GAO Rejects Facially Biased Procurement

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Ever feel like procurement officials are out to get you? Like you’re not getting a fair shake? That must have been how the contractor in the protest Harmonia Holdings Group, LLC felt when faced by a source selection decision that was pretty clearly biased against them. The GAO sustained Harmonia’s protest of the Department of Agriculture’s contract award based on a source selection decision that was flawed in virtually every respect, including the agency’s past performance evaluation, assignment of weaknesses, and best value tradeoff. A close look at the decision reveals that the agency likely had its mind made up before conducting the evaluation, and went through the motions to try to justify its decision. Nonetheless, the GAO sustained the protest based on the individual flaws in the source selection process, rather than the agency’s obvious overall bias against the protestor.

The selection official responsible for evaluating the proposals had previously served as the contracting officer on one of Harmonia’s prior projects for the agency, in which the takeover from the incumbent had not gone completely smoothly. He began his evaluation with a negative view of Harmonia.  His evaluation was based on the recommendations of a technical evaluation board (TEB), the members of which had positive personal experiences with some of the key personnel from the eventual awardee.  While it is legitimate for source selection personnel to consider their past experience with contractors, it cannot control the entire process, as it evidently did in Harmonia.

After the initial contract award to a company whose price was significantly higher than Harmonia’s, Harmonia protested and the agency quickly took corrective action.  The agency then issued a new award to the same awardee, based on a revised evaluation that was flawed in virtually every respect.  Here are a few examples:

  • The agency determined that the awardee’s pricing was “lower on most positions” by selectively comparing less than half of the positions in the offers. The agency then calculated an overall price for each offer inclusive of optional CLINs that were “to be defined as the needs/requirements arise” and that were not supposed to be evaluated under the terms of the solicitation. The GAO held that this price comparison was unreasonable.
  • Harmonia submitted past performance projects that were similar in size, scope and complexity, to the subject project, whereas the awardee’s past performance examples were significantly smaller and of shorter duration. Nonetheless, the agency assigned a much higher rating to the awardee’s past performance than to Harmonia’s.  The GAO held that the high rating for the awardee was “facially inconsistent” with the past performance references the awardee submitted.
  • The agency assigned weaknesses to Harmonia’s technical approach and management approach because “while the technical approach met the requirements of the RFQ, it did not show how Harmonia’s approach was the best.” The GAO held that these were comparative assessments, not weaknesses demonstrating any failure to meet the solicitation’s requirements.
  • The agency assigned a weakness because Harmonia’s proposed staffing level was lower than the government’s estimated staffing level. The GAO held this was improper because “the government’s estimate was not disclosed to the offerors; the agency failed to conduct discussions with the offeror concerning the discrepancy; and the agency did not look beyond the bottom-line numbers to determine whether there were specific areas in which the offeror’s proposed staffing was adequate.”
  • The agency assigned a weakness based on a deficiency in Harmonia’s original proposal, which had been corrected in its revised proposal. The agency stated that while the revised proposal corrected the problem, Harmonia “showed a lack of diligence in initial proposal.”  The GAO held that it was unreasonable to assign a weakness for a deficiency which had been corrected.
  • The agency failed to document the basis for its best-value tradeoff decision, and so could not demonstrate why it was advantageous to the government to pay the awardee’s higher price. The GAO held that the agency had also conducted the tradeoff analysis in a mechanical way, without any consideration of the quality of proposals other than the list of weaknesses assigned, unreasonably, to Harmonia.

The high number and unreasonable nature of the agency’s procurement errors are clear evidence that the agency was biased against Harmonia from the start.  The takeaway for contractors is that despite the strong evidence of overarching bias, the GAO decided the protest based on the individual procurement errors, not the agency’s overall conduct of the procurement.  Effective protests require careful attention to detail to identify specific procurement errors for the GAO to consider.  If you experience a biased procurement and need help crafting a winning protest, we can help.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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