Pre and Post Award Bid Protest

Protesters Argue Solicitation Did Not Consider COVID-19 Pandemic

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Chronos Solutions, LLC; Inside Realty, LLC, and BLB Resources, INC. protested the terms of request for proposals issued by the Department of Housing and Urban Development (HUD). The proposal was for asset management services in support of HUD’s real estate owned properties. Protesters asserted the terms of the solicitation did not accurately reflect the agency’s needs in light of the COVID-19 pandemic.

HUD Solicitation

HUD is “the largest single seller of real estate in the United States.” It administers the single-family mortgage program where it insures approved lenders against the risk of loss on loans financed for single-family homes. HUD relies on contractors to maintain and sell properties as well as asset management contractors to market and sell the properties.


The request for proposal (RFP) was issued in June 2019 and amended 15 times. The latest amendment of the RFP is a small business set-aside seeking asset management contractors for geographic areas within the four Homeownership Centers where HUD administers its real estate owned properties program. The RFP was for an award of 11 indefinite-delivery, indefinite-quantity (IDIQ) contracts. Each contract was for a performance of up to 12 months, four 1-year option periods, and a 6-months extension option. Each contract had a guaranteed minimum cost of $500,000 to a maximum amount of $141,000,000.

Evaluations of proposals were evaluated based on technical acceptability, past performance, and price factors. The award was to be made on a best-value basis with a tradeoff between performance and price. The past performance and price were considered equal. The proposals were ranked by price, technical acceptability and past performance. Under the past performance factor, the RFP indicated the agency would consider recency, relevancy, and quality of the offeror’s prior efforts. The RFP provided HUD would evaluate prices for reasonableness and contracts would be awarded based on fixed unit rates that includes marketing fees paid on a percentage fee basis.


Chronos filed a protest challenging the terms of the solicitation, including the agency’s decision to set aside three of the contract areas for small businesses. The agency took corrective action leading to the Government Accountability Office’s (GAO) dismissal of the protest as academic.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed by Congress to provide protections of public health and economic threats from COVID-19. The CARES Act included the “Foreclosure Moratorium and Consumer Right to Request Forbearance.” This section prohibits foreclosures and foreclosure-related evictions for 60 days beginning March 2020 and mandates up to 180 days of mortgage forbearance, with potential for extensions for borrowers who have experienced financial hardship due to COVID-19.

In April 2020, HUD issued amendment 9 to the RFP, changing the procurement to a total small business set-aside and reopened the competition. The RFP did not acknowledge the COVID-19 pandemic, forbearance mandated by the CARES Act, or other mortgage payment relief options provided by HUD. Prior to the due date of the RFP, Chronos, Inside Realty, and BLB Resources filed protests with GAO challenging the solicitation.


Protesters argued HUD failed to consider the impact of the CARES Act, as the amount of properties asset management services required would decrease during the mandatory forbearance period. They asserted the volume of foreclosures would increase once the mandatory forbearance period expires. Inside Realty further argued HUD failed to consider the effect the financial crisis would have on the housing market, foreclosures, and the number of properties HUD would be required to sell. It added, the solicitation estimates, that were established before the pandemic took place do not take into account how the legal changes the CARES Act would affect the number of foreclosures. Chronos and BLB Resources added that HUD did not consider small businesses ability to support the significant increase in volume of work.

HUD asserted its requirements did not change. It stated the information it used “is the most relevant information available.” It acknowledged that “due to the CARES Act requirement for forbearance, it is likely that foreclosures of federally backed mortgages will decline during that year-long period.” It added, the protest should be dismissed as speculative.

GAO found the terms of the solicitation unreasonable. It rejected the agency’s position that it was not required to consider any changes because “the RFP contemplates the award of IDIQ contracts.” It noted where HUD’s estimates for the amount of work required under an IDIQ contract changes prior to award, the agency must amend the solicitation and provide offerors the opportunity to submit amended proposals. The IDIQ contract must also contain a realistic minimum quantity based upon the most current information. FAR 16.504( )(1) states “estimates are unobjectionable so long as they were established in good faith or based on the best information available, and are reasonably accurate representations of the agency’s anticipated needs.”


GAO disagrees with HUD’s assertion that the change in circumstances were insufficient to warrant a change in its procurement. It concluded the changing circumstances due to the COVID-19 pandemic represent a material change from the assumptions set forth in the solicitation. It found these circumstances should have caused HUD to make a reasonable effort to reconsider its needs.

GAO sustained the protest in October 2020. The Government Accountability Office advised HUD to review the changes in law, its policies, and market conditions. It recommended HUD document its review and consider its needs to determine whether it needs to revise its estimates before amending the solicitation and requesting revised proposals.

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