This month’s bid protest roundup focuses on two recent decisions by the U.S. Government Accountability Office (GAO) and one decision from the U.S. Court of Federal Claims (“Court”). These decisions involve (1) the consequences of failing to scrutinize the terms of an indefinite-delivery indefinite-quantity (IDIQ) solicitation when challenging the terms of a task order solicitation, (2) the distinction between ancillary work and the principal purpose of an information technology (IT) centric solicitation when claiming that a task order solicitation is outside the scope of the underlying IDIQ contract, and (3) in the context of a challenge to the override of a Competition in Contracting Act (CICA) stay, the Court’s rejection of the argument that the status quo involved the continued performance of the incumbent contract and suspension of the contested bridge contract award.
Enterprise Resource Performance, Inc.[1]
This decision involves an untimely protest of the evaluation methodology in a Department of Veterans Affairs’ (VA) task order solicitation. In denying the protest, the GAO found that the underlying IDIQ solicitation explicitly set forth the very tiered set-aside and best value trade-off evaluation methodology that the protester now challenged as unreasonable. The GAO also pointed out that the VA previously awarded the protester an IDIQ contract and a task order award using the same evaluation methodology.
In 2016, the VA issued the underlying IDIQ set-aside solicitation for supply chain and logistics support services. The solicitation contemplated the award of approximately ten IDIQ contracts for each of the six identified “service groups” on a best value basis, using a three-tiered evaluation methodology for use in all subsequent task order competitions.
The solicitation further specified that, over the life of the procurement, offerors that became large would either be off-ramped or evaluated in Tier 3 for the balance of the contract ordering period. The VA also explained that the tiered evaluation approach “may result in awards to only Tier 1 offerors,” as the solicitation directed the VA to first evaluate and make awards to Tier 1 offerors and then evaluate Tier 2 offerors only if the VA needed to make additional awards; Tier 3 offerors would be evaluated last.
In 2017, the VA awarded Enterprise Resource Performance, Inc. (“Enterprise”), an IDIQ contract award as a Tier 1 offeror. And in 2019, Enterprise won a task order 19 award (TO 19) as a Tier 1 offeror. Sometime thereafter, Enterprise became other than small, placing it in Tier 3 for all remaining task order competitions.
On April 1, 2022, the VA issued the task order 88 (TO 88) solicitation at issue in this protest, a follow-on requirement to TO 19. The TO 88 solicitation included the mandatory tiered set-aside evaluation methodology from the IDIQ solicitation.
Prior to the proposal submission deadline, Enterprise filed a protest challenging the best value trade-off aspect of the tiered set‑aside evaluation approach, which Enterprise claimed the VA introduced for the first time in the TO 88 solicitation. Specifically, Enterprise argued that the tiered set-aside evaluation approach was irrational in the context of a best value trade-off award methodology, as it restricted the VA from evaluating all proposals. Enterprise further claimed it did not know the VA would use this approach to evaluate future task order proposals.
The GAO dismissed the protest as untimely. First, the GAO rejected Enterprise’s allegation that the VA first introduced the best value trade-off methodology in TO 88, finding that the VA not only used that approach in making IDIQ contract awards, but that it used the same approach when evaluating TO 19 proposals. Enterprise won IDIQ and TO 19 awards, so the protester clearly knew the agency might employ this methodology in future task order competitions. In reaching this conclusion, the GAO emphasized that the “integrity of the protest process does not permit a protester to espouse one position during the procurement, and then argue during a protest that the position is unreasonable or otherwise improper.”
Next, the GAO determined that irrespective of whether the VA employed a best value trade-off or some other type of evaluation methodology (e.g., lowest-price, technically acceptable), the IDIQ solicitation clearly stated that the mandatory tiered evaluation approach would be used in all future task order solicitations. Enterprise therefore had notice of this requirement in 2016 and, if it disagreed, should have objected at that time.
Finally, the GAO found that, even if Enterprise had timely objected, there is “nothing inherently irrational” about basing a best-value tradeoff on a tiered evaluation, particularly where the FAR expressly affords contracting officers the discretion to limit task order competitions by using small business set-asides.
Takeaways
This decision serves as a reminder that offerors must carefully review the terms of an IDIQ solicitation and questions submitted by other offerors to determine whether any terms might impact future task order competitions. It also emphasizes that the GAO will strike down what are essentially glass house arguments, where a protester waits until its circumstances change to object to the terms of a solicitation that no longer benefit it.
Plateau Software, Inc.[2]
In Plateau Software, Inc., the GAO addressed considerations surrounding the boundary line between a solicitation that seeks ancillary IT services and a solicitation that is principally for IT services in the context of a General Services Administration (GSA) One Acquisition Solution for Integrated Services (OASIS) procurement. Plateau Software, Inc. (“Plateau”), argued that a task order solicitation sought IT services outside the scope of the OASIS unrestricted pool 1 contract (“OASIS contract”), which limited the procurement of IT services to ancillary services “integral and necessary” to meet certain professional service requirements and also confined the scope of task orders to a singular principal purpose. Employing a fact-based analysis, the GAO rejected each of the protester’s arguments, finding that the contested services were ancillary and within the scope of the underlying contract and that the task order had only one principal purpose.
On February 4, 2022, GSA issued the task order solicitation to OASIS unrestricted pool 1 contract holders, seeking occupational health, management, data analysis, and IT support services. Plateau timely filed a pre-award protest, alleging the task order solicitation was outside the scope of the OASIS contract and that, as a result, GSA had to compete the procurement in accordance with CICA, opening the solicitation to companies (such as Plateau) without an OASIS contract.
First, Plateau claimed that the principal purpose of the task order solicitation was for IT services, consisting of IT operations and engineering support services for the Department of Defense Force Risk Reduction (FR2) system. Plateau pointed to the various, interspersed requirements for data analytics work throughout the Performance Work Statement as supporting evidence, emphasizing that such work required experience and expertise in the FR2 infrastructure.
In addition, Plateau argued that the solicitation identified two principal purposes in violation of the single principal purpose restriction in the OASIS contract—“one for IT‑related services to operate, maintain, and modernize the FR2 system[,] and another for safety and occupational health initiatives.”
The GAO disagreed with each of these arguments and denied the protest.
In reaching its determination, and in finding that the GSA already satisfied CICA’s competition requirements by competing the underlying IDIQ contract through full and open competition, the GAO conducted a fact-intensive, comparative evaluation to assess whether the task order was materially different from the original contract. This involved a “review[] [of] the circumstances attending the original procurement” based on a variety of factors, including “changes in the type of work, performance period, and costs between the contract as awarded and the task order solicitation.” The GAO also evaluated whether the terms of the original contract solicitation advised offerors of the potential for the type of task orders issued.
Based on its comparative evaluation of the terms of each solicitation, the GAO concluded that the principal purpose of the solicitation was for integrated professional engineering services with ancillary IT components (such as the data analytics work). It found that such services are encompassed by the broad range of professional services in the OASIS contract and therefore within scope.
The GAO also rejected protester’s argument that historical labor data included in the task order solicitation showed that the principal purpose was for IT services, where two-thirds of the relevant historical labor was allegedly IT-related. Rather, the GAO explained that there is no correlation between the scope of work and the labor mix/breakdown, per the OASIS contract. Moreover, after excluding the data-related labor categories, the portion of ancillary out-of-scope IT services was only approximately 32 to 39 percent.
Finally, the GAO also rejected Plateau’s argument that the OASIS contract precluded task order solicitations from having multiple objectives, noting that it was not inconsistent for the task order solicitation to contain multiple objectives where the OASIS contract called for an integrated solution.
Takeaways
This decision shows that, although IT services can be integral to the performance of a task order (or contract), that does not by itself mean that the principal purpose of the procurement is for IT services. Rather, offerors must pay heed to both the degree of importance and differences among the varying requirements of a solicitation when protesting any terms.
For protesters, this case illustrates the factors that the GAO will consider when analyzing whether a task order is out of scope of its underlying IDIQ contract. And, as this case also demonstrates, if the solicitation for the underlying contract contains a broad scope of requirements, an out‑of‑scope challenge to a task order solicitation will likely fail.
Yahya Technologies, LLC d/b/a Y-Tech, LLC v. United States[3]
In Yahya Technologies, LLC, the latest of a string of CICA stay override decisions by Judge Campbell-Smith over the past several years, the Court denied the plaintiff’s motion for a preliminary injunction or application for a temporary restraining order.
In July 2021, the agency notified Yahya Technologies, LLC d/b/a Y-Tech, LLC (Y-Tech), that it would not exercise any additional option periods under a contract that Y-Tech was performing. Approximately five months later, the agency issued a new solicitation, the terms of which Y-Tech protested at the GAO as being improperly restrictive. In response, the agency elected to take corrective action by cancelling the solicitation and issuing a new one, resulting in dismissal of the protest.
Prior to issuing a new solicitation, the agency awarded a sole source bridge contract to another contractor for the various IT services that Y-Tech had been performing under the incumbent contract. Y‑Tech, in turn, promptly filed a new protest at the GAO, claiming that the agency failed to take corrective action and awarded the bridge contract in bad faith. This protest triggered an automatic CICA stay of performance of the bridge contract. Five days later, the agency notified Y-Tech of its intention to override the CICA stay, as continued performance of the bridge contract was “in the best interests of the United States.”
Plaintiff Y-Tech filed suit with the Court and argued that reinstating the CICA stay was necessary to preserve the status quo, which, in its view, was the continued performance of its incumbent contract and a suspension of the bridge contract award. The plaintiff further alleged that absent an injunction of the CICA stay override, it would go out of business and therefore would not be able to compete for the award once the agency issued the new solicitation.
In its written justification for overriding the CICA stay, the agency articulated the reasons why continued performance of the bridge contract was “in the best interests of the United States.” The agency began by detailing a variety of recent performance issues with the plaintiff, including three service outages within the preceding six-month period and the identification of “significant security vulnerabilities” within its IT systems that the plaintiff failed to resolve for nearly five months, all of which posed a risk to the agency’s infrastructure and core mission.
The justification also highlighted the increased attacks on the United States by entities in foreign states, such as Russian Advanced Persistent Threat groups, through the exploitation of common vulnerabilities and exposures. Comparing those threats to the severe risks resulting from the plaintiff’s performance failures, the agency determined a stay override was appropriate.
In denying plaintiff’s motion, the Court interestingly latched onto the status quo analysis, without analyzing the rationale provided in the agency’s written justification. Instead, the Court focused on the fact that since July 2021, the plaintiff knew the agency would not exercise any options in its contract and that the plaintiff would have to compete for the new contract.
The Court also held that the agency did not have an obligation to extend the incumbent’s performance during the ongoing re-competition process. In a final point, the Court noted that the underlying GAO protest did not “redefine the status quo,” as that protest’s outcome “simply does not dictate whether plaintiff would continue its performance” beyond the expiration date of its incumbent contract. The Court accordingly dismissed the plaintiff’s complaint as moot, as the Court could not fashion any meaningful relief given the status quo and limited scope of the issues before it.
Takeaways
The primary takeaway in this case is that the Court does not consider the continued performance of the incumbent contract to be the status quo where the underlying protest is based on an agency’s bridge contract award. Also underpinning this decision is the key distinction that a recently awarded bridge contract is separate and distinct from an incumbent contract.
On a related point, this decision—among others, including decisions by Judge Campbell-Smith[4]—signals the Court’s continued reliance on at least some of the principles articulated in Reilly’s Wholesale Produce v. United States[5] in the wake of the Federal Circuit’s December 2019 decision in Safeguard Base Operations, LLC v. United States.[6] In that case, the Federal Circuit noted that the Reilly factors for evaluating an override determination “do not even bind the Claims Court, let alone comprise an indispensable aspect of agency rational basis.”[7] Nevertheless, and although not specifically addressed in Yahya Technologies, the Court will seemingly continue to use the Reilly factors as useful guideposts.
[1] Enter. Res. Performance, Inc., B-420714, 2022 U.S. Comp. Gen. LEXIS 123 (Comp. Gen. June 7, 2022).
[2] Plateau Software, Inc., B-420579, 2022 U.S. Comp. Gen. LEXIS 131 (Comp. Gen. June 14, 2022).
[3] Yahya Technologies, LLC d/b/a Y-Tech, LLC v. United States, No. 22-585, 2022 U.S. Claims LEXIS 1347 (Fed. Cl. June 27, 2022).
[4] See generally C&E Servs. v. United States, No. 22-366, 2022 U.S. Claims LEXIS 982 (Fed. Cl. May 23, 2022); see also Comprehensive Health Servs., LLC v. United States, 151 Fed. Cl. 200 (2020) (decision by Judge Tapp).
[5] Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705, 710 (2006).
[6] Safeguard Base Operations, LLC v. United States, 792 Fed. App’x 945 (Fed. Cir. 2019).
[7] Id. at 948–49 (internal citations omitted).
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