Josh Sather
A procuring agency has wide latitude to define its evaluation criteria and relative priorities in soliciting quotations for services. Once it arrives at a decision, the agency must sufficiently document its justification for the decision; otherwise, an unsuccessful bidder may challenge the contract award. For example, in the case of Guidehouse LLP's bid protest challenging the Department of Homeland Security’s (DHS) award of a contract for financial support services, there were two rounds of protests. The first protest led to a request for revised quotations, while the second protest resulted in the following decision by the Government Accountability Office (GAO).
Guidehouse LLP, B-419848.3; B-419848.4; B-419848.5, June 6, 2022
The solicitation
On January 21, 2021, DHS (acting through the United States Secret Service) issued a Request for Quotations (RFQ) for financial support services for the agency’s Chief Financial Officer (CFO), to be performed under an indefinite-delivery, indefinite-quantity (IDIQ) contract consisting of a base year with four one-year options. The award would be made pursuant to three evaluation factors: technical capability, past performance, and price (listed in order of important). On May 5, 2021, DHS awarded the contract to Deloitte Consulting LLP (Deloitte). However, Guidehouse LLP (Guidehouse) protested the award. In response to this protest, DHS rescinded the award, amended the RFQ, and requested vendors submit revised quotations by July 19, 2021. In February 2022, after its reevaluation of the revised quotes, DHS award the contract to Deloitte. Again, Guidehouse protested the award.
The Protest
In its protest, Guidehouse made four arguments. The GAO rejected two arguments because Guidehouse failed to present evidence supporting those arguments. However, two of Guidehouse’s arguments were considered by the GAO.
Organizational Conflict of Interest
Guidehouse argued that the DHS failed to reasonably evaluate Deloitte’s organizational conflict of interest (OCI). Specifically, “an award to Deloitte means that Deloitte will be required to monitor, report on, and identify necessary corrective action related to activities Deloitte itself is performing under another [Secret Service] task order.”
In 2018, Deloitte received Task Order No. 70US0918F2GSA0088, a contract for enterprise support. This included technical and enterprise support for the agency’s financial system, collectively known as TOPS/FRED. Notably, the performance work statement (PWS) for the CFO task order included several tasks directly related to TOPS/FRED. Yet, in its quotation, Deloitte stated it was unaware of any facts creating actual or potential OCIs. However, it took care to distinguish between the TOPS/FRED award and the CFO support services task order quote.
DHS argued that its evaluation was reasonable. In its OCI analysis, DHS found no actual or potential OCI regarding the Deloitte quotation and compiled a two-page report focusing on whether TOPS/FRED and CFO support services were of a similar size and scope. DHS stated, “[n]othing in the CFO Services contract will require Deloitte to evaluate or correct the work done pursuant to the TOPS/FRED contract,” and “[t]he mere fact that Deloitte will need to review data entered by Agency employees in the TOPS/FRED systems under the new [CFO support services] contract, while another group of Deloitte employees provide IT support on the same system, does not create an organizational conflict of interest.”
Best-Value
Additionally, Guidehouse argued that the DHS’ best-value tradeoff evaluation was improper. Guidehouse urged that the underlying evaluation was unreasonable and, therefore, the award decision was unreasonable. According to Guidehouse, DHS did not perform any best-value tradeoff evaluation or include any analysis of Deloitte’s price premium quote.
DHS responded that the source selection authority (SSA), also the CO, considered the technical evaluation and concluded that Deloitte’s proposal was technically superior to Guidehouse’s and was the best value regardless of the higher price. Due to Deloitte’s technical superiority, DHS argued that the SSA reasonably concluded that Deloitte’s bid provided a better value.
The Outcome
Organizational Conflict of Interest
Per Federal Acquisition Regulation (FAR) 9.504 and 9.505, an agency must evaluate and identify OCIs early in the evaluation process and avoid or alleviate any potential OCIs to prevent any conflicting roles or competitive advantage that could impair the selection authority’s objectivity. In this case, impaired objectivity OCI would occur if Deloitte’s ability to provide impartial advice to the Government were undermined by their competing interests due to their other contract. Additionally, a conflict of interest arises when a contractor is capable of assessing itself or its associates and when its supposedly unbiased assessments may potentially affect its self-serving motives.
The GAO reviewed the DHS’ OCI investigation to determine if they gave meaningful consideration to whether a considerable conflict of interest exists. The GAO determined that the short report of generalized findings was insufficient to support DHS’ determination of no OCI. Instead, it was indicative that the CO had a fundamental misunderstanding of their legal obligations concerning an OCI investigation. Furthermore, the short report was reflective that the agency did not take a close look or conduct any meaningful research into any conflict of interest. As a result, the GAO determined that DHS’ OCI evaluation was unreasonable.
Best-Value
Regarding Deloitte’s improper best-value determination, GAO found that the SSA did not provide adequate reasoning. Again, the DHS provided a generalized statement regarding Deloitte’s technical attributes and a contra-explanation regarding why Guidehouse was not the best value. The GAO determined that the source selection decision memorandum did not explain why Deloitte’s superior technical attributes justified the higher price. Therefore, the GAO could not conclude that the SSA’s conclusion was reasonable and that the best-value tradeoff determination was improperly conducted.
Based on these two arguments, the GAO sustained Guidehouse’s protest.
The Takeaway
This decision emphasizes that a soliciting agency must conduct a careful and critical OCI analysis of potential contractors, and any resulting decision must be reasonable under the circumstances. It also stresses that when an agency makes a best-value tradeoff determination, the agency’s decision must be adequately supported by contemporaneous documentation. Additionally, the documentation must contain a substantive discussion of the rationale for the tradeoff determination, as the GAO will not assume generalized statements are indicative of an agency’s reasonableness in a best-value tradeoff scenario.
If you believe a contract was incorrectly awarded to another contractor, contact us at Whitcomb Selinsky, PC. Our Government Contacting attorneys will review the solicitation award to determine if a bid protest is warranted.
