The Government Accountability Office (GAO) issued a Decision on October 13, 2015, regarding Protest B-410778.3, XTec, Inc., October 1, 2015 (http://www.gao.gov/products/B-410778.3)
GAO sustained the protest based on the agency’s failure to engage in reasonable advance planning.
This is a huge decision! The number one frustration for Contracting Officers is when the Program office “fails to plan”. Even for known requirements (such as follow-ons to existing contracts), it is like pulling teeth to get a complete requirements package in time to do an effective acquisition. But now it seems that the GAO has had enough excuses and is going to hold program and contracting offices accountable for ensuring adequate advance planning is done.
XTec protested the General Services Administration’s (GSA) cancellation of request for quotation (RFQ) No. 858797 and their extension of a sole-source task order. XTec asserts that the cancellation and extension of the task were both caused by GSA’s failure to engage in reasonable advance planning.
The initial requirement was awarded competitively to HPES for April 2007 to April 2012.
On July 25, 2011, GSA’s contracting officer (CO) awarded a sole-source “logical follow-on” task order to HPES, permitting them to continue the services. The limited source justification (LSJ) basically stated that no one other than the incumbent could perform without “disruption, transition delays, duplication of costs, and new costs”. The LSJ also stated that the logical follow-on “is for a period not to exceed three years and cannot be used as a justification in the future.”
In August 2011, XTec filed a protest challenging the sole-source award to HPES, which GAO denied on the basis that the agency’s concerns regarding risks associated with transitioning to a non-incumbent contractor were reasonable.
On March 25, 2014, the agency issued RFQ No. 858797 seeking quotations to replace HPES’s sole-source task order. Quotations were received from HPES and XTec. The agency evaluated the proposals and selected XTec for award. HPES protested the award, the government did a re-evaluation of the proposals, and GAO dismissed HPES’s protest.
After the re-evaluation, the agency again selected XTec’s quotation for award. HPES filed a second protest and GSA again took corrective action to another evaluation of proposals, and GAO again dismissed the protest.
On March 27, 2015, the CO signed a modification to the sole-source task order (which was scheduled to expire within a matter of days), extending the performance period of that task order by up to two years “in order to accomplish transition activities.” At that time, no formal justification for the extension of the task order was prepared.
By email to the CO, the program manager requested cancellation of RFP No. 858797 “in order to develop a new acquisition” because “the program office has identified additional factors and requirements that our customers have indicated should be included in the solicitation.”
On June 16, 2015 (almost three months after the mod was issued to extend the task order), the Head of the Contracting Agency (HCA) signed an LSJ to authorize the contracting officer’s March 27, 2015 extension of HPES’s sole-source task order. The LSJ basically repeated that HPES was the only contractor capable of providing the required supplies and services. Nothing in the agency’s LSJ discussed cancellation of RFQ No. 858797.
On June 17, 2015, the agency published the notice of the extension to the sole-source task order and announced cancellation of RFQ No. 858797. This protest followed.
GAO agreed with the protestor’s attestations that both the extension of the task order and cancellation of the RFP were due to the agency’s failure to plan.
The records show that the agency knew in 2011–when it justified and defended its prior award of a sole-source task order – of the need for a new acquisition. The agency’s 2011 justification for not competing the logical follow-on task order expressly referenced the very concerns on which they now rely to support the decision to cancel RFQ No. 858797.
GAO, however, did not recommend the cancelled solicitation be reinstated or that HPES’s ongoing performance be terminated. They did recommend the agency make expeditious efforts to prepare the new solicitation and conduct a competition. Also, based on the agency’s extension of the task order for up to two years, GAO recommended that GSA reimburse XTec for proposal preparation costs incurred in responding to the cancelled solicitation. Finally, GAO recommended that the protester be reimbursed the reasonable costs of filing and pursuing its protest, including reasonable attorneys’ fees.
I know this is a long, convoluted one, but it’s also ground-breaking. The agency issued a sole source to the incumbent to keep receiving the services and another firm protested the situation and was successful. The protest was sustained because the agency failed to show adequate planning.
So program managers and contracting officers beware! GAO is not taking kindly to excuses and wants the team to start acquisitions with plenty of time to complete them. The current average time for a source selection is 24-36 months!
If you are in this situation – as the incumbent or an offeror – be sure you understand how the process is supposed to work and protest if you are being treated unfairly.