Offeror’s Employee Relocation Plan May Have Posed Retention Risk, Says GAO

An offeror’s plan to relocate a significant number of employees after the first year of a task order may have posed a risk to the offeror’s ability to retain qualified staff.

In a recent bid protest decision, the GAO held that it was unreasonable for a procuring agency to fail to consider the potential risks of an offeror’s plan to move a portion of its workforce to a different geographical area in order to take advantage of the relatively lower wages of that area.

The GAO’s decision in Tantus Technologies, Inc., B-411608, B-411608.3 (Sept. 14, 2015) involved a Centers for Medicare and Medicaid Services solicitation for comprehensive testing strategy and testing support services for IT systems.  The solicitation, which was issued under the CIO-SP3 GWAC, contemplated the award of a cost-plus-award-fee task order with a one-year base period and four one-year options.

The solicitation called for a best value tradeoff, in which several factors would be evaluated.  Among these factors, the solicitation directed offerors to submit a staffing plan identifying the individuals who would perform the work under the task order.  The solicitation also specified that CMS would evaluate the extent to which each offeror’s staffing plan “ensures that appropriately qualified staff are available to meet the requirements of this contract on an ongoing basis.”

After evaluating competitive proposals, CMS made award to Edaptive Systems, LLC.  Edaptive’s proposal, which was evaluated as slightly costlier than the proposal submitted by Tantus Technologies, Inc., earned a “Highly Acceptable” score for Personnel/Management–the factor that encompassed the staffing plan.

Tantus filed a GAO bid protest.  Among its arguments, Tantus pointed out that Edaptive planned to relocate a significant number of employees after the first year of the task order to a lower-wage area.  Tantus contended that this plan presented a heightened risk that Edaptive would not be able to retain its employees, and that CMS had ignored this risk in its evaluation.

Reviewing the evaluation record, the GAO agreed that CMS had not evaluated the risks posed by Edaptive’s relocation plan.  The GAO wrote:

We find that Edaptive’s proposed relocation strategy, which would require a significant geographic change for a substantial portion of its workforce, is relevant to the awardee’s ability to provide qualified staff following the base year of the task order.  The agency’s failure to consider this aspect of Edaptive’s proposal was thus unreasonable and inconsistent with the evaluation criteria of the RFP, and on this basis we sustain the protest.

Some GAO decisions are based on legal nuances, whereas others are based more on common sense.  In this case, while the ultimate “sustain” decision stemmed from the terms of the solicitation (which required a staffing plan demonstrating the availability of qualified personnel for the life of the task order), the decision nonetheless included a strong dose of common sense.  Here, Edaptive proposed to relocate a number of qualified staff to a lower-wage area–and then, perhaps, to lower their wages.  It is logical to assume that many of the staff in question would balk at such a plan–and might seek employment elsewhere rather than relocate and take a potential pay cut in the process.

While the GAO did not hold that Edaptive’s plan was itself improper or risky, it did hold that CMS acted unreasonably by failing to consider the potential risks.  To me, that sounds like good old fashioned common sense.

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