Bidding against an incumbent prime contractor often presents unique challenges. In some cases, the incumbent has been highly successful, and the procuring agency may hope to award the follow-on to the same company. Even if the agency is not predisposed to favor the incumbent, the incumbent often knows more than its challengers about how the new procurement will actually operate “in real life.”
But just because an incumbent has unique information about the ongoing procurement does not mean that the procuring agency is necessarily required to level the playing field by releasing that information to challengers. For instance, in one recent GAO bid protest decision, the GAO held that the procuring agency was not required to release the names of the incumbent’s subcontractors or other proprietary and confidential information about the incumbent contract.
GAO’s decision in Richen Management, LLC, B-406750, B-406850 (July 31, 2012), involved two GSA solicitations for janitorial and maintenance services at federal facilities. The solicitations were follow-ons to existing prime contracts. Richen Management, LLC intended to bid on each solicitation.
After each solicitation was issued, Richen asked the GSA to identify the incumbent’s subcontractors. Richen also asked to review service request logs and maintenance logs to better determine the expected level of service.
The GSA refused to release the information, stating that it was proprietary, sensitive, and subject to withholding under the Freedom of Information Act. Richen subsequently filed a GAO bid protest, challenging the terms of the solicitations for excluding the requested information.
The GAO wrote that although “a procuring agency must give sufficient detail in a solicitation to enable bidders to compete intelligently and on a relatively equal basis,” “[w]e do not agree with the protester that the agency’s decision to withhold the incumbent’s subcontractor’s names, the service call log information and more detailed repair history data, hindered Richen’s ability to submit an intelligent proposal.” The GAO continued, “knowledge as to the nature of the incumbent contractor’s work force is strictly an advantage of incumbency, and the government thus has no obligation to disseminate that information to other offerors.” The GAO denied Richen’s protest, holding, “the agency’s refusal to provide subcontractor information, service call logs or more detailed repair history data here did not prevent offerors from competing intelligently and on a relatively equal basis.”
The Richen Management GAO bid protest decision demonstrates that when it comes to competing against an incumbent, perfect equality is not always possible. Rather, as the GAO held, incumbency offers certain advantages, and the agency is not necessarily required to neutralize those advantages by releasing the incumbent’s confidential information.
One final question, which was not addressed in the GAO decision: was it reasonable for the GSA to withhold the names of the incumbent’s subcontractors as “proprietary?” After all, the Federal Funding Accountability and Transparency Act, as implemented in FAR 4.14 and FAR 52.204-10, requires prime contractors to report all subcontract awards of $25,000 or more, and the information is then published at usaspending.gov.
It is not clear whether Richen simply failed to argue that public policy calls for subcontracting information to be made publicly available, or whether the GSA determined that the subcontracting information in question was not covered by the FFATA and related FAR provisions (either because the subcontracts were too small or because the incumbent contracts were issued prior to the implementation of FAR 52.204-10). In any event, prime contractors cannot necessarily count on the Richen Management decision to keep their subcontract awards private: if FAR 52.204-10 is in the prime contract, most subcontract awards will likely be made public.