GAO Rules RFQ Requirement Unreasonably Restricted Competition

In recent GAO decision, Booz Allen Hamilton, Inc., B-418449 (Comp. Gen. May 18, 2020), GAO reminded the Marine Corps to make sure its RFQ requirements were reasonable—and in line with the underlying contract.

Before we jump in, a little bit of background: in May of 2018, the Navy awarded the Financial Improvement and Audit Readiness (or FIAR) contracts to four vendors, including Booz Allen (for more info on the Department of Defense’s FIAR fest, click here.) Under these multiple-award IDIQ FIAR contracts, the Navy anticipated issuing a number of RFQs for specific needs.

Under the RFQ at issue here, the Marine Corps sought out “financial statement audit support services” to help ensure audit readiness for its fiscal year 2020 Full Financial Statement Audit. To facilitate these services, the RFQ required the awarded prime contractor or its affiliate to be an independent public accountant, also know as an IPA (minus the hops in this case). Early in the solicitation process, the Marine Corps clarified that, for the purposes of the RFQ, “affiliate” meant another company connected to the prime “through an official attachment or connection, through licensing, or as subsidiary.” It further explained that “affiliate” did not include subcontractors.

Booz Allen, one of the four would-be competitors, argued that this requirement unduly restricted the competition and exceeded the scope of the underlying FIAR contract. Ultimately, GAO agreed.

First, GAO turned to Booz Allen’s competition argument. Agreeing with the protester, GAO explained that there was no reasonable basis for the Marine Corps to conclude that an IPA was necessary to meet its needs. The Marine Corps relied exclusively on statements made by the Program Manager to the RFQ’s assigned contracting officer to justify the IPA requirement. When it came down to it, the statements insinuated that the Program Manager preferred to employ an IPA to complete the work because an “IPA’s consulting services would yield more credible and relevant advice due to the auditing experience and culture of an IPA firm.”

GAO explained that the IPA requirement did not meet its standard for reasonableness because it “appear[ed] to be based solely on the program manager’s belief that an IPA will provide high quality work, rather than any empirical or other evidence for why an IPA is uniquely qualified to perform the services of the RFQ.” Further, GAO found that requiring the prime or its affiliate, but not a subcontractor, to be an IPA was also unnecessary to meet the Marine Corps’ needs. Thus, while GAO confirmed that the Marine Corps was “entitled to great discretion in establishing its needs,” in this case, it had “failed to provide reasonable justifications for the challenged specifications.”

GAO then turned to Booz Allen’s second argument: that the RFQ’s IPA requirements were outside the scope of the FIAR IDIQ contract and that, if they had been within the scope, Booz Allen would have conducted its pricing and teaming strategies differently. GAO also agreed with Booz Allen here, stating that though “the RFQ and IDIQ involve[d] the same audit remediation services, the RFQ requirement that the services be performed by an IPA [was] materially different from the IDIQ, which only required that firms have comprehensive knowledge of the audit process and the ability to predict and respond to the Department of Defense’s (DOD) IPA.”  

Overall, GAO sustained Booz Allen’s protest and recommended that the Marine Corps reassess the basis for its IPA requirement and either “modify its procurement strategy or delete the IPA requirement.”

This case provides an important reminder for IDIQ contract holders responding to RFQs: keep a close eye on RFQ requirements to make sure they are reasonable and fall within the scope of the underlying contract you signed. If you think they don’t add up and need assistance preparing a GAO protest, Koprince Law can help!

Questions about this post? Email us or give us a call at 785-200-8919.