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GAO: Don’t Misrepresent Incumbent Capture in Proposals

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Koprince Law LLC

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GAO sustained a protest recently where a contractor misrepresented to the agency that it had negotiated offers with incumbent workers when in fact it had not.

In Sev1Tech, Inc., B-416811 et al., (Dec. 18, 2018), the U.S. Coast Guard sought to award a task order contract for project management, technical support, and logistics services to a member of the General Services Administration’s One Acquisition Solution for Integrated Services (“OASIS”) Small Business Pool.

The solicitation required offerors to submit résumés for all positions. It identified six key positions and 26 positions overall. It also said that offerors would be evaluated by their ability to recruit and keep incumbent workers.

Six contractors submitted proposals. The Coast Guard evaluated them and established a competitive range of two: Solutions Through Innovative Technologies, Inc., of Fairborn, Ohio, and Sev1Tech, Inc., of Woodbridge, Virginia.

Solutions Through Innovative Technologies’ proposal included the résumés of 10 incumbent workers and said that it had begun to negotiate contingent offers of employment with them. It offered a lower cost to the government and was selected for award.

Sev1Tech filed a protest. It alleged that Sev1Tech had negotiated exclusive letters of commitment with the employees in question. Sev1Tech argued that Solutions Through Innovative Technologies had misrepresented their availability.

Although, generally, the issue of whether or not proposed workers will actually perform under the contract is one of contract administration and not a matter for GAO to consider, GAO will consider whether an offeror misrepresented its ability to provide the identified staff and, if so, whether the agency relied on that misrepresentation.

The rule is that contractors may propose to use incumbent workers when the worker in question has expressed some interest in working for the contractor. The commitment does not have to be firm, but there at least needs to be some sign that supports the notion that the worker would assent to being included in the proposal.

But here, GAO found that Solutions Through Innovative Technologies got these workers résumés not from the workers themselves, but from a database. GAO said: “The record shows, however, that [Solutions Through Innovative Technologies] received the resumes for the incumbent staff from its proposed subcontractor, which maintained a database that included the resumes of staff who performed under a previous task order.”

In fact, Solutions Through Innovative Technologies had not even contacted those workers. It admitted during the course of the protest that it did not make first contact with them until after it was notified of award. Said GAO, “contrary to its representation in its proposal, [Solutions Through Innovative Technologies] did not reach out to and negotiate contingent offers of employment with candidates for each position and did not have prior permission to submit the incumbent employees’ resumes or a prior expression of willingness by the individuals to consider employment with the awardee.”

In other words, the representation in its proposal that it had begun negotiating contingent offers was simply false.

Solutions Through Innovative Technologies claimed that this was not a deliberate falsehood, but instead a copy and paste error made by relying on the text of a previous proposal and that it reasonably expected to be able to hire incumbents based on its historic incumbent capture rate.

But GAO was having none of that, pointing out that an offeror is responsible for ensuring the accuracy of a proposal as submitted. It added: “Although [Solutions Through Innovative Technologies] may have had a reasonable basis to believe that the incumbent personnel would be available to work for [Solutions Through Innovative Technologies] upon award, this did not negate the awardee’s misrepresentations that it had contacted incumbent personnel whose resumes it submitted.”

Because the Coast Guard found that the provided incumbent résumés were a strength in Solutions Through Innovative Technologies’ proposal, GAO said that this misrepresentation was a material one. It sustained the protest and recommended the Coast Guard reevaluate proposals taking this misrepresentation in to account. It also recommended paying Sev1Tech’s protest costs.

There are a few takeaways from this case. The first is an obvious one. Don’t think that fudging or puffery in a proposal will go unnoticed. Even if the agency misses it, there’s a good chance a competitor (or their attorney, under a protective order) will be more eagle-eyed. Second, be very careful with copy and paste. It’s a tremendous tool, but a dangerous one.

Third, and least obvious, if you are going to file a protest, it can be a tremendous advantage to be represented by an attorney. Had Sev1Tech pursued this protest alone, it would not have been able to gain access to its competitor’s proposal—only those admitted to the protective order (in general, just your attorney) have access to protected materials—and likely would not have caught the misrepresentation. So, it could have missed out on the key argument that swayed GAO.


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