The following is an installment in Crowell & Moring’s 2023 Bid Protest Sustain of the Month Series. All through 2023, Crowell’s Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month. Below, Crowell Partner Cherie Owen discusses a GAO reconsideration decision involving a prior sustain based on an offeror’s material misrepresentation.
Although GAO kicked off 2023 with 3 sustain decisions, February brought a sustain drought – GAO’s public docket shows that GAO did not sustain any protests in the second month of 2023. At first blush, this could appear to be disheartening to would-be protesters. However, the outlook is not as gloomy as it seems. First, it’s important to remember that GAO’s “effectiveness rate” (which measures the percentage of protests that result in some form of relief for the protester, such as voluntary agency corrective action or a sustained decision) consistently hovers near 50%. Thus, even in the absence of written sustain decisions, there were undoubtedly a number of protests that resulted in corrective action during the month. Second, GAO’s docket reflects that the sustain drought has already ended – GAO sustained a protest on March 1. Although that decision is still under the Protective Order and has not yet been released publicly, potential protesters can rest assured that the drought was short-lived.
Although not a sustain decision issued in February, GAO’s decision in Arlluk Technology Solutions, LLC–Reconsideration discusses a recent sustain through the lens of the awardee/intervenor’s request that GAO reconsider its prior sustain decision.
The protests involved a procurement conducted by the Department of Health and Human Services, National Institute of Environmental Health Sciences for information technology (IT) services supporting the Division of the National Toxicology Program. Arlluk had initially been identified as the successful offeror with which the government planned to establish a blanket purchase agreement (BPA). However, an unsuccessful offeror protested claiming, among other things, that Arlluk’s quotation contained material misrepresentations concerning the availability of key personnel identified in Arlluk’s quotation. GAO’s sustain decision focused upon Arlluk’s representations regarding “Dr. B,” which the company proposed as its technical point of contact – a key position.
In addressing the protest challenging Arlluk’s award, GAO found that Arlluk had provided Dr. B with a contingent offer of employment on June 14, 2021, which Dr. B accepted the next day. However, over a year later, and 20 days prior to the RFQ’s response date, Arlluk contacted Dr. B via email on July 5, 2022, to follow up regarding the procurement. Dr. B responded to Arlluk on July 12 as follows:
I just signed a mandatory document with [the incumbent contractor] this morning that “I am exclusively committed to this effort with [the incumbent] as the Prime Contractor. No other company is authorized to use my resume in their proposal.” Good luck with the proposal.
Dr. B did not otherwise respond to Arlluk or accept its requests for a telephone call to discuss the procurement.
Arlluk then submitted its quotation, which identified Dr. B as a key person and included her resume, a few weeks later, stating that “we have contingent offers for . . . critical incumbent leaders and proposed them as key personnel.” The incumbent protested alleging that Arlluk had misrepresented the availability and willingness of Dr. B to serve in a key position if Arlluk was selected for award.
GAO sustained the protest, finding that Arlluk did not have a reasonable basis on which to expect it would furnish Dr. B during contract performance. In this regard, GAO noted that Dr. B not only declined to confirm her prior acceptance, but communicated her refusal to allow Arlluk to include her name and qualifications as part of its quotation. GAO also noted that, while Dr. B’s email did not include an express repudiation of the contingent offer that Dr. B had accepted in June 2021, Dr. B did state that she was “exclusively committed” to her current employer, indicating that she was not willing to accept employment with Arlluk. GAO found that this, coupled with the refusal to discuss the procurement with Arlluk, provided a clear statement of Dr. B’s intent not to be involved in Arlluk’s efforts to secure the BPA. Recognizing that an offeror’s good-faith intent to hire incumbent personnel does not absolve the offeror of responsibility for submitting a proposal that contains material misrepresentations regarding the availability of proposed personnel, GAO concluded that, regardless of Arlluk’s intention to hire Dr. B, its quotation misrepresented the commitment of Dr. B to work for Arlluk. Because Arlluk made a material misrepresentation, the agency relied upon Arlluk’s misrepresentations, and those misrepresentations had a material effect on the evaluations, GAO sustained the protest and recommended that Arlluk be excluded from the competition.
In December 2022, Arlluk filed a request for reconsideration, which GAO denied on February 23, 2023. In its request for reconsideration, Arlluk reiterated its previous argument that it had “read between the lines” of Dr. B’s e-mail – specifically her statement that she had just signed a “mandatory” document with her current employer – and concluded that Dr. B had made the commitment to her employer “under duress.” Arlluk further argued:
GAO ignored the way in which the email was written which altered the “plain” meaning of the words included in the email. The text of the email is akin to a situation when a person speaking makes a statement and then winks at the same time as making the statement. Adding [a] “wink” to the statement alters the meaning of the statement. Or when a person speaking makes a statement but also makes a gesture known as “air quotes” while speaking. Again, adding the hand gesture alters the meaning of the spoken word in that circumstance.
As a result, Arlluk asserted that GAO had erred in sustaining the protest because at best, the meaning of Dr. B’s response to Arlluk was ambiguous – it could have meant that Dr. B no longer authorized Arlluk to use her name in its proposal or it could have meant that Dr. B “was forced to sign a statement that she didn’t mean,” and, subsequently, had misrepresented her true intent to her current employer, not Arlluk.
GAO rejected Arlluk’s “wink and air quotes” argument, finding that it was a repetition of arguments Arlluk had made during the initial protest. Moreover, GAO noted that Arlluk had offered no actual evidence of its claim such as, for example, an affidavit from Dr. B stating that she in fact meant to convey something other than what was conveyed by her e-mail. As a result, GAO denied Arlluk’s request for reconsideration (and also denied the company’s request for a modification of the recommendation that Arlluk be excluded from the competition based on its misrepresentation).
The Arlluk decision (and the original protest regarding Arlluk’s misrepresentation) serve as a cautionary reminder regarding the significant consequences of including misrepresentations in a proposal to the government.