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Pre and Post Award Bid Protest

Eminent IT Protests Contract Award by Department of State

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Eminent IT, LLC, protested a contract award decision by the Department of State (DOS). The contract was for the maintenance, operation, and management of PeopleSoft in a production environment using Scaled Agile Framework (SAFe). Eminent asserted the agency improperly removed the requirement from the Small Business Administration’s (SBA) 8(a) program. It argued the terms of the solicitation did not provide enough information for intelligent competition.

Background

The DOS issued the solicitation in February 2020. It was open to small businesses under the General Services Administration (GSA) Schedule 70, Information Technology Professional Services. The solicitation was to be awarded based on a best-value basis where technical factors combined were valued “significantly more important than price.” The SAFe requirement was for the agency’s Global Employment Management System (GEMS) and was intended to be implemented across the agency’s Integrated Personnel Management System (IPMS) for HR/EX. According to the DOS, the “primary goal of SAFe” is to assist “the agency to deliver value in the shortest, sustainable time period.”

The agency awarded a task order in September 2015 for Peoplesoft-related services to an 8(a)small business under a Governmentwide Acquisition Contract (GWAC). The task order, like the DOS solicitation, required the awardee provide, maintain, operate, and manage PeopleSoft. The period of performance was for one year with four optional years. According to the contracting officer, the DOS decided against obtaining the SAFe requirement through a follow-on to the task order to the B&E task order because the agency viewed SAFe as a new requirement. It issued a request for information (RFI) “to determine the most appropriate vehicle for obtaining the required services.” It listed the following as “key components”: a facility clearance, PeopleSoft Federal Human Capital Management (HCM) experience, and corporate experience using SAFe methodology for PeopleSoftFederal HCM development.” In February 2020, the DOS issued a solicitation for competition among small businesses under GSA Schedule 70. Eminent filed a protest with the Government Accountability Office on March 15.

Regulations

FAR 19.815 and 13 C.F.R. § 124.504(d) state the procurement of an 8(a) contract award requires its follow-on or renewable acquisition remain in the 8(a) program unless the SBA releases it for non-8(a) competition. The follow-on requirement does not apply if the work is a “new requirement.”

According to 13 C.F.R. § 124.504(c)(1)(ii)(C), a “new requirement” is described as “ the expansion or modification of an existing requirement …where the magnitude of change is significant enough to cause a price adjustment of at least 25 percent or to require significant additional or different types of capabilities of work.”

Eminent Allegations

Eminent argued the DOS violated FAR 19.815 and SBA regulations when it issued the solicitation for the SAFe requirement. It alleged the DOS failed to obtain the SBA’s permission prior to removing the requirement from the 8(a) program. It argued the SAFe solicitation did not include a reasonable description of the work to be performed or a deliverable schedule for anticipated work.

Violations

Eminent asserted the SAFe requirement was “clearly a follow-on” to the B&E task order, and not a new requirement. It argued the work did not require additional or different types of capabilities of work. According to Eminent, the only difference between the statement of work (SOW) for the SAFe solicitation and the B&E task order is its solicitation required a “Performance Management Plan (PMP).” It stated the modification that occurred did not lead to a price adjustment of at least 25 percent. It added that if such an expansion did occur, the GAO should not find it dispositive of the “new requirement.”

The DOS asserted the SAFe methodology was a new requirement because of the following: the work under the B&E task order did not “encompass the entirety of GEMS;” the SAFe requirement included additional services and processes, and the B&E task order required the use of “standard waterfall systems development life cycle.” The DOS argued the SAFe requirement would provide HR/EX with a vendor of “proven experience” implementing PeopleSoft Federal HCM using the SAFe Agile methodology,” while the B&E task order did not require these services and level of expertise.

The SBA found the methodology did not impose a new requirement. It stated the “primary and vital” requirements of the solicitations were “nearly identical.” The SBA asserted differences in price should not be viewed as dispositive. It noted, price adjustments arose from “the addition of services that are ancillary to the primary and vital requirements under the contract… , or general inflation of labor rates.” The SBA asserted, “such costs should not be considered with respect to whether there is a significant change in magnitude.”

The GAO agreed with the SBA’s assertion that the DOS did not demonstrate the SAFe requirement qualified as a “new requirement.” It found the requirements in the B&E task order and the DOS solicitation identical. The GAO also stated the DOS failed to show the B&E task order required the use of “standard waterfall systems development life cycle.” The GAO noted an affidavit from the vice president of B&E used the SAFe methodology under the B&E task order. The GAO found that the DOS’ argument the task order required a different methodology “unsupported.”

The GAO stated its policy is to provide “great weight” to the SBA’s interpretation of its own regulations. It noted the SBA advised, “applying the 25 percent rule rigidly in all cases would allow procuring agencies to circumvent the intent of the 8(a) release rules.” The GAO stated the price adjustment was attributed to the introduction of the SAFe methodology. The GAO concluded the change in price requirement was not an indication the requirement was new.

Conclusion

The GAO recommended that the DOS reconsider whether the usage of scaled agile framework methodology for Peoplesoft support qualifies as a new requirement. If the agency still considers the requirement as new, it recommends the agency document its conclusion and the basis for its disagreement with the SBA. If it agrees with the SBA conclusion, it recommends the DOS either procure the requirement using the SBA’s 8(a) program or obtain the SBA agreement before removing the requirement from the program.

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About the AuthorWhitcomb, Selinsky, PC

Whitcomb, Selinsky, PC is a full service law firm serving clients’ diverse legal needs. Our focus is in helping people in their interactions with federal, state and local governments.

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