PCI has started a new webinar series, the Case of the Month Club. Each month PCI’s Government Contracts law experts will discuss one or two recent cases. The second August case is M.C. Dean. If you want to learn more about the Case of the Month Club, click here.
Facts: Agency issues an RFP for services. The RFP required a cleared individual with a certain amount of experience to work in the program management role. The agency selects PTSI Managed Services (PTSI). PTSI’s proposal included the resume of someone who could work in that program management role. After submission, but before agency awarded to PTSI, the security clearance application for the person forwarded to work as a cleared program manager was rejected. PTSI did not notify the agency, on the grounds that it was possible for key personnel to appeal the rejection, and therefore he still might be able to work on the contract. M.C. Dean protests on the grounds that PTSI failed to notify the agency when one of the key personnel was unable to work on the contract and did not notify the agency.
Issue: Does a contractor need to inform an agency when a key person in their initial proposal become unavailable prior to contract award?
Is the uncertainty in the outcome of an appeal on security clearance enough to defeat the requirement that a contractor report the known unavailability of key personnel included in their proposal?
Holding: The GAO sustained the protest. The contractor should have told the agency of the key personnel’s unavailability.
Reasoning: When a key person named in a proposal becomes unavailable prior to the award of a contract, they are supposed to report that change in status to the agency. The contract needs have actual knowledge that the person will not be available – an award decision will not be reversed in situations where a key person is unavailable, but the contractor did not know, and therefore did not report. This allows the agency to decide whether to allow the contractor to amend their proposal with new a person to fit that role, or to evaluate the proposal without considering the resume of the unavailable person. PTSI did not have a specific reason to believe the appeal would have been successful, nor did they file an appeal to the security clearance decision. Considering these facts, the GAO concluded that PTSI was reasonably sure that the specific person at issue would not be available to perform on the contract. Since that is the case, they should have informed the agency.
The agency also argued that they did not give enough weight to the unavailable person’s resume to change the outcome of the procurement decision. The GAO rejected this argument on the grounds that the “Bait and Switch” issue is functionally an isolated grounds for sustaining the protest.