This US Federal GAO case reiterates that "interested party" status is similar to responsiveness, and that it is inappropriate to test it by reference to matters of bidder responsibility.
Here, the protester sought to turn a requirement in the solicitation that the bidder provide information about bidder responsibility with the proposal into a test of "interested party" status. Based on the principle that issues of bidder responsibility cannot be transformed into issues of bid responsiveness by the dictates of a solicitation requirement, the protester failed.
There is also some interesting sidelights about the way GAO integrates ADR processes in its review processes.
Curiously, though, the protester was awarded costs and legal fees: "Request for reimbursement of costs for filing and pursuing an earlier protest is granted where the protester raised a clearly meritorious protest ground, and the agency did not take prompt corrective action."
There were other issues in this case, including what it takes to overturn an evaluation, but those will not be discussed here.
Matter of: Waterfront Technologies, Inc., B-401948.16, June 24, 2011
DOL argues that Waterfront is not an interested party to challenge the award to 21st Century because the protester did not meet a mandatory solicitation requirement to have an interim secret facility clearance.
As relevant here, the RFP stated that offerors would be required to hold “at a minimum, an interim secret facility clearance prior to the RFP closing date.”
The RFP did not expressly state that offerors were required to provide documentation concerning this requirement in their proposals.
However, in an email to the protester on August 28, 2009, after receipt of proposals, the agency asked Waterfront to address the following question: “Does your company hold at a minimum an ‘INTERIM SECRET FACILITY CLEARANCE’ prior to the RFP closing date as referenced in the subject SOW?”
The protester responded that it did not have an interim secret facility clearance.
Based on the foregoing, DOL has argued throughout the various protests that Waterfront’s proposal did not meet a mandatory solicitation requirement and therefore should not have been considered eligible for award.
Our Office has held that the ability to obtain a security clearance is generally a matter of responsibility, absent an express requirement in the solicitation to demonstrate the ability prior to award.
SBA has conclusive authority to determine the responsibility of small business concerns. Thus, when a procuring agency finds that a small business is not eligible for award based on a nonresponsibility determination or a failure to satisfy definitive responsibility criteria, the agency is required to refer the matter to the SBA for a final determination under its certificate of competency (COC) procedures.
On October 15, 2009, prior to the submission of an agency report on that protest, the GAO attorney assigned to the protest conducted an outcome prediction ADR, in which she advised that Waterfront’s asserted failure to provide an interim facility security clearance was a matter of “responsibility,” rather than “responsiveness” or technical acceptability, and predicted that our Office would likely sustain Waterfront’s protest. She also advised the parties that since Waterfront was a small business concern, a finding of non-responsibility would require the DOL to submit the matter to the SBA for a COC review.
DOL took corrective action in response to the ADR and advised our Office that it would refer the matter of Waterfront’s responsibility to the SBA for a COC determination. In its referral to the SBA, however, DOL stated that Waterfront was not the apparent successful offeror for the procurement, and for this reason, the SBA declined to consider whether to issue a COC to the protester.
In connection with Waterfront’s subsequent protest DOL again argued that Waterfront was not eligible for award based on the protester’s lack of an interim secret facility clearance. Our Office asked the SBA to address this issue. SBA again concluded that it need not evaluate Waterfront for a COC, but would consider a COC referral in the event that Waterfront was rejected as nonresponsible or unacceptable on the basis of a definitive responsibility criterion. Waterfront asserts that it is compliant with the RFP’s interim secret facility clearance requirement.
On this record, we think that Waterfront is therefore an interested party eligible to challenge the award to 21st Century.
This case is consistent with a long line of federal authority for the proposition that it is responsiveness, not responsibility, that lies at the heart of the inquiry into interested party status, e.g.:
U.S. v. International Business Machines Corp., 892 F.2d 1006 (C.A.Fed., 1989)
The Brooks Act empowers the board to hear protests of disappointed bidders who are "interested parties." An "interested party" is in turn defined as "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract." In contrast to statutes like the Administrative Procedure Act, under which Congress has extended the traditional basis for standing beyond direct economic injury, in the Brooks Act Congress has deliberately and substantially narrowed the class of persons entitled to invoke the authority of the board.
We have suggested above that Congress intended the phrase "interested party" to be a meaningful limitation on the authority of the board to entertain, and this court to review, protests of an agency's conduct of a Brooks Act procurement. We see responsiveness as another facet of the interested party inquiry. When responsiveness is an issue, it must be resolved before the board can proceed. If a bid is not responsive, the protester has no more right to invoke the office of the board than the proverbial man on the street. A nonresponsive bidder is the epitome of one who lacks a direct economic interest.
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