAO wrote that “[t]his failure is not surprising” because LOTOS’s technical proposal was almost completely descriptions of qualifications and previous work experience. “In other words,” GAO stated, “while the proposal provided information about LOTOS and about [LOTOS’s subcontractor], the proposal provided very little detail about how the two firms would work together.”

The GAO also rejected LOTOS’s argument that its organizational chart was sufficient. The GAO said that given the requirements of the solicitation, and given the lack of detail provided by LOTOS, the Navy acted reasonably in excluding LOTOS’ proposal, concluding “it is reasonable for the agency to have expected more information than that provided by LOTOS in its narrative description and accompanying organizational chart, which depicted nothing more than two boxes showing the prime contractor sitting above its subcontractor.”

When it comes to proposal-writing, details matter. As the LOTOS case demonstrates, when a solicitation requires a detailed response, it is up to the offeror to provide the requested details. As LOTOS learned the hard way, a lack of detail can spell doom for a proposal.

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