NASA Adminsitrator bounced by an unusually cozy relationship with federal regulators

Although federal procurement directives are moving towards acquisitions of supplies and services described in terms of common commercial standards, some needs of the government can only be met by particularized specifications and contractors. Take, for instance, spaceships (although we are now seeing the development of private sector contractors even in the space field, a circumstance not dreamed of when space exploration began in the era of Sputnik).

Why commercial standards? In a word, competition. As the American Bar Association Model Procurement Code elucidates,

"Fair and open competition is a basic tenet of public procurement. Such competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically." Code § 3-201, Commentary 3.

Indeed, an fundamental purpose and policy of the Model Procurement Code is "to foster effective broad-based competition within the free enterprise system". §1-101((2)(g). And, this is not a mere aspiration. "It is the general policy of this [State] to procure standard commercial products whenever practicable. In developing specifications, accepted commercial standards shall be used and unique requirements shall be avoided, to the extent practicable." MPC Regulation § R4-201.01.2 "All specifications shall seek to promote overall economy for the purposes intended and encourage competition in satisfying the [State's] needs, and shall not be unduly restrictive." MPC § 4-205. Further, in general, "Correction or withdrawal of a bid because of an inadvertent, non-judgmental mistake in the bid requires careful consideration to protect the integrity of the competitive bidding system, and to assure fairness. If the mistake is attributable to an error in judgment, the bid may not be corrected." MPC § R3-202.11.1

One of the big impediments to preferring standard commercial products and standards is the pushback and lobbying of entrenched contractors, the "good old boy" network. The basis for such a network is understandable from the standpoint of preferring the devil we know, but it runs foul of the demands of procurement when we become enamored of those well-known devils.

This post, and the article from the Washington Post that inspired it, illustrate the kind of relationship that can, and often does, call such discrimination into question. Once again, I caution that I slice and dice, rearrange, omit, and shade original articles to fit the didactic intent and space of this blawg, to be read as a hypothetical for educational purposes, and not as evidence or insinuation of guilt or wrongdoing. So, you are IMPLORED to link to and read the source material cited, and do not to rely on the rendition here.

Boeing tried to amend bid after guidance from NASA official, raising concerns it received inside information

After a top NASA official contacted a senior Boeing executive about a bid to win a contract potentially worth hundreds of millions of dollars, the company attempted to amend its proposal past the deadline for doing so, according to the article. That raised alarm bells inside the space agency, where officials were concerned that Boeing was attempting to take advantage of inside information. The conversation at the root of the investigation was between Loverro and Jim Chilton, the senior vice president of Boeing’s space and launch division, putting one of the company’s top executives in the middle of the probe.

Federal procurement regulations encourage the government to communicate with contractors about their bids to help agencies get the products and services that best fit their requirements. “The question becomes when is it okay to have those discussions, and more importantly, whether you have to have the exact same discussions with all potential bidders,” said David Berteau, the president and chief executive of the Professional Services Council, a trade group that represents federal contractors. According to the article, a person with direct knowledge of the matter who spoke on the condition of anonymity because of the ongoing investigation said: “I can tell you with 100 percent confidence that no laws were broken. What we are talking about are conversations that occurred outside the normal dictated channels but didn’t violate the sanctity of the procurement process.”

According to a congressional aide with knowledge of the matter, NASA procurement officials grew concerned earlier this year when Boeing contacted the agency, saying it wanted to change parts of its bid for the lunar lander contract. Not only was it late in the process, but the specificity of Boeing’s proposed changes raised “red flags” inside NASA that the company had received inside information improperly. NASA officials wondered, “How did they know to raise this issue or try to fix this issue?” according to the aide, who spoke on the condition of anonymity because of the ongoing investigation.

NASA officials have stressed that the agency has gone to great lengths to ensure the integrity of the contract awards, worth $1 billion combined, that went to teams led by Jeff Bezos’s Blue Origin and Dynetics, as well as Elon Musk’s SpaceX.

Ultimately, the matter was referred to NASA’s inspector general office, and NASA’s leadership last month forced Doug Loverro to resign from his position as the associate administrator of NASA’s human spaceflight directorate. In his resignation letter, Loverro wrote that he took “a risk earlier in the year because I judged it necessary to fulfill our mission. Now, over the balance of time, it is clear that I made a mistake in that choice for which I alone must bear the consequences.” The inspector general investigation could be another headache for Boeing, under fire for having an unusually cozy relationship with federal regulators, especially if it identifies wrongdoing on the part of Boeing senior executives.

In an interview with The Post last month, Loverro said he was trying to speed up the Artemis moon program to meet a White House mandate to return astronauts to the lunar surface by 2024. “It had to do with moving fast on Artemis, and I don’t want to characterize it in any more detail than that,” he said.

But the probe is also focusing on Boeing, officials said. “This certainly goes both ways. It’s one thing to have a mistake that violated the Integrity in Procurement Act,” the aide said. “It’s another if the company took that information and acted on it.”

FURTHER READING:

• Special Compliance Requirements for Government Contractors Part 1, and Part 2

• FAR 52.203-13 Contractor Code of Business Ethics and Conduct.

Own up to those mistakes; don't put lipstick on that pig

Jason Miller is an astute federal procurement journalist with Federal News Radio, with a knack for making arcane and difficult matters interesting and graspable. I don't read him regularly, but when I do I wonder why not. (Not enough time in a day comes to mind.)

Jason wrote the following article, and his respect for action of the protagonist in the unfortunate circumstances of the story is palpable, and deserved. You may just want to click the link to the article and get it from the horse's mouth. Or you can stick around with me and my rendition, and be sorry.

What happened in a nutshell is that the Department of Homeland Security solicited, and then cancelled (after protests began), a solicitation for certain technical services, known as "Flexible Agile Support for the Homeland" ('FLASH'). It was framed as a small business set-aside procurement focused on agile development methodologies. (That's another story; read it, too.)

As Jason explained in a prior article, DHS' Procurement Innovation Lab (PIL) set out to get its arms around one of the problems of federal acquisition — the need to close out low-risk, low-dollar contracts. Too often these contracts are forgotten or under prioritized, and a backlog builds up. At DHS, for example, its backlog grew to more than 350,000, and 92 percent of the contracts had been completed more than a year ago. PIL took an innovation risk and re-engineered the business processes a simplified means for contract closeout. (Look, as I said he can explain better than I, so read that article, too.)

To re-engineer the business processes, DHS first created PIL, a cross-functional team of policy, finance, general counsel, contracting and industry and then had to identify the low-risk contracts. It was all about coordinating, good communications and making sure that all the people that could be involved and are looking at the process to collaboratively understand what to do and all the appropriate steps to do it. PIL completed nine projects and is working on others.

One of the PIL's biggest experiments was FLASH.   As Soraya Correa, the chief procurement officer at DHS, described it, FLASH was meant to take care of "contracts that are typically small dollar value, generally firm fixed price, no activity over the last 12-to-24 months, final goods and services have been delivered so we know they are probably ready for close out. What we are doing is a streamlined approach trying to close them in one fell swoop.”

Correa explained, “Everything we’ve done on FLASH has been very different from what we’ve done in the past. Start with our industry day where our communications were more of a discussion where we provided the ability to do speed teaming or speed dating, but also an opportunity for vendors to meet with government officials and ask questions,” she said. “We also had experts in various business areas like small business, digital services and others so industry could come up to speed on what we were doing in those areas. It was a very interactive day that focused a little more on the business processes around bidding as opposed to focusing on the requirements that would be contained in the solicitation.”

DHS evaluated contractors based on a technical challenge where the bidders had to present to the agency how they would go through an agile development process. Correa said the bidders then had 4-to-6 hours to actually complete and then did a presentation. DHS received 114 proposals.

Now, flash forward a bit to last month when Jason reported "DHS cancels $1.5B contract for agile services".

DHS has been working on the multiple award vehicle for the better part of a year. The goal of FLASH was to give department components access to innovative methods and industry best practices to acquire agile design and development support services. DHS said in the solicitation it was seeking to develop an acquisition contract that includes the concepts from the U.S. Digital Services Playbook such as user-centered design, dev/ops, automated testing and agile. DHS’s Procurement Innovation Lab (PIL) was running FLASH.

But since November when DHS awarded FLASH to 13 companies, it faced an uphill battle to get the contract off the ground. Eight vendors who didn’t make the cut submitted protests to GAO. DHS decided to take corrective action instead of letting GAO decide the protests and reopened bidding.

Then in early March, DHS announced 11 new winners under the FLASH contract, and 12 unsuccessful bidders protested to GAO again.

The decision to cancel FLASH comes as more and more agencies are developing contract vehicles to buy agile services. Along with the DHS, the General Services Administration’s 18F organization also struggled to award and ultimately cancelled the second and third contracts under its agile blanket purchase agreement. 18F awarded 16 vendors a spot in part one of its agile BPA in August 2015.

It’s unclear what comes next for FLASH — whether DHS will try again with a new procurement or give up entirely on a separate contract vehicle for agile services and rely on an existing one like EAGLE II.

So, now for the denouement:

DHS’ internal assessment of its $1.5B agile contract: ‘significant errors and missteps’

If the Homeland Security Department’s decision to cancel its $1.5 billion contract for agile services wasn’t shocking enough, the details of the missteps and problems the agency detailed in its “motion to dismiss” left long-time federal procurement attorneys and vendors with their collective mouths agape.

“DHS has determined that cancellation of the FLASH solicitation, HSHQDC-16-R-00118, is the only viable option to address the many issues that DHS has identified as problems with the requirement and the record,” DHS lawyers wrote to GAO in the document, which Federal News Radio obtained. “The integrity of the procurement process will be served by this cancellation.”

Barbara Kinosky, managing partner with Centre Law and Consulting LLC, said she was “floored” by DHS’s honesty and the level of detail it provided.

“They did everything but name names,” she said. “It is absolutely draconian to cancel the contract at this point. It means it is so flawed that they couldn’t tweak this, or conversely they decided not to let all the protestors on to the vehicle. I suspect the whole methodology was flawed and even if they tweaked the evaluation factors it was still susceptive (sic) to more protests.”

In the motion to dismiss, DHS said the problems with FLASH ranged from the evaluation criteria and adjectival ratings to the price evaluations and best value tradeoffs to lacking the expertise in agile software services to do a proper evaluation.

“DHS has also determined that the evaluation of the offerors may have resulted in unequal treatment of offerors’ weaknesses and risks. This is partially due to the adjectival ratings that were used, but also due to the evaluation process used to evaluate and assess offerors during the technical challenge exercises,” DHS stated in its motion.

“DHS has identified issues in the price evaluation report (PER) and best value tradeoff analysis (BVTA) which do not adequately support its award decisions. The methodology by which the price evaluation team evaluated price realism is not identified in the PER. Nor is it evident in the PER itself what DHS reviewed and evaluated to determine whether prices were reasonable and realistic.”

Christoph Mlinarchik, a government contracts expert and owner of Christoph LLC, a consulting firm, said DHS’s self-assessment of the FLASH procurement resulted in a firm vote of “no confidence” due to a “comedy of errors: poorly executed technical challenge evaluations, sparse price analysis, inadequate tradeoff analysis and more.”

“The most glaring admission by DHS is that critical documents were altered after award, like the technical evaluation report and best value tradeoff analysis. These critical documents were changed after submission to the GAO as part of the official record– a flagrant foul that undermines the bid protest system,” Mlinarchik said. “In summary, DHS rolled over, showed its belly, and provided ample reasons that the FLASH procurement was a total failure.

This does not look good for DHS, but it shows courage in admitting fault and starting from scratch instead of putting lipstick on a pig.”

The decision to cancel FLASH left vendors both relieved and in disbelief. One industry source, who requested anonymity for fear of retaliation from DHS, said it was a painful process from the beginning.

As Soraya Correa, DHS chief procurement officer, said in December in a NextGov article after the initial set of protests delayed FLASH:

“We’ve got to start getting rid of that fear,” Correa said. “We’ve got to start making it OK to sometimes make a mistake, as long as you’re making an intelligent mistake. It’s OK to take a few chances, and you know what? Every now and then, we’re going to stub our toe.”

Sole searching in Oakland, CA?

Courthouse News Service, which is a nationwide news service for lawyers and the news media, filed the following story. This shortened version is intended to alert you to the item and tease you to go to the sourced link and read it in full. Especially since I cut, paste, omit, edit, rearrange and paraphrase to suit the educational content and intent of this blawg; so you must read the original and not take my version of it as true, complete or accurate.

Oakland Playing Fast & Loose With Contracts, Bidders Say

Competitive bidding is meant to secure the lowest price for a project by creating competition and ensuring contracts don't go to pre-selected firms. So when an agency wants to sole-source a contract, it must justify the move internally and get it approved. If that doesn't happen, officials can use sole-sourcing to steer contracts to favored firms and exclude cheaper bidders — raising project costs that taxpayers ultimately pay.

"They're trying to convert the process from a shield-bidding process to a negotiation process and at the federal level, it's not appropriate," said Steve Sorret, an attorney with Kutak Rock in Washington and a former curriculum director for The George Washington University Law School's government contracts program. "What they're doing here certainly goes against the grain of a typical public contracting process."

In a city known for awarding fraudulent contracts, routinely sole-sourcing its projects signals entrenched problems in the way Oakland does business, and in how that affects residents. The City Council currently faces findings by the Alameda County Grand Jury that it improperly awarded a $1.5 billion trash collection contract to an unqualified recycler. The 2014 deal sent garbage collection fees skyrocketing, prompting a group of Oakland landlords to sue the city earlier this year.

And in a 2013 report, the city auditor blasted councilmembers Desley Brooks and Larry Reid for breaking the law by steering part of a $2 million contract for demolition work at the former Oakland Army Base to a friend's company after the city had already begun negotiating with another contractor. Those initial negotiations, too, were illegitimate since municipal law requires the contract to go up for competitive bids first. Brooks also negotiated three separate contracts for a teen center in East Oakland, something only the city administrator can do.

Emboldened by high-ranking officials willing to look the other way when councilmembers break the law, the Oakland City Council routinely waives its legally mandated competitive bid requirement for awarding construction contracts worth more than $50,000 and negotiates the contracts directly with firms of its choice, according to a report by the city auditor.

The council simply relies on a statute allowing it to reject bids it deems invalid — or "nonresponsive." And at a City Council meeting on Tuesday, it blessed another competitive bid waiver, this time for the $400,000 renovation of the Dimond Branch library in East Oakland. Instead, the city will approach construction firms and negotiate with them one-on-one in a process known as sole-source contracting.

But falling short of small business goals and bidding over the project price don't render a bid nonresponsive. If a bidder fulfills all of the requirements for submitting the bid, they are by definition responsive and both Greentech and Wickman satisfied those requirements.

Jonathan Wickman says the city violated its own laws in deeming his firm's proposal nonresponsive so it could justify moving to direct negotiations. "That doesn't seem legal to me," Wickman said. "They should rebid it or find more money and rebid with more money in the budget. It's not like they're left with no avenue."

For-proift out of state company beats non-profit in state organizations to fountain of youth services funding

Youth services providers protest bidding process

Two Arkansas companies that operate seven Youth Services Division facilities submitted protests Friday to the state’s intention to award a contract to run the facilities to an out-of-state company that has said it will charge the state more than the current operators charge. Bidders have 14 days to submit a protest after learning of an alleged flaw in the process.

Every seven years, the state is required to seek proposals from organizations interested in operating the juvenile treatment and juvenile offender facilities. Department of Human Services spokeswoman Amy Webb said it has been eight years since bids were taken because of a previous one-year extension. Youth Opportunity Investments of Carmel, Ind., proposed charging the state $232 per bed per day, up from the $147 the state pays now per day for each of the 249 beds in the facilities.

Sen. Terry Rice, R-Waldron, whose district includes the Mansfield facilities, said Friday he has “a great deal of concern” about the plan to switch to an out-of-state provider at greater cost to the state. The current operators “have not received a dime’s increase in three years,” he said.

Sen. Stephanie Flowers, D-Pine Bluff, chairman of the Senate Children and Youth Committee, also said she has questions. “A lot of the intake providers have been asking for more money for years and we haven’t given it to them. It seems quite odd to have an out-of-state contract and offer them more money,” she said.

2 protest youth services contract; ‘robbed’ of fair shot, current operator’s letter to state says

Two nonprofits running seven Arkansas juvenile treatment and detention centers say state officials failed to document why a for-profit, out-of-state company will replace them, even though the new company's bid was more expensive.

Both Consolidated Youth Services Inc. and South Arkansas Youth Services, which have operated the centers for more than a decade, are challenging the decision. The operators are mostly concerned with how their proposals and Youth Opportunity's were reviewed and the quality of the new company's youth services program.

"They robbed the entire bidding process of equity," state Sen. Jeremy Hutchinson* wrote in a protest letter on behalf of South Arkansas Youth Services. The director of the Department of Human Services is currently drafting a "formal written response" to both organizations, Amy Webb, a department spokesman, said Monday.

In its protest letter, Consolidated Youth Services stated it held "no assurances" that the selection process was consistent. The state agencies did not provide individual score sheets used by evaluators to show how they weighed the proposals in each technical category and only a cumulative score was available, according to both nonprofits' letters. Evaluators appeared to have little experience in the youth services field, and there was no proof they attended training beforehand, the letters said.

Consolidated Youth Services' letter, written by attorney Debby Thetford Nye, called for a new evaluation -- one "untainted by significant procedural deficiencies and bias."

Both nonprofits said that Youth Services Division officials held post-bid discussions with Youth Opportunities Investments, even though post-bid conversations can disqualify vendors competing for a contract. The new company was also permitted to change its proposal and circumvent the criteria laid out in the state's request for services, the current contractors said.

Leaders of the Arkansas-based organizations say their programs cost less, strengthen communities and do not slash services. "We are a community program," said Jerry Walsh, chief executive officer of Magnolia-based South Arkansas Youth Services. His organization runs the Dermott Juvenile Correctional Facility and juvenile treatment centers in Dermott and Mansfield. "We know how to approach the community and how to work with them and to get them to support the program."

Youth Opportunities Investments plans to hire subcontractors from Louisiana and Nashville, Tenn., to carry out services, according to its proposal. The Youth Opportunities plan appears to dedicate fewer staff members to special education, GED and technical-vocational coursework and relies more on online learning, Walsh said.

"There is nothing in their proposal to suggest they would enhance the program," said Bonnie Boon, executive director of Jonesboro-based Consolidated Youth Services. Boon also said that she found the state's ability to find the extra dollars for the increase under the new company "curious."

Youth-services advocates have asked for additional funds for years, which Boon and Walsh said has been frustrating.

"It says a lot about their financial management and not funding youth services. Now all of a sudden you're throwing tons of money in this? Unbelievable," Walsh said.

Prospecting for "interested party" status to sustain a protest

The two most recent posts prior to this one dealt with, in the earlier case, whether an actual bidder was an "interested party" such as to allow a protest, and the more recent post dealt with the question whether changes in contract requirements might require a new solicitation. This case deals both with standing as an "interested party" and changes in a contract requiring a new solicitation, in a twist on both topics: who is a "prospective" bidder or offeror.

The first case presented, deals with the usual situation of a protest of a solicitation in which there is no allegation of a change requiring a new solicitation, by an alleged "prospective" bidder, and concludes with one statement describing, in somewhat categorical language, that the timing of the protest determines whether a protestor is an "interested party" as a "prospective" bidder.

The second case presented deals with the case of a protest by an alleged "prospective" offeror which alleged changes in the contract that require a new solicitation. This protest was brought clearly outside the bounds of who is "prospective" as required by the first case, but the protest was allowed and the protestor was found have "interested party" status. It, in effect, articulates an exception to the usuall rule.

As usual, don't rely on the cases as presented here; read the original at the link.

MCI Telecommunications Corp. v. US, 878 F. 2d 362 - Court of Appeals, Federal Circuit 1989

Believing that AT & T's proposal failed to conform with material, mandatory requirements of the solicitation, and that the GSA, after awarding that contract to AT & T, impermissibly waived mandatory contract requirements rather than resolicit the contract, MCI sought to challenge the award of the contract by bringing a protest before the GSA board. MCI did not participate in the bidding process.

The board is empowered to hear such protests upon request of "an interested party." [T]he term "interested party" means, with respect to a contract or proposed contract described in subparagraph (A), 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.

MCI claimed that, although it was not an "actual offeror or bidder" with respect to the original solicitation, it is a "prospective bidder or offeror" in the event of a resolicitation, and that its economic interest is directly affected by the award to AT & T.

Accordingly, to establish that it is an interested party, MCI must convince us that it is a prospective bidder or offeror, under a correct legal interpretation of that term. This case, then, poses the question whether a would-be protestor wishing to bring about a resolicitation on which it says it intends to bid has the necessary status, even though it failed to either bid in response to the original solicitation or to protest before the close of the proposal period for the original solicitation.

The language of section 759(f)(9)(B) plainly establishes, by use of the word "prospective," that, in order to be eligible to protest, one who has not actually submitted an offer must be expecting to submit an offer prior to the closing date of the solicitation. After the date for submission of proposals has passed, however, the would-be protestor can no longer realistically expect to submit a bid on the proposed contract, and, therefore, cannot achieve prospective bidderhood [yes, bidderhood; a new one on me] with regard to the original solicitation.

Since the opportunity to qualify either as an actual or a prospective bidder ends when the proposal period ends, MCI's stated intention to submit a proposal in response to any resolicitation, and its efforts to secure resolicitation by filing a protest, can do nothing to create the necessary interested party status. Accordingly, no matter how well founded MCI's charges that the GSA waived
mandatory contract requirements and that a resolicitation should occur, MCI's argument that it is an interested party must be rejected.

Matter of: Poly-Pacific Technologies, Inc., B-296029, June 1, 2005

Poly-Pacific Technologies, Inc. protests the modification of contract. Poly-Pacific argues that the agency improperly relaxed the performance requirements in the contract beyond what was reasonably contemplated by the underlying solicitation.

The original solicitation sought proposals that required offerors to both lease plastic media and recycle the resulting SBM in compliance with regulations, and offerors were thus required to propose technical solutions and pricing for both the lease and recycling components of the work. Due to changes in EPA rules regarding the recycling of the plastic media, after work had begun on the awarded contract, the contract was modified to drop that requirement.

Poly-Pacific did not submit a proposal in response to the RFP, as it was not then on the list of qualified providers authorized to lease the plastic media, although it did become an authorized provider subsequently, and before the complained-of contract modifications.

Poly-Pacific argues that the modification of UST’s contract improperly relaxed the performance requirements, thereby changing the scope of work anticipated by the RFP and resulting in an improper sole-source contract of the modified work.

Once a contract is awarded, however, our Office will generally not review modifications to that contract, because such matters are related to contract administration and are beyond the scope of our bid protest function. An exception to this rule arises where a protest alleges that a contract modification changes the work from the scope of the original contract, since the work covered by the modification would otherwise be subject to the statutory requirements for competition absent a valid determination that the work is appropriate for procurement on a sole-source basis. [I usually refer to this exception as the "relation back rule", because it relates back to the essence of the solicitation, allowing a protest of the solicitation, and taking it out of the contract dispute processes (which do not allow a third party to protest).]

Although challenges to the relaxation of contract requirements are less common than challenges to contract modifications that enlarge a contract’s scope of work, our Office recognizes that both fall within this exception, and we will consider whether modifications of performance requirements result in work that should be subject to competition.

In assessing whether a contract modification is outside the scope of the original agreement, we examine whether the original nature or purpose of the contract is so substantially changed by the modification that the original and modified contracts are essentially and materially different. In assessing whether the modified work is essentially the same as the effort for which the competition was held and for which the parties contracted, we consider factors such as the magnitude of the change in relation to the overall effort, including the extent of any changes in the type of work, performance period, and costs between the modification and the underlying contract.

Where an agency has relaxed a contract’s performance requirements, our Office also looks to whether the change in requirements was the type that reasonably would have been anticipated under the solicitation, and whether the modification materially changed the field of competition for the requirement.

We disagree with the agency’s view that the modification does not materially change the requirements of the contract or result in a fundamental change to the nature of the work. The original solicitation sought proposals that required offerors to both lease plastic media and recycle the resulting SBM in compliance with regulations, and offerors were thus required to propose technical solutions and pricing for both the lease and recycling components of the work.

Furthermore, Poly-Pacific contends, and the agency does not dispute, that the costs of leasing plastic media with no recycling requirements is as much as 50 percent less than the costs of leasing plastic media with recycling requirements. An agency may not modify a contract by changing or relaxing requirements where the resulting work is fundamentally different from the work anticipated by the original solicitation. Evidence suggesting that proposals submitted on the basis of a modified contract’s relaxed requirements could result in more competition and lower prices generally weighs in favor of finding that the contract modification was improper.

In our view, the modification resulted in a material and fundamental change to the nature of the work that changed the field of competition and that work, therefore, should have been competed on a full and open basis.

Although the modification of UST’s contract occurred approximately 2 years ago, we find that Poly-Pacific’s protest is timely. Upon learning through news accounts that UST was under investigation for allegedly failing to recycle the SBM according to the contract, Poly-Pacific diligently pursued information regarding UST’s performance. Poly-Pacific made several unsuccessful attempts to obtain information from the agency regarding UST’s contract following the news accounts of the investigation of UST. The agency did not inform Poly-Pacific of the modification until February 25, 2005. We conclude that Poly-Pacific diligently pursued the information that forms the grounds for this protest, and its filing of the protest within 10 days of its notice of the modification is timely.

Finally, we find that the protester was prejudiced by the agency’s improper modification of the contract. As discussed above, Poly-Pacific is a qualified source to provide type V plastic media, and thus could participate in a competition for the work now required under the contract modification.

Under the ABA Model Procurement Code, a prospective bidder or offeror can protest provided it is "aggrieved". It is aggrieved if there was a material defect in the solicitation which wronged (prejudiced) the protestor. Such a protest must be filed within a time period (14 days under Guam law) from the time the aggrieved protestor knows or should have known of the facts by which it became aggrieved.

One protest case before the Guam Public Auditor, as with the Poly-Pacific case, involved a protest made years after the award of a contract. The Public Auditor decided, based on the facts of the case, that the protest was timely filed.

Change in evaluation method or quantity requirements from specifications

You are reminded that cases and articles are typically sliced, diced, rearranged, paraphrased and otherwise edited to my own ends, plus I often leave out necessary or other interesting material, so you must read the whole piece at the link rather than rely on my rendition.

GAO Decision Matter of: CGI Federal Inc.. File: B-410330.2, Date: December 10, 2014

CGI Federal Inc., of Fairfax, Virginia, protests the award of contracts to five other offerors under request for proposals (RFP). The RFP here, which is a follow-on to previously awarded contracts for system design and development and the production of limited deployment units, contemplates the award of contracts pursuant to which production units for unit, force, and submarine platforms will be ordered on a build-to-print basis. The RFP provided for the award of up to three indefinite-delivery/indefinite-quantity (ID/IQ) contracts with firm-fixed-price (FFP) and cost-plus-fixed-fee (CPFF) contract line items (CLINs).

The SSAC recommended that despite the solicitation language indicating that the agency intended to award up to three contracts, award be made to the five top-ranked offerors. In conjunction with its decision to increase the number of awards, the agency decided to change its strategy for placing delivery orders with the selected contractors. Specifically, the agency decided that it would not place 3-4 orders of larger quantities of CANES units annually as originally planned, but rather it would issue more orders for smaller quantities of CANES units in order to achieve more competition on a per order basis.

CGI raises a number of challenges to the agency evaluation of proposals. As a threshold matter, the protester argues the agency used a flawed price evaluation methodology, which produced a misleading result. In this regard, CGI contends that the agency knew prior to award that the solicitation’s stated approach to evaluating offerors’ prices, based solely on the highest order level of 15 units, departed from how the agency actually intended to order the units, which was to place orders for much lower levels. Accordingly, CGI maintains that the agency should have amended the solicitation’s price evaluation scheme to comport with the agency’s actual ordering needs.

CGI contends that the agency’s price evaluation methodology, which provided for comparing offerors’ prices at the maximum order level of 15 units, did not match the agency’s planned ordering needs as determined by the agency prior to award. Given this disconnect, the protester argues that the agency was required to amend the solicitation’s evaluation scheme to provide a reasonable basis for comparing offerors’ prices, one which matched the agency’s ordering needs. CGI further maintains that if the price analysis had been based on offerors’ NTE unit prices for quantities of 5 per delivery order, which is far more in line with the agency’s revised acquisition strategy, decision. its evaluated price would have been [deleted], rather than highest, which would clearly have had an impact on the best value tradeoff.

This case turns on two fundamental principles. One is that, while it is up to the agency to decide on some appropriate and reasonable method for evaluating offerors’ prices, an agency may not use an evaluation method that produces a misleading result. Raymond Express Int’l, B-409872.2, Nov. 6, 2014, 2014 CPD ¶ 317 at 6; Air Trak Travel et al., B-292101 et al., June 30, 2003, 2003 CPD ¶ 117 at 22. That is, the method chosen must include some reasonable basis for evaluating or comparing the relative costs of proposals, so as to establish whether one offeror’s proposal would be more or less costly than another’s. Id.

The other is that where an agency’s requirements materially change after a solicitation has been issued, it must issue an amendment to notify offerors of the changed requirements and afford them an opportunity to respond. Federal Acquisition Regulation (FAR) § 15.206(a); Murray-Benjamin Elec. Co., L.P., B-400255, Aug. 7, 2008, 2008 CPD ¶ 155 at 3-4.

For example, where an agency’s estimate for the amount of work to be ordered under an ID/IQ contract changes significantly, prior to award, the agency must amend the solicitation and provide offerors an opportunity to submit revised proposals. See Symetrics Indus., Inc., B-274246.3 et al., Aug. 20, 1997, 97-2 CPD ¶ 59 at 6. In Symetrics, our Office concluded that the agency should have amended a solicitation for an ID/IQ contract because although the solicitation initially estimated the agency would require 3,755 sequencers, the agency subsequently learned--prior to award--that the agency no longer had a requirement for 3,219 of the sequencers. Id. Similarly, in Northrop Grumman Info. Tech., Inc., et al., B-295526 et al., Mar. 16, 2005, 2005 CPD ¶ 45 at 13, our Office sustained a protest where the Department of the Treasury, prior to award, negotiated a memorandum of understanding with OMB and the General Services Administration that significantly changed the approach set forth in the solicitation and the FAR for determining whether to exercise contract options, making it significantly less likely that the options, which were part of the evaluation, would be exercised.

The circumstances here are unusual in that the meaningfulness of the price evaluation scheme set forth in the RFP changed between the closing date for receipt of FPRs and the date of award. That is, the record reflects that it made perfect sense to evaluate on the basis of 15/each unit pricing when the agency intended to award three contracts and issue 3-4 delivery orders per year. Evaluating on the basis of 15/each unit pricing no longer provided a rational basis for comparison, however, when, during the source selection process, the agency decided to increase the number of awardees to five, and to alter its ordering strategy to significantly increase the number of delivery orders annually, thereby decreasing the number of units to be acquired per delivery order.

Given this fundamental shift in the agency’s anticipated ordering plans, it was unreasonable for the agency to proceed with a price evaluation methodology that was divorced from these plans. Rather, the appropriate course of action was for the agency to amend the solicitation in a manner that would enable it to evaluate, and make a tradeoff decision based on, the offerors’ relative relevant prices.

The agency defends its actions on the basis that it followed the terms of the solicitation and that all offerors competed on an equal basis because the solicitation did not establish that the agency would, in fact, place orders at the 15/unit level. Regarding the latter point, the agency notes that offerors were to submit prices at each level and should have understood that orders could be placed at any of the 15 price levels. The agency’s arguments, however, miss the point.

We agree that the agency followed the terms of the solicitation, and that the offerors submitted prices on an equal basis. The problem is that the price evaluation, and resulting selection decision under which CGI did not receive an award due to its high price, were based on comparing prices for quantities of units that the agency now knows it does not intend to order.

We recognize that price evaluation in the context of an ID/IQ contract may be representative, and therefore something of a fiction; nevertheless, the fiction employed must bear some rational relationship to the agency’s needs. See CW Govt Travel, Inc.--Recon.; CW Gov’t Travel, Inc., et al., B-295330.2 et al., July 25, 2005, 2005 CPD ¶ 139 at 4-5.

Where the agency’s intended ordering strategy does not anticipate placing orders at the 15 unit per order level, we fail to see how comparing prices at this level, and using such prices as the basis for a tradeoff decision, can be understood to be reasonable. As explained above, where the disconnect between the terms of the solicitation and the agency’s order needs became apparent prior to award, it was incumbent on the agency to instead amend the solicitation to correct the flaw in the solicitation.

CGI further contends that the agency failed to conduct a price realism analysis, as required by the terms of the solicitation, and that it failed to recognize that the prices of one of the awardees were unbalanced. CGI also argues that the agency engaged in unequal discussions, assigned its proposal too low a rating for past performance, and unreasonably assigned NG’s proposal a performance confidence rating of satisfactory. We deny the protester’s remaining arguments.

Switcheroo

This post covers a couple of instances in which an award is protested after it has been made. It concerns changes made to the contract awarded. But, because the basis of the protest is the disparity between what was bid and the contract made, it was determined that this was not a contract dispute but a valid protest of the award. In some other words, the contracting formation process begun by the solicitation was so tainted that the protest related back to solicitation, not to the contract itself.

The first instance is in a recent GAO decision. It was reported about in this article: GAO dinged the Army for swapping out requirements post award. The GAO decision itself is reported here. The following is taken from the GAO decision, but selectively and somewhat rearranged, so you need to read the whole decision to keep me honest in my characterization of it. I've also eliminated footnotes and citations, so a student or practitioner would definitely want to read the original.

Matter of: System Studies & Simulation, Inc., B-409375.2; B-409375.3, May 12, 2014

DIGEST: Protest that agency improperly made award of a contract for its actual requirements that differed significantly from the requirements solicited is sustained, where record shows that agency’s actual requirements are for less than 30 percent of the requirements solicited; agencies are required to accurately specify their requirements in a manner that affords offerors an opportunity to compete for the agency’s actual requirements.

The RFP contemplates the award of a fixed-unit-price, indefinite-delivery, indefinite-quantity requirements type contract to provide instructor pilots to perform flight training on a variety of helicopter airframe models. Award was to be made to the firm submitting the low-priced, technically acceptable proposal for a base year1 and up to three 1-year options. The agency could eliminate any proposal for offering unreasonably high/unrealistically low, unbalanced, inaccurate or incomplete prices.

The RFP included a pricing matrix that offerors were required to complete. In that matrix, offerors were required to calculate the fully burdened hourly rates for various labor categories (the labor categories were: program manager, alternate program manager, UH-60 instructor pilot, AH-60D instructor pilot, OH-58D instructor pilot, AH-64D maintenance examiner, UH-60M maintenance examiner, and UH-60A/L maintenance examiner). Offerors also were required to calculate extended prices for the contract based on quantity estimates included elsewhere in the RFP.

After receiving and evaluating the offerors’ revised proposals, the agency made award to M1, finding that it had submitted the low-priced, technically-acceptable proposal.

By letter dated December 5, the agency advised S3 of its award decision.

Systems Studies & Simulation, Inc., (S3), subsequently filed a protest in our Office alleging, among other things, that M1 had engaged in an improper bait and switch relating to its proposed key personnel (its program manager and alternate program manager), and that the agency had failed to evaluate M1’s price for realism. In response to that protest, the Army advised our Office that it would take corrective action and we dismissed the protest as academic on January 15, 2014.

The record shows that the agency investigated S3’s bait and switch allegation and also evaluated the proposals of S3 and M1 for price realism. After these activities, the agency affirmed its selection of M1 on January 27, 2014.

[Here another factor is interjected: S3 already held an existing contract similar to this one being solicited.] Also on January 27, the record shows that the agency’s cognizant commanding officer sent a memorandum to the agency’s administrative contracting officer directing him to partially terminate a significant portion of the agency’s then-current contract for pilot instruction services. These services--being provided under a predecessor contract being performed by S3--were reduced due to a change in the agency’s needs.

On January 28, S3 became aware of the agency’s changed requirements because, as noted, it was the incumbent contractor for the requirement, and was sent a letter dated January 28 partially terminating its contract. The record also shows that S3 inquired as to whether the change to the agency’s requirements was confined to its predecessor contract, or represented the agency’s needs going forward. S3 was advised that the revised requirements would remain in effect for the foreseeable future because of the availability of in-house Department of Defense personnel to perform the training in lieu of contractor personnel.

Finally, the record shows that, on January 31, the agency’s administrative contracting officer sent an e-mail to the agency’s procurement contracting officer (the individual actually conducting the current acquisition, and also serving as the source selection official here) advising her of the significant reduction in the agency’s requirements.

Here, the agency has determined that its actual requirements are significantly different from the requirements that it solicited, and for which the offerors competed. This change represents a reduction in the agency’s overall anticipated requirements of more than 70 percent. It also reflects a significant change in the types of instructors and maintenance examiners required. The record therefore shows that the agency’s current requirements bear little relationship to the requirements that it solicited, and for which the offerors competed.

S3 argues that the Army altered its requirements after making award of the contract to M1. S3 asserts that the change to the agency’s requirements is substantial, and that it would have altered its proposed staffing had it known about the agency’s revised requirements. S3 therefore contends that it was prejudiced by the agency’s failure to solicit its revised, actual, requirements once it became aware of those requirements.

The agency responds that the source selection authority/contracting officer (SSA) was unaware of the change to the agency’s requirements at the time she made her source selection and did not learn of the change until several days later. The agency therefore takes the position that it did not make award with a view to substantially altering the contract after award.

In the alternative, the agency argues that, because this is a requirements contract, there was no obligation on the part of the government to order the estimated quantities included in the RFP. The agency therefore reasons that any reduction in its actual requirement--as compared to the RFP’s estimates--was contemplated by the type of contract solicited.

As a general rule, agencies may not properly award a contract on a basis that is fundamentally different from the basis upon which the competition for the requirement was conducted. Where, for example, there is a significant change in the government’s quantity requirements, the appropriate course of action is for the agency to apprise the offerors of its revised requirements, and afford them an opportunity to submit proposals responsive to those revised requirements, even where, as here, a source selection decision has been made.

In addition, the fact that a requirements-type contract is being used does not relieve the agency of its fundamental obligation to conduct a competition on the basis of the most accurate or realistic estimates of the total quantity of goods or services likely to be ordered. This is because, without such realistic estimated quantities, firms cannot prepare offers that reflect the agency’s actual, anticipated needs.

In responding to the protest, the Army essentially relies on the temporal lack of knowledge on the part of its SSA concerning the agency’s revised requirements. The agency therefore maintains that the original award was proper, and that the change to its requirements is a matter of contract administration.

However, the agency’s reliance is misplaced, since the record shows that the organization as a whole--and more particularly, the agency’s cognizant commanding officer--had to have been aware of the Army’s changed requirements prior to the agency’s revised source selection decision. Nonetheless, the record compels the conclusion that the commanding officer was aware of the change to the agency’s requirements. As noted, the record includes his instruction to partially terminate the protester’s predecessor contract, which was executed on January 27, the same date on which the revised source selection decision was made. In any event, where an agency’s requirements change due to the passage of time occasioned by protest litigation, the agency is nonetheless still required to afford offerors an opportunity to submit proposals responsive to the agency’s revised requirements.

The agency also asserts, based on calculations it has performed, that S3 was not prejudiced by the agency’s failure to solicit its revised requirements because its price still would not have been low. The agency’s calculations are based on hourly rates proposed by the offerors in response to the earlier requirement. The protester maintains, however, that it would have changed its proposed staffing profile, as well as proposed personnel had it known of the agency’s actual requirements.

The agency’s calculations provide no basis for our Office to conclude that the protester was not prejudiced. As correctly noted by the protester, those calculations are based on personnel that the offerors may, or may not, have proposed had the agency advised them of its actual requirements (protest sustained where record showed reasonable possibility of prejudice to protester).

We recommend that the agency either amend its current solicitation to reflect its actual requirements, or cancel the current RFP and issue a new solicitation that reflects its actual requirements. Should M1 not be identified as the successful offeror, we further recommend that its contract be terminated for the convenience of the government, and that the agency make award to the firm identified as the successful concern, if otherwise proper.

This decision was characterized in a post by Nicholas T. Solosky of law firm Fox Rothschild LLP on the Mondaq website as follows:

GAO recently sustained a protest filed concerning the difference between the government's actual needs and what was solicited from contractors as part of the RFP. The protestor challenged the award of a fixed-unit-price, indefinite-delivery, indefinite-quantity requirements contract to provide instructor pilots to perform helicopter flight training. 

After the contract was awarded, however, the government made unilateral changes to its scope – reducing the agency's overall anticipated requirements by more than 70 percent. Based on these significant alterations, the GAO noted that: "The record therefore shows that the agency's current requirements bear little relationship to the requirements that it solicited, and for which the offerors competed."

After considering the reduced scope of services, GAO sustained the protest and recommended "that the agency either amend its current solicitation to reflect its actual requirements, or cancel the current RFP and issue a new solicitation that reflects its actual requirements." The basis for GAO's decision is the long-standing rule (well-established in GAO case law) that agencies may not properly award a contract on a basis that is fundamentally different from the basis upon which the competition for the requirement was conducted.

It may be helpful to remind here that a "requirements" contract is a particular variant of an indefinite quantity contract. A requirements contract obligates the government to acquire its actual needs. It is not a discretionary decision of the government. See 2 GAR 3119(i) of the Guam Procurement Regulations, based on the ABA Model Procurement Code and regulations for a description of and the requirements for an indefinite quantity contract (subsection ii), how it differs from a definite quantity contract (subsection i), and the description and requirements for a requirements contract (subsection iii).

The other case, promised above, is a Guam Public Auditor's appeals decision on a bid protest, OPA-PA-11-002. I will not discuss the details of this case (I represented the protestor and the case is still on appeal to the courts by the awardee) other than to point out that it involved a solicitation for a variety of pieces of copier equipment, ranging from lower to higher cost items. 

After the low bidder was determined and announced to be the intended awardee of the contract, the contract actually made increased the numbers of high cost items and reduced the numbers of lower cost items, with the result that the contract price increased roughly 25% over the bid amount. 

The Public Auditor found that the quantity changes were in violation of law and, by virtue of the remedies allowed by Guam law, terminated the contract. (As the matter continues through the court by virtue of the judicial appeal, the decision of the Public Auditor terminating the contract is stayed and the "terminated" contract looks at this point to become fully or at least mostly performed before a final decision is rendered.)

This highlights one distinction between federal GAO protest cases and local ones: a federal protest stays not just the solicitation but also contract performance; not so locally.

Bundle bungle leads to huge up front cost savings

Being an incumbent can have its advantages, amongst them knowledge of how the contract administration process runs after the contract performance begins. This knowledge can at times give the incumbent a price advantage at bid opening, but the onus then is great on the government to contain performance cost increases.

On Guam, the government had lapsed into the habit of awarding, often without any competition, and usually with unduly specifications, copier contracts to one of a couple of competitors. 

When after at least a decade of such behavior, one large agency was forced to open the work to competitive bids, the incumbent shocked the competition with a bid roughly 50% lower than it had been getting under prior contracts.  But, in a review of the contract performance under the new award, the OPA found that the running costs under the new contract had shot up so much that those costs dwarfed the bid price.

This case concerns the competition, if it can be called that, between Motorola and Raytheon for emergency communications equipment. Read the whole article at the link, as usual, because I truncate and often rearrange the excerpts, and leave out some really good stuff; the related and linked stories mentioned in the article add valuable context, too.

How Motorola bested Raytheon and captured L.A. County’s emergency radio contract

Rather than signaling a new burst of competition in a taxpayer-financed market, the outcome is another reminder of how difficult it’s been for competitors to overcome Motorola’s dominance.

It looked in the summer of 2011 as if electronics giant Raytheon Corp. had gained a major foothold in the U.S. emergency communications market long dominated by one company: Motorola. Raytheon had been selected as the prime contractor for a sprawling, $600 million communications system connecting Los Angeles County’s public safety agencies with those of Los Angeles and more than 80 other cities in the county, two school districts and UCLA via the latest in two-way radio and high-speed broadband technology.

Like large urban areas across the country, Los Angeles County spent years working to meet a drumbeat of interoperability edicts from Washington. The goal was to unite local first responders in a seamless communication system that could withstand a terrorist strike, an earthquake, a wildfire or some other disaster.

In 2010, the newly formed Los Angeles Regional Interoperable Communications System, or LA-RICS, solicited bid proposals for a two-way radio system and a new broadband network. Raytheon’s negotiating team only needed to work out the design details with a joint government authority. Raytheon and the joint powers authority were in a final exclusive bargaining period when things got tangled.

A Los Angeles County attorney declared that the procurement violated an arcane state law because it bundled the radio and broadband systems with the construction of towers in a single “turn-key” contract. Under the law, construction projects had to be bid separately, the attorney reported. Motorola, however, had for years built turn-key projects in California that mingled tower construction and radio electronics.

Patrick Mallon, the executive director of LA-RICS, said in a phone interview that if the authority had proceeded, construction bids would have had to have been taken for each of 300 towers, posing “astronomical risks” if anything went wrong. The state legislature rushed a legislative fix into law, but LA-RICS started the process anew anyway, breaking the radio and broadband networks into separate contracts.

In the final round, the radio system was revised to end Los Angeles’ use of a commercial television band width and shift to a 700-megahertz band set aside for emergency communications. Motorola’s winning bid was a jaw-dropper: $280 million, or about half of its first-round bid and $135 million below Raytheon’s price of $415 million.

The question is, will contract modifications raise Motorola’s price?

For example, public records show that LA-RICS’ subject matter experts concluded that many of Motorola’s towers exceeded government height limits, a characterization that Mallon disputed. If shorter towers must be built, more towers costing up to $1 million each will be required, because their signals don’t extend as far. The authority has agreed to hold Motorola responsible for no more than $2 million of any additional tower costs.

Raytheon also announced that it was dropping out of the broadband competition and left empty handed.

Procurement controversy -- Augusta, Georgia, USA

Judge orders city to rebid employee health insurance contract

Aetna subsidiary Meritain Health protested the bid award last year, but the commission voted to deny the company’s protest and gave the contract to Blue Cross. Richmond County Super­i­or Court Judge David Rop­er blasted the Augusta Commission and city procure­ment department in a Wednes­day order demanding the city re-bid its new employee health insurance contract. The order comes in response to a lawsuit filed by Aetna subsidiary Meritain Health over Augusta’s award of the contract to administer a new self-funded health insurance pool, valued in excess of $20 million, to Blue Cross, the city’s existing provider.

Meritain alleged that procurement engaged in “11th hour” manipulation of the bid award, changing contract terms and ranking criteria to benefit Blue Cross, and Roper agreed. “Simply put, Ms. Sams, Ms. Kelley and the selection committee changed the rules at the 11th hour to require no lasering at inception, and decided that Total Maximum Costs was the driving factor,” he wrote. “No lasering” refers to an insurance practice that divides employees into low- and high-risk groups, covering each differently.

When the “no lasering” requirement was introduced, Aetna vice president of public sector sales Marcus Duckworth complained in two e-mails that only Blue Cross had access to recent claims data to formulate an accurate bid. “The court finds that Meritain was prejudiced thereby,” Roper said.

He also points to Kelley’s romantic involvement with Blue Cross sales representative Mark Dukes throughout the process, citing Commissioner Alvin Mason’s questioning of Kelley about the relationship during commission meetings.

Keep your specs on

If your vacation was ever taken in the manner that many solicitations are processed, you'd never get there, or get where you intended, or get back again.

When planning a vacation, you very carefully (unless on a free-abandon adventure) decide where you want to go, when and where to stay, what to do, etc.; and if you can book the time and place. You also want to shop around for best prices, appropriate accommodations, class of travel, etc.

Then, absent misadventure, you stick to the plan and have the photos to prove it. Even if, along the way, you realize you could have done things a bit differently and saved yourself a little money or convenience.

Once everything is planned and booked, changing plans becomes expensive and often impossible. You have, after all, caused airlines, hotels, tour companies, etc., to modify their plans to accommodate yours. Upsetting you plans causes them inconvenience and often costs and damages.

Procurement should be approached with the same understanding.

First, determine what it is you need. Then find out if it is available in the market. Write the specifications you need to get that. Then get quotes, and go and have fun.

What we too often find with procurement, though, is that people want to change their plans after the bookings have been made and deposits paid. The following article from Suffolk, Virginia, USA, illustrates this common occurrence.

Contract lawsuit dismissed

A lawsuit against the city of Suffolk was dismissed this week after the city canceled a contract it had signed to purchase a mobile command bus for the police department.

The lawsuit involved a mobile command vehicle the Suffolk Police Department planned to purchase with a Port Security Grant of more than $600,000.

The bus, according to a presentation to City Council by Police Chief Thomas Bennett earlier this year, would help the department improve its response to natural disasters, hostage situations and other incidents.

Matthews Specialty Vehicles Inc., submitted a bid of $655,292 for the vehicle. Farber Specialty Vehicles submitted a lower bid of $589,000 and was given the contract.

Matthews promptly cried foul, saying that Farber’s bid did not follow the specifications listed in the bid invitation, including for such things as the width and weight of the bus, dimensions of the radiator, construction and flooring materials, the style of cabinets and ceilings and more.

After the lawsuit was filed, Suffolk Circuit Court granted an injunction that prevented the city from proceeding with the purchase until the trial was concluded. Matthews alleged that Suffolk had violated the Virginia Public Procurement Act.

Unreality procurement TV

This story gets a bit personal, not in the sense of my own personal interests, but in the sense that I have become a bit player in a much larger drama. In involves an ongoing bid process that arises from special legislation to authorize an RFP solicitation to design, build, construct, operate, maintain and finance a new high school facility on Guam.

The procurement process has gone through an initial analysis and ranking of acceptable offerors, and negotiation of all terms necessary to render an award and tender a contract to the selected best most qualified offeror. Along the way there have been two protests by two other offerors, and a court appeal by one of them that ended in a technical dismissal, all of which provided important new material for inclusion and discussion in the draft upcoming new version of the Guam Procurement Process Primer.

At this point, the government's retained bond counsel has decided that the law applicable to this one procurement needed to be changed to remove any possibility that the contract, when awarded, could not be terminated or declared null or void. He opined that this was necessary in order to obtain an "unqualified" opinion for the bond that will be used by the selected offeror to be commercially marketable.

There is disagreement whether any other offeror will need such an opinion, but bond council has stated that, in his opinion, and his inside knowledge of details of all the offerors which must remain undisclosed, all offerors are similarly required to obtain such an unqualified opinion to obtain the financing they have proposed in their respective proposals.

The solution proposed by the bond counsel, and embodied in legislation proposed by the Governor, was sent to the Guam legislature with request for enactment. The transmittal letter stated that the legislation would prohibit any protest of the solicitation. Executive branch testimony was to the effect that protests would be allowed and that the sole intent of the legislation was to eliminate the remedy, allowed under Guam law, for a court or other reviewing body to terminate or declare null and void any contract made in consequence of an award.

In this context, and after amendments conforming the language to that sole intent, amongst other matters, the proposed bill was passed.

The up front and personal part of this for your blawger is that he appeared before the legislature and was offered an opportunity to offer suggestions for some of the proposed amendments.

One consequence of his interjection into that process was the following unreal TV footage, and radio interview, links to which, as well as other news articles, follow:



Radio Interview with Travis Coffman on K-57

Lawmakers question new JFK financing

Special Session Considers Governor's Bill To Jump Start JFK Construction

Senators Grill DPW, AG, Auditor Over JFK Procurement

Special session continues on JFK bill

Senators OK bill to fast-track JFK rebuild

Taitague Applauds Passage of JFK Bill

JFK finance bill passed

Procurement controversies -- South Carolina, USA

Should she who pays the procured piper be allowed to call the procurement tune? That's the question being asked in this bid controversy.

USC nixes bids; donor chooses architect

USC canceled all bids to hire an architect for its new $90 million Moore School of Business so a donor could pick a design firm of her own choosing.

While no state spending rules were broken, four Columbia firms and their national partners spent months of labor and an estimated $100,000 each hoping to win the project before the school abruptly canceled the bids in a two-sentence memo sent April 2.

Instead, the business school's private foundation will pay an estimated $4 million or more to a New York firm chosen by the school's benefactor, Darla Moore.

Moore, a Lake City financier for whom the school is named, sits on the foundation board. The firm chosen, Raphael Vinoly Architects, was a finalist for the contract but was not going to win it, a source close to the bidding told The State newspaper.

The architect's fee will be a gift from the foundation, which is allowed under state procurement rules, according to the S.C. Budget & Control Board.

But the head of the S.C. chapter of the American Institute of Architects called the last-minute canceling of the bids "unprecedented."

And one frequent critic of the university called it "an end run around the procurement process."

"People shouldn't deal with the university if they don't play by the rules," said Ashley Landess, president of the S.C. Policy Council.

If private money is mingled with public money, the project should have to follow public rules, Landess said.

"There will be public money involved in this project," she said. "And a lot comes from other government sources. It's a symptom of a bigger problem: the university blurring the line between private and public money."

Read more here.

Procurement controversies -- NSW, Australia

NSW govt defends Lotteries sale

The 40-year contract has been awarded to Tatts Group, which The Sydney Morning Herald newspaper reported on Tuesday lodged only the third highest bid, leaving rival bidders concerned.

On Tuesday, the Herald reported that original bids came from Tatts Group at $700 million, G-Tech at $730 million and Centrebet at $750 million.

It said Tatts Group then boosted its bid to $850 million in a package to include unclaimed prizes, estimated to be worth some $200 million over the life of the contract, the report said.

However, within hours of the paper's publication, Acting Treasurer John Hatzistergos shot down the report.

"Tatts was the largest bid," Mr Hatzistergos said in a statement.

Mr Hatzistergos denied on Tuesday that Tatts had been given preferential treatment.

"Every shortlisted proponent in the NSW Lotteries transaction process received identical information and bid instructions," his statement said.

"Bidders were also provided an opportunity to bid on any other basis they chose, and all bidders availed themselves of this opportunity."

Auditor to investigate allegations of impropriety in Tatts purchase

Auditor Peter Acherstraat's office has released a statement saying that the deal would be scrutinized, although investigations would "take time" to be completed.

The state appointed investment bank which oversaw the sale process, Goldman Sach's, has been accused of having previous business dealings with Tatts, especially with regards to a merger with Unitab four years ago.

The state opposition in particular has expressed concern over the deal, with shadow treasurer Mike Baird demanding that the state treasurer publicly prove the deal was above-board.

More on this story:

NSW Lotteries sale hits legal snag

A critical, eleventh-hour change to the deal between the State Government and the Tatts Group breaches the legislation that allows the sale.

The Government announced its intention to sell NSW Lotteries last year, but told prospective bidders it would not include unclaimed prizes.

The Acting Treasurer John Hatzistergos says the Tatts Group was the only one which put in what is called a non-conforming bid, offering $850 million if the Government threw in the unclaimed prizes.

That bid was accepted.

The problem is the legislation permitting the sell-off had already gone through Parliament and it says the Government will keep that unclaimed prize money.

But a spokesman for the Treasurer says he has legal advice saying there is discretion in the legislation that would allow it to ignore the breach.

But a rival bidder has legal advice saying that would be against the spirit of the law.

Under US procurement norms, it is improper (illegal) to alter the terms of the solicitation midstream. Any bid (tender) which fails to stick to the terms of the bid is non-responsive, and must be disregarded.

Procurement controversies -- New York State

Federal prosecutors looking into Aqueduct deal

Federal prosecutors have begun a review of the lucrative award to run a sprawling new casino at a downstate racetrack.

Aqueduct Entertainment Group, a consortium of gambling, construction and individuals with Democratic Party ties, was tapped to run a 4,500-slot casino at Aqueduct Racetrack for the next three decades.

In the past week, some of the losing entities have cried foul, claiming the terms of the secretive process kept changing and that AEG won based on political favoritism.

The U.S. Attorney's office in Manhattan this week sent a subpoena to the state Lottery Division, which regulates racetrack casinos and had a vetting role in the Aqueduct process, seeking documents pertaining to a Queens charity. government and industry sources said their probe has widened in the past several days to include the Aqueduct casino deal.

An Assembly official said Assembly Speaker Sheldon Silver continually raised concerns with Governor David A. Paterson about how the process — which changed several times after bids were received — was conducted.

In his letter to NY State Inspector General Joseph Fisch, Silver asked for a review of the process by the state Lottery Division and other agencies in evaluating the casino bids and to determine if state procurement rules were followed.