GAO: Proposal Evaluations Can’t Take Place in La La Land

Wouldn’t it be swell to simply erase those less-than-flattering moments from your past merely by deleting them? For instance, what if your biographer simply omitted any mention of you being excited for and seeing the apparently horrible new Cats movie? Does erasing a historical fact–such as an unfavorable detail from a proposal–mean that it never happened?

Well, evidently the Navy and an awardee, under a recently protested Navy contract, thought so. But GAO brought them back to reality in Qi Tech, LLC, B-416711.8 (Comp. Gen. Nov. 27, 2019).

There, the Navy issued a solicitation to provide administrative and clerical support at the Navy’s Naval Surface Warfare Center in Dahlgren, Virginia. The solicitation outlined several evaluation factors, including a recruitment and retention of personnel factor. Under that factor, offerors were required to describe their personnel management plan and to provide retention metrics of personnel under other contracts subject to the Service Contract Act.

In its first revised proposal (this procurement involved multiple rounds of protests and final revised proposals), the awardee, the incumbent contractor, identified a 32% turnover rate on the incumbent contract. Not unexpectedly, when the Navy first evaluated this fact, it found it to be a significant weakness in the awardee’s proposal. The Navy commented that “[t]his high turnover rate demonstrates that the company investment in staff retention is not effective . . . and increases the risk to the Government that continuity of services will not be provided and it increases the level of effort required to train and orient new personnel.”

After the Navy addressed this significant weakness during discussions, the awardee revised its proposal to omit any reference to the incumbent contract’s 32% turnover rate. In its place, the awardee substituted a lower average turnover rate for multiple contracts.

Now comes the baffling part. During the Navy’s evaluation of that revised proposal, it found that the significant weakness had magically vanished. How? Because the awardee had “removed all verbiage” related to the 32% turnover rate. That is, the Navy was somehow satisfied with the awardee’s new proposal because it “did not reference the retention rate of the current incumbent contract” and instead “provided an average retention rate” among various contracts “which is in line with industry average retention rates.” So, in effect, the Navy played the fool, ignoring a known fact simply because the awardee had excised the deleterious fact from its revised proposal.

GAO was not impressed and held that the Navy’s evaluation was unreasonable, for multiple obvious reasons. For one, the awardee’s turnover rate was known to the evaluators. Also, the turnover rate–as evidenced by the previous evaluation–was a relevant consideration. In addition, the awardee did not dispute its high turnover rate and, as “historical data” it could not “change between the awardee’s first and revised FPRs.”

But what if the awardee had addressed concrete steps that it would take to lower its turnover rate? Would that have been enough to provide the awardee and the Navy with cover? Perhaps, but the record did not contain any discussion that other proposal features could ameliorate concerns with the high turnover rate. Instead, the Navy and the awardee chose to stroll in a fantasy world where inconvenient truths have no place and sweeping things under the rug is acceptable.

So what’s the lesson? Address your bad facts. If you have a high turnover rate, present a comprehensive plan to reverse it (and perhaps don’t highlight it in your proposal). That then allows an agency, if so inclined, to counterbalance a negative with a prospective positive. Most likely, if the awardee and Navy had done that here, GAO would have deferred to the Navy’s discretion.

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