This month's Bid Protest Roundup highlights three recent protests: one from the U.S. Government Accountability Office and two from the Court of Federal Claims. The first protest concerns an agency using unstated evaluation criteria; the second involves the adequacy of an agency's investigation into its own data rights; and the third addresses an unequal access to information organizational conflict of interest.

Hometown Veterans Medical, LLC, B-422751, B-422751.2, October 11, 2024

In this pre-award protest, the GAO held an agency improperly rejected Hometown Veterans Medical's ("Hometown") proposal because the agency (1) evaluated Hometown's proposal using a cursory review, which was not described in the solicitation, and (2) required copies of two representations, even though the solicitation did not expressly require them.

On April 29, 2024, the Department of Veterans Affairs (VA) issued a Request for Proposals (RFP) for commercial home oxygen services. The RFP included the standard solicitation provisions for commercial items and an addendum to the instructions at FAR 52.212-1. Specifically, paragraph "C" of the addendum stated proposals that did not include all required documentation and all criteria would not be considered.

The RFP included FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment. Although the provision includes two representations, it contains instructions stating the offeror shall not complete the representations if it does not provide or use "covered telecommunications equipment."

Hometown posted completed online representations on SAM.gov, but because Hometown responded "does not" to the representations regarding using or providing covered telecommunications equipment, Hometown's representations did not include FAR 52.204-24.

The VA received eight proposals, including Hometown's, and conducted an "initial cursory review" of each proposal. The Contracting Officer looked at each offeror's SAM.gov records and looked for whether each offeror had attached completed responses to FAR 52.209-7 and 52.204-24 to their proposals. Four offerors did not include those representations in their proposals (including Hometown), so the VA rejected them. Hometown challenged the rejection, arguing it was based on unstated criteria.

The GAO determined the VA's removal of the four proposals was unreasonable. First, the GAO noted the VA's initial cursory review was not consistent with the RFP. Second, the GAO disagreed that the solicitation's requirement that "ALL documentation requested" meant offerors needed to include the specific representations at issue because the RFP instructed offerors to submit specific documentation (such as a table of contents, experience narrative, pricing schedule, etc.). Third, the GAO noted the VA's argument is at odds with one of the basic purposes of SAM.gov: to be an electronic repository of offeror's responses to FAR provisions.

The GAO specifically distinguished this case from Futron, Inc., B-420703, July 25, 2022, 2022 CPD ¶ 189. There, the GAO rejected a protester's argument that SAM.gov representations were an adequate response to an RFP requirement to submit a copy of the representation at FAR 52.204-24. GAO noted in Futron that the RFP explicitly required the provisions be attached to the cover letter. Here, the language was not so explicit, as the solicitation did not state offerors were required to provide copies of their SAM.gov representations. Therefore, GAO decided not to extend Futron's holding and sustained the protest.

Takeaway: GAO clarified its holding in Futron. Specifically, when an RFP does not have clear and explicit language indicating that representations must be attached to the responses, the Agency cannot simply reject the proposal as unacceptable if the proposal does not include them. Offerors should also be alert to the fact that sometimes more may be needed than their SAM.gov representations. Although the GAO ultimately decided the VA was unreasonable here, offerors should watch out for language requiring specific representations to be appended to their proposals.

Rotair Aerospace Corporation v. United States

In this post-award protest, the Court of Federal Claims found the Defense Logistics Agency (DLA)conducted an adequate review of the government's data rights by reviewing technical certificates provided by the Army.

The Army Aviation and Missile Command (AMCOM) procures spare parts for the Apache combat helicopter. AMCOM provides instruction manuals known as "technical data packages" (TDPs), which include specifications and instructions on the manufacturing process for each part. AMCOM provides contractors with TDPs, however, the government does not necessarily have the same data rights in the underlying drawings, parts lists, and specifications as it does in the TDP itself, thereby limiting the usefulness of the TDPs. Further, some of AMCOM's spare parts are identified as "critical safety items" that must be purchased from an approved source. A manufacturer can become an approved source through the Source Approval Request (SAR) process, which is managed by the Army. To complete the SAR process, a manufacturer must provide a complete and current copy of the TDP required for the part.

On September 16, 2022, the DLA issued a pre-solicitation notice, after issuing a sources-sought synopsis. On September 20, 2022, the DLA executed a Justification and Approval (J&A) to use a sole source procurement to acquire arm assemblies and bell cranks from Boeing. For the J&A, the Contracting Officer (CO) stated the government did not have the necessary data rights to purchase from any additional sources besides Boeing, and Boeing was the only known source able to furnish the supplies. DLA issued a solicitation for the arm assemblies and bell cranks on September 30, 2022.

On May 9, 2023, Rotair filed a bid protest with the Court. Rotair argued the DLA unreasonably prevented it from competing in the September 30th solicitation. Specifically, Rotair argued the DLA wrongly assumed Boeing maintained the data rights to the arm assembly and bell cranks, and because of this, DLA wrongly determined it could not share those specifications with other sources. Rotair argued the government was required to conduct a reasonable investigation into its data rights prior to making a sole source decision.

Here, the Court determined the justification did meet the requirements of Competition in Contracting Act and DLA's decision was rational. The Competition in Contracting Act allows an agency to use non-competitive procedures when the agency determines that its needs are only available from one responsible source and no other good will satisfy the agency's need. Here, the government needed to review its own data rights. The Court found the government reasonably investigated its data rights. AMCOM provided a TDP list ("TDPL") for each part to DLA. The TDPL for the arm assembly contained a "Technical Certification for Proposed Other than Full & Open Competitive Acquisition of Spare Parts," which stated the data needed was not available. The TDPL for the bell crank contained the same certification and stated the government did not have the rights in the underlying data and could not be purchased. Both certifications concluded by stating there was a reasonable technical basis to conclude the items were only available from Boeing.

The DLA used these certifications in the J&A. DLA stated the data was not available and could not be developed to allow full and open competition.

Further, the Court clarified its broader holding in Chromalloy.[1] The Court stated its holding in Chromalloy was to ensure an agency's investigation was reasonable, not whether the agency took all possible investigatory steps to ascertain its rights. Here, Rotair argued DLA's investigation was unreasonable because there was no evidence DLA, or the Army, reviewed any of its prior contracting history to determine its data rights. However, the Court disagreed and stated that the technical certifications provided showed that each part had undergone a full screening and that this was enough.

Takeaway: This is another case that emphasizes the importance of understanding intellectual property rights. Further, the Court's decision elaborates on what is considered a reasonable investigation into the government's data rights. It seems clear that, so long as the government conducts a rather baseline review of the technical documentation for a specific part, that is good enough. Here, DLA simply relied on a certificate from the Army and the Court determined this to be adequate. Potential offerors should note that this decision inherently protects those offerors that use proprietary data to deliver goods or services to the government.

ITellect, LLC v. United States

In this post-award protest the Court of Federal Claims determined the Defense Information Systems Agency (DISA) reasonably awarded LightGrid, LLC (LightGrid) the protested contract even though LightGrid did not disclose its president was married to a DISA Contracting Officer (CO).

ITellect, LLC (ITellect) was the incumbent contractor providing Enterprise Voice Services (EVS) to DISA. DISA issued a solicitation to continue the EVS contract. Four offerors, including ITellect and LightGrid, submitted proposals. DISA awarded the contract to LightGrid on April 24, 2024.

After LightGrid was awarded the contract, ITellect learned the president of LightGrid was married to a DISA CO who served as CO to ITellect's incumbent EVS contract for two months in 2022 (Mrs. Smith). This was not disclosed on LightGrid's proposal. LightGrid did not identify any current or potential organizational conflicts of interest (OCIs) and it did not mention a personal relationship between any of its employees and any DISA employees.

ITellect protested, specifically claiming LightGrid did not disclose all its potential or actual OCIs and therefore made a material misrepresentation. After ITellect protested, the DISA CO who managed the procurement initiated an investigation to determine whether any OCI existed.

ITellect made two main arguments. Specifically, DISA acted arbitrarily and capriciously by (1) not disqualifying LightGrid's proposal for making a material misrepresentation and failing to comply with the solicitation's requirement mandating disclosure of actual or potential OCIs, and (2) not disqualifying LightGrid for violating the FAR's OCI provisions. ITellect also made an additional argument claiming DISA should have disqualified LightGrid due to the appearance of an OCI.

The CO determined the only type of OCI that could have been applicable was unequal access to information. As part of the CO's investigation, she reviewed communications between Mrs. Smith and LightGrid, Mrs. Smith's sworn statement, and the Mrs. Smith's Office of Government Ethics Form 450, in which Mrs. Smith had disclosed her relationship to the CEO of LightGrid. The CO also looked at Mrs. Smith's roles in both the prior contract and current solicitation. The CO determined no OCI existed, which was consistent with the representations made by LightGrid.

The Court first determined LightGrid did not make a material misrepresentation because DISA did not rely on, and nor was it influenced by LightGrid's "omission." The Court specifically noted Mrs. Smith did not play any role in the current solicitation. Second, the Court stated even if LightGrid did fail in disclosing the relationship between the president and Mrs. Smith, it was within the CO's power to waive the irregularity and not disqualify LightGrid.

Finally, the Court reviewed whether there was any appearance of OCI. The Court determined there was not. The Court distinguished this case from Asia Resource Partners, where the GAO found the Air Force was reasonable when it excluded an offeror because its owner was married to an Air Force CO.[2] The Court noted in that case the CO and the owner hypothetically had access to nonpublic information. Here, however, Mrs. Smith did not have access to any relevant information regarding the instant procurement. Further, the Court stated, the simple existence of a family relationship did not create an appearance of an OCI.

The Court concluded that the CO's investigation was rational and entitled to deference.

Takeaway: Although there was no OCI in the above case, that was not the issue. The issue was the appearance of an OCI. The Court noted LightGrid should have disclosed the relationship. LightGrid could have likely evaded this time consuming and expensive litigation had it simply disclosed the relationship between its president and the contracting officer from the start. Offerors should be thoughtful about what they do not disclose, especially with regard to OCIs, as it's not just whether there is an actual or potential OCI but also whether the lack of disclosure might trigger or prolong an unnecessary protest.

[1] Chromalloy San Diego Corp. v. United States, 145 Fed. Cl. 708 (2019).

[2] Asia Resource Partners, B-400552, Nov. 5, 2008, 2008 CPD ¶ 201.n"

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