He spoke proocurement reform, but got bespoke procurement

It looked good on paper, and, of course, after the horse had bolted:

• Watchdog groups are calling on the Legislature to pass, and for Governor Cuomo to sign, comprehensive “clean contracting” legislation

In 2016, an investigation into a sprawling alleged pay-to-play scheme connected to the Governor Cuomo’s Buffalo Billion economic development program resulted in charges against nine men, including a former top aide to Cuomo, Joe Percoco, and the former president of SUNY Polytechnic Institute, Alain Kaloyeros, a close government partner of Cuomo’s, on bid-rigging, bribery, and other charges.

The organizations -- including Reinvent Albany, New York Public Interest Group, Citizens Union, League of Women Voters, Fiscal Policy Institute, Common Cause, and Citizens Budget Commission -- are also urging state leaders to reduce the potential for conflicts of interest by exploring options to limit campaign contributions from anyone seeking a state contract. Nineteen states and New York City -- but not the state -- already have these anti-pay-to-play laws in place.

“The moment of truth has arrived. State and federal prosecutors say $800 million in state economic development contracts were rigged, but so far, the Legislature and governor have yet to act,” said John Kaehny, executive director of Reinvent Albany, standing in the state Capitol. “It’s time they pass common sense legislation that includes independent oversight over state contracts, uniform contracting rules, and transparency that will prevent corruption and abuse before it happens.”

• Governor Cuomo Announces 35th Proposal of the 2017 State of the State: Restoring the Integrity and Accountability of State Government Through Comprehensive Ethics Reform

The comprehensive package of reforms includes:

Advancing a constitutional amendment limiting outside income and creating a full-time legislature;
Advancing a constitutional amendment imposing term limits for elected officials;
Requiring members of the Legislature to obtain an advisory opinion before earning outside income;
Advancing legislation to close the “LLC Loophole;”
Instituting Public Financing and enacting a number of other campaign finance reforms;
Subjecting local elected officials to financial disclosure requirements;
Promoting Increased Transparency Through Comprehensive Reforms to the State Freedom of Information Law;
Expanding the State Inspector General's authority to SUNY and CUNY not-for-profits;
Creating new Inspectors General for the Port Authority and the State Education Department; and
Ensuring greater oversight of the state's procurement process.

• Statement from Governor Andrew M. Cuomo on Proposed Ethics Reforms Scandal seldom begins with evil, but with temptation, and temptation usually begins with a lack of watchfulness. I will create and appoint separate Inspector Generals for both SUNY and CUNY. They will be charged with identifying and investigating conflicts of interest, fraud, corruption and abuse. They will review contracts and hiring for both improper and illegal actions. They will look for personal benefit to any executive or legislative employee or improper actions with a third party. They will review all campuses and all affiliated entities. The IGs will have the authority to bring any report of improper conduct directly to law enforcement.

I will also appoint a Chief Procurement Officer for the Executive branch. That person will be charged with reviewing all state contracts, with an eye towards eliminating any wrongdoing, conflicts of interest or collusion. And just so there is no confusion, I do mean all contracts. Any contract or agreement that entails the disbursement of state funds will be subject to review. Any question of collusion, political benefit or personal connections will be thoroughly examined. The Chief Procurement Officer will have investigative and prosecutorial experience, and will be authorized to refer problematic issues directly to law enforcement for further action.

Alas, "Procurement reform became a hot-button issue following the arrest of several Cuomo allies on bid-rigging charges."

The rig was up, but not that many dominoes seemed to fall.

N.Y. developer pleads guilty ahead of 'Buffalo Billion' corruption trial

Kevin Schuler, formerly an executive at Buffalo-based LPCiminelli, admitted on Friday to wire fraud and conspiracy charges before U.S. District Judge Valerie Caproni in Manhattan, less than a month before a scheduled trial. Schuler said he was involved in a bid-rigging scheme that allowed his company to win a lucrative contract as part of “Buffalo Billion,” a signature economic development project of New York Governor Andrew Cuomo to revitalize the region around Buffalo, New York.

And then: Architect of Cuomo’s Buffalo Billion Project Is Convicted in Bid-Rigging Scheme

Alain E. Kaloyeros, a principal architect of Gov. Andrew M. Cuomo’s signature economic development initiative, was convicted on Thursday in a bid-rigging scheme that steered hundreds of millions of dollars in state contracts to favored companies in Buffalo and Syracuse. Dr. Kaloyeros, 62, was found guilty of wire fraud and conspiracy in the fourth week of a federal trial in Manhattan that invited harsh scrutiny of Mr. Cuomo’s ambitious plan to revitalize upstate and western New York, known as the Buffalo Billion. Dr. Kaloyeros, the former president of SUNY Polytechnic Institute, had been credited with helping to create a high-tech industry in the capital region, which led Mr. Cuomo, a Democrat, to place him in charge of the Buffalo Billion project. The governor had praised Dr. Kaloyeros as a genius and “New York’s secret weapon.” Soon, the money began to flow to Buffalo; waterfront parks, gleaming modern factories and a cluster of medical and technology facilities were built.

Mr. Cuomo, who has not been accused by prosecutors of any wrongdoing, said after the verdict that he had “no tolerance for those who seek to defraud the system to advance their own personal interests. Anyone who has committed such an egregious act should be punished to the full extent of the law.”

But at the trial, the prosecution presented evidence that Dr. Kaloyeros and Todd R. Howe, a former lobbyist with ties to Mr. Cuomo, conspired to defraud Fort Schuyler Management Corporation, a nonprofit real estate arm of SUNY Polytechnic, by steering lucrative contracts to two firms whose executives were significant donors to Mr. Cuomo’s campaign. As part of the scheme, Dr. Kaloyeros and Mr. Howe tailored requests for proposals, or RFPs, to fit the specific qualifications possessed by the two companies — LPCiminelli, a Buffalo construction management firm, and COR Development, a Syracuse-area firm — and ensure that they be chosen by Fort Schuyler for the projects. LPCiminelli, for example, received a contract to build what became a $750 million solar-panel plant on the banks of the Buffalo River, while COR received contracts worth more than $100 million for other projects. Both firms were clients of Mr. Howe’s.

Michael C. Miller, a lawyer for Dr. Kaloyeros, said after the verdict that his client would appeal. “Alain Kaloyeros is innocent,” Mr. Miller said. “He did not rig bids. Not a penny was lost. Not a bribe was paid. He did the best job that he could for the State of New York and for Fort Schuyler, and we’re just utterly disappointed with the outcome of this case.”

Government watchdog groups said that the verdict, like dozens of previous cases touching on corruption in the state capital, was the result of a lack of strong ethics laws and enforcement.

Jury convicts Ciminelli, Kaloyeros in Buffalo Billion bid-rigging scheme

The jury obviously agreed with the government's key witness, former LPCiminelli vice president Kevin Schuler, who took a plea deal and testified against his former boss early in the trial. Prosecutors dropped their charges against former LPCiminelli executive Michael Laipple.

Schuler spelled out for the jury how he, Ciminelli and Kaloyeros conspired to make sure that LPCiminelli emerged as the winning bidder by designing the request for proposals, or RFP, to favor Ciminelli's company. "We had significant influence over the project, influence over the RFP and influence over the process that was going to select a winner," Schuler told the jury.

Most notably, potential bidders were told in 2013 that they had to have 50 years' worth of construction experience in the Buffalo area in order to qualify for the project. That prompted Schuler to show the jury a shirt, produced in 2011 celebrating LPCiminelli's 50th anniversary. "I think someone put this in to help us ... and I'd never seen a requirement like that," Schuler testified. State officials later shrank the requirement to 15 years of Buffalo experience, saying that the 50-year provision was a typographical error.

Of course, it's another election season, when procurement reform is a can to be kicked through a political goal post.  When procurement reformation is the lipstick slapped on political deformation.

As Governor Cuomo himself said in his Statement quoted above, "Democrats, Republicans, Conservatives, Liberals, Independents – no party or group is immune."

Smack-down of Forestry Service over claim an unduly restrictive specification was reasonable for its needs

This GAO decision is Matter of: Global SuperTanker Services, LLC, File: B-414987; B-414987.2.

This post will be brief, while the decision itself is extensive. Extensive in its unrelenting smack-down of an agency trying to defend a specification the decision hails as "a post hoc attempt to justify" an unreasonable restriction on competition. "[T]he agency’s decision to restrict those assets at this time does not withstand logical scrutiny.

If you ever want to see what a comprehensive, almost frolicking, dismantling of lumbering argument looks like, this will give you an entertaining read. Clearly, the Forest Service was unable to see the forest for its own trees.

The tenacity - and audacity - of incumbent legacy

Although not part of the ABA Model Procurement Code which is Guam's model for its own Procurement Act, 5 GCA 5210, which summarizes the various authorized procurement methods, says "(a) Unless other wise authorized by law, all territorial contracts shall be awarded by competitive sealed bidding [except as authorized by other specified procurement methods. (b) Nothing in this Section requiring competitive bidding shall prohibit the development of specifications which require compatibility with existing supplies, equipment or data processing systems."

On the face of it, such compatibility seems rational enough. The Guam drafters of this provision thought so, commenting "In the past, some problems have arisen due to the requirement for competitive bidding for equipment which should have been, but was not, compatible with existing equipment. The reason alleged was that the lowest bidder had to be chosen. Of course, the proper writing of specifications could have prevented the problem and Subsection (b) makes clear that compatibility may be a legitimate part of the specifications."

Fortunately, the provisions on specifications, in Article 4 of the procurement law, is not part of "this Section", so are not, on the face of the provision, restricted by it, and the provisions of Article 4 are replete with requirements for competition, saying nothing of compatibility. This become important when one stops to consider that compatibility is a substitute for legacy, old school technology and creative destruction.

Which brings me back to yet another Motorola case, this one decided by the federal GAO, related to Motorola's lock on the radio communications market. As always, read the cases and articles in the original, and don't rely on my creative destruction of them in my rendering.

Matter of: Harris IT Services Corporation B-411699; B-411796, October 2, 2015

Harris IT Services Corporation protests the terms of two requests for proposal issued by the Department of Justice, Federal Bureau of Investigation (FBI), to acquire land mobile radio (LMR) equipment through the issuance of a single delivery order under each RFP. Harris maintains that both of these RFPs improperly contemplate the issuance of a single, second-tier, indefinite-delivery, indefinite-quantity (IDIQ) instrument (labelled by the FBI as a delivery order), under which the agency will place subsequent delivery orders for this equipment without providing Harris a fair opportunity to compete for those orders, in violation of the statute authorizing the use of multiple-award IDIQ contracts. Harris also argues that the RFPs contemplate the issuance of orders that potentially exceed the scope of the underlying multiple-award IDIQ contract program, and include unduly restrictive specifications.

We sustain the protests.

Both solicitations have been issued under the Department of Homeland Security’s (DHS) tactical communications (TacCom) IDIQ multiple award contracts program and competition has been limited to concerns that previously have been awarded contracts under the DHS TacCom program. The underlying DHS TacCom multiple award IDIQ contract program solicitation contemplated the award of IDIQ contracts for a full array of communications equipment and services ("commodity products, infrastructure and services"). "DHS seeks to establish a multi-vendor approach to implementing fully interoperable solutions to support mission critical, public safety communications." In effect, the equipment to be purchased using the TacCom program is required to employ open systems architecture so that each contractor’s equipment will “interoperate” with equipment manufactured by other concerns.

The current RFPs represent the FBI’s second attempt to meet its requirements for the equipment being solicited. The first attempt sought the award of a sole-source contract for these requirements, and supported its solicitation with a justification and approval ("J&A"; aka "determination")) document maintaining that only one source--Motorola--was capable of meeting its requirements. After protests, this approach was abandoned.

This is the second attempt. RFP 68 is for the acquisition of “subscriber base radio” LMR equipment and is valued at approximately $200 million. RFP 81 is for the acquisition of infrastructure LMR equipment and is valued at approximately $135 million. Both RFPs contemplate the issuance of what the FBI characterizes as a single delivery order for a base year, with 4 one-year options.

The Federal Acquisition and Streamlining Act of 1994 (FASA) provided agencies with express authority to award task and delivery order type contracts. Broadly speaking, the statutory and regulatory framework favors the award of multiple task or delivery order contracts for the same requirements, rather than the award of a single task or delivery order contract for an agency’s requirements.

The drafters of this federal law said the use of task order contracts for advisory and assistance services and establishing a requirement that solicitations for such contracts shall ordinarily provide for multiple awards and for fair consideration of each awardee for task orders issued under the contracts; indiscriminate use of task order contracts for broad categories of ill-defined services unnecessarily diminishes competition and results in the waste of taxpayer dollars; in many cases, this problem can effectively be addressed, without significantly burdening the procurement system, by awarding multiple task order contracts for the same or similar services and providing reasonable consideration to all such contractors in the award of such task orders under such contracts; and, all federal agencies should move to the use of multiple task order contracts, in lieu of single task order contracts, wherever it is practical to do so.

[Similarly, see Guam procurement regulations: 2 GAR 3122(b): A multiple award is an award of an indefinite quantity contract for one or more similar supplies or services to more than one bidder or offeror when the territory is obligated to order all of its actual requirements for the specified supplies or services from those contractors. A multiple award may be made when award to two or more bidders or offerors for similar products is necessary for adequate delivery, service, or product compatibility.]

The statutory and regulatory framework contemplates that, where an agency is issuing task or delivery orders using a multiple-award IDIQ contract program, it is not required to engage in full and open competition, and may instead confine its competition to firms that have been awarded an underlying multiple-award IDIQ contract. However, those same provisions require agencies to give each contractor that has been awarded a contract a “fair opportunity” to be considered for each task or delivery order in excess of $3,500, and to provide for “enhanced competition” for orders in excess of $5.5 million. Finally, each task or delivery order must specify all of the services to be performed or all the property to be delivered under the order.

Harris first argues that the RFPs impermissibly call for the issuance of what amounts to IDIQ instruments to the successful contractor for a 5-year period. The protester maintains that the RFPs effectively remove the agency’s requirements from further competition for an extended period and amount to an impermissible “downselect” to a single vendor. Harris maintains that this is inconsistent with the terms of the underlying TacCom contracts, as well as applicable statutes and regulations which, the protester maintains, require the FBI to permit all of the eligible TacCom vendors to compete for every delivery order that the FBI may issue to meet its requirements.

The FBI explains that it elected to take this approach to meet its ongoing and future, geographically diverse, requirements in the most streamlined manner possible. According to the agency, its approach will allow it to avoid individually having to compete potentially dozens of delivery orders for varying quantities of equipment over a 5-year period. According to the agency, the latter approach--competing potentially dozens of separate delivery orders--“would place an enormous administrative burden on the FBI.” Legal Memorandum at 5. The agency states that its approach will result in substantial savings of both time and money over the contemplated 5-year period of the delivery orders.

As set forth below [sorry: you're going to have to read the case decision], we conclude that the FBI’s solicitations contemplate the award of what, in effect, would amount to single, multi-year, second-tier IDIQ instruments that are not permitted under the requirements discussed above. The FBI’s contemplated award of a 5-year second-tier IDIQ instrument to a single contractor is inconsistent with the requirements of the applicable statutes and FAR provisions regarding what constitutes a “delivery order.” Those requirements are, at a minimum, that the delivery order be defined as to quantity, place of delivery and schedule.

[Compare Guam's definition of an "incremental" contract, which is distinct from the "multiple award" contract mentioned earlier, in 2 GAR 3122(a). An incremental award is an award of portions of a definite quantity requirement to more than one contractor. Each portion is for a definite quantity and the sum of the portions is the total definite quantity required. An incremental award may be used only when awards to more than one bidder or offeror for different amounts of the same item are necessary to obtain the total quantity or the required delivery. The right to make such an award and the criteria for award shall be stated in the solicitation. Thus, multiple awards, for indefinite quantities, and incremental awards, for definite quantities, are limited to cases where awards to more than one contractor are necessary to obtain the total quantity of the required delivery.]

In essence, the two orders contemplated under these RFPs will deprive all the other TacCom contractors of a fair opportunity to compete for each of the delivery orders that will be issued in the future, despite their aggregate value of approximately $335 million. We therefore sustain this aspect of Harris’s protest.

Harris also maintains that the RFPs impermissibly include a period of performance that exceeds the period of performance of the underlying TacCom contracts. In this connection the FBI’s RFPs contemplate the issuance of delivery orders until August 31, 2020 (whereas the TacCom contracts only allow for issuance of delivery orders until March 25, 2019), and contemplate fulfilling those delivery orders by August 31, 2021 (whereas the TacCom contracts contemplate fulfilling all delivery orders by May 25, 2021). The FBI notes in connection with this allegation that both RFPs incorporate the terms of the underlying TacCom IDIQ contracts and provide that, in the event of a conflict, the terms of the underlying TacCom contracts control. According to the agency, to the extent its RFPs specify a period of performance longer than that contemplated under the TacCom contracts, the terms of the TacCom contracts supersede the terms of its RFPs.

We agree with Harris that the RFPs seek impermissibly to increase the scope of the underlying TacCom contracts. As noted, the agency does not deny that its contemplated delivery schedules vary from, and increase the period of performance beyond, the terms of the underlying TacCom contracts. Rather, the FBI merely asserts that the terms of the TacCom contracts will supersede the inconsistent terms of its solicitations. However, the fact remains that the RFPs expressly contemplate a period of performance longer than the period of performance included in the TacCom contracts.

In addition, and more fundamentally (as discussed above), neither RFP includes a maximum quantity, but, rather, specifies only an estimated quantity. As we conclude above, there essentially is no limit on the quantities the agency could order under the second-tier IDIQ instruments contemplated by the RFPs. It follows that the agency could order quantities that exceed not only the estimated quantities specified in the RFPs, but also the maximum value of the underlying TacCom contracts. In view of the foregoing, we conclude that the FBIs RFPs contemplate delivery orders that potentially are beyond the scope of the underlying TacCom contracts. We therefore sustain this aspect of Harris’s protest.

As a final matter, Harris’s protests that certain specifications are unduly restrictive and are designed to result in the award of the delivery orders to Motorola. Because we recommend below that the agency cancel the RFPs and consider alternatives to how it intends to meet its requirements, we need not consider these allegations in great detail. Nonetheless, we discuss several obvious solicitation requirements that even the agency concedes call for Motorola-specific products.

RFP 68 requires that all radios provided be compatible with a standards based radio system called “SmartNet.” In a similar vein, RFP 68 calls for providing radios that can be reprogrammed using “over-the-air-rekeying” when used with a “key variable loader.”

Harris maintains that these requirements are proprietary to Motorola and that, for all intents and purposes, they limit competition under RFP 68 to products made by Motorola. Harris also maintains that specifying such requirements is inconsistent with the overarching requirement of the TacCom contracts to provide equipment that is interoperable and that meets the P25 open architecture standards.

The agency does not challenge Harris’s fundamental assertion, but nonetheless maintains that these requirements are necessary in order for the radios that it acquires to meet the agency’s needs for data security, and in order for them to be useable with state and local law enforcement entities that still use legacy radio systems that depend on the Motorola-proprietary standards specified.

Where an agency seeks to issue a task or delivery order to acquire items peculiar to one manufacturer, it must execute a J&A in support of its specification for the task or delivery order, unless it has otherwise executed a J&A for other than full and open competition. Here, the agency concedes that it has specified Motorola-specific requirements. However, the record does not include the required J&A, and the agency has offered no explanation regarding its failure to execute such a J&A.

The agency previously attempted to meet its requirements on a sole-source basis, but concluded that the J&A prepared in connection with that acquisition was inadequate to support its attempted sole-source acquisition of Motorola products. Here, the agency again is attempting to acquire Motorola-specific products, but has not executed the required J&A, or even, for that matter, explained or demonstrated why it is not required to execute the J&A. Under the circumstances, we conclude that the RFPs include specifications for products that are specific to Motorola, and that the agency has failed to justify its inclusion of such requirements. We agree with Harris that the agency’s attempt to acquire Motorola-specific equipment appears fundamentally inconsistent with the underlying interoperability objective of the TacCom IDIQ contract program.

We recommend that the FBI cancel the solicitations.

Irrelavance is not specification

It is generally common ground that procurement specifications should not be "unduly" restrictive. See, for instance, ABA Model Procurement Code §4-205d: "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."

To me this means that irrelevant procurement requirements are not just "unduly" restrictive, they are by definition totally restrictive; they are not, indeed, what is meant by a "specification". If a specification has nothing whatsoever to do with the functional or performance criteria of that which is being acquired, it is not a proper specification at all. See, for instance, the definition of "specification" in Model Code §4-101: "Specification means any description of the physical or functional characteristics, or of the nature of a supply, service or construction item."

On that basis, I have a hard time justifying the procurement decision rendered in the following story, assuming, of course, that the story is accurate and complete in its material facts. Your should read the whole story at the link.

Computer firm claims Hillsborough changed rules to aid vendor

Michael Banks, president of Form 10 Group Inc., said ... the county eliminated his company from the competition to install and replace computers in county offices.

The county had this requirement: bidders must be authorized to re-sell Hewlett Packard computers. “There is no technical support called for under this contract,” Banks said.

Form 10 was not an HP re-seller; the winning incumbent company, accomtec, was. Form 10 was the lower bid, but the award went to the incumbent.

Banks maintains that the county’s requirement that vendors be HP re-sellers is unnecessary. He said his company has installed and replaced thousands of HP computers for the Florida Department of Highway Safety and Motor Vehicles and for the Hillsborough County Tax Collector.

After Form 10 lost its bid protest, it still had the option to appeal to an independent hearing master. But Banks decided not to exercise that option before the protest period ended Thursday.

“The legal costs,” he said in an email, “far outweigh our chances for any positive outcome on the contract.”

Banks was not the only loser.

Though Guam follows the Model Code provisions mentioned above, Guam procurement law includes a provision (5 GCA § 5268(c)) which would seem to clearly preclude the kind of decision-making in this case: "Purchase descriptions shall describe the salient ... performance characteristics of ... service to be procured without including restrictions which do not significantly affect ... performance characteristics".

What's in a (brand) name? Unreasonable favoritism.

Matter of: Desktop Alert, Inc., File: B-408196, Date: July 22, 2013 (Chopped, pasted and extracted; if the particulars of this case are critically important to you, read the Decision at the link.)

The protester asserts that the solicitation, which limits the competition to brand name items, is unduly restrictive of competition. We sustain the protest. Solicitation for an emergency mass notification system, telephony and training that was limited on a brand name basis is overly restrictive where the agency fails to demonstrate a reasonable basis for the brand name restriction.

DCMA awarded a Small Business Administration 8(a) set-aside contract on April 11, 2009, to Reliable Government Solutions, Inc., of Silver Spring, Maryland, to provide a product known as the AtHoc Mass Notification System. Among other things, this contract included requirements for: software; licenses; core system; software assurance; upgrades and technical support; 50 dedicated phone lines for transmitting alerts; system installation and set-up; and a back-up system. Contracting Officer’s Statement at 2. This contract ended on April 12, 2013.

On March 12, 2013, DCMA posted the RFQ for the instant procurement on the General Services Administration’s (GSA) e-Buy website. The solicitation was limited under the FSS procedures of FAR § 8.405-6 on a brand name basis to AtHoc products and services. The solicitation sought AtHoc software, upgrades, security patches, software assurance, technical support, communication services, telephony[1] and training.

A limited source procurement under the FSS, such as a brand name limitation, requires a justification that describes the reasons for limiting the competition. On March 7, prior to issuing the RFQ, the contracting officer signed a limited source justification for an AtHoc Mass Notification System. The justification explains the reason for limiting the acquisition to the AtHoc brand name system, as follows:

AtHoc is already installed in the DCMA Infrastructure and is in use by all Contracting Regions across DCMA. By using existing assets, and trained Operator and Administration personnel, DCMA saves money and time. Most of the emergency management force has already been trained on the AtHoc System, and the cost to retrain personnel is substantially lower than other systems. . . . These conditions all point to cost, time, and human resource savings by using the existing AtHoc brand software.

With regard to market research, the justification provides the following assessment, which addressed DCMA’s views of the merits of the AtHoc system:

Based upon the market research conducted, the purchase of the AtHoc brand name represents the best value solution as this product, a) exceeds the technical specifications required for this type of emergency warning system, b) reduces training, as this system is already widely utilized within all DCMA, c) the configuration of this system allows the Agency’s Emergency Management Personnel to provide quick alerts and operability within the Agency, and d) provides a high level ease-of-use for the customers at a very competitive price.

The justification also cites AtHoc’s favorable past performance--both in terms of product reliability and customer service--and states that “AtHoc is the only mass notification application on the [Defense Information Systems Agency (DISA)] Approved Product List (APL).”

On March 20, in response to the e-Buy solicitation, DCMA received one quotation, from Reliable, an AtHoc reseller. Reliable advised in its quotation that at least four of the RFQ’s contract line item numbers (CLINs) for training were listed as open market items in its quotation, because those items are not available on the FSS. On March 29, DCMA re-issued the RFQ on FedBizOpps, via amendment 0001 to the solicitation.

On April 3, Desktop Alert submitted a pre-award protest to DCMA, arguing that the solicitation’s limitation of sources to AtHoc brand name items is unduly restrictive of competition, and that the solicitation fails to describe the agency’s minimum requirements. The protester also asserted that DCMA failed to consider mass notification systems offered by other vendors. In its protest, Desktop Alert notified DCMA that it provides mass notification solutions to DOD and other government and commercial customers.

On April 9, DCMA denied the protest, stating: “[W]e limited our solicitation for support to the AtHoc system [because] it’s the system we currently use and it’s the system we seek to continue to use.”

On April 11, Desktop Alert filed a pre-award protest with our Office arguing the same grounds as its agency level protest. On April 12, the head of the relevant DCMA contracting activity executed a justification and approval, pursuant to FAR
§ 33.104, authorizing award of the contract notwithstanding the stay triggered by the protest to our Office, on the basis that urgent and compelling circumstances did not permit awaiting a GAO decision before proceeding with contract award. That same day, DCMA awarded contract No. S5121A-13-F-0007 to Reliable in the amount of $84,472.50, for the base year, with a total estimated contract value of $540,260.52, inclusive of the base and all option years. Reliable was the only company that submitted a quotation in response to the RFQ.

The protester argues that the solicitation fails to describe the salient characteristics of the agency’s requirement.[4] For this reason, the protester contends that the RFQ is unduly restrictive of competition and does not permit other potentially qualified vendors of similar software systems to compete. Desktop Alert also argues that DCMA’s limited source justification was unreasonable because it failed to describe the agency’s requirements, and did not consider other qualified software systems when justifying its determination to limit the solicitation on a brand name basis.

As discussed below, we find that DCMA failed to justify the use of the restrictive brand name requirements for this procurement. Specifically, we conclude that the agency’s justification is deficient because DCMA failed to adequately define the supplies or services required to meet its needs, or any essential feature of the supplies or services that is unique to the AtHoc brand name. We also conclude that the justification is deficient because the agency failed to document adequately its market research of other vendors’ similar products. For these reasons, we conclude that the solicitation was overly restrictive, and sustain the protest.

Orders placed under the FSS, while streamlined, are considered to satisfy the full and open competition requirements of FAR Part 6. 41 U.S.C. § 152(3) (2006 & Supp. V); FAR § 6.102(d)(3). Moreover, orders or blanket purchase agreements established under the FSS are exempt from the specific requirements in FAR Part 6, including the requirements for justifying restrictions to full and open competition. FAR § 8.405-6. However, to limit sources in FSS orders--such as a brand name requirement--ordering activities are required to justify the restriction in accordance with the procedures set out in FAR § 8.405-6. Id. § 8.405-6(b)(2).

As an initial matter, DCMA argues, in essence, that Desktop Alert is not an interested party to challenge the terms of the solicitation. In this regard, DCMA contends that the RFQ sought maintenance and upgrades for its existing AtHoc system, and did not seek a new mass notification system. AR at 1 (“DCMA did not want to procure a new system or switch to another system; it only wanted to maintain and upgrade the system currently in place.”). The agency asserts that its decision to limit the competition to FSS vendors who are authorized resellers of AtHoc mass notification systems is reasonable because “[b]uying software upgrades and maintenance on a system the agency already owns is far more reasonable than scrapping a functioning system and purchasing a completely new system.” Id. at 2. The agency therefore argues that because the protester requests an opportunity to provide its own mass notification system rather than maintain the existing AtHoc system, it is not an interested party.

The record, however, does not show that the RFQ is merely seeking maintenance or upgrades to the same AtHoc software system that DCMA purchased in 2009. Supp. AR at 2. As the agency’s response to the protest acknowledges, the RFQ seeks a newer version of the AtHoc system with expanded functionality. Id. For example, the newer version of the software “increas[es] the functionality” and “increas[es] the type of methods that may be used to send out warning messages, such as adding capability to provide alerts over Twitter® and using computer desktop alerts (a desktop alert is a message that shows up on a window on the employee’s computer monitor, in addition to telephonic and email alerts).” While the agency will receive “software patches and bug fixes to correct any errors discovered in the software after purchase,” this maintenance appears to be for the newer version of the software purchased, not the 2009 version of the software. Id. Moreover, more than half of the total contract value consists of training and telephony, unrelated to the particular brand name system being purchased. While an agency might reasonably limit a competition to a brand name source where it is simply upgrading an existing system, the record here does not show that the agency has sufficiently justified the limitation for this procurement.

based on our review of the record, we conclude that the agency does not adequately describe its requirements for a mass notification system, or why AtHoc is essential to the government’s requirements. The limited source justification states that “DCMA requires an emergency notification management system . . . to notify DCMA end users on short notice via phone, pager, email, etc. of continuity of operations (COOP), natural disasters, circuit and enterprise application outages, and a myriad of other scenarios that may occur on day-to-day basis.” This general description, however, fails to identify unique features of the AtHoc software system particular to the agency’s needs.

DCMA also argues that its requirement is “to maintain the current AtHoc brand since a large percentage of its workforce was already trained and using this system on a regular basis.” Essentially, the agency raises a circular argument: only the AtHoc system meets the agency’s needs, because the agency does not want to change from the AtHoc system it currently uses. Other than this general rationale, however, the record does not include a definition of DCMA’s requirement or needs that supports the agency’s assertion that the agency’s needs can be met only by the AtHoc software system.

Neither the justification, nor the record submitted in response to this protest, however, state any rationale explaining why the AtHoc software system is the only system that can meet DCMA’s requirement.

The record also fails to support the agency’s contention that limiting the acquisition to AtHoc software is reasonable because its staff has already been trained on the software. the agency concedes that although the agency currently has approximately 300 personnel who have been trained on the 2009 version of the AtHoc software, the “DCMA workforce is not static,” and that training for new personnel will be required: As new personnel join the agency and others depart there exists a requirement that these new employees receive training,” and that “the use of [the AtHoc software] is a perishable skill and employees who were trained on this system in previous years could benefit from refresher training provided by the vendor. Given the amount of training that the contract requires, in combination with the agency’s recognition that it will be required to re-train its staff even if it purchases the AtHoc software system, we find that the agency’s justification limiting the procurement on this basis is insufficient and unreasonable.

Another reason stated in the limited source justification for limiting the competition is that DCMA will save costs and time by upgrading its existing AtHoc system and relying on personnel already trained for that system. FAR subpart 8.4, however, does not cite cost or time savings as a basis for restricting sources. Moreover, the agency has not provided any support for this rationale, either in the justification or its response to the protest. In contrast, the protester asserts that it can provide an upgrade to DCMA’s current installed software by replacing the software system with its current software, and that based on its published FSS pricing, its Desktop Alert software system would cost the Government 20 percent less than the award price to the intervenor. The protester argues that since the original award in 2009, mass notification systems have improved significantly, and generally, the cost has been decreasing.

Next, we conclude that the justification also fails to adequately comply with the market research requirement of FAR § 8.405-6, which requires documentation of the agency’s finding that “other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency’s needs.” FAR § 8.405-6(b)(1). Specifically, the justification fails to show whether DCMA conducted market research concerning other companies’ products. Instead, the agency’s justification merely states that, based upon market research, “the purchase of the AtHoc brand name represents the best value solution” as it exceeds the technical specifications, reduces training, allows the agency to provide quick alerts, and provides a high level ease-of-use at a very competitive price. AR, Tab E, Justification at 1. This analysis does not support the brand name restriction, because, for example, it does not discuss any “technical specifications” that the AtHoc software system exceeds.

DCMA did not adequately define its requirements or specify any special features of the AtHoc supplies and services that make this brand name essential to the agency’s needs. DCMA also did not demonstrate with adequate market research or otherwise that it considered whether other companies’ similar products, or products lacking a particular feature, do not meet, or cannot be modified to meet, the agency’s needs. We find the agency’s limited source justification fails to comply with requirements of FAR § 8.405-6, and is therefore unreasonable.

Because DCMA failed to adequately justify its limitation of the procurement on a brand name basis, the award to Reliable was improper. However, because DCMA moved forward with contract award due to urgent and compelling circumstances, we do not recommend the termination of the contract with Reliable. Instead, we recommend that the options under Reliable’s contract not be exercised and that the agency assess and define its requirements for an emergency notification management system, and either properly justify its need to limit competition to a single brand name system, or recompete its requirement beyond the base year. We further recommend that the agency reimburse the protester the costs of filing and pursuing its protest, including reasonable attorneys’ fees.