My company has a situation where  a Letter of Commitment was rescinded by a Key Personnel after submission of proposal and prior to award.  From research,

https://www.bradley.com/-/media/files/insights/publications/2017/05/risks_for_contractor_with_new_info_after_proposal_submission.pdf?la=en

it appears that the case law is split between notification and no action.  In our view the right thing to do is to notify the CO and, ideally, we'd like to offer a substitute Key Personnel for evaluation.

1) However, is there a basis for allowing us to modify our proposal? (This is NOT a situation where we found a better candidate. Our candidate left us.) (I can't find anything in FAR.)

2) If we notify the CO, can the proposal still legitimately be evaluated as submitted? Or will it be dismissed as "noncompliant" since we are missing a Key Personnel?

3) If we are silent, is the risk limited to protest of award and loss of award? 

 

Thank you.

D

 

 

risks_for_contractor_with_new_info_after_proposal_submission.pdf

The following was just published.

31 Nash & Cibinic Rep. NL ¶ 59

Nash & Cibinic Report | November 2017

The Nash & Cibinic Report

Competition & Award

Vernon J. Edwards

¶ 59. KEY PERSONNEL SUBSTITUTIONS AFTER PROPOSAL SUBMISSION: An Unfair Rule

In General Revenue Corp., Comp. Gen. Dec. B-414220.2, 2017 CPD ¶ 106, 2017 WL 2130379, the Government Accountability Office sustained a protest in part because several awardees had experienced material changes in their proposed key personnel after proposal submission, but failed to notify the agency before contract award. The Request for Proposals had required offerors to submit résumés, and several awardees had employees depart before contract award. The GAO found no evidence that the awardees had made any material misrepresentations about the availability of the key personnel. However, it found that the awardees had an “obligation” to notify the agency of the changes in the status of their key personnel when they occurred:

"Our Office has explained that offerors are obligated to advise agencies of changes in proposed staffing and resources, even after submission of proposals. Pioneering Evolution, LLC, B–412016, B–412016.2, Dec. 8, 2015, 2015 CPD ¶ 385 at 9; Greenleaf Constr. Co., Inc., B–293105.18, B–293105.19, Jan. 17, 2006, 2006 CPD ¶ 19 at 10; Dual, Inc., B–280719, Nov. 12, 1998, 98–2 CPD ¶ 133 at 3–6. When the agency is notified of the withdrawal of a key person, it has two options: either evaluate the proposal as submitted, where the proposal would be rejected as technically unacceptable for failing to meet a material requirement, or open discussions to permit the offeror to amend its proposal. Pioneering Evolution, LLC, supra."

In Pioneering Evolution, LLC, Comp. Gen. Dec. B–412016, 2015 CPD ¶ 385, 2015 WL 9256894, which was about a task order competition, the protester, one of only two offerors, notified the agency after proposal submission that a proposed key person had taken another job and they asked to substitute another person. The agency, which had already conducted two rounds of discussion, decided that the offeror’s proposal was deficient and technically unacceptable due to the change, refused to conduct another round of discussions, and awarded the contract to the other offeror, which had a higher price. The protester argued that it should have been able to provide a substitute by means of clarification, but the GAO rejected its argument.

"When a solicitation requires résumés for key personnel, these form a material requirement of the solicitation. Submission of key personnel résumés after receipt of final proposals constitutes discussions, not clarifications, because without these résumés, the proposal would omit material information required by the RFP. CACI Techs., Inc., B–411282, June 18, 2015, 2015 CPD ¶ 185 at 2 (finding that proposal missing résumés of key personnel lacked the substantive information for the agency to find the proposal acceptable). { Footnote omitted.]

"Here, Pioneering notified the Navy of the withdrawal of one of its key personnel. As our Office has held, offerors are obligated to advise agencies of changes in proposed staffing and resources, even after submission of proposals. Greenleaf Constr. Co., Inc., B–293105.18, B–293105.19, Jan. 17, 2006, 2006 CPD ¶ 19 at 10 (it is an offeror’s obligation to inform a procuring agency); Dual, Inc., B–280719, Nov. 12, 1998, 98–2 CPD ¶ 133 at 3–6. However, upon notice of the withdrawal, the Navy had two options: either evaluate Pioneering’s proposal as submitted, where the proposal would be rejected as technically unacceptable for failing to meet a material requirement, or reopen discussions to permit Pioneering to correct this deficiency. Paradigm Techs., Inc., B–409221.2, B–409221.3, Aug. 1, 2014, 2014 CPD ¶ 257 at 5. The Navy, having already engaged in two rounds of discussions, reasonably declined to reopen a third round of discussions. Under the circumstances here, where prior discussions were meaningful and equal, the agency’s decision not to reopen discussions is a matter within its discretion. The Boeing Co., B–409941, B–409941.2, Sept. 18, 2014, 2014 CPD ¶ 290 at 7 (agency not required to reopen discussions to address proposal weakness introduced after final proposal revisions were received and discussions had concluded). On this basis, the challenge to the agency’s evaluation is denied."

Strange, Ill-Considered, And Unfair Rules

Once again we are reminded of the strangeness of the rules about exchanges of information between the Government and offerors during a source selection, rules which have sprung largely from the decisions of the GAO over the course of some 50-plus years. How many times has the GAO told us, “[D]iscussions occur when an agency communicates with an offeror for the purpose of obtaining information essential to determine the acceptability of a proposal, or provides the offeror with an opportunity to revise or modify its proposal in some material respect….”? Defense Base Services, Inc., Comp. Gen. Dec. B-414591, 2017 CPD ¶ 243, 2017 WL 3263329. In General Revenue, Pioneering Evolution, and a few other decisions, the GAO has ruled (a) that an offeror must tell an agency about any change in the status of key personnel when it occurs and (b) that an agency must consider information about such changes when determining whether an offeror’s proposal is acceptable. That exchange of information apparently does not constitute discussions. However, an exchange of information about the identity of an offeror’s proposed substitute does constitute discussions. Go figure.

The GAO’s rule that offerors are “obligated” to notify agencies of changes in the status of their proposed key personnel is ill-considered and unfair. It makes offerors the victims of the Government’s dilatory processes. Source selections often take a very long time. In both General Revenue and Pioneering Evolution the agencies took a year to complete their source selections. The simple facts of biology (illness, injury, incapacitation due to various causes, and death) and the common realities of business life (people retire, quit, or must be laid off or fired) make it unreasonable to expect that offerors will not experience changes in the status of their staffing over the course of such lengthy periods. The GAO requires offerors to tell agencies when there is a change, but does not require or permit agencies to provide a simple process of substitution. If, by GAO diktat, without publication in the Federal Register and an opportunity for public comment, offerors are to be required to notify agencies of changes in the status of their staffing, and if agencies must consider those changes when evaluating proposals, then the GAO’s rule should mandate an efficient substitution process. Such a process should be available to any offeror still in the competition, rather than subject to Contracting Officer discretion.

A Simple Substitution Procedure

Instead of the rigmarole of discussions pursuant to FAR 15.306, agencies should use a simpler process, such as the following, which could be described as follows in the proposal preparation instructions:

SUBSTITUTION OF PROPOSED KEY PERSONNEL

(a) If, after submission of proposals, but before contract award, an offeror learns that any of its proposed key personnel are no longer available for contract performance, the contracting officer will permit the offeror to substitute another person, provided that the Government finds that the person previously proposed would have been acceptable in accordance with the evaluation factors.

(b) An offeror will not be permitted to improve the evaluation of its proposal through substitution of proposed key personnel. Depending on the substitute’s résumé, he or she will receive either the same evaluation as the person previously proposed or a lower evaluation, as appropriate in accordance with the evaluation factors for award. Under no circumstances will the substitute receive a better evaluation than the person previously proposed, regardless of the content of his or her résumé.

(c) An offeror seeking to make such a substitution before award must notify the Contracting Officer in writing by submitting a brief explanation, accompanied by the substitute’s résumé prepared in accordance with Section L of this solicitation.

(d) Substitutions made before contract award in accordance with this procedure shall not be considered proposal revisions. Acceptance of any such substitution by the Government shall not constitute discussions as described in FAR 15.306 and FAR 52.215-1 and shall not require the Contracting Officer to make a competitive range determination. Such substitutions shall not be considered late proposal submissions as described in FAR 52.215-1. After contract award, key personnel substitutions shall be processed in accordance with the contract Key Personnel clause.

A FAR deviation? Maybe. If so, so what? FAR Subpart 1.4 includes a process for approving deviations.

Withdrawing A No Longer Viable Offer

In General Revenue Corp., cited above, the proposal preparation instructions concerning key personnel were as follows: “Résumés of Key Personnel proposed (3 page limit per person proposed).” (That was it. No verb.) But the model contract in the solicitation included the following “key personnel” clause:

"(a) The personnel designated as key personnel in this contract are considered to be essential to the work being performed hereunder. Prior to diverting any of the specified individuals to other programs, or otherwise substituting any other personnel for specified personnel, the contractor shall notify the contracting officer reasonably in advance and shall submit justification (including proposed substitutions) in sufficient detail to permit evaluation of the impact on the contract effort. No diversion or substitution shall be made by the contractor without written consent of the contracting officer; provided, that the contracting officer may ratify a diversion or substitution in writing and that ratification shall constitute the consent of the contracting officer required by this clause. The contract shall be modified to reflect the addition or deletion of key personnel.

"(b) The following personnel have been identified as Key Personnel in the performance of this contract:

Labor Category                            Name

Contract Representative

Project Manager"

During the Q&A with prospective offerors after release of the RFP, the agency told them that they must insert the names of their proposed Contract Representative and Project Manager into the spaces in the “Name” column. Thus, by submitting résumés, an offeror would promise to employ specific persons in those positions. This did not factor into the GAO’s analysis of the case, but it should have.

We have written about the often unrecognized distinction between offers (promises) and proposals as packages that include both promises and nonpromissory information. See Proposals: Offers or Offers and Information?, 12 N&CR ¶ 5 and Edwards, The Problem of Proposal-Based Competition (Aug. 6, 2017), http://www.wifcon.com/discussion/index.php?/blogs/entry/3544-the-problem-of-proposal-based-competition. It is one thing for an offeror to provide résumés for candidate key personnel simply as a matter of information, as it might in order to demonstrate its responsibility under FAR Subpart 9.1. It is another thing entirely to promise to employ specific persons in specific capacities. In the latter case, an offeror’s realization after proposal submission that it will be unable to keep a promise mandates that the offeror withdraw its offer. (Which may be done at any time in accordance with FAR 15.208(e).) Failure to withdraw an offer in such a case might well result in breach of contract if the Government unknowingly accepts the offer.

The obligation of an offeror to withdraw its offer in such a case is an obligation to itself—a matter of simple common sense and self protection. Yet it confronts the offeror with the prospect of a business failure that in dealings with ordinary customers might easily be avoided. The offeror could propose to replace the original candidate with a substitute of equal stature. But in dealings with the Government, a CO would likely consider any such substitution to constitute discussions, governed by FAR 15.306. A CO who is inclined or under pressure to award on the basis of initial proposals without discussions can reject the substitution, dooming the offeror’s proposal to unacceptability.

There might be a viable tactic for dealing with that prospect. An offeror that must notify a CO that one or more of its proposed key persons is no longer available should do so by submitting an explanatory cover letter and attaching the résumé of the substitute(s). Suppose that the CO responds that he or she is accepting the notification and will evaluate the proposal accordingly as unacceptable, but will not consider the substitute, because the agency is not going to conduct discussions. The offeror might respond that the CO has already conducted discussions by accepting the notification of unavailability and evaluating the proposal accordingly. Refusing to give the offeror a chance to correct the deficiency caused by the key person’s unavailability would constitute a failure to conduct meaningful discussions. If the CO still rejects the request to propose a substitute, a protest might be worthwhile. It is a matter of conjecture as to whether the U.S. Court of Federal Claims might be more open to such an argument than the GAO.

Change The Rules!

We have often complained about the rules governing exchanges of information between the Government and offerors during source selection. We hope that the Section 809 Panel on streamlining and codifying acquisition regulations will consider the problems associated with clarification, discussion, and proposal modification and revision and propose a simpler and more workable and effective scheme. See The Section 809 Panel Interim Report: Strong on Analysis, Short on Solutions, 31 NCRNL ¶ 41; The Department of Defense’s Section 809 Advisory Panel: Recommendations, 30 NCRNL ¶ 52. The authors of the FAR Part 15 Rewrite of 20 years ago had hoped to bring about a better communications protocol, but they failed. The Executive Branch has allowed the GAO to maintain the bizarre labyrinth of its case “law.” It is long past time for the Executive Branch to take the reins, if only there were capable acquisition leadership. VJE

Westlaw. © 2017 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.

End of Document

 

© 2017 Thomson Reuters. No claim to original U.S. Government Works.

Vern,

LOL, Thank you!!

D

5 hours ago, Vern Edwards said:

Refusing to give the offeror a chance to correct the deficiency caused by the key person’s unavailability would constitute a failure to conduct meaningful discussions.

Once again, the Government cuts off its nose to spite its face.  Why is it better to throw out an entire proposal that is otherwise acceptable because of the normal churn and burn of participants in a market-based economy?  Not allowing an offeror to improve their evaluation results in case of a substitution is the simple fix.

No wonder people hate this town so much - it defies logic and reason in favor of mindless agendas, all in the service of C'ing Your own A.

 

I like that phrase: "normal churn and burn of participants in a market-based economy." Very nice.