Labels and Tags

Accountability (71) Adequate documentation (7) ADR in procurement (4) Allocation of risks (6) Best interest of government (11) Best practices (19) Best value (15) Bidder prejudice (11) Blanket purchase agreement (1) Bridge contract (2) Bundling (6) Cancellation and rejection (2) Centralized procurement structure (12) Changes during bid process (14) Clarifications vs Discussions (1) Competence (9) Competition vs Efficiency (29) Competitive position (3) Compliance (35) Conflict of interest (32) Contract administration (26) Contract disputes (4) Contract extension or modification (9) Contract formation (1) Contract interpretation (1) Contract terms (3) Contract types (6) Contract vs solicitation dispute (2) Contractor responsibility (20) Conviction (4) Cooperative purchasing (3) Corrective action (1) Cost and pricing (13) Debarment (4) Determinations (8) Determining responsibility (37) Disclosure requirements (7) Discussions during solicitation (10) Disposal of surplus property (3) Effective enforcement requirement (35) Effective procurement management (5) Effective specifications (36) Emergency procurement (14) eProcurement (5) Equitable tolling (2) Evaluation of submissions (22) Fair and equitable treatment (14) Fair and reasonable value (23) Fiscal effect of procurement (14) Frivolous protest (1) Good governance (12) Governmental functions (27) Guam (14) Guam procurement law (12) Improper influence (11) Incumbency (13) Integrity of system (31) Interested party (7) Jurisdiction (1) Justification (1) Life-cycle cost (1) Limits of government contracting (5) Lore vs Law (4) market research (7) Materiality (3) Methods of source selection (33) Mistakes (4) Models of Procurement (1) Needs assessment (11) No harm no foul? (8) Offer & acceptance (1) Other procurement links (14) Outsourcing (34) Past performance (12) Planning policy (34) Politics of procurement (52) PPPs (6) Prequalification (1) Principle of competition (95) Principles of procurement (25) Private vs public contract (17) Procurement authority (5) Procurement controversies series (79) Procurement ethics (19) Procurement fraud (31) Procurement lifecycle (9) Procurement philosophy (17) Procurement procedures (30) Procurement reform (63) Procurement theory (11) Procurement workforce (2) Procurment philosophy (6) Professionalism (17) Protest - formality (2) Protest - timing (12) Protests - general (37) Purposes and policies of procurement (11) Recusal (1) Remedies (17) Requirement for new procurement (4) Resolution of protests (4) Responsiveness (14) Restrictive specifications (5) Review procedures (13) RFQ vs RFP (1) Scope of contract (16) Settlement (2) Social preference provisions (60) Sole source (48) Sovereign immunity (3) Staffing (8) Standard commercial products (3) Standards of review (2) Standing (6) Stays and injunctions (6) Structure of procurement (1) Substantiation (9) Surety (1) Suspension (6) The procurement record (1) The role of price (10) The subject matter of procurement (23) Trade agreements vs procurement (1) Training (33) Transparency (63) Uniformity (6) Unsolicited proposals (3)

Wednesday, January 3, 2018

Protest must be timely and protestor must show prejudice, and a footnote about issue of contract dispute vs solicitation dispute

The following is from a protest decision of the GAO. This protest involved two protests from two protestors in the same solicitation. One protest illustrates by example when a protest is not "timely". The other illustrates a protestor's lack of prejudice, and thereby standing to protest.

Bear in mind my proclivity to re-work the original articles, leave out critical citations, paraphrase and so on, so read the original decision at the link if you need to rely on it.

Matter of: AeroSage, LLC; SageCare, Inc., File: B-415607; B-415607.2; B-415607.3, January 3, 2018 AeroSage, LLC, and SageCare, Inc., protest the award of a contract to Tayrona Oil, Inc., issued by the Defense Logistics Agency (DLA), for 5,000 gallons of fuel to the Milwaukee Veterans Administration Medical Center (MVAMC).

The protesters primarily allege that DLA unreasonably modified the purchase request's delivery schedule without issuing an amendment. We dismiss SageCare's protest and deny AeroSage's protest.

MVAMC placed a purchase request with DLA for 5,000 gallons of fuel for delivery. The request (1) represented that the procurement was being conducted as a small business set-aside, (2) confirmed that delivery was for 5,000 gallons of fuel on Friday, October 13, (3) requested quotations by no later than 11:30 a.m. on Thursday, October 12, and (4) provided that award would be made on a lowest-priced, technically-acceptable basis. DLA timely received quotations from the three firms that it had solicited, Tayrona, AeroSage, and SageCare. Tayrona submitted the lowest-priced quotation of $2.3487 per gallon.

The contracting specialist represents that he notified Tayrona via telephone on the morning of October 12 that its quotation was selected for award. Shortly after contacting the awardee, however, the contracting specialist represents that he was contacted via telephone by an official with the Department of Veterans Affairs indicating that the delivery had to be rescheduled for Tuesday, October 17. The contracting specialist contacted Tayrona via telephone to confirm whether the company would agree to the revised delivery schedule at the same awarded price, and the awardee confirmed.

Following that telephone conversation, the contracting specialist then emailed Tayrona to confirm that DLA was going to award the order to Tayrona and indicated that the delivery date was now Tuesday, October 17. The contracting specialist then emailed AeroSage and SageCare respectively to indicate that neither firm submitted the lowest-priced, technically acceptable quotation. Those emails also indicated that the delivery date was now Tuesday, October 17.

AeroSage's protest:

Following receipt of the notice, AeroSage filed an agency-level protest with DLA on October 12. The primary protest allegation raised by AeroSage was that [t]he contracting officer solicited the RFQ for requirement delivery for Oct[ober] 13, 2017, but awarded the purchase order for delivery four days later, October 17, 2017 thus prejudicing the protester by changing the date, and thereby creating pricing uncertainty on the new delivery date. On Monday, October 23, AeroSage filed the instant protest with our Office.

AeroSage's protest decision:

AeroSage argues that the agency unreasonably changed the solicitation's delivery schedule without amending the solicitation and allowing all offerors to compete against the new schedule. The protester contends that "[a] four day change in a solicitation time can both dramatically impact price/availability and the risks quoters are able to accept to provide best prices to [the] government." "AeroSage was prejudiced in this solicitation with a significant change in the solicitation prior to award."

We have generally recognized that when the government changes its requirements prior to award, it must notify all offerors of the changed requirements and to afford them an opportunity to respond to the revised requirements. Moreover, a contract's period of performance is generally considered to be a material solicitation requirement.

Our Office will not sustain a protest, however, unless the protester demonstrates a reasonable possibility of prejudice, that is, unless the protester demonstrates that, but for the agency's actions, it would have had a substantial chance of receiving the award. Here, the protester has offered no evidence that it was in fact prejudiced by the agency's failure to amend the delivery schedule by four days through the issuance of an amendment. The protester has not asserted that, let alone substantiated how, it would have reduced its unit pricing by an amount that would have overcome the awardee's price advantage. AeroSage's unsupported speculation that the change in delivery schedule could have impacted its proposed price is insufficient to establish competitive prejudice.

There is another teachable moment in footnote 6: The Government argued that the change in delivery schedule was a matter of contract administration, and thus not a proper subject for a protest dispute. As discussed above, however, the change occurred after proposals were submitted and evaluated, but before the contract award was formally made on October 13. Therefore, we do not find that the schedule change can reasonably be considered as a matter of contract administration, and therefore would be proper subject matter for a protest, if only the protestor had standing.

AeroSage's protest is denied.

SageCare's protest:

On November 22, SageCare filed a request to intervene in AeroSage's protest. On the same day, our Office denied the request to intervene on the basis that SageCare was a disappointed offeror, not the awardee of the protested contract.[3] We further explained that "[t]o the extent that SageCare, a disappointed offeror, believes that there were errors in the procurement, SageCare must file its own protest subject to our Bid Protest Regulations." SageCare subsequently filed its protest on November 24.

DLA moved to dismiss SageCare's November 24 protest as untimely because it was filed more than 10 days after the protester's owner and president had actual knowledge that SageCare had not been selected for award and of the change to the delivery schedule. Our Bid Protest Regulations contain strict rules for the timely submission of protests. Under these rules, a protest based on other than alleged improprieties in a solicitation must be filed no later than 10 calendar days after the protester knew, or should have known, of the basis for protest, whichever is earlier.

SageCare's protest decision:

SageCare seems to measure the timeliness of its protest from when SageCare's president received the awardee's price information through the agency report submitted in response to AeroSage's protest. DLA's October 12 notice to SageCare's president, however, clearly indicated that the protester's quotation was not the lowest-priced, technically-acceptable quotation, and that delivery was moved to Tuesday, October 17. Thus, the protester was aware of the material facts relevant to its asserted protest ground related to the modification of the delivery schedule as of October 12. Its November 24 protest, filed more than 40 days later, is untimely, and therefore the protest is dismissed.

SageCare's protest is dismissed.

Methinks they do protest too much about frivolous protests

Whenever there are contracts to be had or performed, there will be disputes. Thus, procurement protests are endemic to government contracts and contracting.

And, since government contracting is the means by which most of our tax money is spent, the government provides an administrative process to resolve the disputes more expediently than available by courts, which is where private contract disputes usually end up, absent some form of ADR (alternative dispute resolution) process the circumvents court action. In this light, the administrative dispute process is another form of ADR.

It must also be added that the procurement dispute process is the only means of assuring our tax moneys are being spent properly (if not wisely) by policing the system in real time (as contrasted with an audit some years hence).

I feel quite certain that the boring and routine procurement protest system would receive no more attention than the run-of-the-mill ADR procedure but for two things: it provides a "train wreck" story for the media to monetarize; and, it provides a platform for politicians to politicize. The theme in both cases is by question and answer. Question: why is this procurement being held up when the need is obvious and immediate? Answer: because of the frivolous action of a disreputable vendor.

In this blawg, I have often posted about frivolous protests, because the issue is so constantly being brought up. See, here, here, here, here, here, and here, for example.

And it is only being brought up because it is "good" (money making) media and "good" (vote and/or attention-getting) politics. It is not being brought up because it is a real problem, and to the extent it may be some kind of problem it blown all out of proportion to the seriousness of the matter.  It is not brought up in good faith to address a real issue.  It is simply a concocted drama.

Here is another illustration of the meme from Bloomberg. As always, read the original article at the link. I can end up taking extreme liberties and artistic license to the subject for my own didactic purposes, and you cannot rely on this blawg to provide the full, accurate, true-to-form, or intended iteration. So, go on, read the original.

Pentagon Contract Protests Aren't Frivolous, Rand Study Finds, by Anthony Capaccio, January 4, 2018
The Defense Department’s process for buying weapons, goods and services isn’t being overwhelmed or delayed by frivolous contract protests filed by major defense contractors as critics have contended, according to a study mandated by Congress. Instead, “bid protests are exceedingly uncommon for DoD procurements,” the report by the Rand Corp.’s federally funded National Defense Research Institute said. The report was based on a review protests in years fiscal 2008 through 2016.

Congress directed the study to examine 14 areas, including how much the government spends on manpower to defend its actions. Rand said it was unable to quantify those costs for lack of data. This lack of data could undercut a provision in this year’s defense policy bill that requires the Pentagon set up a three-year pilot program in 2019 requiring losing protesters to pay the Defense Department’s costs for handling GAO challenges.

More than half of challenges were brought by small businesses, it said, and the protest process was more effective than generally realized at compelling a military service to change its initial contract solicitation terms or its decision after a protest was filed.

The data-driven assessment is significant because it’s likely to be the basis of future congressional and Pentagon decisions on improving the process that lets bidders that have complaints before an award or those who lose a competition file appeals to the Government Accountability Office. The report underscores that most challenges are routine, unlike the few that end up in the spotlight.

“Policymakers should avoid drawing overall conclusions or assumptions about trends from one case when it comes to the efficacy of the bid protest system,” Rand said. The percentage of contracts protested is very small -- less than 0.3 percent per billion dollars of military contract spending, Rand said.

The report also described “a lack of trust on each side” between the defense industry and the Pentagon’s acquisition bureaucracy about the protest process. For example, military personnel say the rules allow “protesters to make excessive numbers of ‘weak allegations,’” it said. The report concluded that “firms are not likely to protest without merit,” debunking the notion that losing incumbents protest a loss merely to extend their contracts for a few months while the case is open, according to Daniel Snyder, an analyst with Bloomberg Government.

While the GAO sustained 2.6 percent of defense protests filed since fiscal 2008, the study found that’s not the whole measure of effectiveness. “The majority of relief to protesters takes the form of corrective actions” by the contracting agency while a challenge is pending before the GAO or withdrawn based on the potential for solving issues short of a decision, the study said. “Roughly 40 percent of all protest actions result in some change to the initial procurement decision or terms,” Rand said.

Rand concluded the steady record of effectiveness it documented “refutes the claim that meritless protests (some use the term frivolous)” account for the increased challenges.

MORE:
Methinks we doth not protest so much after all?
Poppycock
Doth we protest too much? Methinks not